All Forum Posts by: Joe Smith
Joe Smith has started 19 posts and replied 73 times.
Post: cash out restrictions on refinance
- Akron, OH
- Posts 77
- Votes 2
OK, well that makes some sense. So it sounds like if the cash was going right to a new purchase, rather than the owner's pocket, it's more likely to be approved, since, technically, the original $500k is still "in" the property, although it's now in the new one, but, not in their pocket, so the incentive not to default is still there...is that more or less it?
What it sounds like, though, is in that situation I couldn't just say "well, I want to take a million cash out 'in case' I find a new property?" I presume you'd have to find the property first? Or - would they actually "watch" the borrower to make sure they used that amount of funds or more within XXXXX amount of time to put down on a new property?
Post: Is it still possible to get really RICH
- Akron, OH
- Posts 77
- Votes 2
Originally posted by Charles Perkins:
http://www.plantingdollars.com/personal-finance/being-rich-versus-being-wealthy/
Someone who is wealthy has accumulated a certain amount in assets. Often this is done with leverage and is not something that happens over night.
On the other hand it is quite possible for someone to become rich overnight. Being rich is more of an assessment of where someone is at today. Someone in the 99.9% say earning over 2 million per year is certainly rich and might become wealthy if they handle their finances well.
You may find this interesting as well:
US Income curve
http://economix.blogs.nytimes.com/2011/05/24/where-do-you-fall-on-the-income-curve/
To me it is very arbitrary to assign a certain income level or accumulation level and say that is rich or wealthy. There are certainly those that make a substantial amount of income every year that accumulate nearly nothing. In the eyes of the public they may be rich, but hardly rich in substance IMHO.
For me, I want to accumulate enough in assets (liquid and otherwise) that a job is not necessary to take care of myself or my family. That doesn’t necessarily equate to living on 50K, 100K or 200k/year in income. It can mean living on much less and having wealth that can be easily converted to cash when needed.
Do I consider my self rich or Rich Weese ? No. I do feel comfortable and I could live off my real estate assets, but choose not to. I have developed a practice that I love and I have not tired of investing in real estate.
Rich means you MAKE a lot of money. Wealthy means you HAVE a lot of money.
All wealthy people are rich, but not all rich are wealthy.
Post: Is it still possible to get really RICH
- Akron, OH
- Posts 77
- Votes 2
Originally posted by Joseph M:
Getting and working at a good job isn't the path to wealth, but unfortunately everyone believes it is because that's what is told to us from the time we are young. The other thing is these high paying jobs especially usually require a lot of your time..over 40hours a week. So unless you really love it ,and would rather work your job versus anything else...then you still might be money rich , but time poor.
I think most people would rather have time versus a BUNCH of money.
For example would you rather make like $100,000 a year and have most of your time free or
$200,000 a year but have to work 60 hours a week...
I'd rather take the $100,000 and a bunch of free time..
of course these are hypothetical situations , but still.
Here's something I think about. I have 2 small children. IF by some chance, 10 years from now I manage to make enough money in my Real Estate investments (and whatever else) and achieve enough semi-passive (it's not REALLY "passive") income to quit my "day job" - how do I explain to my then-teenage sons why I expect them to go to college and get a job when, from what they see everyday, I don't!!
I *hope* to have this problem, by the way... :)
Post: Is it still possible to get really RICH
- Akron, OH
- Posts 77
- Votes 2
Originally posted by Jason S.:
Originally posted by Andrew Jones:
I can assure you, this number will change.
I've had $10k a month in income, and, while it's not poor by any means, it's not as much as you think it is, either.
Post: cash out restrictions on refinance
- Akron, OH
- Posts 77
- Votes 2
Originally posted by Dion DePaoli:
Commercial lenders will not let you, the owner, cash out your skin in the game so when you add all of it up, generally speaking there is not normally a tremendous amount of equity to cash out. If you are in for 10% and you owe 60% then your limited by what equity the bank wants you to keep in the property as first loss.
OK, I can understand that. So, basically, in THIS situation:
Bought for $2,000,000 with 25% down ($500k)
Appraises at $4,000,000 (unlikely these days but humor me)
Loan has been paid down to $1,289,000
So, the only cash out that one could get is the difference between the original loan and the current balance, regardless how much equity is there now?
Original Loan $1,500,000 - $1,289,000 (ignore closing costs, prepay etc) = $211,000
Or - do they take the max allowed LTV, and subtract the initial "skin" like so:
[i]Max LTV 70%
$4,000,000 * 70% = $2,800,000
Minus original down $500,000
Max cashout loan amount $2,300,000 - $1,289,000 = 1,011,000
[/i]
Now, are there exceptions to this "cashing out your skin" rule in the other situations, say, you want to rehab the building, or, cross collateralize w/a new purchase, or does that original amount ALWAYS have to remain in there?
Wow...no wonder commercial is so much more complicated!
Post: cash out restrictions on refinance
- Akron, OH
- Posts 77
- Votes 2
How about if used to grow via buying more property?
Post: anyone heard of this company?
- Akron, OH
- Posts 77
- Votes 2
Commercial/multifamily lender FYI.
Post: cash out restrictions on refinance
- Akron, OH
- Posts 77
- Votes 2
Since I as of yet do not have any commercial property, this is nothing more than morbid curiosity...
...I've heard that cashout on refi's in the commercial world cannot exceed 20% of loan amount regardless of LTV. Is this true, or is that only on certain loan products?
Post: anyone heard of this company?
- Akron, OH
- Posts 77
- Votes 2
I'm not sure if they're an actual bank, or a broker, but this company looks like it has good stuff:
www.commercialbanc.com
Anyone heard of them?
Post: Question about leveraging existing rental properties
- Akron, OH
- Posts 77
- Votes 2
Agree with Brian - you have to stick with local/smaller regional banks and lenders. The big boys, and brokers, mostly deal with Agency loans (fannie, Freddie, etc) that absolutely will not bend on lending only to individuals. It doesn't matter how profitable the entities are. Few lenders have ever done it, but even fewer now since a HUGE number of investor foreclosures have been in "entity vested" properties.
As far as loan size, ditto. Also try credit unions.