Episode 6

Grab the Map Podcast Episode 6 How to Make the Bank Never Say No John answers every email that goes to grabthemap gmail com Today we re discussing how to make sure the bank never says no It can be intimidating to approach a bank It appears as if banks don t lend money Today we ll discuss the secret to making sure the bank does not say no This is a process and it does not work 100 of the time Most of the time you ll walk into three banks and one will usually say yes 02 45 You need a solid education for what the business plan is for what you re asking for for the money John usually asks the bank to lend money on a property and he s asking for the money to be collateral for a period of time while he collects rent and pays the bank back with the rent He s not asking for money for a new car or boat He s usually asking to buy something that s cashflow-generating Present them with a business plan that results in cashflow They need to see that the money you ask for will generate more money than it will cost you to buy 04 15 Practical example if you buy a house for 50 000 i e in Mississippi calculate the debt serviced to the bank taxes owed to the state and local government insurance maintenance and capital reserves to keep the property in good condition After those expenses you must be making money on the rent from that property The more money you re making on that property the less likely the bank will tell you know because the more likely you ll be able to pay the loan back with interest They want to lend you money on a deal that will cashflow 05 50 If you have trouble getting the bank s money look at your deal Don t ask for more money than will allow the deal to cashflow Some people look for a bank loan hoping the money will keep them afloat until prices increase Instead show the bank a significantly undervalued property that is cashflowing very well after expenses Ensure the asset will make you money 08 10 What would happen if the bank took the property back and had to manage that tenant Bring the bank quality i e renovated properties That means you can t spend all the cashflow on vacation or nice-to-haves Save that cashflow into capital reserves and maintenance reserves so you re prepared for a leak for example and the property remains attractive 09 55 Be a good borrower yourself The banks will examine your assets and see what you bring to the table as a borrower They ll see if you pay your bills on time and have good credit The better the other two factors are the less this is an issue The more your property cashflow is ldquo on the edge rdquo the more they will examine your credit report Do you pay late Are you maxed out 11 10 Bring in property that cashflows a great asset and have a great credit history as the borrower What if you don t have great credit Start paying your bills on time talk to smaller banks and let them to get you know as a person Update your credit report to remove any negative items that don t belong Pay down your credit cards 13 00 It s hard for a bank to say no to a deal with a cashflow property and great lender They need to loan money to make money Consider making friends with other borrowers Early in John s career he obtained his first loan at a small bank due to a recommendation from a friend Stop chasing shady ldquo wholesaler rdquo deals research the numbers fix up a property and get its worth to 25 more than what it was when you first entered the deal then approach the bank after you ve fixed it up Be a decent borrower and have an attractive property that cashflows Contact us at grabthemap gmail com or grabthemap net Click here to visit this podcast episode

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