All Forum Posts by: Joffrey Long

Thanks Karen. Hope all is well for you.

Hope we get even more feedback on this.

Joffrey

Geof Greeneisen
Rob K

Thanks for these posts. EXACTLY what I am looking for.

Please, everybody - what online rental marketing sources are you using?

Joffrey

Please count me in and let me know where it is. I'm in San Fernando Valley but just succeeded in raising capital to refuel both vehicles so can travel.

Joffrey

I'm not sure we're allowed to name names of rental listing services.

But as an old guy who used to suffer the pain and indignation of having to place...........(it hurts to even say it) newspaper ads (sorry, feeling a little sick just typing those words - older landlords will understand ), I really love being able to post my rentals quickly and without cost on different sites.

The ones I'm using now are Craigslist.org , Trulia.com , Zillow.com , and a local CA site called WestsideRentals.com ( Again, hope I'm not breaking rules by mentioning names of sites.)

Are you using any good sites or the ones I mentioned ?

Which ones do you like / dislike ?

Are there paid sites worth paying for ?

As you comment, would be great if you give the area your rentals are in and what you rent, i.e. $1,700 a month houses, or $600 a month apartments, student, military or regular working class housing, etc.

Ok - gotta go. Gotta post one of my rentals right now!

Joffrey

Ann Bellamy summarizes what I belive is the key point here:

Would it hold up in court? I don't know, because I've never had to go to court after using it. Which is, of course, the whole point.

I like to consider what will really happen in day to day practice, since I fortunately, do 99.9% of all my business without ever coming under the scrutiny of a judge, jury or arbitrator.

Of course, you have to consider how big the downfall or loss could be if you do wind up in front of a judge with your late charge, early-pay discount, or whatever. Fortunately, when you lose on most landlord / tenant matters, it's $400, $1,392, or some amount like that, which you've more than made up for in using profitable practices.

One minor idea to consider: A clause in all rental agreements limiting the amount of attorney fees recovered to a small number, $700 or so. If the tenant does decide to go after me on certain matters, they'll need to really shop for cheap attorneys!

Joffrey Long

Joffrey Long: Hard Money Loan Rate Survey:

Let's see what hard money / non-bank rates and costs are for buying a buy and hold rental house, taking money out of a rental house and for short-term flip properties.

No pitch here, and no conspiracy to set prices, just you ( the non-lenders ) telling each other what rates and terms you're seeing.

To protect lenders and mortgage brokers against restraint of trade accusations, we (lenders and loan brokers and other providers of loans) should refrain (as I will) from posting our rates here.***

If you are a non-broker / non-lender, please post rates you have found, better to post without the name of a lender and people can contact you direct if you are willing to share info.

If you just post rate and points, or rate and length of loan without posting all normal info, it loses some of the meaning. Best to post all of:

rate

points and costs

length / term of loan

prepayment penalty or minimum interest requirement, if any

This assumes only non-owner occupied loans, loans for investors, not loans for people who live in the property that they are borrowing against.

Thanks, all, hope this helps,

Joffrey Long

*** Because of restraint of trade / pricefixing laws, lenders should not post rates here as we should be very careful to avoid any accusation or circumstance where it looks like we're agreeing on, or conspiring to charge a certain rate. My rates are set and available for review, and are completely independent from any acknowledgement or agreement with any other lender or loan broker as to what rates they may charge.

Justin,

I'll also add that where some may take a conservative approach to this and say it may be deemed "unenforceable" by some judge due to an attempt to circumvent the law, I disagree completely.

First, it is legitimate. If you advertise the property and properly offer it at the non-discounted price, it is real. Or, if you lease at a lower price and legally raise the price to the full rent, again, real.

You can always get some crackpot judge who may even invalidate your birth certificate, but your Mom knows all too well what day you were born.

The reality is that many of your rental relationships will NOT, and I hope they WON'T wind up before a judge.

A tenant that is sufficiently intimidated into believing that the non-discounted rent must be paid is all you need. The judge, hopefully will never hear about your agreement, and if it happens (the judge finds your agreement unenforceable) a few times, you can always then back off.

If the judge does find against you, and you lose that one case against the tenant, it's unlikely that you'll find yourself chained up for 21 years in some far away prison as a result of your evil scheme, or forced to spend the rest of your life sitting home and never doing a deal because you're too scared.

Keep thinking,

Joffrey Long
P.S. Check all landlord / tenant agreements and relationship issues with a qualified attorney in your area. My opinions are that of a fellow landlord and are based on my own experience in my area but may not relate to your area, your situation, or your set-up. Please do not rely on what I wrote as legal advice.

After 37 years of landlording, I've learned one thing - ask 7 different successful landlords and you'll get 7 different answers.

Those that won't discount for on time rent, those that do, you're all right - if, as Dr. Phil says, it's working for you.

That said, depending on the situation, rent discounting might be a good idea for the following reasons:

1) In certain areas, it's not possible ( like where I operate, in the municipal city of Los Angeles) to collect late charges in court. So, a discount for paying early, that is forfeited by late payment, is simply contract rent, where the full (non-discounted) amount is due.

2) May provide kind of a reverse incentive to pay rent on time and take advantage of the discount.
Fewer sour grapes on paying full pop, just didn't earn the discount that month.

3) Focuses tenant on the "real rent" the rent without the discount

4) Properly explained up front, can help focus tenants on prompt payment

Joffrey Long, C.G.O.P.O (Certified Grumpy Old Property Owner)

Speaking for California properties only:

It's simple.

You hold a note secured by real property.

You may not want to sell the note at a deep discount and lose a large portion of the money that you stand to collect.

You but up your note as collateral and borrow about 50% of your note balance. The costs of borrowing are far less than the discount you would suffer if you sold the note.

If the note pays off in full as you anticipate it will, we (yes, we make those loans) get paid off in full and you get the rest of the money.

In summary, you own note, you use it as collateral to borrow money.

(Very similar to using a house you own as collateral to borrow money.)

Investors should keep this basically SIMPLE method of raising capital in their inventory of knowledge. You will (sooner or later) get stuck carrying paper. You will have a need for capital.

Joffrey Long

Hard Money: What's covered by what?

In trying to figure out what loan is covered by what law, people will ask, "is it a one to four family residence?" Or, "is it owner occupied?" Is it commercial property?

Don't forget. You need a purpose.

Part of what loan is covered by what law falls to the loan PURPOSE. What the money will be used for - is it for consumer or non-consumer purpose?

A quick cheat-sheet:

RESPA (Real Estate Settlement Procedures Act) Only affects loans secured by 1-4 family residences, BUT you have to know the purpose.

1-4 family residence loan for consumer purposes - covered by RESPA

1-4 family residence loan for non-consumer purposes - not covered

TILA (Truth in Lending Act) (the good-old APR)

Again you HAVE to know the purpose. But here's a wrinkle:

ALL consumer loans are covered. Yes, 1-4 family, 28 units, commercial and office buildings, IF the proceeds of the loan will be used for consumer purposes.

Yes, Martha, if we refinance the office building to remodel our house, they have to give us the Truth in Lending Disclosure. TILA applies.

NMLS (National Mortgage Licensing System) Originators must have this endorsement to originate loans that are both secured by a 1-4 family residence AND are consumer purpose loans. (So a loan on a rental, for business purposes would not require the use of an NMLS endorsed loan officer.*)

CONSUMER LOANS DEFINED: Loans to consumers (natural persons) that are for personal, family or household use.

* NMLS does not require that an originator have an NMLS endorsement to originate NON-CONSUMER loans secured by a 1-4 family residence. HOWEVER, most FHLMC/FMNA / SECONDARY MARKET institutional lenders require that the originator have the NMLS endorsement for ANY 1-4 family loan, whether or not the loan is for consumer purposes, so many people think that is the law, which it's not.

I believe that 90% of the people in the lending industry aren't aware of this distinction. (about loan purpose) Good to be aware of, since regardless of what part of the housing industry you're involved in, this comes up.

For me, as a hard money lender, I don't do owner-occupied loans, but often run into non-owner loans that are for consumer purposes. Working on a small office building loan right now where owner will use proceeds for a consumer purpose - so must give TILA disclosures.

Hope this is of value.

Joffrey Long