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Debt Ratio |
sayana
109 Posts
Member Since: 06/11/2003
Taylor, MI
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Posted: 11:58 on 08-27-2004
Hi Everybody:
I bought a bunch of SFRs
during the past 18 months by making 20 % down payment in each of the nine cases. Then I got those properties up to city codes and that ate away a lot of money. I want to keep growing but my debt ratio is now higher.
My question is if it will be advisable for me to start buying properties on land contract or lease options even if the cash flow is negligible or negative in the hope of appreciation down the road.
sayana 
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wwiler
8 Posts
Member Since: 05/22/2004
Portland, OR
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Posted: 12:17 on 08-27-2004
I would recommend that you start buying with No Ratio loans, (similar to going Stated). For 80% LTV scenarios this would be extremely easy. You also could start doing some refinancing and plough the proceeds into paying off all your other consumer debt, if you have any, which will improve your debt ratio.
I am mortgage broker so I have seen this work well for my investor clients as well.
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InActive_Account
-5 Posts
Member Since: 02/26/2002
AnyTown, NY
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Posted: 19:54 on 08-27-2004
You do know that most lenders will let you count 75% of the rent payment as an off set for the mortgage payment?
If your putting 20% down doing repairs and still have negative cashflow then you need to think about what your doing.
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j_owley
332 Posts
Member Since: 06/19/2003
Cutten, CA
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Posted: 20:15 on 08-27-2004
What is an SFR?
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sayana
109 Posts
Member Since: 06/11/2003
Taylor, MI
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Posted: 04:16 on 08-28-2004
Hi j_owley
SFR is single family residence.
sayana
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sayana
109 Posts
Member Since: 06/11/2003
Taylor, MI
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Posted: 04:36 on 08-28-2004
Hi:
Thanks to all the above contributers.
Please let me make a few clarifications.
1. I do not have any consumer debt but I do use some of my credit cards which offer zero % or 2-3 % APR.
2.I do not have any negative cash flow in any of the existing properties but was planning to buy some on Land Contract or with Lease Option.
3.The suggestion about refinancing is great but all my properties were bought almost recently involving seasoning issue.
4.Where do I find the No Ratio Loans?
sayana
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fmmp
416 Posts
Member Since: 09/07/2003
East Saint Louis, IL
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Posted: 04:45 on 08-28-2004
Sayana you could locate and broker in your state or a broker who services loans in your state. I would suggest doing a little research first on the loans to educate yourself. There may be someone to help on the TCI Lenders tab.
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sayana
109 Posts
Member Since: 06/11/2003
Taylor, MI
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Posted: 06:36 on 08-31-2004
Hi :
My original question dated 08-27-04 to the TCI was as under:
"My question is if it will be advisable for me to start buying properties on land contract or lease options even if the cash flow is negligible or negative in the hope of appreciation down the road."
Monthly payment $ 715 which includes land contract payment, taxes, insurance.
Rental income $ 700.00.
Could any veteran investor please respond urgently ?
sayana
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