Getting a mortgage as a professional gambler

[KJ]

I also saw where someone essentially said - KJ, what are you doing, essentially making reference to additional dollars that could be made in the market. I don't think that's dumb at all, and I'm assuming that a good portion if not all of the down payment came from his bankroll. Firstly, the higher downstroke decreases his monthly nut, and secondly, depending on how the loan is structured, he may have a significant portion of the remaining equity available to him through low cost lines of credit secured by that equity (if he needs it and still considers a part of his bankroll) the interesting question (and it would hel if I was more conversant with US tax law) is if he will continue to put excess funds against his mortgage, provided there is no penalty, which may have the further positive consequence of increasing his credit line, thus maintaining his bankroll size.

As professional AP's and in particular AP's engaging mostly in card counting, we need and fortunately I have been able to acquire, a large bankroll. Naturally we want that money working for us rather than just sitting there. This (investing), however is an area I am not very knowledgeable in.

When I purchased my first property, a condo, I was required to put 25% down (actually closer to 30%). Even though professional gambler is being seen as a more legit and substantial form of income (especially in Vegas where there are many), you gotta show a history, meaning paperwork, tax returns, etc. At that time I hadn't been at it all that long and had been at it at a reasonable level of income even less time. The property was acquired through an auction and the mortgage through that same outfit. Because they were looking to move a number of units they had sitting empty, I think I was able to put less down that I would have if I had been purchasing without that situation.

Four years later after I sold my condo, when I was purchasing my first house, I was able to purchase it with less down as I had more of a history, but I still chose to put 50% down. I figured putting significant part of my bankroll into that was my form of investing it, rather than getting involved with the stock markets and other areas that I am not very knowledgeable with.

I then went even further purchasing a second, smaller, less expensive home, in the same neighborhood which was selling below market. With real estate being rock bottom, I though this would be my vehicle for investing my bankroll and making money off of it. I fairly quickly decided I didn't like the whole renting out my second property/landlord thing and sold that second property early this year.

The only reason I didn't take those funds and pay off the balance of my primary home was because I was and still am in a situation where one of the local casinos is paying that primary home mortgage for a year (via winning a drawing). As soon as that is complete, in January, I will be paying off my primary home, which will reduce my monthly nut (hate that phrase) and serve as that invested part of my bankroll that I can get to through a line of credit if things go really bad with what I consider my playing or easily accessible bankroll, which is right at 6 figures.

edit: I didn't realize until after I posted that I covered some of this earlier in the thread (although several years ago). My bad for only reading the recent posts.

[seriousplayer]

As professional AP's and in particular AP's engaging mostly in card counting, we need and fortunately I have been able to acquire, a large bankroll. Naturally we want that money working for us rather than just sitting there. This (investing), however is an area I am not very knowledgeable in.

When I purchased my first property, a condo, I was required to put 25% down (actually closer to 30%). Even though professional gambler is being seen as a more legit and substantial form of income (especially in Vegas where there are many), you gotta show a history, meaning paperwork, tax returns, etc. At that time I hadn't been at it all that long and had been at it at a reasonable level of income even less time. The property was acquired through an auction and the mortgage through that same outfit. Because they were looking to move a number of units they had sitting empty, I think I was able to put less down that I would have if I had been purchasing without that situation.

Four years later after I sold my condo, when I was purchasing my first house, I was able to purchase it with less down as I had more of a history, but I still chose to put 50% down. I figured putting significant part of my bankroll into that was my form of investing it, rather than getting involved with the stock markets and other areas that I am not very knowledgeable with.

I then went even further purchasing a second, smaller, less expensive home, in the same neighborhood which was selling below market. With real estate being rock bottom, I though this would be my vehicle for investing my bankroll and making money off of it. I fairly quickly decided I didn't like the whole renting out my second property/landlord thing and sold that second property early this year.

The only reason I didn't take those funds and pay off the balance of my primary home was because I was and still am in a situation where one of the local casinos is paying that primary home mortgage for a year (via winning a drawing). As soon as that is complete, in January, I will be paying off my primary home, which will reduce my monthly nut (hate that phrase) and serve as that invested part of my bankroll that I can get to through a line of credit if things go really bad with what I consider my playing or easily accessible bankroll, which is right at 6 figures.

edit: I didn't realize until after I posted that I covered some of this earlier in the thread (although several years ago). My bad for only reading the recent posts.

KJ, you post in many of the thread that you acquire a bankroll and made large profit (6 figures) by engaging mostly in card counting. You have shared that you did it using the keep it simple method. Could you share with us your wisdom on how you did it and what made you succeed? Did you start out small?

[KJ]

KJ, you post in many of the thread that you acquire a bankroll and made large profit (6 figures) by engaging mostly in card counting. You have shared that you did it using the keep it simple method. Could you share with us you wisdom on how you did it and what made you succeed? Did you start out small?

Yes, started very small, got very lucky along the way in ways that I had no idea about at the time and worked hard and long at it, especially in the beginning at lower limits.

I am not going to rehash that though. The members on this site are sick of hearing my story (as well as my thoughts and experiences and just about anything that I have to say). But most of it is posted on this site. You can find it of you look.

[seriousplayer]

Yes, started very small, got very lucky along the way in ways that I had no idea about at the time and worked hard and long at it, especially in the beginning at lower limits.

I am not going to rehash that though. The members on this site are sick of hearing my story (as well as my thoughts and experiences and just about anything that I have to say). But most of it is posted on this site. You can find it of you look.

Thanks for sharing that with me. I learn from every AP no matter how much I know. I contribute as well.

[metronome]

off topic but can't resist. Sold the "big" house and netted enough equity to only need a mortgage of 35K on a 235K property in the country. My business showed a loss for 2012, but not 2011 or 2010. Our credit scores are right at 800. The wife was I believe 810, the highest the underwriter could ever recall seeing.
Could not get the loan, so we said piss on 'em, sold some securities and paid cash.

[Freightman]

off topic but can't resist. Sold the "big" house and netted enough equity to only need a mortgage of 35K on a 235K property in the country. My business showed a loss for 2012, but not 2011 or 2010. Our credit scores are right at 800. The wife was I believe 810, the highest the underwriter could ever recall seeing.
Could not get the loan, so we said piss on 'em, sold some securities and paid cash.

Wow, they rejected FICO's of 810 and 800 on a property with about 80% equity because ur biz lost money 1 year. There are tons of factors here. I would have told them where to get off - unless something else unknown, you should have been able to get a loan virtually anywhere - unless the biz was about to circle the toilet bowl.

Pretty sure my lastFICO was 848.

[Freightman]

As professional AP's and in particular AP's engaging mostly in card counting, we need and fortunately I have been able to acquire, a large bankroll. Naturally we want that money working for us rather than just sitting there. This (investing), however is an area I am not very knowledgeable in.

When I purchased my first property, a condo, I was required to put 25% down (actually closer to 30%). Even though professional gambler is being seen as a more legit and substantial form of income (especially in Vegas where there are many), you gotta show a history, meaning paperwork, tax returns, etc. At that time I hadn't been at it all that long and had been at it at a reasonable level of income even less time. The property was acquired through an auction and the mortgage through that same outfit. Because they were looking to move a number of units they had sitting empty, I think I was able to put less down that I would have if I had been purchasing without that situation.

Four years later after I sold my condo, when I was purchasing my first house, I was able to purchase it with less down as I had more of a history, but I still chose to put 50% down. I figured putting significant part of my bankroll into that was my form of investing it, rather than getting involved with the stock markets and other areas that I am not very knowledgeable with.

I then went even further purchasing a second, smaller, less expensive home, in the same neighborhood which was selling below market. With real estate being rock bottom, I though this would be my vehicle for investing my bankroll and making money off of it. I fairly quickly decided I didn't like the whole renting out my second property/landlord thing and sold that second property early this year.

The only reason I didn't take those funds and pay off the balance of my primary home was because I was and still am in a situation where one of the local casinos is paying that primary home mortgage for a year (via winning a drawing). As soon as that is complete, in January, I will be paying off my primary home, which will reduce my monthly nut (hate that phrase) and serve as that invested part of my bankroll that I can get to through a line of credit if things go really bad with what I consider my playing or easily accessible bankroll, which is right at 6 figures.

edit: I didn't realize until after I posted that I covered some of this earlier in the thread (although several years ago). My bad for only reading the recent posts.

So, what I'm seeing here, regardless of opportunity to deduct interest expense, KJ will opt to pay off his mortgage at some future opportune time. Regardless of anything else, regardless of potential loss of other profit to be had - there us huge comfort in having your biggest investment (house) free and clear.

Again, without a thorough knowledge of US tax law, a Canadian citzen residing in Canada, and having rental property, would be well advised to eliminate debt on primary residence, and have all mortgage interest expense directed towards the revenue property. M assuming, that in the US, the same might be true, as there be some limitations on personal home interest deductibility vs rental mortgage interest deductibility.

[Freightman]

As professional AP's and in particular AP's engaging mostly in card counting, we need and fortunately I have been able to acquire, a large bankroll. Naturally we want that money working for us rather than just sitting there. This (investing), however is an area I am not very knowledgeable in.

When I purchased my first property, a condo, I was required to put 25% down (actually closer to 30%). Even though professional gambler is being seen as a more legit and substantial form of income (especially in Vegas where there are many), you gotta show a history, meaning paperwork, tax returns, etc. At that time I hadn't been at it all that long and had been at it at a reasonable level of income even less time. The property was acquired through an auction and the mortgage through that same outfit. Because they were looking to move a number of units they had sitting empty, I think I was able to put less down that I would have if I had been purchasing without that situation.

Four years later after I sold my condo, when I was purchasing my first house, I was able to purchase it with less down as I had more of a history, but I still chose to put 50% down. I figured putting significant part of my bankroll into that was my form of investing it, rather than getting involved with the stock markets and other areas that I am not very knowledgeable with.

I then went even further purchasing a second, smaller, less expensive home, in the same neighborhood which was selling below market. With real estate being rock bottom, I though this would be my vehicle for investing my bankroll and making money off of it. I fairly quickly decided I didn't like the whole renting out my second property/landlord thing and sold that second property early this year.

The only reason I didn't take those funds and pay off the balance of my primary home was because I was and still am in a situation where one of the local casinos is paying that primary home mortgage for a year (via winning a drawing). As soon as that is complete, in January, I will be paying off my primary home, which will reduce my monthly nut (hate that phrase) and serve as that invested part of my bankroll that I can get to through a line of credit if things go really bad with what I consider my playing or easily accessible bankroll, which is right at 6 figures.

edit: I didn't realize until after I posted that I covered some of this earlier in the thread (although several years ago). My bad for only reading the recent posts.

A couple of comments here. You mentioned thay you purchased at auction, that the mortgage was provided by the company holding the foreclosed properties. The glut surrounding property likely gave you extra slack which may not have been available st a more buoyant time. Timing means a lot. Being a landlord is a PAIN in the ass. I plan to sell rental property in the next while.

Time goes on and you have reinvested in larger property, adding additional funds into the Frey. You say you have a poor understanding of the market - probably a good thing. Your bankroll, partially tied up in your house (that part being available via credit lines, which is my assumption), a further portion which may be in a savings account. None if which is in your chequing account (except your paycheque, or however you handle that part of your bill paying and spending money) and your stash at home which is your day to day playing inventory. Naturally, you need immediate access to money should u run out playing inventory (money) So, making a couple if assumptions, after house equity and playing inventory, let's say you have 50 k in low interest savings account, maybe some other time of limited interest account. You have a need to access that money, if necessary at 0 or close to 0 cost as possible. Talk to your bank about other options to increase your return. Doesn't hurt to take to different bank to see what's out there.

One possibility, as an example, would be revolving (don't know what they're called down there) 30 day investment accounts, automatically renewable, 25 k which would mature every month. These should pay greater than savings interest, not likely to keep up with inflation, but still something. Money not required could be put in some other more profitable long term account.

[MJGolf]

We are talking lending here..........and with all the examples given, there are a great many types of loans discussed but might be lumped together. Zergy, I agree with what you are saying and don't doubt that they were "mortgages" in the least, as that they were secured by real property. BUT I doubt that they were the standard, secondary market pass through or sale to investor MOST home mortgages are. In other words, not guaranteed by FHA or Fannie or Freddie. But I do agree that your lender/probably a bank or commercial loan did grant you the various mortgages with your house or rental properties as collateral. Those are just a different type of loan than I thought than was the topic of conversation.


Metro, my friend states:

"off topic but can't resist. Sold the "big" house and netted enough equity to only need a mortgage of 35K on a 235K property in the country. My business showed a loss for 2012, but not 2011 or 2010. Our credit scores are right at 800. The wife was I believe 810, the highest the underwriter could ever recall seeing.
Could not get the loan, so we said piss on 'em, sold some securities and paid cash."

Your lender was probably a little idiotic or didn't explain matters to you. You should have easily been able to get a bank loan (probably not a standard mortgage) for your purposes. You had plenty of LTV but with the latest loss on your business (and I'm sure you deducted EVERYTHING you could like most self-employed or small business men, the standard mortgage underwriting is different than in years past. Instead of looking at cash flow/deposits INTO your accounts (which they used to use) they now use your net income from your tax returns to reflect your qualifying income...........even though we know that you had no issues making payments with credit scores as high as you and your wife had. It doesn't make sense but it's a way that we get punished as small business men or self employed..........when we don't want Uncle Sam to take MORE than his fair share. The standard for underwriting is to want two years of profits........and your net (off returns) might have been too low for them looking at the past two or two out of three years.

In addition, to take you to the secondary market.........most lenders have a MINIMUM mortgage amount that will be able to be sold. Sometimes it's 50k; sometimes it's 60k. Depends upon lender. But you got PUNISHED so to speak for wanting to ONLY borrow what you needed. If you had asked for more........say to what they wanted for minimum mortgage limits, they might have looked at it differently.

In your particular situation, I think you should have gone to a different bank if you really wanted the loan........though obviously you had the assets to purchase the home outright. I think a different lender would have given you an in house loan without too much trouble.

All in all, what I'm really trying to say guys is that if you want to qualify for a home mortgage.........and you want to substantially rely upon professional gambling income, that you be flexible and look for a lender that has a variety of loans (not just the standard home mortgage loan that will be sold in the secondary market) available. A GOOD, KNOWLEDGEABLE lender will also talk to you in advance about what their underwriters require for which loan WITHOUT just asking you for the paperwork first...........that's a LAZY loan officer! LOL

[WABJ11]

Has anyone tried getting a trusted friend or family member with sufficient income, making payments to them, and then having them sign it over to you?

[MJGolf]

Has anyone tried getting a trusted friend or family member with sufficient income, making payments to them, and then having them sign it over to you?

This is a totally different situation but it is quite possible. The only issue would be if that family member represented to the lender that they were going to live in the home as their personal residence or second home (depending upon distance from primary residence). Government has really been cracking down on what they consider mortgage fraud as to who is actually residing in the home.

But you could set up a lease with an option to buy or a lease purchase contract with a relative (and I would suggest it all be in writing). In the long run this could also assist you because you can refinance the purchase a year later after making payments (with written proof), without having it treated as a purchase by the lender in many circumstances.