The Three Most Important Aspects of Lending
Most lenders will lean on the “Three Cs” of Credit – Collateral, Capacity, and Character as the pillars of underwriting a loan, but it’s become clear
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NY Landlord Paying $1M for Denying Ex-Felon Renters
A Queens landlord who allegedly denied renting to any ex-convict will pay $1.187 million, based on a lawsuit initiated in 2014 that claimed it violated the Fair Housing Act. The Fortune Society, which sued, says it’s possibly the largest settlement ever for this type of allegation.
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Game Theory
During the first part of my career, I bragged about the fact that I had never had a real estate loan go into default. It was a sense of pride to me until one of my mentors retorted “that just means you aren’t making enough loans!” He was right.
WHY WOULD A BANK SELL A LOAN?
When a bank finds its earning down, it usually is directly attributable to issues within its loan portfolio. Many investors reach out to banks with the delusion that the bankers are stupid and can’t solve their own problems.
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THE POWER OF DISCOUNTING
Discounting a loan is where a loan is purchased for less that the loan balance. A lender does this when the need to move a loan off the books to raise more cash or if the loan does not fit in their long-term plans. We’ll talk more about why a lender would do this later, but back to how a discount works.
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Separate People from the Problem
A seasoned negotiator will recognize that there is a difference between the problem at hand and the person on the other side of the table.
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MBS, CMBS, and Bank Loans
In order to fund large amounts of fixed-rate, longer-term loans, conservative investors would purchase a portion of a large pool of loans. The investment works a lot like a bond where an amount is invested…
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MAKING THE DECISION: LOAN UNDERWRITING FROM YOUR IRA
More and more Self-Directed IRA owners are lending money from their IRAs than ever before. The practice can be an amazing way to grow your IRA’s balance to new heights and secure your future with a lucrative passive income stream, but a vast majority of the people that are lending out of their IRAs have no formal credit background. This can sometimes get them into deep trouble. Outside
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Airbnb: Florida Has 7 of Top 10 Short-Term-Rental Cities
Airbnb has seen explosive growth in the last few years, even as some cities fight to manage short-term rentals, fearful that they’re taking over their communities. But some homeowners and investors are cashing in.
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After the Storms Pass, the Disaster Investors Arrive
Disaster investors save money, wait for a disaster and attempt to buy real estate at bargain prices. In Mexico Beach, some owners have posted “Not for Sale” signs.
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What to Do With Tenant Who Consistently Breaks HOA Rules?
We have a tenant in our homeowners association (HOA) that consistently breaks the rules. The landlord is indifferent because he is receiving rent, but the neighbors are very frustrated. What can we do?
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Family Office Investors Focusing More on Real Estate
As a possible economic slowdown looms, the people who invest money for ultra-rich families are buying more real estate as a hedge against any possible downturn.
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Mortgage Delinquency is Low, but…
Data from Federal Reserve via CNN show that mortgage delinquency is at its lowest point in years, but other types of debt have delinquency rates that are much higher than in previous times.
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FTC Halts ‘Misleading’ and “Bogus” Seminars
A court has agreed to put a temporary stop to pricey real estate seminars fronted by HGTV stars after the Federal Trade Commission said promises that the classes could make people rich were “misleading” and “bogus.”FY
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Vacant Foreclosures Haunt Bay Area Neighborhoods
Dark, abandoned, and vacant properties turn the American dream into a nightmare for neighborhoods across the Bay Area, and not just during the month of October.
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What Goes Into the Debt to Income Ratio
Most people understand the concept of a debt to income ratio, but many don’t know what goes into the calculation and what is left out. Here’s a brief overview:
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C&I vs CRE Lending
Commercial Banking can be quite confusing, particularly because banks tend to use confusing acronyms and often departments aren’t named in a way that the general public can tell what exactly they do. Take for example C&I Lending and CRE Lending.
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DOES A NEGATIVE YIELD CURVE (INVERTED YIELD CURVE) SPELL DOOM?
Every now and then, however, that curve “inverts” or flips. This is called an inverted yield curve, or a negative yield curve.
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Defective/Chinese Drywall
Defective Drywall, or Chinese Drywall as it is often called, was a real problem in the late stages of the building boom and still remains an issue today if you are not careful.
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TRANSFERRING A MORTGAGE/DEED OF TRUST
If you’ve ever had a loan on your home, I’m sure you’ve received a letter in the mail that your loan has been sold/transferred to another lender.
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What Does “ARV” Mean?
I’m sure you’ve heard the term “ARV” pop up from time to time, but what exactly does it mean? “
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Deed Theory vs Lien Theory States
There are two primary theories when it comes to how real estate is treated as collateral. Most states either prescribe to Deed Theory of Lien Theory with a few states exercising a combination of both.
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How Much to Lend Against a Property?
There are many factors that enter into making a good loan. LTV is only one factor and should not be solely relied upon a determining factor, but it’s a big one. It has been my experience that stretching on LTV is a quick way to the poor house.
How Much to Lend Against a Property? Read More »
Defining the Scope of Work
Flippers often make the mistake of not clearly defining the scope with a contractor only to be disappointed later.
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What are Recourse and Non-Recourse Loans?
One of the questions we hear most often here is this: “I want to buy the property in the name of my LLC, but I don’t want to be personally responsible for it. Can I do that?” The answer is yes…if your lender will let you.
What are Recourse and Non-Recourse Loans? Read More »