All Forum Categories
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback
All Forum Posts by: Jay Hinrichs
Jay Hinrichs has started 322 posts and replied 40727 times.
Post: Creating a debt fund for owner finance strategy
#1 All Forums ContributorPosted - Lender
- Lake Oswego OR Summerlin, NV
- Posts 42,458
- Votes 62,443
Quote from @Joe S.:
Quote from @Ram Gonzales:
Quote from @Jay Hinrichs:
so U want investors to put firsts on the property at 9% and then let buyers either assume those or your going to wrap them ?
that would be sub prime lending to owner occ.. And most of those buyers dont have a very big down payment / unless you think you can get bigger BP..
so if these are high ltv loans then no I dont think HNW folks will jump on it.
if the LTV is about 60% then that might work.
I would use the funds to buy at deep discounts (60-70% LTV) and then wrap with seller financing. Buyers would put 10% down. This is what I do currently but it's a process of purchase, rehab, wait 4-6 months, refi, then wrap and sell (and risk DOS clauses). A fund would streamline and scale things significantly.
Do you know if investors are wrapping DSCR loans?
if your asking me Joe I suspect wrapping a DSCR loan would be an event of default with those lenders.. and one would risk having the loan called and a lot of times if you have multiple loans with the lender they can call them all in default.. Personally I would want to make darn sure before I wrapped a DSCR loan.. ( make sure you dont violate the covenants)
Post: Failed Leadership is why California is on fire.
#1 All Forums ContributorPosted - Lender
- Lake Oswego OR Summerlin, NV
- Posts 42,458
- Votes 62,443
Quote from @James Hamling:
Quote from @Jay Hinrichs:
Quote from @James Hamling:
Quote from @John Clark:
Quote from @Jay Hinrichs:
Quote from @John Clark:
Quote from @Chris Seveney:
I believe Biden said the federal govt is going to pick up the bill for all the cleanup.
from a lot of reports I read, most of the private insurance companies got out last year and state insurance is where many were insured. I believe once that is exhausted the private ones pick up the tab but they noted it will get passed on to consumers.
where I see the issues are if this is now a one in every 5 or 10 or even 20 year event and it's a $1M home (cost to build not total value with land) then the insurance for these areas is not sustainable. You could see insurance policies in the six figures.
i think the state and local governments should use eminent domain and take the land, rezone it for condos and multi-family, install mass transit and better transportation systems and turn difficult to defend areas into parks. The justification for eminent domain would be the cost of defending the current set up, health costs and environmental cleanup costs.
There is now the proverbial blank slate for redevelopment. The governments should seize the opportunity.
keep in mind all the fuel is now gone.. so wild fire will not be an issue going forward as long as folks do more of a desert style landscaping and dont plant things that burn like Eucalyptus as one poster mentioned those things go up like a roman candle at 4th of July. There is no question that fires in these areas are caused by man developing in what was vacant areas where even if there was a fire ( which there has been over the centuries) But these were not in the thought process's in the 1900 until the 60s before CA recorded the subdivision map act into law.. you just platted and recorded Just look out in the high Deseret there are 1 mil platted lots with virtually no homes but nothing to burn.. One would be amazed at how many cities were platted between 1900 and 1940 in CA then the slow build out started..
To do that, to completely re-zone and re-plat the entire area would require, if my history is correct, the largest exercise of eminent domain in US history.
Given the # of people effected, it would probably only take about 50 years to clear court..... And that's if CA want's to flip the $300m/ $400m in legal fee's to keep fighting for it, for decades.
Keep in mind we are talking ten's of billions in real estate. CA doesn't have an extra $30b/$40b laying around to do that, not to mention the additional billion to actually do the project to be build ready.
And how about the loss of tax revenues during that entire time...... I don't know the #'s off hand but I feel safe in saying L.A. would go bankrupt yr2 if not yr1.
It's not remotely feasible.
OK I do have a little expertise in CA on these issues.. I was on a senate committee way back in the 80s to deal with these antiquated subdivisions and lots of record which of course many of these areas are. And LA County already has laws dealing with any lot created prior I think to 1924 or 34.. They have to meet modern codes and SEQUA requirements.. this is what stops building on lots that would not be buildable with modern subdivisions map act standards or modern zoning. in the hilly areas road widths and slopes will not meet Sequa so they stop building on those lots there are thousands of the lots scattered around LA county and these are the lots you see going to tax sale all the time.
The reality now is govmit in my mind is going to be highly pressured to allow folks to rebuild on their LOT they OWN.. Biggest question in my mind will be the Ocean front.. I suspect a lot of those with current regulations CANNOT be rebuilt if they are destroyed but we will see..
I also wonder how this is going to work.. you cant tax a parcel that has lost a 5 mil dollar improvement ??? Also think about the down stream affects not only to the fire victims but those in contract to buy or sell.. Going to be some of that.. IE someone sold there house in Minneapolis to move to LA but the house they are in contract to buy just got destroyed ? and now they are houseless.. I think you may have a run on Vegas props and Vegas furnished rentals Just sayin.
Oh yeah, there is soooo many trailing effects not mentioned that I think isn't in minds yet, understandably so, fires are still ongoing.
How about the local business's. For example say a Starbucks, one of those little drive thru ones, can rapidly rebuild. Well, for what? For who?
Who's coming in to work and with area in ashes and homes taking 10X longer to slowly rebuild and persons come back, how many of the community business's are non-viable until a certain density is reached.
How about the jobs lost of persons who worked at those places.
Or city being under staffed for certain added works now, and possibly over-staffed during down cycle portions of it all.
And don't get me started on clean-up, what hazmat landfill has the space for all that????? Will it be declared a super-sight? It has to, because it is. And than we have all those requirements to meet to get clean designation.
This things is a spaghetti road map of issues.
just think about all the diamonds and other gems . Gold got melted I know friends of mine that lost their homes in the Atlas Peak fire in Napa that lived in my old hood Silverado country club they were back sifting through looking for all their diamonds.
Post: Why do people Buy Property in California
#1 All Forums ContributorPosted - Lender
- Lake Oswego OR Summerlin, NV
- Posts 42,458
- Votes 62,443
Quote from @Ken M.:
Quote from @James Hamling:
Quote from @Jay Hinrichs:
Quote from @James Hamling:
Quote from @Jay Hinrichs:
Quote from @James Hamling:
Quote from @Jay Hinrichs:
Quote from @James Hamling:
Quote from @Jay Hinrichs:
Quote from @James Hamling:
Quote from @Chris Wilson:
Not trolling but just trying to provide some context about why states and other countries like CA have such stringent earth quake codes that keep getting updated.
I will never really understand the power of a Cat4 or Cat5 hurricane until I experience one. I have been in a 6.8 and 6.9 earthquake in WA and CA respectively. The 6.8 was some 65 miles south of me, I was on the 2nd floor of an office building that shook so hard for a minute that people were having problems staying standing up. A 7.0 releases some 32 times the amount of energy as the atomic bomb used on Hiroshima.
I am fully aware and well versed.
I have been a Building Contractor for over 30yrs. Master Journey Carpenter, Journey Mason, Journey HVAC. My last remodeling co. was a specialty Design Build firm. I had been scouted more times than I can recount to come to CA to apply my skills because the standards I came up in exceed that of CA and most places.
Building for seismic zones is actually not all that difficult. Wind and water, those are tricky ones, especially wind. Wind is an exerted force in many more ways than just the direct most think of. And hydraulic is a force that's very extreme.
Point is, the predominant production method of housing in the US is rather lack luster. The framing lumber popularly used is pathetic. And there is a lot of superior options out there in both product and methodology.
If you want a good CA home, do timber balloon frame, mortise and tenon joinery with masonry facade. Slate roof or even Spanish tile. Now you have seismic resilient with fire preventative.
Rockwool insulation...... I mean, your doing $1m+ for a property, why not get one built like it's a $1m+ home????
No, I'm hearing reports of shake roofs being predominant in a FIRE ZONE.... I'm sorry but anyone doing that is literally begging for it.
You tempt the Devil, bad things happen.
James shake roofs were the go to product back in the thats why there are so many in CA the material came from the Cedar industry in Oregon and Washington.. My bizz partner when I was doing timber in the 90s prior to us doing our thing.. he had a Cedar shake mill.. things changed in San Jose area tile roofs are very prevalent. Its all about the heavy brush with Manzanita and other dense brush full of oils that burn so hot and fast.. thats why in many areas in CA they have control burns.. And keep in mind the Indians used to burn this stuff hundreds of years ago as well
That helps to make a lot more sense. The fire prevention policies were different, more aggressive, so far less imperative reasons to sway away from a then amply supplied and I imagine price adjusted material of shake vs fire resilient material.
I saw news other day of those winds and just clouds of embers and that, holly-cow with shake roof's, wow, that's literally an impossible fire to fight as it could jump homes and blocks in a blink, with every ember filled gust.
It drives me nuts seeing the lions share of blame being placed on weather in main stream media (talking as an aggregate whole not going to cherry pick individual ones of differing messaging) when I see a laundry list of obvious human caused contributing factors.
Because next thing, without a doubt, will be all about taking Federal funds to pay for all this. And that means YOU, me, WE paying the bill for what was in fair-share a CA person-made catastrophe via there idiotic actions.
FL can't do a dang thing to stop a hurricane, but they at least try to put in place mitigation items to lesson impact.
CA, stopping doing fire breaks because it messes with a mouse..... How's that mouse doing now? Crispy fried right....
Or not topping off reservoirs in advance of a known annual heightened fire risk season.
I am not saying it would have been 100% prevented if hadn't done these dumb actions, but with 100% certainty the scale of it all would have been different, lessor.
People died because of this, and thus there needs to be a criminal inquiry. Criminal negligence, that's a thing. And this, what I am hearing, wreaks of criminal negligence. Accountability must be demanded by Californians, and the nation as a whole.
But let me guess, Biden will issue pardons for entire CA political class...... Retroactive for any crimes known or unknown for the last however many years......
well typically middle of January is winter and not fire season so you have that .. Fire breaks work for sure I remember a big fire in Lake co. cA when I lived there and there were 4 to 5 dozer in a line doing fire breaks along ridge lines.. keep in mind though this is steep country so moving dozer through there is not that easy.. That fire in 1980 burnt 35,000 acres between ukiah CA and Lakeport Ca and only stopped when it got to the pear orchards in lake co.. there was not stopping it.. moved at about 10 to 20 miles per hour.. all over 8 hours.. until you see it in person you simply cant understand it..
Also keep in mind in LA most of those lots were created from 1900 to 1950s and well they are lots of record.. and were developed with the standards of the day.. Todays standards are far different as you know.. I deal with it in all the subdivisions I have built.. Fire department is the toughest one to deal with.. U need 1500 GPH at the hydrants.. no street can be longer than 600feet with out dual access.. If you cant meet GPH you need to sprinkler the houses so add 8 to 12k per track house to the build cost and oh by the way we need starter houses.. Etc etc.
I always heard the fire risk season was tied to Santa Ana winds, Sept. - May..
I am sure your right on the winds.. I spent a winter in Palm Springs and brought my plane down there and you talk about some wicked winds .. I got caught in a mtn wave on one trip from Napa to Thermal Ca and we had 2k ft ups and downs un commanded you just ride the wave like a surfer and on the back side of the wave U pick up some pretty impressive ground speed.
No thanks, I'm way too Norwegian for that noise. Put me on a boat with 10' swells and I'm happy as a pig in slop but in air getting thrown.... I'm the guy turning 3 shades of green with the verps. Lol.
my wife if Norwegian Wika :) raised on a little island in the Columbia River and family were all fishermen and loggers.
Without doubt a brilliant and fierce women she is, SKOAL!
.
I took the average $4,000,000 house in Pacific Palisades CA and it shows a monthly tax payment of $4,167 for a total of $50,004 a year. (That would buy two houses in Ohio). :-)
Now, the average length of ownership is 7 years (for normal people) a longer time if you have no where else to go "UP". After 10, years they have paid $500,040 in just property taxes.
And the city "forgets" to turn on the water to the hydrants?, during fire season?
Can somebody please explain how investing in the area makes sense?
I am not smart enough to figure this one out.
Somebody mentioned they have access to the ocean. Well at 6 trips a year, that's $8,334 a trip. I can fly to Greece and enjoy the ocean there for less. And eat great food.
The Homeless are at the beach all day long - everyday, and don't have to pay property taxes. In fact, lunch is delivered to them.
"Oh, but we have easy access from Pacific Palisades", and the accompanying statement "yes, now we also have to hurdle over our neighbor's smoldering ruins to get there, but we still get to go to the beach."
Does nobody else see the irony, malfeasance?
People are not buying 4 mil personal residence as investments they buy them to live there.
No different then people buying high priced homes in Texas and paying massive prop taxs on those its because they choose to live there and have a certain lifestyle they want to achieve.
U dont need to be smart to understand the desires of owner occupants.
Post: Failed Leadership is why California is on fire.
#1 All Forums ContributorPosted - Lender
- Lake Oswego OR Summerlin, NV
- Posts 42,458
- Votes 62,443
Quote from @James Hamling:
Quote from @John Clark:
Quote from @Jay Hinrichs:
Quote from @John Clark:
Quote from @Chris Seveney:
I believe Biden said the federal govt is going to pick up the bill for all the cleanup.
from a lot of reports I read, most of the private insurance companies got out last year and state insurance is where many were insured. I believe once that is exhausted the private ones pick up the tab but they noted it will get passed on to consumers.
where I see the issues are if this is now a one in every 5 or 10 or even 20 year event and it's a $1M home (cost to build not total value with land) then the insurance for these areas is not sustainable. You could see insurance policies in the six figures.
i think the state and local governments should use eminent domain and take the land, rezone it for condos and multi-family, install mass transit and better transportation systems and turn difficult to defend areas into parks. The justification for eminent domain would be the cost of defending the current set up, health costs and environmental cleanup costs.
There is now the proverbial blank slate for redevelopment. The governments should seize the opportunity.
keep in mind all the fuel is now gone.. so wild fire will not be an issue going forward as long as folks do more of a desert style landscaping and dont plant things that burn like Eucalyptus as one poster mentioned those things go up like a roman candle at 4th of July. There is no question that fires in these areas are caused by man developing in what was vacant areas where even if there was a fire ( which there has been over the centuries) But these were not in the thought process's in the 1900 until the 60s before CA recorded the subdivision map act into law.. you just platted and recorded Just look out in the high Deseret there are 1 mil platted lots with virtually no homes but nothing to burn.. One would be amazed at how many cities were platted between 1900 and 1940 in CA then the slow build out started..
To do that, to completely re-zone and re-plat the entire area would require, if my history is correct, the largest exercise of eminent domain in US history.
Given the # of people effected, it would probably only take about 50 years to clear court..... And that's if CA want's to flip the $300m/ $400m in legal fee's to keep fighting for it, for decades.
Keep in mind we are talking ten's of billions in real estate. CA doesn't have an extra $30b/$40b laying around to do that, not to mention the additional billion to actually do the project to be build ready.
And how about the loss of tax revenues during that entire time...... I don't know the #'s off hand but I feel safe in saying L.A. would go bankrupt yr2 if not yr1.
It's not remotely feasible.
OK I do have a little expertise in CA on these issues.. I was on a senate committee way back in the 80s to deal with these antiquated subdivisions and lots of record which of course many of these areas are. And LA County already has laws dealing with any lot created prior I think to 1924 or 34.. They have to meet modern codes and SEQUA requirements.. this is what stops building on lots that would not be buildable with modern subdivisions map act standards or modern zoning. in the hilly areas road widths and slopes will not meet Sequa so they stop building on those lots there are thousands of the lots scattered around LA county and these are the lots you see going to tax sale all the time.
The reality now is govmit in my mind is going to be highly pressured to allow folks to rebuild on their LOT they OWN.. Biggest question in my mind will be the Ocean front.. I suspect a lot of those with current regulations CANNOT be rebuilt if they are destroyed but we will see..
I also wonder how this is going to work.. you cant tax a parcel that has lost a 5 mil dollar improvement ??? Also think about the down stream affects not only to the fire victims but those in contract to buy or sell.. Going to be some of that.. IE someone sold there house in Minneapolis to move to LA but the house they are in contract to buy just got destroyed ? and now they are houseless.. I think you may have a run on Vegas props and Vegas furnished rentals Just sayin.
Post: What is the Best Way to Grow as a Private Lender
#1 All Forums ContributorPosted - Lender
- Lake Oswego OR Summerlin, NV
- Posts 42,458
- Votes 62,443
during the 2000s before the crash we got up to about 3 mil a month in lower balance high profit loans and were between 30 to 40 mil out.. we originated all our own loans.. do not trust brokers all my worst deals came from them.. this took about 12 people..
Today this would be possible in high priced markets were your average loans are more in the 500k range so only 10 a month.. like CA NJ Denver and ski areas .
My company now just me and two staff and we are about 20 mil in short term JV deals with higher profits and what most would think is higher risk. We have 10 to 12 borrowers all repeat. No beginners.
Post: Creating a debt fund for owner finance strategy
#1 All Forums ContributorPosted - Lender
- Lake Oswego OR Summerlin, NV
- Posts 42,458
- Votes 62,443
so U want investors to put firsts on the property at 9% and then let buyers either assume those or your going to wrap them ?
that would be sub prime lending to owner occ.. And most of those buyers dont have a very big down payment / unless you think you can get bigger BP..
so if these are high ltv loans then no I dont think HNW folks will jump on it.
if the LTV is about 60% then that might work.
Post: Wholesaling as it is today will be a thing of the past.
#1 All Forums ContributorPosted - Lender
- Lake Oswego OR Summerlin, NV
- Posts 42,458
- Votes 62,443
Quote from @Jerryll Noorden:
I don't know about you all, but I for one am getting sick and tired of these "wholesaling is dead" posts.
please, dude. Contribute.
If you think something is wrong with the way it s done, teach people how to do it right. But just hating on wholesaling in a wholesaling forum is so unbelievably pointless.
its not dead per se but it is starting to be regulated as it should.. oregon just passed their version. where to wholesale you now need a license and over site by the RE commission.. along with criminal back ground and a BOND.. and as we know not everyone can pass either of those with the bond being the tough one if you have bad credit your not getting a bond. And of course other states are following suit.. Iowa you may not assign contracts for compensation attornies wont close those.. same in South Carolina.. Folks just need to understand things never stay the same.. And for sure I highly doubt those that teach the common wholesaling techinques are not up to speed with all these new laws in all the different states.. Just sayin
Post: Failed Leadership is why California is on fire.
#1 All Forums ContributorPosted - Lender
- Lake Oswego OR Summerlin, NV
- Posts 42,458
- Votes 62,443
Quote from @John Clark:
Quote from @Chris Seveney:
I believe Biden said the federal govt is going to pick up the bill for all the cleanup.
from a lot of reports I read, most of the private insurance companies got out last year and state insurance is where many were insured. I believe once that is exhausted the private ones pick up the tab but they noted it will get passed on to consumers.
where I see the issues are if this is now a one in every 5 or 10 or even 20 year event and it's a $1M home (cost to build not total value with land) then the insurance for these areas is not sustainable. You could see insurance policies in the six figures.
i think the state and local governments should use eminent domain and take the land, rezone it for condos and multi-family, install mass transit and better transportation systems and turn difficult to defend areas into parks. The justification for eminent domain would be the cost of defending the current set up, health costs and environmental cleanup costs.
There is now the proverbial blank slate for redevelopment. The governments should seize the opportunity.
keep in mind all the fuel is now gone.. so wild fire will not be an issue going forward as long as folks do more of a desert style landscaping and dont plant things that burn like Eucalyptus as one poster mentioned those things go up like a roman candle at 4th of July. There is no question that fires in these areas are caused by man developing in what was vacant areas where even if there was a fire ( which there has been over the centuries) But these were not in the thought process's in the 1900 until the 60s before CA recorded the subdivision map act into law.. you just platted and recorded Just look out in the high Deseret there are 1 mil platted lots with virtually no homes but nothing to burn.. One would be amazed at how many cities were platted between 1900 and 1940 in CA then the slow build out started..
Post: Failed Leadership is why California is on fire.
#1 All Forums ContributorPosted - Lender
- Lake Oswego OR Summerlin, NV
- Posts 42,458
- Votes 62,443
Quote from @James Wise:
Quote from @Jay Hinrichs:
Quote from @Steve K.:
Quote from @Eric Bilderback:
What started the fires? Negligent forest management, drug addicts, or illegals? DEI policies along with environmental, immigration policies is not sustainable for a non 3rd world country (my guess that is the point). I read an article I thought articulated this very well, we are seeing the collapse of a very complex system and this the fruit.
Or it could be an arsonist/ arsonists.
In the northern ca fires a few years back it was downed power lines.. and PGE got massive fines for that.. Now anytime in Northern CA when winds get past a certain speed there is rolling blackouts..
They say that about 90% of wildfires are man made. Obviously not all Arson, but makes sense. Downed Power Lines would fall into that man made category. I would assume the % of man made fires caused by Arson is pretty darn low though.
Actually out here in the west with our homeless situations that are out of control in certain areas they cause all sorts of fires. VERY common.. One fire they had lit under and under pass and weakened it and it failed :) Also they burn up their RVs and campers pretty often then the basic tent fire... I am just guessing of course but I think down lines is a real possibility with those wind speeds..
Post: Advice on Specific Performance for Breach of Real Estate Contract
#1 All Forums ContributorPosted - Lender
- Lake Oswego OR Summerlin, NV
- Posts 42,458
- Votes 62,443
Quote from @Ryan Schwartz:
Quote from @Steve K.:
Did you use the state-approved contract/ a contract that addresses the remedy for breach of contract and specific performance?
Yes. I used a Colorado state-approved contract. The contract states the below:
20.2.1. Specific Performance, Damages or Both. Buyer may elect to treat this Contract as canceled, in which case all Earnest Money received hereunder will be returned to Buyer and Buyer may recover such damages as may be proper. Alternatively, in addition to the per diem in § 17 (Possession) for failure of Seller to timely deliver possession of the Property after Closing occurs, Buyer may elect to treat this Contract as being in full force and effect and Buyer has the right to specific performance or damages, or both.
22. MEDIATION. If a dispute arises relating to this Contract (whether prior to or after Closing) and is not resolved, the parties must first proceed, in good faith, to mediation. Mediation is a process in which the parties meet with an impartial person who helps to resolve the dispute informally and confidentially. Mediators cannot impose binding decisions. Before any mediated settlement is binding, the parties to the dispute must agree to the settlement, in writing. The parties will jointly appoint an acceptable mediator and will share equally in the cost of such mediation. The obligation to mediate, unless otherwise agreed, will terminate if the entire dispute is not resolved within thirty days of the date written notice requesting mediation is delivered by one party to the other at that party’s last known address (physical or electronic as provided in § 26). Nothing in this Section prohibits either party from filing a lawsuit and recording a lis pendens affecting the Property, before or after the date of written notice requesting mediation. This Section will not alter any date in this Contract, unless otherwise agreed.
so you wont sue at this point you will go to mediation.
U asked if anyone had done a specific performance.. And yes I have done one in 50 years in the industry.
Facts:
1. purchase contract and gave 50k up front to bring tax's current.
2. it was all cash no contingencies.
3. seller just goes dark no response to anything.
4. We put 100% of the purchase price per the contract into escrow 2 days before closing.
5. Close date comes and goes and still not a word from the seller.
6. I am now out 50k and have a few hundred grand sitting in escrow.
7. not willing to just walk from 50k if there was not this 50k I would have just moved on.
8. We sue
9. We win as seller is a no show in court
10. Judge still gives seller another 90 days to file appeal or whatever.
11. that time runs now title company wont insure until we give another 60 days.
12. judge signs order and the 60 days the title company starts to run.
13. We finally close with title insurance.
14. seller is holed up its a massive hoarder situation as bad as I have ever seen.
15. another 6 months to get eviction.
so about 30 months later we finally take possession and bull doze house and built three new homes. 250k in out for 30 months another 30k in legal fees..
Now this is with an uncontested legal action.. I suspect if someone contests could be longer.
I also think once you go to mediation this will get worked out pretty quick mediators if you get a good one do a nice job putting these deals together..