The term lease option and contract for deed are often used in real estate transactions as a type of “creative financing arrangements”, but there are subtle differences between these terms that will need to know as you embark on your real estate investment career.
Lease Options, Contract for Deed, and Other Confusing Terms Read More »
If I had a dime for every ridiculous low-ball offer I’ve gotten in my career, I would indeed be a very rich man. The world is filled with sleazy real estate investors that love to throw offers against the wall to see if something sticks. The next time you have an asset to sell, those same investors wonder why you didn’t call them to solicit offers.
Making Offers That Entice: The Case Against Lowballing Read More »
So you’ve searched and searched and you’ve found the perfect real estate deal. The inspection came back clear and now you’re simply waiting for the lender to sign off on your loan. Soon, you get a solemn call from your loan officer…”The property appraisal was low. I’m sorry, we can’t do your loan for you.”
Getting the Appraiser to See It Your Way Read More »
When I first left banking to run a fund, I had not yet fully embraced the entrepreneur mentality. I was still stuck in the corporate brainwashing that had been part of my “professional upbringing” since I graduated from college and went into the management training program for one of the largest institutions in the country. My eyes were fully opened when I stepped out.
Transactional Funding: The A to B, B to C Transaction Read More »
Banks are mysterious places. The layperson’s initial reaction is to see the manager of their local branch and ask if they have any bank assets, REO properties or non-performing loans, to sell. When you do this, however, the banker will probably look at you like you have two heads.
Who at the Bank Should You Speak To? Read More »
During a session of surfing the internet, one person asked if an on-line payment calculator was accurate. I thought, “you know, I bet many of our readers that are not members have the same question!” I have one of my own on an Excel Spreadsheet that I have used for years as a banker and later as a Fund Manager for Castle Rock.
Build Your Own Payment Calculator! Read More »
So you’ve made a bank an amazing offer to purchase a non-performing loan…an offer that they can’t refuse. For reasons passing understanding, they refuse it anyway and respond by countering you with a ridiculous amount in return. Why on God’s green earth to banks make the decisions they do.
Banks Don’t Make Decisions Read More »
We are often asked questions about setting up banking relationships for real estate investors. I was a banking executive with an expertise in lending and real estate for more than 25 years before managing real estate-related portfolios for Castle Rock, so I know something about this topic. Let’s talk about your options.
Banks, Credit Unions, and Other Lenders: Who is Right for You? Read More »
We just received a question from a newer real estate investor surrounding “Guidance Lines of Credit”. Their branch banker recommended that they explore getting a Guidance Line for their real estate investment business.
As the Institute prepares a new video for its members on building a decisioning model to take the guess work out of it, we thought it would be a good idea to share with you the first step in building a model.
Understanding the Cost of an Investment Read More »
It’s pretty boring stuff, but if you are going to buy rental property, you really need to understand the concept.
THE BORING, BUT NECESSARY CHAT ABOUT DEPRECIATION RECAPTURE Read More »
In the early days of Castle Rock, we had the grandiose idea that we would develop our own decisioning system based on models that we had created and developed over time. We bartered services with one of our investors, a data base designer for a large international consulting firm, to design a system that would help us with our pricing. We really thought this would speed up the process. There was one real fly in the ointment. That fly’s was me.
HOW DO YOU SCULPT YOUR MODEL? Read More »
Jim Collins is one of my favorite business authors. In one of his books, he talks about the concept of firing bullets then cannon balls. In his books such as “Good to Great,” he and his team use objective data to find out what makes some companies great and others simply average.
Fire Bullets, Then Cannonballs Read More »
I’ve seen this saying pop up on Linked In all the time and it’s true. I see so many private lenders and note buyers try to prepare their own paperwork, avoid pulling title reports, and generally trying to cut costs that I see them get themselves into trouble when things go awry in a transaction.
IF YOU THINK ITS EXPENSIVE TO HIRE A PROFESSIONAL, TRY HIRING AN AMATEUR Read More »
Contrary to popular belief, real estate does not always appreciate. It acts similarly to how other assets classes work, therefore, looking at how asset classes function is critical to building a strong, healthy portfolio
REAL ESTATE AS AN ASSET CLASS Read More »
There is a saying in lending “Every loan is a good loan when you make it.” During that visit, I learned that this saying is false.
WHY DO BANKS SELL ASSETS? Read More »
I’m often asked “how did you go from being a bank real estate executive to running a successful real estate-based fund that does business in so many states?” One of the chapters in my upcoming book gives you the scoop. Here is that story…
How I Got Started… Read More »
Borrowers are similar. The big hedge funds and even Fannie Mae and Freddie Mac are convinced that borrowers with a track record of habitually defaulting can be redeemed.
PAST PREDICTS FUTURE Read More »
So you’ve found a borrower for your IRA funds. He’s a great guy and the purpose for him borrowing from you sounds great. He needs the money right now, but it will take time to get the proper agreements drawn up
GOOD FENCES BUILD GOOD NEIGHBORS Read More »
Every time I turn on HGTV there is another fix-n-flip show gracing the airwaves where regular people seemingly make huge profits by putting granite in a bathroom. Do these people ever lose? Yes…yes they do, but it’s a TV show.
IF YOU DON’T KNOW, FIND SOMEONE THAT DOES. Read More »
Managing portfolio risk is critical to the success of any loan-based fund. It is important to understand that there are many types of risk associated with lending that differ from other types of investing.
Thoughts on Lending Risk Read More »
You’ve probably heard of the three C’s of credit; Character (Credit), Capacity, and Collateral (Capital). You also might be aware that most private lenders and note buyers ignore sound underwriting principals in order to get money out the door.
DON’T DO A DEAL JUST BECAUSE THE LTV IS GOOD! Read More »
Whether you purchase notes or you are a hard equity lender, understanding the value of your collateral is critical to creating a good loan for your portfolio. Banks and GSE lenders use the good, old-fashioned appraisal to determine value.
TRUSTING THIRD-PARTY VALUATIONS Read More »
Most lenders and investors rely on on-line data and title reports to determine the real estate tax delinquency status of a collateral property. Simply looking at the title report or pulling up the local tax assessor’s web site isn’t as reliable as one might think.
Don’t Miss Back Taxes Read More »
MIAMI – In the future, potential renters may visit available units, apply for leases and execute paperwork without ever seeing a human being.
Real Estate Investors Bank on Technology to Deliver Profits Read More »
