Real Estate Broker · Yorba Linda, CA · Member since 2017 · 154 posts · 114 votes
With the new passing of a bill called the Financial Choice Act, which scales back or eliminates many of the post-crisis banking rules under Dodd Frank, I wanted to know what other BP members thought about this topic, and how they feel this will impact real estate as a whole, and specifically in their markets.
Many argue the Choice Act would leave the U.S. economy vulnerable to another financial crisis, and I don't think they are wrong. Loosing guidelines with lending laws is what got us into trouble back in 2008-2009, and yet it appears we could be headed there again.
Being a CA real estate Broker and looking at investing OOS for long term buy/hold properties (Small multi-family communities up to 15 units and/or possibly SFRs) for positive cash flow, I don't feel certain markets where I'm looking to invest (Ohio, Indiana, Oklahoma, Utah, Tennessee) will be as impacted when the SHIFT and DOWNSWING hits, as it will in BOOM/BUST states like CA, NV, AZ and FL.
Rental Property Investor · Broken Arrow, OK · Member since 2016 · 1k+ posts · 1k+ votes
9y
Will be happy to see DF eliminated or at least cut out a lot of it. Fully understand its original intent, but all it accomplished was making it harder for the small guys to operate who want to offer seller financing. You can still do it, but a lot more regulations and cost involved. For someone like me who pays cash for properties, it makes no sense. Its impossible for me to overleverage. It makes no sense that I can have unlimited RTO/LTO deals, but have to go through red tape to offer clients seller financing. IMO, RTO/LTO are a lot worse deal for the clients. Many clients don't understand the terminology, and think their monthly rent is paying for the house, but most of the time their just paying inflated "down payments" in order to have the option to buy the property. At least for those offering legitimate seller financing, the clients are actually buying the property from day one. Just my 2 cents, which is worth about 1 penny!! :-)
Rental Property Investor · Broken Arrow, OK · Member since 2016 · 1k+ posts · 1k+ votes
9y
Will be happy to see DF eliminated or at least cut out a lot of it. Fully understand its original intent, but all it accomplished was making it harder for the small guys to operate who want to offer seller financing. You can still do it, but a lot more regulations and cost involved. For someone like me who pays cash for properties, it makes no sense. Its impossible for me to overleverage. It makes no sense that I can have unlimited RTO/LTO deals, but have to go through red tape to offer clients seller financing. IMO, RTO/LTO are a lot worse deal for the clients. Many clients don't understand the terminology, and think their monthly rent is paying for the house, but most of the time their just paying inflated "down payments" in order to have the option to buy the property. At least for those offering legitimate seller financing, the clients are actually buying the property from day one. Just my 2 cents, which is worth about 1 penny!! :-)
Investor · Broken Arrow, OK · Member since 2016 · 210 posts · 314 votes
9y
Jeff, this might not be politically correct, but what got us into the financial crisis/real estate crisis was GOVERNMENT. Yes, banks and mortgage brokers were doing stupid stuff, but it was simply due to government and stupid liberals getting involved via Community Reinvestment Act and the resultant incentives to have people into homes that could not and should not have been getting loans in first place.
Pisses me off when I hear people blame banks and others for those that lost their houses. My question: Who held a gun to those people's heads and forced them to take out loans? HMMM? The only response is that those people were too stupid to know what they were doing? Really? If the government (Barney Frank, Chris Dodd, Bill Clinton, Jimmy Carter, Franklin Raines, etc..) would never have incentified banks to make those loans, none of it would have ever happened.
Investor · Broken Arrow, OK · Member since 2016 · 210 posts · 314 votes
9y
Jeff, I agree that greed played a role. But, government and liberals started it in 1976 with Community Reinvestment Act. Without that, nothing else would have happened.