All Forum Posts by: John Mireles

Robert Adams - I had used homepath financing, I would have had to come in with 20% down. Instead, I went the FHA route and came in with 3% down. Even with the additional $8,000, it was less money out of my pocket: $21,000 verses $86,000 (plus P&I on the extra $35k).

Originally posted by Wayne Brooks:

Same problems here with FNMA short sales and REO's. The FNMA appraisers tell me one reason is that FNMA wants "future values", 120 days out. I guess you have project what the comp.s will be in 120 days? Forget financing a FNMA REO unlees you're using Homepath, where no appraisal is required.

I used FHA - which required an appraisal. It worked out for me but I also understand why they were initially reluctant to accept my offer (given that I wasn't using Homepath financing).

Went through that recently. We had an accepted offer at $435k but then the appraisal came in at $382k. Fannie came down to $400k and I made up the difference.

You have an appraisal contingency so if you're sure the appraisal will come in low, take their offer and then wait for the appraisal to come in. Then renegotiate.

It's alway interesting for me to see the layers of paint as I strip them away from wood doors and windows. I tend to buy houses from 1910 to 1930 so these houses have been through their share of trends. They usually start out with dark stained wood. Then there's a yellow, then a sea green and then multiple coats of white from when it became a rental.

I think pink and green came along in the 50's and came to a sad crash with pink bathtubs and toilets in the 70's and maybe 80's. I wasn't around back then but the feeling I get is that people were tired of the dark days of the depression so they went for more color in the happy days of the post-war era. It was just the style of the day in the same way that granite countertops and stainless steel appliances are must-haves in any new home now.

This is a really bad idea in my book. First, you're lying which is unethical and a really bad way to conduct a business. Once word gets out about what you're doing, who's going to want to do business with you?

Second, knowingly providing false information is considered fraud - which is illegal. Also, inherent in every contract is the implied covenant of good faith and fair dealing. If you violate that covenant by lying, you're guilty of bad faith. You can be sued not only for the money loaned to you, but also for punitive damages - which can be many multiples of the underlying damages.

In my estimation, lying to get a loan isn't worth the hit to your reputation and the potential liability.

Originally posted by Matthew Loring:

Lesson learned on this one. Identify the commission structure in advance and on paper.

Thanks,
Matt

In my mind, the lesson to be learned here is don't work with this agent again. He's trying to nickel and dime you and obviously thinks he can take advantage of you. That's not a good basis for a continued relationship in my opinion. You want someone who delivers a nice bottle of wine at closing - not an invoice.

Commercial is such a tricky beast. My suggestion is to work with a community bank to get the loan. It really helps to have a sales and underwriting team that knows you and your area. If that doesn't work, try the branch of a bigger bank in your area. I'd also talk to your current banker to see what they say. Finally, if that doesn't work, call up a commercial broker whose signs you see a lot of in your area and see if his/her office will recommend a commercial loan broker.

I'm in the middle of refinancing my commercial loan. I'm pushing the bank to do 75% LTV. It helps that I was able to get the loan officer out to the property, show him how good it was, let him hear from my tenants and show him the development that was taking place in the area. Now he can go back to the underwriter and sell him on me and my property. (With my old local bank - that went under a couple of years ago, I could (and did) have had that conversation with the underwriter.) Relationships matter so much.

I'd tell him what I tell anyone who tries to charge me a commission or other fees after the fact: Get lost.

I don't know that there's any one source for figuring out your target demo. It really depends on so much - location of course being the main factor. You really have to know what's happening in the areas where you're buying. Some areas are on the decline. Others stable and others up and coming.

What other development is taking place around you? What's the larger plan for the community? Is the area becoming popular among the young and adventurous? Is the area predominantly Hispanic?

Marketing a property in North Park is going to be a completely different experience from marketing one in National City. North Park is going to be more of an upscale experience to the yuppie/hipster crowd while National City is going to be more of a budget minded crowd. It certainly helps to be involved with the community where you're working so you know what's going on. In the past, I sat on the Business Improvement District board where my studio is located. I also sat on the redevelopment committee so I knew who was doing what and when - and I knew it before most other folks.

For example, knowing that hip restaurant was going in at a certain corner means that a similarly hip clientele is likely to be attracted to that area and more growth would take place. I don't know that you can just sit back and think that looking at some reports or numbers is going to give you the ears-to-the-ground kind of information that gives you a competitive advantage over everyone else in the game.

Looks great to me! What was the purchase price and what's your target price if you don't mind sharing?