Lending Club funding source

[Thomas St John]

Hey everyone, I just wanted to leave a quick post regarding Lending Club as a means to fund a deal. If you haven't listened to the BP podcast with Dawn Anastasi's, I highly recommend it. I recommend reading her posts as well, they have been valuable to me. I borrowed $18,000 to buy a rental property in Toledo, OH and am renting it for $700 per month. My market is similar to Dawn's in Milwaukee where these types of opportunities are plentiful. These are not war zone areas, rather lower middle class areas that still rent extremely well. Its a 5 yr loan and the house will be paid off. It is not a home run as far as my cash flow for these 5 years, in fact, I know a lot of people will think this is a bad move. But quick and easy money from Lending Club and a free and clear house in no time is a success for me. Thoughts and questions from anyone are welcome

[Jerry W.]

@Thomas St John I am going to have to disagree with you on your description of your rental purchase or of your math. You bought a house for $18,000 and rent it for $700, that is is not just a home run its a grand slam bud.

The 2% rule means you should be getting 360$ a month in rent you are double that. The 50% rule says you pay 50% of your rental income in repairs and expenses then your other 50% needs to cover your debt and put money in your pocket.

While your paying $480 per month for payments and insurance you are doing a 5 year loan, not a 30 year loan. Your mortgage payment if you had a 30 year note at 12% would be about $185 per month which would mean about a $165 per month cash flow. Since you have a 5 year note your payment is higher but your deal analyses very nicely.