Cash Short-need advice - Posted by Robert

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.


Cash Short-need advice - Posted by Robert

Posted by Robert on April 07, 1999 at 05:35:24:

I started investing in Real Estate a year ago and I have purchased 15 properties with practically no money down at all. A couple of the properties were vacant and so I started to rehab them at a very low cost even though some of them needed a lot of work. I purchased the properties at very good prices and now have most of them rented. I still have some vacant ones that I still have to complete which i have signed leases for. The problem I have now is that I’m cash short. I don’t want to use up the equity in these properties, but I know I need to do something fast. The properties are valued at $550,000.00 together and the mortgages total appproximately $300,000.00.
I’m currently buying #16 & 17 which are rented properties, but I’m having a heck of a time getting them through for mortgages. These are going through private mortgage companies and it’s been tough because they want me doing this for 2yrs. or making big bucks. My track record shows I’m growing and producing more income but it doesn’t seem to be enough. I feel if I go to try and get some of the equity out of these propeerties it won’t work.
I know at this time I need to revamp my finances to get back on track, but I’m not sure how to do it. Any advice would be appreciated.
Thanks in advance

Re: Cash Short-need advice - Posted by Jim Rayner

Posted by Jim Rayner on April 07, 1999 at 21:08:29:


Mr Piper’s advice is right on. I found myself exactly where you are right now just about one year ago. I went to the Stlouis workshop and came back with a plan which will have been fully completed by close of business this friday. I have restructured my financing and in doing so have increased my holdings from 10 units to 31, increased my equity position by 756K and increased my cashflow 5 times. The atlanta workshop is the best advice I can offer because it comes with the one on one mentoring that helped me find the way to a new level of investing with no more money out of my pocket except for the cost of the workshop and several long distance phone calls.

Re: Cash Short-need advice - Posted by mike

Posted by mike on April 07, 1999 at 21:04:20:

dead equity can come to life and save yours. put a note against one of your assets, minimal closing costs, get new equity in the property you are buying. refinance it for cash. buy prudently. called pyramiding. which has a risk, but you might need to do it.