All Forum Posts by: Brad James

I will try to be brief.  I need to obtain a loan against a large farm property I own.  Just built a large metal building on it.  Total real estate value will be closer to 300K.  The property is currently paid for.  I also own another 200K of tangible assets and have 80K in the bank.  However, due to some family matters, I have not really worked in about 1.5yrs.  I did recently flip and sell a few assets with an income of $50K, but I am not sure how they will look at that money.  

I have not filed taxes due to not working.  I need to obtain a loan of approx 80K to simply pay off my ex's interest in the property and remove her from the deed.  I could write that check, but I would have no cash left.  I am hoping to get more than a 3-5yr loan and set this up on a 15-20yr loan if possible so I get some other stuff worked out.  

So a rough LTV of 27%, real estate otherwise has no lien, have cash in the bank to nearly cover the loan, and credit should be fine. I say "should" because I have not got a loan in 15yrs, though I have certainly paid all my bills and such on time.

I do have some credit card debt from buying a business asset, but I maintain that at 0% interest, and I have several older credit cards with high limits so my revolving credit utilization should be about 30%.  

Basically this should be a no brainer for a money guy and I would be an idiot to role over on the loan!! Where can I shop for such a loan? Are these best with smaller banks? Farm bank maybe since I will be running a farm on it? What sort of rates would these bring? I assume they will somehow class this up as a "higher risk" loan than a first time buyer buying at 105% LTV!

A couple things.  I am paying cash for the building and will not even apply for the loan until the building is complete.  

On the credit cards, I have always liked UNSECURED credit because there is no trail of asset ownership and I don't have to deal the bank's BS of insurance, valuations, etc, etc.  I have an easy 6 figures in mobile industrial, vehicles, etc. I have not had a bank loan in yrs.  There is just too much red tape IMO!

If someone came in and actually looked at my assets and realized they overshadow my credit card stuff, they would realize I don't really have "credit card debt", I have "credit card investments".  

WOW, can I reup this question?  Did I ask something wrong here?  

How/why is a credit union going to look at this differently?  I guess what I need is something that can look more at my, my holdings, NOT my stated income, and the risk in an investment where they are only loaning about 20% of the value of a property.  

OK, I have a situation in which I need to pay someone off to remove them from the title of real estate.  Basically I am currently building a large steel building, putting living quarters in it, and moving there.  I will then sell my current home in which I currently have a mortgage at 56K.  

The building I am building alone would appraise for 150K, and the land was just purchased 2yrs ago for 120K so lets assume at least 250K appraisal.  

I will own the land and building clean and clear.  

After completing the construction and moving there, I need a loan for about 60K against the property. The issue is unless a banker can see this as a wise investment, they would deny me as my DTI is high and my income on my returns is not that high.

I have never defaulted on anything and pay everything.  However my score is only a 700 because of my use of credit cards for investments.  However, I use them wisely and play the zero interest games, not 20%!

The property is ag property and I believe the ag dept may be able to do a loan for "ag" but they are a SERIOUS PITA.  I would rather get a loan traditionally but I need to figure out what angle I want to attack this.  from my perspective, my god, 60K against a property worth 250K??  how is that risky at all?  Who cares if I can repay??  

We have a few investments in real estate but another corporation just established as a machine shop we worked with for many years. Maybe 50K in assets right now. We are is desperate need of expanding the business and curious how to get funding for a new machine and a multi-use building? We are considering credit cards but getting a high enough credit limit out of the blocks is tough.

We need around 150K but even 75K would be huge right now for that business. The new machine can pay that off in a year easily but we have to get it here! Ideas? Should we be applying for a personal small business card or is a corporate card the way to go?

extremely good info guys. Thanks for the lengthy write ups. I guess I normally would not even look at a short sale but because of the alarming number on mortgage disasters right now, I have no doubt that lenders are overwhelmed. I have never worked a short and like David points out, it might be a total waste of time in the end. I will see if I can get a few people on the hook and try it. I am not one to waste 100 hrs of work when it is better used somewhere else. I will keep what David said in mind.

I have seem too many of these "gold mines" sell for EXACTLY what they are worth. For instance, just looked at one Fri that was worth 55K (in my mind) as it sat and I would have been a buyer at 35K knowing the property could be improved to around 75K rather easy. Well, I decided the auction was too public to get a good deal so I walked. House sold for 52K + 10% buyers premium. NOPE. No deal there. At least not for me. We want to grab some rentals some day but more focused on capital gain right now.

Here is the deal. We have a small business that is doing OK but my debt pretty much gets buried in the business so my income statement is next to nill. We pretty much buy enough to offset the income so as to grow the business faster.

We generally either had jobs for lending or had cash around for investments but that has been light lately. We have a big investor involved for other financing but his money is miles of red tape and expensive. My only real option right now is credit cards. The rates are good under specials but the payments are hard to sit on at over 3X what a 15yr mortgage would be.

I guess my questions is, is there a way to secure funds with my assets in the business without showing in income? I only talked to a couple lenders and they said N O! They just want a paper trail to show repayment method. So can you see any other options here? We are looking to buy a few homes at around 50K each for short term flip homes of that helps.

The only way I though to make this work is pull enough off the credit cards to secure the property and also subsidize the payment as well. seems risky but the interest is good, there are apps, approvals, etc. Now if I could only get a credit card to do an interest only on a short term....

So, let me see if I have this right. Get an info release from current owner, 1st will probably only settle for full amount, but 2nd will settle for peanuts?

I am curious what motivates the 2-3rd lenders to settle this? Does the owner get a foreclosure hit against them? Do I have to prove to the lenders that the home needs work?

It would seem the ideal model might be a lower 1st with higher 2nd?

One of the things I am trying to figure out is my advantage angle to the owner. If I can keep the foreclosure off their record, that would be a big help "I guess".

OK, I am confused. You are saying there is TOO much headroom in this deal and the 1st would not even negotiate on it?

I guess I stir a fuss when I mention market values. 105K is what the house would sell for all fixed up and market ready. It is NOT ready and needs work. As is condition, it is worth around 80K. Whether it is an equitable deal for me is yet unknown because I do not have all the specifics.

The info I was looking for like what Wheatie added is just how to process works and what the idea numbers should look like to work a short deal. By presenting my numbers, I am simply trying to give an idea of a situation to see where to go on this one. We have a house about 1 blk away so I know the area pretty well.

That really did not answer my question but the valuation was set by me through real property sales in the area in the last 2 yrs. actually 115K is the average. The house is far from market ready.

What I am asking is how does this process go down in terms of who negotiates what happens to the owner? How does one negotiate the process? I am also talking with a few people within 30 days of losing their home to tax foreclosure auction.