All Forum Posts by: Todd Rasmussen

Hi Michael,

Highly recommend Christopher Jones KW for the Indianapolis Area. I'll message you his cell. He helped my wife and I on our first investment property purchase. The Indy market was a little hot when we went back, but I still hear about people finding good deals there. Good Luck!

I love CK but credit score is usually +/- 50 pts in my experience. The general principles and information it provides are pretty accurate other than what I just mentioned. I take free credit reports from the three companies to make sure nothing is there that shouldn't be but don't pay them for the number. I pay credit cards balances weekly to keep utilization as low as possible. Don't know if that helps any more than keeping them below 10%, but it's just become a little obsession I have to keep it around 1%.

Hi Jonathan,

All based on your specific situation. There is a Fannie Mae / Freddie Mac guideline about the maximum number of loans you can have. Our lender told me it's 10 total, and a smaller local lender said they can only do four, so for us primary plus nine investment properties seems like the max available until I find an alternative. This same lender doesn't consider rental income until the property has been owned for two years, so debt to income ratios potentially are an issue depending on how quickly you scale.

Don't have relevant knowledge related to borrowing as a business owner, but you might try starting with where you have your business accounts. Someone that knows you might be more motivated to get you what you need. Small credit unions and local banks seem to have the most flexibility making underwriting decisions so I'd check there too.

@Al Bryant

Correct, it sounds like you have it right.

It's not figuring the cost of money. Your ROI will be reduced by interest you pay to the hard money lender. If you broke the cost of your hard money loan into a monthly average and added it to your holding costs number, you could see what ROI you could expect in your specific situation.

Congratulations, welcome, and good luck.

Don't know what you need to know, but here's a couple things we do well, learned to do well, or still do poorly:

1. Make lenders compete for your business. Funding will be a huge component of how you cash flow so get to know as many lenders as you can. There is a limit to how many conforming loans you can get from a bank, so make sure you start looking for direct lenders early. 

2. Know your limits but be confident enough to ask and negotiate for what you need. Property management rates, lease renewal fees, origination fees, cost of appliances, cost of paint, contractor's quotes, and how many properties your wife lets you buy at the same time; all negotiable.

3. Don't be afraid to raise rents. The real cash flow comes after 20 years of inflation when your P&I payment is the same, but the amount you are charging in rent has doubled. Be fair and reasonable, but keep up with market rates.

4. Be picky, every time you don't get a deal, someone is accepting a smaller return than you were willing to. Don't be willing to pay more than you are comfortable with. Slow and steady pace means you have time for it all.

5. Don't quit your day job..... yet. If you can hang on, w-2 income is consistent and safe when a bank looks at you and is deciding, if, how much, and at what rate to lend you money. Make sure your income stream from real estate will support you, even in a market down turn when rental rates drop.

 Well... That tells you how far through mine I am. Thanks for the heads up.

Form 2106 is where we do, but we have w-2 jobs we deduct travel for. And it's five days away, you're still ahead of 40% of us!

 And google analytics just registered a spike for searches of Albrightsville, PA. Dying with you. That one must have hurt!

Strongly Agree, don't spend money, just to spend money. Lowest bidder might also be a bad choice, but that's for a different post.

If you had something you HAD to do anyways, you might do it a little early to incur the expense in an earlier tax year instead of the next one (if you had something you were worried about trying to offset). In taxes, expenses or deductions will usually net you worse than 1/5th the amount you spend in actual tax savings. Credits might net you 1/1 in tax savings as a best case scenario, but even then they are often limited to less than that.