All Forum Posts by: Jay Hinrichs

The option provision of the promulgated contract by the TREC was put into effect to reduce the number of disputes rising out of contracts contingent on inspections, etc.  These disputes would arise when the buyer wanted to terminate the contract because the house was not in a condition to their liking, while the seller was willing to do the repairs noted in the inspection report.  Often the seller would disagree with the buyers inspection report, and obtain their own with differences leading to further disputes. Then there were disputes over the quality of repairs and type of repairs when sellers undertook to do the repairs.  

By placing a limited time unrestricted  option in the contract the buyer can terminate for any, or no reason, with no dispute and hence a clean break.  While there’s still plenty of room for disagreement in other parts of the contract, off hand I’d say earnest money disputes have been cut by 75%.  

I lived in Texas 41 of the last 46 years.  Yes, Texans are independent thinkers who don’t automatically accept the popular or common way of doing something is necessarily the best.  Many of us are “refugees” from coastal cities where we found the heavy handed government regulation, ridiculously high state and local taxes to pay for “social engineering”, and general attitude of ‘victimization” to be too restricting to our personal liberty.  

Ahh I see. It would seem that once again Texans always feel like they have to do things differently than everyone else just because they're Texans

Earnest Money and Option Money are different.  Earnest money typically held by the title company and refundable under certain circumstances and different timeframes.  I call this your serious money.

Option Money is normally more of a nominal amount and while now delivered to the title company is non-refundable and belongs to the seller if you back out of the contract for any or no reason.  Really the idea behind this is time to do your due diligence like a home inspection.

While there are some legit owner finance deals in Texas I will just tell you most are a scam.  My general thought is for most buyers to stay away from them.  They're full of risk of you losing all your money and the home.  Probably 95 out of 100 I see are just downright fraudulent.  When you are asking all these questions, it makes me even more nervous.

@Ko Kashiwagi is correct.  If you do find a true owner finance deal, you want an attorney and probably better yet a title attorney who is familiar and experienced with owner finance to assist you with the transaction and paperwork.  You should be using a servicer and not paying directly to the owner.

Plenty of things to check on.  Like is the property paid off, or is the seller trying to do a wrap.  Is the person you're working with even own the property.  Many I see do not own the property and are trying to arbitrage or come up with a scheme they think will work and it doesn't normally turn out good for the buyer.

@Jay Hinrichs @Chris Seveney @Andrew Syrios   Our normal Texas contracts have two sets of money involved at the outset.  One is Earnest Money and normally held at title company where they function as both the escrow agent and title insurance provider and researcher.  The second set of money is Option Money.  This is different.  Option Money gives a buyer the right to tie up the property for a certain number of days...right now probably 7-10 days.  While it is not stated in the contract, the idea with this is really to do a home inspection and negotiate any repairs.  If the buyer backs out during this time period, they can back out for any or no reason and they get the earnest money back, but the option money gets released to seller.  Great for buyers, normally horrible for sellers in my opinion.  Lots of reasons I think it is horrible for sellers....for $100-$200-$500 a buyer can tie up a property and bail potentially after 10 days...(both money and days are negotiable) and seller gets the $100 after keeping the property off the market for 10 days.  To confuse things even more, we used to write two checks, one to title for earnest money and one to the seller for option money.  Now both amounts can be in one check or draft or wire and title company splits the money out.  Both EM and OM can go towards the purchase price if it goes all the way to closing if the right boxes are selected.

I would have to dig into this more but that doesn't sound at all right about how the Census estimates population (and is quite different than what the census itself says or a google search https://www.census.gov/data/developers/data-sets/popest-popp...). That being said, Detroit's politicians have every reason to claim Detroit's population has been growing for years and not just for the first time in 2024 (more federal funds, better press, etc.) The Census has no reason to undercount. So I would lean in favor of the Census until I see something more concrete than merely the assertions of Detroit's politicians. 

Financial freedom won't happen in real estate unless you are able to defy the norm & participate in outliers 

1) You bought in 2010-2020.

2) You bought or refinanced in 2020-2021

3) You've calculated inflation and notice every 12-15 years, you'll need 40-50% more. You've also set aside a tangible amount for medical care.  Meaning if you're 40, you're making 150-200% more monthly knowing the dollar will decline in value to be able to live to 85. Knowing health care costs maybe in the $5-7k/month range.

4) Your leverage situation is capable of handling two troughs; not just RE, but any debt. 

5) Your real estate is physically in shape(no major capex for 7 years +)

6) Your holding cash flow as 50% property reserves before profit. 

7) Your location is quality enough to deter vacancies and, not or, keep very good tenants with average turns of 3, 4 years.

8) You have another stream of income, or two, that can cover 125% of your debt payments.

9) You're insured, mitigated against legal issues & natural disasters appropriately.

10) You're able to save 15-20% of your current income for real retirement age 

If you dont have those things, you're not financially free. Quit focusing on this obscenely overused terms & just develop.

There's just a handful of people that post on this forum that can wake up and do whatever they want. Quit comparing yourself to them and compare yourself to how where you been and how you're going to move forward.

Quote from @Eric Bilderback:

Quote from @Marcus Auerbach:

Quote from @Eric Bilderback:

Quote from @Marcus Auerbach:

We don't have the labor to make more things in the US. 

We still have about 7.4 million open jobs and vs 7 million unemployed. You can't drive unemployment to zero. Anything under 5% is considered full employment. And we are at 4.1%. So while it sounds great to "bring jobs back" - who is going to do them?

And we also have a qualification problem. A modern auto factory does not require much unskilled labor. Material is moved by automated forklifts, and assembly is either done or assisted by robots to meet TQM standards. Much of what you need are engineers and highly skilled workers. We are already short on both.

I doubt that most of the 40% unemployed men of the inner city of Detroit are a good fit for a modern day manufacturing plant.

The Apple CEO Tim Cook said famously: people think we manufacture in China because labor is cheap. The real reason is they have a vast pool of HIGHLY qualified skilled labor.  Video.

I have spent almost 20 years working for a global manufacturer. For any machine that was produced in our US factory and the components needed to assemble the decision was to either fully automate the process to 24/7 production here in the US - or offshore to MX or CHN, the difference being the response time to change orders (6 months vs 6 weeks) due to geographic distance. MX kept us more flexible.

Here is a picture of the BMW plant in Spartenburg, SC and if you want to see the list of jobs they have it's here https://www.bmwgroup.jobs/us/en/location/location-spartanbur...

Why should we care about Apples phones etc.  If they aren't going to bring opportunity to Americans to buy a house, provide for a family then they are not a priority, if they go broke "thems the breaks".  They can take all the money they are spending sending missiles and weapons all across the world and get the folks in Detroit up to speed for those good jobs Apple has.  Americans don't need more technology, we need some good jobs that can create strong communities, towns, neighborhoods etc.  And if your business doesn't provide that then your business is not a priority.  Am I missing something?

Yes, I think you missed my point. It's not about Apple. The issue is: we have more open jobs than people looking for jobs. In other words: we don't need more jobs. And if we create more jobs, who is going to take them?

And a large portion of the people unemployed today have a qualification problem. Simple manual labor is not a thing anymore. You need automation engineers who can troubleshoot a FANUC 6-axis robot - and not a grunt to do heavy manual labor.

And you are not going to train a 40 year old unskilled laborer to become an engineer. Heck, who would even make the investment to pay for college with only 20 working years left to retirement?

Good jobs to create strong communities" sounds really great, we all want that, I am all for it. But the definition of what a good job looks like has changed. Give it another 3 or 5 years. Machines will be picking your strawberries, because they will do it cheaper, better and also at night.

We can recreate an economy like it was in the 80s with "Good jobs for hard working Americans". Tune back the technology. But the world will move on and the ones who say America is a dying empire will have been right.

People today have a qualification problem because the jobs have been shipped over to asia, and industries like timber has been crushed by regulation with the help of BlackRock etc so they can use cheaper labor and make more money.  Nike, Apple etc use these people in asia like slaves the governments are totally corrupt with no labor or environmental protection, impossible for us to compete with that.  The outsourcing of the nations wealth Wall Street and the corporate outsourcers took a huge cut off the top and sent it overseas.  Thats how I view it and that is why Trump was elected I believe.  If Apple can't make money building their technology or Nike can't build their dumb woke shoes here and make money I'm good with that let them go broke.  It took along time to get our population as fat and ignorant as they are today (God bless them, LOL) there could be alot of pain and time whipping our country back into shape.

I didn't know shoes can be woke, good thing I don't have any Nike lol. I agree that Wallstreet and turbo-capitalism took the wealth from the middle class, but the real question is weather it is feasible for us to on-shore production in a reasonable time, AND get wages up AND keep prices from shooting up so affordability gets better AND redistribute income back to the middle class.

It took as all of the 80s, 90s and 00s to offshore our manufacturing. Moving factories and building supply chains takes decades. Raising a workforce with the right qualifications takes a generation. And the sweatshop China you describe has been rapidly vanishing and is being replaced with hyper modern fully automated facilities. 

And you need a very qualified workforce to run them: 1.5 million engineers graduate every year in China, I believe we are just over 100,000

We are asking if we could re-open some of the mothballed factories that was designed to manually assemble a Ford Granada. Meanwhile, BYD is just finishing a car manufacturing plant the size of San Francisco - about 50 square miles large - that will produce a million cars per year. Highly automated factory, not a sweatshop. 

And the cars are amazing! I usually drive German SUVs, but every Chinese car I have driven in the last 2 years makes me realize that they are getting ahead in every aspect. For half the price

So, yeah - something has to change. We can't keep importing everything and the only thing we ship the other way is dollar bills. We do this long enough they have all the dollars and we have all the stuff. Then what?

@Chris Seveney  is like to disagree just a bit. Is your friend really financially free? From my understanding financially free means you can be without a job and live the lifestyle you desire. Your friend has a job that he has to continue to go to, without it, and without investing elsewhere, he is not financially free. Also, in order to reach that you need to excel in certain skills, study hard, and go through probably atleast four years of college. Real estate is accessible to anybody. I think it is also worth mentioning that nvidia is one of the top paying tech companies. To get a degree in tech doesn't guarantee you a job there or somewhere else that pays that much. 

The reality is real estate very much can get you to financial freedom. What you're saying that I agree with is that it's going to take time, it won't happen tomorrow. 

Hello BP community - any one lately come across new construction properties for investors in Columbus OH, most of these builders in Columbus refrain from selling it to investors and only entertain first time home buyers or if you plan to make it as primary home to live in. (Rockford, MI, Pulte, Ryan homes) - any one know of builders who are investor friendly in Columbus?

sachin