Shiek… don’t make any assumption about Bronchick’s course. Until - Posted by scot
Posted by scot on March 24, 2000 at 17:42:19:
Until you read the course, don’t make assumption about
Bill’s suggestions. The course is VERY good and unique to some degree. Bill is one the best at putting RE techniques into applicable terms for the beginning and experienced investor.
I doing quite well with Bill’s 10% below… sell 10% over…using wraps, and ILC.
scott
Getting lenders fighting to give you $$$ - Posted by Jim-WI
Posted by Jim-WI on March 24, 2000 at 15:06:48:
Click on the banner above for more info!
Re: I’ve got a plan for you . . . - Posted by William Bronchick
Posted by William Bronchick on March 24, 2000 at 12:37:21:
The lack of buyers is NEVER a problem. The average time is take to find a buyer and close is about 3 weeks. As for default, only 2-3% default, and most are willing to go quietly. I have done well over 150 of these for clients in the last two years and only one went to court.
In NY, where the mortgage process takes longer, just get more money down. The NY market is strong enough that you will make up the money when you resell the property.
Re: Interesting… - Posted by Rob FL
Posted by Rob FL on March 25, 2000 at 21:55:49:
Robert Kiyosaki calls this the “S” quadrant. He also says this is the toughest quadrant to be in.
Re: Quick Question - Posted by Stacy (AZ)
Posted by Stacy (AZ) on March 25, 2000 at 04:32:03:
Hi Steve-
When you qualify people to buy your SFRs, do you stick to the FHA debt/income ratios? Or, do you allow for some fudge factor if their FICO is good? Can you enlighten me on your overall guidelines?
Thanks-
Stacy
Re: I’ve got a plan for you . . . - Posted by DavidV
Posted by DavidV on March 28, 2000 at 20:52:54:
In reference to the one Land Contract deal you had go to court could you give a few details. What was the cause, result, lesson learned etc.
Re: I’ve got a plan for you . . . - Posted by eric
Posted by eric on March 24, 2000 at 13:41:06:
how is this different than Wade Cook’s Money Machine from way back? didn’t this all go away due to IRS restrictions and investor vs. dealer rules after '86 and '91? Also, you didn’t answer the question about the conventional loan limit. conventional lenders typically “cut you off” at some point, and then where are we at, seller carry backs? and what about due on sale clauses, they almost universally include wraps. I know we can just not tell the bank about it, but does that really work in real life? I’m not trying to be adversarial; on the contrary, since I read Wade Cook on this I’ve wanted to do it, but couldn’t make the jump from theory to reality. Very interested in hearing your thoughts.
Re: Quick Question - Posted by GIO
Posted by GIO on March 26, 2000 at 12:39:19:
if their fico is good why on earth would you carry a note when you can get them a reg mortg.(even a 5% stated income loan (no pay stubs)) and cash out (even if it is at higher rate - your taking a risk), i know lenders that can close within a month anyway if the buyer is in a rush, if he has no d.p there are ways to get d.p. from them (ie. car, give them work, etc.), cl. costs can just be incorporated into the price.
so re. your quest - on ratios and guidelines, it all depends on the program you are going to put them thru, but if you are going to hold you better be real sure they will be able to pay ontime everytime. remember banks have years of experience and there is a reason for these gdlines, just keep your risks as low as possible
Re: I’ve got a plan for you . . . - Posted by Mark (SDCA)
Posted by Mark (SDCA) on March 24, 2000 at 14:15:03:
I think the loan limit is much like the due on sale clause: over-hyped and under-sold. I have 12 mortgages and have never heard a peep about this. There is so much 90% mortgage out there, it’s absurd. I recently had a mortgage broker tell me she could do 95% LTV loans and the person could have up to TWENTY mortgages. So just how high is this mystical loan limit? At least 20, obviously. How many of these wraps do you need to do to make some money?
Mark
Re: I’ve got a plan for you . . . - Posted by William Bronchick
Posted by William Bronchick on March 24, 2000 at 13:53:40:
Wade Cook didn’t make it up - it was around way before that!
The difference is (which answers your other question), you are buying homes and financing them at low rates, then selling on an unrecorded land contract. In that case, the lender never finds out (nor do they care). As far as running out of loans, yes, they do cut you off after a while on certain loans. On others, you can do as many as you want. I have clients who have done well over 50. Another way is to find partners to put up their credit for the loan; 10 partners will give you access to at least 50 properties!
If you don’t believe the theory, you have to believe reality; I do it all the time. My office closes several every week.
Re: How do you determine who to accept for owner financing? - Posted by Stacy (AZ)
Posted by Stacy (AZ) on March 26, 2000 at 20:06:49:
I guess I should have been more clear. I would always consider running a buyer through my mortgage broker. But the deal is, owner-financing is a good, quick way to sell a house. As stated several times on this newsgroup, and verified by me through some of my for sale ads, “Owner Will Finance” gets the phone ringing (and ringing). Bronchick’s Cash Cow strategy relies heavily on financing buyers.
My question is, how does Steve determine who he will finance? If they don’t qualify for an institutional loan, how does one determine if they are a good enough risk for owner financing? I wanted to hear his criteria for accepting, or rejecting, based on a credit report.
When you said,
“but if you are going to hold you better be real sure they will be able to pay ontime everytime,” I would like to know what criteria people use to determine this, when they are not able to qualify with an institutional loan. What criteria do you use?
I hope that clears things up.
Stacy
The mortgage limit number only applies to FNMA/FHLMA/etc… . - Posted by David
Posted by David on March 24, 2000 at 18:31:01:
only conventioal, va, fha, mortgages sold on the secondary market have these restrictions. Any bank, s&l, credit union, or individual lending money for their own portfolio don’t have the magic number limit.
David
Re: I’ve got a plan for you . . . - Posted by JohnBoy
Posted by JohnBoy on March 25, 2000 at 09:39:45:
How do you prevent the land contract from being recorded by your buyers? My understanding in the state of Illinois is that you cannot put a clause in a contract preventing the contract from being recorded when pertaining to a contract for deed on real estate. If the seller does put such a clause in the contract the buyers can declare the contract null & void at any time and be entitled to a full refund of all monies paid. Basically, my understanding is that any such clause makes the entire contract illegal. How would you get around this?
Re: Quick Question - Posted by Stacy (AZ)
Posted by Stacy (AZ) on March 24, 2000 at 14:13:07:
Hi Bill-
When you wrap these with a land contract, do you always put in a balloon for 5 years or so? The reason I ask, is that it seems you would want to encourage this cash flow to continue forever, if you had the choice. I guess you could put in the balloon and renegotiate the financing when it pops, and keep the cash coming. What’s your preference?
Stacy
Re: How do you determine who to accept for owner financing? - Posted by GIO
Posted by GIO on March 28, 2000 at 10:43:22:
I am currently holding a mortgage because the client didnt qualify creditwise, in the meantime i am assisting in correcting their credit and hope to refi them in 6 mo’s. the loan to value ratios i used were similar to those used by a bank since my intention is to get them to qualify with a bank loan in a couple of months, if my intention was to put them in no income check loan in sevl months because not all their income is on the books or they are self employed then my req’ts to give them a loan are still similar ratios since i want to make sure they will be able to pay. as some r.e. pros advise : i got a down payment of 5% = $9000
Re: I’ve got a plan for you . . . - Posted by William Bronchick
Posted by William Bronchick on March 27, 2000 at 10:31:42:
I researched IL statutes on this and found no such law. Do you have a citation for this rule?
Re: Quick Question - Posted by William Bronchick
Posted by William Bronchick on March 24, 2000 at 15:06:31:
I personally put a 2 year. Many of my clients don’t, against my advice!
Re: General question about LC - Posted by Sheik
Posted by Sheik on March 24, 2000 at 15:28:48:
Bill & others:
When you sell via LC, obviously the title is still in your (read corp) name. Lets say that after a year the buyer wants title in his/her name assuming that he/she can now qualify for a new loan. Is this a simple refi procedure at this point? Remember the title is not in the buyers name yet. How is this handled?
Sheik