Random Thoughts In Search of Facts
Posted @ 8:20 pm - Filed under 401(k)'s & IRA's, Financing, Texas
I’ll begin with what I think might win this year’s award for most used oxymoronic phrase. If it isn’t Jobless Recovery, I’d sure like to hear your nominations. Recession recoveries without jobs are like waffle cones without ice cream — what’s the point?
Fannie Mae (and the rest of the ill-named posse), have done pretty much everything possible to make a real estate recovery more difficult. Example, you prod? Not a problem.
First they put an artificial limit on how many investment loans we can have. First to 10, then, in a truly Draconian move, down to 4. That pretty much put the blade to the investor’s jugular, so they ‘relented’ (crummy attempt at humor) by setting new and higher hurdles for investors when acquiring properties 5-10. Lord Almighty, we already needed to be bullet proof credit wise, have enough cash reserves to buy the Coronado Bay Bridge outa petty cash, and a FICO score in the nosebleed section.
Think about it rationally. A very experienced investor has 6 properties and finds more he’d like to buy. He’s gonna put 25% down, pay more interest, have a Sominex Account that’d choke Secretariat, and to add insult to injury, pay more interest. Aren’t experienced investors who’re willing to put ’skin in the game’ the exact profile of who we want buying real estate these days? Did I miss the memo or somethin’?
OK, takin’ a few deep breaths. There, that’s much better.
As I research the acquisition of real estate via self-directed Qualified Plans (An uppity way of sayin’ IRA’s & 401’s.), it’s amazing to me more lenders aren’t shouting from the mountaintops, making sure they get their share. Large down payments, high DCR’s (debt coverage ratios) i.e., solid cash flow from Day 1, higher points up front, and 1-1.5% higher interest rates. If I’m a real estate lender, I’m askin’ everybody where to sign up!
Was yakkin’ with a lender for whom I have maximum professional respect, asking him if the doofuses in charge of his bank have done anything to get themselves into Texas. They can now lend in over 40 states — but not the state showing the healthiest economy in the Union. Texas requires what’s known in the industry as ‘brick & mortar’ — ya gotta have an office in the state. Geez, is that too tough for a huge national operation to accomplish? Really? And they wonder how they got where they are today.
OK, I’m done. Would love to hear your random thoughts. Or, you can give me a call and we’ll figure out how to improve your status quo. I can be reached at 619 889-7100. Have a good one.
This entry was posted on Tuesday, October 6th, 2009 at 8:20 pm and is filed under 401(k)'s & IRA's, Financing, Texas. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
