All Forum Posts by: David Weintraub

Email me and I’ll send you some names

Never did it, and probably wouldn’t, but...I know a number of successful FB clients. Some of my best borrowers went through and they believe it changed them.

I can help with both.  Thanks @David Lichtenstadter

I've been reading this thread and enjoying it.

Just have to say, and I'm DEFINITEY NOT an expert in any sense, but while "history tends to repeat itself" is a useful maxim, it's also sort of silly. 

History can really only do one of two things: go positive/go negative.  So if there's some type of financial crash that affects real estate, banks, or anything else, someone will say, "You see?  History always repeats itself."

But that doesn't mean a crash, or correction, is in some way related directly to real estate.

During the "GFC" 3 of my closest friends worked at major financial insitutions, and I knew at least 20 people working at the banks.  Living in Jersey City/NYC was FUGGED UP!  My closest friend was one of the top guys on the trading desk for Merrill's SP Mortgage Bonds.  Michael Lewis seemingly tried to crap on their heads, specifically.  The guy who committed the LARGEST TRADING LOSS IN HISTORY is my buddy's brother in law.  JP Morgan gave him 40 Million to leave...what a country...

Yet those guys, believe it, or not, learned from that.  Those who survived recognize the pitfalls, etc.  So what type of real estate correction could create THAT situation again?  No situation?  Yeah, pretty much.

The GFC was a once-in-a-lifetime scenario.  That's not to say it can't happen again, but lets not assume a "correction" is equal to what that was.  It won't be.  We just think to ourselves, "Oh, that happened, so it can happen again..."  

Yeah, it can, but it won't be for a LONG *** TIME. 

The next closest thing would be if the world was devoid of silicon and couldn't make microchips.  Or the internet just stopped working.  We're talking monumental! 

I read a lot of those books when it was happening (Too Big to Fail, Diary of a Very Bad Year, Big Short, Eight Days, My Girlfriend Hated Me Because I Keep Talking About This Stuff, But She's a Moron), and you can tell that what happened was a perfect storm.  So while we can expect storms, I think it's an overstatement to think THAT can happen again.  

It's like, terrorists didn't "blow up our buildings."  They flew planes into them.  Ok, we locked the planes down, so now what can they do?  They were willing to die.  So now they have to hijack nuclear materials in suitcases, or take over nuclear weapons, etc.  Like, REALLY HARD THINGS.  The impact was catastrophic, but how they did it was really easy.  in our minds though we think, "Man, what are they going to do next?  They destoryed those buildings!"  Well, they've tried other things; maybe blown up trains, or shot people in Paris, but they haven't destroyed buildings.  They had their one big trick.

And basically, the mortgage crisis was that big trick, and it resonates because of the impact.  But expect smaller scale things to happen as we go forward.  Just not the MASSIVE scenario.

Sorry for the poor anecdote, but it works.  

Wordy, I'm sorry, but I think corrections will happen, but in no way shape of form do I think it's anything like we just saw.  History DOES repeat itself, and the history of 2009, if it repeats, would have to be generational because that was.  We've got time...

Originally posted by @Scot Howat:

I just found out that there's a secondary market for hard money fix & flip loans.  That's scary!   It's a sign of the times...

It's actually a pretty good bet. The foreclosure rates on HML are miniscule, relatively speaking. That's because borrowers have options to pay off the HML, like refinancing into something longer term if they can't sell, or worst case, selling off the investment property before $h1t hits the fan. Just encountered a situation this week where a lender in Philly "didn't want to" foreclose on a guy who purchased an 8 unit property, so the lender found another buyer, who is going to take it over. Happens all the time.

Plus, with the short term nature of things, you can kind of see the light at the end of the tunnel.  

There's a VORACIOUS appetite for these loans.  

How far away?  On the train line?  I mean, Elizabeth could qualify.

Is not the 12th the 2nd Thursday of the month? 

This house makes money not as a simple flip, but needs a full gut, and probably a second floor addition. Maybe the owner sees this, or maybe not. He’s been earning on it for 10 years and maybe he thinks he still can, but there was already a serious water damage issue due to the property sitting 10 feet below street level and water building up every time it rains. Ultimately, the owner needs about $10-15k minimum over next couple of years and he may not want to do this. I’m guessing you could buy it for $500k, put in $150-180k and sell for around 800-900k.

I feel like he could partner up with one his flipper friends, and at least profit from the sale.  He knows the owner, so he can suggest something like lease-purchase, to see if he even desires to sell it.  And if he can't buy it in X number of days, he can at least line up a flip, and maybe find a place to live over a certain period of time.  

My friend "Barry" lives in a 3 bed, 1.5 bath in a very nice town in New Jersey.  He rents for approx $3,000 a month, which is low for the town, but not for the property itself.  The two homes to his right, one is on the market and was recently renovated, and the one right next door is in the process.  House he lives in sold for $480k back in 2010; homes on the street sell for $1MM+ 

I happened to go by his place last week to discuss some business and immediately noticed all of these factors, and others like the near-rotting window panes made of wood and the roof that needed to be replaced last year.  The owner isn't going to repair anything.  Owner's sister used to live a few blocks away but moved to Cincy.  Owner lives in Ohio as well, so no one nearby to oversee the place.  

Barry has crap credit, and a lot of expenses.  Used to work in finance, but that was ages ago, and thinks he's going to hit it big again (he probably won't).  When he first rented it his credit was ok, but not it's shot.  He can't rent somewhere else without getting credit up.  He's month-to-month on the property.  

I told him, "Someone is going to make an offer on this place the owner can't refuse, and you're going to be out.  You need to be proactive, contact the owner, and offer to buy it."  

I figure he needs to live there a few more years as he has a kid in college, one that's 16 and a 10 year old.  But at least he needs to control the situation.  

But again, someone is going to offer to buy it, and flip it.  

If you're Barry, what's your move?