All Forum Posts by: Mark Fitzpatrick

Hi Arthur, I definitely agree that real estate is still a good investment. I still think Schiff raises a good point though that drives home even more the importance of not leveraging yourself too much. A stagflationary environment could put pressure on rents and maintenance on a building could cost more. Labor might be cheap, but materials probably won't be.

One good point he made was the impact of higher prices on your tenants. Higher prices on food and gas will mean less disposable income for your tenants to spend on rents. I've heard from many people that rents tend to increase with inflation, so rental property is kind of an inflation hedge. That may be true while incomes are rising as well, but if incomes stay flat or fall and prices rise significantly (which Schiff predicts), people will have less to spend on housing - which could put downward pressure on rents. Not something I'd thought about before.

Schiff is one bright dude (he predicted the real estate crash), and he doesn't paint a rosy picture of our economic future - unless the government drastically changes course from it's borrow/spending binge in the near future.

Unless the government hugely slashes spending and raises interest rates, he sees a dollar crash and US sovereign debt crisis in the coming years. The result will significantly higher prices on everything, a lower standard of living, and a much worse employment situation. Not pretty.

Anybody else happen to attend?

I'm currently handling bank financing for an investor who is buying aggressively in Vegas right now. He said the issue that he's running into is that most of the homes available are REOs with Bank of America, who is a nightmare to deal with. Good deals are to be had, but you definitely have to be patient.

Hi Kenneth, it's definitely a great time to get financing because of the low rates.

I think the issue you might run into with the 1-4 unit (residential) properties is the number of properties you have financed. It's easy to get financing from a traditional bank or mortgage lender when you have 1-4 financed residential properties, but when you have 5 to 10 financed residential properties it starts getting harder to find banks to finance you. If you have more than 10 financed residential properties, you pretty much can forget trying to get traditional bank financing for them.

As you're shopping around, I would tell the lender up front how many financed residential properties you have so you're not wasting your time. If you can find somebody to do the loans, be prepared to show up to 6 months worth of payments in the bank for reserves for each of your residential rentals.

Hope this helps, and good luck!

Hi Cheryl, it sounds to me like you're getting a decent deal. If rates drop significantly from here, you can always do the loan again if you need to - especially considering the lender is picking up the costs for you.

And if you're comfortable working with the guy, then go with it. For people with complicated loan applications, the comfort level you have with the loan officer you're working with should be a big consideration. Loans are not as easy to get as they used to be and you're going to be working with him or her for a while to get the loan. You want to have a good rapport and working relationship with the LO.

I also think the 60-day lock was a smart move - particularly if your deal is complicated. I tend to lock my loans on 45-day locks even if they're simple, vanilla deals because there's always stuff that comes up in the process to delay things. Having the long lock does cost more, but at least you don't need to worry about your rate.

If you're doing buy and hold, purchasing for a good discount will make it much easier to get the financing you need. If you buy for a good discount with hard money, for instance, you'll find it much easier to refi into a permanent bank loan later without having to bring money to the table at closing.

Hi Thomas, the key is finding a deal with built-in upside, then finance with a partner or hard money. Once the deal is rehabbed (assuming it needs it), you can refi into permanent bank financing. I have a free report you can grab off my website that shows you how to do this. The link is either on my profile or my signature, so feel free to check it out.

Hi Shanequa, the Fannie limit is 10 financed properties if you're financing an investment property, but many banks limit it to 4 with their own guideline overlays. There are some banks out there that do up to 10, you just need to call around. The lender I work for only does up to 4, but will occasionally do up to 10 on a case-by-case basis.

Hi Ryan, we lend in PA and might be able to help. Feel free to contact me. As long as you're not pulling out cash from your properties, you should be able to use the new appraised values as long as they can be documented adequately. If you need to pull out cash, you'll need to wait at least 6 months from the date you acquired the properties.