equity line of credit

The equity line of credit is the best tool for the person who wants to flip real estate.

It took me more than a year before I had enough money to buy a house and pay cash, that’s cash from my savings and not from my credit cards.

Once I had my first house that was paid for I immediately got an equity line of credit on it.

This loan allowed me to withdraw up to 80% of the homes value any time I wanted.

Of course I used this money to buy and sell more houses. Now I had:

• Credit cards


• Personal line of credit


• Equity line of credit

Each one was large enough to buy a house with so I started buying 3 houses at a time.

The equity line of credit has the lowest interest rate so I always use that line of credit first.

When I have used it up then I move on to my personal line of credit with the next highest interest rate.

When that is gone I start back in on the credit cards.

This is the basic system that I used for the entire time I worked buying and selling houses, and I still use it today.

When you turn your inventory around and sell it within 4 months, the most important factor is that you have the money available.

The interest is secondary, it could add up to as much as $2500 so if you can get the better rate always try for it.  But never pass up a good deal because you are worried about how much interest you going to be paying.

As long as your interest rate is within reason.  

On my credit cards the interest rate runs between 9% up to about 18%.

My current equity line of credit has an interest rate of 4.5% per year.