When is the best time to finance?

The best time to finance is when you don’t need it

That’s right. When you feel like you don’t need a loan, go get a loan. Because what will happen when you need it, you either don’t have the time to do go through it or bank will not lend it to you. I will share with you my personal story and how I am currently weathering through the storm of financing right now.

I thought that I was in a great shape. I was able to leverage and purchase up to 7 properties within 3 years. You can read here to see how I buy one of my properties with no money down. Other that than, the way I set it up is pretty simple. We would enter a 50/50 partnership with a partner. They will provide the down payment and lend me 50% of the deal for 0% interest in 3-4years. In exchange, I will manage the property and do all the work to make sure my partner will get the return he or she expected.

But there is one mistake (kind of a mistake) I invest with family member!

What happen when your non family/friend partner said he or she wanted the loan back earlier? Simple! You pointed into the contract and said sorry. It’s going to be 3 years until you get your money back

What happen when your family/friend said he or she wanted the loan back earlier? Uhm..that’s is not very simple.

My sister is going to have a baby and she needed extra money. In the same time, she wanted to invest in her newly leather making business. I was able to happily return her the money back earlier.

My aunt want all of her money back all of the sudden and I was able to return it to her to avoid the awkward upcoming thanks giving as well

Not to mention that I was able to refinance repay another 40k debt earlier than scheduled. It’s just me! I like to under promise and over deliver!

I would not be able to done all this without thinking ahead. When the time is great and the cash flow is good. Instead of spending the money on luxury vacation, or an Audi R8, which is my dream car. I keep all the fund under my saving account for rainy day and use it as a leverage to borrow even more money and setup even more credit line. By having a sound and solid credit score, cash flow, and financial statement. I have no problem setting up extra credit line and loan at a rocking bottom rate!

All the extra fund sitting around will come in very handy for an event like this when all of the sudden everybody is asking for their money back! Instead of fight it off with my sister or having an awkward family dinner. I just refinance and pay of 62k of loan to family member and friend in a matter of weeks! This could have been a disaster, but by following the “get the loan when you don’t need it” rule. I was able to come out as of nothing ever happen.

Why the best time to finance is when you don’t need it? 

Because most bank will only give you an umbrella when it is not raining

I want to hear your story and how you weather through your financing crisis!