All Forum Posts by: Shawn Coverdell

Hello, so all I know is this. I had to build mine up as well. Read, Read, Read. I think I tired just about every site out there. Best one by a long shot is MYFICO  they show all 3 Fico8 scores which are for Credit card companies and car dealers. You want the FICO 5 as mentioned above. you click on other scores and there they are. The blogs and info provided on that site will tell you more that you ever wanted to know about this crazy but necessary system. 

My lowest score of the 3 is now 813.   Took a few years. The scores provided on that site jives with what mortgage lenders pull. Only accurate one I have found.

Most of the free sites offer "Fako scores" which will only drive you crazy trying to figure out what is affecting them.  Read the fine print on those sites carefully. 

The real scores are not free. this is how the credit companies make there money and they protect that of course. Like many areas, you have to pay to play I suppose.

Biggest factors for me, Age of average account and keeping all credit cards at zero on the report date. One card always has a balance of around 25 bucks. This shows less than 1% utilization ratio which these scoring systems love. Fastest improvement of course is having a bad item deleted if you have any. 

At some point you realize (sooner the better), that cards are for having, not for using. use only to keep active. charge a tank of gas and send them a check when you get home.

Yes, you need mid 700's to be a decent customer in a bankers eyes. 

Best of luck to you!

Thank you so much Dave. Excellent points I will take not and give consideration to these. Would you mind elaborating on #6 I would love to dramatically increase my holdings if I can just figure out how to go about it. 

My units are in a fairly rough but improving neighborhood. appreciation seems fair and cash flow is amazingly good, but I think I can match these numbers in a better property on the coast (45 min away from my residence).  Better tenants, better feel. More pride of ownership maybe? but My thinking is if I turn a 100K equity box into a down on a 400K 4 plex on the coast I have bigger appreciation. maybe get some retired folks in there who plan to stay for awhile.

Jay J, 

I see what you are saying but also would like to add, Scott, myself and many others here on Biggerpockets are NOT that typical story. Yes we are that very small minority that have figured out how to delay gratification. I started in a 1 bedroom apartment in a bad part of town. I started with a wine jug that I put my change into. The dream got bigger and my boredom with my day job grew until I became obsessed almost with finding a way out. Yes, this is a rare approach. For most, the answer is usually, "It is what it is." 

I have a measly 4 years experience and at my age (late start) that is a blink of an eye believe me. My net worth is right at 1 million and snowballing. Not borrowing limit but net worth. negative net worth to one million starting with an empty wine jug. Momma had nothing to do with that.

I say this because I hope that you find that secret to happiness. It is knowing that you can pay cash for just about any car on that lot, but you keep on going in your 1986 Toyota pick up not because you are afraid to spend money, but because you know a better place to put that 40 grand. That is the victory over money. It is a satisfaction that I hope you too can some day enjoy.

Imagine this. You go on a nice 2 week vacation. When you return, instead of worrying about how much you spent, your bank account went up while you were gone. 

You can do the same exact thing! You just don't know it yet.

Thinking ahead. I am accumulating SFH and Duplexes with pretty good cash flow. Assuming that I can borrow 70% from the equity currently, Is there an easy way to determine when it is best to 1031 up VS refinancing for the cash out to scale up. any loans would be 25 year amortization with 10 year balloon. Portfolio. One idea is to keep buying up the little boxes and wait till year 8 or so (before balloon) and trade up. but either way loan or 1031 would avoid the balloon so not sure how to approach my next level in the game.

I guess what I'm asking is how to get to the next level when the time is right.

any and all suggestions are very welcome. I am thick skinned so fire away!

Cap Ex is the big moster. When we buy a home we factor in 5K roof, 5K full pex (to the meter), leaving existing drains. say 10K to shine her up (10K goes a long ways if it's you and family doing the work. so if I buy at 65K I am really buying a clean home with a new roof and full Pex-uponor plumbing at 85K. I still factor in 5 percent for cap ex just for overkill. These are low end homes. Cadet heaters are only 130 bucks to replace, and I can get a new breaker box put in for 3K. Yes, house sits empty for 2 months while this all happens. I don't worry about 2 months lost rents because you could take those same 2 months running calculators on deals and not buying. all a mater of perspective. 

I BRRRR but with one tweek, We sometimes leave 5K to 15K behind because I want my Cap Ex expenses paid early for peace of mind as well as getting top rent with many applications flooding in. I can sell for top dollar if I get into trouble, and my appraisals are great at the refinance stage. Will it end well? We will have to wait to find out.

In the end here is the risk. earthquake or tweeters destroy all my shiny boxes and I stay sitting in my cubicle until I prune up and the government says I am old enough to draw a check. A grumpy 99%er all the way to the grave. 

wait, that is the position I was in just 4 years ago!

For those old enough to remember Logan's Run, "I am going to try the tunnels".

Great blog. It also depends on what your income requirements are for your idea of retirement.

Don't worry. ask for 5 days. That is plenty of time to do everything in your power to gain or loose confidence in this deal. I agree with Doug Larson, make sure you have a finance clause to fall back on.

Do not get pushed around. There are boxes everywhere, you don't need this one that badly!

Good shopping to you!

My son has this problem.but not really a problem. he just financed his first hold. will finance his second, maybe third, until he gets up enough cash for a true cash purchase.

be sure to click the Cash purchase box first. Has to be cash for it to work properly. if the cash is borrowed, BRRRR just does not work well because you just pay off one lender with another.

the amortization should be the amortization of the loan you expect on the refinance stage. 30, 25, 15 etc. depending on your loan you expect to receive to get cash back out. 

Hope that helps.

If your goal is just to own a a piece of the ant farm. Drive forward. Your headed in the right direction. Partner up or something. 

If you want to grow wealth faster than you can imagine is possible, MOVE NOW!  and house hack a duplex. Get time working for you and not against you. 

If you spend this year saving up say 10K but properties in your range go up 40K, you are loosing the race.

Best of luck to you!