Hating Banks== Just Don't

Investor · Portland, OR · Member since 2017 · 182 posts · 115 votes

Mind Blown: For the longest time many people have posted so many negative things about banks etc. Myself included..... then I thought about it: Why tf would I hate a partner with virtually an unlimited bank account? Because they ask for a personal guarantee? Maybe a different way of thinking of things--- but since I thought about this 2 weeks ago- my banking relationships have improved almost overnight...

Stay positive guys! Build your business around the BEST business partner: The Bank!

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Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

Originally posted by @Account Closed:

Jay Hinrichs Great Info—- I feel the same. I got so caught up there for a little while “All Banks are evil” etc... not so at all. Went back to two bankers last week that I got denied from for a deal—- and got lines of credit etc no issues and started a positive relationship.

your local small community banks if you have good credit good standing in the community and some money and experience this is who they lend to.

Now when I talk to my banker they do not do deals . For those just coming off of BP or a guru training course that have none of the above.. you need it all.

it took me 3 years to land a bank in Charleston SC even though I domicile on the west coast.. but I kept trying now I have a great banker there and we are his ONLY out of market borrower.. but he did just raise his interest rate from 5.5 to 6. oh well instead of making a 100k on a deal he funds we will only make 99k.. REALLY all these folks who worry about rates instead of worrying about getting the funding are so short sighted.. they never do deals.. that rate is too high your getting screwed LOL... if there is good money in the deal 20% rate is OK.. its what I make at the end of the day.. if it works it works if it don't it don't

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Mike Dymski
Investor · Greenville, SC · Member since 2016 · 5k+ posts · 13k+ votes
8y
Lenders are my only partners, they take on the most risk, and they do it for a low return. I routinely get disappointed by lenders but I never loose site of the value they provide.
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
8y
Originally posted by @Mike Dymski:

Lenders are my only partners, they take on the most risk, and they do it for a low return. I routinely get disappointed by lenders but I never loose site of the value they provide.
Amen Brother !!!! Took me 3 years to find South Atlantic bank but man are they great to me.. allowed me to scale our operation in Charleston and be more competitive on buying infill lots since my capital is cheaper than most that have to use hard money or split profits.
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Charles Branch
Pontiac, MI · Member since 2018 · 10 posts · 4 votes
8y
@Jay Hinrichs This definitely makes sense. I was exploring the possibility of not using creative financing for my first deal. However based on what you said - a new investor with 0 deals , perhaps a bank may not be my best option. I'm still optimistic and will continue to study how to get lending from a local bank . Interestingly I am am investing in MF in Michigan so maybe they will be a bit more friendly.
@Account Closed - great point, partnerships could definitely help me get started. Thanks for the advice
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Account Closed
OP
Investor · Portland, OR · Member since 2017 · 182 posts · 115 votes
8y
Jay Hinrichs they get it because it is the “easiest” play... but in all honesty. It is “easier” finding someone or firm with money, and no time to partner with... God forbid you split something with someone 50-50 for all of your “hard work” etc. Lame. Pay your dues. At 26 yrs old, even I know that s”””. Also if I might add. In my opinion- if you want to stay small, think small. But if you have a goal to build a 1000 units- better think big. Big money. Big team. Etc. But what do I know? Im a snowflake millennial POS!
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
8y
Originally posted by @Account Closed:

Jay Hinrichs they get it because it is the “easiest” play... but in all honesty. It is “easier” finding someone or firm with money, and no time to partner with... God forbid you split something with someone 50-50 for all of your “hard work” etc. Lame. Pay your dues. At 26 yrs old, even I know that s”””.
Also if I might add. In my opinion- if you want to stay small, think small. But if you have a goal to build a 1000 units- better think big. Big money. Big team. Etc.
But what do I know? Im a snowflake millennial POS!
and your group is all going to be life long renters because you don't want to won real estate and you want to live down town walk to the pubs and resturants.. at least that what people think these days.. and I am sure for a time.. but then life happens.
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Anthony Wick
Rental Property Investor · Ankeny, IA · Member since 2017 · 2k+ posts · 3k+ votes
8y
Educate yourself and stop being a “victim”. Was it the banks fault people bought a house with zero down, interest only loan, knowing full well they couldn’t pay the principle after 3 years? If you borrow $100 from your friend when you know you’ll never pay him back, is it your friends fault, and are you the victim? Without banks I wouldn’t own cars or houses. Forgive me Dave Ramsey, but paying cash for everything is a pipe dream to most people. I don’t want to save 20 years to own property. And I’ll take all the loans I can get at 3-4% interest. Banks can be your friend. Just stop blaming your friend for your poor choices.
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Ray Johnson
Irvine, CA · Member since 2016 · 545 posts · 614 votes
8y
@Benjamin Maciel I love the big banks, they do more for me than any regional/local bank or credit union could ever do. I have my financial life together so I've only had amazing experiences with the major banks, they seek me out offering assistance and services for deals. The best thing about dealing with the major banks is how easy it is to make money off of them. Everytime a major bank gets hammered on the market and the stock tanks, I buy blocks of the stock like I did with Bank of America at $10.05 per share, it's tripled in value, when Wells Fargo stock tanked I see the upside of the company selling a stock for $51 that will be over $80 in the next three years and these all include Dividends as well. Diversification is the key for overall success.
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Account Closed
OP
Investor · Portland, OR · Member since 2017 · 182 posts · 115 votes
8y
Jay Hinrichs and many can’t. Too much debt and self esteem issues, anxiety etc. Why do you think I am moving my business to manual labor and trades i.e home building, new construction etc. NO ONE WANTS TO DO IT! US Pop to double by 2050- Renters, Renters everywhere. But the problem will be the proletariat voting in pols that are anti-landlord. On your new builds do you do any type of Contract Sales post build? Big down payment, foreclose in 4-5 yrs repeat? No maintenance?
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Ryan Proffit
Saint Joseph, MO · Member since 2018 · 401 posts · 244 votes
8y
What's up Benjamin? I am from St Joseph and just getting started. Fortunately I already have some banking contacts here in town.
1 Reply
Mark H.
Investor · Grapevine, TX · Member since 2014 · 88 posts · 75 votes
8y
Great thread! I hits the nail on the head, and in my opinion applies not only to banks but other businesses as well. To make progress and make bigger things happen, I should not nickel and dime with others, instead focus on the bigger question - WHO can help me achieve my GOALS. Here are three examples:
I used a mortgage firm with very low fees, but when I tried to cashout refi quickly for upcoming auctions, they were terribly slow and I missed three auctions - so it cost me a fortune in lost deals. After that I found another mortgage firm on BP that is investor-friendly and closed very fast on loans, I was happy to pay them 2k more in fees but in return made it to an auction and made another 60k profit!
Back in 2010 I placed low offers on fantastic foreclosed properties and was obviously rejected. Agents thought I wasted their time, and I lost great long-term rentals. Once I placed higher offers and closed on deals, agents were happy to bring more deals to me.
I also looked for a PM that fits my requirements and worldview rather than the lowest management fees. I pay a few more dollars in monthly fees, but my PM brings profitable deals to me that are off market, from other investors she knows.
I also agree about using local banks and spreading my eggs in more than one basket:
When I decided to target cash auctions, I went to a national bank and asked to open a line of credit, assuming they would gladly approve it because of my high credit score, fantastic credit history and because I used to deposit all the money from my consulting business and RE rent at that bank. The loan rep looked at me and quickly said "sorry, nope, we will NOT offer you that product!". I was puzzled, so I replied back "OK, if I'm not good enough to lend money to, then I'm not good enough to deposit my money here either". I proceeded to open new accounts at 5 local banks, shifted all my business and rent deposits to them, and they were VERY happy to open 5 lines of credit for me. They charge me higher rates and fees, but they helped me reach my goal - expand my portfolio with profitable rentals.
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Account Closed
OP
Investor · Portland, OR · Member since 2017 · 182 posts · 115 votes
8y
Awesome Story Mark! CHEAP is a very expensive word my friend. Learned that the hard way a couple yrs ago on a deal--- lesson learned Yes? Yup.
0 Reply
Account Closed
OP
Investor · Portland, OR · Member since 2017 · 182 posts · 115 votes
8y
FOR THOSE W/O EXPIERENCE--- WHY NOT JUST BUY A HOUSE WITH YOUR FHA? AND START THAT WAY--- IN 2-3 YRS OF REPEATING YOU WILL HAVE YOUR "EXPIERENCE." I BOUGHT AN OFF MARKET 4-PLEX 4 YRS AGO, IT GOT ME GOING AND I LEARNED MANY LESSONS ETC.
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
8y
Originally posted by @Account Closed:

Jay Hinrichs and many can’t. Too much debt and self esteem issues, anxiety etc. Why do you think I am moving my business to manual labor and trades i.e home building, new construction etc.
NO ONE WANTS TO DO IT! US Pop to double by 2050- Renters, Renters everywhere. But the problem will be the proletariat voting in pols that are anti-landlord.
On your new builds do you do any type of Contract Sales post build? Big down payment, foreclose in 4-5 yrs repeat? No maintenance?
NO need to we cash out within 10 days of CO .. I reserve the loan to own to those who say they are helping the poor people when in fact they charge them more make them maintain the home then rip it away.. not a fan.
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Account Closed
OP
Investor · Portland, OR · Member since 2017 · 182 posts · 115 votes
8y
Originally posted by @Jay Hinrichs:

Originally posted by @Account Closed:
Jay Hinrichs and many can’t. Too much debt and self esteem issues, anxiety etc. Why do you think I am moving my business to manual labor and trades i.e home building, new construction etc.
NO ONE WANTS TO DO IT! US Pop to double by 2050- Renters, Renters everywhere. But the problem will be the proletariat voting in pols that are anti-landlord.
On your new builds do you do any type of Contract Sales post build? Big down payment, foreclose in 4-5 yrs repeat? No maintenance?
NO need to we cash out within 10 days of CO .. I reserve the loan to own to those who say they are helping the poor people when in fact they charge them more make them maintain the home then rip it away.. not a fan.
GREAT!
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Kim Wendland
Rental Property Investor · Pflugerville, TX · Member since 2017 · 37 posts · 20 votes
8y
Thank you! I needed that.
1 Reply
Spencer Hilligoss
Investor · Alameda, CA · Member since 2016 · 132 posts · 170 votes
8y
@Account Closed love your input on how banks can/will change over time

My big learning about banks relates to knowing what TYPE of bank you are partnering with, before you move forward.
If you want flexibility and open-mindedness from your banker... it's really up to you as the operator to vet the bank for these characteristics. Things like entity-deeding after closing can be painless and quick if you partner with an investor-friendly bank.
If you end up going with a big bank that primarily tailors to conventional consumer loans... you'll get buried in bureaucracy and it will slow down your deal; but, to reiterate the key point - don't head into the relationship expecting the bank to act like something they're not.
For the curious folks on this thread: I wrote a ranty two-part post a while back, outlining the big-bank double-deeding process, in detail. Check if out if you're considering working with a big bank because they offer an interest rate that's 10bps stronger than that amazing credit union you're talking to with nominally higher debt pricing
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William BrownPro Member
Wholesaler · Los Angeles, CA · Member since 2016 · 276 posts · 181 votes
8y
Banks aren't tangible or real, it's the people inside them that make it run. (duh). I find that in any interaction with bankers, it helps me to visualize them as a robot that speaks a different language than me--numbers. Tell a story with your numbers, build credibility with your track record of numbers, and lay the vision for them in terms of numbers. Yes, they are people. But they likely aren't driven by the same emotions we are, therefore they are robots.
Developing relationships with these robots is key, but you can't build it on emotion and small talk. Build a relationship on numbers.
Speak their language and just remember that if one robot doesn't get it or like your numbers, there's another 100 waiting in line to beep and boop at you.
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Kat Mak
Member since 2017 · 2 posts · 0 votes
8y
Much of the frustration with "banks" come from their having to comply with "Dodd Frank" legislation that doesn't recognize depreciation as simple accounting and only looks at the taxable income, not the free cash flow, on a property.
Dodd Frank is a monster that needs to be shot to death. The sooner the better for real estate investors.
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David Hildebrandt
Cincinnati, OH · Member since 2016 · 146 posts · 104 votes
8y
@Account Closed the jist (spelling?) of the book is utilizing a high cash value life insurance policy that earns a constant rate of return and grows tax free to borrow against for large purchases. This strategy has its proponents and detractors, as any strategy does.
1 Reply
Account Closed
OP
Investor · Portland, OR · Member since 2017 · 182 posts · 115 votes
8y
David Hildebrandt I just heard of this last week. I will be honest and upfront... unless you want to do 1 deal a yr... that isn’t going to work to becoming a mogul—- but you can be a rich 60 yr old utilizing that strategy.
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David Hildebrandt
Cincinnati, OH · Member since 2016 · 146 posts · 104 votes
8y
I definitely think its a process. But I plan to contribute to life insurance anyway as an alternate way to transfer wealth. This is by no means a replacement for continued investing, but a way to build a bank to borrow against that grows tax free for the long term.
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Chris MasonPro Member
Moderator
Lender · CA · Member since 2015 · 9k+ posts · 10k+ votes
8y
Originally posted by @Account Closed:

I hate to be negative but how many billions in fines do banks have to pay for ripping off their "partners" before those partners should start thinking negatively about them?
My sister still hates Wells Fargo even after they had to give her a free house and hundreds of thousands of dollars in legal fees.
They admit to having millions of victims since then.
Their own advertising admits they have had a problem with how they acted.
Wells Fargo is a bit unique... they get fined/penalized so much that they evidently turned their restitution payments into a formal first time homebuyer down payment assistance program. Typically such restitution is a one-off, so it's rare to have systematized it... it's like getting so many DUIs and speeding tickets that you have a "system" for handling the penalties. "Lift" if you want to google search it. Here's the Bay Area example.
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