Perhaps the biggest single expense that will make or break a real estate investment is the roof. Can you let it slide with what is currently on the house or do you have to replace it? That’s a very good question. The answer is quite simple…it depends.
To Roof or Not to Roof? Read More »
One of the hardest parts of making a loan decision is determining the true cash flow situation for a self-employed borrower. If you lend money to borrowers, chances are that those borrowers are commercial in nature as consumer lending laws and considerably more stringent. That means that in most situations, you’ll be working with self-employed borrowers. Our members-only area has classes on cash flowing self-employed borrowers, but we wanted to focus on one area that can really throw a lender a curve ball…extraordinary events.
Lending, Cash Flow, and Extraordinary Events Read More »
If you’re new to the fix-n-flip or rental world, the question of where to get your cabinets, flooring, fixtures, and other materials to make a silk purse from a sow’s ear is one that will make you lose sleep. Don’t worry. In this short article, we’ll tell you how we do it.
Where Does an Investor Buy Materials for their Properties? Read More »
It all comes down to modeling. No, I’m not talking about walking down the runway in a ball gown…I’m talking about putting together a spreadsheet that allows you to enter a handful of variables like purchase price, renovation budget, closing costs, and other costs that we have historically encountered on our deals.
You Should Start Modeling Read More »
Generally, homes with repaired sink holes generally are safe, but further settlement can occur. The biggest issue with a home that has had settlement and sink hole issues in the past are…
Buying Sink Hole Properties Read More »
John (not his real name, but we’ll use John for this story) was referred to me by an attorney because he had gotten himself in a bit of a pickle. It seems that John had purchased homes in his local foreclosure auction for incredibly low prices only to find out that the homes were still subject to mortgages. How could this be? Doesn’t foreclosure wipe out subordinate liens?
Subordinate Liens at Auction Read More »
One of the newest trends in real estate investing is building single and multi-family homes for the purpose of putting them in a rental portfolio. There are many reasons why now might just be the time to jump in on this trend.
The Next New Thing…Build-to-Rent Read More »
Have you ever walked into a bank branch to borrow money in the name of your LLC only to be told that they don’t do that type of lending. Unfortunately, that is a regular scenario that pays out all across our country. Luckily, that is not necessarily true. There are secrets that most branch bankers don’t know. We’re going to share those with you right now.
Borrowing in the Name of an LLC through a Bank Read More »
So your friend is struggling to make her mortgage payments and you would like to buy the loan off of her lender at a discount. How did that go for you? Let me guess, they quoted you the payoff on the loan including back interest and fees with no discount. There is a reason for that.
Buying Out a Loan for a Discount Read More »
It can be quite confusing when you see a big valuation difference between the value that the tax assessor places on a property and the value that a consumer site like Zillow places on a property. Fortunately, there is a way to figure out what the approximate true value of the property is without hiring an appraiser.
Zillow Zestimates, Tax Assessments, and True Values Read More »
If you’ve been looking into commercial property investing, I am sure you’ve spotted the terms “Net”, “Triple Net”, and “Gross” at some point. It’s all very confusing. What do these terms mean?
Net and Gross Leases Read More »
Raise your hand (figuratively, of course…we can’t see you through the computer) if you have been to a “free seminar” at a hotel conference room to be told that you should all your credit card company and increase the limits in order to pay for expensive additional training. Has this happened to you or someone you know?
Increase Credit Limits to Pay for Training…Hold On One Minute! Read More »
In a boom market, investors seem to be able to make money by throwing darts at a board, but how does one do well in a down market. There are many ways to do well in a down market, but this is the best way that we have found to do well in any market condition.
Making Money in a Down Market Read More »
A common question that we get at the Institute is “How do I come up with a reasonable price for a note?” Doug Smith, the Portfolio Manager for Castle Rock and an Institute instructor gives us some ideas…
Properly Pricing a Note Read More »
The thing with real estate and loan investing, however, is that I use almost nothing of what I learned in college in my practice today.
Do You Need a Formal Degree In Real Estate? Read More »
Commercial loan underwriting guidelines can be a lot like reading Egyptian hieroglyphics to the untrained eye. One of the more confusing facets of commercial lending when compared to consumer lending. The key is to understand the difference between DTI, better known as “Debt to Income Ratio” and DSCR, which stands for “Debt Service Coverage Ratio”.
Debt to Income, Debt Service Coverage, and Other Madness Read More »
It is not uncommon for real estate investors to request one loan using many properties as collateral. These types of mortgages are aptly called “blanket mortgages.” The biggest problem, however, with a blanket mortgage is this, how do you sell a property that is serves as part of the collateral pool?
Is a Blanket Mortgage a Good Idea? Read More »
You’ve found the perfect property to renovate and turn into a rental property. You’ve got great credit scores and a good job, so financing at your local bank shouldn’t be a problem, right? Unfortunately, banks aren’t as friendly toward real estate investors as you would think they would be.
Why Banks Hate Real Estate Investors Read More »
Some time ago, we had a home under contract and, at the last minute, the seller decided that they didn’t want to sell. Now, I felt very badly for them. They had owned the home for many years and were quite fond of it. They provided us with a sincere, heart-felt reason why they no longer wished to sell.
Specific Performance Read More »
So you’ve decided to finance a property that you are planning to rent, but you can’t decide on whether to take out a long-term loan at a decent rate, or a shorter-term loan with much higher payments, but a much better interest rate.
The Long and the Short of It Read More »
If you are a real estate investor, nonperforming loan investor, or private lender, you’ve undoubtedly had or considered doing a deal or two with a partner. Working with other stakeholders in a deal or venture is dicey at best, particularly when the venture takes on debt that is personally guaranteed by the partners. Taking on recourse debt (where the debt is personally guaranteed by the owners of the business) brings us to a term that you will hear in such a situation…Joint and Severable Liability.
Joint and Severable Liability Read More »
Many of the “get-rich-quick”, “no-money-down” gurus tout the use of loan assumption when purchasing a property, but is it rarely a possibility in today’s day and age. It might be harder than you think to assume a loan from a seller, particularly if your credit application is weaker than that of the seller.
Assuming a Loan from a Seller Read More »
A recent question was asked with respect to refinancing a property for a lower payment. The questioner asked if lowering his payment by $200 per month would make sense. My answer was simple…”it depends.”
Should You Refinance for a Lower Payment? Read More »
On another forum, a question was asked by a new investor about paying cash for a home. When they meant “paying cash”, they meant that they had the cash stashed in a safe deposit box for the transaction.
Cash in the Mattress Read More »
Hard Money is a tool that many investors turn to in order to start their investing business. Most investors have very little money to put down on a deal and they simply need a little help. It can be a great tool to use, but it will also dramatically eat into your profits.
Should You Use Hard Money on a Flip? Read More »
