All Forum Posts by: Anthony Johnson

Blanchard, I was not able to clearly grasp your message. I surmised that you prefer not using the banks and that is understandable. For me, I love the banks. I have bank mortgages, seller mortgaged, and private lenders, and the one thing that is consistent, is that the banks always have the best terms ( rates, amortization,etc). With that in mind, I run my corporate business as I should, to make the most profit in the most efficient manner. Now that I have over 10 mortgages, I only qualify for portfolio lending, I know there are exceptions, very unique, but 10 mortgages is all you can get conforming. So, here I am making an offer on a house with a private lender at 9% 20 year amortization and 5 year balloon, that was the best financing available to me when I found this house. A few days later, I got approved for a portfolio loan with a bank I already had 3 commercial portfolio loans with, and they let me borrow in my LLC. Anyways the bank was 5.5% 5/1 arm 20 yr amortization. Much better for my business, so I love the banks, they take a lot of risk helping my business.

I do not  specifically remember the states, without going back to re read the artices.   I have the Florida Senate print out my attorney gave me for the Land Trust law.   I read about the 9 states googling the topic.

So I am taking a small break from buying right now. I have closed on 14 homes and 5 refi's since Jan 2012 and I want to reevaluate, and check everything, I have a great business attorney who has been helping me with the details. I have a multi member LLC that owns single member LLC's, which hold the properties. The MM LLC is the banking, credit lines, property mgr etc. So that is the set up I have learned to use. The challenging part of this for me is that along the way I have 6 rentals in my personal name, with real bank mortgages. My CPA and others are always yelling at me to put them in a land trust( good in only 9 states) and I have been scared/apprehensive of the due on sale clause. I learned yesterday, here in Florida that I can transfer those deeds to a land trust where my person is the beneficiary, not the LLC, attorney is the Trustee, and then the bank by law cannot call the note. Then my LLC will buy the beneficial interest in the Trust! So, that is how you take a house with a bank mortgage and get it to your LLC, if you are in some states.

Also, I carry 500k auto ins bodily injury, uninsured motorist, and a 2 million dollar umbrella for the homes in my name. If LLC owns it, then I have a 2million General Liability policy.

30.   When this is a rental, getting the equity out is impossible.  If there is a downmarket you might be glad you had the lower mortgage and cash on hand.  Always maximize the leverage the bank offers, why not?    Also, the rates do not really matter if it is going to be a rental, you are thinking like an emotional homeowner.   I reference  Gary Keller's book Millionaire RE Investor, or the blue book as it is called.   He studied top investors nationally and cites the interest rate as not even being in the top 5 considerations.    Take the home equity line before you move out, since you will not get it later. 

Great time old question.   I am also struggling with this question.    I make a good living as a Broker, however, I now have a nice portfolio of homes that can easily cover my monthly salary/budget and there is enough left over for vacancies and repairs.   My thinking is to make the switch sooner so that I can focus on my future now, and to not overlook something, or in other words, to focus everything on my systems to eventually have more, even tho I will earn less now.   For me, I feel I do not have to make the decision, it is something that  just took me over.  I have no motivation to do anything other than the  property mgmt role, acquisition, and constantly obsessing over the numbers.   

Thanks for the  well wishes,  I am enjoying the site. 

Since we do not know, and cannot know the real problem in this context, then try this. Start interviewing other Realtors. Interview top listing agents, agents that sell listings. Ask them their 3 weekend sell price. Get someone else on deck. You need a Realtor to take this stress for you. Bonuses to buyers agent are a waste of time. Just make sure your listing agent is offering a full commision on the MLS. Did you approve your MLS listing? Are there over 20 great photos? I was top listing agent for Keller Williams and not all agents are listing agents. Start there until you convince yourself you hired the right person.

I like to take the 30 year  mortgage, or as long as I  can get with private lenders, or seller financing, here are some of my reasons why:

-If I can depreciate the home for 27.5 years, along with the  mtg interest, I can reduce taxes further.  

-equity is not usable since the banks are not doing equity loans on Investment homes and the do not do cash out re-fi's, at lease here in Fl.

-more cash flow monthly to keep aquiring before the market rises more.   Now that I have 12, I am understanding the "ebb" or "flow" of operating capital and  how to easily keep 6 months reserves, it is all easier with more cash flow now, in a few years you can refi or pay extra principal if you like.  

Just my thoughts, thanks=)

Jane, annual deposits.   25% of annual deposits.  I learned that once you understand the underwriting guidelines you can use them to your advantage.  For instance, I applied for the BLOC and they only gave me like 5k, so I politely argued, asked a lot of question, and then I learned about the 25% rule, so I applied again.   At the time my Real Estate Brokerage was depositing tons of checks so got one there also.   I was able to close on 14 homes, and I refinanced 6 or 7 since  Dec 2011 and in the beginning several banks told me no to the first  investment mortgage.  If you want from the banks, you have to be tenacious.   I moved everything I had from BOA to WF for those lines, lines of credit are the most important thing to holders.   As I got more established I learned you can always get mortgages, always, it is the down payment you need the lines for. 

Hopefully your  RE Entity has business accounts at Wells Fargo.     I am a  hold guy so I get rent checks.   They will give you credit lines for 25% of deposits.   (BLOC) Which can be a lot.   Then get the  PLOC personal.    These run 10-12% revolving but it is easy to get up to 100k credit lines. ( I have multiple entities so two business lines BLOC and one personal PLOC.)  Then you want the BOA, Chase, and Discover cards.  Those 3 constantly send 0% checks for 18 months.   I use the BLOC to transfer for a few days until the new 0% checks clear or get paid balance down to zero so you can use the new checks.    With this strategy I have carried upwards of 60k revolving at zero percent.   I use my contractors 10% HD discount and this works for me. I hope this helps.