All Forum Posts by: Account Closed

@David Oldenburg

A quick search on the internet seems to define a bridge loan as 12 months or less, not under 12 months, you probably knew that but I offer it for clarification.

The ATR and QM you mention seem to apply to Dodd Frank, there is a boat load of other regulations, Business Purpose seems to be an exemption for all of them, I'm guessing Bridge loan doesn't apply to all of them, maybe only DF.

I am a CA BRE Broker and only lend to rehabers, and only for 12mo or less, and am very careful about keeping to the business purpose.  Interesting about the bridge loan exemption, I didn't know about that.

I've used doc companies in the past, they seem to cost around $695 for a private money package.  I have my own (attorney approved) docs thus save.  If the doc company you know is good and less expensive I'd certainly be interested.  For the other readers, I'm guessing most if not all private money doc companies will only work with licensed individuals.

@Mike G. I don't know what the truth is.  Interesting idea though.  Being licensed myself I don't worry or even think about usury issues.

@David Oldenburg I don't know what ATM, QM or ATR are but I've been operating under notion that RESPA, TILA, SAFE, DF, CFPB don't apply if you can fit the loan in a "business purpose" box, carefully of course.

I saw it suggested on this website that for example if usury is 10% you could write the loan for say 8% + 4pts for two years and not violate usury.  The 4 pts is spread over 2 years giving 10%/yr, not a usury violation.  If rehabber pays off in 12 months the roi is 14% but because the loan was written for 2 yrs it's 10%/yr from a usury perspective.  Most rehabbers pay off in less than one year thus giving an even higher roi.  This is not legal advice.

http://www.evict123.com/

If you get checks in powers of two you will hit the final bid within 1k no matter what it is.  This minimizes the amount you have to over pay.  This is somewhat important because they don't give you your change back right away.  Example, if you get checks in the following denominations you can cover any bid up to 127k:

1k, 2k, 4k, 8k, 16k, 32k, 64k

Try it, pick any number between 1k and 127k and with this denomination you hit it within 1k.

 So, if you have one receipt that spreads across several accounts, you break down the receipt total into different accounts?  e.g. Where I'm at we get a Dept of Water and Power (DWP) bill, you would dig into the bill and break the total down to water, power and trash?  Or a a contractors bill down into paint, trim and labor?

With regard to COGS, I guess your accountant "knows" to not expense rehab expenses unless the house is sold even though it shows on the P&L as an expense for the year?

@J Scott

I got your book and started going through it.  I'm looking at the Chart of Accounts.  Do you really keep track of all those cost categories?  I count 82 different rehab cost categories.  Your bookkeeper must go nuts.  Is there really any advantage to the detailed breakdown?  You're a very detailed guy, I like that.

And shouldn't all those COGS accounts be against a capital account until the flip is sold then become COGS accounts.  The Quickbooks book I have written by a cpa/atty shows all flip expenses against the property capital account until sold at which time it gets transferred to the COGS account.

The reason I ask is because I'm starting to JV with a flipper, I supply the money and he does the work and we split profits 50/50. I am keeping the books so I KNOW what 50/50 really is.

Not being an expert in this area, it would seem to me there is a way for $/sqft to be tremendously accurate.  If you flip one house after another of the same type, in the same area, with the same contractors, with the same finishes, just calculate the $/sqft of your last rehab and there you have it.

@James Miller

Your post got me wondering about trusts in California.  So I went back to the material I received from the California attorney that educated me on trusts.  He says "Acting as a trustee for someone's title holding trust is of little import because the trustee isn't personally liable for any act performed on behalf of the trust pursuant to a written direction to do so by the beneficiary of the trust."

If this is not true I surely want to know.

That's not to say a trustee won't get sued, it only says a trustee can't be held liable when acting strictly in the capacity of a trustee.

Are you saying in TX a trustee is help liable?

PS.  I'm not a lawyer.

@Will Barnard

Did  you ever figure out how this guy's attorney was getting paid all this time?  Hard to believe attorney was doing this on contingency, unless it was a relative or something.