stated no seasoning refis. - Posted by Jay

Posted by Ed Garcia on December 18, 2000 at 10:54:26:


I know exactly where you’re coming from. Your story is more common than not.

Jay, I’m sorry to tell you that there is no carved in stone answer. Unfortunately we don’t know your equity position in these properties, meaning, what are the Loan to Values, or the cash flow you are receiving. You also don’t tell us your intention with these properties, meaning, are you going to hold to them as renters, or sell them.

Jay, I feel your best bet at this point, is a small independent local bank. I would go to them with my property schedule, and comps to support the new values.

Before I do that I would have a game plan with my properties. Chances are, you already have. I think that it’s important that you demonstrate to the bank that you’re not credit happy and only leveraged your credit because it made sense. You should make it clear that you have picked up equity position and cash flow.

If you work it right, you might convince the bank to give you a working credit line.
My suggestion is for you to put together a Business Plan.

True definition of a Working Credit Line, is a line of credit, that the bank provides the
borrower, to purchase real-property as inventory, collateralizing the line with that inventory. Of course there can be variations of this type of loan, and that’s why you have
to be cautious when requesting such a line.

As a rule of thumb not always, the bank will request a BUSINESS PLAN, etc.

If someone plans to be successful in this business, then they should take it upon themselves to have an understanding of a Business Plan. Many people are intimidated by
just the thought of a Business Plan. They have no idea how valuable of a work tool this is
for their success. As a result they try to find someone to write if for them. Unfortunately,
much of the benefit of a Business Plan is lost if you have somebody else write it for you.
Spending time and writing it out, piece by piece forces you to do considerable thinking and evaluation of your plan.

I could go on and on about what it takes to build or map out your real-estate career to be
successful in this business. I’ve said it before, and I’ll say it again. If you run this business off of the seat of your pants with no rime or reason, no direction, you can still be
successful in spite of your stupidity. Can you imagine how successful you can be if you
do it with a GAME PLAN ( Business Plan).

Jay, with a working credit line you can season your deals, allowing time to re-finance them pulling out cash, or sell them. You can make cash offers and cut better deals when you buy. I can go on and on because I believe in what I’m sharing with you.

At this point I think it’s time for you to develop a banking relationship with a small bank.

Good Luck,

Ed Garcia

stated no seasoning refis. - Posted by Jay

Posted by Jay on December 18, 2000 at 02:36:22:

Dear ED,

I’ve been investing for about 2yrs now and currently own 12 houses ( bought 11 this year)I buy forclosers and remodel and rent them. When i finish remodeling them i usually try to refinance them, but in Oklahoma ( where i live) lenders look at me like i crazy when i ask them about state, noseasoning loans. I got into buying houses on credit cards and remodeling them, then refi and pay the credit card off, now i’ve ran into a wall i cann’t seem to find anyone that will help me refi. My debt to income looks bad on paper but what they don’t seem to understand is as soon as i refi. the house all the money goes back to the credit cards lowering the debt to income. Would you happen to know anyone that is willing to do this kind of lending for me.
I’m a class A barrower with high 600s to low 700s beacon, just a high debt to income level. Any help would be greatly apprecitated.
Thanks again

Re: stated no seasoning refis. - Posted by lee

Posted by lee on December 18, 2000 at 14:42:51:

It sounds to me like your real problem is your credit card debt is hurting youre debt to income ratio

a posiibble solution is many conventional will provide loans for the purpose of debt consolidation if they are the ones to actually control the loan proceeds and distribute the funds to the varios creditors and would fund you under the the new ratios Im a pretty new investor see if this might help