Would you pay $50K for a shelf corporation that has $1,000,000.00 line of bank credit.?

July 23, 2010 3 Comments

Purchases can only be used for real estate purchases such as,investment properties,new construction,rehab,condos etc.

Why would I pay anybody anything for the ability to borrow???

Pay 50k so I have the RIGHT to borrow $1mm????

Sounds really silly.

I can fill out a mortgage app or loan app FOR FREE and obtain the right to borrow money.

Does this 50k sound like a good deal to you or something???? I believe you are not really thinking straight on this!

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3 Responses to “Would you pay $50K for a shelf corporation that has $1,000,000.00 line of bank credit.?”

  1. arbeit July 23, 2010 at 4:02 pm

    I don’t think so, no. It’s only credit, not money. $50,000.00 seems a lot to pay for the right to borrow money.
    References :

  2. tsbr1963 July 23, 2010 at 4:23 pm

    Why would I pay anybody anything for the ability to borrow???

    Pay 50k so I have the RIGHT to borrow $1mm????

    Sounds really silly.

    I can fill out a mortgage app or loan app FOR FREE and obtain the right to borrow money.

    Does this 50k sound like a good deal to you or something???? I believe you are not really thinking straight on this!
    References :

  3. ~Trey July 23, 2010 at 5:11 pm

    Hi Jordan,

    It’s called utilizing debt capital.

    If you could not normally achieve a loan that size.

    Sure, roll that 50k into the total loan figuratively speaking. Find out what the LOC ( Line of Credit) rate is, IE: Prime plus a margin. Prime right now is 8.25% and the margin would be anything above that. Prime plus 3, would then equal 11.25%.
    You could then determine what the APR is.

    Here’s the tricky part, you have to find the RIGHT TRANSACTION to be able to realize a good ROI. (Return on Investment)

    Good Luck,
    ~Trey
    References :
    Business Owner