Trying to guess what a market is going to do can be dicey at best, but there are times where a bubble is pretty obvious. We were very accurate at predicting the last bubble. As a matter of fact, we actually underestimated it.
Anticipating a Real Estate Bubble Read More »
It was by far the best loan training I could have had at that stage of my career. We looked at such things debt to income ratios, amount the customer was putting down, payment history, and depth of credit. The one glaring omission from our underwriting process…Credit Score!
Scores are for Sporting Events, Not Loan Underwriting Read More »
Buying real estate or real estate-related assets in IRAs continues to grow in popularity, but there are many pitfalls that await a would be investor that chooses this unique way of investing. Knowing the rules, however, is critical to keeping out of hot water with the IRS.
IRA Prohibited Transactions Read More »
It’s a common story. Investors in real estate, loans, or private lenders (collectively called “assets”) find that opportunities are limited in their particular geographic area. They soon hear about opportunities in other markets, but they are scared to purchase assets away from home. The question that often pops up is “should I purchase assets in other markets and how should I go about doing it?” We’re here to take some of the mystery out of that very question.
Buying Assets in Other Markets Read More »
Recently, I replied to a post from someone that had sold a commercial building for $650,000. The buyer put $250,000 down and the seller agreed to hold a first mortgage note with a rate of 12% with 8 points financed into the deal. An attorney properly prepared the documents and the buyer has been paying well.
To Sell or Not to Sell a Note? Read More »
That was the same question I struggled to wrap my head around when I first left banking to run Castle Rock. Having lived in the Tampa area for over 20 years, I had become accustomed only to this market. It was tough to climb outside of my comfort zone to buy assets (both non-performing loans and real estate) in other areas of the country.
How Do I Understand a Real Estate Market I Don’t Live In? Read More »
Every time I watch an HGTV show, they seem to have a huge surprise that they didn’t expect once they get into the demolition phase of the project. As pros, we often spot these when they are looking for the house and, many times, we even see it when they are touring the house for the first time.
Inspections and Speed Read More »
When I first left banking to embark on this odyssey that eventually led me to run the real estate and non-performing loan portfolios for Castle Rock, I went to work for a hedge fund with the mandate to build a similar portfolio. My vision, however, didn’t match the vision of the person running the fund company
Paralysis by Analysis Read More »
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 »
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 »
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 »
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 »
