All Forum Posts by: Account Closed

I think the key is he keeps saying "buy at distressed prices", "30 year mortgage" and "fine renters"

I see a lot of websites (usually wholesalers or agents) posting this quote as a way to convince readers they should hurry up and buy a property because Buffett says he would buy SFRs, but they don't mention he also has the above 3 caveats.

Also keep in mind this quote is from 2012.

I'm reading a book ("This Time Is Different") about past bubbles, and found the below paragraph really interesting. Just figured I would share since it seemed relevant to the discussion.

"Our immersion in the details of crises that have arisen over the past eight centuries and in data on them has led us to conclude that the most commonly repeated and most expensive investment advice ever given in the boom just before a financial crisis stems from the perception that 'this time is different.' That advice, that the old rules of valuation no longer apply, is usually followed up with vigor. Financial professionals and, all too often, government leaders explain that we are doing things better than before, we are smarter, and we have learned from past mistakes. Each time, society convinces itself that the current boom, unlike the many booms that preceded catastrophic collapses in the past, is built on sound fundamentals, structural reforms, technological innovation, and good policy"

I’m probably the only person in Dallas who doesn’t have a car yet. I work from home and whenever I need to go downtown I just use public transport, and worst case there’s the occasional uber/lyft

@John W. - I wouldn't get caught up with absolute statements like "appreciation rises along with interest rates". Appreciation rises based on multiple factors, interest rates is one but so is the location, population growth, wages, jobs etc etc. As an example of why you can't predict appreciation goes up with a single factor like interest rates, just look at the last 10 years - most areas have experienced tremendous growth in appreciation yet interest rates have stayed low.

It sounds like your goal is to buy and hold, in which case I would just focus on buying in good locations, make sure you have strong cash flow, and lock in your interest rate with 30 year mortgages. 

Think about it, if someone offers you a fantastic deal today with a 30 year fixed rate mortgage, are you going to say "This looks amazing, but I will pass because interest rates are going up"?

I've always thought of it the same as if you rented out a property and the tenant caused liens to be placed on the property. That said, I don't buy CFDs and perhaps many CFD investors (particularly beginners) don’t realize that’s a key risk between secured notes vs CFDs. Interested to read the replies

In summary, I don't think you pick between a Mortgage or Promissory note, and the Promissory note allows you to avoid mortgage lending guidelines. 

You have a Promissory note, and then based on the state you secure the note with a Mortgage or a Deed of trust, and no matter what there are guidelines to be mindful of, particularly if its to a owner-occupant.

Thanks Shiloh. I think I may be misunderstanding your 1st and 3rd paragraph, or there's a bit of a confusion between mortgage and notes. For real estate loans, they all have two instruments (1) a promissory note which is an IOU and outlines the terms and (2) a mortgage or deed of trust which is a security instrument pledging the property as collateral for your note. Everything I have seen includes both a note and a mortgage/DoT to secure the note.

Maybe I have missed something, but I'm not aware of a loan where you have a note, and "happen to be secured" without also having a mortgage or DoT, otherwise how are you secured? And to your last sentence, I'm not sure there is a workaround to avoid mortgage lending rules, especially if your loan is to a borrower who is also occupying the home (given how sensitive the CFPB is with owner-occupied loans).

Sorry for the segue...

https://www.nolo.com/legal-encyclopedia/whats-the-...

@Shiloh Lundahl - out of curiosity, what is the difference if they are both notes secured by a deed of trust/mortgage?

@Steve Hodgdon has a business related to non-re debt collections

Interesting question though (I grew up near DC), housing affordability is definitely an issue in every major market. I get why some would say investors are causing the affordability issue, but my guess is it would be a lot more productive if policies/discussions focused on two issues, (i) why haven't wages been increasing as asset prices and rent have gone up the last 10 years and (ii) why isn't there enough of an incentive for investors to build affordable housing. Ignoring that and saying investors should stop flipping houses doesn't seem to address the core issues (at least in my view). But happy to hear from the other side.

For example, maybe someone who does developments could chime in, but my guess is the numbers on building new affordable housing just aren't compelling, and if policy/markets shift so that it is attractive, you're going to have a lot more BP forum discussions with everyone asking how to get involved (which would be a positive for low income families because supply will go up and rents eventually come down)