what should I do? - Posted by Douglas McDowell

Posted by Douglas McDowell on July 11, 2001 at 08:43:25:

Hi Nate,
Thanks for the response…I should have added that although THIS one would only be about 100/month, I would be trying to get better than that when I could.

Regarding the FICO, you’re right. That’s my Equifax score from the FICO web site. And I just learned this: It’s the score of my entire credit history, because when the mortgage company ran their credit score, it showed up as 605. I thought OK, either FICO screwed up in what they told me, or in what they told the mortgage company. So my wife called Equifax yesterday to find out about the discrepancy.

Turns out that most mortgage companies don’t look at everything (in my case payment on student loans must be what it was) when they request your score. But when YOU personally request your score, you’re given everything. Hence the difference in the two scores. I think that kinda stinks (of course I WOULDN’T think that if the score they got had been higher than the one I got!).

My Transunion score was 640. I have been working on pulling up my credit rating from a CH 7 of almost 4 years ago.

Still compared to ‘average’ it could be a LOT better: I tried to refinance my 8.625 personal home mortgage this week but was given 9.1 as the best rate I could hope for for another 2 years. I thought enough time had passed…but obviously not.

what should I do? - Posted by Douglas McDowell

Posted by Douglas McDowell on July 09, 2001 at 13:22:07:

I have found a 3 brm, 2 ba. home in need of about $4500 repair. Asking price is 48,000, can probably get it for 43,000 because of the repairs. My credit isn’t great. I can purchase the home with 10% down at 11%, but this results in a negative cash flow of about 100/month.

My Dad lives in a retirement community and is paying his rent with payments he gets from a 6 year note. He says he’s willing to let me use his credit to apply for any loan I can. He could get a VA loan at 7% but then he would HAVE to live in the property, which my mother’s health and their general situation will not allow.

Is there a way to structure a ‘partnership’ to allow us to buy this property using my income and his good credit? The difference between 7% and 11% is what would make this a positive cash flow investment of about 100/month.
Thanks for any advice.

Re: what should I do? - Posted by Douglas McDowell

Posted by Douglas McDowell on July 10, 2001 at 09:14:20:

To the party who emailed me about ‘Repairing my Credit’…
I appreciate your advice. However, there is no need for me to pay $520.00 for a program to check for loopholes in my credit report. I’ve seen it, it’s quite accurate. I have no desire to do anything other than own up to my past mistakes and work at repairing the damage I irresponsibly brought upon myself in my younger days.
Please understand I’m not knocking what you’re selling; it might well be worth it to others. But I have worked hard at re-establishing good credit for the past few years. My FICO is coming up due to diligence and a much greater understanding of my own finances.

Re: what should I do? - Posted by Cyndi

Posted by Cyndi on July 09, 2001 at 20:20:52:

Perhaps you should just let this deal go by. I would suggest looking for a duplex to fourplex that you and your parents can agree on. I do believe VA covers up to a 4 units. If not FHA does. Allow him to purchase it as principal residence and move in. Why should they pay rent at this stage of the game? Then wrap the loan in your name at a slightly higher interest rate (shhhhhhh) or as a lease/purchase. Help your folks and help yourself. Win/win. My kinda deal. If you go FHA, don’t forget about 203(k) rehab funding. If your folks miss renting, they only have to live there a year. If they enjoy investing with you, getting the tax breaks and maybe a bit of income, I understand they can purchase another property in this manner after the first year. Good luck to you all!

Re: what should I do? - Posted by Chuck (AZ)

Posted by Chuck (AZ) on July 09, 2001 at 17:48:00:

What you want to do is certainly possible. But consider this.

$100/month positive cash flow? I mean you could work a few extra hours a week and have the same results, right?

The margin on this deal doesn’t work as an investment or as a income-producing property.

Check out my comments in the thread concerning “buying a house while still in bankruptcy” farther down the page.

Re: what should I do? - Posted by Douglas McDowell

Posted by Douglas McDowell on July 10, 2001 at 08:31:06:

Thanks for the input! I think you guys are right, I should let this one go by. I don’t know if my Dad’s income would allow him to qualify to purchase a duplex. Our problem is he has great credit, but low income. I have what is for my area an OK income, but pretty slow credit (FICO 679).
I will definitely keep the duplex idea in mind. Thanks again!

Re: what should I do? - Posted by Douglas McDowell

Posted by Douglas McDowell on July 10, 2001 at 09:05:33:

Thanks for the input. You are quite right that I could work part time and make this much. I had a goal of getting 20 such income properties in about 4 years but so far I have found none that could work very well on paper given my circumstances. The best I’ve done so far is to back off of a few bad deals. I never want Guedo to come looking for me :wink:

Re: what should I do? - Posted by Nate(DC)

Posted by Nate(DC) on July 10, 2001 at 23:59:33:

At $100/mo, I question why you would want to accumulate 20 of them. That’s a HECK of a lot of work to make $2000/mo. $24000/yr. In many parts of the country, that’s not even enough to live on. You’d still need a JOB.

Also, I had to comment on something you said elsewhere. Who told you a FICO of 679 was bad? If that is your score, you should be getting A or A- type financing. 679 is pretty good.


Re: what should I do? - Posted by Chuck (AZ)

Posted by Chuck (AZ) on July 10, 2001 at 10:21:49:

You’ve no doubt heard the saying…

“There’s always time to do it right, there’s never time to do it over”.