Securing Credit for New Properties

[Chris Rhodes]

Hello All,

I'm a newb here so please take it easy on me. I'll give you a little background and get to my point.

First of all, I live in WV, probably the most conservative bank lending state in the country, a good reason why our housing market never seems to swing either direction. I am trying to figure out how to get myself to look better to local lenders when a deal becomes available. I am not sure if I need to set up a company to do this or if anybody has some better ideas.

My credit score used to be around 720+, I say used to be because I purchased a few properties and now the lenders say my debt to income is way to high. Now my credit score has dropped to the 640 range.

I own a very nice townhouse that I used to live in. I purchased the property for $73,000 and put another $5000 out of pocket into it upgrading flooring, appiances, bathrooms and so forth. I did all the labor myself so I saved quite a bit of money. The property appraised for $89,000 when I was finished. It is a 3 bed 2.5 bath townhome. I ended up borrowing $14,000 on a HELOC to purchase a 3 bed 1 bath home. $14,000 was the purchase price. I put another $2000 out of pocket into this home, once again doing the labor myself, and now get $500 month in rent.

The wife and I had another child so we needed a 4th bedroom. We are now renting the townhouse for $700 month. We purchased a lot, thinking we would build a new house, for $26,000. We decided to wait on building a house and found a steal on a 4 bed 2 bath house for $99,000.

Having said that, if you follow so far, here is what we have:

3 bed 2.5 bath townhouse: Currently Owe $65,000, 12 years remain on loan, plus HELOC $12,200 currently owed.
Rent $700.00 month

3 bed 1 bath house: Purchased with HELOC above
Rent $500.00 month

1 lot: Currently owe $23,000, 9 years remain on loan

4 bed 2 bath house: Owe $97,000, 29 years remain on loan.

I earn $84,000 year at my current job, wife earns $24,000 year.

We do have some credit card debt but all the banks say that part is fine, it's the mortgages that are killing the debt to income ratio. I am actually going to pay off the cc debt today with my latest bonus.

How do I make myself look more attractive to lenders? There may be serious investor types around but I haven't found a way to network with them. It seems this state has one or two big players in each market then several small potatoes like me. How do I become important and be taken seriously at the banks. Do I need to become an LLC or Corp with a big business plan in hand when I walk thru the door?

Am I off base in my thinking with my investments and incomes listed above? Does somebody need to give me a smack on the back of the head and say "you're doing it wrong?"