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 »
You’ve found the perfect property to renovate and turn into a rental property. You’ve got great credit scores and a good job, so financing at your local bank shouldn’t be a problem, right? Unfortunately, banks aren’t as friendly toward real estate investors as you would think they would be.
Why Banks Hate Real Estate Investors 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 »
Many of the “get-rich-quick”, “no-money-down” gurus tout the use of loan assumption when purchasing a property, but is it rarely a possibility in today’s day and age. It might be harder than you think to assume a loan from a seller, particularly if your credit application is weaker than that of the seller.
Assuming a Loan from a Seller 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 »
Hard Money is a tool that many investors turn to in order to start their investing business. Most investors have very little money to put down on a deal and they simply need a little help. It can be a great tool to use, but it will also dramatically eat into your profits.
Should You Use Hard Money on a Flip? Read More »
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 »
. I’ve been very fortunate in the respect that I spent 25 years in banking. Bankers move around quite a bit, so many of my old co-workers now are the movers and shakers at banks all over this great land.
Where is the best place to find foreclosures? 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 »
If I had a dime for every ridiculous low-ball offer I’ve gotten in my career, I would indeed be a very rich man. The world is filled with sleazy real estate investors that love to throw offers against the wall to see if something sticks. The next time you have an asset to sell, those same investors wonder why you didn’t call them to solicit offers.
Making Offers That Entice: The Case Against Lowballing Read More »
