All Forum Posts by: Andy Collins

The issue I see with doing the cash out, is if you have more than 4 mortgages, you can't do a cash out refi (with conforming mortgages),,,I really hate to give up a mortgage with 4% locked in for 2x more years and go with a 6% locked in for 3-5 years,,,with interest rates having to increase over the next few years those low intererst 30 year mortgages are worth something

Try to call and set up a meeting (as stated above), if he/they don't respond to the phone call, send a letter.

In the letter don't get "hot" just say how sorry you are that the electrician is experiencing health issues, however the lack of completion of the job is causing you financial harm.

Give them 2 weeks to either finish the job or return your deposit to you.

Say obviously it is in the best interest of everyone to get the project complete by "xx" date, but if it is not, and the deposit (s) aren't returned, it would force you to take action to protect yourself financially for further loss.

If you have an attorney that does any work for you, copy him on the letter (ok, you don't really have to copy him, but it looks better if you have copied an attorney,,,,but don't "copy" an attorney that you don't know, if there is that 1% chance they call the attorney (they won't) you don't want him to say "who is that"

Send the letter certified,,but again, try to set a meeting first,,and have the letter ready to give him during the meeting depending on how the meeting goes

andy

I backed out of a hud deal as an investor because someone vandalized the house, cutting all electrical lines in the attic and some plumbing lines,,,after month HUD finally agreed to give me half of my EM back,,,I have been told i was very lucky to get half back,,,its obvious it was vandalized, which is why i probable got them to give any back

no, the last time my umbrella came up for $3M in coverage it was about $290 per year, total,,,now all of my properties are held in my own name, no LLCs etc

Call the agent you use for everything else,,the price for a $1M umbrella is very low, probable $100-$200,,,they maybe have to change the coverage on some of your current liability to match the umbrella, so I've always found its easier to use the same company or at least agent

Wow, reading this thread makes me happy I'm in Dallas,,the numbers Cuong Le gave are just about exactly what I would have said,,,,my last total AC/Heat job was about $3700 (including a little bit of duck rework),,,,,maybe I'll fill a truck up with stuff and drive to CT

Larthsa,

To figure cash flow, you list all of the monthly expenses, Principal and interest, taxes and insurance, add in any utilities, HOA fees, etc,,,then you need to figure out a fair figure for "reserves', this is a hold back amount for the hot water heater breaking etc,,,then figure in a percentage for vacancy (most will use around 5% if its easy to lease) if your going to have a management company manage, their fees,,then add,,,take the final figure and take it from your monthly rent, and you SHOULD have your cash flow (if I missed anything anyone please chime ini)

If you want to figure your "cash on cash" return, figure out how much you will end up in the deal for in cash (deposit, rehab, closing cost paid in cash etc, all expenses you will pay in cash), thats your total "cash" in the deal,,now see what your annual cash flow from the property should be, divide that by the cash you have in the deal, and you should have your cash on cash.

You can do this with a simple spreadsheet, it makes it very easy to look at deals, but remember, these numbers are only right IF the estimates you put in are right,,,including the anticipated rent,,too many new investors tend to under estimate expenses and over estimate rent.

andy

Logan,

Everything Darrell said is true, I follow credit closely and spend time on credit boards,,,there are companies that will offer to sell you 'seasoned corporations" with great credit,,,it just doesn't work that way in today's environment.

Banks will only lend money to people/companies they can show can pay back the loans (by law),,,work with a mortgage broker, hopefully one that does hard money and traditional mortgages, have them look at your credit situation and develop a plan to be able to move forward,,,credit can be destroyed quickly, but takes time to establish.

andy

Gus,

You will find much discussion on these boards about buying in your personal name and then transferring to an LLC,,but first let's look at you, why do you not want the property in your personal name?

There are "due on sale' clauses in mortgages that a bank could use to call a note due in such a situation, I have heard of few that do it,,but I normally keeping up to the max of 10 properties (because thats the max for conforming mortgages) in your personal name. If you are worth Tens of Millions, that might not be the right case, but for the normal person, an umbrella policy on the properties of a few million should take care of the liability.

If you are managing the property yourself, an LLC won't help you much, but if your a truely silent partner (normally this applies to multi-family) it might work.

You could use hard money or private money to help you buy the properties (with a good percentage down and your background many hard money lenders would work with you)

You want the hard money deals to not be too high, and you need at least 12 months. You can buy the properties, rehab, fill them up and manage, while your in hard money you won't be making much in the way of cash flow, but it gets the property (s) and you can spend that time rebuilding your credit.

This gives you a chance to look for really good deals and when you find one 'pull the trigger' and get things going.

Just keep moving forward with getting your credit cleaned up, you can qualify for a traditional mortgage with something like a 660-680 (again, I think, talk to mortgage broker) for your first 4 mortgages,,,after 4 it goes to a 720 mid score requirement