How much of a loan could I get with these numbers? - Posted by Senior C

Posted by old bear on April 04, 2005 at 09:57:14:

Then go for it Senior C :wink: I know what you mean. 100K is a lot to me too. Just do me a favor. Sell before prices drop or stagnate. Don’t hold on to it. Cally has had bubbles before. Sometimes it takes a decade for prices to recover after bubbles. In Japan, RE prices went up this year… the first time since 1987 :wink: they were paying $1000/sqr foot too at one time. Best of Luck!!!

How much of a loan could I get with these numbers? - Posted by Senior C

Posted by Senior C on March 31, 2005 at 11:13:19:

Hello all,

Credit Score - 575
Monthly Gross Income - $7083+75% rental income = $7983
Current Mortgage - $1400 (but will rent this out for $1200)
Car and Ins - $280
Credit Card - $0
Other Loans - $0

Note: I haven’t been at the company 6 months, however all my previous changes in employment have been for higher pay. Would I have to be there for 6 months first?

Also, my wife could add roughly $25-$30K to the household income, but her credit is worst than mine, so not sure if it’s beneficial to add her name. Her debt ratios are low however, because everything is in my name.

I want to purchase a fixer home in an up and coming area in Southern California creatively (under market value) and live there for 2-4 years while fixing it up. I’ll then sell this home for a profit (hopefully with some appreciation help)and move back into my then rented home in Texas. I just don’t know whether I can get a loan for $300K with that credit score. Would a co-signer help?

Re: How much of a loan could I gey - Posted by dealmaker

Posted by dealmaker on March 31, 2005 at 13:09:40:

A couple of things arent’ entirely clear to me, but here’s the way I’m interpreting your post.

Do you now live in TX? And you’re thinking about relocating to CA? This sounds a bit like a post from a few days ago asking about Irvine CA, was that you?

On the 75% rental income, I’m guessing is $900 of the $1200 you’ll get from the TX house. Does the $1400/mo include a MANAGEMENT FEE? Does it include an upward adjustment in PPTY tax when it loses it’s homestead exemption? WHY ON EARTH would you want to be a long distance landlord, with a NEGATIVE CASH FLOW in the state with probably the worse record on appreciation? I can’t imagine that will improve your FICO score.

Have you found a place in CA that you know you can buy at a substantial discount?

I don’t want to sound like I’m criticizing but with a $110K family income, your track record on financial management isn’t looking too good. You might want to take a hard look at where your money is going, not take on any more money losing investments and really spend awhile getting your act together.

A cosignor might help, but it’s going to have to be someone who loves you, not someone who’s in the business of lending money.

I’ve had people approach me about cosigning who have credit down around your numbers, it’s usually for a re-hab. Sometimes I do them, sometimes I don’t. But I NEVER DO THEM AS A CO-SIGNOR. I do them by having all agreement in place regarding work to be done and how it will be done, WHEN it will be done and a price above the price I’m buying for (instead of them, or them and me buying), but below FMV. Most people turn me down, at least initially. Many of them after re-evaluating their options (HML at high points and interest or losing the deal) come back to me. My program PUTS THEM UNDER THE GUN to do the work and not sit around thinking “I’ll get to it later”. When we do these deals and they do the work we both make money.

Or I could tell you about a “guaranteed money making course” I have for sale that will solve all your problems. I figure telling the truth is better, even though it can hurt.

dealmaker

Re: How much of a loan could I get - Posted by Senior C

Posted by Senior C on March 31, 2005 at 13:52:36:

Hi Dealmaker,

Yes that was me posting that question. I have no problems with honesty. That’s what I need the most right now, because I have to make a decision quick.

My family income had never been this high, and in fact it’s been quite a big jump every few years to get here. So it’s not like I’ve been making great money for the last 5 years. However, I’ll admit I need to get better at money management. My score is low over very small and stupid credit card expenses, all under $4K.

Now as far as renting the house in Texas I totally agree. It’s pointless. I could coem back in 3 years and fine a HUD or a foreclosure to move into without a problem for prorbably less than what we bought this house for. The issue is my wife feels more “secure” knowing we have a home to come back to if I get layed off after 4 months at this new place, which is understandable. The thing is she’s attached to THIS HOUSE. She wants to come back to THIS HOUSE. Her arguement is that there are more things that can go wrong than right in this scenario, and I agree.

My arguement is that history shows if you can buy a house in California for under market value, you will not regret it. Am a partly banking on appreciation. Probably so, but I won’t buy anything at market value to protect myself. If that means I can’t buy anything, then so be it.

We can stay here and do the some old thing, or we can take a chance that can change our lives. If it doesn’t work, then we sell our house in California and move back to Texas. Or her other option was for me to get off my rump and do some investing IN TEXAS where there is less competition. She fears if I haven’t done a deal in Texas, what makes me think I’ll get a house under market value in the most competitive market in the country? Good question.

Re: How much of a loan could I get - Posted by old bear

Posted by old bear on April 03, 2005 at 19:07:46:

Cally will be one of the first areas to tank… and you’re thinking of going there? As Mr. Buffet once said, “the little guy always gets caught going the wrong way.” Don’t do it. Stay in TX. Cally RE is WAY overpriced and will pop… what if you’re out there when it pops? Have you thought of that or are you too busy doing thinking of negative cash flow deals in TX? 1400 mortage payment, but you can rent it for 1200… you sound like the new fangled RE investor ;)… the ones who don’t care about ROI or yields and don’t know what these things mean. Sad what people such as yourself are doing to spur asset infalation… the very thing that’ll lead to massive foreclosures and BRs soon… very soon.

Re: How much of a loan could I get - Posted by Denise

Posted by Denise on April 02, 2005 at 17:17:46:

Just remember that real estate is not a liquid asset you may or may not be able to sell as quickly as necessary with out taking a reduction in price.

Re: How much of a loan could I get - Posted by Carl

Posted by Carl on April 07, 2005 at 20:01:45:

I have been hearing that story that the California market will collapse for the last 25 years. Has it? No! Will it? Maybe! Along the way there are always some price corrections when coming out of a bull real estate market, but the forces of California keep the prices rising every decade.

Re: How much of a loan could I get - Posted by Senior C

Posted by Senior C on April 03, 2005 at 20:53:25:

Old Bear,

I do hear what your saying, but I didn’t mention I lived in California until I was 22, and I’m now 26. If I had a dollar for everytime I heard that “pop” line I wouldn’t need to ask these questions. If I do a search back a year ago I’d probably fine posts saying the same thing then. What happened? Houses went up $100K in one year. I live a modest life and $100K is a lot to me at this point in my life. You could be right, but history says you’re wrong. I just don’t want to end up kicking myself 5 years from now. Of course if everything works out in Texas, I won’t care what happens in California…

Re: How much of a loan could I get - Posted by old_bear

Posted by old_bear on April 07, 2005 at 20:38:12:

Let me make it real simple for you Carl. Incomes are not keeping up with the increase in property prices. In fact, they’re no where NEAR keeping up. People are paying 2K a month on mortgage payments and only taking in 1K in rent (and that’s with 100% financing and all costs rolled into the loan). Cally’s gonna go down hard. Believe it. Sell ASAP… or at least before the crash comes… that’s all that’ll matter in the end.