Flip Tip Summary
Most agree that successful real estate investing has a lot to do with leverage. In this FlipNerd.com Flip Tip, Scott Ferguson shares a great tip for how to leverage the cash you do have to do more deals.
Flip Tip Transcript:
Mike Hambright: Hey, it ‘s Mike Hambright from FlipNerd.com and we have a quick VIP tip to share with you from Scott Ferguson, CEO of the Private Loan Store; who’s going to show a tip on how to leverage your cash to get more deals done.
Scott Ferguson: Hey guys, good to be here. I’ve got a quick tip for you on how to make your cash go a little further and how to leverage that cash to get more deals done. If you go to any traditional bank you can put your money into a CD. Alternatively, at the same time you could [get a line of] credit for the same exact amount of that CD, so you’re using your CD as the collateral for the line of credit. So, you’re not going to pay any interest on the line of credit, because it’s going to be an interest only, it’s only going to charge you interest on what you’re drawing off of it and your money is in a CD. So, what this gives you is the ability to use that money from the line of credit while leaving the full balance in the CD account. So, when you go to make offers on deals you can show them your bank statement and say “Look, I’ve got $50 thousand in my CD and that’s my proof of cash, the proof of funds for this transaction” but you’ll still be able to draw off the line of credit to actually get the deal funded; whether you use a lender or you pay cash for it or whatever. It’s just a quick way to keep your cash and use it too.
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Mike: Please note the views and opinions expressed by the individuals in this program do not necessarily reflect those of FlipNerd.com or any of its partners, advertisers or affiliates. Please consult professionals before making any investment or tax decisions, as real estate investing can be risky.