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Minimize Liability

Submitted by admin_matt on Fri, 2017-07-14 08:21

Worst Practice: Hold Title in Your Own Name

When you buy an investment property, if you buy it in your own name, you are personally liable for bad things that happen there. If somebody sues you and wins, they can take not only the property, but also your personal assets and income.

Better Practice: Hold TItle in an LLC

Chain Your Loans

Submitted by admin_matt on Mon, 2016-12-05 13:02

Here's an example showing how you can "chain your loans" to provide the down payments for a chain of future deals.

Bob buys a house for $70K with the intention to fix and flip it.  He plans on putting $40K into the rehab and selling it for $200K.  His realtor did a CMA (comparative market analysis) on the house and determined that $200K was a reasonable sale price.  We call that $200K the "ARV" or "after repair value".

Screening Tenants

Submitted by admin_matt on Tue, 2015-08-04 09:25

95% of the problems that landlords have is due to poor (or no) tenant screening processes. The landlords who do good, thorough tenant screening are not the burnt out, bitter ones. They are the ones who are always smiling. Here is a link to a fantastic Bigger Pockets blog post called "The Ultimate Guide to Screening Tenants": http://www.biggerpockets.com/renewsblog/2013/01/27/tenant-screening/.

Foreclosure Auctions

Submitted by admin_matt on Sat, 2015-07-04 09:33

A few years ago there was a foreclosure auction in my neighborhood. I walked over there with my wife and my dog just to see how it was going. As the bidding progressed, one of the auctioneers pointed to me as if accepting a bid. I looked around, wondering if maybe he had been pointing to someone behind me. I shrugged and put my hands in my pockets so that the auctioneer could not possibly think that I was bidding. Then it happened again! I folded my arms across my chest and avoided all eye contact with the auctioneer.

Projecting Monthly Cash Flow for Your Flip

Submitted by admin_matt on Fri, 2015-01-09 08:34

You're all familiar with the stereotype of an anal-retentive engineer. Well, I'm here to tell you the stereotype is correct. I know this because I am an engineer by education and long practice, despite being also the owner of New Hampshire Private Lending. In social situations this obsessive attention to detail is just plain embarrassing (more to my wife than me, as I am somewhat socially obtuse). However, it is of enormous benefit for planning monthly cash flow for a flip and estimating profit.

Watch Out for Non-Warrantable Condo Complexes!

Submitted by admin_matt on Sat, 2015-01-03 10:38

Most of my customers are real estate investors in New Hampshire who borrow money from private lenders like me to buy distressed properties, rehab them, then sell them for a profit as quickly as possible. We call those customers "flippers" because they "flip" properties. A flipper called me the other day about a hard money loan on a condo that he was considering purchasing for a flip. As he was describing this small condo complex, I realized that it was a "non-warrantable" complex.

Bernanke Denied Home Loan

Submitted by admin_matt on Tue, 2014-12-23 22:35

In early October 2014 former federal reserve bank chairman Ben Bernanke revealed that he had been turned down for a refinance of his home mortgage loan. His previous salary as head of the Federal Reserve bank was in the neighborhood of $200,000 annually and he reportedly earned $250,000 for his first speaking engagement after stepping down as chairman of the Federal Reserve and had also reportedly received one million dollars to write his memoirs.

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