A prequalification letter from a lender isn’t worth the paper that its printed on. I know that sounds harsh, but it’s true. When you list that property for sale and you are trying to determine which offer you should choose, it’s not all about price. Close-ability is also a huge consideration. Can and will the prospective buyer actually sign the closing documents? Will their lender actually approve the deal?
The Prequalification Predicament Read More »
We recently explored several reasons why you should consider investing in notes. It can be a very lucrative place to invest, but investing in notes does have its challenges. These ten things that you must know shouldn’t be enough to keep you from considering buying notes, but you certainly should understand these ten items in order to build a thriving practice.
Ten Challenges to Buying Notes Read More »
When was first asked to speak about purchasing nonperforming loans at a national conference, people couldn’t wrap their heads around the concept of buying the mortgage on a property instead of owning the property itself. I was even laughed at by some of the real estate groups who were certain that I had lost my marbles. Fast forward a few years and no one is laughing now. As a matter of fact, many of the larger real estate funds have turned to note buying to provide them with a strong return.
Why Buy Notes Over Real Estate? Read More »
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 »
I just returned from speaking at IMN’s East Coast NPLs, Notes, and Default Servicing Forum in Fort Lauderdale, Florida and my mind is racing. It’s always a treat to hear what other fund managers, servicers, and investors are seeing in the marketplace. Whenever I come back from these conferences, I tend to by energized by the possibilities.
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 »
Buying foreclosure homes at auction can be one of the most frustrating things that you do as an investor. It can also be very lucrative. The foreclosure laws are very different in each state. We’ve purchased most of our foreclosure homes…
Jane (not her real name) purchased a nonperforming loan where the borrower had not paid in years. She purchased it for a huge discount from the collateral value and immediately had her servicer try to work through the collection waterfall (see our previous article). When they got to the point of foreclosing, however, they learned that it was too late to foreclose on the property. How could this be?
Uncollectible Notes Read More »
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 »
So your friend is struggling to make her mortgage payments and you would like to buy the loan off of her lender at a discount. How did that go for you? Let me guess, they quoted you the payoff on the loan including back interest and fees with no discount. There is a reason for that.
Buying Out a Loan for a Discount 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 »
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 »
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 »
