Need to Borrow $$ - Debt ratio too high, but own houses - Advise?

[Draug]

Hey folks,

I need to borrow about $100K to finish renovating a property, and consolidate some debt. However, our debt to income ratio is too high, and I dont qualify for the regular Home Equity Line of Credit from my bank. What are some other ways to get this amount of money, without paying an extremely high interest rate?

In a nutshell, here is the picture:
Home 1 - $400K resale, no debt against it whatsoever
Home 2 - $330K resale, $140K HELoC against it
Home 3 - Mid Remodel, Going to be worth about $350K, $50K HELoC against it.

There are the same 3 Co-Owners on each house. One is retired, and the other two are gainfully employed. But, the two of us who are employed have our own houses, and mortgage payments, in addition to the houses above, so our debt ratio is too high to be approved.

Anyone in the Home Equity business? Anyone have any ideas as to how to borrow against the houses?

I called a mortgage broker today, and the LoC they had we would be approved for, but the rate was 10%.

[photon]

Nice! Wish I had something but all my cash is tied up in properties.

I'd say to try and do a joint venture with someone, get someone who can qualify for you. They don't even have to put in any cash. (Just make sure the contracts are all drawn up before doing anything.)

[Claeren]

nm

[V]

Homerun Investments is another place to look, but I'd advise against it, because I really think that chick is going to jail in the next 5 years, the way she does business...

Shucks, just put an ad in the paper. 10:1 says you get a few calls from interested investors, especially if you can make the investment RSP eligible. I know that's what my buddy here at work does.

[Flames_Gimp]

anyone know if i can get any money out of my house? I only have about $32,000 equity....

[Log]

Originally Posted by Flames_Gimp

anyone know if i can get any money out of my house? I only have about $32,000 equity....

Re-do your mortgage (might be fees to do so early)... Mind you, in Calgary, $32k in equity might be below the 5% minimum equity you need in a house...

[Flames_Gimp]

Originally Posted by Log

Re-do your mortgage (might be fees to do so early)... Mind you, in Calgary, $32k in equity might be below the 5% minimum equity you need in a house...

was just wondering if i could ever get like 15k out. Tried the bank, they couldnt do it, said i need like 25% of the house value in equity.

[V]

Yeah, most HELOCs only let you borrow up to 75% of your house value. So if your place is worth 300K and you have a 250K mortgage, you wouldn't be able to take out a HELOC because you'd need less than 225K on your mortgage.

Some places like Manulife One will allow you to borrow up to 90% for a fee. I suppose that could be a route you might want to take.

[Draug]

The best rate I have been able to find is from Aaron Acceptance. 6.75% for the first mortgage.

It might not get any better than that.

A private investor is probably going to want a 7% return too. I might just have to go with them.

[White Doors]

1) Sell your first house and finance the reno's that way?
2) Take the banks point and don't over-stretch yourself?

[MacDougalbry]

Are you guys renovating and flipping or renovating and holding or renting?

[White Doors]

Originally Posted by fotze

Exactly, no one ever got rich taking risks. Do the safe thing and be thankful you did.

haha. I'm all for taking risks, I'm just saying that if banks are turning you down now, there is a reason for it. He's taken too many risks now basically. Time to take some profit and re-invest is all.

[photon]

Man if 3 houses is overstretching, I'll have to let my friend who has 47 know he has to slow down!

[photon]

I duuno, this guy does his normal job of running around the country all week.. he says he spends between one and two days a week with his properties. Mind you he's got pretty good relationships with all the people he uses so "managing" probably doesn't entail much more than calling the handyman he always uses to tell him what needs to be done, sending the montly info to the accountant, or calling the big guys to go evict someone.

He also says finding the right properties and tenants is important, but I haven't got that part picked out of his brain yet.

[ken0042]

Originally Posted by photon

He also says finding the right properties and tenants is important, but I haven't got that part picked out of his brain yet.

The last place I rented; one of the reasons I was able to negotiate a better rental rate from him is he knew that I was able to handle minor emergencies that might come up (like the one time the plumbing sprung a leak at 2:00 am, I just shut off the water and called him in the morning.)

[Mike Oxlong]

Originally Posted by Dominicwasalreadytaken

Homerun Investments is another place to look, but I'd advise against it, because I really think that chick is going to jail in the next 5 years, the way she does business...

Hey I know that chick as well. I am surprised she isn't in jail already.
How do you know her? Have you worked with her in the past on something?

[V]

My buddy in the office here who I'm always talking about (the one with 18 properties) has done some work with her in the past, and now has made a concious effort to distance himself as far away as possible from her. I've also met her at one of her sales pitches at the Business and Franchises show. Some of the stories my buddy tells me about her really made me keep my distance. I don't want to go to jail.

[Mike Oxlong]

Originally Posted by Dominicwasalreadytaken

My buddy in the office here who I'm always talking about (the one with 18 properties) has done some work with her in the past, and now has made a concious effort to distance himself as far away as possible from her. I've also met her at one of her sales pitches at the Business and Franchises show. Some of the stories my buddy tells me about her really made me keep my distance. I don't want to go to jail.

Yeah I have been to some of her "seminars" on real estate investing that she always advertises in the paper. I know her on a personal level as well and it is very smart of you to stay far away from her.

I have heard and seen many of her practices which she says are "legal". I am curious what country she thinks they are legal in, because they aren't legal in Canada.

She also writes a column in Comfree magazine I believe it is. She is always warning people to be wary of Real estate investors and how they aren't always trustworthy etc.... Hello Kettle? This the the pot...

That chick would steal from her Mother to make a quick buck. She is really quite a joke.

[Tiger]

I know a few people that could possibly help

[V]

Any ties to the mafia? That's the feeling I'm getting outta your post.