All Forum Posts by: Dustin Lyle

What will this do to the commercial loan products? Will they be cheaper as well?

Mike,

yes, but keeping in mind that an investors goal is to grow their portfolio, The equity base in one piece of property (the 200k ARV) could in fact give him the power to leverage more properties that have higher individual NOI's, utilizing that properties equity base makes it a winner, not a loser. At the same time that property could be on the market, eventually turning that equity into cash right? Keeping the overall average NOI as high as possible is what it's about isn't it?



Who said he's ONLY buying properties at the 100's mark?
70K could in fact buy 3 properties free and clear that could produce 450-500/month each, (in my area at least) And with those purchases, hes gaining 30-35K in equity, each. (assuming he found the right deals)

This scenario is made in the best of conditions with no mistakes BUT, it's leaving his portfolio with a sound 120-135K in equity, FOUR income producing properties with a monthly mortgage under 1000 bucks. Plenty of room to grow. :lol:

Dustin

Carmen,

I don't think this is a good deal.. A few reasons why.

1) After rehabbing and closing costs, you are well OVER fair market value.

2) The bank holds no prejudice as to who gets the property, Why would they wait for you if they have "multiple" offers on the table. What their doing is making you feel as if you have no room to negotiate.

3) At 600K+, your borrowing power on that property on a 800K ARV is pretty well spent.

I would like to know more on the deal...
When was this ARV derived, or the last appraisal done?
When you say that you will be breaking even or out of pocket some, Did you calculate ALL expenses? PITI, vacancy, as well as Maintenance?

Good Luck,
Dustin

I do appreciate everyone's involvement in this thread as it has answered alot of questions I had on the subject..
Thanks!

Dustin

Thanks Andrew!

I have been thinking about the best way to go about doing that... I was thinking about driving somewhere, with a folder full of contracts :) My approach would probably be to contact possible buyers and title company FIRST, let them now what I'll be doing, and ask if they want to be considered, if I have a deal.

Hows that sound?

Thanks again,
Dustin

Tyler,

I'm going to have to disagree with Mike on this one. Building your equity base is the quickest strategy to cashflow down the road. And YES, I personally think that buying more properties with that accessible money is best. 70 K could easily get you 2 or 3 "earners" F&C, which should cover the total 170K loan payment, and lower your probable vacancy rate. But just imagine, you buy 3 properties at a moderate discount, say 20K each with individual FMV's of 35K.. you now have 305K worth of property and owe 170K, and still a great deal of borrowing power. I like how this is lookin for you..
Good luck,
Dustin

Withdraw from the card or from your account? If you close the account (ie. withdraw your money) you will have VERY harsh penalties. And if you spend the 5K.. Well, You now owe them 5K plus interest, plus over the limit fees, (because they will have a monthly fee on top of your finance fees), AND a new APR somewhere around 28.9%.

Your best bet for something like this is to get a CD for 5K... Then get a secured loan against the CD.. The finance rate will be between 1and 2% of what you are gaining from the CD.

There are a lot of good things about this, here are a couple.

1. If you set it up on an automatic payment, they cut the finance fees.

2. Most banks report payment on this loan to credit agencies, hence, building credit FAST. This shows possible credit vendors that a) you have something to loan against, and B) you pay on time.

Good Luck,
Dustin

Good job!!!

Thanks everyone!!

Not at all... A score check is a "soft" inquiry... As opposed to "hard" inquiries if you where applying for credit etc..

Good luck,
Dustin