Tuesday, January 9, 2007

Hard money LOC approved

One of my real estate goals for 2007 has been to find sources of money to fund purchases. I had applied to Community Preservation Corp but they can't seem to make a decision. I had also applied to BrookViewFinancial. Today they finally approved a $150K line of credit for me!

When I first read about hard money lenders the line was that they didn 't care about the credit of the person applying, just the equity of the property. Now it seems they are becoming more like banks and want people with good credit scores and adequate cash flow. I was not going to get approved at first due to my cash poor balance sheet. However, thanks to the sale of some property, I have some cash on hand now, so Brookview decided to give me a line of credit. They will fund up to 75% of ARV (after repaired value) including purchse price and repair costs. Funding repairs is something a conventional lender will not do.

I think that with the cash on hand now I also could get conventional financing since I have about $75k of equity in the house I have rented, but I know this type of loan takes about 6 weeks to process. Since my focus is on foreclosures I need to be able to close much faster than this. None the less, I feel I am about 40% of my way towards my goal of having $500k available for funding deals.

I am becoming more and more convinced that I need to build up a war chest of private money funding to build a successful real estate business. I've got an audio CD from Don DeRosa's Private Money course and have made up a Brochure to hand out with it. Now, I've got to talk to people. This week I have sent out the CD to friends and family that might be in a position to invest. I also made up a Power Point presentation and want to to a luncheon seminar.

Right now I have two deals I am working on. Both sellers in foreclosure and neither has equity in the property. Both properties have mulitple loans, so I am going to make short sale offers to the junior lien holders and see if they will bite.

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