“Real Estate Rich and Cash Poor”

Walter owns 4 properties, three 4 family homes valued at $600,000 and a total of $165,000 in mortgages at an average of 8% and his primary residence valued at $360,000 with three mortgages and all total $66,800. His total monthly payments were killing him.

Walter had worked with the same bank for nearly 20 years and they said they couldn’t help him. The biggest problem, by the time all of the deductions were taken on the investment properties, he showed a loss and in spite of his $60,000 income, the bank couldn’t make a loan work. The loan officer was attempted refinance the 3 income properties, but no dice.

The banker that has worked with him called me to ask if I could see what I could do. To say that Walter was frustrated was an understatement. After reviewing tax returns, his leases, pay stubs, bank accounts and retirement account, I proposed we refinance his primary residence. The mortgage would be $230,000 @4% for 15 years, his principal and interest payment was $1,666 per month. Currently the principal and interest payments on the 4 properties totaled $2,311.

All of the interest was still all deductible and since he had already depreciated the 3 investment properties, then doing a refinance on his primary residence was the best option.

Certainly helping out the client was wonderful, but the thank you card from the banker was really special.