All Forum Posts by: Austin Moran

There's not enough interest rate arbitrage to be had to make it worth the hassle of shifting debt around. Your mortgage payment is fixed, your rental income is not. 

At what point do you project rents covering mortgage payments?

@Jay Hinrichs I like the business model. The $10k down payment you require is a one-time out of pocket for flippers. No different than many of the financial gurus, but this goes right into a deal! Profit from #1 pays for down payment on #2, then the cash flow really kicks in given your underwriting. Good stuff, thank you for sharing :)

Thank you for the well thought out responses gentlemen. 

@Darren Eady I've had a difficult time finding performing mortgage notes which yield anything attractive.

@Jay Raught Your link was a great refresher, thanks for posting it. It inspired me to modify my spreadsheet

@Steve Haight I'm not sure what the reason for selling is. The note was originated at $15,000 with 10% down and a $599 document prep fee bringing it to $14,099. The land is 1.9 acres of lightly treed road front property 70 miles outside of Dallas. 

I have the opportunity to purchase a small note on undeveloped land which was purchased with the intent to clear and build. Below is my checklist. Am I missing anything critical that needs to be answered before investing?

• Verify title / ensure lien has been recorded
•    -When is it customary for seller to pay for this?
• Is note senior to any construction loans?
  
• Compare land value to note
  
• Review credit histories of borrower
•   -What's the legal way to do this?

Thank you for helping me work through the due diligence.

-Austin

Are there any Houston mixed use developers here? Looking for some advice on what to have on the radar for projects in the $1M range. 

Really surprised to see no responses. Is this not something commonly done by BP members?

I'm not sure what the typical occupation is for that area, but this may be worth looking into. Keep in mind that with oil prices lower for longer, many industries in Houston will suffer, not just big oil and oil service companies, but also the companies that provide software, accounting, etc to the energy industry. Every single energy company without exception has slashed their capex budgets by a minimum of 40%. Layoffs continue to follow. The market may sour quickly and I would be willing to bet there will be better real-estate deals soon enough.

Owner is selling his motorcycle to pay the mortgage due to wifes medical bills. He is married, employed, and has a couple of children. Before I contact the owner, I would like some feedback from the BP community on how to approach him. Ideally, I would like to keep him in the home and originate a new note. Here is what I've considered so far under the assumption they are close to foreclosure:

-Ask to buy property outright, originate new note with significantly lower monthly payment. (Assuming the numbers work)

-Inquire with bank about their willingness to sell current note (depending on performance) at a discount. Originate new note.

Cheers,

Austin

@Bill Gulley If Nayt were to originate and sell notes and partials to other business entities only would he be exempt from many of the compliance requirements?