INTRO – What I’m looking to accomplish.

These are the five things I’m considering and would like help with:

1.      Get approved for a loan to purchase another investment property, preferably conventional loan but will do hard money.

2.      Do a cash-out refi on an investment property that I have in Cleveland, again use the extra cash from it to buy an investment property.

3.      Check the possibility of getting a HELOC on my primary residence, again to purchase an investment property.

4.      Figure out if it makes sense to do a blanket loan.  I have an LLC. 

5.      Get pre-approved for a new primary residence, up to $200,000 max. We would then turn the house into a rental.

I currently have six properties, one primary and five rentals; three mortgages and three private loans.  All of the rentals that I have are rented and have positive cash flow.  All three of my mortgages are with GMAC, one primary and two rentals. 

In order to save time, I am going to include as much pertinent information that I can think of that will help you make your decision as to whether or not this is the type of loan you can or want do. 

PRIMARY RESIDENCE

I bought the house in August, 2006 for $151,000.00.  The house is now worth $170,000.00 – $175,000.00.  The address is 20914 Water Point Trail, Humble, TX  77346.  The mortgage is $1068 on a 15-year loan which I am two years into.  I have never missed nor been late on any mortgage payment for any property.  

Copied from GMAC Mortgage on 4/1/12

FIRST INVESTMENT PROPERTY

I own an investment property that I purchased at an auction.  I closed on this property on March 31, 2009.  It is a 1-story, 3BR/2BA on 1/3 acre.  The address is 97 CR3701, Splendora, TX 77372, which is in Liberty County.  I only paid $5,000.00 for the house because there was a huge tree that had fallen through the roof.  The house was totally rehabbed and I have a tenant who pays me $795/month.  It is not escrowed.  The taxes on the property are approximately $700/yr and the insurance is $438/yr.  The house is cash flowing +$295/month.  The appraised value as of 2/4/10 was $65,000.00.  After repairs, that is approximately a $30,000.00 equity capture.  I have the full appraisal report.

SECOND INVESTMENT PROPERTY

I also purchased this house at an auction.  I closed on this property 3/30/10.  It is a 2-story, 4BR/2BA, 1960 SF.  The address is 18747 Firefly, Porter, TX  77365, which is in Montgomery County.  I paid $51,000 for it but with the auction house fees the total was $53,500.00. The tenants are paying me $1000/month.  This house is escrowed and the payment is $490.20.  So the house is cash flowing +$509.80.  The appraised value as of 3/2/10 was $76,000.00.  That was an instant equity capture of $22,500.00.  I have the full appraisal report.

THE THIRD THROUGH FIFTH RENTAL PROPERTIES

These three properties are all financed through private lenders.  I have the details on these if necessary. 

CASH FLOW

SIXTH INVESTMENT PROPERTY

The property has yet to be determined.  However, it will be in the Houston or Humble area and preferably a light to medium rehab.  It will need to have at least a 25% instant equity capture or I won’t buy it.  I use this formula when evaluating properties:  After Repair Value (ARV) x 65% – Repairs – Closing Costs = Maximum Allowable Offer (MAO). For example, $100K After Repair Value (ARV) x 65% – $5K repairs -$3K closing costs = $57K Cash. 

I’ll need a loan of approximately $60,000 to $80,000.  I would like to purchase as soon as possible.  Also, if possible, I would prefer a loan where the rehab money is rolled into the loan. 

MISCELLANEOUS INFO

I make $70,000/yr, with my bonuses and commission; my wife, Maria, makes $50,000/yr.

I also earned $17930.59 last year with my positive cash flow from my rentals and doing various side jobs, including my computer repair business and vending machines, etc. 

My credit has ranged from 721 to 764 the last few times I checked.  My wife’s was 712 the last time we checked. 

Besides my mortgages, which are making me money, the only other debt I have is a small student loan in which I owe approximately $2500, the only reason I’m not in a rush to pay it off is because the interest rate is only 3.27%.  The payment on the student loan is only $56/month. 

Here is the loan summary as of 4/12/12:

Both my wife and I have vehicles that are paid off.

I have been with my employer for over eight years.  My wife has been with the same employer for over seven years. 

I had a bankruptcy in 2003. 

I own a Marriott timeshare, which is paid off that is worth $23,000.00 and another timeshare from the Aruban Resort and Casino that is also paid off.  It is valued at $9000.00. 

Between the five properties there is a monthly positive cash flow of $1778.13.  One of my goals for the next three years is to have enough rental properties where the cash flow will be sufficient enough for me to meet my monthly living expenses which are currently $3008/month.  With my average cash flow of $355.63 per house, in which should be a lot higher if it weren’t for the one house in Cleveland only cash flowing at $60/mo because it is on a 5-year note, I will need another five houses in the next three years.  That is only 1.67 houses per year.  Considering I purchased two in less than a year, I think the plan can be accomplished rather easily, especially now with my increased knowledge and huge amount of contacts and resources. 

DOCUMENTATION

I can provide all of the documentation below:

1.                  20011 W2

2.                  Last 30 days paystubs

3.                  Homeowners insurance declaration page

4.                  Home survey

5.                  2010 Tax returns, all pages

6.                  TX drivers license

7.                  Permanent resident card for my wife, Maria.

8.                  Social security numbers for my wife and I

9.                  Current mortgage statements

10.              Current lease agreements with tenants

QUESTIONS

What are your terms, including interest rate, length of loan, what percentage I am required to put down, origination fees, etc.?  Do you need to pull my credit score?   How long will it take to get approved?  Do you know of any good schools to get your license to become a mortgage agent? 

SUMMARY

I would like to get at least one of the four options done as soon as possible with the best rate possible.  If you need more documentation than what I have listed above, please let me know and I’ll see if I can get it for you.  If possible, I would like a GFE (or equivalent – I know there have been a lot of changes in the mortgage industry) BEFORE giving out my social security number.  Emailing here or faxing the GFE to 713-400-1928 is fine.  The GFE is critical because I want to compare your offer with a couple others.  Please be clear and let me know what my interest rate will be, if there are points involved and any and all other fees.  I’m only interested in fixed rate mortgages, no ARMs or balloons.

If you need any other information from me, please email me here or call me at 713-510-7922.  If this is not the kind of loan you that fits your lending model, and you know of someone (maybe a hard or private money lender) who may want to lend on one of these types of deals, please forward this email to him/her for me.

Thank you,

Landon Rothstein
Real Estate Investor, Notary Public
4141 North Freeway Suite 310
Houston, TX 77022
713-510-7922 Office
713-400-1928 Fax to email

Do you handle these modifications? Think if I had a pro help we may get more savings. Also would a foreclosure do the most good to settle all of our debt? And if we went with bankrupt would we be unable to purchase a home again? I am fine renting for a couple years but want to own again.

Thank you very much for any financial advice you can lend.

If you need more background on us let me know but based off the above is there any way we would get a loan for the roof? Thank you so much and I await your reply.

Susan

Canton, MI

Thank you.

Thanks Eric