Private Hard Money Lender in California, Texas and Arizona: Secured Real-Estate Lines of Credit: Benefits and Drawbacks

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Monday, October 8, 2018

Secured Real-Estate Lines of Credit: Benefits and Drawbacks

iStock_000002302749_Large (1)Looking to expand your businesses real-estate investment portfolio? Secured real estate lines of credit offer many benefits.A secured line of credit turns you into a cash buyer, and a secured real estate line of credit, you can make a full offer right away without having to wait for financing to come through. A secured line of credit can give you an edge over the competition when it comes to purchasing the best investment properties, while offering you savings over a standard term loan.

To qualify for this type of credit line, you'll want to be a seasoned real-estate investor, whose properties are titled to an LLC or other legal business entity. Qualifying for this type of loan depends on how much income your business earns on a consistent basis and the total value of the properties currently titled to your business.


Eligibility in the case of secured real-estate lines of credit, comes down to the value of business assets and the financial strength of your business.

To get more specific about the qualifications for a secured line of credit, the sum of the loan you receive generally cannot exceed 65 percent of the value of your business's currently held assets. In addition, your company should have a healthy balance of debt and income.

Because this is a business loan, its the financial strength of your company which counts for your lender, making your personal credit score a non-factor, which can make qualifying easier.

Secured real-estate lines of credit generally imply higher interest payments, and as with any secured loan, there is some risk to your personal property. However, if you can qualify, you could save a lot of money.

Business loans of any sort carry higher interest rates, but when compared to an unsecured line of credit, a secured line of credit generally offers lower rates, typically of 4-8 percent.However because a this line of credit is secured, your lender can confiscate whatever property you pledge should you default.

Nevertheless, applying for a secured credit line carries lower fees and little to no up-front costs. Application fees are virtually unheard of and there little in the way of underwriting costs.

But beyond the savings this type of loan offers you concerning fees, its primary benefit to you is what you could save in terms of interest. With a line of credit you only pay down and pay interest on what you spend, when compared to a conventional term loan this can result in massive savings.

In addition, secured lines of credit offer flexibility, once the loan closes you can spend the money in any way you see fit, with no restrictions on the type of property you can purchase. Compare this to a conventional loan where your lender will have to scrutinize the property you are purchasing.

Once you qualify for a secured line, your lender then gives you a lump sum which you draw from to finance individual purchases or spend as you see fit. So if your business can qualify a secured line of credit can help you rapidly expand, diversify your real-estate investment portfolio and could result in significant savings in terms of interest payments.



 Dennis Dahlberg Mortgage Broker[3][2][2]Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC 
Hard Money Lender
Hard Money Loans
Hard Money Loan
Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177
Dennis@level4funding.com
Dennis Dahlberg Broker/RI/CEO

NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave | Austin | Texas | 78701 

About the Author:  Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 43 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

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