Went to the bank today

[swyman]

So I couldn't get anything out of them for a stump grinder as a business, I thought I would take advantage of low mortgage rates. (Don't mean to get off tree stuff but you guys are the only ones I care to talk to) Currently I am paying 6.5% and local bank is at 3.8%. This would save me a few hundy a month (save for stump grinder). In '07 my home was valued at $195,000 but today is worth $114,000!!! WTF happened. I am writing this because some of you may be or have been in this situation and I am looking for some sun. I really really want to say F'it and just quit making payments and tell the bank if they won't help me they can figure out what to do with it but it's just not my nature. I am really pissing away a lot of money paying for this when I could be gettting a much better deal. I did ask the banker that if I did not pay and let them take it how long it would take before I could buy a house and he said 4 years. Doesn't sound that long and woud probably be money ahead. I don't qualify for the Fanny May or Freddy Mac BS which is BS. Is there anything I can do other than waste a lot of my hard earned money???? Could I bully my bank into working with me? Been with them for eveything for 18 years.

 

[no tree to big]

yep kinda the same situation here in 02-03 my house was appraised at 235 we bought it for 200 now I'd be lucky to get 120 for it (more like 100) a lot of real nice foreclosures around the Chicago area for cheap so private party deals for full price are in the crapper. I ended up taking the payments over for my dad so he didn't loose the house(was a small builder 1 crew and when the houseing market tanked there was not a lot of money coming in for quite a while) but he was in foreclosure but after nearly 5 years of the banks screwing around was finally able to get a modification I think we have like a 2% loan now so I only have to pay like $1100/month including property taxes at nearly 4K/yr it was at like 16+taxes before.

what due you owe still? were you trying to get a bit more on top of that too?

you cant make a bank do anything if the house ain't worth it why would they give more?

if you purposely go into foreclosure that's taking a big chance cause if you get into one of the many modification programs and they look at your income (which they will do in great detail) and see that you could have made the payments they might start asking questions... its not worth it at all if you can manage the payments you have now!

 

[swyman]

I owe $140, making the payments or not a problem but I just don't seem to be getting ahead. It kills me to see how much I could save by getting the interest rates that are available but I can't touch them. Kills me

 

[no tree to big]

at that point since you are only 26K over market value I would try and save up a little extra cash and make say a $3-5K payment to quickly knock down some of the principle and help you get to the point you could refi for the last 90K (80% of value) time to start selling your butt off for tree work!!

 

[swyman]

Insult to injury, I just got another call for a stump job....dammit have $500 lined up but is $350 a day for a 252

 

[treeman75]

Sounds really frustrating! I always try to think on the positive side of things. Atleast you have some work and a roof over your head. The housing market here might of slowed up some but values havent droped.

 

[pdqdl]

Quit talking to your bank. They aren't interested.

Apply for a loan from a company that specializes in commercial equipment, you probably have a better chance. The dealer for your stump grinder can probably tip you off to one that will close the sale at an interest rate you would rather not pay.




I'm going to crawl out on a limb and guess that you have no business plan, no CPA approved financial statements, and your personal income statement does not reveal much income, while your bank account is flush with lots of cash (and check) transactions that seem like a lot more business than your income tax statement suggests.

These are the hallmarks of a cash-income business. Banks fear this kind of business, because it is likely to get slammed by the IRS, which puts the bank 2nd in line to get their money. They don't like that to even be a possibility.

Get an accountant that can make you look better, and your financing problems will go away.

 

[capecodtree]

banks are tough

You can buy equipment with no money down, only monthly payments, that is how I got started. The down side is that you pay big on interest, 15%+/-. As far as your house goes I have a friend that is a mortgage broker. no closing cost and rates in the 3s. pm me and I will get you the contact info for either or both. jim

 

[GQL&L]

first off if you just walk from your house it 7 years before you can buy. it 4 if you short sale. i would look more for specialized company to get the loan.

 

[swyman]

Quit talking to your bank. They aren't interested.

Apply for a loan from a company that specializes in commercial equipment, you probably have a better chance. The dealer for your stump grinder can probably tip you off to one that will close the sale at an interest rate you would rather not pay.




I'm going to crawl out on a limb and guess that you have no business plan, no CPA approved financial statements, and your personal income statement does not reveal much income, while your bank account is flush with lots of cash (and check) transactions that seem like a lot more business than your income tax statement suggests.

These are the hallmarks of a cash-income business. Banks fear this kind of business, because it is likely to get slammed by the IRS, which puts the bank 2nd in line to get their money. They don't like that to even be a possibility.

Get an accountant that can make you look better, and your financing problems will go away.

I have a CPA that takes care of all my records and does all the LLC stuff. Tried going through equipment (Rayco of MI) and they were having me go through some lease co with 16% interest on a 4k hour machine. As income goes my second job is a skilled tradesman at Chrysler so I am very stable. I guess the only business plan I have is to do as many jobs as I can and put the money back in the business to upgrade equipment. Have put a lot of money in my equipment making everything perfect so between that and insurance I have been hit hard this spring. Just have to keep working and saving I guess

 

[pdqdl]

CPA prepared financial statements are the first big thing to have.

Second: PROFITS. Does your LLC declare profits and pay taxes that are consistent with your cash activity, or does it look like a tax shelter that is used to deduct expenses on your house & truck?

Banks like to see profits, and small businesses like to hide cash income and avoid paying taxes. This is often what keeps them from getting along too well.

Your bank will ignore all the cpa prepared forms if your tax statement doesn't show that you paid taxes on the profits you made.

 

[pdqdl]

Try these guys: Customer Section : Sheffield Financial

They finance LOTS of equipment, and they aren't too evil. I have used them for several loans.

 

[swyman]

Try these guys: Customer Section : Sheffield Financial

They finance LOTS of equipment, and they aren't too evil. I have used them for several loans.

Thanks man, maybe the biggest thing is that I lost my job so I whipped out my 401k and bought my truck and chipper to get started. To offset the tax hit my accountant let me write off everything 100% so I showed a $44k loss. Guess that is.self explanatory I will call them though, thanks. At the boys little league game this morning and one of the moms asked.me to do 2 stumps...errr

 

[pdqdl]

Any financial officer at a bank that notices that huge write off (not likely) will pause immediately. Trucks & chippers are a long term investment and require depreciation. You don't generally just get to write them off the same year you buy them.

Most bank loan officers really aren't that sharp about accounting. They generally just look at the bottom line. 44k loss...Oh Dear! We can't loan money to someone that isn't making money.

Have your accountant write up a less used financial statement: the Change in Cash Position, usually called a cash flow statement. If this shows an increase in cash availability, then you will be able to make payments on a loan, and that is all the bank officer really cares about. Loan approved...

 

[swyman]

I just don't understand why they don't take the money I make from the other source of income. I guess I am troubled by being shot down, I have never been turned away and am not taking it very well. Maybe for my own good but I keep getting these stump calls that I can't do. Need to just buy a small self propelled as I have been told in previous posts and get the stump jobs that I have been turning down. Will take longer but money in the pocket and can do complete service for the customer. That is my main concern. I have a lot of growing to do and my patience sucks. You guys always get me back on track and I thank you!
Shane

 

[pdqdl]

I have been using the same stump grinder for the last 13 years. Rayco 1625 super jr. I haven't found a stump it wouldn't do, although sometimes it takes a bit of patience.

You don't need a big machine, unless your demand is so great that you are losing money by grinding slow. Besides, sometimes smaller is much better. I have done many stumps that a bigger machine would never get to.

 

[pdqdl]

I just don't understand why they don't take the money I make from the other source of income. ...
Shane

People can get fired, or lose their other source of income. The bank is mostly interested in loaning you money on a machine that will pay for itself. Unless they are convinced that it is a profitable investment or that they have a secured interest that they will profit hugely on your default, they will decline.

They have no interest in taking risks.