Posted by JPiper on April 07, 1999 at 18:30:06:
Your problem illustrates the wisdom of one thing?.you need to have a strategy for pulling cash from your properties. Otherwise, ultimately you run out of cash.
Having said this, your question is one that is almost impossible to answer because there really aren’t sufficient details?.and chances are you aren’t going to want to post sufficient details for anyone to give a good answer?.but here’s a few thoughts.
First possibility?.sell something. You say you have some vacant properties with leases. I would QUICKLY finish your work?and then sell some of these?.perhaps to the people wanting to lease. There are a wide variety of loan programs out there these days that may be able to accommodate these tenants?if they want to own rather than rent.
In connection with the above, go back to some of the properties that you currently have leased. See if some of those tenants would like to become a homeowner.
Second possibility?.refinance some of your existing property. Again, there are a wide variety of loan programs. Depending on your credit you may be able to refinance property that is seasoned?that is you’ve owned it for a year?enabling you to pull cash. There are programs called “stated income” programs?.that is you tell them what your income is?.they may only verify your bank statements for a few months?.no tax return or W-2’s. You’ll need some equity to do this, but based on the information you’ve provided it would appear that you’ve got equity. To do this you need to connect with a GOOD mortgage broker. These are non-conforming loans?.not conforming or conventional type loans.
Third possibility?.restructure your purchases. There are non owner occupant type programs available that are quite liberal. You’ll have to have some money down in all probability?.but if the owner is willing to carry a part of the purchase, you can put these deals together. But at the same time you’re going to need an exit strategy…and the appropriate strategy is not always just to rent the property. That gives you equity…but it’s hard to eat equity, and leaves you cash poor as you’re now discovering.
Finally, you might give some thought to calling Ed Garcia?perhaps attend his workshop in Atlanta. A sound knowledge of finance is quite important in this business.