If you are an active Real Estate Investor you may qualify for a business line of credit that will allow you to purchase, rehabilitation, sandals, wholesale or buy and hold a distressed property as if you are a cash buyer. With your credit limit, you are a cash buyer.
This offers you many advantages including the ability to purchase the property at a moment’s notice and you do not need to qualify for financing. You can buy through an auction where you are getting a good deal. You can buy the bulk of real estate transactions and become a true wholesaler.
Line of Credit
This is actually a rolling business line of credit secured by commercial real estate. This means a loan made to a business entity rather than the individual. Collateral cannot be occupied by residential property owners. This works as a revolving credit card that you can borrow up to a maximum limit of credit, pay down the monthly loan if you choose to then borrow up to the limit again.
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There are two main qualifications for the B.L.O.C. product. The first is the collateral. The lenders set a credit limit of up to 65% of the property value for the cash flow of the business that will support the loan. The second is the cash flow. The business must have been established for an absolute minimum of three months and has sustained regular cash flow. To determine the cash flow underwriting review bank statements for the last three to six months to determine the ability to repay the loan.
There are many advantages to having a credit line versus-term loan on your property. The main advantages are cost and as a business expense of people is the key to all of your decisions. This is how you save money with a business line of credit.