Lendings and Quotas

Now that I'm finally on track with my plan to buy two large properties before the end of 2012, I've been doing more research and calculations to prepare myself for what ever comes. I see the changes in my approach to business and I like it.

I've been looking at the economy which is actually pretty good for investors right now. The home prices are falling and will continue to fall for the next couple of years. This means I'll be able to get a better property for a lower price. Sellers are absolutely dying to get rid of their properties, almost to the point of taking a loss and getting out of the real estate business altogether.

The only problem I see now is financing. Banks are going crazy with these tough guidelines for buying properties. I can't find any lenders willing to do 10 or 15 percent downpayments on residential loan purchases. Everything is 20% and up. What's worse is that I'm looking to buy a 5-unit property or better, and that's considered a commercial loan. Any purchase of a property more than 4 units is considered a commercial loan, which means a higher downpayment and tougher loan-qualifying criteria. I'm sure that things will loosen up by the time I'm ready to buy in April or May, but I have to keep my eyes and ears open in the meantime.

To get a better idea of what's going on in the lending world, I'm going to make a list of every lender I can find this weekend. I'll be working 100 hours next week thanks to 2 co-workers leaving at the bank job, so I should have time to call a shitload of lenders and get a better idea of what programs are out there to help reduce down payments and ease criteria for lending approval.

I also did a more detailed calculation of my expenses and I may fall short of my $4500 goal for this month by a few hundred bucks. Everything was going fine until I got hit with a $600 water bill that I had forgotten about from May. They sent a "shut off" notice for property Beta, so I have to pay the full amount on Monday or the tenants of Beta will have to be using nothing but deodorant for next week. I'll try my best to meet my $4500 quota, as any shortage will make it difficult to reach future quotas. I'm becoming more informed of the real estate world around me, so now is definitely not the time to fall behind.