Stand up and make a damn decision

As I said last week, I had built up my one house to a tolerable level and was making enough of an income that I could afford to be comfortable, but I had no plan from there. Now Im a big reader. I have been all my life. Ive read everything from self help, motivation, investment strategy, sci-fi, blah blah and on and on. So one day I was reading on my lunch hour and I had jsut started my 3rd "Rich Dad" book. It was called Real Estate Loopholes. Very early in the book the author talks about doing a cash-out refinance on oone rental property to fund the purchase of another. BINGO!  I had my plan. Now to get my refi on!

I went out to local banks to start my new plan and found out some things. I have very solid credit. Ive been working at the same job for 5 years. But I dont make crap at that job. This became a hurdle. I went to bank one and started the process only to be told I should walk away because my appraisal wouldnt be favorable (the problem was based on the difficulty of finding comps for my house). The 2nd bank I played it smarter and got past the comps issue by disguising my 2nd kitchen so the house could be considered an SFR. But then I got turned down because my cashflow wasnt going to work out even though my monthly payments were going to be exactly the same as what I was currently paying. So Id done the appraisal and was out the money. The 3rd bank I went to I told them to pay off my student loans and a small credit card debt and a few other little  items so my cashflow would improve just enough to make the loan happen (there were reasons I didnt want to do this initially but I needed to make things happen.

Each time I went to a new bank I learned the lessons from the last bank. See, the lenders have a cookie cutter set of criteria that we all must "fit" in order for them to make the loans. I learned at each stage how to jump through the next hoop and push further into the process. Also, my 3rd bank was a mortgage lender rather than a normal bank and they really wanted to loan me the money rather than the normal banks that didnt care either way and it that difference was clear by the way they worked to make the loan happen. 

Another interesting thing that occurred was when I asked one of my bosses a question. See, I was talking to one bank that said I could get a loan, but after everything was paid off, my monthly cashflow would only qualify me for about $7500 cash out. This wasnt going to be enough to do much investing. Another bank I had started to talk to gave me the impression that if I waited 6 months I could get about $20000, but that wasnt guaranteed and who knows what would happen with interest rates and to the market in general by then. So I asked his opinion and he said he would take the smaller amount because he is very "security oriented". Well thats not exactly my approach. I felt like it was time to take some risks, rather than take the easy promises. I looked into a 3rd option and came out better than both choices. I got my money immediately AND got a lot more. So this was a moment of truth for me. Was I gonna take the easy money or go for something better? I made my stand and turned down the easier path so I could get something more. hey now, dont mock my pride, it was big for me.

So now Im ready to start my real estate investing. Uh, what do I invest in? That, my friends, is a question for next week......