All Forum Posts by: Jay Hinrichs

Quote from @Allan C.:

Vegas is the Detroit of west coast. The appreciation you observed is the result of CA influx. It’s real, but you can’t fundamentally bank on it continuing. There’s so much land and not much economic diversity to support continued appreciation. You’re basically relying on CA migration, and while that may be a strategy, it’s a risky one.

don't really agree with the comment on so much land.. Vegas is in a bowl and surrounded by federal lands  even if the fed opened up this land to development once U get to the part of the mountain that has a 15% or greater slope development becomes hard to impossible. But maybe the fed will open up lands suitable for development. Until then though land is very rapidly disappearing and is very expensive  Personally I dont see how they companies make money with dirt that is 1mil and acre. 

Quote from @Remington Lyman:

Quote from @Matthew Irish-Jones:

@Remington Lyman this is why I constantly miss spell words and use horrible grammar.

First off I have horrible grammar and spelling as it is.  Secondly it proves these responses are from my noggin not AI.

Not sure how BP can get in front of this, since some people are taking their actual responses and having AI correct grammar and spelling so it is their thought but improved by AI.

It seems like the entire internet will be AI bots and posts soon enough.  

 It is kind of funny that misspelling and using improper grammer is the better way to go now so people know you are real. I do not understand the point of all those spelling quizes and grammer lessons now...

I used to use ai grammer fixers a year ago but now I just let it ride like you!

grammer who needs stinkin grammer on a RE site ?

got hounded by them when I had my Mortgage bankers license  ( to send them deals)

borrowed from them once or twice 5 or so years ago. pretty simple for someone of my experience level. Better than Lima one which I did one maybe two ground up loans in Charleston SC when my bank LOC was maxed and I did not want to lose the deals.

Scottman just did an article with the CEO on Kiavi  U might want to take a peek at that.

Quote from @Andrew Syrios:

Quote from @Jay Hinrichs:

Quote from @Andrew Syrios:

Quote from @Jay Hinrichs:

Quote from @Andrew Syrios:

Quote from @Don Konipol:

Quote from @Andrew Syrios:

I have never seen a bank call a Due on Sales Clause on a performing loan. I've heard of it but never seen it happen. Has anyone actually had a bank do this on a property they bought subject to? 

Yes, I’ve seen it done a number of times, but more come in the commercial arena.  More common with private lenders, or banking institutions where pressure is being applied by regulatory authorities 

 That makes perfect sense. I could definitely see commercial loans (where the bank presumes the buyer could pay it off) and private lenders calling them much more than a bank calling a performing residential loan. I also figured it would be much more likely now when rates are in the mid 6s and many subject to loans are in the 2s and 3s vs the post-2008 phase when the loans being assumed generally had higher rates than the loans being originated even though basically no new loans were being originated. 

 I dont think rates play into like your thinking.. so many notes are sold to servicing companies so payoffs are not good for them.

That makes sense but I will still think rates play some part of it, at least for portfolio'd loans. I would think if I had a 3% fixed loan that got subject to'd I would be tempted to call the loan.

 tend to agree on portfolio loans. But then why on many of the commercial loans are there pre pay penalties ??? I will have this conversation with my Banker and ask him for instance on a commercial loan I have at about 4% why I cant just pay it off without a big fat pentalty. ?  Right ? 

I suspect Don may know why banks have pre pay penalties on 4% loans today.. One answer might be deals are harder to find so they want to keep thier funds out and working

Well those prepayment penalties are all put in place when the loan is originated. And since the issue here is that interest rates have risen dramatically since those loans were originated, they probably would get rid of the prepayment penalties on such loans if they could redo them. Indeed, I'd be interested to know if banks are more willing to wave them after the fact if borrowers express interest in possibly refinancing those pre-2023 loans. I bet they are more willing to do so. 

 just went through this on a 10 unit we bought and financed with one of my commercial banks in Oregon.. they will waive pre pay if we refi with THEM.. but if we go somewhere else NO..  But I am sure this is simply case by case .. What kind of relationship one might have with a bank holding your paper.. Do you have millions on deposit.. or just an account to pay the bills type of thing.. I think commercial banks look at the global picture.. 

Quote from @John Clark:

Quote from @Jay Hinrichs:

Quote from @John Clark:

Quote from @Jay Hinrichs:

Quote from @Andrew Syrios:

Quote from @Jay Hinrichs:

Quote from @Andrew Syrios:

Quote from @Don Konipol:

Quote from @Andrew Syrios:

I have never seen a bank call a Due on Sales Clause on a performing loan. I've heard of it but never seen it happen. Has anyone actually had a bank do this on a property they bought subject to? 

Yes, I’ve seen it done a number of times, but more come in the commercial arena.  More common with private lenders, or banking institutions where pressure is being applied by regulatory authorities 

 That makes perfect sense. I could definitely see commercial loans (where the bank presumes the buyer could pay it off) and private lenders calling them much more than a bank calling a performing residential loan. I also figured it would be much more likely now when rates are in the mid 6s and many subject to loans are in the 2s and 3s vs the post-2008 phase when the loans being assumed generally had higher rates than the loans being originated even though basically no new loans were being originated. 

 I dont think rates play into like your thinking.. so many notes are sold to servicing companies so payoffs are not good for them.

That makes sense but I will still think rates play some part of it, at least for portfolio'd loans. I would think if I had a 3% fixed loan that got subject to'd I would be tempted to call the loan.

 tend to agree on portfolio loans. But then why on many of the commercial loans are there pre pay penalties ??? I will have this conversation with my Banker and ask him for instance on a commercial loan I have at about 4% why I cant just pay it off without a big fat pentalty. ?  Right ? 

I suspect Don may know why banks have pre pay penalties on 4% loans today.. One answer might be deals are harder to find so they want to keep thier funds out and working

They write the contract in general and waive in the specific. Once the relevant (duration) treasury goes above your mortgage rate, I have always found banks open to waiving prepay penalties.

Ok going to ask are treasuries above 4% ? 

Find out by asking your bank if it will waive prepayment penalties.

 had conversation a few weeks ago and the answer was NO.. :) can only pay 20% of the balance in anyone calender year. 

Quote from @John Clark:

Quote from @Jay Hinrichs:

Quote from @Andrew Syrios:

Quote from @Jay Hinrichs:

Quote from @Andrew Syrios:

Quote from @Don Konipol:

Quote from @Andrew Syrios:

I have never seen a bank call a Due on Sales Clause on a performing loan. I've heard of it but never seen it happen. Has anyone actually had a bank do this on a property they bought subject to? 

Yes, I’ve seen it done a number of times, but more come in the commercial arena.  More common with private lenders, or banking institutions where pressure is being applied by regulatory authorities 

 That makes perfect sense. I could definitely see commercial loans (where the bank presumes the buyer could pay it off) and private lenders calling them much more than a bank calling a performing residential loan. I also figured it would be much more likely now when rates are in the mid 6s and many subject to loans are in the 2s and 3s vs the post-2008 phase when the loans being assumed generally had higher rates than the loans being originated even though basically no new loans were being originated. 

 I dont think rates play into like your thinking.. so many notes are sold to servicing companies so payoffs are not good for them.

That makes sense but I will still think rates play some part of it, at least for portfolio'd loans. I would think if I had a 3% fixed loan that got subject to'd I would be tempted to call the loan.

 tend to agree on portfolio loans. But then why on many of the commercial loans are there pre pay penalties ??? I will have this conversation with my Banker and ask him for instance on a commercial loan I have at about 4% why I cant just pay it off without a big fat pentalty. ?  Right ? 

I suspect Don may know why banks have pre pay penalties on 4% loans today.. One answer might be deals are harder to find so they want to keep thier funds out and working

They write the contract in general and waive in the specific. Once the relevant (duration) treasury goes above your mortgage rate, I have always found banks open to waiving prepay penalties.

Ok going to ask are treasuries above 4% ? 

Quote from @Andrew Syrios:

Quote from @Jay Hinrichs:

Quote from @Andrew Syrios:

Quote from @Don Konipol:

Quote from @Andrew Syrios:

I have never seen a bank call a Due on Sales Clause on a performing loan. I've heard of it but never seen it happen. Has anyone actually had a bank do this on a property they bought subject to? 

Yes, I’ve seen it done a number of times, but more come in the commercial arena.  More common with private lenders, or banking institutions where pressure is being applied by regulatory authorities 

 That makes perfect sense. I could definitely see commercial loans (where the bank presumes the buyer could pay it off) and private lenders calling them much more than a bank calling a performing residential loan. I also figured it would be much more likely now when rates are in the mid 6s and many subject to loans are in the 2s and 3s vs the post-2008 phase when the loans being assumed generally had higher rates than the loans being originated even though basically no new loans were being originated. 

 I dont think rates play into like your thinking.. so many notes are sold to servicing companies so payoffs are not good for them.

That makes sense but I will still think rates play some part of it, at least for portfolio'd loans. I would think if I had a 3% fixed loan that got subject to'd I would be tempted to call the loan.

 tend to agree on portfolio loans. But then why on many of the commercial loans are there pre pay penalties ??? I will have this conversation with my Banker and ask him for instance on a commercial loan I have at about 4% why I cant just pay it off without a big fat pentalty. ?  Right ? 

I suspect Don may know why banks have pre pay penalties on 4% loans today.. One answer might be deals are harder to find so they want to keep thier funds out and working

Quote from @Diego A.:

Hi @Rick Albert

Wholesalers are the main ones that you have to be careful. There are a lot of fraud around and these are the ones that are more open to it.

You always have pros and cons, a renamed wholesaler will bring you a lots of deals that won't work in the numbers. The cost are high.

A new wholesaler could bring a lot of issues in the transaction.

I have experienced both situations so your due diligence is the most important in the process  Saying this, if you are doing a out of state investment then I would recommend you to build your team at least with a contractor and agent locally that will go and tour the property so you reduce the risk.

You always have to find ways to reduce the risk on the investment.

 I have had 2 title claims this year both deals through wholesalers.. 

Quote from @Andrew Syrios:

Quote from @Don Konipol:

Quote from @Andrew Syrios:

I have never seen a bank call a Due on Sales Clause on a performing loan. I've heard of it but never seen it happen. Has anyone actually had a bank do this on a property they bought subject to? 

Yes, I’ve seen it done a number of times, but more come in the commercial arena.  More common with private lenders, or banking institutions where pressure is being applied by regulatory authorities 

 That makes perfect sense. I could definitely see commercial loans (where the bank presumes the buyer could pay it off) and private lenders calling them much more than a bank calling a performing residential loan. I also figured it would be much more likely now when rates are in the mid 6s and many subject to loans are in the 2s and 3s vs the post-2008 phase when the loans being assumed generally had higher rates than the loans being originated even though basically no new loans were being originated. 

 I dont think rates play into like your thinking.. so many notes are sold to servicing companies so payoffs are not good for them.

Quote from @Ken M.:

Quote from @Andrew Syrios:

Quote from @Ken M.:

Quote from @Andrew Syrios:

I have never seen a bank call a Due on Sales Clause on a performing loan. I've heard of it but never seen it happen. Has anyone actually had a bank do this on a property they bought subject to? 

.
Your comment: "I have never seen a bank call a Due on Sales Clause on a performing loan"

That would be very rare, but Pace Morby in May said he had 10 called this year (2025). If I can find his post, I will note it here.

It's my experience and my opinion that he was doing something wrong. It becomes concerning for those who follow his teaching, in my opinion.

 10! How many has he done? I understand why it would be more common now with the spread between pre 2023 loans and current interest rates so high. But that sounds ridiculous

Normally, the only reason a bank calls a Note is for lack of payment.

 My notes that were called were from alienating the title ( transferring title to someone not affiliated with the original loan  ME  :) )