bran987 said:
No I know I'm in commercial dude... except my company does $300 million deals so we have to have huge institutions partnering with us to guarantee those loans...
Walk me through say 3 purchases of 2-4 unit properties, what loans you would use, and how you'd structure the transactions. let's actually learn something instead of just saying "oh it's great you should do it"!
With prime at 8 1/4 I'd definitely take advantage of Option Arms currently. The 12 Month treasure average at full index right now (full margin too, i'm doing my own loans so I'm getting the immediate commission so I can dump the money in a 7-pay VUL and create immediate tax free income
) is in the mid 7s. Obviously depending upon program guidelines, generally the MTA start rate is 1%. The great thing about the Option Arms is that your payment can only go up or down 7.5%/year. Not the interest rate now, the minimum payment, I want to clarify that.
For example. If your payment is $1000/month and the MTA index goes up forcing the lender to increase your minimum payment to the maximum of 7.5% that means that your payment for the next year will be $1075. Yes, it is a fact that you have some negative amoritization going on, however, if you are a savvy investor you will know that you can write off your interest on your taxes and you will of course, be making a substantial ROR with the money you opted to not pay towards your principle.
See, just look at everything like a business. It's really a mindset more than it is anything. Think of it like a restaurant. You take a loss on wings on Saturdays so you can attract more people to buy your highest profit margin goods like beer and liquor. Obviously, there is a risk that people may only show up and buy wings and drink water so you should put in a disclaimer that the price is only valid with the purchase of a drink. You might also consider putting overly attractive women in there to boost alcohol sales. AFter all, how hard is it to say "No" to a 5'1" 115lb brunette with a round ass, big fake boobs, and pigtails asking you if you want another round. I find it extremely difficult to this day.
I really think that if you can truly understand that you will become successful. Rich Dad Poor Dad by Kyosaki was an awesome book. It really shows you the different mindsets of an average-poor person to a successful businessman. Knowledge is power, yes, however applied knowledge is success.
Back to the loan.. Well, I would state as much information as the lender would let me. Southstar Funding will do an 80/20 combo 100% financing 12MAT/HELOC. If you'll loan me 100% LTV I'll take it all day b/c that just frees up cash. The key is to pay off the HELOC before you purchase another property b/c it drastically reduces your DTI.
Realistically the key is to do everything stated with letters from a CPA. Basically if you have good credit lenders look at you like "hmm, ok, these numbers look a little exaggerated but he has great credit so he is honest. Let's do it"
As long as you know how to set up a stated deal and give yourself plenty of leeway with DTI and not exaggerate numbers too much you can close a deal. Take advantage of the Option Arms and get together with an ESTATE PLANNER not a Financial Consultant from a bank whose primary income comes from deposits or a Financial Planner from T Rowe Price who is going to charge you a grand to sit down and talk then give you a 4 inch thick folder with hundreds of pie charts and technical terms and then move your money 4 times a month so he gets paid. Screw that.. That's why I'm so passionate about what I do, that's not how our company does business.. That's why we don't need a series 7 license.
I'm telling you guys if you don't know what you want to do I would consider doing estate planning. Within the next 5-10years $45trillion is going to exchange hands from the baby boomer's parents to the babyboomers. Everytime money moves someone has to get paid, why not let it be you? Besides money under management pays a RESIDUAL income. Not only that, our economy is going to go through a real shift with all this money (power)change hands. How we educate consumers to spend their money is crucial in the health of our economy. The economy is drive by how money is spent, not how it is saved. If no one trust the economy and we all just stash our money underneath our mattresses or be stupid and give it to a bank so the bank can get rich off our hard earned money then our middle class is in big trouble. Money works. Why let money work for the bank? Why not let it work for you?
Homework for whoever reads this. Search up the Rule of 72. It explains how compound interest works. Go to the bank and put in $10,000 go get your 4% return on a cd. The bank is AT LEAST going to get 12% ror from that money. So, it's going to take you 18 years to double your money and it's going to take the bank 6 years. So in 36 years times the bank gladly hands you your $40,000 and walks away with $600,000....
How can you expect a ship to come in with gold for you if you never even send one out??
T-Matt
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I'd imagine you're pretty good in person.
