All Forum Posts by: Account Closed

Good comment re: MeetUp.

I focus on meetings where they have a number of members and there are some ratings for prior meetings that people attended.

Ryan,

Go to your preferences and you can turn off notifications. That is my default setting (off).

What I wanted was something that works when I am looking at the forum and logged in. A way to see what is new that I have interest in or just new but not things I know I no longer want to read.

In effect you would never be on the same (original) loan. You could be both on a new loan if you refinance as you suggest.

Being on the loan increases your liability with no obvious benefit if you are already on title for the property or have control of it otherwise.

The point of some deals (lease options, buying on land contracts, flipping a contract) is all about buying without being on the loan. Being off the loan has its place.

I suspect the real motivation has to do with your relationship with your partner. They have all the risk associated with the loan right now and that might not be what you two feel is fair.

Will,

I agree.

The secret is knowing when too much leverage is too much.

Cash flow problems is what terminates most businesses and the same for REI who are over extended.

Anyone using all cash and no debt tends to stay out of cash flow problems.

Somewhere in the middle is a growth strategy that does not wipe people out. The right level varies based on market conditions.

What service are they being paid for? Bringing together a buyer and a seller and only collecting a fee is and when the deal closes (documented on the HUD-1)?

It is a matter for the NC licensing folks. They can decide.

I believe this topic specific to NC was discussed about a year ago. Similar to how many people speed on the highway so people start to think the law has changed.

If the difference between 10% to a private investor and hard money rates makes your deal unprofitable then you need better deals.

I am not being flip. The private investors are a good path but you really should be able to find some deals that work using with hard money. It gives you more options when a great deal happens.

Hard money might be expensive in comparison. Doing more deals where you make a profit is still better than passing on good deals just because hard money is expensive.

Banks will want to lend to you when you have more money, more assets and more of a track record. They like to see income on your tax returns for a couple of years. Most contractors do not want to show a lot of taxable profits. The two are in conflict. Decide which way you want to go.

Most of the time the big money is in the deals and contractors are available to work for REIs.

Run the numbers on some of your best deals. Could you really not make a profit with hard money but there would be a profit with private funds at 10%? If it is true all the time the deals are rather thin. Many deals will never work for hard money but you would be surprised.

In the past when I funded deals with hard money (as the lender) I found it very funny that borrowers wanted to split the profit rather than pay hard money rates. Once I walked them throw the math they realized half the profits from a good deal was more than the worst case with hard money. Others realized they had pretty thin deals where unexpected costs would wipe them out.

A new CEO sweeps out all the questionable deals and take a write down as far as legally possible. If something is questionable they can write it off and blame it on the past guy.

If it works out that some of the positions do better than expected it shows up as income (it was written off so it comes back as income). Extra income, extra profits, WOW the new CEO must be great.

Common with many businesses and clearly nothing at all unique to banking.

Emotionally the new guy as few or no emotional attachments to prior decisions so they can take the hit without feeling like they messed up.

Did the law specifically indicate that 1099's or other things (1098?) are no longer filed? Or did the law just say that no taxes are due even though the debt reduction needs to be reported?

I think people need to get away from if a 1099 is filed or not and focus on the real tax impact if any. Even when lenders do not file anything the borrower is still required to document correctly the debt being forgiven.

Bottom line is home owners should have less to worry about if they fit within the new law. Not all well. Investors do not fit if there is a short sale where they receive debt reduction as a borrower. Only investors who exited through a short sale, not the investors buying a property in a short sale.

It is hard to say if you are wrong or write as I am not sure of what you are saying.

Disclosure on the HUD-1 has to do with a transaction. It has nothing to do with the rules for RE agency in the state. Many things that are legal for a transaction can still be illegal when it comes to being paid as an unlicensed agent. Even if it is legal to receive the money it might not be something an agent can do and still stay within the rules for agency.

Most states, not all, are very strict about this. For good reason. If they want to force people to hold a license to broker a deal and receive compensation they can not let agents pay unlicensed people for helping or otherwise benefiting in some way.

The question was raised by a licensed agent in the State of CT. They can check their state laws. I happen to know a few states but it mostly falls to the agents in specific states to know their own laws.

To extend the point a bit...

How many remember the phrase the only two things that are certain are death and taxes?

REI can avoid some or all taxes right up to death. Legally.