All Forum Posts by: Lee Ali

We have 21 years of experience in buying, repairing, renting and selling residential and commercial properties.

We are looking for properties primarily to fix and flip and possibly rent. We prefer to deal with principals but if you have negotiated a good contract from the seller then we can look into it as well.

Please contact through BP, or directly to [email protected] or 203-953-6490.

Looking forward to it as well.

Folks, let's stay focused on the specific silliness of HR 1728. Let the state attorneys fight on our behalf because that's what they are getting paid for.

I have written a blog post, "HR 1728 and Age-Based Discrimination."

Please read and comment.

Originally posted by Tony Severino:

My main investing strategy today is targeting free and clear properties, getting long term 0% financing from sellers… then selling on terms or just renting out as keepers. It is a great system, and we close 2 -3 per month, all with 0% financing.

Tony,

- How much down payment are you making? [This is only for my edification.]
- What is the age range of those "free and clear" sellers. [This is VERY much related to HR 1728.]

I am writing, on my BiggerPockets blog, about a course of action which WILL work against HR 1728. I am not writing it here because the contents freeze after 10 minutes.

Eddie, you should forget the bank and focus on private money.

Visit my website and download the free report on bank free investing. If you have any questions give me a call, I can answer any questions you may have about private money.

Private money. . .It's a beautiful thing. :)

Eddie,

Banks are not in the business of promoting commerce. It is us who think that we have a great asset class, we provide decent housing to fellow citizens, etc. Banks hate real estate. It is our affinity with real estate which banks capitalize on.

Banks are rent collectors of a different kind that base their underwriting decisions on pain infliction. That is, bring 20% down. It MUST be your own money. If you are 15 days late, we will throw you to credit dogs, etc., etc.

Most of us need banks because we have not cultivated our fund-raising skills and have not learned and mastered the securities framework which allow us to raise money without banks' silly underwriting requirements.

We must position ourselves as money magnets so that people invest money with us directly instead of donating it to banks (at 1.75% ROI) and Wall Street (free money, no guarantee) which make it available to us. We can then acquire properties without going through banks' silly underwriting requirements.

Trying to convince banks on logical grounds is a waste of time.

Scott, the point is not that Dory and I have spoken and the case is closed.

The point is that instead of just saying "you haven't convinced me" you need to present your counter-argument. If you think that DTI is not the major issue, then what is?

If you have time/interest in presenting a counter argument then the debate CAN be extended. Otherwise, I am not going to shoot in the dark to try to convince you. That's all.

Scott, my position is that banks' underwriting models are seriously flawed and that banks create booms and busts in real estate and I have written a whole 200 page book to outline the problem and recommend solutions to eliminate booms and busts in real estate forever with the engagement of private money.

What position are you taking then?

Once again. Debt-to-income IS the main issue regardless of how it came about; health, job loss, divorce, bad tenants, etc. When I talk about DTI I am not talking about DTI at the time of the origination of the loan. I am talking about "dynamic DTI" which will vary throughout the duration of the loan.

Down-payment IS NOT the main issue. Someone could have put down 20% and the value of the house went down 40%. The owner is in a hole of 20% which has happened in many MSAs.

Note: The prices are currently at 2003-2004 prices range. If anyone is buying at those price-points then there is a big chance that they are taking risk of losing 20%-30% which may or may not happen. I am advising my clients to purchase at 2000 prices to make sure that they don't lose any equity.

Now if buyer's income situation is under control, then he is going to rough it out.

If his income situation is not under control then he is going to walk away from the property regardless of how much money he put down.

I don't think that there is much to be added to this debate between what I have written and what Dory has written.

If you don't agree, then we can agree to disagree and move on. :)

Scott. Good questions.

The mess we are in is because of too many people got houses at high DTI when they bought the houses AND many people ended up having high DTI after they bought because they lost all or most of the income due to bad economy.

For example, if Big Three were hiring like crazy in Detroit, would people we walking away from their houses or would the be bidding the prices up?

No down payment DOES NOT mean no money in buyers' pockets. I am fine with escrow funds for emergencies. That is a much safer course of action for the buyer as well as the financier.

Thanks for the post Daniel. In the back end, it is the quants who have wreaked havoc in structured finance. Check these out.

http://www.newsweek.com/id/200015
http://www.portfolio.com/business-news/2009/03/03/Formula-That-Killed-Wall-Street


Mathematician, actuary and statistician are the top jobs according to Wall Street Journal. http://online.wsj.com/article/SB123119236117055127.html

Soapbox: Please note that most of the "Best Jobs" are exportable and most of the "Worst Jobs" are not exportable.

The quants are out to monkey with our Internet usage by creating models to exploit our web surfing patterns. [Suggested reading: The Numerati, the Click, the Search, What Would Google Do?, The Long Tail, Planet Google, etc.]