All Forum Posts by: Joffrey Long

I'm sorry to use the "A" word here. But I'd be inclined to do one of three things first. 1) Get advice from an attorney, or 2) Get advice from an attorney, or 3) Well, you get the picture.

37 years of experience in real estate brokerage and buying and selling tells me......... I'm not qualified to figure out this contract/default stuff.

Joffrey Long

Just one thought: When looking at anything, residential or commercial, that's leased out to smaller businesses or individuals, I like to see where I stand (rent-wise) if those people leave.

So, before doing this transaction, I'd want to carefully research where your tenants (both the businesses and the residential renters) can go if they leave you, or if you raise rents, how much comparable vacancy you're competing against if you have to re-lease something, or if there's vacant land nearby where someone could build rental space and compete with you.

This has really helped me on properties I've purchased or made loans on. Sometimes the results of carefully going out and really looking at my potential rental competition has made me realize that if I need to re-rent one of the units, I'm in deep trouble. Or on other occasions, it helped me realize I'd found quite a deal.

Joffrey Long

I'm a California Hard Money Lender so you would have to find someone local, but I would suggest:

1) escrow or title company people, who would know who is funding the hard money deals

2) CERTAIN real estate agents, who may be aware of the sources

3) Certain loan officers will be aware of the hard money sources

4) Appraisers may also know who is doing hard money

These are all sources of people who know who is really funding these deals.

Joffrey Long

Charles,

Thank you so much for responding to my post.

I'm going to send you a direct message, as I don't want to wear out my welcome on BP by using up thread space to quote my own rates and fees. Thanks, will e-mail you shortly.

Joffrey Long

Happy New Year, and THANK YOU to all my fellow BP posters and/or readers.

As it gets cheaper, with hard money at 8.5% - that's the interest rate on loans for apartment buildings, (California loans for investment, not consumer purposes) more people are using hard money lenders as a source for financing rental or investment properties. (When, of course, they can't get the 3.5% bank money.)

The challenge is this: Many loan officers and real estate agents don't "get" hard money lending. They either think it's all 12% and you deal with guys with huge pinky rings and gold chains, or they think it's from Mars.

But how do we get past this stereotype?

In truth, the guys with pinky rings and gold chains are still trying to make their 12% loans, but there are others offering more realistic rates, but they also want a better quality loan. Costs have dropped as well - the apartment hard money loan closed at 8.5%, with no points or fees, and the lender paying escrow, title and recording for borrower. And among better California private money lenders, the days of making a "loan to own" are gone. Legitimate lenders are in the LOAN business because they want to LOAN, and get paid back with money, not trustee's deeds.

Many have not learned that hard money isn't either good or bad, no more than paying all cash for a property is either good or bad. It's an OPTION that has to be evaluated, not just labeled without analysis.

My question is, what ways would you suggest to better educate or explain this to real estate agents and loan officers? (When I say loan officers, I mean the type that do mainly bank/insitutitional loans) Real estate agents and loan officers are HANDS DOWN, our biggest source of business. Some of them "get it" and really understand when to bring the client to a private money lender or hard money lender, others - could make more deals if they understood this.

Would really appreciate your suggestions and input. Thanks in advance!

Joffrey Long

P.S. Nothing really wrong with pinky rings or gold chains - just used the expression because of the movie!

One more quick thing: Be sure you instruct your mold inspector to give YOU the results, and not discuss them with the tenant.

You can present any information to the tenant yourself, but you are paying your inspector to give you a report, not fan the flames of drama with your tenant.

Joffrey

I take this very seriously and have very strong opinions about it. However, Rick Bradd (previous post) summed it up very well. My advice about his advice is read every sentence in his post.

Joffrey Long

Just another quick item to take into account:

Title insurance.

Trust deed lenders or trust deed investors can (and should) follow all the laws they want, but ultimately, it's pretty tough to do too much with real estate that is the collateral for a trust deed investment if you don't have title insurance coverage. The connection to this is that a title insurer may deny coverage in a case where no collection action has been taken for an excessive period of time.

Please remember, I said "might" deny coverage. They may also stand behind the coverage. (This relates to my experience in California.) Hard money lenders do see cases where title insurance carriers deny coverage on certain trust deed investments. California is where I work, so laws / practices may vary in your area.

Joffrey Long

Bill,

Thanks for your reply. It sounds like you've got a great background and resume as a mortgage expert witness.

California (where I'm located) has a lot of cases requiring a "usury expert witness," or someone testifying on usury in mortgage lending. There are also a number of hard money lender cases, resulting in the expert really testifying as a "hard money expert witness" or "private money expert witness."

I agree with many of your comments, and relate to what you said about the dangers of being a "professional mortgage expert witness." California has a number of people who are qualified as a mortgage lending expert witness, and most of them also actually make or arrange mortgage loans. For the triers of fact, I can see why they would be more convinced by testimony from someone who is actually making mud pies every day, as opposed to someone who is just a expert on mud pies, but hasn't mixed up a batch of mud for the last 24 years.

( I have no clue where the "mud" analogy came from, so don't ask me. )

As a mortgage broker, expert witness work sometimes relates to the California Department of Real Estate. Expert witness assignments sometimes involve the regulations of the commissioner, real estate / mortgage broker standard of care, mortgage broker fiduciary duty, and California Mortgage Disclosures.

Thanks again for sharing your thoughts, Bill - exactly what I'm looking for - other thoughts from others who serve as a mortgage expert witness, and thoughts from those who are aware of mortgage litigation cases involving a mortgage lending expert witness, as well.

Joffrey Long

Mortgage Expert Witness consultation, research and testimony is often used in mortgage litigation cases. I do this work sometimes, but wanted to ask what common types of mortgage litigation others are seeing, especially cases that used a mortgage lending expert witness.

California is the state I work in, but I'd be interested in what you have observed in other states, as well.

Joffrey Long