All Forum Posts by: Allen Fletcher

@Chris Weaver the first thing you want to do is prepare an investment package. Create a report that outlines in as much detail (these are good) as you can get and then add account statements, tax returns, etc. Your goal is to answer as many questions that a loan officer may have in as efficient and professional a manner as possible. Then you go out and talk to local banks. The worst they can do is say no, but you may be surprised at how well you are received when you come prepared.

Good Luck,

Allen Fletcher

@Camille Joos-Visconti a good rule of thumb when dealing with personal and business property is to never mix them. When it comes to legal issues you want separation between personal assets and business assets. If your business gets sued the separation you maintain between business and personal property will protect your personal property from the lawsuit and vice versa.

I would bundle your personal residence with your personal vehicles and bundle business vehicles with business properties. Otherwise you are asking for trouble.

Good luck,

Allen Fletcher

@Kenny Lewis when you refinance a VA loan it is important to ensure that you have at least 20% equity in the property. One of the nice things about the VA loan is that you are not required to pay Primary Mortgage Insurance (PMI), when you refinance the loan you may have to start paying PMI unless you have enough equity (or put down enough cash to create the equity). PMI can be expensive and will definitely eat into your cash flows if you are going to rent out the refinanced property.

I hope this helps some,

Allen Fletcher 

I wanted to thank everyone for the comments and advice. I was able to get the house posted as a short-sale and it has closed. Talk about a lot of trouble.

Ashley,

It never hurts to go and talk to a bank about a traditional mortgage. I would gather some paperwork (i.e. most current account statements, credit reports, etc.) and go talk to a couple of different banks. If you do decide to try this ask to see a senior loan officer, they have the experience and authority to give you an idea of whether or not you will qualify and be able to give you a ballpark on rates. If you are worried about having too many pulls on your credit report do not authorize them to pull it until you decide you want to really apply. When it comes to financing never assume that one route will not work until you have tried.

Regards,

Allen

I am active duty military and thus move very often. Due to this I have decided to go into real estate using a partner that is located where I want to invest and does not plan to move within the next 10 years. I have found a partner and we are trying to work out the agreements and legal documents that will allow us to invest without legal issues. Here are a few of the highlights from our partnership structure:

1) Business is an LLC with a differentiation between partners and investors written in

2) Plan is for my partner to run operations and I will run the financing side of the business

3) We are looking primarily to fix-and-flip, but we are open to buy-and-hold if we find a good deal

Does anyone have any pointers on what I should bring up in our meeting with our lawyer?

Regards,

Allen

Thank you everyone for your replies. I took your advice and offered a sweeter deal and it turns out the renter could not qualify for the price we agreed upon.

I have put the home back on the market and hope to sell it soon.

Purchase Price: $ $265,000

Equity: $18,000

Current Appraised Value: $280,000

Square Footage: 2150

Mortgage Payment: $1,745

Property Taxes: $449.14

Insurance: $44.17

Current Monthly Rent: $1,250

Backstory: I was forced to move from the home due to a change in my employment and could not sell the home before moving.

Current Situation: The current tenants were planning on purchasing the home in December, but have now changed their minds.

Desired Outcome: Have the home sell as quickly as possible. I do not want to rent it, but if I cannot sell it I would accept a renter to reduce my out of pocket expenses.

Does anyone have any ideas or advice to what I can try to either get the home rented or sold as fast as possible?

@William Hepner,

Thank you for the warm welcome. To answer your question, it all depends on what your investment goal is. If you are putting this money away for a long period of time (like retirement savings) then you want to put that hard earned cash into an index fund using a dollar cost averaging strategy. This will be the best way to build a large retirement nest egg without taking a lot of your time. Using a speculative approach has the ability to increase your profits immensely, but you will end up paying a lot more fees and spend a lot more time doing securities analysis. I prefer a mix of the two, but that is because I enjoy spending a couple of hours a week doing securities analysis looking for the next hot stock.

The advice I generally give to clients is to stick with a passive-index fund investment strategy for most of your investing and if you would like to try your hand at a little speculation use no more than 5% of your portfolio to do so. This system allows you to "play" the market without risking your financial security after retirement.

If you are planning on investing money for the short-term (building cash for a purchase within the next 5 years) then speculation is out as a strategy and so are many index funds, but there are some index ETFs that will help you get a return while keeping your principal relatively safe.

I hope this answers your question, if you have more please ask.