Our average client can obtain at least $50,000 and up to $100,000 of credit for their business or rental portfolio. Our strategy involves grouping together several business credit cards with limits ranging from $5,000 to $20,000 and transferring the balances to a line of credit the business owner already has available. Most credit cards have a special provision in them as an incentive to take your debt from another source and transfer it to them at a low introductory rate.  It’s a simple trick, but these few steps save a ton of interest over taking cash directly out of these cards and paying the high cash advance rates. Even better, our sources don’t report to the credit bureau on your personal credit report!

We can obtain this credit for our clients in less than 30 days. There are three main requirements that you will need to meet to qualify for this program:

1) 680 credit score.

2) An LLC or other business entity formed.

3) A true business phone number set up. (We can help you with this for about $15 per month.)

Believe it or not, our sources do not require income information to qualify.  The cost for this service is 6.99% of the amount of credit we get for you and the average rate on the cards is 10%.

This is a great way to create a cushion for yourself if your a new small business owner without a solid income history yet or a new landlord that is trying to come up with a quick down payment or cash flow to make repairs.

For more information, Give me a call at 952-808-2820.

Rob Bonahoom

Mortgage Coach

If an investor will focus on the fundamentals of an investment property vs. market timing, I believe they will have the best chances of success. The fundamentals include: cash flow, financing terms, property condition, location and management. If you can obtain favorable terms in each (or most) of these categories, your property will be able to withstand most of the ups and downs of the real estate market. Most people who bought in 2005, 2006 and 2007, bought solely for appreciation. This, as we now know, was a big mistake.

The other big mistake I see most investors make is that they have no strategy to pay down their mortgage on an accelerated plan. I have some great tools to help people with that. You can learn more about that on my website.    You won’t enjoy the greatest benefits of your investment property until you own it. You don’t need to wait 30 years for that to happen. (Most of my clients can do it in 10 years)

So in conclusion, if the fundamentals look good, it will greatly increase your chances of success. Then do your best to buy near the bottom of the market. I believe that time is now or sometime very soon. I think some time mid summer we will see the market get back to what we call a “balanced market”.   In the Twin Cities, that’s about $22,000 listings. Right now we are sitting around $28,000 listings on the market and this number seems to get lower every month.

If you want help analyzing the fundamentals, give me a call 952-808-2828.

Rob Bonahoom

Mortgage Coach

Mortgage modifcation companies have been popping up all over the country. Many of them are ran by mortgage orignators that got out of lending the business. (be careful) Although I fully believe that there are plenty of these companies out their that have great intentions of helping people successfully modify their mortgages, I worry that some of these compannies are just going to exploite people further by taking up front money and then aren’t able to do anything for the client.  Do you homework about who you choose to work with.

I have helped many people successfully get their mortgage modified. Most lenders have a simillar process that has to be followed to successfully get a mortgage modified. The first step to a successful loan modification is that you will be required to be late on your mortgage. This is a very hard step (emotionally) especially if you have always been on time with your bills in the past. Lenders know this and it sets an important bar for them and tells them that you are serious about the need to modify your loan.

Secondly, you need to determine if a 30-year fixed fully amortized rate at 5% will help your situation. (this is not always the package you get but it is most common) For some people, that just isn’t gong to lower their payment enough. If a term like this won’t help you, a short sale or foreclosure may be a better option for you.

Finally, You need to be prequalified. You have to prove that you have the income required to be able to afford the new payments. 51% of all current loan modfications are failing because people still can’t make their payments. Lenders are going to make sure you can pay them back if they are going to agree to modify your loan.

If all three of these hurdles seem feasable to you, a loan modification may be a great way to save you thousands of dollars in interest over the life of your loan. You can definately take this on with your lender on your own however some poeple would prefer to pay us a $1500 fee (only upon successful modfication) and have us handle things for them.  To learn more about our company, check out www.modmanagers.com.

I hope this article gives you a better idea about how the process works. Feel free to call me for more questions 952-808-2820.

Rob Bonahoom Mortgage Coach

  In today’s market, clients aren’t given the option to take the higher rate. Some experts believe that Fannie Mae is doing this so they don’t have lenders charging higher rates right now and offering no cost refinances to their clients. A lender will lose a lot of money if a borrower doesn’t keep thier mortgage with their loan servicer for at least 12 months.  If a client were to do a no cost loan today, and rates drop further next month, a borrower may be tempted to refinance again. Regardless of Fannie’s true motivation here, this option of higher rates offsetting the discount points is temporarily off the table.

Below is an example of investment property rates right now for a borrower with a 720 credit score that is purchasing a property for $250,000 and putting down 25%.

Current Pricing                                                      2 Month’s Ago

5.625% - 2% Discount                                             6.25%  - 2% Discount

6% - 1.5% Discount                                                 6.75% - 1.5% Discount

6.375% -1% Discount                                                 7% - 1% Discount

No Discount - Not Available                                    7.5% - No points

Notice both the lower current rates and also notice that the discount point previously didn’t buy you as much of a rate difference before as it does today (.25% before and .375%+ today).

In conclusion, the extra discount points may cost you if you don’t plan on holding your investment property very long but for those investors who will hold their properties for a while, now is a great time to be both purchasing and refinancing.

If you would like a spreadsheet sent to you with different loan options at different rates and discount points, please shoot me an email at rbonahoom@houseloan.com.

Happy investing!

Rob Mortgage Coach

952-808-2820

Instead of simply buying based on the emotional aspect of a great 4% rate, look at the fundamentals of the transaction. If the deal makes sense, don’t wait. Many professionals believe that rates will never reach these unpreceded levels.

Here is an article to support my postion….

Mortgage Rate Article

Rob Bonahoom

Mortgage Coach

The Followings Changes Were Made to the Loan to Value Ratio’s for Investment Properties:
                                                                Old LTV                 New LTV
Purchase Transactions                              90%                        85%
No Cashout Refinances                             90%                        75%
Cash Out Refinances                                 85%                        75%

We have seen many changes in 2008 to Fannie Mae’s guidelines for investment properties. Some the the changes this year include:

* No cash out of investment properties for 6 months
* Limiting the number of financed investment properties to 3.
* Raising credit score requirements

I expect that the changes aren’t done yet and we will continue to see more restrictive credit standards until the housing market starts to come back and default rates decrease.

Rob Bonahoom
Mortgage Coach
952-808-2820

One of the tricks with this rehab loan is finding realible sources for financing. I have found that banks will do the program for a while and then things will change and they will no longer be able to help you. Many times early on in my career I found myself in a pinch when a local bank pulled the plug on a deal no different than one I closed with them last month. My experience has been that they will run out of funds to lend or new people come to the bank who no longer think the rehab loan is a good program. Because of this, I am always working with new banks to establish other options for this program. I never want to be without at least two outlets for any deal.  

If you have interest in learning more about my rehab program, check out the REHAB Loan Page of my site or call me at 952-808-2820.

Rob Bonahoom

Mortage Coach

The biggest key in using real estate to build wealth is utilizing the power of using other people’s money to purchase income producing assets, however, the exit strategy has to evolve around a reduction or elimination of your debt. Investment properties that are debt free allow you to receive the cash flow which can serve as a income stream that could last for the rest of your life.

I have found a tool out there that seems to work very well to help guide you to the quickest route to paying off all your debt as well as  give you a moment by moment snap shot the exact date you will be debt free.

A company called United First Financial out of Salt Lake City, Utah has designed an incredible program that I believe every investor needs to own and utilize on a regular basis. In most cases, It will show the real estate investor how to pay off their properties in half the time. You can obtain a free analysis of your personal situation by clicking on the link below and filling out the appropriate information. There are also two very interesting video’s on the following link. Take 10 minutes to watch and learn more about this phenominal program.  I started the program myself two weeks ago and I am thrilled with the results.

Click on Link Here to View

I hope you take a hard look at this.

Rob Bonahoom

Mortgage Coach

The magic starts by utilizing the maximum potential of two investment loan programs.

The first loan is used for the aquisition and renovation of your investment property. Yes I did say renovation. To use this system and loan program, there has to be some renovation required on the property. The minimum amount of rehab required is $10,000. It’s actually easier than you think to spend $10,000 on a home. Buy new appliances, paint and carpet and you can probably get there. Most of the good buys today that investors are looking for require some type of renovation work. The second requirement of this loan is that the property needs to appraise for 25% more than the aquistion cost and renovation costs added together. For example, if you buy a property for $50,000 and spend $25,000 on rehab costs, the home needs to appraise for at least $100,000. Warning! The bank does require that you escrow 20% of your loan amount in a secured savings account with them as collateral during your renovation. This money serves as a security deposit for both you and the bank if something goes wrong during construction. As long as everything goes correctly and you refinance into our second investment loan we are going to do, the escrow money comes back to you. This is an important key to our program. You have a six month time line in order to complete your work.

For the second loan we utilize Fannie Mae. Fannie has no seasoning on a refinance which means they will use the appraised value when they consider our loan to value ratio. This is an important key. If we were to use Fannie Mae directly on the purchase of this property, we would be required to put at least 20% down. By doing it on the refinance, we get the benefit of a long term - low rate financing package but also get the benefit of using the appraised value and no down payment is required. No cash out is allowed with this loan program.

Closing costs on the purchase can be paid by the seller and since we aren’t using Fannie Mae for that, and there is no limit on the amount the seller can pay. (Fannie Mae limits you to 2% of the sales price)

Once your refinance is completed, you are now into this property for very little cash invested. I see nothing fundamentally wrong with that as long as you are cash flowing on the property. In this real estate market, you can cash flow on property in any area of the Twin Cities utilizing this program.

The reason I reference 3 properties in the beginning of this article is because that is all Fannie Mae will allow you to finance with them. After your first 3 purchases, things will get a little harder and a little more expensive, but you can still follow a simillar system and limit your cash invested.

Rob Bonahoom Mortgage Coach

View the complete article HERE