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 »
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
The Three Most Important Aspects of Lending Read More »
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.
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.
WHY WOULD A BANK SELL A LOAN? Read More »
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.
Separate People from the Problem Read More »
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…
MBS, CMBS, and Bank Loans Read More »
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
MAKING THE DECISION: LOAN UNDERWRITING FROM YOUR IRA Read More »
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.
Family Office Investors Focusing More on Real Estate Read More »
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.
Mortgage Delinquency is Low, but… Read More »
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.
Vacant Foreclosures Haunt Bay Area Neighborhoods Read More »
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:
What Goes Into the Debt to Income Ratio Read More »
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.
C&I vs CRE Lending Read More »
Every now and then, however, that curve “inverts” or flips. This is called an inverted yield curve, or a negative yield curve.
DOES A NEGATIVE YIELD CURVE (INVERTED YIELD CURVE) SPELL DOOM? Read More »
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.
TRANSFERRING A MORTGAGE/DEED OF TRUST Read More »
I’m sure you’ve heard the term “ARV” pop up from time to time, but what exactly does it mean? “
What Does “ARV” Mean? Read More »
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.
Deed Theory vs Lien Theory States Read More »
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 »
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 »
Why would any seller take their property off the market if they didn’t know if their buyer was approved or not.
PreQualification vs PreApproval Read More »
Outside of hiring a firm or person with a formal credit background to help you make loan decisions, educating yourself on the basics of how professional lending institutions make their decisions is critical to making your lending venture successful.
MAKING THE DECISION: LOAN UNDERWRITING FROM YOUR IRA Read More »
The term “recourse” is something that pops up from time to time when someone is taking out a commercial loan. What exactly is “recourse”?
What Does “Recourse” Mean in Lending Read More »
Question: Doug, I have been lending out of my IRA for some time and I have a friend that wants to borrow money from me with no collateral. Is this a good idea?
