Ten Thousand Dollar Man No More

I showed my 2010 income tax return to the mortgage guy and he said that I'd be approved for... over 110k! I didn't even think I would be approved for 90k! That was the good news. Time for the not so good news.

My tax guy messed up certain parts of the tax return. He put that I only owned one property, and that the property I owned was vacant so I was paying for everything. That made me take a hit on my income of 14k. By not listing the second property, he also gives the bank something to hold against me when applying for the loan. Also, due to my tax guy's incompetence, I owe the state $400. This comes as especially bad news since I was actually expecting $670 from the state. Furthermore, the mortgage guy (I'll call him Jimmy Gage) told me that I'll have to clean up my credit, a move that would cost me a little over 4k. I was really happy to see that 10k in my account last week, but a good portion of it will have to go.

I currently have 10k in my account and a lot to pay for. Repairs to Property Chi will cost over 2k, maybe 2500 or so. Rita will probably have to put in half. I'm also going to pay May and June's mortgage payment for Property Chi so that I won't have to worry too much. The combination of Rita's money plus the security deposits and rents of the new tenants should help offset most of the costs.

I will pay the money needed to get my credit in order (a little over 4k), then use the better credit score to refinance properties Alpha and Beta. Refinancing allows me to get new loans for both properties at a lower interest rate. I'm more interested in using the refinances to borrow against the assessed value of the properties. For example, I currently owe about 58k on property Beta. If I can get it appraised for 85k or more, I may be able to get a good 10k out of the deal. It's called a cash-out refinance. So the money I pay to get my credit taken care of will be returned more than double what I paid. And that's only for one property! It's a gamble, but it's worth a shot. If this works, I'll be able to purchase my new property sooner than planned, maybe by September.

I'll pay the tax guy (yes, he's charging me $100 for HIS screw up) to take care of the mess, then pay the state the $400 I owe them. While I'm at it, I might as well take care of my suspended license and registration for my vehicle. I hate to spend all this money but, in this case, I'm going to have to spend money to make money.