Credit Score, ROI/COC/Finance

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We are two firefighters who are getting started in the real estate investing business. While reading several books, we still a had a couple real life practical questions that haven't been answered it and I was wondering if anyone had time to discuss a couple of financial questions. With certain lending options (montage vs conventional vs portfolio) I did see several statements saying only a certain amount of loans are possible at once. When getting prequalified or finalizing deals, how would one protect their individual credit score if applications are being done multiple times? Would using an LLC be more beneficial, although several books did say banks would not loan single family houses to LLC's? Before jumping in, should hard inquiries be as close to zero as possible?

The last question would be if anyone could explain the numbers and general rule of thumb with calculating and generally analyzing cash on cash returns as well as return on interest.I think a couple more examples on this would really be helpful in comparing deals (good vs bad ones) in long and short term.

We hope a conversation is possible, as a real world scenario might be helpful!

Looking forward to meeting new people,

Thank you in advance!


There are mortgage limits, so generally 10, but that means 10 in your name, 10 in his, 10 in your wife's, etc etc.  Some lenders have reduced limits, so check with your bank.

Hard checks are not as damaging as one might think...FICO says about 5 points and the drop is temporary, but you probably won't be running a ton of checks for each around to banks, find the one with the terms that match your needs, and then apply.  You can shop banks well ahead of an application, especially if you have an idea of your own FICO (which you can get free through discover) and the terms of the deal you are shopping.

As for LLCs, you can find banks that will do it, but often they have to be single purpose entities and generally still have personal guarantees and qualification, so while LLCs are great and protecting legal liability, the bank will still run your credit and you will still be liable for mortgage repayment and will do nothing to shelter your FICO from a credit check.  As for waiting, don't!  Jump in there and get busy.  The hit to your credit from a credit check to buy an investment property is a silly thing to get hung up on.  Go get 'em!

Regarding calculations, it is far easier for you to play with the calculators above under the "Tools" tab, and the webinars that you should be getting via email include a couple great ones that cover CoC and ROI hardcore with visual learning, better than a back and forth will. Best of luck to you both!

- jm