Critique my thinking

[Adam Gerig]

I am in the process of wrapping all my mortgages and notes on the properties I own into one. The bank is going to give me a 15 year note fixed at 4.75% interest and it will save me about $30/month and 8 years on the notes I have outstanding then what I am doing currently.

Now obviously I can't foresee the future, but after thinking (not long and hard) my thoughts are why not once these are all paid off then go back to the bank and assuming interest rates are 10% at that point take another loan against the properties pocket some of the money and then use the other to purchase more properties? Again, it's a theory and nothing I have done I just would like great minds to come with comments on what they would do.

I suppose the purpose of this and in general is to use other people's money and keep mine in my bank account lol. So, do you think this is a viable strategy or not? Why?

Also, I guess to put another kink in this discussion I do have access to private investors who are willing loan at between 8-10% interest. How would that affect if it was you if at all? My thoughts are that with my current strategy and the properties I am picking up I am getting them at around 60-75% ARV fix-up included so for me I think that I can get a private investor aboard for 1 year or less give them 8-10% interest and then have the bank go out appraise it and give me a loan for what I owe the private investor for his time in the deal. He's happy because he gets a great return on his money and I'm happy because I got the deal without any out of pocket expenses. Sorry for writing a novel it's my fatal flaw!

[Bill Gulley]

Thanks...

A release fee can get complicated, sorta, as it could be viewed as a weighted average of the various loan to values to the outstanding balance and doing so could mean that to payoff a lesser property could require more than the sale price!

Another way is to use a set ltv to each property as if the note contained several notes, an assigned value to each property, best for you and simple. This is what you need to ask for a written LTV assigned to each property and the outstanding principal reduced as a % of each payment.

Don't know if you can attach a letter to a PM, but if it's not in pdf, be happy to look at your committment letter, fire away...