All Forum Posts by: Aleks Gifford

Hey Brett. You and I have met in the past. I used to be active in the the REi Clubs.

Who invests in lots besides me?

I specifically buy lots. I use a strategy and only buy lots that have high potential to be build able or are next door to a resident home owner.

The resident home owner is the key. I buy the property typically from surplus and then turn around and sell it to the owner for double what I paid via quit claim deed. Most can not afford to take a day off work and go to the auction and pay cash. this way they can buy it from me over 6-12 months and I doubled my money. They get a side yard and I get more cash.

I also b8uy lots that are suitable to build on. I have not sold any of these as I am waiting for the market to support new builds.

You seem to be missing several things in your review:

1. Turning neighborhoods.

2. Cause for pricing.

3. Non-publicized opportunities.

4. ROR.

For instance one property I am looking at is going for $2k at a auction. What most people don't know is that it has a occupant that has been paying rent for 2 years to some one who doesn't own it. $650 a month. I will put $10k in. You do the math. All in at $12k, taxes and insurance will run me about $150 a month. I will clear $500 every month. In 5 years I will sell it for $50k+ and have collected a ton in rent. Net will be close to $70k. Why do I know how much I will be able to sell it for conservatively? The neighborhood is changing and the market has not put the pieces together yet.

The reason I am going to buy is people are 1 year behind on what is going on they wait for the ground breakings to believe change is coming. I on the other hand look for the signed contracts and buy in early.

Legal stuff first: I am a licensed Sr. Loan Originator NMLS# 1157855 and am currently licensed to originate in IN, OH, KY, FL. If you are not in those states what I say may or may not apply to you. Please consult an advisor in your state.

Licensed Loan officers ie they have a NMLS number like mine above are licensed by state same as brokers.

Traditional Banking Institutions can serve all 50 states however in my experience you pay more and end up with more issues as they are not well educated on the state specifics. Further more you will be in a turn and burn situation and the odds are they will not like your product as it takes more work versus end-user loans. Typically they run about .25% higher on the rate and/or will be a point higher in discount points and more than likely can not offer Lender's Credits.

The above is simply based on my experiences.

Finding a loan officer for each state is often beneficial for you for the above mentioned reason as well as the fact that they fight a little harder. Think of it this way: You have a guy who is a generic with national access to borrowers and as such has no real need for your loan versus a guy who has a limited reach but is specialized in state knowledge and needs your loan.

In short from experience your theory sounds good but will cost you more.

Legal stuff first: I am a licensed Sr. Loan Originator NMLS# 1157855 and am currently licensed to originate in IN, OH, KY, FL. If you are not in those states what I say may or may not apply to you. Please consult an advisor in your state.

In the US it is not worth the time to get licensed if you are not originating. It is expensive and you have to be tied to a functioning office. If you want the knowledge just read the guidelines and save yourself money and time.

Legal stuff first: I am a licensed Sr. Loan Originator NMLS# 1157855 and am currently licensed to originate in IN, OH, KY, FL. If you are not in those states what I say may or may not apply to you. Please consult an advisor in your state.

This is true excepting the items you mentioned or if he can demonstrate in a reasonable way that the property he is leaving is not useable due some factor such as expense or education. The is especially important if it has an FHA mortgage. If it is paid off or has a conventional he maybe able to swing it as he could show it would allow him to improve his financial situation to rent the old home and have a duplex to rent one side.

Be upfront with your lender and this is not a deal for a rookie to cut their teeth on.

Legal stuff first: I am a licensed Sr. Loan Originator NMLS# 1157855 and am currently licensed to originate in IN, OH, KY, FL. If you are not in those states what I say may or may not apply to you. Please consult an advisor in your state.

Legal stuff first: I am a licensed Sr. Loan Originator NMLS# 1157855 and am currently licensed to originate in IN, OH, KY, FL. If you are not in those states what I say may or may not apply to you. Please consult an advisor in your state.

 This being said the Lender does not know this stuff until your appraisal and cert are completed. A good lender will prep you for this and get you working on it earlier in the process before money is spent.

Secondly most lenders do not refund appraisal as it is a due diligence cost on your part just like an inspection. Some may issue you a credit for future items. In regards to the points and LTV: The low LTV indicates lender fears the deal and this is a courtesy attempt that you can take or leave typically it is 75%. The points are a little high in my book on such a low LTV.

The odds are he hoped you would shop him as a no-warrantable condo is a pain in the butt.

As for the ethics your loan officer is not All Knowing and should prep you that everything could topple a deal right up till closing. As an investor you know this and as such he may not have felt the need to remind you. Consider everything up till closing as due diligence process by the lender and as such they can walk away if it is a bad deal in their mind.

If at any point he was unprofessional it would be in assuming you knew what was happening. I ask my borrowers a lot of questions to determine how knowledgeable they are.

Any lender who is using rental income and it is less than two years is not using the income if it is FANNIE, FREDDIE, USDA, VA or FHA. You qualify with out it. Any of this stuff can be searched out by going to www.allregs.com and searching the guidelines for yourself. The only way the income can be counted is if they are using a portfolio product. The odds on are you qualified with out it. Remember a lender can go up to 50%DTI on several of these products. Why would they fib about it? Simply to keep your business especially as other lenders will tell you the truth. This also applies to many other topics. For instance how many Lenders discuss Lender's Credits or even offer them to you.

The short version is you need to write your own knowledge base on these subjects.