Question for Ed Garcia - Posted by HappyInvestor

import · May 1, 2003, 11:29am

Posted by HappyInvestor on May 01, 2003 at 21:18:38:

I realized I should have given you some background on our rehab experience. We since the summer of 2001, we have done 3 rehabs and sold them, we almost have completed our 4th rehab and just about ready to list it, and have our 5th waiting (my mother and I have started demo while my husband finishes the 4th). My husband works as an electrical foreman full-time and does the rehabs for 2-3 hours a night on the weeknights and 10 hours per day on the weekend. He does everything himself (tiling, interior painting, installing new windows, etc.) except for re-roof jobs, carpeting, and extensive exterior painting. Total net profit on each project has been anywhere from $34,000-$67,000. Our profit has been $20,000-$30,000 because of the splits with our parents who have been funding the projects. We are happy with the profits, but my husband desparately wants to quit his full-time job to do rehabs full-time and I’ve told him until we can do the projects on our own he’s going to have to hold on to his job (pretty mean wife, huh? Anyway Ed, thank you for your time in advance.

import · May 1, 2003, 11:29am

Posted by HappyInvestor on May 01, 2003 at 11:29:37:

Hi Ed,
I really would love to attend your workshop someday if you ever get the the west side of the country. Unfortunately my husband and I are afraid of flying and would have to leave our children for a longer time than we are comfortable with in order to drive to attend the workshop (we live in NV). My question to you is in order to get a working line of credit, should you have all unsecured debt payed off? We have high credit card debt currently as we used credit cards to rehab 2 duplexes and a house that we rent. We are currently rehabing 2 homes that should take care of the unsecured debt plus pay off my car. That will leave only the 4 mortgages (3 on rentals, 1 on personal residence). This should happen in the next 7 months or so. Will you be in this area any time soon? Our credit scores once everything is paid off should be somewhere in the high 600’s to low 700’s. With our experience in rei, would we be good candidates for a WLOC? Any comments would be greatly appreciated. Thank you.

import · May 4, 2003, 8:15pm

Re: Question for Ed Garcia - Posted by Ed Garcia

Posted by Ed Garcia on May 04, 2003 at 20:15:32:

HappyInvestor,

I’m going to try to answer your questions in the order you have given them.

QUESTION:

My question to you is in order to get a working line of credit, should you have all unsecured debt payed off?

ANSWER:

NO, it would be nice, but not realistic or characteristic of the average borrower.

QUESTION:

We have high credit card debt currently as we used credit cards to rehab 2 duplexes and a house that we rent. We are currently rehabbing
2 homes that should take care of the unsecured debt plus pay off my car. That will leave only the 4 mortgages (3 on rentals, 1 on personal
residence). This should happen in the next 7 months or so. Will you be in this area any time soon?

ANSWER:

I think that you’re doing a good job of thinking ahead and trying to control your credit.

As to weather Terry and I are going to do a workshop on the West Coast or not, I can’t say. Terry and I focus on one workshop at a time
and never do more than two a year.
Chances are we will discuss the next workshop in June while were at the workshop. That’s when we decide if, when and where we will do
our next workshop.

QUESTON:

With our experience in rei, would we be good candidates for a WLOC?

ANSWER:

HappyInvestor, I have read your additional post “Background on us” and there is no question that you have the experience and are headed
in the right direction to acquire a WLOC. One thing that I’m not sure of is, do you or are you going to do, enough deals to warrant a
WLOC. I don’t mind telling you that sometimes we’re in a catch 22, because if we had the money that we can get from a WLOC, that
would give us the ability to do more deals. However if an investor just does a few deals a year, they would not warrant a WLOC. Again,
like you, I look ahead and work with alternative financing. There are many things a bank can do for us other then just a WLOC, such as
still give us money to buy and fix the properties as we buy them. It doesn’t always have to be a WLOC.

HappyInvestor, I hope I’ve answered some of your questions and want to wish you a nice day,

Ed Garcia