INVESTORS AND “HARD MONEY” LOANS

August 1, 2011 Owner No Comments

LENDER’S VIEWPOINT

By Owner

There was a really good article in the Wall Street Journal last week about Hard Money loans. It was informational to borrowers and investors alike. It spoke of the fact that Hard Money loans will account for 1% of the 5.5 million home loans originated this year, up sharply from prior years.

The Article features a Dallas attorney who has doing Hard Money loans as a “side business”.

He believes that originating home loans in the current environment, when many economists believe housing is at or near the bottom, is less risky than putting money in the “volatile stock market or opaque bond market.”

He states further “I can’t drive by and look at those stocks and bonds.” Plus, he says, investing in residential real estate earns “passive income that doesn’t require much work from me.”

The interest rate paid on these investments can be anywhere from 9% to 14% with 12% being fairly typical. They can be a first or second mortgage ranging in size from $30,000 to $1,000,000 or larger with a term of from 6 months to 7 years or more. These loans are secured by land, 1 to 4 unit residential, 5+ unit residential (deemed commercial), office buildings, strip centers, large commercial, etc.

The main qualification for a borrower is: 1. Equity or a good down payment and 2. Ability to repay the loan. If they do not make payments, they could forfeit the property that was the security for the loan to the investor.

Check out our website for further details.

Owner is a CA DRE Broker with over 23 years experience in real estate and lending. His number is (707) 523-2099. See website @ sunpacmortgage.com.

Hard Money Use Increase by Homebuyers

July 27, 2011 Owner No Comments

LENDER’S VIEWPOINT
By Owner, Guy In The White Hat

“Hard Money” Loans

There was a really good article in the Wall Street Journal last week about Hard Money loans. It was informational to borrowers and investors alike. It spoke of the fact that Hard Money loans will account for 1% of the 5.5 million home loans originated this year, up sharply from prior years.

It mentioned “Hard Money” filling an important void. Look at just a few instances.

1. You just did a short sale on your home and want to buy another one. Your favorite bank won’t even talk to you. You know that prices are at rock bottom and you can buy the same home that you bought 5 years ago for $400,000 now priced at $195,000! Hard Money can fund that loan!

2. You lost your job and your credit is shot. You now are back to work in your old job making the same money and you want to buy a house. You’ve got 30% down. No bank will touch you as your FICO score is 525. Hard Money can fund that loan!

The Wall Street Journal article further states that the fees and rates are no doubt higher than a bank, but it is well worth it as “no bank is willing to listen.”

The real gist of the article is to buy a home. Even at Hard Money rates it’s worth it because you’d be getting in at the bottom of the market and down the road could refinance to a 30-year fixed rate loan once qualified again. Your gain from buying at the right time can offset the cost using Hard Money.

Take advantage of a Hard Money loan and be a Buyer, or help your potential Buyers succeed at getting into a new home by directing them to such available financing!

Owner- the Guy in the White Hat – is a CA DRE Broker with more than 23 years of experience in real estate and lending. His phone number is (707) 523-2099. Email is Broker@sunpacmortgage.com. See website @ www.sunpacmortgage.com. DRE#01464899/NMLS #360993

Reference:

Wall Street Journal Hard Money Lending Article

http://online.wsj.com/article/SB10001424053111904233404576458514107499084.html?mod=business_newsreel

The Guy in The White Hat to Homebuyers’ Rescue

July 6, 2011 Owner No Comments

HARD MONEY and The Property Dumpometer Scale

June 24, 2011 Owner No Comments

LENDER’S VIEWPOINT by Broker, Owner

THE PROPERTY

Home Loans, HARD MONEY AND The Dumpometer Scale

[youtube=http://www.youtube.com/watch?v=TrKWJ44ggMU&w=448&h=252&hd=1]

Property Dumpometer Scale and Loans

This aspect of buying a home examines the security for the loan. In most states, when you buy a home you pledge the property as collateral for the loan with a legal document called a deed of trust. They should actually call it a deed of no trust because if you do not pay your home loan and the lender forecloses, they take your home.

The lenders left in the mortgage market arena, let’s call them institutional lenders, the ones that are offering the 30 year mortgages at historic low rates, require a good property. But what does that mean?

You can figure that out by comparing homes you look at to one another on a scale that has, for example, a brand new home to the furthest right on the scale and the ugliest, smelliest, most rundown home you’ve ever seen or imagined, to the far left of the scale. We call that home a “dump” for lack of a better word, hence the Dumpometer Scale.

The 30 year fixed rate lenders will actually allow a home to be just a bit to the left of the perfect house on the far right. It can have some cosmetic things needed and a bit of what is referred to as “deferred maintenance”. But not too much. An FHA lender is about the same but anything that stands out in their appraisal may need to be repaired prior to close of escrow. These lenders will not allow you to buy a home that requires any major cash outlay. That’s because they are taking on buyers that are scraping to get the minimum down payment and would not have monies after their down payment and closing costs for repairs and/or upgrades.

Hard Money lenders allow every home on the Dumpometer Scale. I just made a home loan last month on one of these homes classified a “dump”. The roof was caved in, the well and septic had both failed, the foundation had crumbled away to almost nothing and blackberries were growing out of every exterior wall left standing. It was a perfect property for the buyers though, all their family is in proximity to the house. It was almost 2 acres for a very good value. Perfect Hard Money loan. By the way, these Buyers had perfect credit, great long term jobs, their own savings and family money to help make their dream home a reality. No 30 year fixed rate lender would touch that transaction because of the property. Once they are finished with all the renovations, they will refinance into a great 30 year fixed rate loan. Hard Money saved the day.

One final note here, these Buyers also made a very sound investment decision with this house. The sum total of the purchase price plus their costs to renovate will give them a home value that exceeds what they have into the property. Very smart and all made possible with Hard Money!

Hard money lenders generally require just 2 things: 1. Equity or a good down payment and 2. Ability to repay the loan.

A Hard Money broker will do this loan. There is equity and ability to repay. This handles the property aspect of a loan.

Sincerely,

Owner

Owner- the Guy in the White Hat – is a CA DRE Broker with more than 23 years of experience in real estate and lending. His phone number is (707) 523-2099. Email is Broker@sunpacmortgage.com. See website @ www.sunpacmortgage.com.

Visit us @ SunPacMortgage.com

“LIKE” us @ facebook.com/SunPacMortgage

It Pays To Own A Home

June 20, 2011 Owner No Comments

LENDER’S VIEWPOINT

By Broker, Owner

It Pays To Own A Home

I tout the big three reasons to buy a home: #1. Pride of ownership appreciation; #2. Tax benefits and #3. Appreciation. There is a 4^th though that may well trump them all.

I have had the pleasure to work with many, many private money investors for more than 20 years. These are men and women who have made their fortunes in a variety of ways and lend those funds to borrowers who have equity in a property and an ability to repay the loan.

Many of them have told me that the day you can retire is the day you pay off your home. That is a very future minded goal. It’s difficult to see when you are 29 years old, have 2 kids in diapers, own your own boat which you never use because you have 2 kids in diapers, credit card debt, and a car payment of $329 per month. Plus you have to buy all those diapers! And handi-wipes. And little sets of clothing. And teeny-tiny shoes.

But if you had the good sense to buy the home you live in, then all of a sudden – and believe me as a Grandpa it’s all of a sudden – your kids are grown up and now in college and you’ve paid 20 years on that mortgage. Then a bit later on, you no longer have the kids at home, you have a bit of extra money and can start throwing it at the mortgage to get it gone. So say at age 55 you no longer have a house payment. Priceless!

My Dad bought a home in Chandler Loan Originatorzona in 1968 for $16,900. He took out a 30 year mortgage with a monthly payment of $159. With 7 kids at home, the payment was difficult for him to afford at that time. But what strapped him in 1968 was almost a breeze in 1978 as his and Mom’s incomes had risen. It was even easier in 1988 for the same reason. After another 10 years Dad finally paid off their 30 year fixed rate loan. No house payment and a very low property tax basis on their home.

You cannot accomplish the above as a renter. Here is some astonishing math. Let’s say your rent is $1,300. In 30 years you will have paid $468,000 on some other guys mortgage. That’s if rent over 30 years stays at $1,300. I bet not. Let’s say it goes up $250 every 10 years. That’s $570,000.

Those numbers alone should compel you to figure out how to be a buyer, but there is more. Ever been told you have to move because the landlord is selling the home? Or the rent increases come quicker than $250 every 10 years?

Buy a home and let it work for you, quietly in the background, being paid down, increasing in value, until that glorious day arrives when the mortgage is no more! Then retire.

Priceless!

Owner- the Guy in the White Hat – is a CA DRE Broker with more than 23 years of experience in real estate and lending. His phone number is (707) 523-2099. Email is Broker@sunpacmortgage.com. See website @ www.sunpacmortgage.com.

Buyer’s Credit, Home Loans and Hard Money

June 9, 2011 Owner No Comments

LENDER’S VIEWPOINT

By Broker Tardibuonio

CREDIT

Home Loans and HARD MONEY

This aspect of qualifying for a home loan boils down to good credit versus bad credit.

The lenders left in the mortgage market arena, let’s call them institutional lenders, the ones that are offering the 30 year mortgages at historic low rates, require good credit (among other things).

Hard Money lenders allow bad credit. Institutional lenders will make you wait years after you have a bankruptcy, foreclosure or short sale before they will lend to you.

Hard money lenders will loan to you immediately after any of those events and even while you are going through them!

Same with recent credit problems including 30, 60, 90, 120 day lates, judgments and/or collection accounts. Institutional lenders hate these. Private money lenders can do a loan in spite of these.

Hard money lenders generally require just 2 things:

1. Equity or a good down payment and

2. Ability to repay the loan.

Look at the important role played by Hard Money: Guy has a free and clear property. He fell on some misfortune and his credit was damaged. He makes plenty of money and he has no house payment. He goes to his favorite bank where he’s been for 25 years. Loan denied due to bad credit. He calls a loan officer friend who works for a bigger bank who tells him he’s out of luck due to bad credit. Come see him in a couple of years.

This guy has a free and clear property and none of the institutional lenders will lend to him due to bad credit.

A Hard Money broker will do this loan! There is equity and ability to repay. This handles the credit aspect of a loan,

Owner- the Guy in the White Hat – is a CA DRE Broker with more than 23 years of experience in real estate and lending. His phone number is (707) 523-2099. Email is Broker@sunpacmortgage.com. See website @ www.sunpacmortg

How “The Guy In The White Hat” Came To Be

June 3, 2011 Owner No Comments

Hi. My name is Owner and I am the proud Co-owner and Broker of Sun Pacific Mortgage & Real Estate since 1988 – established in Sonoma County, CA!

Thought I’d tell you a bit about myself as my kids have nagged at me to let people know my interesting life history up to now…they say it answers why I came to be a Broker, taking a sincere interest in helping others. So here I go:

I was born in 1957 in Irumagawa, Japan at the Johnson Air Force Base. I have 7 siblings – with 2 sets of twins – so I had my hands full helping out as the eldest!

As my father was in the Air Force, we travelled a lot. One can say I was a military brat until 1972 when my Dad retired at Williams Air Force Base outside of Chandler, Loan Originatorzona. We had moved back and forth, living in Illinois, Japan and finally settled down in Loan Originatorzona.

My Mother was a teacher at the Catholic Grade school I attended and she was my teacher through my 7^th and 8^th grades for English, art and music.

[youtube=http://www.youtube.com/watch?v=JP-qGpAnpHo&w=501&h=281&hd=1]

I graduated Chandler High School in 1975 and I lettered in football, wrestling and believe it or not, in Debate!

I also must mention my 7 proud years of newspaper delivery of “The Phoenix Gazette” and the Sunday morning paper “The Loan Originatorzona Republic” every single day! I was paperboy of the month several times out of hundreds of carriers and also paperboy of the year. Guess you could say I liked to excel at everything I put my mind to!

After College I went to Loan Originatorzona State University on a debate scholarship. Graduated with a Bachelor of Science Degree in Business and Public Administration in 1982 and also joined the national social fraternity Phi Sigma Kappa.

I moved to La Jolla, California and did first year’s law studies at Western State University College of Law where I met my lovely future spouse and co-owner, Lynn. We married in 1987 and chose to move to Santa Rosa, CA. in December of 1987 because they had a law school with a night program as well as how beautiful it was here.

Our daughter, Megan, was born January 30, 1989 and happily joined our family of Lynn’s two sons of her previous marriage: Broker 7 and Phillip 3.

We opened Sun Harbor Mortgage on January 11, 1988 which was a branch of a San Diego Mortgage company. Since we had a true personal desire to help others in this county with honest financial services, we bought them out in June 1990 and changed the name to Sun Pacific Mortgage which has since evolved in 2004 to Sun Pacific Mortgage & Real Estate as we offer both real estate and mortgage/lending services!

Throughout my tenure as the Broker, I worked diligently to deliver the best service to all our customers and received the prestigious Model-Of-Admin-Know-How Award from WISE International for 10 consecutive years, beginning in 1997.

I take pleasure in working hard to help others during the week and on weekends enjoy fishing, gardening and golf – as well as a variety of other activities including spending joyful time with my 1^st grandson, Braden, who was born July 2009.

Having helped literally thousands of customers, I continue to strive to deliver the most honest and friendly service to all Borrowers, Buyers, Agents, Brokers, Investors and other affiliates I am in contact with on a regular basis. I enjoy what I do and am sincerely happy to help in any way I can.

I look forward to doing the same for you!

Feel free to call me up at 707/523-2099 for a free consultation, ask any question you have about mortgages, lending or real estate, to refer a friend or family member in need of my services or to get help yourself!

My website is regularly updated with timely information, tips, articles and videos about the current market of real estate and lending so take a moment to check it out: https://www.sunpacificmortgage.com//. You can also sign up there to receive emails and videos with timely information about the real estate and mortgage and lending markets.

Sincerely,

Broker