#2 All Forums ContributorPosted Does anyone know the regulation behind licensed MLOs brokering or originating commercial loans in states that don't require licensing under a different company from the one the MLO is currently sponsored by who is NMLS regulated? Does that make sense? Recently had a conversation with an MLO who had their license with Company A (NMLS regulated) and then on the side, this person conducted commercial-only business loan-related activity by starting their own LLC (company B) in the states where no mortgage licenses are required. Does that make sense? Can anyone verify this is OK or is it state by state-regulated based on their individual jurisdiction?
Yes I understand what you are noting, and I believe on the commercial side of things they are typically not putting their names on the docs like you do for a resi loan but just brokering/underwriting it and collecting a fee as a 1099. I know people who do this and I do not believe there are issues with it, but speak to an attorney and they should probably notify the company if they are an employee of that company that they are doing this. Most companies would require this type of disclosure since its similar to what they are doing
Yes Chris I agree - I think if anything it's not illegal state-wide or federally, since commercial lending is NMLS-recognized. However, it could be a conflict of interest between the MLO and the sponsoring company. It seems like this would have to be some preset terms under employment agreements. Other than that, the NMLS specifies no restrictions on the matter.
Speaking of licensing, are you licensed in NV or found a way around it in nevada as you need to have a brick and mortar.
#2 All Forums ContributorPosted @Jay Hinrichs
I plan on checking them out. We use Propstream but I am looking for some added info that Propstream does not easily provide
@Sean OToole is the owner and he has built an incredible platform.. My guy I was telling you about in Loudoun county uses PR to find his deals as well its very robust and the best I have seen.
#2 All Forums ContributorPosted You'll definitely need more time to get things processed. I'm sure it's a little more efficient in larger cities, but my market requires up to 60 days to get approval.
Lower your expectations with Section 8 tenants. In my experience, a large percentage of them are fully functional adults that refuse to take personal responsibility for their lives, which is why they are receiving free rent from taxpayers instead of working for a living. They don't communicate well, don't take responsibility for their actions, do not clean or maintain homes well, and will shaft you when it's time to leave.
Other than that, it's a pretty good system.
#2 All Forums ContributorPosted curious how do they structure a note purchase that is not all cash. did they already own the note and just sold the note to you or something ?
#2 All Forums ContributorPosted @Ryan Kohen
It’s gotten some pretty bad reviews here on BP
Do you like it or have an alternative ?
#2 All Forums ContributorPosted Does anyone know the regulation behind licensed MLOs brokering or originating commercial loans in states that don't require licensing under a different company from the one the MLO is currently sponsored by who is NMLS regulated? Does that make sense? Recently had a conversation with an MLO who had their license with Company A (NMLS regulated) and then on the side, this person conducted commercial-only business loan-related activity by starting their own LLC (company B) in the states where no mortgage licenses are required. Does that make sense? Can anyone verify this is OK or is it state by state-regulated based on their individual jurisdiction?
Yes I understand what you are noting, and I believe on the commercial side of things they are typically not putting their names on the docs like you do for a resi loan but just brokering/underwriting it and collecting a fee as a 1099. I know people who do this and I do not believe there are issues with it, but speak to an attorney and they should probably notify the company if they are an employee of that company that they are doing this. Most companies would require this type of disclosure since its similar to what they are doing
Yes Chris I agree - I think if anything it's not illegal state-wide or federally, since commercial lending is NMLS-recognized. However, it could be a conflict of interest between the MLO and the sponsoring company. It seems like this would have to be some preset terms under employment agreements. Other than that, the NMLS specifies no restrictions on the matter.
#2 All Forums ContributorPosted Thank you all @Eric N. @Jay Hinrichs @Jonathan Greene @Nicholas L.
you have all helped me to really consider what type of challenge / path I want to get into, and all this information is excellent. I look at foreclosures.com
Out of the 3 stages I am definitely not ready for an auction
preclosure / short sales:
- I need to research how to take over a deed / title
- need to prepare how to do door knocking (I have a sales background and feel confident in dealing with an emotional conversation about someone’s home)
- there IS a window of like 4 weeks that I need to prepare for (have my finances in order) to then bid before it goes to auction?
- question: so NO real estate agent in this piece? Just an attorney?
For Actual Foreclosures:
- the negotiation will be harder to get a certain price?
- do I NEED real estate agent here in this phase then?
I know I am really condensing ALOT of things….but if you guys could help give 3 major pointers in the pre foreclosure and foreclosure part on this for someone who HAS real estate already (I have a condo in Mexico). Thank you so much @Eric N. @Jonathan Greene @Jay Hinrichs @Nicholas L.
#2 All Forums ContributorPosted Foreclosures usually have a lot of "hair" that goes with them. Like deferred maintenance, (bad roof, worn out water heater/AC Unit, warped flooring, water damage) etc, unpaid utilities, unpaid taxes, a second loan, unpaid HOA fees, a bad pool, bad reputation, sometimes squatters, sometimes they were drug houses, and so on. The problem is that you don't get an opportunity to do an inspection before you buy.
If you buy pre-sale from the owner, you have arrears to bring current, getting the owner to move after you have solved their problem and taken the pressure off, along with the previously listed concerns. You can wind up with title issues if you are not careful. Make sure you buy it low enough to make it worth the trouble. If you buy it too low, in some jurisdictions they will call it "equity skimming" which is illegal.
It can be very profitable, I've done many, but you really need to know what you are doing.
Thank you so much! I don't plan on going on the actual auctions :/. What I am starting to lean towards is "Preforeclosures" and "Foreclosures," not the in between part
Very valuable insights, Jay. I was referring to Owner Occupied foreclosures in particular, when warning to stay away from foreclosures in certain states.
I agree that door knocking would be the best way to get these deals down. I also agree that funnel is big and wide when foreclosures start, but only few properties end up being sold. People reinstate the loans and do loan modifications all the time. That's why I would target them a week before foreclosure sale and put all effort on homes that were all but certain to go off the hammer.
But are you sure that it's impossible to get done remotely, by phone? Did you ever try it?
You did the right way. Going direct to seller in pre-foreclosure and snatching it before auction sale. Once it's gone to auction forget it. It will be bloated up by bid wars and sold for way more that what it's worth. Makes banks happy, but not what you want if you are concerned about your bottom line.
My personal experience tells me home owners in foreclosure are in complete denial and will try their best to dig themselves in as deep as they can. There is no point in talking to them when they are just hit with foreclosure notice. Most will curse you and send you to hell. You better reach out to them days before the auction and give them a simple choice: allow foreclosure sale to occur or allow you to take it over from them, with equity justifying your purchase.
#2 All Forums ContributorPosted Should you cut your losses and move on? Seems like it's in a lower end area so if it is filled you will have tenant issues and turnover cost. Why did you invest there? What drew you to it? Winter time is rough for renting especially in states like IL with rougher winters.
I would sell. You made another post about you mentioning you do well with STR in NJ. Why don't you further dive into that? Stick with what works for you
#2 All Forums ContributorPosted Foreclosures usually have a lot of "hair" that goes with them. Like deferred maintenance, (bad roof, worn out water heater/AC Unit, warped flooring, water damage) etc, unpaid utilities, unpaid taxes, a second loan, unpaid HOA fees, a bad pool, bad reputation, sometimes squatters, sometimes they were drug houses, and so on. The problem is that you don't get an opportunity to do an inspection before you buy.
If you buy pre-sale from the owner, you have arrears to bring current, getting the owner to move after you have solved their problem and taken the pressure off, along with the previously listed concerns. You can wind up with title issues if you are not careful. Make sure you buy it low enough to make it worth the trouble. If you buy it too low, in some jurisdictions they will call it "equity skimming" which is illegal.
It can be very profitable, I've done many, but you really need to know what you are doing.
Thank you so much! I don't plan on going on the actual auctions :/. What I am starting to lean towards is "Preforeclosures" and "Foreclosures," not the in between part
Very valuable insights, Jay. I was referring to Owner Occupied foreclosures in particular, when warning to stay away from foreclosures in certain states.
I agree that door knocking would be the best way to get these deals down. I also agree that funnel is big and wide when foreclosures start, but only few properties end up being sold. People reinstate the loans and do loan modifications all the time. That's why I would target them a week before foreclosure sale and put all effort on homes that were all but certain to go off the hammer.
But are you sure that it's impossible to get done remotely, by phone? Did you ever try it?