CF Student
Active 1 year, 5 months agoForum Replies Created
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In FL Tampa bay area, we just had a closing stall again…the lender put all loans on hold for 2 weeks. This was already approved and in the pipeline to close this week. This was for an investor loan on a rental duplex. I think those are the first lenders to hold off.
Consumers for owner occupant loans may still be able to get mortgages…as long as they still have a job and credit.
There is an interesting cycle ahead that is for sure. The uncertainty adds to it and the length of time until there is a solution to this pandemic is totally unknown and IMHO what will make all the difference in the length and severity of the market challenge.Josh
Thanks for the feedback!
Agreed, we would not use this as an excuse. We try to help our optionees close. The insurance has a high deductible and the repairs would not exceed it. The tree work was done by a friend who used a chainsaw on the roof in the rain. This isn’t acceptable, this puts the landlord at risk of loss and is not in compliance with our agreements.There is more work to be done. We sent them a notice of noncompliance because of the tree work and to prevent them from doing something similar on the roof work or in the future. At least it is documented.
We are here to help them close, but they don’t seem to want an open dialogue, when we inquire about closing details they ask us to direct questions to their attorney. This leads me to believe we should transact strictly by “the book” our agreement.
As of now we are planning to have our licensed professionals do the repairs, add the repair cost to the strike price, and see what we can do within our agreement to help them close.
Thanks again!
Thank you for the feedback Kathleen! I totally agree, I did learn but while there was good info it was apparent their primary goal was to sign up students, not educate the current attendees.
I stayed in touch with some students who became members and I may buy some partials in my Roth, as another way to learn and make a decent return.
What area of the country are you looking for mobiles?Thanks again
Thanks for the response Don, here are some details.
The Investor borrower has a contract to buy the REO house, 3/1.5 block for 75k and is flipping it to another buyer for 82k. Basically a wholesale deal, but since they are buying from a bank they need to double close rather than assign the contract.They want the transactional funding for the initial purchase. They are looking for a loan for 70k just for a day or 2 for the double closing.
The house value is 150k ARV, needs 25k of rehab work.At first glance the house as collateral seems acceptable.
Let me know your thoughts.
Thanks!
Love the idea of knocking on neighbor.s doors. That really is very effective. I went out door knocking with Bill Cook once and it is an extremely resourceful way to get neighborhood intel. AND sometimes you find deals you didn’t even have targeted! He was a pro and we really learned a lot.
Basically be very friendly, introduce yourself and say you like buying houses in the neighborhood do you know of anyone selling? And maybe add something about that specific rundown house since it is so obvious.
Also, Since I’m on the topic,some other tips Bill recommended for door knocking were:
– Back way away from the door while waiting for them to answer.
– When they do answer position yourself to sort of lean back on one leg and have your shoulders and body at an angle so you are not squared off to them You want to present yourself as humble, sincere and NON threatening.Also…one other tip on hunting down owners….John Schaub mentioned this in one of his courses….when all else failed …..he hired a PI. If the deal is good and you are willing to think differently and do what others will not, the deal may be much better than just good!
Best of luck!
Very interesting, thanks for sharing. I also try to read a lot about this and agree it is time to be very cautious. But at the same time in our market (tampa bay area) we are still filling vacancies extremely quickly. We’ll put the for rent sign up and have it rented in a few days sometimes before getting a chance to post online. Could be just luck, but things may have been so depressed that there was room for a frenzy of investor activity at the bottom and we are slowing down to hopefully reasonable growth that mirrors population growth, wage growth, new employment, and not artificial factors …till the next downturn of course. There will always be a cycle, but the next may not be specifically tied to real estate like the last.
At the same time we definitely sold and are selling a couple more to take some “chips off the table” while the retail market is still strong. Caution is top of mind, but if the numbers work for a nice house in a nice neighborhood as a profitable rental we are always buying.
Hi Paul,
All of these replies are excellent and I think the take-away is to tailor the agreement to your financial friend’s preferences while protecting yourself. I would keep it simple and start by proposing a couple of options, sincerely explaining the pros and cons to him/her.
One deal I recently did like this had the financial friend lend on the property recording a note/mortgage as well as have 50% interest in the land trust we set up to hold title. A co-venture agreement detailed who did what and all responsibilities.
Functionally at the end of the day the mortgage payment guaranteed him some minimum payment each month which was important to him and the 50% interest offered half of all profits including cashflow and any future sale/upside. The interest payment was included in his share of half the profits thereby giving him the guaranteed minimum but also a maximum making sure he was only getting 50% of all profit.
The rate was very low so I felt comfortable with that, plus having a lien on the property could offer some asset protection.
Good luck
Thanks Jackie!
SO! it turns out the buyer and his wife will be occupying the unit. He said it would probably be for his mother in law but now for whatever reason makes more sense for him and his wife to stay there. So, since this will be our only and 1st loan of the year we would not be considered a mortgage originator
and …
We are going to ask for more down to increase the security of the loan but also, these are the 5 requirements it seems we would still need to meet. I think we are ok here. His applications will show his expenses and we are looking for the payment not to be more than a third of his income.1. The seller did not construct the home. *We did not
2. The loan is fully amortizing (no balloon mortgages allowed). *yes 15 yr
3. The seller determines in good faith and documents that the buyer has a reasonable ability to repay the loan. *applications, pay stubs, etc being documented
4. The loan has a fixed rate or is adjustable after 5 or more years, subject to reasonable annual and lifetime caps. *yes fixed
5. The loan meets other criteria set by the Federal Reserve Board.Are we missing anything here?
Thank You
