All Forum Posts by: Jason Garrett

Thanks Clint. 

John, thank you for your comments as well.  Apparently hurricane insurance covers wind, and we did have some wind damage to include siding torn off and guttering bent up.  We also had giant trees blown over that took out the electric lines, tearing the mast and conduit right off the building.  So there is some that will be covered.  On a positive note, during a similar incident 6 years ago the city had issues in a different neighborhood.  The neighborhood found out that the city knew about the issue and didn't mitigate the risk.  The city settled out of court and paid for all damages, so maybe that will work out for us as well.  We will see.  This is going to be a tough issue for us, but we'll get through it.  We'll also be working with the SBA to get loans.  Has anyone every done that before?  Any advice?  Thanks.  Jason

Colleen, Mary, thank you so much for your answers.   As I learn more I will keep this blog updated.   Today we cut out all the drywall and removed the flooring so it could dry out and not grow mold.   Tomorrow we will engage the city to figure out what their plans for this area are.   It bothers me that they know about this problem that can jeopardize lives, yet they aren’t doing anything about it.   

I had two quads in downtown Pensacola. I had just rehabbed and rented all four of my downstairs units and was working on the upstairs units. Hurricane Sally destroyed them. I was not in a flood zone, so had no flood insurance, only hurricane insurance. The storm sewers could not keep up and six feet of water rose up around them. They are essentially uninhabitable due to a flood. Does anyone have any thoughts or recommendations? Does FEMA help with this or is it just SBA loans? If anyone has been down this road, I would appreciate hearing from you. Thanks, Jason

Fantastic, I didn't know that either.  So my creditors push the info to the credit bureaus instead of the credit bureaus pulling it from them.  Good to know.

Since you may know, I do have another related question:  You mentioned that every time I pay my mortgage, a new balance is reported.  One comment I notice on my reports says "The balances on your accounts are too high compared to loan amounts."  As I described above, I bought a condo in 1997 and paid it down to about $40,000 which meant I had a $93500 loan paid all the way down to $40,000.  When I refinanced it for a much lower interest rate earlier this year, it changed that loan to look like I had a loan for $40,000 and still owed $38,000.  Thinking it though, can refinancing a loan hurt your credit as well?  Jason

Steven, thanks for your comments.  Do you know if credit agencies take a look only once a month, or twice a month, or is it more random?  I seem to think they do it twice a month, but can't find anything to prove that.  I guess if there is one thing that I find very trying in real estate, it's patience.  I'm finding I want  things to happen instantly and they don't in this type of business.  Thanks again.  Jason

Kevin, thanks for the reply.  I'm glad I asked the question as I didn't know flucuations were so common.  I thought I was doing something wrong somewhere.  Jason

Jason, thanks for commenting.  I truth, I didn't know if I was unique in these large credit score swings or if I was doing something wrong.  I appreciate you telling me that you also see large fluctuations in your credit score.  I guess if others are able to deal with it and  keep buying, then so can I.  Thanks again.  Jason 

Thanks, good thoughts there. You may very well be right about too many credit inquiries. I'm tying to be very careful before I request any more loans. I guess they stay on about a year and then roll off, so yes, I think that is definitely part of it. A few months back I did notice they had a credit card on my file that I didn't own. I was impressed with how fast that came off and there was a pretty good boost there. Still though, the use of credit seems to be a big hit, yet it takes the use of credit (HELOC, etc) to do some of the stuff I'm doing. I feel like I'm missing something here. Thanks again Jay. Jason

For years I have had a credit score over 800.Now that I am investing in real estate, it is plummeting. I can’t find any articles or advice on how to preserve my credit score while investing. To understand what is happening, here is a brief description:

1997-We (my wife and I) bought a condo in Ponte Vedra Beach, Fl. We were in the military, so when we moved out, we just kept it and rented it out.(Positive Cash Flow)

2007-We were transferred to Hawaii where we bought a beautiful home with a detached Ohana (Mother-in-law suite). We moved away in 2015 and are renting it out.(Outstanding Cash Flow)

2017-We moved to the Pensacola, Fl area and bought our current home.(Credit score over 800)

2018-We committed to increasing our real estate holdings.In February we bought a condo in Pensacola, Fl. We put 20% down and financed the rest with a 30 year mortgage.(Positive Cash Flow) (Credit Score over 800)

2018-In February we refinanced our house in Hawaii.

2018-In March we refinanced our Condo in PV Beach.

2018-In May we bought a SFH in Central Alabama.We bought it with cash…purchase and rehab cost was $42K.It rents for $725/m.(Positive Cash Flow). (Credit Score over 800, but ownership of this property does not seem to be on my credit report)

2018-In June we bought a duplex in Mobile Alabama.We put down 20%, got a commercial loan and it was our first purchase in a newly formed LLC. (Credit Score probably over 800, but I never really checked during this purchase).We are finishing a rehab and are just starting to advertise for rent (Sept 5, 2018)

2018-In July we got a HELOC on our Hawaii House so we can start using it to buy property. We haven't used it yet, except for…see next line.

2018-In July, we rehabbed our Ponte Vedra condo.It’s done now and newly rented for double what we had been renting it for, so now it is providing not just positive cash flow, but outstanding cash flow.  Anyway, we used two credit cards to pay for the rehab. We put about 75% of the limit on each on those cards for about a month. (I’m assuming this is where the Credit Score got into issues).

2018-In the last few days of Aug or first few days of Sept, I paid off one credit card with cash on hand.I then wrote a check from the HELOC to pay off the other. All told, the HELOC has about $11,900 on it. That's less than 10% of the credit line. I then did a credit check on myself as I am getting ready to purchase a new build and found out that the credit companies did their monthly look at the exact moment where I had put the money on the HELOC, but my cash payment hadn't yet come off my credit cards. It looks like I had double the debt that I actually had. Now I have found out much to my horror that my credit score has plummeted in a matter of days from above 800 to between 720-740 between all three credit bureaus.

While I fully understand how credit scores work and what affects them, I’m not sure what you are supposed to do with credit if the use of it is so damaging. How are others using credit without damaging their credit scores? Is anyone else dealing with these issues? Sadly, I’m not seeing any discussions, articles, podcasts, or books on this subject.  It’s a real Catch 22…use your equity and credit to buy property, only to have a credit score damaged to the point that you’ll have trouble buying any more. Anyway, I’d love to hear what you all think or advise.

Jason Garrett