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Posts Tagged ‘Debt-to-income ratio’

Hello Everyone,

Hope everyone had a great Thanksgiving.  It’s back to work!

A couple weeks back, we made an offer on a great 3 family nearby.  It was recently rehabbed and de-leaded, rented with long term tenants and it also had a parking lot for extra income.   The cash flow would be at least $800 a month, depending on our financing.  We made a first offer of owner financing at 8% with a 10% downpayment (I looked at the on-line deed records and I thought the seller may have owned it outright).  The seller came back and countered with non-owner financing, he countered pretty close to asking.  We countered again for about 11k under asking. The seller came back asking about $6k under asking, but we said our last offer was highest and best.  We haven’t heard back, so I assume he’s not interested.  Our Agent told us that they also had another offer on the table, for the same amount (as our final offer).  Interesting, huh?   This one would have been great, but we’re not going to overpay.   The seller just bought this house back in April for $215k and wanted to sell quickly, but I guess he didn’t want to sell that fast enough, since he has it listed for $239k.   And I just got word that the house went under agreement today.  Another one bites the dust (cue the song).

Oh, and one of the REOs we made an offer on a while ago is back on the market again.  This means the property will be on the market close to a year and a half…and they wouldn’t take our offer?  These banks are really ridiculous.   I guess they want to go through another winter with maintenance, snow removal and the risk of  frozen pipes. 

In the process of looking at this deal, we talked to a lender about conventional financing for rentals. I knew this was a waste of time, since we are down to one income since my husband was laid off.  But, the guy I talked to was nice and suggested just going with my income, since I have long term job employment.  He was impressed by my (and our) high credit scores, but said my own debt to income ratio is too high to buy a rental, which I know, since we already have a mortgage and other bills.   But, I did talk to a couple of other hard money types that have been helpful.  There are some awesome people over at BiggerPockets.com (BP) that have been great.  BTW, if you are not a BP member, do join, it’s a great place to learn and connect with others.  The main sticking point is that we don’t want to take all of our reserves to use as a 30% (or more) downpayment, since that is a significant amount of money here with our local real estate prices.  So, I gotta figure out a way to make it work. I’m a little stuck in the private lending department, too.  It’s a long story, but with my 9-to-5 and the work I do, I do have SEC guidelines I follow with my day to day job, so private lending on the side is really not possible.  I need to find a way around this…I think I’d be ok with lenders with whom I have a previous relationship, but to seek out new people I think would not be possible.  I am still loving the PMBP course, and I knew my job would be an issue, but I may need to hold off private lending until I leave the job. 

So, in the meantime, we are still looking at REI and other ways of making passive and not-so-passive income…like getting back into eBay and stuff like that.  Anything we can do to make enough to pay our bills (to reach our “number” found in Shae’s Financial Freedom GPS), is what we need to do.

That leads me to my goals for next year.  I really need and want to be out of my job by next summer. I am willing to do anything I need to accomplish this.  I just wish all these things I want to do wouldn’t take as long as they should to happen!

Happy Investing!

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