Entering into a new partnership is exciting. Your head is dancing with the possibilities that the new venture could bring. You must, however, protect yourself. There are so many sayings that fit so well in this particular situation. I’m reminded of two saying that I use a great deal.
Good Fences Build Good Neighbors Read More »
Borrowing money to complete a flip allows us poor people to get into the real estate game. If you aren’t careful, however, the time value of money when using hard money will eat up any profits that you hoped to make on a project.
Rehab Costs, Hard Money, and Time Read More »
We’ll call the seller “Mike”. Mike was selling a home that he had renovated and immediately got several showings. One of the selling agents, we’ll call her “Cheryl” brought “Bob” through the house and he loved it. The next thing Mike new. He was fielding offers.
An Ethical Dilemma Read More »
When I was a child, our next-door neighbor, Ann, had already lived a long and full life. Born at the tail end of the 1800s, Ann had seen it all in her lifetime. She had lived through the roaring 20s, the Great Depression, both World Wars, and so many other points in history. We always thought it was odd how frugal she was. She made popcorn balls for Halloween and she folded and saved her used aluminum foil. To us at the time it was odd, but she remembered times when she had nothing and had to conserve.
New Free State of the Real Estate Industry Webinars Read More »
If you are in a real estate-related business, you undoubtedly work with contracts and agreements in your business. Although we are taught to read everything carefully before you sign a contract, most people simply gloss over the highlights before signing. If you are part of the minority that actually reads everything that they sign, they you have probably encountered a term called “Force Majeure” buried somewhere in the legalese.
Yamamoto famously had serious concerns over plunging Japan into a war with the US. He thought very little of America’s naval leadership, but he understood America’s industrial capacity should it get backed into a corner. Although there are no records of him ever saying this, he is often quoted as saying “I fear all we have done is to awaken a sleeping giant and fill him with a terrible resolve” after the bombing of Pearl Harbor in 1941.
The Sleeping Giant Read More »
Watching HGTV would have you believe that buying a foreclosure property at auction is super easy. You simply look at an ad in the newspaper over breakfast while you get the kids ready for school, you drive down to the courthouse steps where you and 6 other unsavory-looking characters stand in a semi-circle and then you start bidding. Of course, you always seem to win the deal. That’s real life…right?
Buying Homes at Auction is Easy…Right? Read More »
In a dimly lit restaurant, our clients and vendors rubbed elbows at one of our networking events in Florida. Our associate that was responsible to vetting contractors brought me a gentleman that proclaimed that he and his business partner would be the best contractor that we ever had if only we would give them a chance. Our associate spoke highly of him, so I gave them three of our renovations to see how they did.
Ten Things You Should Know Before You Hire a Contractor Read More »
Most of the residential loans in the United States today or not owned by big banks. They’re owned by funds. Conservative investors that seek safer investments, in this case real estate-based loans secured by real property, wish to protect and mitigate against downside risk to the portfolio. As most investors see a mortgage fund to be relatively safe, they are usually willing to accept a smaller return on investment.
Buying Notes from a Fund Read More »
In 2007, the housing and mortgage markets crashed hard…very hard. The real estate market began to spiral downward in a self-feeding crash that left many families in the US facing homelessness. In 2010, the Federal Government created the Hardest Hit Fund (HHF) to help families save their homes. Originally, $1.5 billion was allocated to assist families, but available funds have increased to $9.6 billion. This means that note buyers have a tool to not only convert nonperforming loans into more profitable performing loans, but they have the opportunity to help families in need.
When you have been doing something as long as I have, you sometimes think that everyone knows what you know about a particular subject. I have been dealing with real estate lending and collections for nearly 30 years. I speak at national conferences on the subject to an audience that has a background in buying loans and real estate. Sometimes when I speak about purchasing first mortgage loans, a question I often get is “what happened to the bank?”
But What About the Bank? Read More »
Fear is rampant all over the globe over the Covid 19 Virus, commonly known as The Corona Virus. The unprecedented steps that have been taken by not only governments but also the private sector have most feeling angst over the state of the economy. Many are asking about the short and long-term impacts of the Covid 19 Virus response on the real estate sector. Although there are many concerns, there is also tremendous opportunity for homebuyers and investors alike.
The Corona Virus Impact on Real Estate Markets Read More »
Recently, one of our clients entered into a contract to purchase a large property from a seller that was selling by owner. The house was a bit pricey, but it really fit what our client was looking for. He was borrowing money, so an appraisal was ordered on the property. Much to everyone’s surprise, the appraisal indicated that there were 400 less square feet than was disclosed by the seller in the listing.
Square Footage Fallacies Read More »
There are few things in business as thrilling as selling a flipped property for a handsome profit, but what happens when you’ve renovated a property and it simply sits on the market. If you have a hard money loan on the property, you can practically hear the interest ticking up as you pray for someone to buy your flip. This scenario happens…even to the best real estate investors, but what can you do to get out from under the albatross.
When a Flip Doesn’t Sell Read More »
Levers and pulleys have been used in construction since before the ancient Egyptians built the Pyramids. They allow force to be multiplied so that, if enough levers are used, a person can move a large, heavy stone. The ancient Greek mathematician Archimedes famously stated “Give me a lever long enough and a fulcrum on which to place it and I can move the world.” Similarly, borrowing, or using leverage as it’s known in the industry, can help multiply your investment efforts as well as your returns, but it also can have dire consequences to your portfolio if things go wrong.
Archimedes Was Right Read More »
One of the items that buyers remember when they are purchasing a home are the countertops. Putting in a cheap countertop can cost you much more than you save. The old axiom is that kitchens and bathrooms sell a house and what really sells a kitchen or bathroom is a great countertop.
The Countertop Quandary Read More »
Everyone knows that elephants are grey in color. That’s just common sense. If I asked a third grader to color in a picture of an elephant, they are probably going to reach for a grey color, but have you ever seen a white elephant? They would certainly be unusual. They are different and stand out from the crowd. In our society, being different is a good thing…except when it comes to real estate investment. White elephants aren’t something that can be easily valued.
Being told “no” by a bank when you have non-W2 income for less than 2 years is a common story. Unfortunately, banks have to set up a stringent credit policy and adhere to it in order to keep federal and state regulators off of their back. That policy is going to be universal, but there are ways around it.
Cosigners, Co-Makers, and Hypothecation Read More »
A general durable power of attorney is a key part of estate planning. Wills and trusts are usually the first things that come to mind as an individual considers their estate plan or potential estate plan, but the importance of having thorough and detailed power attorney documents cannot be overstated.
What is a General Durable Power of Attorney? Read More »
I never learned to read. Well, it seems that way. As a long time banker, I tend to get right down to the numbers. Whenever a business owner spends a long period of time polishing their prose in a business plan, I must be honest, I skip it and head straight to the financials.
Bankers and Business Plans Read More »
There are two types of people in this world…those that pull into a parking space and ones that back into it. I’ve never understood the need to back into a parking place, but I always back into my offer prices when it comes to real estate investing. I’m often asked how I come up with my offer prices. Well, let me tell you how I do it.
Back into the Parking Space Read More »
In real estate investing, blankets aren’t something that keeps you warm. When an investor owns several properties, a lender might give them one loan and use several or all of their properties as collateral. When the mortgage/deed of trust “blankets” all of the properties, that is known as a “Blanket Mortgage/Deed of Trust.”
What About Blankets? Read More »
Taking out a loan against your primary residence could benefit your tax situation in a couple of ways, but you should talk with your tax advisor. Full disclosure…although my degree was in accounting 30 years ago, I have never practiced as an accountant. Be sure to talk with your tax advisor for what I am about to tell you.
Investing and Taxes Read More »
We often here from members that they are unsure of using hard money and equity lines as a way to finance flips. I was a banker for over 25 years before leaving to do what I am doing now. Back in my banking days, I did many HELOCs for real estate investors. I’ve also worked with many investors that use hard money.
HELOCs and Hard Money Read More »
Finding the right realtor proved to be a challenge for us as well. When Castle Rock first started, I quickly realized that the realtors that we were using simply slapped our listing on the MLS, put a lock box on the house, and showed up at the closing to collect their check. What really got my goat was when I saw that the realtors were making more money on our projects than I was.
What to Expect from a Great Realtor Read More »
