Comments on: A Tale Of Two Investors — BawldGuy Is Interviewed http://www.bawldguy.com/a-tale-of-two-investors-bawldguy-is-interviewed/ Real Estate Investing through Purposeful Planning Tue, 06 Jan 2009 21:49:57 +0000 http://wordpress.org/?v=2.0.11 by: bawldguy http://www.bawldguy.com/a-tale-of-two-investors-bawldguy-is-interviewed/#comment-376 Sun, 04 Feb 2007 18:23:01 +0000 http://www.bawldguy.com/a-tale-of-two-investors-bawldguy-is-interviewed/#comment-376 Cher - Let me address your last comment first. I've been using neg-ams since their inception back in the '80's, and the interest on interest hasn't been a problem. The reason? When the investor is able to take advantage of such high leverage while maintaining either cash flow or breaking even, the ability to experience capital growth based upon a figure 5-10 times their actual invested capital so over powers the neg-am affects, as to render them relatively, but not quite, neutral. I'll email you with some numbers on the hybrid. Cher - Let me address your last comment first.

I’ve been using neg-ams since their inception back in the ’80’s, and the interest on interest hasn’t been a problem. The reason? When the investor is able to take advantage of such high leverage while maintaining either cash flow or breaking even, the ability to experience capital growth based upon a figure 5-10 times their actual invested capital so over powers the neg-am affects, as to render them relatively, but not quite, neutral.

I’ll email you with some numbers on the hybrid.

]]> by: Cher http://www.bawldguy.com/a-tale-of-two-investors-bawldguy-is-interviewed/#comment-374 Sun, 04 Feb 2007 18:12:05 +0000 http://www.bawldguy.com/a-tale-of-two-investors-bawldguy-is-interviewed/#comment-374 Wow...that sounds great. This way if the property turns out to be a cash generator, one could hold on to the property and feel like they had to sell or refinance in a few yrs. I'd like to do the numbers to see where you would be if the difference in payment were invested wisely (ala Doug Andrew's software calc's) Also, as the yrs go by, the backend added is also accurring interest, so I wonder when these margins are up what I am REALLY paying for the interest...you know interest on interest...this could result in a bad scene like the credit card companies to you. Wow…that sounds great.
This way if the property turns out to be a cash generator, one could hold on to the property and feel like they had to sell or refinance in a few yrs.
I’d like to do the numbers to see where you would be if the difference in payment were invested wisely (ala Doug Andrew’s software calc’s)
Also, as the yrs go by, the backend added is also accurring interest, so I wonder when these margins are up what I am REALLY paying for the interest…you know interest on interest…this could result in a bad scene like the credit card companies to you.

]]> by: bawldguy http://www.bawldguy.com/a-tale-of-two-investors-bawldguy-is-interviewed/#comment-373 Sun, 04 Feb 2007 17:18:20 +0000 http://www.bawldguy.com/a-tale-of-two-investors-bawldguy-is-interviewed/#comment-373 Cher - An astute observation. The new loan, if the lender comes through, is actually superior to traditional neg-ams in every way except payments. And the payments are not so much higher that the investor, at lieast in the majority of cases, would care. The 'neg-am' portion is about half the amount. :) Cher - An astute observation.

The new loan, if the lender comes through, is actually superior to traditional neg-ams in every way except payments. And the payments are not so much higher that the investor, at lieast in the majority of cases, would care.

The ‘neg-am’ portion is about half the amount. :)

]]> by: Cher http://www.bawldguy.com/a-tale-of-two-investors-bawldguy-is-interviewed/#comment-369 Sun, 04 Feb 2007 01:01:50 +0000 http://www.bawldguy.com/a-tale-of-two-investors-bawldguy-is-interviewed/#comment-369 That sounds great. But I think if you use the money from a re-fi to create more money, it is probably six of one half a dozen of another. I sure wish they would lower those margins. Giving up those old margins is hard to take. Oh well, you have to get used to heart break and being uncomfortable and heartbreak to be a good investor. That sounds great. But I think if you use the money from a re-fi to create more money, it is probably six of one half a dozen of another.
I sure wish they would lower those margins. Giving up those old margins is hard to take.
Oh well, you have to get used to heart break and being uncomfortable and heartbreak to be a good investor.

]]> by: BawldGuy http://www.bawldguy.com/a-tale-of-two-investors-bawldguy-is-interviewed/#comment-366 Sat, 03 Feb 2007 07:29:11 +0000 http://www.bawldguy.com/a-tale-of-two-investors-bawldguy-is-interviewed/#comment-366 The lenders are indeed getting just a tad greedy on the margins. There is a new loan on the market that is more or less a hybrid neg'am. I'm taking a close look at it and expect to have some comments soon. The payment is slightly higher, but the neg'am portion is about half giver or take of a normal option ARM. The lenders are indeed getting just a tad greedy on the margins. There is a new loan on the market that is more or less a hybrid neg’am. I’m taking a close look at it and expect to have some comments soon. The payment is slightly higher, but the neg’am portion is about half giver or take of a normal option ARM.

]]> by: Cher http://www.bawldguy.com/a-tale-of-two-investors-bawldguy-is-interviewed/#comment-364 Sat, 03 Feb 2007 07:12:44 +0000 http://www.bawldguy.com/a-tale-of-two-investors-bawldguy-is-interviewed/#comment-364 Jeff that was a good explanation of the use of neg ams. Lately they are putting allot on the backend, however. Any news that short term money will be less expensive in the near future? Jeff that was a good explanation of the use of neg ams. Lately they are putting allot on the backend, however.
Any news that short term money will be less expensive in the near future?

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