All Forum Posts by: Jimmy Hong

@Ann Bellamy undefined, I am under the assumption that HML becomes the lender. For example, on a $100k property, borrower pays $35k (35%) and HML pays $65k (65%). So when the borrower defaults, does HML automatically not take over the property? Why does it have to go into foreclosure process if HML is the lender and owns the property free and clear ($100k paid off).

Sorry, I seemed to be confused.

0 Votes

Great post, thanks for sharing.

0 Votes

I also agree, Sean O'Toole's foreclosureradar now propertyradar is quality stuff.

0 Votes

This is a very common misconception. First, most HML’s don’t want the property. If they wanted to acquire homes to flip, they’d buy some and be in the flipping business. Most hard money lenders are in the business of making money off their money, not by flipping or otherwise acquiring properties. Foreclosure doesn’t work like this anyway.

When a lender forecloses he doesn’t automatically get the property. He is able to add all his relevant expenses to the amount you owe and put the property up for public auction, starting at no more than this amount, at a trustee or sheriff sale (or whatever they call it in your state).

If the lender is lucky, someone will bid high enough to buy the property and pay the lender off. If someone bids high enough, any subordinate lien-holders (2nd's etc.) will also get repaid.

@Jeff S. , why would the property go into foreclosure? Isn't the property paid in full and therefore HML would own the property free and clear, when borrower defaults?

0 Votes

Originally posted by Matt Mason:

I'm with . Marie Poe , that doesn't make any sense to me. Also, why don't you contact State Farm to see if they would write you a policy? If they are insuring it now, it seems they would for you as well - no?

@Matt Mason , they are insuring to seller because he has about 30 properties all over Memphis and they have a relationship with him. I'm having hard time because I'm an out of state investor, 1st property in Memphis, and my residential home is separately insured. A lot of them are requiring that I have my residential property insured together. These are the few that I've talked to that doesn't require it.

0 Votes

@k.

@Account Closed

Let me explain more clearly, I had the property inspected and they recommended new roof, electrical, and other things. Seller asked that they will completely replace the roof (quoted for $8000) but asked I pay their deductible of $1000, and I agreed. I informed the seller that I would do the same to replace the knob & tube but seller's insurance says they won't cover that.

0 Votes

@Rob K. , when shopping around for insurance companies, they specifically asked about roof, plumbing, and electrical wiring.

0 Votes

Originally posted by K. Marie Poe:

Originally posted by Jimmy Hong:

Seller has state farm but they won't cover the knob & tube replacement. I asked the seller to have their insurance replace it and I'll pay the deductible but state farm said they won't do it.

This is confusing to me. Since when does an insurance company replace wiring or pay for repairs or bring a property up-to-date? Where are these policies where you get to pay a deductible and get new wiring....without the house burning down first? Did you make that up or am I missing something?

Hi @k.

@Account Closed, let me explain more clearly, I had the property inspected and they recommended new roof, electrical, and other things. Seller asked that they will completely replace the roof (quoted for $8000) but asked I pay their deductible of $1000, and I agreed. I informed the seller that I would do the same to replace the knob & tube but seller's insurance says they won't cover that.

0 Votes

Seller has state farm but they won't cover the knob & tube replacement. I asked the seller to have their insurance replace it and I'll pay the deductible but state farm said they won't do it.

0 Votes

Alright @Bill Gulley , I'll get more quotes and get 2nd and 3rd opinions, will update. Thanks guys.

0 Votes

All Forum Posts by: Jimmy Hong

Jimmy Hong has started 24 posts and replied 342 times.

Post: Hard Money Loans with down payment requirement?

Post: My first eviction and lessons learned

Post: PropertyRadar or RealtyTrac?

Post: Hard Money Loans with down payment requirement?

Post: Knob & Tube wiring

Post: Knob & Tube wiring

Post: Knob & Tube wiring

Post: Knob & Tube wiring

Post: Knob & Tube wiring

Post: Knob & Tube wiring