All Forum Posts by: Andy Collins

12 months of reserves is a bit high, normally mortgages 5-10 require 6 months of reserves for PITI for rental properties (not your personal residence),,but every lender has their own underwritting guidelines.

Your not going to get 4% on a commercial loan, maybe around 6% if your really lucky.

What the bank told you was your credit score was too low and your DTI was too high,,,now that the properties are leased you can make a big change in your calculated DTI, but that score is going to hurt you.

Talk to a good mortgage broker, they can usually help you figure out what you need to do to your credit, or refer you to a professional they know.

I study credit, I know how important it is to my investing and recommend investors learn more about credit. Know what you should be working on long term to get your score up, if your going conventional financing and you have over 4 mortgaged properties you will have to have a 720 mid score.

Whatever you do don't go and 'forget' a property going conforming,,they will find it,,ask me how I know (LOL).

andy

I'm in the process of buying a short sale right now, i haven't bought one in a few years,,,of course its taking forever to get bank approval (but is suppose to close next Friday,,,yea sure)

I had a short sale take about 3 months a few years ago, but it was one of the best deals I've done, so I learn the waiting is just part of it.

andy

Spend less time worrying about "mission statements" more time working on goals,,,I don't have a "mission statement", but I do have a written set of guidelines of what I'm looking for in a house, what area I am willing to invest in,,,and why.

I'm not a wholesaler, I buy and hold, I have a defied "mission', but don't really care much about something 'flowery' for others to read.

I've been in business development in the media industry for 30+ years, I bet i haven't read 5 mission statements in all that time,,,the few I have were in companies going bankrupt I was looking at buying, just to see what they thought they were going to do.

It's about action,,,the biggest problem for the first time investor is making themself take action,,,,is there a chance you will make a mistake, sure we all have that chance,,but it doesn't keep me from moving forward..

Execution is everything

andy

Your taking a short term problem, a vacant unit, and potentially giving yourself a long term problem (a tenant that doesn't have money).

Have you checked their credit and talked to prior landlords?

andy

Annette,

I'm not going to get into the 'mud slinging' going on here, but I will say, to imply in any way that someone is guaranteed to get their money back, is both illegal and immoral.

This doesn't make this a 'scam', I don't know if it is or not, but it is not a "guaranteed" bond as in being guaranteed by the government, and even those, aren't always truely guaranteed (just ask anyone holding General Obligation Bonds of Detroit right now, they will get some money back, but they will lose a LOT).

I will say again, if a bond is 'solid' or not has nothing to do with how much money anyone says they can make, it has to do with the company behind the bonds...I don't know anything about the company, but if the company is solid, and the business plan that good, they wouldn't be paying 14%,they would be paying closer to 6%.

Higher interest is based on more risk,,that is how is it and how it has always been,,does that mean people that buy 14% bonds never get paid, not at all, but they are much more likely to not get all of their money back or interest,,,that is not based on anything about you or this company, thats just businesss.

andy

In Dallas years ago an apartment in a war zone was renting out units, requiring more money if you were going to sell drugs out of the apartment,,,they not only threw the owner in jail (because obviously he was gaining financially by the drug selling since he was charging more), they took the apartments (it was 10-20 units)

If someone is doing something illegal in one of your rentals, and you don't do anything about it, you could be charged for being involved,,if you don't know, thats a different story, but if you know and 'look the other way', you are asking for trouble.

Jan,

I have granite in one rental, it was there when I bought the house. I haven't had a problem because of the granite, but of course that depends on your tenants.

I doubt you can get more rent because of it, however it might help you lease it faster and would help on resale.

I would probable stick to normal counters, unless you were planning on changing them out anyway

andy

My "day job" is working for a very small, private venture capital firm, basically I take my bosses money, and make more money with it, We primarily buy and sell media properties (mainly radio stations), but since we don't take any investors money, we could do any type of deal that we think would be profitable.

First all bonds are "guaranteed" to some extent, by the company that issues them. They guarantee to pay "x"% interest as described in the bond. Obviously this doesn't mean you will ever get anything if the company can't pay.

Interest rates are not determined by how much money a company can make with your money, they are determined by the credit worthiness of the company issuing the bonds. A company with stellar assets/credit, will pay a very low interest rate (length of the term of the bond also has plays into the bond rate.

There are plenty of 14% bonds available, in fact I think Clear Channel, the largest owner of radio stations in the country just refinanced some bonds that were coming due in the next couple of years that were paying around 10%, for bonds paying closer to the 14% but not due for another 5 or 6 years, this is because the feeling is they are a riskier investment than they were when the original bonds were issued. You have to be paid more in interest if your taking more risk of not getting paid.

If there were bonds that were "solid" that I felt would have a 99.8% chance of being paid back, and they were paying 10% interest, I would buy $100 Million worth tomorrow,,no question,,,however, you won't find a bond paying 14% that have an extremely high chance of being paid back (its not saying that it might not be paid back, but they are paying this because they can't borrow any cheaper)

Would I touch this,,no, I wouldn't even bother to look at it, I know the credit markets and anyone having to pay 14% interest isn't a place I want to invest.

I'll try to put it in terms most of us can understand, if I get 4 bids for foundation work on a house and they range from $15-$20k, and someone drives up in an old pickup, they tell me they just started in the business but they will fix it for $500, and "guaranatee" it for life,,,,,would I let them fix my foundation,,,I wouldn't, maybe you would

Don't go out and apply for several lines of credit at once, you will get hit with multiple inquiries (which have a small effect on score) but mainly your "average age of account" will get hurt, which hurts your score more (unless you have really long term good credit, which you may or may not.

A goodwill letter on the student loans is worth writting, your basically writting to the lender saying you made a mistake in the past, but have been current for 4 years, and now those late payments from 4 years ago are hurting your credit and your ability to buy a house, and ask that they remove those late payments from your credit report as a good customer. Sometimes with some lenders goodwill letters work, you never know until you try.

Building credit is a long process, but mainly you need new good credit reporting to "water down" those old late payments. If you had been making payments on 10 accounts for the past 4 years, the effect of those late payments on the student debt would be less.

As I believe @Michaela Graham stated, there are literally dozens of scoring methods,,what you are interested in is your FICO score, which you can buy from MYFICO.com,,,but even then, there are different versions of your FICO score, and of course 3 different credit reporting agencies.

Whatever you do, don't do anything until you have researched credit repair, Michaela was great to point out, just paying off an old late sounds like it would be positive,,but you have to do it right