All Forum Posts by: Daniel Hennek

A down payment is only able to be financed with a down payment assistance program.  

In all other cases, down payments by definition are not financed and you can't use a repair allowance for one, that doesn't make any sense.  No this is not anything possible with a "normal" mortgage.  Maybe you can be more specific where you got these ideas from.

Is what you're saying, you think you can put down $100,000 and get more than $100,000 at closing from the lender in cash? 

Nobody is giving you cash at closing, on a purchase, to do with what you will.  The lender is going to hold on to the money and use an administrator to give you draws as work is completed by a qualified contractor and verified by an inspector.  They are not paying you, they make payments to the contractor/s.  A lender isn't going to give you more money than a property is worth and just trust that you're going to get it done.  In Brian's example the repair credit was almost certainly held back in escrow and paid out as repairs were completed.  It was on Brian's settlement statement because it was being held back in escrow.  Trying to do this outside of closing isn't going to be cool with your lender.

I think you're going to have to go into more detail if you want more of an answer.

A good mortgage broker can help you sort through options and lenders.  They can help you formulate your plan and find the best lenders that have what you want.  You don't have to interview 10 different banks, a broker can help you by having a discussion about all the nuts and bolts of the scenario.  A good broker already knows who's got what and they probably work with national lenders as well as some local.  They probably have traditional mortgages as well as non-traditional.  I'm a broker and I've got all the traditional mortgages, and many non traditional.  I've got a few products that specifically cater to investors by using cash flow calculations, asset depletion, and cross-collateralization.  So, if you're shopping around you should at least find a couple brokers to talk to.  I moved to the broker channel for a lot of reasons, but its mostly about more product options, and better rates to offer customers while at the same time increasing profitability.  Yeah I said I've got lower rates and make more money as a broker, it's why many really high producing originators are moving to the broker channel.

I also agree with Will about finding someone with the mental aptitude to handle your scenarios.  The average loan officer doesn't do well with more complicated situations.  Heck, the average loan officer can't even calculate income from a tax return on a conventional loan when they are given a worksheet to do it!  Investors need better loan officers and you should be evaluating the knowledge of the loan officer diligently.  If you are guiding the conversation they probably aren't right for you.  You want someone who can take control and put you on a path.

As mentioned by CJ text blasts are against the law unless you have the consent of the person you're texting.  Many people on here should learn more about telemarketing regulations to understand when they are "telemarketing".

Here's a link to the FTC site about it...

https://www.ftc.gov/tips-advice/business-center/guidance/complying-telemarketing-sales-rule

David,

I was commenting about issues raised in my mind by what you said.  I wasn't trying to insult, offend or attack you in any way and my apologies if you felt that way.  I was just engaging in the discussion.

The words ethical and marketing don't usually go together in the USA!  Marketing is one of the most manipulative professions out there and many people spend their days trying to game the system.  There are lots of laws regulating advertising because it wastes people's time and is generally a blight on society if left unchecked.  There are federal laws, state laws, city laws, and county laws all over the country that regulate the practice of advertising and bandit signs are illegal in many jurisdictions.

Laws and regulations existing doesn't mean people abide by them though, and the resources are not available to regulating authorities to enforce advertising laws most of the time.  It's only the biggest offenders that get singled out to make an example of, or the most annoying practices that get attention.  

Most of the time regulations are violated simply out of ignorance.  Just go to the FTC's or CFPB's website and start looking at all their resources.  You think most people actually go and read that stuff before they advertise?  It's tens of thousands of pages if you start digging into the actual regulations and not just the guides.  Businesses violate advertising regulations all the time without even thinking about it and some people just willfully disregard laws.  Just look at what Corey said.

"The city is off, so they won't be pulling your signs."

Why is he worried about his signs getting pulled?  Obviously because his city, state, or county says they are illegal.  He willfully disregarded whatever law is in place that would allow authorities to "pull his signs".  What he is doing is illegal by his own admission, but he doesn't seem to care and instead wants to come on here and brag about it like he's someone to look up to and emulate.

Ethical advertising involves a lot of things.  First you have to follow the law and respect your neighbors, fellow citizens and legislators that voted for and created those laws.  They don't want your stupid signs all over the place and they don't want them badly enough that some sort of legislation got passed!  Passing legislation is generally not an easy process and speaks to the level of annoyance that people feel when confronted with these types of advertising.  Just look at how the country is divided over politics right now, but we can still come together and work on stopping robocalls.  Bandit signs are on a robocall level of annoyance and that's why many states have outlawed the practice.

The "formula" that you're looking for is simply an advertising policy.  Every company that advertises should have a detailed and thought out advertising policy that is specific to their business channel and specialty.  Check the laws, and write down a set of rules to abide by before you advertise; it's called having policies and procedures.  If you don't have the ability or resources to write an advertising policy then have a lawyer or compliance specialist do it for you and follow it.  On top of that you should know what is ethical and what is not.  Generally, people know they are doing something wrong as Corey just gave us an example of.  There are always people that think the rules don't apply to them as proven by this thread.

 Most people are stuck in debt because they have bad habits and can't control their spending. If you want to not be in debt learn good financial habits. Budget your money and control yourself.  Don't live beyond your means like the 78 percent of Americans that live paycheck to paycheck.  Real estate isn't going to fix bad financial habits.

You probably see real estate as a better path because of all the marketing that real estate schools put out there.  With no knowledge of what it takes to succeed in real estate how can you possibly have an accurate perspective of what's the best path?  Real estate licensing schools are money making institutions, not educational ones.  It's their goal to get you to think exactly what you just said. They are selling $400 classes, not making real estate agents.

Jacob,

I'm a tough love kind of guy because I think sugar coating anything doesn't help someone understand what is really necessary.  So don't be offended by what I'm about to say.

A big challenge you are going to have is that you're 19 and don't know anything about real estate.  Any 19 year old will have a challenge being an "advisor" to someone older than them.  Think of it like a job interview.  If you're competing for a job against a 25 year old with a college degree who do you think is more likely to get that job?  What if you're competing with a 45 year old broker owner in his prime with extensive experience?

Very few people under the age of 25 buy a home so you're always going to be working with people older than you.  You're going to find it difficult to get people to trust you to list their home for sale.  It's going to be much easier to find buyers willing to let you show them houses which is why many younger or newer agents focus on being a buyer's agent first.

If you're a high quality person with a great work ethic and thirst for knowledge then you can certainly succeed as a real estate agent at a young age but don't fool yourself about the odds.  It's going to be really tough.  As James mentioned there is a very high fail rate and that fail rate is based on a group that is on average much older than you with more life experience.  

Just put yourself in the shoes of a couple in their late 20's with 2 kids.  Would you trust someone you view as a child to go through complicated contracts that you don't yourself fully understand?  Would you trust that the 19 year old knows how to market and sell a house?  That 19 year old doesn't have a college education and basically no work experience so how do they know how to sell a house?  If you're talking about trying to work with an older couple, or older individual then they are going to have even more doubts about your ability.  Do not underestimate the age factor.  As a real estate agent you cannot discriminate against people based on age, but they can certainly discriminate against you and will do so.  Every meeting with a potential client is a job interview.  You're competing for that job against people with more experience and knowledge almost every time if you're only 19.  The odds that they get the job over you are very high almost every time.

If you were my kid I'd be telling you to enjoy college, learn more stuff, and worry about making money after you've had some fun.  You're only 19 once, go live a little!  Feeling like "you're not happy with what you've accomplished" is a silly thing to say at 19 years old.  You've been an adult for 1 year and you're in college so you're really not an adult yet.  Give yourself some time and do what you should be doing in college and go have a blast with your friends.  Have adventures, do stupid stuff, just be safe and worry about growing up in a few years.

Realtors charging commission for a professional service is much different than investors looking for desperate sellers to take advantage of by giving them half of what their property is worth.  20-50% is quite different than 6% so your Realtor/vulture analogy doesn't hold water.

I agree about junk mail.  I hate it myself and I won't be that guy.  However, to me, littering neighborhoods with signs is far more offensive than a postcard in the mail.  

As far as stealing equity goes it's a grey area as well as a slippery slope.  Some investors do add value that they should get rewarded for.  However, lots of residential real estate investors attempt to justify their profit by saying they "added value" when in reality they didn't do much. These people must not care or understand that they are making money by taking advantage of vulnerable or desperate people.  When I find vulnerable or desperate people my first thought is "can I help", not "how can I take their stuff?".  Many of these "investors" are downright predatory. 

Just because something works doesn't mean it's worth doing or ethical.  Banks and credit card companies can charge outrageous fees and rates.  Some mortgage lenders used certain strategies in the past to get people to default so they could take their homes.  Recently there have been refinance churning schemes to refinance military veterans with little to no benefit to the borrower.  

Real estate is an area where people can be taken advantage of in a way that has a significant impact on their financial futures.  This comment about people getting "taken advantage of every day in every industry" stinks of a "they do it so I'm gonna do it" mentality.  I personally find that mentality objectionable and don't respect people that drop their level just because others are doing it too.

Some people just don't care about their effect on society as long as they are making a buck.  That mentality is more prevalent than ever. Take take take.

At least one person commented about how they really want the desperate people to call them so they can take their equity.

Meanwhile they are charging people to teach them how to be low level, and annoying just like them.

 Wisely stated.

Pretty much what Tim said but I'll take it a step further.

The light spots could be areas that were sanded more than the darker areas. More sanding means you get closer to the original wood color because stains only penetrate so far.  Then when you put down new stain it makes the spots where you did more sanding lighter in color.  Sanding is by far the most important job when refinishing a wood floor and if it was done correctly there would be no lighter areas.  You just keep working that sander until it's even.  I agree with Tim that they did a bad job sanding.

It could have been a previous surfacing job and the new contractor just didn't sand it enough, and didn't see it.  Either way this is absolutely a poor refinishing job because they COULD have made it look like downstairs with more work.  Maybe the downstairs was in better shape and didn't need as much attention to detail.

In any case this would be unacceptable for me.  Almost any wood floor can be refinished properly if it's done correctly; that is part of the beauty of wood.  My guess is that the contractor doing it just didn't see what was going to happen when stain was applied, but that's the most important thing you pay any woodworker for, knowing how it's going to turn out and making sure it does.

The seller stating that the wood "appears to be white oak" is just a line to try and smooth over the situation and I find it funny.  There are very few people that can actually tell the difference between white oak and red oak before its stained, and after they are stained it's even harder.  The grain lines are pretty bold all over the place so it all looks like red oak to me.  I am a hobby woodworker with quite a large wood shop and have done lots of fine wood work projects that require excellent finishes.  I can tell you that people who aren't wood workers (even contractors) very rarely know the difference between red oak and white oak so for them to respond like that is just grasping for straws because they likely have no real experience with red oak vs white oak.

They didn't sand enough, that's really all that happened.  Well, that and the person in charge doesn't have a good enough eye to be refinishing wood at a high level.  If they sanded more they'd get it even.  Again, that's part of the beauty of wood, just keep sanding.  It's hard work so its often an area where people give up and or take short cuts and that seems like exactly what happened here.

The fact that the floor has been "refinished, stained, sealed" numerous times is not an issue because guess what....you can just sand through it all! That's why there are lighter areas, because all of the stain/sealer was sanded through.  So their reasons are all a bunch of crap because yes you absolutely can make that floor appear brand new.  They are just making stuff up to support their case.