Finance Question..
I have good credit, and i make good money, but i would not like to have 5 mortgages under my personal name...
How do you guys handle more then one rental?
Do you guys have 5 mortgages on your credit?
It has to be a better way...
Any help would be great...
Thank you guys... <IMG SRC="images/forum/smilies/icon_cool.gif"> [ Edited by efeneyeguy on Date 03/11/2004 ]
Unfortunately if you are going to get into the real-estate game, you are going to have multiple mortgages in your name unless you own a corporation that can qualify for loans without a personal guarantee.
There are a couple ways around it. You could purchase "subject to" and take over other peoples mortgages giving them cash for keys. The mortgage stays in their name however you own the property and make payments.
You could find some private money and have them lend money to a trust that you set up or your corporation you set up.
You might be able to talk them into not
making you personally guarantee it.
So, to answer your question, If you make good money, what is wrong with having
5 mortgages in your name if they all have a positive cash-flow. Most investors I know have at least 5 mortgages in their name. They also have loans from private guys, loans that they have taken over "subject to" etc...
It is just part of the game. The more you
have the more you make!
Best Riches,
Jeffrey Adam
Got to agree with Jeffery, hopefully the more properties you have financed the more money you are making, in which case 5 hopefully will just be the start.
But, there are ways to stream line things. I know my father has at least 10 houses on 1 note, each representing a percentage of the loan so he still has the ability to sell individual properties if desired. Favorable interest rates made refinancing benificial to begin with, so there wasn't a cost hurdle, wrapping several together made the loan conditions even more favorable as the banks were liking the loan size. If the original purchases were at good rates the cost of refi everything might be prohibitive.
My personal situation, I am taking out a line of credit on 2 properties I had paid for, so I have funds available to pay cash when i find a deal. So, once I buy a new property I can turn it over to the bank and have the credit line increased appropriately. Again each property represents a percentage of the total line, so selling is possible. To be absolutely honest and not steer anyone wrong, I am in the process of setting this up and won't have it done for another week, my banker swears it's the way to go for me, but I obviously haven't utilized it to know for sure how effective it will be. If the idea stinks someone please correct me.
Mykle
As a newbie with NO mortgages on my credit, I have always wondered why or actually what kind of effect 5 mortgages would have on someones credit rating if they did have 5 mortgages all being paid on time, etc. Whenever I talk to inexperienced real estate investors, (mom and posp) they are always trying to get their name OFF of the mortgage so they can pursue other houses, etc.
It would be nice to be able to show them the error of their thinking, so I can use them as investors in my other houses.. when they happen.
Any suggestions?
Thank you for your help....
The funny thing is that i'm a finance director, but i don't deal with mortgages.
The only problem i see with 5 mortgages under my name, that if i try to get something personal, i would have to show my lease papers....
It's not a big deal, i was just trying to get around it...
I was thinking about seting up a company, but building the company credit also would need my P.G for a while.....
This is a great forum,,,
Again, thank you guys....
Good question and answers, I am just starting out in the land lord business as well, I am about to have 4 mortgages. I am not too worried, because I know I will have pos cashflow, but I also wondered how it would affect me if I wanted something personal.
JB
[addsig]
Quote:As a newbie with NO mortgages on my credit, I have always wondered why or actually what kind of effect 5 mortgages would have on someones credit rating if they did have 5 mortgages all being paid on time, etc.It should have no effect on your credit score. From my own experience, ten mortgages in my own name has not reduced my credit score at all.
Quote:Whenever I talk to inexperienced real estate investors, (mom and posp) they are always trying to get their name OFF of the mortgage so they can pursue other houses, etc.The issue for these folks may not be their credit score, but instead, they may be unwilling to be held personally liable for so many loans at one time.
Quote:It would be nice to be able to show them the error of their thinking, so I can use them as investors in my other houses.. when they happen. Getting a mortgage and giving a mortgage are not the same thing. If you are giving your "investors" a mortgage, then your mortgage loan does not appear on their credit report.
I'm in mortgages and it's not a problem as long as the income offsets the mortgage pmt.
The reason why some M&P's want to get mortgages off to pursue others is that lenders have limits as to how many properties you can have financed. Some are more liberal than others so be sure to have your broker check the guidelines of the program you're qualifying under to ensure you can have a bunch. Some go to 4, some 10 and others 20 with an exception.