I'm working on some loans right now for an investor who owns over 15 properties and has been working within the real estate/ development industry for over 20 years. He has never missed a payment. He has over a million dollars in the bank.
His loans were just canned because of the Colorado legislature.
Why??
Foreclosures have been blowing up. The government has to step in to protect its constituents right?
I disagree.
The loans that the lender canned were sophisticated loans that required no income disclosure.
(If you want to know exactly why the no income loan fits borrowers who retain many properties, please contact me. Basically, those who own & rent real estate have an extremely high overhead because the mortgage payments are so high.)
Anyway.... back to the task at hand.
1.) Should mortgage broker's be licensed?
-Absolutely. You, as a consumer, have a right to know that the person handling your mortgage is not a criminal.
2.) Should consumers enter mortgage agreements with caution?
-Yes! If your mortgage broker isn't willing to tell you how much money they are making or let you know that your loan terms are changing minutes before closing, get out! Work with someone who can provide references. Work with someone who deserves your trust and has your prosperity in mind.
3.) Should the legislature determine which loans are acceptible for consumers?
- No! Borrowers need to take responsibility and understand the exact terms of their loan. When I speak with borrowers, the most important question I ask is, "What is your worst case scenario?" I work with investors, first time home buyers and everyone in between. Their needs are different. The loans that fit these needs are different.
The bottom line:
Don't trust anyone with your financial future. Ask the hard questions, understand your worst case scenario. Make wise investments that will build wealth! There will always be scum looking to kill it off of some poor sucker. Work with people who are honest and deserve your trust. Am I the richest loan officer you'll meet? Absolutely not. Will I do everything in my power to help my customers achieve wealth? Yes!
Jun 29, 2007
Jun 27, 2007
Own Your Future!
Check out this article.
http://www.denverpost.com/specialreports/ci_4421584
So basically, an elderly couple on fixed income with escalating medical bills was encouraged to obtain an option arm loan.
What is an option arm?
-Basically, an option arm is an adjustable rate mortgage with payment options. You can pay interest, amortization or the minimum payment which is actually less than your interest rate. In other words, every month you make the minimum payment, you owe more on your house then you did before. When you owe 110 - 115% of your homes value.... hasta luego minimum payment and hello amortizing loan.
Is the option arm evil?
-Yes and no. It's definitely not for everyone.
Who is it for and why?
-Frankly, right now I wouldn't encourage anyone to take on an option arm. If short term interest rates were very low (i.e. 3%), the market was seeing strong appreciation (i.e. 5%) and the borrower is financially capable of making drastically larger payments should the negative amortization cap hit.
In other words, I only recommend this loan under certain circumstances for savvy knowledgeable investors who understand exactly what the loan entails.
Whose is to blame in the case of this article?
-No one likes to blame consumers (especially senior citizens on fixed income) for trusting a mortgage broker and not asking enough questions. That being said, consumers absolutely must understand the intricacies of their mortgage and always know their worst case scenario! If you are in a loan and don't know your worst case scenario, you need to find out and fast.
-Mortgage brokers looking out for their checkbook are also to blame. Few consumers understand loans. Brokers need to understand this and take on the responsibility to educate their customers. Broker - client relationships must be a win -win. The broker pays his bills and the consumer has the loan that best fits their needs.
-Regulation basically doesn't exist. The government could eliminate more exotic loans.
My two cents....
1. Consumers, take responsibility for your financial future. Be an informed client. Ask for references. No matter what kind of government regulation exists, there will always be brokers looking for maximum commissions with minimal regard for their clients.
2. Brokers, put yourselves in the shoes of the consumer. Make sure they are informed. Ask questions to make sure that this loan best meets their needs.
3. Regulation needs to exist. I believe broker licensing is the most important step. More disclosures that borrowers don't read won't help. Eliminating option arms will not fix the problem.
The Bottom Line:
Work to become an educated and informed client with a reputable broker whose priority is your prosperity!
http://www.denverpost.com/specialreports/ci_4421584
So basically, an elderly couple on fixed income with escalating medical bills was encouraged to obtain an option arm loan.
What is an option arm?
-Basically, an option arm is an adjustable rate mortgage with payment options. You can pay interest, amortization or the minimum payment which is actually less than your interest rate. In other words, every month you make the minimum payment, you owe more on your house then you did before. When you owe 110 - 115% of your homes value.... hasta luego minimum payment and hello amortizing loan.
Is the option arm evil?
-Yes and no. It's definitely not for everyone.
Who is it for and why?
-Frankly, right now I wouldn't encourage anyone to take on an option arm. If short term interest rates were very low (i.e. 3%), the market was seeing strong appreciation (i.e. 5%) and the borrower is financially capable of making drastically larger payments should the negative amortization cap hit.
In other words, I only recommend this loan under certain circumstances for savvy knowledgeable investors who understand exactly what the loan entails.
Whose is to blame in the case of this article?
-No one likes to blame consumers (especially senior citizens on fixed income) for trusting a mortgage broker and not asking enough questions. That being said, consumers absolutely must understand the intricacies of their mortgage and always know their worst case scenario! If you are in a loan and don't know your worst case scenario, you need to find out and fast.
-Mortgage brokers looking out for their checkbook are also to blame. Few consumers understand loans. Brokers need to understand this and take on the responsibility to educate their customers. Broker - client relationships must be a win -win. The broker pays his bills and the consumer has the loan that best fits their needs.
-Regulation basically doesn't exist. The government could eliminate more exotic loans.
My two cents....
1. Consumers, take responsibility for your financial future. Be an informed client. Ask for references. No matter what kind of government regulation exists, there will always be brokers looking for maximum commissions with minimal regard for their clients.
2. Brokers, put yourselves in the shoes of the consumer. Make sure they are informed. Ask questions to make sure that this loan best meets their needs.
3. Regulation needs to exist. I believe broker licensing is the most important step. More disclosures that borrowers don't read won't help. Eliminating option arms will not fix the problem.
The Bottom Line:
Work to become an educated and informed client with a reputable broker whose priority is your prosperity!
Jun 25, 2007
Most Important Number
Not your birthday.
Not the significant other's birthday.
Not your anniversary.
Not your income.
Not your checking account.
The most important number you will encounter is your credit score.
I have no idea why they don't require a high school or college course on credit. Here is an article posted by Bankrate concerning the costs of poor credit.
http://www.bankrate.com/nltrack/news/Financial_Literacy/June07_credit_scores_value_a1.asp?ec_id=brmint_ns_cc_20070625&s=1&caret=36c
If you have any questions about building credit or repairing damaged credit, feel free to contact me.
No cost.
No obligation.
Free advice that can empower your financial security.
Not the significant other's birthday.
Not your anniversary.
Not your income.
Not your checking account.
The most important number you will encounter is your credit score.
I have no idea why they don't require a high school or college course on credit. Here is an article posted by Bankrate concerning the costs of poor credit.
http://www.bankrate.com/nltrack/news/Financial_Literacy/June07_credit_scores_value_a1.asp?ec_id=brmint_ns_cc_20070625&s=1&caret=36c
If you have any questions about building credit or repairing damaged credit, feel free to contact me.
No cost.
No obligation.
Free advice that can empower your financial security.
Panic in the Streets!
Subprime mortgages are dead.
Foreclosures are at all time highs.
Home sales continue to fall.
What on earth am I doing in real estate?
I believe that a great value is still a great value.
-Are they easy to find? No.
-Are they easy money? Absolutely not.
-Do they exist? Yes!
The real estate market is cyclical. It will turn around. When? I don't know. I do think Denver will start to pick up within the next 2 years. For renters or those who want to own a rental, now is a great time to get involved in residential real estate.
Foreclosures are at all time highs.
Home sales continue to fall.
What on earth am I doing in real estate?
I believe that a great value is still a great value.
-Are they easy to find? No.
-Are they easy money? Absolutely not.
-Do they exist? Yes!
The real estate market is cyclical. It will turn around. When? I don't know. I do think Denver will start to pick up within the next 2 years. For renters or those who want to own a rental, now is a great time to get involved in residential real estate.
Jun 21, 2007
Balls or Stupidity?
Sometimes I wonder which category I fall into when it comes into real estate investing.
We often times work with investors who want to start investing in real estate. My estimate is that less than 10% of these qualified and motivated leads actually follow through.
(Let me define qualified: 1- Good Credit 2- Good Employment 3- Strong assets whether in the form of equity, cash, stocks, retirement, etc...)
Today, a general contractor with over $250,000 in the bank bailed on a property and lost over $5,000 in earnest money. What?? This is the most qualified flipper I've ever seen!
Back to balls vs. IQ....
It probably takes a little bit of both.
-I've never met anyone who has told me that making money in real estate is easy. It's just not. -I've never had anyone tell me that nothing unexpected popped up along the way. Stuff happens.
-I've never met anyone who stayed on both their budget and timeline with their first flip.
This is the reality. Flipping real estate offers the highest risk and highest returns in the industry. It's not for everybody and that's okay.
Before you jump into flipping, you have to be 100% dedicated and willing to put everything you've got into the project.
It takes balls.
It might take a small dose of stupidity.
Dig it?
We often times work with investors who want to start investing in real estate. My estimate is that less than 10% of these qualified and motivated leads actually follow through.
(Let me define qualified: 1- Good Credit 2- Good Employment 3- Strong assets whether in the form of equity, cash, stocks, retirement, etc...)
Today, a general contractor with over $250,000 in the bank bailed on a property and lost over $5,000 in earnest money. What?? This is the most qualified flipper I've ever seen!
Back to balls vs. IQ....
It probably takes a little bit of both.
-I've never met anyone who has told me that making money in real estate is easy. It's just not. -I've never had anyone tell me that nothing unexpected popped up along the way. Stuff happens.
-I've never met anyone who stayed on both their budget and timeline with their first flip.
This is the reality. Flipping real estate offers the highest risk and highest returns in the industry. It's not for everybody and that's okay.
Before you jump into flipping, you have to be 100% dedicated and willing to put everything you've got into the project.
It takes balls.
It might take a small dose of stupidity.
Dig it?
Jun 20, 2007
Conversation
I was in the bank today chatting with a personal banker. The banker really envied me. Why?
1 - I have a few business accounts. I guess this makes it look like I'm running numerous businesses which seems to imply that I'm making a ton of money. Why else would someone need so many accounts? Answer: Record keeping. Running all of my flips, mortgages and rental through different accounts makes record keeping much easier.
2 - I am self employed. I get to set my own schedule and take as much time as I want to off! Not so fast.... I work evenings and weekends. I have to provide my own health insurance and I have no benefits. If you're looking for an 8-5 Monday - Friday with great benefits and 2 weeks of vacation, forget self employment. If your looking for 60 hours a week, working 6 days a week and no certainty of a paycheck..... look into self employment. (For the record, I love being self employed and never plan on working an 8 - 5 in a corporate environment.)
3 - Real estate investor = rich, right? I hope so. I'm far from rich right now. Hopefully, after a few sound investments, I'll see some big numbers in all of those bank accounts.
1 - I have a few business accounts. I guess this makes it look like I'm running numerous businesses which seems to imply that I'm making a ton of money. Why else would someone need so many accounts? Answer: Record keeping. Running all of my flips, mortgages and rental through different accounts makes record keeping much easier.
2 - I am self employed. I get to set my own schedule and take as much time as I want to off! Not so fast.... I work evenings and weekends. I have to provide my own health insurance and I have no benefits. If you're looking for an 8-5 Monday - Friday with great benefits and 2 weeks of vacation, forget self employment. If your looking for 60 hours a week, working 6 days a week and no certainty of a paycheck..... look into self employment. (For the record, I love being self employed and never plan on working an 8 - 5 in a corporate environment.)
3 - Real estate investor = rich, right? I hope so. I'm far from rich right now. Hopefully, after a few sound investments, I'll see some big numbers in all of those bank accounts.
Jun 19, 2007
Mortgage Broker Licensing!
Colorado is one of the last states to implement licensing standards for mortgage brokers.
Members of the mortgage industry are somewhat split concerning licensing.
My opinion - Licensing is great for our industry. It provides accountability. It will eliminate uneducated and unqualified brokers.
That being said, regulation will not transform every broker into a vehicle working for the borrower's interests. Always work with a trustworthy reputable broker who can provide references!
Check out http://www.dora.state.co.us/real-estate/mortgage/legislation.htm
Members of the mortgage industry are somewhat split concerning licensing.
My opinion - Licensing is great for our industry. It provides accountability. It will eliminate uneducated and unqualified brokers.
That being said, regulation will not transform every broker into a vehicle working for the borrower's interests. Always work with a trustworthy reputable broker who can provide references!
Check out http://www.dora.state.co.us/real-estate/mortgage/legislation.htm
Jun 18, 2007
Burnt Out...
We missed our open house deadline that we'd set for Saturday. Disappointing to say the least. The house will be done in the next day or two, but that means a couple more long nights and a couple more days in carrying costs. Most importantly, it means I won't see any cash!
How important are deadlines?
In this case, I decided to blow my deadline rather than contract out some of the remaining work. My carrying costs are so low that financially, I'm way better off taking a couple of extra days to do the work myself.
Almost there...........
How important are deadlines?
In this case, I decided to blow my deadline rather than contract out some of the remaining work. My carrying costs are so low that financially, I'm way better off taking a couple of extra days to do the work myself.
Almost there...........
Jun 15, 2007
Deadline...
I have an open house. My property is being listed tomorrow. One problem...
It's not done!
I'm looking at a couple of long days. In less than 38 hours, the open house is happening.
I have 38 hours to tile, grout, install lighting, paint, install new electrical outlets, switches, a microwave..... The list goes on and on. After working for over 16 hours today, tomorrow looks like another 15 hours minimum.
Time for some honesty....
I'm tired. Exhausted. I have too many 'irons on the fire' so to speak.
I love it. I love the pressure. I love the deadlines. I love the volatility and risk involved.
Like many of you, I don't want to work for someone else. I want to do my own thing. My thing is real estate.
I believe I'm willing to pay the price. I'm willing to put in the time. I'm willing to take the risk. I'm going to give this all of my energy. The upside is just too good to pass up.
37:30 and counting.....
It's not done!
I'm looking at a couple of long days. In less than 38 hours, the open house is happening.
I have 38 hours to tile, grout, install lighting, paint, install new electrical outlets, switches, a microwave..... The list goes on and on. After working for over 16 hours today, tomorrow looks like another 15 hours minimum.
Time for some honesty....
I'm tired. Exhausted. I have too many 'irons on the fire' so to speak.
I love it. I love the pressure. I love the deadlines. I love the volatility and risk involved.
Like many of you, I don't want to work for someone else. I want to do my own thing. My thing is real estate.
I believe I'm willing to pay the price. I'm willing to put in the time. I'm willing to take the risk. I'm going to give this all of my energy. The upside is just too good to pass up.
37:30 and counting.....
Jun 14, 2007
Final 48....
Just over 48 hours from now is the open house deadline. I've got a detailed plan laying out everything that needs to be done. It's going to be nuts. Not much sleep, lots of stress. Tons of "finishing touches."
I'll try to keep everyone up to date, but no promises. Wish me luck!
I'll try to keep everyone up to date, but no promises. Wish me luck!
Jun 13, 2007
Ouch....
I'm not referring to my back after 8 hours of laying tile yesterday... I wish I was.
"Colorado came in second with one foreclosure filing for every 290 households, which was 2.3 times the national average. Colorado's foreclosure activity, at 6,231 foreclosure filings in May, rose 9 percent from the previous month and was an increase of more than 50 percent from May 2006" (Source: CNBC http://www.cnbc.com/id/19193611)
OUCH!
What does this mean for homebuyers, homewners and investors?
"Colorado came in second with one foreclosure filing for every 290 households, which was 2.3 times the national average. Colorado's foreclosure activity, at 6,231 foreclosure filings in May, rose 9 percent from the previous month and was an increase of more than 50 percent from May 2006" (Source: CNBC http://www.cnbc.com/id/19193611)
OUCH!
What does this mean for homebuyers, homewners and investors?
- Homeowners - Foreclosures drive market prices down, making it more difficult to sell & move up or to refinance.
- Homebuyers - Lenders have cut back first time buyer programs, but if you can qualify there are a ton of good deals out there.
- Investors - Get off of this foreclosure mindset. Will your investments probably be foreclosures? Yes. 1 of every 290 houses is in foreclosure! Does this automatically mean you're getting a great deal? No way! Look for great deals. Who cares if the property is owned by a bank or private seller?
Jun 12, 2007
What Am I Worth?
I asked my mom and she said that I'm priceless.
I asked my girlfriend and she said it depended on the day.... she was serious.
I'm not going to ask my friends because I don't think I'll like what I hear back.
The question?
"What am I worth?"
As this question pertains to real estate and specifically fix ups, this is an important question to consider and answer. Why?
I asked my girlfriend and she said it depended on the day.... she was serious.
I'm not going to ask my friends because I don't think I'll like what I hear back.
The question?
"What am I worth?"
As this question pertains to real estate and specifically fix ups, this is an important question to consider and answer. Why?
- You need to know what your skills are worth. Am I in over my head? Would I be better off (time, money, quality) to hire this particular task out?
- You need to know what your time is worth. Let's say you do (insert job) by yourself. It takes four full days to complete. Did you save money? It depends. Here is an example:
Carrying costs per day (Payment, Interest) - $50.00
Cost of professional labor - $500.00
$50 x 4 = $200 so you saved $300 right? Not so fast. If you would have hired a professional, you could have spent four days working on other tasks. In other words -
$50 interest x 8 days = $400. Now you only saved $100.00.
I don't think its worth $100 to carry the house for another week. When working with real estate, GET IN, GET OUT, GET PAID.
Big Day......
Today is going to be a long and hopefully rewarding day. I need to finish tiling counter tops and install travertine tile throughout the kitchen and walkway. 4 days until the open house. Can't wait!
Predictions:
-I won't be able to stand up straight for at least 36 hours.
-I'll sleep like a baby tonight.
-I'll celebrate completion with at least 2 beers.
Predictions:
-I won't be able to stand up straight for at least 36 hours.
-I'll sleep like a baby tonight.
-I'll celebrate completion with at least 2 beers.
Jun 11, 2007
Marketing!
Here is the deal. I haven't listed my property yet. I'd really like to sell without involving realtors as it costs me 6% of the sales price and I have plenty of experience dealing with real estate contracts. Here is what I'm doing so far....
Open House Special
-Pricing over 5% under market value for open house
-Distributing flyers with pertinent information to local real estate agents and offices.
-Advertising on Craig's List.
I'd be open to hearing any suggestions.... matt.d.hanna@gmail.com 720.236.9695
Open House Special
-Pricing over 5% under market value for open house
-Distributing flyers with pertinent information to local real estate agents and offices.
-Advertising on Craig's List.
I'd be open to hearing any suggestions.... matt.d.hanna@gmail.com 720.236.9695
Open House
Saturday, I'm hosting an open house for a property I've flipped. I'm excited for a couple of rea$on$.
First of all, I'm tired of working on this place every waking moment for the past couple of months. I'm tired of putting in 25 hours a weekend fixing the place up on top of evenings and afternoons I was able to skip out of the office. I want to go golfing, camping, fishing, bobbing for apples.... whatever. Now that I've complained, there is also a tremendous feeling of satisfaction. I've completely remodeled a house. I'm proud of my work. I would buy this place.
**Sidenote: When this townhome was purchased, Tanna hated it. It was ugly, cramped and smelled. I told Tanna that she was the barameter for this project. She needed to love it when we finished. She loves it.
Most importantly, I'm excited to make some money. Afterall, that's why I'm investing. It's not a service project. That being said, I truly believe that this is a win-win situation. I will price the property under market value to ensure a quick sale and the buyer will step into some instant equity.
Wish me luck...
First of all, I'm tired of working on this place every waking moment for the past couple of months. I'm tired of putting in 25 hours a weekend fixing the place up on top of evenings and afternoons I was able to skip out of the office. I want to go golfing, camping, fishing, bobbing for apples.... whatever. Now that I've complained, there is also a tremendous feeling of satisfaction. I've completely remodeled a house. I'm proud of my work. I would buy this place.
**Sidenote: When this townhome was purchased, Tanna hated it. It was ugly, cramped and smelled. I told Tanna that she was the barameter for this project. She needed to love it when we finished. She loves it.
Most importantly, I'm excited to make some money. Afterall, that's why I'm investing. It's not a service project. That being said, I truly believe that this is a win-win situation. I will price the property under market value to ensure a quick sale and the buyer will step into some instant equity.
Wish me luck...
Here We Go....
After several months, I'm finally online and ready to rock. The website is in the process of being finalized. I've got a bunch of articles written and ready to post. I look forward to getting some feedback and making this site a resource for you.
Subscribe to:
Posts (Atom)
