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The Rise of Non-Performing Loans and Opportunity for Investors

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By Edward Brown

It is no surprise that mortgage rates have dramatically increased over the past year. In July 2022, 30-year fixed rates for both conforming and high-balance loans had reached 5.375%, according to sources such as Guaranteed Rate. This is up from the low 2% range in early 2021. Obviously, such an increase in rates can have a dramatic effect on house prices as would-be buyers try to buy a house they can afford.

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However, the rise in interest rates goes far beyond just what buyers can afford for a new purchase. First, adjustable-rate mortgages will climb dramatically, which will impact homeowners trying to make sure they keep up with their mortgages by not going into default. Next, the whole reason the Fed increased rates was to stave off even more inflation than the country had been experiencing since the change in presidency. Here is where we might see a rise in non-performing loans [NPLs], as homeowners fight to keep up with inflation as well as rising interest rates that impact mortgages and other borrowings [credit cards, auto loans, etc.].

During The Great Recession, the U.S. saw a huge wave of defaults with mortgages; primarily, this was due to a credit bubble, as lenders were too eager to make loans. Very little oversight was seen regarding these loans, and borrowers who should not have been granted loans still qualified. Fast forward 15 years, real estate prices have increased substantially to overcome the devastation of the previous drop.

Banks, thanks to Dodd-Frank, are now only allowed to make loans to borrowers who can demonstrate an ability to repay. All of this makes for a strong real estate market, and we should not experience the wave of foreclosures we previously saw; however, that does not mean we will not see them.

As noted above, when there is a spike in interest rates [and inflation] as we have recently experienced [and potentially more increases to come], homeowners can get behind in their mortgages, and without the government moratoriums that were in place during Covid, banks will have to start foreclosing, or sell off mortgages to keep within Federal guidelines of Reserve Requirements. The banks may try and work modifications or other remedies to assist homeowners, but there are times when there is not much the bank can do except file notices of default and start the foreclosure proceedings.

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One major difference in today’s real estate world as compared to The Great Recession is that, today, many homeowners have ample equity in their houses. This gives the homeowner the possibility of preserving some equity by selling their house rather than get foreclosed on. However, many homeowners around the country, mostly in the lower end market, will still lose their house in foreclosure. One reason is that the homeowner has not researched the value of their house; they just assume that if they cannot pay, they lose the house. Another is that some homeowners are headstrong about staying in their house and trying to fight a legal battle only to be on the wrong end and, by that time, it is too late to try and save their equity. These situations are unfortunate, as, even when the lender points these things out, many borrowers stick their head in the sand and let the chips fall where they may.

Investors have been clamoring for yield. So much so that even NPLs were commanding unheard of prices [as much as 85% of face value]. As the economy was doing well [pre-Covid], real estate prices were steadily increasing and there was confidence in the marketplace. However, in “normal” times, one might offer 50% +/- of the face of the NPL note, as there is a fair amount of work that goes into managing a NPL regarding foreclosure, forbearance, modifications, bankruptcies, and possible lawsuits by the borrowers. As interest rates rise and the supply of NPLs is sure to increase, one should expect the prices of the NPLs to decrease – – allowing investors to potentially pick up handsome profits.

In the early 1990s, the S&L crisis provided such opportunities to investors swooping up “bad loans”, as the S&Ls were directed to unload these mortgages into the market very quickly. As the dust settled, as it usually does after wide pendulum swings, these investors profited, as they picked up loans [or property if the foreclosure had already been completed, and the bank held the asset as an REO] at discounts that were previously only imaginable. Discounts of more than 60% were not uncommon. At such a discounted price, the investor appeared to not take any undue risk. There was so much room for error, almost any loan to be purchased was worth it.

We may not be in that same situation now due to restrictive banking regulations that have been imposed on banks for years, prohibiting them from making unreasonably risky loans and the fact that real estate has held its own since The Great Recession, but there should be plenty of opportunity for investors to pick up discounted loans with fairly large margins built in; however, the average investor is prohibited from participating in buying these loans due to the relatively large amount of capital needed to enter this space. For example, a large bank or hedge fund willing to unload NPLs may require a buyer to invest a minimum of $1,000,000 or more. If there is a bidding situation [auction], a refundable deposit is usually required, so the bank/hedge fund knows they are dealing with serious, wealthy buyers.

For those investors who have the wherewithal to participate in purchasing NPLs, they should have a sophisticated team to assist them, as there will be a need for analysts to do a deep dive in the values of the property to which the loans are secured, contractors to help facilitate potential rehabbing of the property if/when the property reverts to the investor, legal analysts dealing with the various foreclosure laws in the states where the properties are located, and good real estate sales people to not only give BPOs — but also help facilitate the eventual sale of the property or assist with the possible rental of the same [or find a good management company].

One strategy to consider is to approach the NPL borrower and try to re-write or modify the loan [of course, before doing so, consult with competent legal counsel to make sure that there are no legal issues that would compromise the collateral]. There are a few benefits to this strategy; first, turning a NPL into a performing loan brings immediate cash flow. Because of the discount that is obtained in the purchase, the new note holder has the flexibility of making the note more attractive for the borrower. For instance, if a note [that has a face value of $100,000] has 20 years to go and has a note rate of 6% was purchased for 60 cents on the dollar from the bank, the new note holder could offer to lower the balance to $90,000 and reduce the interest rate to 5% and have a great asset that can either be held for cash flow or sold in the secondary market.

One additional factor that may help in modifying the NPL’s notes is the fact that, according to Bank of America’s internal data, rents continue to rise. July 2022 year over year showed an increase in rents of 7.4%. Most people want to keep their home. If the lender can give them advantages to saving it, most homeowners will jump at the chance, especially when their alternative is to be thrown into a rising rent market. A question the lender has to contemplate is whether the strategy of keeping a homeowner in their home makes economic sense [ignoring the moral issue of eviction]. In some cases, evicting a homeowner and immediately selling the house may make sense.

In some cases, the lender may choose to invest money in rehabbing the property in hopes of additional gain, but there is uncertainty with this strategy; the time it takes to rehab, the expense, and the value of the house after rehab and time to sell [with expenses associated with the sale]. When a homeowner is going to get foreclosed on, there are avenues that can be taken to delay the inevitable, including filing bankruptcy. Due to court budgets, this delay may be prolonged more than the lender originally anticipated, especially in judicial-only states.

The time and expense for entering into foreclosure for the lender may not be worth the anticipated profit; however, the strategy of keeping the homeowner in place and working out a new deal can produce immediate cash flow, as the borrower will start making payments right away. In addition, the costs to modify a note are substantially less than what foreclosure costs would normally be.

The good news from the lender’s point of view is that, due to the purchase of these loans at steep discounts, rates of returns in excess of 15% are not uncommon. After the note is modified, the lender has the option to flip the note to a note buyer as a performing note [which will command a higher price than an NPL], or the lender may choose to keep the note for the cash flow. In the case of choosing to sell the note, the lender may be wise in waiting to experience six months of performance by the borrower, as most note holders desire to see notes that have at least six months’ seasoning; otherwise, they may discount the note for uncertainty reasons [lack of history] more than the lender desires.

MEET EDWARD BROWN

Edward Brown currently hosts two radio shows, The Best of Investing and Sports Econ 101. He is also in the Investor Relations department for Pacific Private Money, a private real estate lending company. Edward has published many articles in various financial magazines as well as been an expert on CNN, in addition to appearing as an expert witness and consultant in cases involving investments and analysis of financial statements and tax returns.

Edward Brown, Host
The Best of Investing on KDOW AM1220 on Saturdays at noon.

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Pros and Cons: Short Term Loans vs. Long Term Loans

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Image from Pixabay

By: Michael Mikhail, CEO Stratton Equities

Real estate investment loans can be tricky and it can be unclear at times which ones are the best. While there are many versions of loans, let’s go to the basics. There’s a time frame that you need to pay for your loan. It can be on the shorter side ranging from months to a couple of years and long-term loans can take more than a decade to pay off. Now, there are pros and cons to each of these and one of them may be a better fit depending on your loan scenario.

Types of Short Term Real Estate Investment Loans:

● Bridge Loans
● Hard Money Loans
● Fix and Flip Loans
● Foreclosure Bailout Loans

Types of Long Term Real Estate Investment Loans:

● Soft Money Loans
● Rental Loans
● NO-DOC Loans
● Stated Income Loans
● No Income Verification Loans

The Differences between Short Term Loans & Long Term Loans

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1) The Approval Process

Generally, short-term loans have a quicker application and approval process. Since they are a shorter commitment, lenders may be more willing to approve a short-term loan than one they would be stuck in for close to a decade. For both types of loans, the lender wants to make sure that the borrower can pay them back but it is less risky when the loan is only for several months. Due to the quick approval process, short-term loans tend to be better if you need money sooner rather than later. Also, thanks to the shorter time commitment, short-term loans tend to require less documentation to prove you will pay the loan back.

While long-term loans require more documentation to prove to the lender they want to be in a long-term agreement with you. Having to look through more documentation and having to do more research into whether you are a responsible borrower will make the approval process take a lot longer.

Finally, short-term real estate investment loans tend to have much higher approval ratings. Since it’s a shorter commitment, people are much more likely to approve a borrower who has a bad credit history or not too much of one. They may instead ask for collateral but regardless the approval process is easier. Conversely, a long-term loan is a longer and harder approval process. The lender tends to really look at all the details and thus has a much lower approval rate.

Image from Pixabay

2) Interest Rates

For a short-term loan, borrowers will be more likely offered high-interest loans. Due to the short application process and the fact that it tends to be more lenient and flexible, private lenders tend to offer short-term loans with significantly higher interest rates. This is why for short-term loans you want to shorten the repayment period as much as possible. You don’t want to spend 2 years repaying a loan with high-interest rates. Think more about paying it off in months rather than years.

With long-term loans, you are more likely to receive a lower interest rate. The lender has done a lot more research on you, they think they know you will pay off the debt so they are more likely to offer you a lower interest rate. However, make sure to calculate the math, you may end up spending a lot more money over many years with a small interest rate than a much higher interest rate over a few months. For long-term loans, the lower interest rate with a much longer repayment timeline can cost you in interest rates as much as your initial loan was. So with interest rates you want to be careful and to do the math.

3) Loan Payment Schedule

Due to the nature of short-term loans, which are over a much shorter time period, payments may be needed much more frequently. If the loan is only for a few months, then the repayment may be biweekly or more frequently. On the other hand, if it’s a long-term loan, you may not be paying monthly but every few months or every quarter. Thus, if you don’t have a steady income at your company, it may not be a good idea to do a short-term loan because you can’t make all the frequent payments.

Image from Pixabay

4) Amount of Money

With a short-term loan, you are more likely to be only able to borrow a smaller amount of money for your loan scenario. Since the real estate investor needs to repay the amount of money in a short period of time, it is unlikely that a lender would be willing to lend a large amount of money. Since a larger amount of money carries a larger risk, a private mortgage lender will be hesitant to offer you more than a smaller amount. While with long-term loans, lenders know more information about you and so would be more likely to increase the risk and lend you more money.

What’s better for your investment property? Long Term Loans or Short Term Loans?

There is so much to know when it comes to loans so it’s important to educate yourself on all the pros and cons before making any decisions. Make sure to be cautious before you agree to anything.

Each loan scenario is different based upon the borrower’s credit score, investment experience, liquid assets, and reserves. The loan will always be structured or calculated based upon those results.

The best way to discover which is better for your investment property is to contact a direct private money lender to assist you with the purchase of your investment property.

Michael Mikhail, CEO Stratton Equities

Michael Mikhail is the Founder and CEO of Stratton Equities, the nation’s leading hard money-lender to national real estate investors, with the largest variety of mortgage loans and programs nationwide.

Having launched Stratton Equities in early 2017, Michael has always been an entrepreneur and innovator in the real estate market, purchasing his first home at 19.

A serial entrepreneur with a foresight for business opportunities, Michael had a slew of small businesses prior to launching Stratton Equities. One of his most prolific ventures was a car wash connected to a gym he was affiliated with in Florida during 2001-2002 while attending college.

It wasn’t until he graduated from Florida State University with a degree in Business, that he officially joined the mortgage industry in 2003 and decided to travel to explore his options globally.

After travelling to 19 countries in 5 years, Michael knew two things; he wanted to start his own business and launch it in the United States. He knew that moving back to the states was the best place he could start something small and grow it into something infinite.

In 2017, Michael noticed how the mortgage industry had transformed after the regulations presented from 2008-2012, and knew it was time to set out something on his own, thus creating Stratton Equities.

Under Michael’s leadership, Stratton Equities has grown into one of the biggest leaders in the Mortgage and Real Estate industry across genres and platforms.

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4 Reasons You Should Always Repay Your Loans

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By Gabby Darroch

If you’ve been with me for a while, you know you are not required to repay your policy loans. And if you’ve ever wondered, “If I don’t have to repay my loans, why should I?” let’s set the record straight.

The Caveat

In the initial stages of using your policy it’s important to note that we don’t recommend repaying your loan payments back into your actual policy. Instead, we encourage you to put those payments in a totally separate checking account. This is simply because why pay back money you’re just going to use again and again for things like paying off debt, financing a car, or buying a house. And a checking account is a bit easier to access than the money in your policy.

There may come a time in your life where most of your immediate financial needs are met (ie. debts are paid off). It is at this point that we encourage you to put all money stored in that separate checking account back into your policy to repay your outstanding loan balance. And here’s why:

Repaying your loan to your policy means:

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  1. You’re rebuilding your available cash. You have a cash account for the purpose of financing your needs in life at any moment. But when you Repay your loan to get more moneytake loans from your policy, you deplete the amount you can take on a loan. So by rebuilding the cash value in your account, you’re allowing your future financial needs to be met with a loan later on. This keeps your money in motion and working hard for you.
  2. You’re replenishing your death benefit to the full amount. Remember, when you take a loan, your death benefit covers all your existing unpaid loan amounts and whatever is left goes to your beneficiary after you “graduate.” Repaying your loan means that you are replenishing the full amount of your death benefit that will be paid to your beneficiary.
  3. You will restore your full dividend earning potential (if your contract is with a direct company). Direct companies don’t always give you the full dividend depending on your outstanding loan balance. When you repay your loan, you’re able to collect the full dividend amount that is owed to you.
  4. You reduce the charge on your interest payment. If you recall, when you take a loan you are actually being loaned the insurance company’s money. They charge an interest rate of about 5% for this privilege. So paying back your loans to the insurance company will result in a lowering of your interest rate on subsequent loans. This frees up more money for you. (To learn more about the interest you are charged on your policy loans, check out this article.)

The Gist of It

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So yes, you don’t have to repay your loans. But it benefits you most to do so, if done at the right time in your life. Just remember, you do always want to pay the interest on that loan back to the insurance company. That is required.

To learn more or get started, please visit www.TheMoneyMultiplier.com. Scroll to the very bottom and click on “Member Area.” Enter the password “bankwithbrent” and watch the presentation that appears on the next page.

When you’re ready to get started on creating your financial legacy or if you have more questions, please email us at [email protected] . Or you can give us a call at 386-456-9335, and one of our mentors will be in touch with you.

VA and FHA Mortgages & the Housing Boom (Part 2)

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Military Experience Eligibility for VA Loans

How does a retired or active military personnel member qualify for a VA loan based upon their military experience?

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* An earlier discharge date for a service-connected disability may still qualify you.
** Officers who separated from service after 10/16/81 may be eligible.

For more details, please visit The U.S. Department of Veteran Affairs’ website to learn about VA mortgage loan eligibility benefits:
https://www.va.gov/housing-assistance/home-loans/eligibility/

Once an active or retired military person meets the minimum qualifying guidelines, he or she will be given a Certificate of Eligibility that’s issued by the Department of Veteran Affairs. The VA mortgage loan applicant will then send a copy of the VA Certificate of Eligibility (VA Form 26-1880) to their mortgage broker or banker. For VA loan applicants who do not have a copy, they may complete a form entitled Request for a Certificate of Eligibility (Fillable) that’s linked here:
https://www.vba.va.gov/pubs/forms/VBA-26-1880-ARE.pdf

The Evolution of VA and FHA Loans

veterans-day-4653841_1280Near the end of World War II, the VA home loan program was created in 1944 as part of the original Servicemen’s Readjustment Act that’s also referred to as the GI Bill of Rights. The VA loan benefits were signed into law by President Franklin D. Roosevelt. A portion of each funded VA mortgage loan was guaranteed by the federal government in the event that the VA borrower later defaulted on the loan and lost the home in foreclosure. This way, each bank that funded the 100% loan for qualifying VA borrowers had much less financial risk.

Specifically, there were two types of government-backed or insured mortgage loans that stimulated the housing market and helped the U.S. economy prosper and rise up out of the previous negative Great Depression (1929 – 1939) years – VA and FHA (Federal Housing Administration) loans. These more flexible residential mortgage loans were part of President Roosevelt’s New Deal plan and the National Housing Act of 1934 that were designed to create more jobs and boost home values and the economy once again.

Since 1934, FHA has insured over 34 million home mortgages nationwide. As per the U.S. Department of Housing and Urban Development (HUD), FHA has active insurance on over 8 million single-family mortgages. In total for both residential and commercial real estate properties, FHA’s insurance portfolio exceeds $1.3 trillion.

To learn more about the Federal Housing Administration (FHA), please visit HUD’s website:
https://www.hud.gov/program_offices/housing/fhahistory#:~:text=Congress%20created%20the%20Federal%20Housing,workers%20had%20lost%20their%20jobs.

VA and FHA Loans for Buyers, Sellers, and Owners

calculator-723925_1280The main difference between FHA and VA is that the government insures a portion of the FHA loan while guaranteeing a portion of a funded VA loan. The vast majority of home loans funded nationwide over the past 10 years, directly or indirectly, were either government-backed (VA) or insured (FHA) and/or purchased in the secondary markets by other government-sponsored or federal entities named Fannie Mae, Freddie Mac, or Ginnie Mae.

FHA loans allow borrowers to qualify with 3.5% down on average (96.5% LTV) with lower FICO credit score options near 580 and easier overall underwriting allowances. FHA also allows seller credits and gifts from family members toward down payments that can effectively make a purchase loan become near 100% LTV also. However, borrowers will have to pay an additional monthly insurance premium along with their mortgage payment that can reach a few hundred dollars per month, depending upon the borrower’s FICO credit score, loan amount, debt-to-income (DTI) ratios, and LTV (loan-to-value). There are more flexible FHA Streamline refinance programs available as well that are similar to the VA Streamline.

For qualified VA borrowers, there is perhaps no better mortgage loan option available while FHA loans might be the second best option for high LTV loans. This is especially true as 30-year fixed mortgage rates continue to hover at or near all-time record lows while making many mortgage payments more affordable than rent even when the home is financed up to 100% of the purchase price.

To date, VA and FHA have guaranteed or insured over 58 million mortgages for homeowners. Home sellers should welcome any VA or FHA buyer prospect who has a pre-approval letter from a mortgage lender. This is because the lender is prepared to provide up to 96.5% LTV for FHA or up to 100% LTV for a VA loan. Amazingly, both FHA and VA loans can close in a few weeks or less due to expedited online application processing options.

 

Rick-Tobin-Professional-Pic-sharperRick Tobin

Rick Tobin has a diversified background in both the real estate and securities fields for the past 30+ years. He has held seven (7) different real estate and securities brokerage licenses to date, and is a graduate of the University of Southern California. Rick has an extensive background in the financing of residential and commercial properties around the U.S with debt, equity, and mezzanine money. His funding sources have included banks, life insurance companies, REITs (Real Estate Investment Trusts), equity funds, and foreign money sources. You can visit Rick Tobin at RealLoans.com for more details.

VA and FHA Mortgages & the Housing Boom (Part 1)

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By Rick Tobin

The most flexible and easiest qualifying mortgage loan product in America is the VA (US Department of Veteran Affairs) mortgage loan. Between 1944 and 1966, approximately 20% of all single-family homes built or purchased were financed by the VA home loan program for active military or retired veterans of World War II (1939 – 1945) or the Korean War (1950 – 1953). From 1944 through 1993, the VA mortgage loan program guaranteed almost 14 million home loans. By 2013, the VA had guaranteed over 20 million loans. As of 2019 in the VA’s 75th anniversary year, VA had surpassed 24 million loan guarantees for borrowers.

investment-4737118_1280Did you know that there are 100% LTV (loan-to-value) mortgage loans available to qualifying active or retired military personnel up to $1.5 million dollars for owner-occupied homes as of 2020? Yes, a qualifying VA mortgage applicant has the option to purchase a home priced as high as $1.5 million with no money down. These 100% LTV loans have no additional monthly mortgage insurance payment requirements like required for most other mortgages with a loan-to-value range above 80% of the purchase price or appraised value.

VA Loan Guidelines

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Mortgage loan underwriting guidelines are subject to change and may have some exception allowances for mortgage borrower applicants due to factors such as credit scores, income, job history, debt-to-income ratios, and property types. However, these are common VA loan terms or guidelines that were available as of June 2020:

  • No money down up to $1.5 million for owner-occupied borrowers (not second homes or investment properties)
  • Historically, a debt-to-income ratio of up to 41% DTI* was typical for VA borrowers. However, some VA loan programs allow up to 60% DTI or higher
  • No monthly mortgage insurance premium requirements
  • FICO credit scores as low as 620

* Debt-to-income ratio (DTI) = Borrower’s proposed mortgage payment plus monthly consumer debt obligations that are divided by monthly income. A borrower with $2,500 in monthly debt payments and $5,000 in monthly gross income (before taxes) will have a 50% debt-to-income ratio ($2,500 / $5,000 = 50%).

VA Loan Refinance

percent-226357_1280For existing VA mortgage borrowers under newer 2020 rules, VA borrowers can pull cash out of their property up to 100% of their property value. For example, a homeowner with an existing $250,000 mortgage loan secured by a property valued at $500,000 could apply for a new $500,000 cash-out loan that gets them upwards of $250,000 additional cash-out that they could use to pay off credit cards, student loans, automobile loans, business debts, or use the funds to make new property or stock investments.

A mortgage borrower in a non-VA loan can refinance from a conventional bank loan or an FHA loan with costly monthly insurance premium (MIP) payments into a new VA loan if one or more of the borrowers has VA eligibility.

Another easier qualifying VA refinance loan option is generally referred to as a “VA Streamline” (IRRRL – Interest Rate Reduction Refinance Loan). With some non-credit qualifying VA Streamline loan programs (subject to change), the borrower’s application process includes:

  • No minimum credit score
  • No appraisal required
  • Primary and non-owner occupied properties may be allowed
  • Must be current on existing mortgage loan about to be paid off
  • Manufactured homes attached to the foundation may be eligible

To learn more details about qualifying for VA refinance loans, here is a link to VA Pamphlet 26-7, Revised, Chapter 6: Refinancing Loans

https://www.benefits.va.gov/WARMS/docs/admin26/pamphlet/pam26_7/Chg_17_ch_5.pdf

 

Rick-Tobin-Professional-Pic-sharperRick Tobin

Rick Tobin has a diversified background in both the real estate and securities fields for the past 30+ years. He has held seven (7) different real estate and securities brokerage licenses to date, and is a graduate of the University of Southern California. Rick has an extensive background in the financing of residential and commercial properties around the U.S with debt, equity, and mezzanine money. His funding sources have included banks, life insurance companies, REITs (Real Estate Investment Trusts), equity funds, and foreign money sources. You can visit Rick Tobin at RealLoans.com for more details.

Wildcat Lending Helps Investors Roar Toward Their Goals With Fast & Easy Funding

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The house flipping market seems to be moving faster than ever. Opportunities are plentiful. Though success in getting started or dominating your market is still all about having the funding on tap. Don’t let those deals get away like a herd of gazelles. Let Wildcat Lending put a spring in your step and fund more deals, faster than the competition.

House Flipping Rates Leap in 2019

According to the latest statistics from ATTOM Data, the US home flipping rate has reached a new high in 2019.

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The total dollar volume of homes flipped using financing hit a new 12 year high in Q1 2019, at $6.4B. Over 49k homes were flipped in the first three months of the year, for an average gross profit of $60,000 each. Flipping has been growing by double digits in many markets, with several Texas cities growing 41% to 55% year over year. House flippers have been making over 100% returns in at least five markets.

Roar into Action & Speed Up Your Game with the Lender That Makes Hard Money Easy

In order to stand out on the landscape and win more contracts, to get started or to scale to crush your new goals, it’s still all about the capital. The deals are there, the buyers are there, new technology is making the operational side easier than ever. It’s just about having the money to buy and rehab, and to fund them faster and more efficiently than everyone else.

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This is where Wildcat Lending comes in.

Wildcat Lending is on a mission to make hard money and rehab loans extremely efficient, simple and effective for investors. They offer lighting fast funding, aggressive terms, and could help fund your next deal.

They can finance your flips, wholesale deals and even rentals.

What’s New with Wildcat

We tracked down Wildcat’s Chief Lending Officer Kevin Shipman to find out the latest on this lender.

Kevin says the lender’s recent expansion from Texas to Tennessee has been a huge hit, with new deals being funded there every week.

Kevin and his team’s outlook for the market remains very bullish, especially for properties at $300k and below. They see plenty of buyers for deals, and great performance on the loans they’ve been making.

What you might not know about Wildcat is that in addition to financing up to 90% of your house flipping projects, they do rental property loans, and they’ll finance 1-4 unit properties, including condos.

While many of their investors are experienced, Kevin says, “we love working with newbies.” It’s always exciting to help someone new get into the game and off the ground. So, if you’ve had trouble meeting the experience requirements at other lenders, consider trying these guys out.

Improving the lending experience and helping investors is something Kevin has been passionate about since school. He always liked numbers and was good at math. After getting his finance degree he started working at Wells Fargo and quickly moved up to management before striking out at the Senior Vice President of a community bank. Then being driven to create even more efficiency and better service for investors, he joined Wildcat.

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When we say Wildcat is fast, we mean really fast, and it is one of the advantages that is helping them scoop up more market share. Kevin says they can close deals in as little as 24 to 48 hours. In fact, when another lender recently turned down a house flipper’s loan in the middle of a deal, Kevin’s team stepped in and got the file from start to closing in a ridiculously fast four and a half hours.

You’ll find lots of convenient features at WildcatLending.com, including:

● Online applications
● The ability to text a loan officer
● Rehab worksheets
● Draw request forms
● Online payoff requests

They’ve also teamed up with investor friendly title company Strike Title. A title insurance provider who gets investor needs, assignments, double closes, and a sense of urgency.

The Investment Property Loans You Want

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Fix & Flip Loans

● Up to 90% Loan to Cost(LTC) or 70% of ARV the lessor of the two
● 6 month term with 90 day extension option
● Lender ordered ARV appraisal
● $50k+ loan amounts
● 1-4 unit homes

Rental Property Loans

● Up to 80% LTV for purchases
● Up to 75% Cash out Loans
● 24-36 month terms
● Rates as low as 8.99%

These loans are ideal for those taking on new income properties which may need some improvement and releasing before investors can season them for more attractive loan term financing. As well as for those who just don’t want to deal with the hassles of out of touch banks.

The Wildcat Lending Difference

● Wildcat currently charges just 2-3 points for hard money loans
● Funding for brand new and experienced property investors
● Same day loan approvals
● No income verification
● Modest credit scores accepted
● Everyone you speak to is a decision maker and able to make a common sense loan decisions

Summary

There is a relentless amount of real estate investment opportunities for income property investors, wholesalers and house flippers. The profit potential is incredible. If funding has been holding you back from your goals, get a hold of Wildcat and see what they can do for you.

Head over to WildcatLending.com where you can submit deals online and use their rehab budget worksheet to nail those numbers, or just pick up the phone and run your deal by Kevin now at 817.832.3451.

 

Kevin

Kevin M. Shipman | Wildcat Lending, LLC. Chief Lending Officer

Getting Prepared for After COVID-19

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By David Mashian

Thankfully, we now see a light at the end of this tunnel. We all have been self-quarantining, and are eager to get back to “normal” life. It will be a new normal, and things will not be where you left them before the quarantine. Even now the people in China are cautiously and slowly peeking their heads out of their homes to see if all is OK, so there will be an adjustment period for us as well.

If you are in the sales business, like I am, we need to get tooled up to get back into action and start SELLING! You are going to Create or Find New Opportunity. This situation is an opportunity. Things change, they always change, and it is best to accept and adapt. Interestingly, in Chinese, the word for “Problem” and “Opportunity” are the same word. So, this is a new opportunity, and a possibility for a better life and a better you.

WHAT TO DO?

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1) Make a TO DO list for today, and at the end of the day, make a list for the next day.

2) What should be on this list? Sales Activity is #1 – We are going to make and / or find opportunities.

WHO TO MARKET TO?

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1) People you already know and have a relationship with. DON’T PRE-JUDGE – JUST CALL!

2) Call people in your cell phone contacts. Get personal with your calls to create the opportunity. People have time on their hands and are receptive.

a. Call people you have done transactions within the past, no matter how long ago.

b. Call colleagues in the business, and past colleagues in your life. You do not know where your business is going to come from, especially given the current circumstances.

c. Friends and Family.

Implement Marketing Program

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1) Make or clean up your email list.

2) Create or update your marketing, social media, website, meet-up group, bio, brochures, flyers.

3) Start marketing by doing email blasts, post articles on social media, hosting webinars.

4) Offer something of value. Create content of value – not a sales pitch. Become viewed as a leader in your industry. Offer newsletter, helpful website links and useful webinars.

WHAT TO DO PERSONALLY:

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• Eat healthy, cook at home.

• Meditate, pray, bring calm into your life.

• Exercise, go for walks, move your body.

• Sleep well and rest when it is time to rest.

• Play Music, Paint, Enjoy your hobby.

• Talk to positive people.

 

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David Mashian

David Mashian is the founder and CEO for MoneyMac Loans. David started MoneyMac because he personally experienced and realized that small businesses and entrepreneurs could not qualify for loans under the traditional bank lending standards. MoneyMac is a nationwide lender dedicated to providing investment real estate loans for residential 1-4, multi-family, mixed-use and commercial properties. David provides asset-based investment property loans give financing for tough to qualify borrowers, including W-2 employees, self-employed entrepreneurs and small business owners. MoneyMac focuses on the property’s value and the borrower’s credit, without using bank statements or tax returns.

David is a proven real estate industry leader, who has helped many companies transform their business goals to reality. He has a high degree of real estate experience and expertise spanning from real estate finance, brokerage, sales, leasing, brokerage management, and franchising of real estate brokerage companies. Using his wide base of connections to brokers, investors and industry leaders, David has put together many deals for joint ventures, debt & equity raises, acquisitions, and real estate sales. David graduated from the University of California, Los Angeles, and teaches Real Estate Principles at the University of California, Irvine.

Interview With Bruce Norris of The Norris Group, Riverside, California

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By Christina Suter, FIBI Pasadena

I recently spoke with my industry colleague and good friend Bruce Norris about what it took for him to break through from who he was as a young man to the guru he is today. Bruce is an active investor, hard money lender, and real estate educator with over 30 years of experience. He is the founder of The Norris Group and has been involved in more than 2,000 real estate transactions as a buyer, seller, builder, and money partner. Bruce has dedicated himself to understanding the economic field in Southern California, and it shows in his work.

Photograph of Bruce Norris, courtesy of Christina Suter.

Photograph of Bruce Norris, courtesy of Christina Suter.

Bruce was married at 17, fired five times in a row, and eventually got the hang of getting a job. After reading How To Win Friends and Influence People, Bruce said he learned about avoiding the acute angle, which is finding a way to find an argument in everything. The book taught him to diffuse it and to enjoy the skill of learning to diffuse it.

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Bruce then got a job in sales, where he sold electrical supplies for six years. One day he was invited to join a man to watch his attempt to buy a house wholesale. After the house was purchased, Bruce realized his life experiences could translate into the real estate buying business. In his electrical business, Bruce sold supplies to people who already had suppliers. In real estate, he convinced people to sell their house to him because he had cash and people could close in a few days.

One of the skills Bruce has mastered is the power to close a deal. When he negotiates with a seller, he lets them know that based on his experience, things work or they don’t, so his offer leaves with him. Bruce tells sellers if they call him back the next day, he will let them know that he’s no longer interested because he wants the power to close and know he’s telling them the truth.

Bruce has earned a reputation in the industry based on his integrity. He will often spend the first 15 minutes speaking with an owner just suggesting things for them that have nothing to do with him making a profit. Bruce will ask about their situation and make recommendations that don’t always lead to him, as a cash buyer, closing the deal.

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Someone once referred a couple to go talk to him. He visited the couple for two hours. During that meeting, the husband made it clear to Bruce that he desperately wanted to move to another state, Tennessee, where he had a job waiting for him and his wife. The husband wanted such a full price without commission that he basically got in his own way, Bruce remembered.

There was an underlying desperateness to the man’s situation, so Bruce told him he could sell his house to him that night if he was willing to take less for his house. Bruce closed on their house.

Ten years later, that couple’s 21-year-old son visited his office and informed Bruce that he had been causing trouble in their house, due to his gang involvement. He told Bruce that had if he not bought their house, they wouldn’t have been able to move — and that kid would have ended up dead. He asked Bruce to teach him what he knew and how he was able to purchase his childhood home. That kid went on to open an office on Magnolia and Riverside and bought houses.

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The first foreclosure Bruce ever door-knocked was an elderly woman who had $13,000 of debt on a $64,000 house. Because he didn’t want to make the woman homeless, Bruce was able to get the lender to arrange a loan for her — largely thanks to the equity she had in the house. Therefore, she was able to keep her house.

Bruce said he wants both sides of that when he’s a buyer. He wants to be able to look across the table and if he can help the seller make the decision he’d make if he were in their situation, he also wants to be kind enough to let them know when they’re making a mistake.

I asked Bruce how he switched from real estate as a job to having freedom and creating financial stability.

“It really wasn’t a priority to me, so I kept very little inventory for rentals for the first 15 year plus years; I just flipped,” he said.

Bruce added that Jack Fullerton was influential in saying, “That’s great, but what happens if you get hurt or sick? How are you going to have income coming in?”

Bruce said he took that question to heart. While on vacation in Maui, he listened to Robert Kiyosaki’s Rich Dad, Poor Dad. Thus, he learned Kiyosaki’s four ways to make income quadrant.

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Bruce said he was always working for someone else or self-employed (the left side of the quadrant) — but on the right side of the quadrant, he was attracted to the two that involved running a business that didn’t need him and collecting checks from investments.

From that vacation on, Bruce changed the way he made income. He said he’s not self-employed because when he goes on vacation, his business can run without him. Thus, he runs a company. Bruce’s loan business, education business, and rentals all started to run without him, and he said he’s probably the least needed person at The Norris Group.

According to Bruce, it took him until late 2005 for his rental income to allow him to feel financially free. He had to think long term and at age 33, a $30,000 profit from a flip was more appealing to him than a cash flow of $200. Bruce said it took him a while to want to be methodical with the rental income and to actually fulfill that vision.

Bruce and The Norris Group can be reached at www.thenorrisgroup.com

 

Christina Suter

Christina Suter

As the founder and lead consultant of Ground Level Consulting, Christina L. Suter brings two decades of real-world experience as a serial small business owner and real estate investor. She developed her extensive financial and operational skills firsthand as she faced and overcame each difficulty that appeared along the way. As a result, she started up, managed and sold several businesses successfully, while developing an extensive real estate portfolio.

In 2002, Christina made the decision to leverage her experience into helping other small business owners and property owners through a consulting practice that works the way an entrepreneur works, dealing with the pressing problems of a business on the ground level and in real time. Since then, she has supported numerous companies throughout southern California and the western United States move beyond surviving to thriving.

Christina’s solid background and education–including a Bachelors in Business, an Associates in Teaching and a Masters in Psychology–strongly influence her work with your company as a Ground Level client. Not only does she have a keen insight into what will make or break the success of your business, but she can teach you the skills you need going forward. And she does this in a warm, supportive, non-judgmental way that is always highly respectful of your personal values.