All Forum Posts by: Jason S.

Sometimes a deal is made in the knowing of a specific neighborhood better than others.

Sometimes the deal is done before it hits the MLS.

A lot of times the deal is in the relationship you build with the listing agent.

Keep making offers. Are you building rapport with the listing agent? Are the others that get the deals paying more or less than your offer? Are they re-selling at your projected sales price, lower? higher?

Also, 70%ARV deals like your target are difficult off the MLS without some finesse and rapport.

There are deals.
Whats your ROI target?
Making $20K is not descriptive enough, $20K on $50K or $20K on $100K? or $150K?
Your mentors may also be too conservative, I know I passed around a list of cash homes the other day and no one bit, yet on there was a home for $110K cash that I now have in escrow for $167K financed conventional no concessions - did not touch the house.
There are deals.

What are your numbers?

Yes, indeed it is a consequence of the need for ever increasing productivity in competing against lower wage up and coming economies.

But you cannot deny that with this increase in productivity/efficiency there is an underlying social cost, which if no longer pinned with a moral conscience as it once was, now results in an accepted mentality of "just walk away".

This my friend is what is known as a culture in decline. See the pattern, there is more to a thriving culture than productivity - though time erodes the thought of the need for anything else - which, without significant "Revival" will collapse any culture no matter the strength.

Do you not see it?

As de Tocqueville pointed out roughly - "America is great because America is good." We are losing the "good" and collapse is inevitable without some change.

I do not blame people for doing as they do. I also believe that this so called moral covenant was changed as banks departed from having an interest in the customer and no longer care what they do either way.

This departure from loyalty or connectedness in all parts of society is similar to how most people used to have one job they were loyal to for a lifetime and now there is no loyalty. A person now realizes that no matter how long they have worked at a company they can be fired anytime - no notice.

Once again we could talk on and on about this.

Income and asset lies on applications were prevalent. Can we the guilty parties are not ethical in their strategic default?

And when the Gov't steps in through CRA etc and forces participation? What then? Go out of business?

Not really, many strategic defaulter's in their high and mighty ethical towers live for months "free" and many collect rents for months. Should we then say that this type of strategic default is not ethical?

How?

Then the default is ethical but not paying taxes on the "income" is not? Surely a law does not define ethics.

Once again, we are talking about strategic defaults, not defaults that have extraneous underlying circumstances.

If I borrow $400K and I am fine with my payments and I am only defaulting in order to get out from under my underwater loan, that is not ethical - assuming there are no other mitigating circumstances. How can you argue that?

First off - I agree with Bill Gulley.
Paul B. The lender's primary underwriting criteria is called the "Three C's of Underwriting" and they are Credit Capacity and Collateral, not just capacity as you argued. Credit is the portion that is looked at as the borrowers "willingness" to pay.
Bryan Hancock I think you are too much "for the people" and not accepting the fact that many of these people lied on their applications. You also mentioned that with rent you can sue the owner, demand payment, follow them to collect. Yet with the mortgage the politicians have stepped in and made this type of recourse impossible. What if they did that to you with regard to rent? What if they stayed for an extra 13 months, rented out rooms, kept the rents collected, then left and you had no way to go back and collect - how would that feel?

Manyin this thread have argued about non Strategic Defaults - but what about those that have the ability to pay and simply choose to strategically default?

Clearly it is not ethical (once again this is for strategic defaults not defaults for cause or with job loss etc reasons). You entered into an agreement and you are leaving that agreement. The bank handed you $400K, you handed it to the home seller, and now you have decided you do not want to pay back what you were given.

You say it is just business? OK then, Mr. "Just Business" then feel the wrath of the bank, a lifetime judgement until you pay the residual, wage garnishments, etc. After all, you took the money. Oh, you say it is non-recourse? OK then, but why are you not paying taxes on that money YOU lost? Why must your neighbor pay taxes and you be let off the hook? That loss to the bank will be written off by the bank and therefore the bank will pay less in taxes - who is making up that loss? The rest of us.

I could go on and on.

In the end Strategic Defaults are a decision that a person makes, but there is no question as to the ethics of that decision.

And where is that recourse for all of those that "lied"? That was fraud that should end in jail time, fines, or both.

How can that be? If it is a great market to /hold props then there is room for those who find better than average deals? no?

Once its sold, its his lot. that's my first answer.

The second is that you need to check with your local building dept / code enforcement agency.

Too much to read really.

In the end I would like to reiterate 2 points that have already been made.

1. You should have seen the writing on the wall with your HELOC - I do not know anyone that did not max theirs out or at least make the conscious decision to not, knowing it would be taken.

2. You stiffed the bank for how much I do not know on your other properties, that was real cash they gave you for those homes. You walk away and assume that others like Wells should continue to trust you? Are you not self reflective enough to know that YOU, yes YOU created financial loss to the other banks, investors, maybe even taxpayers etc. How can you not see this and come here crying the blues?

You have to look at the ROI/ROA numbers at any given time and make that determination from there. It is also wise to diversify and take into consideration the markets where your assets are held, even diversify markets.

An apartment vs. a handful of SFR's in Vegas or are we talking trading a handful of Vegas SFRS's for an apartment in Pasadena or Walnut Creek? So many factors to consider.