Flipping

Housing

Chickens Coming Home to Roost?

Flipping, Lending, Non-Performing/Performing Loans, Rentals, Uncategorized /

The saying goes, “The road to Hell is paved in good intentions.” Our society attempts to solve problems by throwing money at them and increasing government regulation. Well, money can’t buy happiness, or solutions for that matter. Neither is government ever the most efficient solution to our problems. The current economic upheaval left in the aftermath of the Covid-19 crisis has only been exacerbated by government intervention.

Chickens Coming Home to Roost? Read More »

Calculator

The Precomputed Interest Abyss

Flipping, Lending, Rentals, Uncategorized /

My first job out of college was this a consumer finance company. We would make small loans to consumers at incredibly high interest rates, but I justified it as if I was actually helping people. I was a young, naïve kid and I should have known better. The interest rates we were charging sometimes approached 39%, but more important than the rate was how the interest was calculated.

The Precomputed Interest Abyss Read More »

The Ring

The Lesson of the Ring

Flipping, Lending, Non-Performing/Performing Loans, Rentals, Uncategorized /

It has been told that King Solomon charged one of his servants to find a ring that would make a happy person sad when they wore it and, if a sad person wore it, they would become happier. When the servant told the wise king that he could find no such ring, King Solomon commissioned a jeweler to inscribe a ring with the saying “This too shall pass.”

The Lesson of the Ring Read More »

Realtor

Realtors Stink!

Flipping, Rentals, Uncategorized /

I periodically peruse industry blogs to catch up on what is going on in the real estate and nonperforming loan fields. Most of the posts I see are uninteresting or they are just downright stupid. Sometimes, I see a post that is not only stupid, but it makes me think. One in particular that stuck out was a question that I see pop up from time to time, “Is it me or (do) most of these realtors (stink) at their job?” Two things come to mind when I read the question. Many, if not most realtors do not really bring value, but more importantly, are you the right customer for a good realtor?

Realtors Stink! Read More »

Uncertain

Certainty in an Uncertain World

Flipping, Non-Performing/Performing Loans, Uncategorized /

The real estate loan industry seems to be in turmoil at the present time. Buyers and sellers alike are struggling to make sense of a seemingly changing world. Buyers are concerned about the future of their jobs while sellers have grave concerns about the lack of buyers that are out looking for properties during the pandemic. Our real estate practice is seeing fewer buyers that are actively searching, but the ones that are searching are very serious about buying.

Certainty in an Uncertain World Read More »

Coal Miners

Canary in a Coal Mine

Flipping, Lending, Non-Performing/Performing Loans, Rentals, Uncategorized /

In addition to all of the consulting work we do for smaller investors and larger investors, we have our own funds, manage the funds of other entities, and we have a real estate practice that operates on the West Coast of Florida. It’s that real estate sales practice that gives us some of the most important information. It’s a canary in a coal mine, and I don’t mean the awesome song by The Police

Canary in a Coal Mine Read More »

Poker

The Patsy

Flipping, Lending, Non-Performing/Performing Loans, Rentals, Uncategorized /

There is an old saying that goes “If you’ve been sitting at the poker table for more than 15 minutes and you don’t know who the patsy is, you’re the patsy.” That’s pretty harsh, but it’s true. So many note and real estate investors try to jump into the market with both feet without having a strong background in the field only to make mistakes. The problem with making mistakes with a 6-figure property is that it can be a very expensive mistake. I’ve made mistakes. I call my mistakes “tuition”…very expensive tuition.

The Patsy Read More »

Hands with Money Globe

How Lenders Make Money

Flipping, Lending, Non-Performing/Performing Loans, Uncategorized /

Getting financing for your first few flips can be quite expensive. As I’ve mentioned in earlier posts, banks and federal banking regulators absolutely hate to lend to smaller real estate investors. The struggle that many newer investors have is that they are accustomed to seeing the rates that are being charged to owner-occupant home buyers. They fail to take into account the level of relative risk to a lender that a real estate investor imposes on the institution, therefore, they struggle to understand why rates for real estate investors are higher than they are for owner-occupants.

How Lenders Make Money Read More »

debt

The Debt Dilemma

Flipping, Rentals, Uncategorized /

Most real estate gurus really tick me off. People looking to make a better life for themselves and their family decide that the gateway to make their dreams come true is real estate. They sign up for a “free” seminar at the Days Inn and the first thing that they are told to do is to call your credit card company during the break and up your limits. When you return they have you run to the back of the room to pay for “training” that will be the only way you can find out the secrets of real estate riches. The trouble is that the “training” and the trips to the back of the room never stop. You also never get any closer to learning how to be an investor, a note buyer, a wholesaler, or whatever you are wanting to be. One thing that they do drill into you is that “it’s all about the cash flow…don’t worry about the debt,” but is that right?

The Debt Dilemma Read More »

Mysterious Road

New Free State of the Real Estate Industry Webinars

Flipping, Lending, Non-Performing/Performing Loans, Rentals, Uncategorized /

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 »

Signing

An Act of God

Flipping, Lending, Non-Performing/Performing Loans, Rentals, Uncategorized /

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.

An Act of God Read More »

Waking Up

The Sleeping Giant

Flipping, Lending, Non-Performing/Performing Loans, Rentals, Uncategorized /

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 »

Old Home

Buying Homes at Auction is Easy…Right?

Flipping, Non-Performing/Performing Loans, Rentals, Uncategorized /

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 »

Contractor

Ten Things You Should Know Before You Hire a Contractor

Flipping, Non-Performing/Performing Loans, Rentals, Uncategorized /

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 »

Medical Mask

The Corona Virus Impact on Real Estate Markets

Flipping, Lending, Non-Performing/Performing Loans, Rentals, Uncategorized /

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 »

Ruler

Square Footage Fallacies

Flipping, Rentals, Uncategorized /

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 »

For Sale

When a Flip Doesn’t Sell

Flipping, Rentals, Uncategorized /

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 »

Crane

Archimedes Was Right

Flipping, Lending, Non-Performing/Performing Loans, Rentals, Uncategorized /

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 »

Elephant

White Elephants

Flipping, Lending, Non-Performing/Performing Loans, Rentals, Uncategorized /

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.

White Elephants Read More »