All Forum Posts by: Matthew Peterson

@Jay Hinrichs I spoke too soon. He was throwing so much out at me yesterday. I just texted him and he responded. New rules for chase are:

Primary - 20% down, 6 months worth of liquid PITI in your bank

Investment - 30% down, 18 months worth PITI in bank

@Jay Hinrichs I thought the same, but he stated it was for primary and reiterated most of his clients were doing 3-5% down and it completely blew their loans apart with the new regs. He said it came down from Chase execs Thursday night.

I’d love to have your bank contact by the way! I’ve done a couple million in loans with chase over the past couple of years and they haven’t mentioned any programs at all to me like yours is helping you with. I do my personal banking with them, my business banking and all loans, I think I’ve become a creature of habit!

@Nick Rutkowski

I closed on two rental properties in the $300K each range this month and have one more to close on. My lender (at Chase) said he had 11 deals fall through in the past 3 days. We spoke yesterday. I’ve personally backed out of 1 deal and am closing on 1 more for now. I’m fairly liquid and am keeping a lot of dry powder ready for whatever happens in the next 12 months.

He stated that Chase standards as of Thursday afternoon were 30% down and the buyer must have liquid capital of 18 months PITI in the bank. So even on a 200K house, that's 60K down and roughly $1,500 x 18 needed in your checking account on top of the down payment. Majority of US primary residence buyers don't have $100,000 cash sitting around. For those in rental markets dependent on the income, I feel for them. The value of liquidity has never been so evident.

My lender sounded devastated because of all of his deals that fell through. He reminded me that most folks buying a primary are putting 3-10% down, which is why there will be a deluge of deals falling through with the new standards. He mentioned BofA isn’t even originating new loans. Not sure if that’s valid but that was his statement.

@Joe Carter I’ve been in your shoes my friend. Last thing you need are a bunch of folks on a forum beating you down for mistakes any of us could have made. I can say from personal experience, sometimes hard lessons are the ones that make you a great investor down the road. No one can give you the right answer on what you should do, as everyone’s opinion will be based on their own successes and/or failures. 

I can also say this, bankruptcy is not a “reset”, and it will haunt you for years to come if you are interested in investing in real estate anytime soon. In the housing crisis, I had accumulated some properties in south Florida that shot up like a rocket, caused me to become greedy, and eventually I got hosed on most of them. After some foreclosures, Deed in lieu’s and short sales, I told myself I would never touch real estate again. But, those memories of anguish, led me to certain rules I made for myself that I do not deviate from as I’ve aged. Those tough years of learning caused me to become more mentally astute and wise with where I park my money, way more conservative than I was back then, keep more reserves, have better investments, and even put a couple of ferrari’s in the garage now. Time does go on and no matter what quagmire you find yourself in, there are many of us who have found ourselves in similar places, but in the end came out okay. 

My point is, we all make mistakes in our investing careers, whether it’s bad real estate deals, bad stock purchases, etc. You can come back from this, do what’s best for you given your current situation...if it’s bankruptcy, so be it, if it’s paying your debts and not going that route, that’s your choice too. As long as you learn some lessons from what you’re dealing with and don’t repeat the same mistakes, then as I said earlier, you’ll be a good investor down the road. 

I remember the sleepless nights like they were yesterday. That sting dictates many of my financial decisions today, and I can honestly say I’m glad I went through the experience which I went through. 

@Jay Hinrichs I can relate. I got wiped out in the dot.com crash too. I went mainly cash in mid to late 2019. I just thought the market (after having the longest bull run in history) was getting a little "peaky". I would say I was roughly 70fixed/30equity in February. I started shifting funds back into the market last week. As they say, we can't time the market. My strategy is I move a certain % back into equities every other week. My number is 5%. 

I picked up REM today, the REIT ETF, it was getting crushed and has some decent Real Estate Investement Trusts tucked in it. I try not to pick individual stocks. I trade options (selling covered calls and naked puts) on a few bellweathers that I own or either want to own, but I have gotten burned bad twice chasing individual stocks (Dot.com and then oil collapse) so I just deploy my funny money to trying to pick. I went long REM and KBE (Banking ETF).

I think it's a great buying opportunity if you have the stomach to endure the insane fluctuations, but for me, I easeeeeeee in every other Monday with an ETF type stock that tracks a broad market and has a bucket of securities within it. Good luck with any trades!

@Kathy Choi I can relate! I went on margin as well along with starting to play with stock options in 2008. It literally was the worst year of my life (even worse than chasing all the tech companies at the dot-com crash). Learned my lesson big time on using margin!

@John Underwood John - do you mind if I ask what type of security cameras you use? I'm closing on some properties next week that will be STR's eventually. Just curious as to what brand you used and if you're happy with the clarity of them.

@Avery Carl - I am interested in hearing how things pan out in the next two months as well. Please keep us posted. I spoke with Lucas via phone last week about 2 I am closing on next week. I want to close on 5-6 more by year end in that area, but am a little on edge with all the attractions shutting down and the potential shelter in place orders dropping from state governors each day. On the other side of the coin, I am getting excited about potential deals that may become available if folks have to dump their properties to free up cash. 

@Joe Cassandra one thing I also do if a stock does get put to me. Once I own it, I start selling what is called “Covered Calls” on my stock. Brings in more income each month from the stocks I own. Some have gotten called away from me, which was also fine since I set the strike price higher than what the current share price of my stock is. So I get the monthly premiums in the selling of covered calls and if it gets called away, the stock appreciated and I participate in the appreciation to the strike price. 

Let’s say CAT is at 98. I’ll sell $105 calls on it so I get the premium for the calls if it never gets to $105 each month, but then if it hits $107 or something..they get called away from me and I’m forced to sell at $105. But who knows when that will happen, so you just get the premium from selling the calls each month. 

@Joe Cassandra I’m selling cash secured since I do want to own the stock, regardless of whether it gets “put” to me or not. It’s just a way I gain entry into a stock I want to own, a little cheaper. If it never gets “put” to me, it’s a way to collect the premiums week after week...which is fine by me too.