Tips for arranging financing.

The biggest mistake investors make is scouting before they arrange financing.

 

Every week some investor calls me and says "I have good credit, a good job and a house. How much of a loan can I get." No idea. Don't have a clue. There are about 40 variables that go into determining a loan and loan conditions change every day. If you want a FREE and ACCURATE answer, call my broker. Asking me is like asking your mechanic about a skin condition.

Half the investors who call me don't know what their credit is. Amazing. This is like driving around without a gas gauge. If you already own a home and have credit less than 650, you are going to have problems purchasing an investment property unless you are paying cash. If you want a FREE and ACCURATE interpretation of your credit, call my broker.

Everyone loves the excitement of combining financing with experience. However, these are usually a disaster. These are easy to get into and nearly impossible to get out of. Like a crab trap, you will be stuck in that thing forever. The chances of you escaping with all your fingers and toes is less than 5%. People also forget that you will both have to make decisions on repairs, tenants and a million other little decisions while you own the property.

Unlike a partnership, a person lending you money has specific ideas of return and an exit date in mind. These notes can also be secured with a deed. If you have a partner in mind, this is the type of relationship you should have. If you need assistance in creating notes and/or deeds of trust, I will be happy to help.