All Forum Posts by: Kathy Utiss

Many great comments here. Good to have so many different inputs.  I've been in asset management since 1994. Prior to the 08 crisis we figured out a way to stop it from happening. This concept has been approved since then. The issue is many people do one thing in this industry. That is talk. 

In this industry rather you are a homeowner purchasing your 1st home. Or a property investor investing in whatever you invest in there are similarities among all of us in the way we purchase. We have to qualify with having jobs for xyz amount of time. Proof of that income. We all know the higher the score the more prospects someone has to rent or purchase any property in this country. 

 Many assets require large sums down to purchase. While the investor thinks the property will be beneficial to their portfolio there is an issue.  The homeowner faces this same issue. That is if something happens beyond their control they could end up screwed. 

* Money down is lost

*Income is lost

*asset appreciation is lost

*credit scores fall as income isn't always replaceable. 

Some put their life savings into buying a home, business, or a income producing property. One can't predict life changing circumstances but they happen. Sometimes even if one has reserves they could be depleted in such conditions. 

The banks insure everything on their side. Yet those of us that buy properties could lose it all. They don't INSURE the person putting the money up to purchase. There's no guarantee if you have to use their courts you will win. Even if you have money. 

So the best bet is to insure your debt against default at origination. By doing such you can get an interest only loan. By prepaying your debt you keep what would be your usual principal payment for the life of your loan. You avoid usual reserve requirements. As YOU ARE ACTUALLY prepaying your debt into the future at a discount as well. So all the pitfalls you have above are avoided. If someone can't pay once in a while you won't be so hesitant to give a hand up. Many don't believe in not paying their way. 

By insuring your debt at origination you end up with two assets --the property or business- a treasury that matures and pays off in 30 years. Bankers agreed to it cause they make more money using our idea. It's still best to make sure any property will debt service as you would accordingly. But the idea really puts real estate and banking on steroids.  If done correctly it could revamp incomes for many American's. Just like my life is a "True Ripley's Believe It Or Not Story" this is as well!

Besides what has been mentioned the other thing is some HOA's depending on the state don't allow modular homes. We have a lender in place to become a modular home reseller. The nice thing about this lender is that since they are the lender they have many modular home companies to choose from.

The scenario we are working on the new build modular homes are 3,000 sq ft going for over $110 sq ft and are being built for less than 65% ltv. This includes the purchase of land, improvements, and homes.  The nice thing is land owner comes from a family of builders with over 160 lots.

I know the lender does multi-family, they even do modular Marriott Hotels. But to do large projects you need like $2m or a jv partner with it.

Zero coupon treasuries are Triple A Rated, they are issued at a discount and mature in 30 years if those are what you buy to insure your loans. Banks usually use 10 yr treasuries. Letters of credit come in handy as well. 

That is a $28,000 difference. A lot of people will tell you not to go by Zillow alone. I'm not going to guess on such a discrepancy. Use other free tools. Look by homes sold recently, see what homes are selling for with same amenities, and sq ft. Maybe, have a realtor do a BPO. Or you may even want to hire a home inspector depending on how serious you are in figuring out numbers. You don't want and need surprises you can't afford :) 

I'm in O'Fallon, MO west of this area of St. Louis. This is a lower income area. There are always people needing affordable homes. But this area is riskier for tenants. As you are dealing in the city of Florissant at this point. The appreciation on property won't be as good as if you invest in other areas of St. Louis. Still in the city but the potential to rehab, gain a lot of equity, and rent to hold opportunity is better in like the 63108, 63118, 63116 zip codes. There may be other areas as well. As Kathy said a Pm could help. But if you do your homework in those zip codes you can do it yourself. Online tools are very helpful. As some real estate websites give free info. I like not to promote or anything Realtytrac as you can put in a street name and get values comparable as an appraiser is likely to do by area and sq ft with repairs done. By using the currently solds, for sale and such. 

This is what they say about the CARES ACT in Texas. I would assume most of the requirements are universal .

https://www.kbtx.com/content/news/Local-bank-to-provide-CARES-Act-loans-to-community-569193501.html

Good evening...Since, about 1994 I've been in the asset management industry. I initially got into the biz via recovery on credit cards. Then the more experience I got the better my opportunities got. In 2001 I started doing recovery work via a 3rd party agency.  In February 2004 I found out the agency I accepted employment with never had it in their contract to sell mortgage notes for xyz. Then the other company didn't sell their's but did end up selling theirs. I know it sounds confusing. But in some cases google can be our best friend. I've been documenting my experience since about 2007 when I found out the people wanting to be paid couldn't prove ownership. 

I proved this in court. Instead of being made to pay fines as putting fraud into the court knowing it's fraud is supposed to be a $500,000 penalty I was made to be a deplorable. You know being one of America's top asset managers the only way I had to pay to keep my home since they lied depended on me getting an opportunity to get honest business done.

As it really defeats the purpose in having any accredited investor that can spend $150,000 a month on npn or an investor with $10-$50 million per month on deficiency balance notes if you can't get honest biz done!

Needless, to say the attorney that refused to file an adversary when I did my own and put his in with it things went POOF in the East Dist of MO-St. Louis. 

Currently, if you put money down to purchase a property it can be up to 30% down. That's to get a loan usually 30 yrs in term on a p/i basis + your taxes+ ins. If when you close on a loan you insure it yourself against default YOU DO some interesting things.

*You INSURE your PRINCIPAL at a discount. (Avoiding Reserves)(TRIPLE A+ RATED)

*You INSURE your DOWN PAYMENT against loss

*You end up with an interest only loan for the lifetime of your loan. Meaning all that principal like 18 yrs WORTH YOU as an INVESTOR keep in YOUR POCKET.

*INTEREST is A YEARLY PAYMENT

* You still gain property appreciation as well 

You can only do what you can to protect you. What their offering is short term assistance. Anything that modifies or extends means you owe longer. I've seen things one could never imagine.  I respect professionalism as I've always attempted to be one. But unless you want to waste money you don't have I'd get out of any p/i loan and you avoid such catastrophes such as this. As even if a certain percentage get down to paying you should still make enough to pay interest. Which is better than ever chancing default in a cruel world that won't care what your abilities are. 

If you have a way to manage without doing a modification on the account or a forbearance you are probably better off. I've been an asset manager and once an account goes into delinquency chances are you could face issues you could never imagine. Most banks suck at servicing accounts. It's quite interesting what they get by with as well. If you enjoy the assets you already own seek other methods. That protect you as an investor now and in the future. If you have more than one property perhaps doing a whole new loan would be better. The rates are low. There are loans you can get done that are interest only without balloons. Maybe a blanket loan. Interest only loans vs P/I really puts an investor in money mode :)

Sad that someone would say such...But the result of you posting this has brought some inspirational thoughts for everyone of us. Many jump into real estate thinking quick riches. Reality isn't always that. There are a lot of good and bad stories surrounding real estate or banking transactions. Good to see positive postings to keep us inspired :)

I agree with Greg.

Depends on the numbers. There are lenders doing such loans as well. If the land is worth enough and you can setup your exit strategy it's quite simple to do. You could even do with no money out of your pocket.