Financing the Rehab: A little different perspective. This is where I explain how accumulating Credit Cards for Home Improvement Lines of Credit can add up to more than 30k in available credit to finance a rehab. Of course, use credit wisely and use technology such as automatic payments on billpay to not be late, but this is a way to get “cash” for that rehab without going to a bank or credit union to get a line of credit (which I will go into in one of the next episodes).
Real Estate investment is unique that it is the one form of investing where funding the venture has spawned a slew of different industries and financing opportunities that aren’t available in Stocks, Bonds, Precious Metals, Small Businesses etc. These are easily accessible to the general public. Please use this as one of the means for coming up with the capital to invest in real estate without hitting up family and friends.
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22 Comments
I like how you share your REI journey Lisa. Keep up the good work.
Thank you, Linda!
check to see if they have any hard money lender in your area , credit
should not be the main factor.
This is fantastic info — How high does your credit have to be to qualify
for credit lines from these stores like HomeDepot and Lowes…
Do you still maintain the rule of 3rds for your lines of credit?… Making
sure not to spend more than a third of your available balance? My
experience is that having a high balance on your cards can have a negative
impact on your credit score.
Hi! You’re absolutely right, 1/3 is optimal! That is a big reason why I am at a snails pace doing 1 house a year for the next couple of years, to have time to pay a lot of items down. Stay frugal š
Valuable info for newbies like me…
if you think this is good, sign up for my newsletter.
Yes. I have over 35 credit cards. Do what you have to and buy Real Estate
with all you got. Just make sure you have a home that is eventually
“saleable” and positive cash flow after ALL expenses. Even if you make a
mistake, the appreciation till 2022-2024 will bail you out.
Wow, thank you for this advice. It had never even occurred to me to look
for lines of credit from these places. By the way, I have watched about a
dozen of your real estate videos. You get an A+ on your presentation
skills and how you come across. Very personable and you explain things
well.
Thank you, Thank you!
Awesome awesome post regarding lines of credit to finance a rehab. May I add that each property could (should) be LLC and the revenues,expenses and liabilities are all tied to that property. So theoretically, each property carries its own liability, thus lines of credit. Now, that’s a bit much, cause 30 prop, 30 lines of credit.. Let’s just say. If the real estate BUSINESS is properly set up, possibly centrally managed, then portions of debt is allocated towards renovations, but accounted for by property. Also, the liabilities are in the name of the company, not the individual. Thereby reducing any personal liability.
Thank you for allowing me to post this tidbit. Again, awesome, awesome post!
Hi Nia! A property does not need to be in the name of the LLC to separate your assets (I don’t think – Im not a lawyer!). However, I focus more on my documentation of my LLC and operating my business as a business. This includes meeting minutes, general ledgers, formal record of actions, and meeting minutes, even when its just myself. I will make a formal record of action recognizing that this property is under my management and that I have full fiduciary duties to collect payments and provide responsible and reasonable due diligence to the property and my tenants through my LLC.
Lisa, you are so wonderful for sharing this info with us. I have spent so much of my own money on my first house, and now I’ve practically run out, but have so much more work to do, so I’m going to start seeking these lines of credit. Thank you from the bottom of my heart.
one foot in front of the other, a lot of research, and reach out for help when you need it!
At the yime, did u have to use a business name or personal name for wels
fargo Home Projects Visa?Their application is asking me for my bus name and
monthly sales..lol
I’m new to reviewing your blogs and I love them all. Thanks so much for being willing to share your personal experiences. I purchased my 1st property two years ago but ran into a bad experience with a horrible tenant and I’m currently going through the legal process of evictiion which is causing me to loose money until I get another tenant. I now know how important it is to do thorough screening of tenants to avoid paying for it later. It almost discourage me from investing again. However, I thought about my mistakes and ready to move forward. Once my tenant is evicted, I may be left with damages inside the home. Getting credit for materials may not be the issue. The issue will be getting the funds to pay the labor expense for contractors for repairs. I’m able to do to some minor work on my own, but it’s the work for flooring, Windows and other renovations that I lack the experience and need funds for a contractor? Any suggestions?
I love all of your videos!! I have one property(for$7000) and am rehabbing it. Renting it for $400 while i rehab. Love you!
HI, Lisa, love this video and all the information you provided. I will be checking with Lowes, Home Depot, and Sears for lines of credit. I never would have thought of financing home repairs.
If this can take up 25% of your total budget, why not? Hope to hear from you more!
Hi,Lisa I just repaired my credit how and I wanted to know how many credit cards and lines of credit I can apply for at let’s say in a month to two months time.
I usually apply in batches, on the same day, same hour – about 4. Then I let it ride until the next time. As many long term, with balance transfer and points, that I know about and research.