All Forum Posts by: Ned Carey
Ned Carey has started 43 posts and replied 15953 times.
Post: Deal Analysis- everything is a negative cash flow
- Investor
- Baltimore, MD
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@Chelsea Coltman most properties on the market do not cash flow. Finding and negotiating good deals is a large part of being a successful investor.
Post: If the seller's inspection report does not contain the crawl space, is this fishy?
- Investor
- Baltimore, MD
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I wouldn't go by a seller inspection report. I would get my own.
Post: The 5 Ugly Truths of Real Estate Investing
- Investor
- Baltimore, MD
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@Matthew Irish-JonesI great post. I hope a lot of newbies read this.
#4 REAL ESTATE IS RISKY Most people don't believe it until they start to lose money.
Post: All of a Sudden I’m Receiving Solicitations on BP
- Investor
- Baltimore, MD
- Posts 16,986
- Votes 13,334
Please report these.
Just click the link on the upper right of the message
Post: DSCR Loans Will Default
- Investor
- Baltimore, MD
- Posts 16,986
- Votes 13,334
Quote from @Matthew Crivelli:
Quote from @Ned Carey:
Quote from @Matthew Crivelli:
Since 2018 we originated over 500 DSCR loans, in that time we have seen less than 10 defaults. This video is really doom and gloom. The lenders don't care? The majority of these loans are packaged and sold as mortgage backed securities. If the lenders loan roll is full of defaults, the secondary market stops purchasing the notes, which in turn puts the lender out of business. Right now the rates on these non QM products are better than what Fannie or Freddy are offering with way less red tape. This product has been around since 2010ish, there has never been a wave of defaults, even through COVID. This is click bait.
Since 2018, You have had low foreclosures during a time of lowering interest rates, rent and price increases. If you think that will continue you are fooling yourself. This is the kind of thinking that caused the 2008 crash.
2008 was caused by subprime lenders handing out ARM loans to anyone with a pulse + credit agency's AAA stamping turd mortgages. They were qualifying mortgages based on a teaser rate. This caused home prices to rise because buyers who couldn't realistically handle the mortgage payments could acquire home loans with next to nothing as a down payment. Once the 3-5Y teaser rate expired the monthly cost of the note skyrocketed, leading to a huge wave of foreclosures. I'm not sure how you are paralleling 30Y fixed investor loans that have stringent, LTV, credit, reserve, and rental income requirements to the 2008 crash... Kind of stretch here.
Mathew re-read my post. I was not comparing the 2008 crash to the situation now. I was comparing the kind of thinking that allowed the crash to the kind of thinking now.
I was replying to your original poste whare you were using results from a vary favorable environment and extrapolating like they will continue.
Post: DSCR Loans Will Default
- Investor
- Baltimore, MD
- Posts 16,986
- Votes 13,334
@Alex Bekeza Your bullet points
- Require real cash flow at underwriting,
- Are issued to savvier borrowers,
Do you actually believe that? a 1.25 DSCR if you are only counting PITI, is negative cash flow.
If your Borrowers don't understand that they are not savvier.
The comparison to 2008 is irrelevant since we are talking about DSCR loans failing not the market as a whole crashing.
Post: Define "uninhabitable"... (repair/tenant issues)
- Investor
- Baltimore, MD
- Posts 16,986
- Votes 13,334
@Jason Sinclair My non lawyer understanding is you are liable to the tenant the neighbor is liable to you.
He sounds like a problem tenant. I would be glad to get him out. If all you have to give him his security deposit back that sounds like a cheap easy way to get rid of a problem.
Post: DSCR Loans Will Default
- Investor
- Baltimore, MD
- Posts 16,986
- Votes 13,334
Quote from @Matthew Crivelli:
Since 2018 we originated over 500 DSCR loans, in that time we have seen less than 10 defaults. This video is really doom and gloom. The lenders don't care? The majority of these loans are packaged and sold as mortgage backed securities. If the lenders loan roll is full of defaults, the secondary market stops purchasing the notes, which in turn puts the lender out of business. Right now the rates on these non QM products are better than what Fannie or Freddy are offering with way less red tape. This product has been around since 2010ish, there has never been a wave of defaults, even through COVID. This is click bait.
Since 2018, You have had low foreclosures during a time of lowering interest rates, rent and price increases. If you think that will continue you are fooling yourself. This is the kind of thinking that caused the 2008 crash.
Post: Pending changes to Section 8?
- Investor
- Baltimore, MD
- Posts 16,986
- Votes 13,334
If we limit section 8 to 2 years who would accept that? Rentals that turn over every 2 years are not viable. I rent to section 8, by an large have good tenants and they stay 5+ years
This goes to @James Wise and @Jay Hinrichs point, We could see hosing chaos, and the politicians won't allow it for long.
Post: Should I buy far away
- Investor
- Baltimore, MD
- Posts 16,986
- Votes 13,334
@Eli Shannon I live in Baltimore from one side of the city to another is an hour sometimes. I think an hour and a half is a reasonable distance.
I am generally against long distance investing, like out of state. The reason is it increases both your risk and your cost. The investors who get the best deals are the ones that know their market the best. An hour and 1/2 is close enough you can drive there and learn the market.
An important consideration is which is the better investment. If better deals, meaning belter return on investment, are available 1 1/2 hours away go for it. If closer deals cost more but are a belter return on investment then stay closer.