All Forum Posts by: Zachary Clevenger

Hmm. Few things I notice when having credit discussions with clients...

1) Try not have have max utilization of a charge card / credit card / etc. be over 30%. For instance if your credit limit is $1,000 do not have more than a $300 balance. That being said, try to pay your balance off in full every month.

2) Number of open accounts can hurt you, but can also help you if; 1) you maintain a zero balance, and 2) you have "time in credit" aka it's been open for a while (years).

3) Late student loan payments, exceeding 60 days are bad, exceeding 120 days are crap...

4) Outstanding balances, judgements, etc... try not to have those

But most importantly, you need TIME.

I concur with you... prices are astronomically higher. Not much is penciling out to even look attractive and no amount of percentage drop will remedy that.

Will prices on supply drop? I cannot be sure. I do agree with you that once the rates do drop into the 5's (already happening) you will begin to see an influx of buyers enter the market after sitting idle. Will that create a scenario like we saw the last few years? Bidding wars? Premiums on a sought after property? Overpaying? Surely.... actually it is highly likely.

And with that comes a new risk. Well, not so much new to some of us. An over extended and over leveraged consumer. Think 2007-09.

Just my 2 cents as someone who has lived in Indianapolis area for over 20 years... 1.5 of those 3 streets over from Tuxedo Park.

The East Side of Indianapolis is generally the roughest. Has been for years, for decades. It is the most densely populated, some of the oldest neighborhoods, and... some of the poorest.

My sister lives to the east of Tuxedo's boundary (still..). Is the area "better"? Sure... it is not difficult to be "better" when you were near the bottom.

Quality tenants will really depend on a lot of factors, but keep in mind that an area like this is unlikely to attract higher credit score individuals.

All factors come into play here. Higher rents are possible, but so are increased risks of problems.

Ultimately, run your numbers and determine your risk factors.

Yeah... unfortunate, but this is the cost of doing business. A few questions come to mind...
1) Did you have a good lease in place?
2) Did you have an adequate security deposit?
3) What lessons have you learned from this experience?

Soft pull, no hard pull required for DSCR loans.
660 credit score starts the good stuff, and only goes up from there. 
Most require 20% down and you should consider this as a standard.

I'll ask a few lenders in my network to see what the general consensus is. I have recently worked up several ground-up construction builds, but those are for single family residences platted out. I imagine this would not be much different, but being a dedicated commercial building... never know. Commercial is the wild west.

 I would argue those numbers.... triple value on the house is only 1.5 mil, whereas compounded interest on $500k for 30 years is nearly 4.9 mil. +/- a few hundred thousand.

Quote from @Doug Smith:

I’ve been a banking executive, real estate investor, and lender for nearly 35 years now and I know how hard it is to get good info on the markets. That’s why I enjoy logging on to BP. There are a lot of perspectives and a lot of good people just trying to learn. That being said, today we’re seeing a ton of volatility in the interest rate markets and I thought I would tailor a post to help newer, “non-econ” people to understand what’s happening and what direction rates are heading (and why).

I know I’ve posted about Long-Term Mortgage Rates and the Federal Funds Rate not being directly tied, but this morning’s economic report will impact both. The attached chart is the 10-Year Treasury and you need to watch it closely (“TNX” on your smart phone’s stock ticker). Long-Term Mortgage Rates WILL move in lock-step with the 10-Year Treasury. As you can see, its cratering. Jobs data came in 22,000 lower than expected with losses in most sectors including 19,000 in manufacturing alone. Unemployment is up and I think you’ll see inflation tick up next month as well. Watch that index closely. It’s going to be a volatile day and it will remain so into next week at least, but this indicator tells us that rates ARE coming down.

Now, let’s switch gears to the Federal Reserve. This is not a political statement, but a statement of fact. Chairman Powell and President Trump are not on each other’s Christmas Card list. I suspect the Fed has wanted to lower rates, but they’ve held off as to not look like they are bending to the President’s will. With this data, however, this gives them the political cover to lower rates by 25 bps with an outside shot at a 50 bps drop. This will impact commercial loans, car loans, and equity lines (HELOCs).

I do hope this helps you and your customers. I’m always happy to “talk shop” is anyone wants to chat.

Doug

 Outstanding data and info Doug! I concur that things are going to get interesting and am being ever watchful.

 I appreciate your concerns, truly, and do not think I am not aware of the issues that take place. I have no desire to be a "gator", be in the paid "SubTo" group, or anything in relation to. I am there to meet quality people. I vet, research, question, talk to the person that interests me, and decide from there. Red flags, answers I do not like, "off" feelings, don't pass the vibe check, anything... I move on. 

But again, thank you for your viewpoint.

Quote from @Ken M.:

Quote from @Zachary Clevenger:

Quote from @David Hori:

I've been vetting gurus to determine where an investment would return the greatest ROI. Many gurus dangle their network, trainings and resources but few deliver real value. Fewer still actually show-up to deliver the value in-person.

Pace was the only one I encountered who showed up live, who is living these deals out every day and consistently finding ways to deliver (increasing) value to his community. The quality of people in his community is exceptional - yes there are world class experts, yes they hustle and are brilliant. But what's most compelling is that he's managed to curate a group of people who also care for each other and care about HOW they conduct business. They're not out to just make money, but take care of homeowners, business owners, partners, etc and their well-being. 

Real estate investing wasn't on my radar - my focus is business acquisition, but once I encountered the Subto community and saw for myself how much they were willing to extend to me for free, I had complete confidence in making the investment.

Peace of mind with such an investment does not come cheap for me... I lost my job in July. I'm living off of cash reserves and burning through it - there is a well dry date looming on the horizon. I'm confident in the value that Pace is creating and what the Subto Community is delivering every day.

 I cannot attest to him or his character, only what I have personally experienced. I have attended several local SubTo meetups and walk away everytime meeting excellent people that care for one-another. From what the organizer tells me, Pace keeps a tight hold on the quality, organization, and methods, of how the area leaders should function.

I will continue to attend them and build those networks because I feel I get value from them, not only from an investment standpoint, but from a knowledge and growth one as well.

Hmmm, that's no reason to tie yourself to a group of people.
The Mafia is pretty tight with one another.
Not that he's Mafia, but the point is "good feelings" don't impress judges.
This isn't a Morby lawsuit, just someone doing what he teaches.

There is a difference between doing something and then later being called to account for doing it. Most of these have 3 year statute of limitations, some have 10 years SOL - from the time they are discovered. They can be discovered years later. So, the liability is decades long.

Click to enlarge

You would be well advised to read the entire summons and avoid what has been going on here

https://www.azag.gov/sites/default/files/2025-03/CV2025-008402%20State%20of%20Arizona%20v.%20Cameron%20Jones%20et%20al%20FILED%20%281%29.pdf

 There are definitely those people out there, but they are prevalent in all areas of real estate. When you mix money and emotions there are bound to be problems.