OfflineOK, I am hoping that all the other little banks out there are watching this little bank's example. If they are, YOU could be a winner!
The reason I am writing this is in response to a PM I got today:
"I have a question for you: How do you manage to keep buying properties without lowering your credit score, and without increasing your income-to-debt ratio?"
I wanted to share this exciting secret I have found by using my local bank. I can use this for purchases as well, but the "plan" works better this way:
1. Purchase a property with short-term seller-finance or private money (try to find ones that won't take a lot of extra money or time to get rented out)
2. Do your fixing and get a renter in there ASAP.
3. Once I have a signed lease and KNOW that I got a great deal on the property, I go in for the refi. (It helps to know your comps at this point).
4. The bank orders an appraisal. If possible, let the appraiser know why you got the property so cheap to start, with or how your improvements have added to the value of the property.
5. This particular bank right now will refi up to 80% of the FMV (not purchase price), at 5.5%, amortized at 30yrs, which makes the payments extremely low.
6. To figure the income they will consider on a rental, they take the gross monthly rent minus 25%, minus PITI (principal, interest, taxes, insurance). The net after that is either income or liability. If you have found a great enough deal, you will be helping your debt-to-income ratio while getting more than you paid for the property, and at the same time having someone else make the payments for you.
REAL EXAMPLE:
purchase $50K
new appraisal $70K
refi= $56K
gross rent $750mo
-25% bank subtracts $187.50mo
-new refi payment PITI $317mo
----------------------
income $245.50mo + $5000 cash in pocket after closing costs and paying your seller or private money
Of course, the better the deals and the more you pick up, the more you add to your income base, and the more you can take out to use toward more deals! YAY!
This particular bank has no limit to the number of these in-house loans you can have through them. I feel like I found a gold mine!! 
I would encourage everyone to be checking in with their little local banks (like Matt, Nathan, Lloyd, and so many others have said). You never know what new programs they might be offering!
Best wishes to all and happy investing!!!!
Rina
"Obstacles can slow you down, but they can only stop you with your permission." Dean Graziosi (BARM pg 101)
"For I know the plans I have for you," declares the Lord, "plans to prosper you and not to harm you, plans to give you hope and a future." Jeremiah 29:11
For a little about me, welcome to the site, and a few tips for new DG family members, click on this link: http://www.deangraziosi.com/user/3249
This is a great strategy for me to possibly use right now. I have a seller finance option available to me as we speak! Maybe i can try this strategy.
Success and Nothing Less!
Thank you for sharing the valuable information, that is excellent! I will absolutely keep this in mind when I start holding properties. Which will be sooner then later hopefully!
-Mike Hutchins
Amen to that Rina! I do the same thing here in my little town. Not only that the bank finance 100% plus $$ for the repairs, but i also get money back in closing, cool huh! Thanks for sharing that with everyone!
LL
Yes, I hope this can work for lots of us!
One thing I didn't include was that there is a 3-year balloon. I know that's a little more risky than a straight 30-year mortgage, but if it can get us in the running to build up cash-flow now while the pickins are good NOW, great!! And the rates do go up in three years, we can always sell some off to balance it out. In the meantime, the interest rate of 5.5% compared to 8% on the typical investment loan saves some serious money!!
Anyone with any pros or cons to this, speak out. Love to hear your voice!
Rina
"Obstacles can slow you down, but they can only stop you with your permission." Dean Graziosi (BARM pg 101)
"For I know the plans I have for you," declares the Lord, "plans to prosper you and not to harm you, plans to give you hope and a future." Jeremiah 29:11
For a little about me, welcome to the site, and a few tips for new DG family members, click on this link: http://www.deangraziosi.com/user/3249
That's even better! I forgot you'd been doing that! I have to go add you to my examples above!
THANKS for the input!
Rina
"Obstacles can slow you down, but they can only stop you with your permission." Dean Graziosi (BARM pg 101)
"For I know the plans I have for you," declares the Lord, "plans to prosper you and not to harm you, plans to give you hope and a future." Jeremiah 29:11
For a little about me, welcome to the site, and a few tips for new DG family members, click on this link: http://www.deangraziosi.com/user/3249
Geez! I'm gonna move near you guys! Hmmmm...gonna have to flip a coin which direction I go
You guys are amazing. I am printing this post and going to my small town banker to do some wheelin and dealin, because I'm sure not getting deals like that here....YET haha. Great info - thanks!
www.adeptpropertiesllc.com
my story:
http://www.deangraziosi.com/node/10404
I'm with Laura on this one...I'm going to print this out as my blueprint and make appointments with the local banks. That was still on my to-do list but this fires me up to get that part going! You never know unless you ask!
Thank you, Rina, for once again sharing some terrific information.
Nancy D.
Help feed the hungry - www.freerice.com
This is true for RE..."The best way to learn this business is to do this business." - John Addision, co-chief executive officer, Primerica
Aerialist's Journal - Because Life Is a Circus
http://www.deangraziosi.com/real-estate-forums/investing-journals/18857/...
What about the apprasial? I have a house about those same figures--but I am worried the appraisal will come back too low--everything is selling for so low--We are looking at a 20/5 yr balloon tomorrow with a bank--hoping our debt to income is not too high. We have another house bought with private money and now worried about the same thing.
You are a wealth of knowledge, thank you so much for sharing. I will keep this information for future reference (we won't be holding properties but assigning.)
Lea
SPR Property Solutions, LLC
Like in any investiment deals, the main thing is what you plan to do with the property. Rina buys them at discount price, fix them up and rent them out for cash flow. She later re-finance it at 80% and use that $$ for re-investment or pay back hard money. I do the same thing. We buy them and hold for cash flow for three to five year before the interst goes up. For me, my objective is get the bank finance the property at 100% and then rent them for cash flow for three to five years and then sell them for much bigger profit.
The only thing i do differently is i have all my loans under my LLC. Every loan that i obtained is under my LLC. My personal credit is not perfect by any means, but as long as my LLC credit is in great shape, i'll continue to go to the bank and use their money to get mine. I tell them that every loan application that i do, i want to go strickly under my LLC. If the loans were also under my personal credit history, i may not even qualify due to Debt-to-Income ratio as Rina stated above, but the fact of the matter is, i tell the bank that my loans are business loans and therefore should be strickly under my business name as well. Good luck ya'll!
Lloyd
Thanks for sharing the info...did you ever find out if they finance down here?
You're amazing! I think you should come down for a visit real soon...
That would be so great! I could use a HML, then refi? Wow...gotta check that out & see if any of our "little" banks can do THAT!!!
Oh, and Laura...I have a spare room if you need it!
We could be like the traveling sisterhood of REI! 
Dawn
Life's a Dance you learn as you go...GET HAPPY FEET!
"Most of the important things in the world have been accomplished by people who have kept on trying when there seemed no hope at all." ~Dale Carnegie
Thanks for the input, so you said that you obtain all business loans to buy your properties. Can you choose to obtain a mortgage loan under your LLC? Or is it better to ask them for a business loan in the first place?
Ron
Thanks for sharing this great information and the example with all of us. It appears the best opportunities may be at the smaller local area banks. The more we can find banks like this bank the better it will be for all the real estate investors. Thanks again for sharing the details with us. Continued success on all your deals! Believe and Achieve!
- Joe
YOU TUBE CHANNEL - Follow me on my You Tube Channel at Joe Jurek Real Estate Investing Adventures
https://www.youtube.com/channel/UCiko62V79zLKX_owbirAYNA
TWITTER - Follow me on Twitter at Joe Jurek CPA
Joe Jurek CPA
https://twitter.com/JoeJurekCPA
I guess it would be Lloyd's turn to see you, but then you come live HERE, ok?
Actually, I was gonna say, if you end up wanting to do a refi on your WI house, you might be able to use this local bank. Not sure of the details, but I know my other investor used them. Then again, they had started a WI LLC to buy here with. Not sure how that works, but I can certainly give you the bank's contact number. I'm working with the VP.
Hope all is well with you this morning.
Rina
"Obstacles can slow you down, but they can only stop you with your permission." Dean Graziosi (BARM pg 101)
"For I know the plans I have for you," declares the Lord, "plans to prosper you and not to harm you, plans to give you hope and a future." Jeremiah 29:11
For a little about me, welcome to the site, and a few tips for new DG family members, click on this link: http://www.deangraziosi.com/user/3249
Keep fired up!
And I will wish you luck on finding a little gold mine in your area. Thank you for all your helpful contributions to the site.
to your success!
Rina
"Obstacles can slow you down, but they can only stop you with your permission." Dean Graziosi (BARM pg 101)
"For I know the plans I have for you," declares the Lord, "plans to prosper you and not to harm you, plans to give you hope and a future." Jeremiah 29:11
For a little about me, welcome to the site, and a few tips for new DG family members, click on this link: http://www.deangraziosi.com/user/3249
Yes! Please pm me the bank info. That is a fabulous idea! dont know where my brain is lately. Many thanks for coming to the rescue last night. I will call you when I can today to get details and outcome. xoxoxoxoxoo me
www.adeptpropertiesllc.com
my story:
http://www.deangraziosi.com/node/10404
Just make sure you get good comps beforehand. This will really help you to make sound offers and be confident in your exit strategies.
There's one I'm looking at right now that I may even have an appraisal on BEFORE I sign the PA (not suggesting that for every purchase. could get spendy), so I can creatively structure the deal.
The appraisers come up with their numbers with some of the same comps that you get from your realtor, so going that route should give you a real good idea.
Hope that helps.
Rina
"Obstacles can slow you down, but they can only stop you with your permission." Dean Graziosi (BARM pg 101)
"For I know the plans I have for you," declares the Lord, "plans to prosper you and not to harm you, plans to give you hope and a future." Jeremiah 29:11
For a little about me, welcome to the site, and a few tips for new DG family members, click on this link: http://www.deangraziosi.com/user/3249
Thank you for the kind words, and I wish you well with your assignments! I would encourage you to look into what your local banks have to offer, as well, not only for if you decide to hold any properties, but also it is valuable information you could pass on to the investors you will be assigning to. I have been doing this, now that I know of the product. Actually that is how I found OUT about it, from other investors. It's great to share knowledge and is a great asset of networking. People helping people on any level is always rewarding.
And just because someone is a newbie to REI doesn't mean they can't teach an old dog new tricks. 
(Especially true of Dean's stuff. He's always giving us cutting-edge info!)
Good luck and thanks again!
God bless,
Rina
"Obstacles can slow you down, but they can only stop you with your permission." Dean Graziosi (BARM pg 101)
"For I know the plans I have for you," declares the Lord, "plans to prosper you and not to harm you, plans to give you hope and a future." Jeremiah 29:11
For a little about me, welcome to the site, and a few tips for new DG family members, click on this link: http://www.deangraziosi.com/user/3249
Thanks for the reminder. I will DEFINITELY ask this morning.
And yes, look into your local banks, too.
I like the traveling sisterhood thing!
Rina
"Obstacles can slow you down, but they can only stop you with your permission." Dean Graziosi (BARM pg 101)
"For I know the plans I have for you," declares the Lord, "plans to prosper you and not to harm you, plans to give you hope and a future." Jeremiah 29:11
For a little about me, welcome to the site, and a few tips for new DG family members, click on this link: http://www.deangraziosi.com/user/3249
Thanks for the added info! I need to look into a better business loan source than the one I was using. I spoke with the Pres & VP of my original bank yesterday. I went in to wire some $, and they came over to say hi and see how things were going. I told them about the product at the other bank and they looked chagrined, and said they couldn't even touch those rates. But they encouraged me to stop by to discuss more about the commercial loans they had available. (I'm thinking line of credit now, to work together with the product from the other bank.) Actually I'm looking forward to the sale of the one property I have on a business loan through them right now (the others with them are personal), because they actually have liens on THREE of our properties for that ONE loan. craziness. That will release two of our properties to then refi with the other bank, giving us even more capital to work with. Nice, huh?
Thanks, LL, and congrats on all your deals!!
Rina
"Obstacles can slow you down, but they can only stop you with your permission." Dean Graziosi (BARM pg 101)
"For I know the plans I have for you," declares the Lord, "plans to prosper you and not to harm you, plans to give you hope and a future." Jeremiah 29:11
For a little about me, welcome to the site, and a few tips for new DG family members, click on this link: http://www.deangraziosi.com/user/3249
You are absolutely right.
I was also thinking of this new tweak to my plan, utilizing this new product:
I will be seeking properties and making offers now based on this simple idea. Purchase price (or eventual refi) MUST be low enough to give me a mortgage amount that, when deducted from the rent will leave me enough net to cover the 25% the bank doesn't consider and give me net cash-flow above that. This will be very easy to figure out beforehand now that I know the exact terms of the refi.
Current example. (I'll use purchase price)
2 props
$70K (Current value about $115K, so should be able to refi the $70K)
$700 monthly PITI amount, based on the 5.5%, 30-yr terms
$1400mo gross rent
SO...
$1400 rental income
-$350 (25%)
-$700 (PITI)
------------
$350 additional income the bank will consider. (and actual cash-flow will be $700 month of course). Nice. I like addition. lol
Rina
P.S. mortgage calculators come in very handy. You can use the one from the site or there are a ton of them on the web.
"Obstacles can slow you down, but they can only stop you with your permission." Dean Graziosi (BARM pg 101)
"For I know the plans I have for you," declares the Lord, "plans to prosper you and not to harm you, plans to give you hope and a future." Jeremiah 29:11
For a little about me, welcome to the site, and a few tips for new DG family members, click on this link: http://www.deangraziosi.com/user/3249
This sounds like great news! I'm new to the website, and was wondering how I can strategize my first deal. I already have a high DI ratio and am looking to real estate investing to payoff my debts and gain financial stability. Thank you for the information!
Karla
NEVER GIVE UP!
You can do both, but then again, they may use your personal credit and Debt-to-Income aganist you. Here's what i've done, i purchased one last year using convention 30 year mortgage loan. Six months later, i moved out of that house and turned that into cash flow rental property. I bought another one, moved in there and used that as my new place of residence. So basically you can use both, but at this point, any loans that i obtain will be strickly under my LLC. I have other properties in Utah that i had my attorney put under my LLC as well. Good luck!
LL
Laura, you can move out here any time, but i guess since Rina offered you to move in with her, then it would be much easier for me to come out to Rina and see you both there, lol. In that case, i can kill two birds with one stone, lol.
Ok Rina, i like what you're doing girl. Yeah, go to the bank and negotiate with them. I like when you said "I told them about the product at the other bank and they looked chagrined, and said that couldn't even touch those rates" I bet they will if you keep negotiating with them. They give you that red flag from the begining, but once you sit down with them and go throughly with your plan, they will come to understand you, and most likely come on board and do business with you. But i like it when you have the banks compete for you business. I do the same and the more you do business with each bank, the more they likely keep lending you the $$$. You may not get everything you want from one bank, but what you don't get from the other bank, the other bank may step in and do it for you. The best thing about dealing with these banks, if they have an "REO" property in their listing, they will call you and ask if you want to purchase it. When they do that, i go to Bank C and ask them for loan to buy a property from Bank A. That's the beauty of it, and i love when that happened, lol. Good luck to you ladies and wish you more success in your real estate endeavours.
LL