I love all my nephews but there’s a particular place in my heart for Ryan, the youngest of my sister’s five sons. He’s always been smart, a good listener, and a quick learner. So, when Ryan told me he wanted to get involved with real estate investing, I couldn’t have been more thrilled. I loved the idea of taking Ryan under my wings and imparting all the real estate investing wisdom I’ve amassed over the years.
Ryan was like most real estate investors just starting out. He had a ton of questions, particularly about how to fund his purchases. He knew there were different lending products but wasn’t sure which one was right for him. He did say he liked the sound of a fix and flip line of credit. I told him that those are great—if you can get them. But that there are other options available for funding deals, too, that provide all the opportunity you need to get started in real estate.
Why a Fix and Flip Line of Credit Is an Attractive Option
A fix and flip line of credit can give you access to financing for buying and rehabbing properties. You borrow a predetermined amount of money—based on an assessment of your creditworthiness—from a bank or credit union. Then you draw down the cash as you go along. Unlike with hard money loans, good credit is essential. Fix and flip credit is used by both novice real estate investors and people like me who have been around the block a lot.
A fix and flip line of credit offers several attractive features. Here’s just a few:
Flexible investment options. You can use the funds to purchase a single investment property or even a portfolio of investment properties. Since the funding is already promised, you don’t need to pass each deal by the lender. (more…)