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There’s always something to howl about.

Category: Lending (page 28 of 56)

September 17, 2020

Overnight News: Redfin: “Why isn’t this historic seller’s market holding back buyers?” CTRL-F ‘riot’; not found.

by

Suburban Phoenix Real Estate Broker

Author website

“Prices always shoot up for no reason!”

Housing Wire: Fed says expect low rates through 2023. Much better crystal ball than the one we have…

Forbes: Will The Latest Stimulus Proposal Stop A Potential Housing Crisis In 2021?

Redfin: Home Prices Rose 11% in August—Biggest Gain in Over 6 Years.

Housing Wire: More young adults live at home now than during the Great Depression.

Forbes: Topeka, Kansas Is Looking To Lure Remote Workers With A $10,000 Incentive.

Yahoo Finance: Analyst: Neither Trump or Biden care about soaring federal debt, deficit.

City Journal: Apocalyptic rhetoric about climate change is undermining the fight for pragmatic solutions to the West’s fire crisis.

Reason: Homeschooling Hits a Tipping Point.

FEE.org: George Floyd Riots Caused Record-Setting $2 Billion in Damage, New Report Says. Here’s Why the True Cost Is Even Higher.

The Federalist: Study: Up To 95 Percent Of 2020 U.S. Riots Are Linked To Black Lives Matter.

City Journal: Against Wokeness: Conservatives must understand the threat posed by critical race theory.

September 16, 2020

Overnight News: “Yo, incipient hermits! Who craves a mile-high skyscraper?”

by

Suburban Phoenix Real Estate Broker

Author website

“Going up?”

Big Think: Is it possible to build a mile-high skyscraper?

Housing Wire: Bought right out of a job? When one OpenDoor closes… Opendoor announces merger with Social Capital Hedosophia Holdings Corp. in bid to go public.

Forbes: Opendoor’s Cofounder Talks Covid, Growth, And The Quest For Profits As The Company Goes Public.

Housing Wire: The words that are going to matter, when this nonsense all blows up, are: “Agency with an interest.” EasyKnock launches solution that lets homeowners lease back their home after selling.

CNBC: Homebuilder sentiment soars to record high, but lumber prices raise a red flag.

Housing Wire: Mortgage lending volume in 2020 likely to break records.

Connect Media: An monument to a dying industry in a dying location? Los Angeles Approves Tribune’s 56-Story DTLA Tower.

Redfin: Coastal Migrants Boost Las Vegas Home Prices, Up 8% in August, Amid High Local Unemployment Rate.

Housing Wire: Virtual notary adoption surges as businesses rush to close transactions remotely.

Forbes: Stripe Is Offering $20,000 Bonus To Employees Who Relocate To Less Expensive Cities, But It Comes With A Pay Reduction.

Housing Wire: Title insurance premiums surging during COVID-19 pandemic.

RedState.com: 5G – and 10G. Symbiotic Wireless and Wired Internet – And Their Government-Free Miracles.

The Daily Signal: Wildfires Will Get Worse Under Decades-Old Liberal Policies, Veteran Forester Says.

AIER: So You Want to Overthrow the State: Ten Questions for Aspiring Revolutionaries.

Entertainment Weekly: South Park tackling COVID-19 with its first hour-long episode. The trailer:

September 14, 2020

Can’t refinance because your income dropped? Help may be on the way.

by

Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL

Author website

Last week, Freddie Mac published their Mortgage Market Survey, showing that the average rate, for conforming mortgage loans originated, was under 3%.  The company who performed the survey (Black Knight), figures that there are close to 20 million homeowners who can refinance now:

The company says there are now 19.3 million “high quality” refinance candidates, the largest number ever. This is 43 percent of all active 30-year mortgages. Black Knight defines a refinanceable loan as one where the homeowner has a credit score of at least 720, at least 20 percent equity in the home, and the potential for a 75-basis point reduction in their mortgage interest rate. These homeowners have potential savings averaging $299 per month, a national aggregate of $5.8 billion per month if all homeowners took advantage of the opportunity. That is the largest aggregate ever available through refinancing.

This is a stupendous amount of potential refinance candidates, maybe more than the industry has refinanced since March of this year.  To put things in perspective, I have worked in real estate finance since 1997 and these past 6 months have been the hardest I have worked – ever.  It means that my industry could be stretched for another 6 months.

VA and FHA both have loan programs which permit borrowers to refinance their mortgages, if they aren’t taking out money, without verifying their income – that’s a BIG deal as many borrowers have suffered income losses since they originally took out their loan.  Borrowers with conventional loans though, must have their incomes re-verified for the refinance.  In one respect, income verification protects lenders from making a loan to people who may/may not be able to afford it but, on the other hand, it offers no relief for borrowers who, despite the drop in income, have made their payments through thick or thin.

The regulators however, are trying to address that problem.  They propose to amend the definition of a “qualified mortgage” to include those which are “seasoned” for at least 36 months.  What that means to the “stuck” homeowners is that, as long as they have paid the last 36 monthly mortgage payments Read more

September 10, 2020

When the punters come out to play, are they tugging a real estate bubble behind them?

by

Suburban Phoenix Real Estate Broker

Author website

Q: Why is it so hard to buy at the top?
A: That’s how you know it’s the top.

Who’s listing actual fee-simple dirt? Could life get any better? Representing hypothetical cubes of air-space amidst spookily-vacant concrete canyons? Not so much.

I just heard that J.P. Morgan is calling its people back to the office, so maybe vertical cities are not dead yet. My bet runs the other way, and, doubling-down, that employers incur liability by requiring attendance in dangerous locales.

Cinemas and shopping malls were dying, anyway. So, too, cities? A way of thinking of this urban exodus is simply as a matter of economic obsolescence: What is generally the oldest and most decrepit segment of the housing stock is being abandoned.

That pushes up prices in the suburbs, don’t it? “Gimme land, lotsa land, under smoggy skies above – and don’t dance so close to me!”

I thought we were pushing the top of this market turn before Coronavirus hit. That foreign import was killing big cities even before the rioters started burning them down. Accordingly, there won’t be a top in Phoenix for a while, where March of 2020 may be the high-water mark for decades for many great American cities.

But the thing about market tops is, they advertise themselves: Rapid price jumps, low inventory, bidding wars, waived contingencies, escalator clauses, solemn pre-dawn ungulate sacrifices, etc.

Again, not there, but very much here – and everywhere suburban parcels abound.

Here’s another characteristic of market tops, one we were all very well paid to overlook in the housing bubble of this century’s toddler years:

The real estate market tops when even the most marginally-prepared borrowers compete for and get mortgages.

What’s a bubble? It’s when the bike messengers and coffee shop waitresses come down to Wall Street with their mattress money. Wait, that’s a dated image. How about this? A bubble is when lifelong renters become very temporary homeowners. No, that was the last time. Try this: A bubble is when forty-year-old adolescents emerge from mom’s basement just long enough to sign socially-distanced closing docs in a title company’s parking lot.

My point would be that, Read more

September 10, 2020

Overnight News: If your houses aren’t evaporating, your taxpayers are.

by

Suburban Phoenix Real Estate Broker

Author website

“What’s new, nu?”

Hoover Institution: California Businesses Leave The State By The Thousands.

Housing Wire: U.S. mortgage rates fall to all-time lows this week.

CNBC: The CDC banned evictions, but some renters are still vulnerable.

Forbes: What It Might Mean If We All Work From Home?

City Journal: What the Trump Eviction Ban Gets Wrong.

City Journal: New York City at the precipice: A Tale of Two Cities, Indeed.

CNBC: Manhattan rental market plunges, leaving 15,000 empty apartments in August.

And for hard-working grunts on the ground who have found a praxis that pays…

UPI: Virginia man buys 20 lottery tickets, wins 20 times.

September 2, 2020

Vacation Rental Investing: Perdido Key, FL– Purple Parrot

by

Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL

Author website

How about a vacation property, on Perdido Key, Pensacola, Florida, which cash-flows with just 25% down payment?

This Realtor-listed property sold for $238,000 in November of 2019 and this FSBO sold for $242,500, two weeks ago.  Both properties are 2 BR 2.5 bath bungalows and are in the Purple Parrot Village Resort, a community of about 150 bungalows on the east end of Perdido Key, walking distance to Johnson State Beach, a half-dozen restaurants, and less than 10-minute drive to two golf courses, a dozen restaurants, Big Lagoon State Park, and the world-famous Flora-Bama Bar and Marina on the Alabama state line.

While there are no similar properties listed now, a few of the 2BR, 2.5 BA bungalows turn over each year and its; likely that one of these can be purchased for less than $245,000.  Let me walk you through how I analyze  or “screen” properties like this one for investing purposes:

I star by using the public-facing rental calculator on the Vacasa website to get a rough annual income estimate.  When adjusted for the amenities, it shows $45,000.  That is above the average for the area so I adjust downwards (to the average) to arrive at $39,000.  Vacasa (and most other vacation property management companies) charge a 30% management fee so our adjusted annual income will be $27,300

We plug in the following annual expenses:

$1500  for Repairs/Maintenance
$2800  for taxes
$8400  for HOA fees
$  300  for insurance
$10,788 to cover the 30-year fixed rate mortgage, for $183,750, at 4.125% (4.38% APR)

As a Vacasa-Certified Real Estate Broker, I have access to some pretty nice analytical tools so here are the numbers in a nice report.

The down-payment plus closing costs will cost you approximately $66,000 and, while it’s not uncommon to purchase these properties furnished, you may want to spend $5,000-10,000 changing/updating the furnishings.  Your investment then, should be around $75,000.

I can’t predict the future but I do think these properties will double in value over the next 20 years.  Let’s assume it only appreciates at less than 3% annually and, in 20 years, sells for $375,000.  If we assume selling costs of approximately 8%, that should net Read more

August 30, 2020

Three reasons why New York and San Francisco aren’t dead

by

Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL

Author website

“The reports of our deaths are greatly exaggerated”– New York City and San Francisco

The Bloodhounds have been talking about San Francisco and Manhattan’s death over on Facebook.  The general consensus is that they have been ruined by Marxist mayors (they have) and become much too expensive for people to live, work and play (they have).  The pandemic exacerbated these flaws and now that everyone is working from home, these cities are destined to crumble into ruin.

Greg Swann fired a shot the other day, right here in Bloodhound Blog.  I don’t dispute that both cities are in trouble.

This graphic shows the growth in year-over-year housing inventory.  While most of the country is experiencing actual declines in housing inventory (less homes for sale than the year before), NYC and San Francisco have more homes for sale than the year before.

Some reasons for the decline in housing supply are:

(1) homeowners are hunkering down because of the pandemic,
(2) some homeowners are in trouble and taking advantage of the mortgage forbearance program.— they are delaying the inevitable sale,
(3) new housing construction has slowed or halter in most major cities.

Greg Swann went so far as to suggest that cities might be dead forever, thanks to the internet and remote work opportunities.  While his criticism of poorly run cities is valid, the notion that the future of work is a “laptop in the basement” is not.

I am the one of the most tech-friendly Luddites you’ll ever meet.  If an app or platform is relatively easy to use, I embrace it.  Back in the early days, I was teaching real estate agents and lenders how to build IRL networks from social media.  I have been doing that since 2003.  The key component to success in online networking is to connect online but to meet, and develop a relationship in person.  Human beings are mammals and we like to cuddle.  The cuddlers will be more productive than the email-ers every time.  Keep this in mind when you think that humans will scatter to the mountains and do business on Zoom forever.

Here are three reasons why neither San Francisco nor New Read more

August 24, 2020

Eight reasons to own vacation rental properties

by

Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL

Author website

While we earn most of our money from our mortgage brokerage business, I started helping investors buy real estate some 5 years ago.  Working in San Diego, I have seen just how profitable vacation ownership has been for long-term investors.  If you follow me on any of my social sites, you will see that we just traveled to the Florida Panhandle to look at some of the best areas to own a vacation rental property.   Subsequently, we entered into a strategic partnership with Vacasa, the nation’s largest vacation rental property manager.

Here is an incomplete list of reasons why we think vacation rentals make sense for most investors:

1- Landlords get paid up-front.  When this COVID panic hit, politicians in every level of government instituted eviction stays, denying landlords the right to remove tenants who couldn’t afford the rent.  When you own a vacation rental, the typical stay is 7-30 days and you get paid by the renter before they occupy your property

2- The capitalization rates are better than long-term leases.  Properly managed, vacation rentals produce between 1.6 and 2.1 times the annual income which a long term lease would produce.  A vacation rental requires much more active marketing and management and, for that, vacation rental property managers take a healthy management fee but, after that is accounted for, the net operating income is still better than a long-term tenant.

3- Vacation rental properties are maintained better than those with long-term leases.  This seems counter-intuitive but, because of the active management, the properties are kept cleaner and repairs are addressed immediately.  The housekeeping service is usually passed on to the vacation renter and many of the repairs are covered by that renter if they break it.  Routine maintenance is addressed immediately because the vacation rental needs to be in top-condition to be rented again– tenants don’t “hide” small problems (which can become big problems)

4- Owners can take a vacation in their property.  While using the property can eat into profits, there are seasonal vacancies which can be expected and, if the property is within driving distance, the owner can use the property for leisure Read more

August 21, 2020

VA Interest Rate Reduction Loans (IRRL) and Forbearances

by

Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL

Author website

A VA Interest Rate Reduction Loan (IRRL) is a streamlined refinance mortgage which allows veterans to lower their interest rate and payment without an appraisal, income qualification, or assets documentation.  It is a simple process which, over the years, has been subject to lender overlays but still offers veterans a chance to save money on their mortgage.

Basic rules are:

1- the VA loan must be seasoned with a minimum of 6 monthly payments AND  at least 210 days from the first payment date.  This means that, if a veteran closed his/her loan in November 2019, with a first mortgage payment date of January 1, 2020, the veteran wouldn’t be able to close on the VA IRRL until July 29, 2020.  While the June payment would have been the 6th consecutive payment, the 210-day period extends through July 29.

2- When a veteran makes a VA IRRL application (sample), he/she would skip the income, assets, and liabilities section.  While it is not a VA requirement, most lenders want to know that one or both borrowers are employed so we encourage veterans to include their current employment information on the application.

3- the loan processor will ask the veteran and co-borrower to provide a copy of the old note, a copy of identity documents to comply with the USA-PATRIOT Act , a copy of the current mortgage statement

4- right after the application is made, a mortgage loan originator may present 2-3 options for the VA IRRL (sample), showing the inverse relationship between rates and fees.  Quick rules of thumb  for a VA IRRL  are:

  • the rate must drop at least .5%.  If a veteran has a current mortgage rate of 3.25%, the rate offered must be 2.75% or lower
  • closing costs, including the VA funding fee of .5%, must be recovered through the monthly savings within 36 months (disabled veterans are not charged a VA funding fee.  Thus, their savings are greater than veterans who do not have a VA-rated disability)

5- Once the veteran selects the rate and closing costs scheme, the loan terms are locked and loan disclosures are sent (this must happen within 3 Read more

October 6, 2017

Want to increase business? Answer your phone

by

Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL

Author website

Do you want to sell your listing faster and for more money?  Answer your phone

Do you want to work with more buyers?  Answer your phone

Lenders, do you want more loan business from agents?  Answer your phone

I know this sounds simplistic but more sales are made on the phone then are made via text or email.  This year, I made a conscious effort to ANSWER every phone call which come in.  I even bought a contraption which charges my phone and puts the calls on the car speakers.  The connection sucks but it allows me to acknowlege whomever called and to “triage” why they are calling.  If it’s a “money” call, I tell them that I will pull off the freeway and call them in a matter of minutes.  If it’s something to do with something other than work, I ask them to send me a text so I can call them later.

It doesn’t always work.  Sometimes, I’m a in a meeting and can’t answer the phone but by changing my mindset to believing that every single phone call represents a five-figure check, I am conditioned to sell.

Most importantly, our high tech culture has made incoming phone calls a “nuisance’ to many people.  if you are on the dialing end of the phone call, a voicemail or text, instead of an answer, tells you that you just might be bothering someone.  If you call me, I try to make you the most important person in the world.

You ARE the most important person in the world because you are the one paying my bills.  So call me at 858-777-9751

September 30, 2017

RE.net 2.0

by

Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL

Author website

Here’s a preview of what I have in my mind :

1- Facebook ads (as an agent)
2- Value-added services for real estate agents (as a lender)
3- Non-distressed auctions for real estate brokerages (as a vendor)

I have posted a few things since the content slow down on Bloodhound Blog but a lot has happened since 2012-ish.  The market has recovered nicely and most of the contributors are probably too busy listing, showing or financing property to write.  Bloodhound Blog was on the cutting edge of the RE.net:  provocative, hard-hitting, curious, and innovative.

Let’s start howling again

August 17, 2016

Four Tips To Supercharge Your Real Estate Brokerage Business

by

Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL

Author website

Most real estate agents want two things:  more money and more time off.  The challenge is that they are doing things that (a) are not dollar productive and (b) are time consuming.  Add in more regulatory burdens, market shifts, and industry participants which are staffed by people who are incompetent, lazy, and/or stupid and it makes an agent’s goals harder and harder to reach.

Don’t let this gloomy scenario bring you down.  Here are four action-oriented things, agents can do right away, which have built empires, created wealth, and sparked business revolutions.

1-  Own everything about your business.  You are responsible for EVERYTHING even if it’s “not your job”.  We live in a world where any question can be answered by a smart phone and still I hear agents get confused about where to find answers.  Your broker isn’t calling you back with an answer to that question?  Ask Siri the question and read a few of the thousands of answers offered, by other brokers, on Trulia, Google, and Zillow.  The lender seems stuck?  Call a well-rated lender and get another opinion.

Stop bitching about problems you can’t control and fix them anyway.

You are the captain of your ship.  If the crew screws up and the ship runs aground, the captain is fired.  Your client doesn’t care about the lender, your broker, your transaction coordinator or the seller/buyer.  They want action and they hired you to get it for them.  Own everything.

2- Surround yourself with congruent rather than competent people.  It’s not enough to have a great lender, proficient escrow officer, and proactive transaction coordinator.  You must have people working with you who are on board with your goals.  If your goals is to make more money and save more time, you need to focus on dollar productive activities so you want affiliates who have suggested solutions to problems when they call with problems.  A lender should call you and say “we ran into a problem but this is how I will fix it”.   The escrow officer should be thinking about chasing down your client for signatures rather than emailing you.  The TC Read more

August 25, 2014

Getting a San Diego Condo VA-Approved Adds Value To Service Members

by

Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL

Author website

Debra Brady and I are experts at VA-financing.  One of the things we do very well is secure a VA condo complex approval for condominiums which aren’t agency approved.  Some comments from a recent YELP review:

I started the home buying process while still on deployment, and Brian graciously worked with me across 13 time zones to begin explaining the ins and outs of home buying.

This is actually kind of fun for me.  With technology, deployed service members can communicate with me well in advance of buying.  Many times, when deployed,  they have free time with little to do.  They use Gchat, Facebook Messenger, Skype, and email to communicate with me.  Sometimes it makes for some weird hours but I enjoy finally meeting them when they return to the States.

I googled VA home approval, and his was the first name to pop up.  Brian is an absolute master at working with the VA.

That’s what I love to hear–that we come up first on Google Search for this topic.

Brian took my wife and I out for cocktails to explain in person the different loan rates and explain the decision making process for each of them, and Debra worked like a fiend to make sure thinks were done WELL ahead of time.

This is how Debra and I work.  I spend most of my time “selling” real estate agents and educating clients and Debra gets the loan done.  When we’re clicking properly, I am “Mr. Outside” and she is “Mrs. Inside”.  Clients know that she is in the office, every day from 8AM until 230PM each day and available on the telephone.  This frees me up to: (a) find more business for us and (b) properly educate home buyers about the process.  We pride ourselves on “no surprises” during the loan process.

To any Servicemembers who are interested in using their VA loan option, look no further than Brian, he is THE expert who will get you into the place you want.

That’s what I hope to hear on every VA loan we close.  It doesn’t ALWAYS happen but, I’m proud to say, it does happen more Read more

December 30, 2013

Most Creative Loans We Funded in 2013

by

Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL

Author website

1- We funded a $900,000 Orange County purchase with just 6.5% down payment and no mortgage insurance

2- We funded an Orange County condo, with a VA loan, and got both the Master Association and Condo Association VA approved in 30 days

3- We funded a $600,000 San Diego County purchase, with just 5% down payment and a seller-carry back second mortgage and a conventional first mortgage.

4- We funded a 7-unit San Diego apartment property, $820,000 purchase price with just 10% down and a 20% seller-carry back second mortgage.

5- We funded an “underwater” property with loan values at 135% of the appraised value in Los Angeles County.

April 4, 2013

If the condominum is not VA-approved, how do I get a VA home loan offer accepted?

by

Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL

Author website

Many veterans in California purchase properties which are classified as condominiums.  Some are large complexes, with professional HOA management, some are small complexes (under 6 units) with no monthly HOA fee and an informal cost-sharing agreement, and some are townhomes.  All share on thing in common–they are listed on the county records as a condominium.  This, the VA loan can not be funded until the condominium complex is approved.

The Southern California market has shifted, seemingly overnight from a buyer’s market to a seller’s market.  Many listing agents are presenting multiple offers to sellers.  Sadly, sellers leave some money on the table because the best offer is one using a VA home loan.  The sellers believe that the VA home loan can not be used because the condominium complex does not have a VA approval.

Buyer’s agents jobs then, are to present the VA offer with an eye towards minimizing the risk associated with it.

First, the buyer’s agent would do well to present documentation which demonstrates that the veteran is a strong buyer.  Some successful agents go so far to present my automated underwriting findings along with asset and income documentation (with the veteran’s permission, of course).  Demonstrating that the veteran has the credit, income, and asset requirements, to be approved for the loan amount, shows that the veteran is “bankable”.

Second, the buyer’s agent might address the three common concerns, sellers have with VA loans in the cover letter.  The cover letter should highlight that the veteran earned the no-down payment loan as compensation for his or her service to our country.  I sometimes call this “wrapping the offer in the flag” and the buyer’s agent should not be shy about doing it.  If the veteran served overseas, highlight it. If the veteran earned a distinctive award, highlight it.

The buyer’s agent should be clear about whether the seller is being asked to pay for the VA non-allowable costs and specify the dollar amount.  If the offer does not include seller-paid costs, the letter should state who is paying for those costs (usually the lender) and reference the section in the offer which states Read more

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Inventing Real Estate 2.0

Welcome to BloodhoundBlog, the national real estate industry marketing and technology weblog written by, for and about real estate professionals. Better yet, welcome to the wired world of real estate. We are busily inventing Real Estate 2.0 – technology, marketing, service and salesmanship. Like all Bloodhounds, we are smart, frisky and fiercely independent. We've built a spot on the earth – beloved over all – where each one of us can be who we are, no matter who that might be. We are committed to an idea of excellence that will flush the bums, the con-men and the crybabies out of the real estate industry. If you yearn to have your failures excused, your moral lapses absolved or your boo-boos kissed, seek elsewhere. But if you are sick to death of mediocrity – welcome home. Read all about us, subscribe to our feed and steel yourself for the hunt. We work hard, we play hard, we learn everything we can – and we bow to no one.

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