All Forum Posts by: James Hamling

I am not shocked that you boil everything down to a question of do you go epic d-bag via (A) or (B), and that's it...... 

Are you not capable of at least pretending your a normal human being for just 1hr and having a conversation with them? 

It's not a good living situation for them, not a chance it is. 

Hey, how about you man-up and go tell them your line of thinking and the 2 options. That you were thinking this was a great time to really squeeze em and get around the rent controls. 

As James said you-do-you but stop expecting some hugg's and BS telling you your anything but what you clearly are in all this. 

Karma has a way of coming round to balance the scales of life.... 

Karma.......

It was kind of mashed together so I get how could have missed that conversion of don't do HELOC and instead use any of the other way safer less risk strategies.

I mean, in theory HELOC could be great but whole problem is all the if's & but's that come with it.

And let's be honest, all of us pro's of various kinds coast to coast, how many buy's have we seen the last few years that we say "who in the hell is that dumb..... what the hell are they thinking?". 

For me it's at least 50% of the buys I've seen the last 3/4 years that are just head scratchers. Buyer is clearly got there head in the clouds.

But we see this in all the high leverage strategies too right. SubTo, there is so many crazy bizarre buy cases there like the one's arguing getting in at 110%+ FMV "makes sense" because because because...... And there all betting on perpetual 2x/3x+ appreciation rates vs historical norms.

About the only safe'ish way to do HELOC is if look at refinance, and it pencils out with a refinance at a worst-case-scenario based on future potential of rates and monetization declines, so you have that plan B if ever need be to refi it all, ok. But that's not how 90%+ of people are using HELOC's today.

Most are using HELOC's to squeeze everything, all leverage right to the maximum.

Max leverage = 0 buffer for any bumps in the road, that everything must go perfectly for many months and/or years or else the whole house of cards comes down. 

And who often would take such gambles? The novice, those least equipped or experienced to get through any trouble spots. 

It's a setup for failure. 

In 2005/06/07 it was a similar thing in new construction. People were blindly just buying anything and everything on pre-sale, because it was just known that you'd always be able to sell it at market once build was done to pocket a quick $20k....... 

Until it didn't work anymore. And when it stopped it STOPPED and slingshot the opposite direction fast and hard. 

It bankrupt a lot of people. 

Leverage amplifies results, good or bad. Maximum leverage makes for maximum amplification. 

Ok, let me preface this that I am an immigrant household and family. 

@Frederick William exemplifies the most vile and disgusting parts of human nature. And perfectly details how illegal immigration is BAD in a whole array of ways including to the illegal immigrants themselves, as a life of exploitation is NOT a life or system of any good. 

A life of exploitation harms the illegal immigrants, it harms the economy, and it harms the community via it's manufacture of poverty. 

And the statements popularized to just give away to illegals everything LEGAL immigrants spent years and thousands to EARN just makes the blood boil! 

It is NOT "just business" to look at such situation and salivate at the opportunity to use it as leverage to squeeze some more dollars from these people. It is no different than having a tenant whom you know is wanted for rape states away and thinking "oh, what if I tell him he's gotta pay me 20% more to keep my mouth shut, and oh, 40% more for a view of the next door school playground"..... It's vile, you are a bad person for even considering such.

There is things a person can do such as turn themselves in to ICE and request opportunity to go through the paperwork and steps to become LEGAL. Yes, that is a thing, always has been. 

I just can't believe people are so devoid of a soul that they look at a family packed into a 1br and think "oooh, how can I squeeze em for few more dollars".....  

And saying you inherited them is not an excuse. You accepted them as-is, there yours end of story, it's been more then enough time and you know full well the situation and are seeking to EXPLOIT it/them for profit. End of story. 

Lastly; before anyone wants to get all political with this maybe look up some facts as to who was named and remains the "Deporter in Chief". Deportation for illegal immigrants has been a thing for generations, nothing new, R, D, it's always been a thing and nearly every country the world round engages in doing the same. It's necessary to have order to things. Or else we get the kind of exploitation as championed by Fred.

You mis-read what I stated. I cheer the merits of seller financing, dscr and other methods vs HELOQ. 

And you detail the exact problem with HELOQ for investment property. It works IF, IF everything works out right. 

If it does NOT, you not only risk the new buy but you also risk the previous assets now connected into things. It's a form of comingling assets. It greatly add's risk exposure, it compounds risk exposure. 

In the coming months there is going to be ever increasing #'s of people crying out for help because what was a "good buy" has gone belly up and now it's not only that but also the heloq they now are in risk with and that property.....    There will be people reaping the negative compounding effect and loosing everything. 

Fact is HELOQ for acquiring investment property is a HIGH LEVERAGE strategy and with that HIGH RISK. 

People have gotten lazy and negligent to that reality because of the past years boom market.... well yet again people get into weird thinking that the market of the moment is the market of eternity. 

The vast majority of people do NOT have the skill, experience or qualifications to do highly accurate market analysis projections out years, and with that know what is or is not a "good buy" over the duration of years. 

They instead do it on the moment, and if it looks good at the moment the equate that too eternity. Years go by and market shifts. That's exactly what we have going on now. 

In these instances I have persons who specialize in credit repair of this type and if we can transact it PRE-foreclosure, and even in redemption situations, they have been able to completely remove the foreclosure from credit because it was satisfied in full. 

Now, the lates are and will always be lates. The credit will not be perfect of course but it is a very big difference in credit impact of just those lates with a fully satisfied pay-off or with a foreclosure. 

It is an item that takes months, but still far better then a decade of foreclosure on record. 

@Don Konipol I blame the collapse in creativity and vision. 

When my wife pressed for "how much is enough" after some thought on it I had the correct answer: 

When I can play battleship with actual ships..... 

I absolutely hate Hate HATE this BS ridiculous notion popularized by various books, programs, gurus and what not that you just go ask enough, or in the right way, and someone is magically dumb enough to sell you a $300k FMV property for $200k.....

It does NOT work that way and it never has. Not last year, not in 2010, not ever. 

So the only "psychological trick" is to not be an idiot yourself. 

How it ACTUALLY works, and has always worked, is you are selling a SOLUTION. A solution that has monetary value. And you the buyer are BUYING PROBLEMS that you can solve at a net return. 

For example: 

Aged property owner transitioning into assisted living. Property is 27 years out-dated. 

You are selling them a solution that they can sell it as-is, no need to spend $ out of there pocket to get it into sale condition. This holds a value. 

And you can reno it to retail in it's "Sunday best". 

Win-win. 

Or a person in pre-foreclosure. You can help save there credit from the whammy of a foreclosure on their record for a decade to come. Again, selling a solution. 

Or a person who's maybe owned a property 30-odd years and been listing forever with no takers, clearly with a strong desire to sell but an issue of market price not working. You may be a solution via taking it on seller financing. 

SOLUTIONS. The primary reality is being a problem solver 4-profit. 

In most places they have a term for conning a person to give up there $300k FMV property for $200k via a silver-tongue..... Equity Stripping..... And it can come with a nice shiny pair of bracelets and free room and board at camp-klink for a few years.

The generalized slang of "buy under market value" is a short form way of saying "buy at a price that affords correct margin to effect what repairs and problem solving is necessary with an appropriate profit margin and carried costs to make it a net profitable venture". 

If all the books, programs and gurus were focused on accuracy over marketing the headline would instead read "Buy Profitable Problems". 

But that doesn't have the same sizzle for those never-doe's chasing hopeium hit's. And that's just the reality, there selling a dream same as Nike building a brand where a 300lb middle aged whatever feels more "athletic" cause they got the new Jordans..... 

This is exactly why I hate HELOC's and advise to never NEVER us a heloc to acquire investment property. DSCR, seller financing, or get more capitol.

It's just horrible to risk all that have done. Sad. 

I really appreciate that Don, and I also appreciate your position. 

I agree, there is no such thing as an unbiased person. I just try to be really upfront when it's a place that I believe others could see as a bias influencing opinion to support bias vs support facts. 

And that's a funny thing about me, I actually really enjoy finding I was wrong on something. For me it's better than confirmation of being right. Because if find I am wrong on something I get to learn something new AND I just improved myself, 2 for 1. 

So I really enjoy debate. Great things can come out of debate. Diverging opinions and theories is how we all improve. 

But not regurgitating propaganda and rhetoric to brow beat a person into conformity as thankfully few do, I have no patience for that garbage.