Shooting Dice With the Bubbleheads - 12/30/06 01:30 PM
My hands were sweaty as I nervously darted my eyes around  the craps table .  I was the pariah because I was “betting on the don’t line“.  This particular strategy can be extraordinarily frustrating when a table gets hot.  It requires a bettor to double up his stake each time he is incorrect.  It takes incredible faith in the mathematical probability of a negative result.
“Seven Out!” yelled the croupier.
Victory, while inevitable, doesn’t really feel that sweet.    I risked $2500 to win five bucks.  I  proved my strategy to the reckless gamblers betting the other way. I yelped exuberantly, not for my … (23 comments)

Hard Money: Beware of the Brokerage "Daisy Chain" - 12/26/06 02:46 AM
Principals or agents?  What's the difference?
Private mortgage lenders are typically high net-worth individuals or pension funds.  They are principals or people with money.  Sometimes those principals delegate certain loan origination functions to loan brokers (who are agents).  Some of the common functions we perform for our private mortgage investors are:  due diligence, loan structuring, financial analysis of a borrower,  valuation of the subject property, identifying an ability to repay the loan, and determining the credit-worthiness of a borrower.
How many agents in a private mortgage loan transaction are too many?   I think that question can be answered by asking another question; what … (12 comments)

Jeff Corbett is Guilty - 12/15/06 02:34 AM
How is Xenophobia best cured with a plate of popcorn lobster and a beer?
In the tradition of East meets West ...Active Rain Get Together, I had the opportunity to meet my online nemesis, Jeff Corbett, for dinner this evening.  Now, Jeff is really not my nemesis.  We did a little blog battle a month ago but had some opportunities to counter-blog and counter the counter blogs to gain some better insight about our respective opinions.  A few e-mails into the deal, we recognized two things:  we both want the same things (more of mo' better business), and that we had an … (23 comments)

"Hard Money" makes sense for good credit borrowers - 12/14/06 01:10 AM
Why would a borrower with a 736 FICO score get a hard money loan?
I'm deviating a bit from my earlier blog, So you want to be a California Hard Money Broker?  I know I promised more detailed information about  the disclosure process in California Hard Money transactions and I will.  Tonight, I'm not up to that arduous task.  I'll share with you some reasons why a borrower with GOOD credit would actually pay the high points and rates associated with a "hard money loan"
Introduction:  Private mortgages or "hard money" loans are all about taking on risk that is unacceptable to conventional … (22 comments)

Borrow Money Like You Would Buy A Cell Phone - 12/09/06 05:49 PM
How is borrowing money like  buying a cell phone?
 
I'm going to share a funny personal story with you.  I just bought a cell phone the other day. Now,  read on because it has a LOT to do with how to get good mortgage terms.
This was a big thing for me because I bought a real bad-ass cell phone.  It's the LG CU500, the first HSDPA compatible UMTS handset for the US, and probably the first to be offered by Cingular.
Now I have no idea what I just cut and pasted about my cell phone but I know the thing … (26 comments)

A Realtor's Guide to the Power of an Annual ARM - 12/08/06 12:53 AM
Why should you ALWAYS get a one year ARM rather than "locking" into a 30 year fixed rate loan?  The easiest answer is that you will NEVER be able to accurately predict interest rates.  Did you know that Wall Street gurus are wrong over 60% of the time with their interest rate projections over a 3-5 year timeframe?  What makes you think you know better than them ?Did you know that over a five year period of time, the one year ARM has always outperformed a 30-year fixed rate loan?   That statistic has held true for over 40 years. What that … (25 comments)

The Six Stages of the Long-Term Real Estate Play - 12/01/06 08:27 PM
I talk a lot about trends in housing.  One of the ways to make money in any real estate market is to buy correctly.  How can you spot the next Aspen or Scottsdale?  Here are the six stages to watch:
1- If looking for the next hot ex-urb, look for a small town that is surrounded by natural beauty.  An old mining town in Southeastern Arizona, a former mill town on the river in Massachusetts, or an unnoticed beach town on the Gulf of Mexico.  This is the period where the real cowboys invest.  Their plan is to buy land and promote … (42 comments)