All Forum Posts by: Brant Richardson

Does the bank have an issue with your debt to income ratio?

Taking on more debt from a HELOC to use as a down payment to allow you to get into more debt could raise a risk flag. Perhaps you could do a cash out refinance on your home and get the cash that way.

Somebody else can probably explain it better but this is basically the reason banks give me that they can not make too small of a loan. There is a certain bare minimum cost to originating a loan which does not go down lower even as the size of the loan gets smaller. However there is a maximum that the bank can charge that keeps going down as the loan gets smaller. Below a certain point, if the bank charges enough to make a profit, then they are charging more than the maximum and are a "predatory lender".

I have talked to a lot of lenders in KC and found that most were not interested in going under 50k. I am currently using Wells Fargo, my loan officer said there in no minimum. My loans are in the low 40's.

Feel them out a little with questions like "Why do you want to sell this property?". Answers like "I inherited it, I don't know anything about the area, I can't rent it, the tax and mortgage are eating me alive, I just want to get out of this." gives you a clue as to how low to try with out offending them. Do your best to help them out with some options so they see your not just a slime ball trying to snatch your property. You could ask the seller what they think its worth to try to get a number on the table to start working around instead of a blatant how low will you go.

You are absolutely right, the gift to gab is a huge asset in this part of the business. You want to be a likeable personality that they feel good about giving the property to. A lot of people recommend making cold calls until you feel comfortable talking to people. Then when a motivated seller calls you, you're ready for it.

Have you been listening to the podcasts? Check out 70 and 71.

I'm up in Santa Barbara where the rental rate to purchase price ratio is at least as bad as San Diego. I started investing in Kansas City last year and haven't looked back. It was tough for me to make that commitment because I can fix just about any problem a house has. Since you are already and out of state investor in Arizona it might be easier for you. SoCal is mostly a flipping or pray for appreciation game. If you go inland you can get some positive cash flow but not like the Mid West.

Accidental post.

KC is a great market for buy and hold. You might want to consider flipping for capital but always with an eye out to pick up a great buy and hold when it pops up. The two strategies go together quite well because you have everything in place to find and rehab your buy and holds.

Welcome to BP. Read the beginners guide and listen to all the podcasts.

What's the least you'll take for it? - Offend them and they will give it to somebody else, anybody but you.

I have no experience with doing subject too but maybe I can be helpful with this observation. You have no clear question stated or information about the deal.

I'm surprised internet sales have not popped up more. Read "The 4 Hour Work Week". The author describes automating a business, in his case diet supplements.

Do you want 10.3% interest on your money which could end at any time, 4 year maximum, starting off with -$1000 + fees?

Or do you want to buy a piece of real estate?

@Andy Gross

At this point the bank has determined to lend to Garrett with the belief that he can cover his mortgages with his employment income alone, no help from his rental income needed. So including rental income he should be in pretty good shape to handle a vacancy or two.

Ned Carry has a good point, that two year waiting period gives you some forced waiting time that you might as well spend being patient looking for a great deal. I am also considering flipping one during this time to get a little more cash on hand for when my debt to income ratio jumps up. My model would be to sell the property as a turnkey so I can collect rent until it sells.