All Forum Posts by: Ray Johnson

@Wyatt Franta Thanks for the insight! I would think that MarketWatch would reveal a little more on how the source data was compiled.

I was just surprised that there are markets currently under water, when everywhere I've looked prices are way above pre-recession values. Well guess there's a reason those markets never showed up on my radar.

@Terry Harris I'm able to get 80% on my SFR's and Condo's with PenFed Credit Union. The last one I've done was in December, I would think this percentage is going to change soon. Chase Bank announced yesterday, that on this coming Tuesday new stricter lending guidelines will begin as they prepare for the fallout of the COVID-19 hit to the housing market.

I thought this was an interesting article, odd that a majority of the properties are on the east coast. .25 Most vulnerable COVID-19 related housing markets Wish I could see more than 25 markets. How is it that some of these markets still have such high percentages of underwater properties in 2020? 

@Ricardo P. I think the May and June rent payments will be telling. Keep in mind many of those on unemployment starting tomorrow will be getting that extra $600 a week from the Fed stimulus package. They will be making close to pre-COVID-19 income, and some will be making more money than when they had a job and was paying rent.

I can see them taking the first couple of extra checks to rebalance their financial situation, but I will say, come May, and definitely June, if they are getting an extra $2,400 a month and not paying rent, it's because they are choosing not to pay since there is no rent enforcement right now for not paying rent.

@Ashly Frasso I get that he put a down payment of 20% at 3.75% on the $1.1M sale that's $220,000. What we don't know is how much he borrowed in hard money/Family loan at 3%. This is important because it will determine if there's 20% in equity remaining after the rehab. So if the property really does Appraise at $1.6M now it's an easier answer. If he has more than 20%-25% in equity after the rehab, He can cash out the 2nd loan. The fact that the rent of the other unit barely covers the 1st mortgage, he will have to come out of pocket regardless of what financing structure he goes to. To answer the question as to how difficult it is to fiancé a Jumbo, it's not difficult at all if you can afford the loan payment on paper. we live in South OC, almost all of our loans are Jumbo, it's very common.

@Tom Murphy the intent of the program is to incentivize business owners Not to lay off their employees. The government is basically saying, keep them hired and we will give you the money to make that happen. The payroll associated loaned funds will then become a grant at some point in the future. The thing to keep in mind is that this starts off as a loan, Even if you have the hypothetical 7 million in the bank and your monthly expenses are 30K, chances are you will still apply for the loan if you're a good business man. The program also comes with tax incentives as well when it comes to tax reporting time, would you not choose to use that incentive as well? Look at it this way, The Fed is going to pay your employee one way or another, either through the $600 a week unemployment stimulus on top of the State check, or giving you the $600 a week money, plus a tax incentive, plus a little cushion to cover, insurance, healthcare, etc.. Since the Treasury Secretary said they looked at the fraud components of this program, I'm assuming there will be some sort of political litmus test as a part of this process. In regards to people overinflating numbers, this is a loan document and if they are lying, they are committing bank fraud, which I'm sure the criminals will be doing.

@Tricia Valverde, It depends on what type of investing you're trying to accomplish. Are you looking for the $30k houses, or the $300K houses? Looking for just cashflow, or cashflow, and appreciation? Class B neighborhood, or Class D neighborhood?

@John Lynagh Ask to see a copy of the Repair and Reserve Analysis report, This will show the details of what was projected to be repaired that is accounting for that 35% allocation.

@Brad L I went to the Mayors website to look at the details of the issue. It says the new measure gives residential tenants 12 months following the "expiration" of the local emergency period to repay any missed rent. What I got from that is 1) A tenant can go without paying rent during the "Emergency Period" 2) Los Angeles will announce when the emergency period ends, and the 12 month clock will start at that point. 3) The landlord cannot take any action against a tenant until after the 12 month period, should they not make up the unpaid rent that occurred during the defined emergency period. Now I get what you are saying, If this emergency period goes for 3 months, lets say until June, At month 4 (July), the tenant begins paying rent in July for the month of July, then the tenant has up to 12 months to repay the missed 3 months of rent (Apr. May, Jun). That makes much more sense. The local news outlets this morning were spreading some tenant friendly propaganda. Making it sound like due to COVID-19, tenants will have up to 12 months to catch-up "ANY" missed rent payments. This isn't as bad as what the media was making it out to be.

@Brooklyn R Los Angeles is getting really close to free rent, the Mayor just signed the new law for tenants to have 12 months to catch-up or settle any back rent before a landlord can take any action.