can't believe my banker - Posted by Farril de foor

Posted by tubby on June 16, 2006 at 17:48:06:

This is great advice Ed! REI is a business and should be treated as such. Now that the easy money is gone or going away and all of the crazy speculaters are turning tail to run, only those with sound business plans will make deals and as you said, ‘rightfully so’. I’m glad it’s finally begun! These nuts have been driving prices up everywhere for the last 3 years.

can’t believe my banker - Posted by Farril de foor

Posted by Farril de foor on June 16, 2006 at 01:46:34:

I have done 12 houses this past year. I have rehabbed the last 10. I have 7 with my bank 5 with permanent financing elsewhere.
I sold 2 and I close both next week so it reduces my loan by 100k to my bank.
Well I found another house its a great buy.
I asked for the loan plus the remodeling expense.
house is 160,900.00
remodeled is 35,000.00
I can sell this for 239 to 250k
He has financed the last 3 homes 100% know he is making me put up the 35k to remodel. He owns the bank.
It sucks.
I have proved my self with him over 16 years.
My credit score is 698
I have people paying me for every loan and I have great cashflow on every purchase.
Tell me what you would do?
I need answers.
Please e-mail me

Re: can’t believe my banker - Posted by Ed Garcia

Posted by Ed Garcia on June 16, 2006 at 14:30:52:

Farril de foor,

I can understand why your banker is having a change of attitude. It coincides with the softening of the market. If the deal you?ve presented is a business model of how you?re doing your deals, then it?s time you change your business model.

When the market is HOT, 80% LTV can work, when it?s cooling as it is now, 80% is high.

The first 10% of a deal we don?t even count, its air, water, what ever expression you what to us, but it attributes to negotiation variances and 6% commission. When you say $239,000 to $250,000, conservatively I?ll take the $239,000. That being the case if the property was repaired up to market and sold today you?d be at 82% LTV not counting holding cost or commission.

If the property does not sell and you have to go into a holding pattern, I doubt the house would rent with a positive cash-flow.

A16 year business relationship means nothing if you?re not a prudent investor who makes their money on the buy and has POSITIVE cash-flow. The Lending community is going to tighten up in general and rightfully so, so we need to be an astute buyer with multiple exit strategies when doing a deal.

Ed Garcia

Re: can’t believe my banker - Posted by Patrick S. Lawson

Posted by Patrick S. Lawson on June 16, 2006 at 10:23:07:

There are a number of other banks that will offer 80% ARV. Send a couple deals to other banks and then play the two bankers against each other.

Re: can’t believe my banker - Posted by Edwin

Posted by Edwin on June 16, 2006 at 02:32:26:

I’d tell that turkey to take a long walk on a short pier and find another banker