Perhaps the #1 factor that goes into making a profit or taking a loss is controlling your costs. Whether you are purchasing a nonperforming loan or a property to flip, it’s all about the math. Regardless of how well you rehab and present a property, you are still limited by the local market with respect to the amount you can sell the property for. Cost controls are essential for hitting your profit goals.
Mind Your Nickels and Dimes Read More »
A few years ago, we had the opportunity to purchase a nonperforming note in Columbia, Missouri. Once upon a time I worked for a financial institution in the town, so I knew it well. The due diligence file provided by the seller had a Broker’s Price Opinion that showed a very nice little house that could provide us with a nice return on investment.
Do Your Own Homework Read More »
It’s hard to get started in real estate-based investing. You have to raise capital, form a business entity, find property or loan opportunities, find lenders, find contractors, find real estate agents, negotiate prices, and on and on. Where to begin or how to scale up can be confusing. It’s hard to figure out where to turn.
The Institute Announces New Programs Read More »
It’s standard practice within the note industry to obtain a Broker’s Price Opinion, or BPO, to place a value on a property within an investor’s portfolio. When selling a note, it is expected from buyers that a BPO will be in the offering package, but how accurate are BPOs and do they add value to an investor when making a decision on buying a loan?
The 4 Ways that Lenders Make Money Read More »
It’s standard practice within the note industry to obtain a Broker’s Price Opinion, or BPO, to place a value on a property within an investor’s portfolio. When selling a note, it is expected from buyers that a BPO will be in the offering package, but how accurate are BPOs and do they add value to an investor when making a decision on buying a loan?
BPOs and Property Condition Reports Read More »
Many, if not most people, dream of building financial independence through real estate investment. The vast majority of people that want to start investing don’t have enough money in the coffers to buy their first property outright. Banks usually aren’t willing to finance a fix-n-flipper or, as one banker put it, “a rental jockey.” Hard money is usually where people turn to start building their dream, but what is the impact of borrowing on real estate investments?
The Good and Bad of Leverage Read More »
A borrower with weaker credit asked a question about getting a business line of credit where the bank required someone be added to the loan as a “co-signer”. The questioner stated that the bank is requiring the co-signer to be added to the borrowing entity…something that the questioner wasn’t sure if he wanted to do. Here was our response…
Business Loan “C0-Signers” Read More »
The Institute’s own Doug Smith will be speaking this week at IMN’s “NPLs, Notes, and Default Servicing Forum” at the Ritz Carlton in Fort Lauderdale Florida on Monday, February 10th and Tuesday, February 11th. IMN is excited to return to Fort Lauderdale, Florida on February 10-11, for our next NPLs, Notes & Default Servicing Forum.
Doug Smith Speaks at IMN Conference Read More »
If you are not familiar with purchasing commercial property, such as retail centers, office buildings, and multi-family buildings, then you probably aren’t sure how professionals place a value on these properties.
Collecting on a delinquent consumer mortgage loan has changed dramatically in the last several years. Gone are the days of the Wild West where you could collect on a loan in pretty much any legal way you want. Unless you follow these steps, you can find yourself and your company in a world of trouble.
I never took Latin in High School or College and I don’t regularly converse with Ancient Romans, but Latin terms seem to creep into my vocabulary whenever I am dealing with a foreclosure. Perhaps the most common term you will see in a foreclosure proceeding is the term “Lis Pendens”. What is a Lis Pendens anyway and what does it have to do with loan or real estate investment?
What is a “Lis Pendens”? 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 »
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 »
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 »
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 »
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 »
