All Forum Posts by: John Barnes

Great work. Impressive write up as well!

Good answer, it must be based on historic default rates, or else the lenders would not be looking at it like this. It makes sense, there are certainly people smarter than myself working on the bank's risk side.

 thanks Mike.

I totally get the DTI. What I don't exactly understand is, the bank is not taking their liquidity into consideration.

How is it safer to lend to someone making 50k a year with 25K in the bank rather than someone making 35K a year with 300K in the bank? The banks seem to prefer the 50K borrower over the 35K borrower, even though the 35K borrower could essentially be a 50K borrower for 20 years with income + spending down the liquidity. 

That angle from the bank I am not understanding.

 Hey George,

This is helpful. Do you have any you suggest to start looking at?

thanks

Hey Mike,

Appreciate the reply. This is the kind of advice I'm here for. I'm not sure why the bank wouldn't be interested in having liquidity in the property, isn't loaning money what they are there for? The bank has more liquidity in my portfolio than I do, by design. I would assume most folks want to leverage as much as possible.

I think the income is the real sticking point. Banks seem to care about income as their #1 qualification and not much else. I flat out asked the broker, if they had 10 MM in the bank and no income, could they get the loan? and he said without income, no they can't. I don't exactly understand that, as the lump sum in the bank is obviously more stable than a paycheck which could disappear based on any number of factors. What am I missing here, or did the broker not know what they were talking about?

thanks

John

Thanks for the replies, everyone.

The property is currently leased for $2,500 a month in total, however lenders have been resisting using that income due to the fact it is not on a tax return yet.

If any lenders see this and want to close an easy loan, please reach out!

thanks

John

Hi Everyone,

I'm trying to assist someone in obtaining a loan. The person in question:

Owns primary residence (300K)

Has +-300K in equities

Income of $35,000

They took out a HELOC and used those funds to buy a 4plex for $120,000.

They have waited 6 months and are attempting a cash out refinance to then pay down the HELOC. I am trying to help them obtain financing but the issue appears to be their Debt to Income Ratio. Lenders have been requiring 40% down and the best rate I found was 5.625% on a 15 year note.

Both credit scores are over 800 so there is no issue there.

I'm trying to ask and see if there is something I'm missing, or if there is another avenue I should explore.

It seems silly that Income is an issue when they have so much liquid assets? I don't fully understand why the banks are looking strictly at DTI when a borrower has good, liquid assets.

Any direction would be great. thanks

John

Hello,

We have been presented a slam-dunk wholesale flip of a 2/1.5 Townhouse in a very nice area of Tampa, FL. Great area with A rated schools.

A portion of our funds are tied up in another flip at the moment but this deal is an easy money maker, so we are looking for an equity partner or short term lending solution to be able to finish this deal. We are open to various/creative solutions.

Purchase Price: $109,900

Built 2002

Needs cosmetic interior rehab.

Exact same floor plan comps as follows:

$153,000

$164,000

$150,000

Let me know what ideas you may have or interest in JVing this opportunity.

Thank You,

John Barnes

Bradley & Barnes Investments

Hi All, hope someone has advice.

We have a 3 unit, concrete block property in FL. Program we rent through (similar to sec 8) said all units have to have heaters.

To give you an idea of how important heaters are, I ran mine just once last year.... but they require what they require. So we want an option that makes sense (not a 4 figure option), based on how much use they will get, which is not much.

The apartments have window AC units now.

Anyone have advice? Space heaters? Or a better alternative. Have heard space heaters are a bit of a liability with tenants.

Regards,

Jon

Hi, we own 4 properties in Florida. Even for a $50-100,000 loan, closing costs here are still $5,000+.

Trying to figure out how people acquire 50 to 100 rental properties without paying hundreds of thousands in closing costs. Our goal is somewhere in that range.

There must be some sort of line of credit/blanket loan or some type of product that we are not aware of. If anyone can enlighten me that would be great. 

thanks,

John