Preapproved for $150k at 0% Interest. Is this for real?

I own a single-family rental in Phoenix valued at about $450,000 and am currently close to breaking even on rent.

The property is zoned to add a 900 sq. ft. unit in the backyard, which could generate around $2,950 monthly. Estimated construction costs range from $170–$210 per sq. ft., totaling roughly $200,000, plus $22,000 for permits and design.

I can access $80,000 from a business line of credit and $40,000 in savings, leaving a shortfall of about $120,000.

I recently read an article about “0% interest financing through business credit lines,” but it seems too good to be true. 

I’d appreciate some feedback or opinions on whether this strategy is realistic.

2 Comments
 

0% rate on a credit line does not mean $0 in loan costs.  These things do exist but they tend to just front load the interest in the form of loan fees.  You might only get 110K of that 150K loan amount. 

 
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