I can’t seem to get my mind around the master plan of buy and hold. Certainly not whether it should be done, but HOW to accomplish the desired goal. The main bone of contention being the financing, as it seems to me that each deal the is remotely tied to my credit score will negatively impact it making it that much more difficult and/or expensive to do the next deal. Is the only answer sub2 and lease option/purchase? Is this the only way to enjoy the tax benefits of building the empire while not cutting off my ability to grow the empire?
Your lender should not have to pull a credit report for each deal that you do. For example my company (not a shameless promotion) will use a credit report that is up to 60 days old. So for my investors we use the same report multiple times before we have to pull again. Adding mortgages to your credit report may dip your score a bit at first, but as long as you are making all of your payments on time it will go back up fairly rapidly.
Although scores do come into play, the need for positive cash flow, cash reserves, etc. are also detrimental conditions that are prohibiting some investors in today’s new and every changing lending enviroment.
I originally suggested back in January (at the start of the meltdown) that we are returning to early 1990’s guidelines and guess what, we are almost there…
Cash is king, increasing your down payment allowances is one way you could possibly use to circumvent some of the problems you have mentioned.
Regards,
Scott Miller