All Forum Posts by: Alex Aronson

Here is what I am recommending.

Use your credit cards for the Down Payment if you can get a 0% or less than 5% balance transfer rate for upto 12 months. Once you get the property, refi with a conventional loan with cash out and pay off the card.

If you do not have enough credit line to do that, call and ask the customer service rep to double it. If they can't do it, ask for a supervisor and ask them. Also while you are on the phone with them, ask them about the balance transfer programs. Programs come and go all th time, so call back periodically. Most credit companies will increase your credit line every six months if you ask them to.

Also, pay attention to your bank statement closing dates. When you go to get your mortgage, they are going to want the last two monthly statements. If they see a deposit for 10K which appears to be not normal, they are going to ask where did that money come from. If you tell them its a balance transfer they are going to reject your loan application. So when you go to buy, you need to have two statemtents with monthly balances that include the 10K in my example, but no deposit to show for it,so that no flags are raised.

That is one why to do it.

Hello,

Does anyone have a recommendation of software or of a service that they use to evaluate the ARV of real estate?

I have heard of Courthouse Retrial System and Chandler Reports.

My current method of deriving this data is not easy and not always up to date.

Thanks,
:D

To guy who is buying a new condo,

GET IT INSPECTED! if you do not know what to look for. New does not mean it was done right.

Joe,

Here is what I recommend to do.

1) Establish credit history. To do this, get 4 credit cards, (American Express, MasterCard, Visa, and Discover only since they can be used to buy real estate if needed, stay away from Chase, HSBC, and store brand cards) with a limit of $500 on each. I would then go out and spend $100 dollars on each of them (buy some real estate books). Once you get your statement, freeze those cards in a block of ice so you will not use it. Pay off that purchase slowly so that you can start to building credit history.

With the credit crunch, if you can't get an unsecured card, then get a secured card (where you deposit the amount of the credit line with the credit card company) and then call in 6 months asking for the line to be switched to unsecured.

2) Grow your credit line.
Every 6 months, call the credit company and ask them to double the line of credit. If the customer service rep will not do it, ask for a supervisor and ask them (supervisors have more authority).

If you do that 6 times, your line of credit should be around $32K for each card or $128K collectively.

3) Keep working and saving cash, cash is king in the business and you will need it to get started.

4) Get a mentor (who can show you the business). Offer to work for free if it helps you get the experience.

5) Sometime in 2011 when your ready to make your first purchase, create a second checking account with your bank. Ask for one of those balance transfers checks where they are offering 0% interest for 6 to 12 months from your card companies. You want the balance transfer to be where you can cash the check at your bank so that you have cash to buy your first property. Then get it refinanced ASAP and pay off the cards.

The reason for the second account, is that when go to refinance, the mortgage company will want two months of bank statements. If they see a huge increase and then a large decrease, a red flag will be made. Thus, when you apply for your refi, use your original checking account to show your assets with. Beside, mortgage companies love seeing a checking account that has been growing.

By doing this, you are using other peoples money to buy with (which is what Kiyosaki says to do), you protect your cash for future use and you will be off to a great start.

6) Your first house, keep it small (-20 to +10 of the average price of the homes in the area). This is the range that most good renters can afford to rent with.

7) Use a management company to located, place, and collect rents with.

8) You want at a minimum, $200 cash flow per front door. When factoring in cash flow, take your rent, subtract the mortgage (principal and interest), taxes, insurance, and management company expenses).

9) Continue to read and talking to other investors.

Does a business line of credit ding my personal credit score?

Thanks in advance

Hello,

I just fired Myfreecreditreport.com because the credit scores were 40 points lower than actual. It was very embarrassing to go into a loan office expecting 700+ credit score financing and not being able to get. I have since started using the identityguard.com from Costco. The scores it provided were dead on with the credit scores shown to me by the loan officer.

The only problem I have with identityguard is that it updates your credit score only every 30 days, but then again, it cost less than $10 a month to use.

Does anyone have another service they use which offers weekly or better credit scoring updates?

What is your website? You aremissing a free chance to advertise right here.

I agree with Tom, your in a bad position being 15K upside down on house #1. Typically, to cashflow a property well, your loan to value ratio can't exceed 80%.

Since you are looking for answers and maybe someone guidence, I would suggest checking out hud.gov to see what the fair market rents are for section 8 housing. Section 8 rents by my observation are higher than standard rents for a home in a not so good part of town. In memphis, I have one home that can rent for $800-850 on the open market, but section 8 pays me $990 (god I love the government). If the math of the fair market rents justifies renting your own place, then get yourself and house #1 property qualified with your local housing authority before you go and dive into house #2. To become qualified for section 8 you have to take a 2.5 hour class and your property has to be inspected by the housing authority.

Let the numbers tell you what to do.

I have a property that I am considering to list as section 8. Can anyone out there share thier experience with section 8 tenants? What are the red tape and hassles that I will face with section 8? What the benefits or perks of section 8?

Thanks for sharing