All Forum Posts by: Verna M.

I hope it causes a huge panic and property values plummet into the ocean.  I will be standing on the side with cash waiting for a cheap beach house lol!!

 I live for doomsdayers,  survival prepers and the like. There's a lot of profit to be made off irrational fear.  

My personal home is at 1800 feet elevation and on spetic tank. Whew. I won't be doing any sinking. 

Yes. My company did not match, yet I still choose to max out my 401k and Roth IRA every year instead of investing in real estate. I did want to invest in RE, very much so! However I live in Los Angeles where the cost is high and everyone bets on appreciation. I looked into out of state but at the time had a very demanding job.

The tax savings on a 401k combined with  homeowner deductions is a powerful thing if your  are in a high tax bracket.  Also, without the 401k deduction I wouldn't have always qualified for a Roth.  That is a one two punch you cannot over look.  

Roth IRAs are amazingly flexible and can be used as an emergency fund savings account. When credit was tight I was able to take out a portion of initial investment (with no tax penalty) and use it to pay cash for a new roof on my personal residence. Not to say it is without risk, becasue investing in the stock market is not without risk or work. Just like REI there is a whole set of metrics to learn. However you can do it from a desk.

What kind of risk can you or are you willing to manage? Do you have the time to manage properties? Even if I owned properties locally, my time was too tight to be a landlord.  Can you find something that's a good enough deal and a good enough PM that you can sleep at night? 

Due to my aggressive investing I was on track to retire at 45 in best case scenario. Worse case scenario is that my company went out of business about 5 years too soon.  Apparently the owner wasn't on the same plan as I was!

All good tho, because  Instead of scrambling for a new job like everyone else switched my investments from growth  to income and  picked up some part time work.  I am getting by just fine and semi retired at 38  :D 

Of course as  many stated above, the advantage of real estate is cash flow. Which is why I am now looking to switch.  Being semi retired at 38 is boring as (*%$

I feel as if I should add that I started working/investing  full time at 19, and had no college debt whatsoever. And that is two huge things I had in my favor!

Do you post in every single socal thread about how your get cash flow elsewhere so people hopefully check out your company via signature? 

I've been reading the BP archives and you kind of sound like a broken record

From my experience institutional lenders do not like loaning to the self employed, unemployed,  those with income that ebbs and flows or have an income tax return with 3-5 different W2/1099s. (I deal with all of those things) Having a years worth of cash in reserves and a high FICO helps but it is still difficult. And if you don't have the lump sum yet, I wouldn't even consider it. 

They will want to see steady employement during escrow,  and on the day you close will call your employer. It doesn't matter if your employer changes or you have a gap as long as you let them know well in advance. Most and not all will expect you to have a job at COE. Even if you're fired the next day. But don't try to pull a fast on on them and look shady, the underwriter will dump you.  

My company went chapter 11 last year and 2 of my co workers were undergoing a re-fi. They found new jobs and while faced delays were able to close. 

Totally agree. There is just never been a time where money has been so cheap for so long.  The fed has flooded system with so much cash that it's worthless to sit on it.  More and more people are retiring and living longer. They need cash flow more then anything (I know, I am semi retired lol)

There's a lot of people sitting on a lot of capital and they see it becoming worth less and less  by the day. You might as well spend it because if you don't it won't be worth anything in 5 years.   There is only so much manipulation of the CPI you can do,and I don't care what the gov reports as the inflation rate.  Perhaps its not nationwide but here in LA  inflation is beating the interest rate in a big way.   and that's driving capital to real estate. 

That I am aware of. And yes, I had insurance.  

I was more concerned about getting my family member in trouble for lending without proper licensing as there seemed to be many threads here about that sort of thing. Warning people about new laws that have been passed in regards to consumer lending.  This was awhile back. 

I plan to do more business with this family member and while they are a bit cavalier (and in this instance it was in my benefit)  I want to make sure we are to the letter of the law if we move forward in a different direction or I borrow more funds from them in the future. 

and it's the kick in the *** I need to write up a will!

The part about me being incapacitaed it what I needed to hear. I didn't even think about that! 

Well, this is a vailid concern, and thanks for thinking of it. At the time of doing this, my only concerns were with legality with the IRS and NMLS.   At the time, I had no heirs or will.  The house would have gone to probate. (!!!!!!!!!) 

I don't know how I could have taken out another mortgage? Because I tried! The payment was clearly shown on my checking account, institutional lenders figured there was a note and would not give me a loan, only a HELOC. Im sure I could have found an alternative lender to write me a note on the house.

As far as if my family member died, yes their heirs were aware of the deal. 

That is my plan.  And look for deals in the mean time if they can be found.  I have been living here my whole life, and I have been watching real estate the whole time.  ITs funny  to see the historical charts, because I remember my parents buying houses at those prices. But at much higher interest rates. 

 When I was a little kid I would wander around the neighborhood and go to open houses,   I've got almost 40 years of historical data in my head :-/

I have done decently as a home owner, but  I have never had cash on hand to invest when the time is right.  Every time things have been ugly in real estate, I have always had my capital tied up in the stock market or in a business.  I am willing to be patient and wait, its cyclical. 

The economy here seems to be doing ok, my company went out of business a year ago and every single person I worked with is back working full time at a new employer. I am working part time out of choice. 

Hello all

I have been reading this forum and wow, lots of great discussion and tons of knowledgable people. I wasn't aware of all the regulation regarding lending, now I am wondering about a transaction I did in the past.   If there is no lien recorded do you need to have an MLO involved?  Can you write loans secured with property if the lender has physical possession of the deed? 

I had a family member approach me looking to invest. At the time, I had 50% equity 720+ FICO, high income.  I was going to sell in three years anyway, so we worked out a loan agreement and had it notorized.  I had a 30yr fixed with chase at the time, if that matters. 

I asked for a payoff statement and my family member  wired the money. Property was reconveyed to me and the deed and loan agreement went into my family members safe.  

2 years later I sold the home and  escrow asked to see all the paperwork. I provided them the full paper trail.  From payoff request, to canceled checks showing I paid the note. 

Incidentally during this time I bought a car and when I spoke to the finance guy he was tripping over himself to loan me money. Was he able to see that I had a free and clear house? On my car loan app I put a mortgage payment down, and you could see the monthly payment on my checking acct statement.  The funny part was I sold the house and paid off the car loan 3 months later.

To top this off the family member who loaned me the money was audited by the IRS ! As far as I know, they passed with flying colors and it had nothing to do with our agreement.  

Thanks for any insight. 

I used to think that too. That houses in the ghetto don't sell. 

Well I used to live in a very rought part of Pasadena.  I actually installed bars on the windows after my house was broken into twice in the first year I lived there. 

when I sold it I got multiple offers!  One from a family that had just sold their home in Inglewood.  Who knows where their buyers were from.