Posted by Michigan Andy on November 29, 2000 at 16:17:10:
Thanks for the quick response, and I apologize for not getting back with you sooner. I would have done it via e-mail, but @home strikes again. Apparently, the have a nationwide e-mail outage.
Anyway, I considered the equity line of credit, and e-mailed Ed with details. I talked with a “small” local bank today, who told me that a ballpark interest rate is 13%. I guess that’s better than what I’m paying on my credit cards, and I like your approach - using it in future investments. Downside is that they will only go 70% LTV. If I were able to find someone to go 80% LTV, I would no longer have any “consumer” debt. So then I got to thinking about the creation of a second mortgage. I could market myself a much better interest rate, but the only downside there is future flexibility. Guess I’m gonna have to bust my butt to acquire some more properties in other ways.
I’m going to put you to task now. I have never done anything like this before. How does one go about creating a secondary note (please remember that this is a commercial note); and then how do I go about finding someone to buy it? Obviously, it would have to be at a large discount, as it is unseasoned. How big am I going to have to make this thing to handle my first challenge of eliminating my consumer debt, minus the investor’s discount?
I sincerely appreciate the time you are taking to at least pitch some ideas. I used to really stress out some years back over “money problems”. I don’t see them that way any more. I now see them as challenges. I make a good sum of money, both from my J-O-B, and through my REI dealings, but, as you know, income from tenants doesn’t show up on a credit report. I recently applied for 2 cell phones, as my contracts with another cellular carrier are about to expire. I got turned down!!! That, is a big part of my challenge! I make plenty more than enough to pay my bills, but again, the income doesn’t show. ARRRGGGHHHH!
Thanks again for your time.
To your $ucce$$,