Posted by JD on November 16, 2000 at 21:07:23:
All I had time for.
Clever use of collateral - Posted by Marek
Posted by Marek on November 15, 2000 at 23:46:06:
Dear List,
how do we borrow money to buy rental property and still buy more later?
Let me explain, this is our situation. We own a property ( freehold) worth $ 80000 and combined income is $ 96000/year. We are looking to buy the first investment and want to make things easier when buying more than one property in the future.
We are looking to purchose rentals for $35000 which wan’t increase in value ( apart of inflation )but are +geared and service the mortgage 100% and still some money left over .
How do we borrow money to buy the rentals and still buy more later?
Can we incumber the properties as we go along i.e every new rental is a security for the mortgage and no other collateral in needed. Thus freeing our own property to get a collateral loan if need be.
Would it make any differance to the lending institution if the properties are fully servicing the mortgage, with regards to using these properties as collateral for their own finance?
We would greatly apritiate some creative suggestions at this early time in our planning.
Sincerely,
Marek
You’ve come to the wrong place - Posted by Jim IL
Posted by Jim IL on November 16, 2000 at 03:42:55:
Marek,
Please do not take this as a slam, because it is not.
I am only trying to help by offering you some free advice, based on my rather limited experience.
You can buy homes to hold and rent using bank loans, but honestly, why?
Why risk your credit?
Why risk your cash?
This board is primarily for the exchanging of ideas on “Creative financing” of investment properties.
There are surely some here who do use bank loans, I know I do, just not in my own name.
Heck, if I even tried to get one now, the lender would probably laugh me out of there office. (Long story!)
So, do yourself a favor and read all you can here on the board, the “How to” articles, “Success stories” and “Money making ideas” sections of this website.
Then after you have spent many hours enjoying the writings here, cruise on over to the section where they sell courses.
All the ones offered here are great and will get you started.
I for the life of me cannot figure out why anyone would use bank loand exclusively to buy properties?
After you do some reading/studying, then come here and post your questions.
Trust me, there are plenty of people here who will help you FOR FREE as you enter into the game called “Creative REI”.
They helped me get my first few deals, and continue to teach me something new every day.
By the way, it is very easy to buy properties that will support the financing 100%, AND provide you with cash flow. The key is to get the financing done creatively, with as little of your money in it as possible.
It can be done, and I am living proof of that.
Someday I’ll actually sit down when I have time and count just how many properties I have purchased creatively since 1998.
But, a quick review of my deals in my head, and I cannot recall a single one where I got a loan in my name.
Then again, as the nay-sayers state daily, “This cannot be done in your area”!
What a farse.
Happy reading,
Jim IL