Subsequent transactions:
Once we fund the first deal, we will offer the builder a Facility Line of Credit for future deals:
- Note: there is zero cost to get approved for a Builder LOC
- LOC approval is good for 6 months
- Line amount is set at a ratio of 7:1 of liquid assets
Our line of credit acts like an exposure limit, or a “facility” line of credit; this is not a bank LOC, HELOC or “as good as cash” program; this is a preapproval for the builder. I just need to order the appraisal.
The client’s experience, credit score, and liquid assets are what factors into the line amount. Terms are based on each individual deal, since the rate is determined once we send out a quote for the project. It is not like a LOC from a bank where you draw cash without approval on a single, fixed rate.
Once we verify credit and assets, we can offer a line amount equal to 7x their verified assets. For example, if they showed $100,000 in assets, they would be approved for a line of credit for $700,000.
This facility line of credit program is best for big flippers and builders; it means we can fund deals with less paperwork and typically 2-3 days faster. It means fewer credit pulls and fewer bank statements. We want to make it easy for your clients to come back for additional funding.
The client must have previous flipping/rental experience to qualify for the setting up of a line only. We look for at least 5 flips and/or new builds in the last 3 years.
Our LOC offers your clients upfront certainty with a line approval amount, simplifies liquidity requirements, and helps your borrowers scale up quickly!
More details:
- Note: there is zero cost to your client to get approved for a LOC!
- LOC approval is good for 6 months
- Line amount is set at a ratio of 7:1 of liquid assets