The fact that it is been so dificult to borrow money is having a positive effect on the rental acrtivity. we rented seven places today. Considering the fact that we have had record snow fall and it should be one of the slowest times of the year this is nothing short of amazing. On top of that we are seeing the quality of peoeple that are applying to rent getting better. My sales people call me “Mr Rain cloud” for my outlook on the economy. So I am waiting for the other shoe to drop
mitdino Uncategorized
I recently send out an RFP for a new bank loan on a project we are working on. Here is an overview of what the terms would be, expect something similar if you are looking for a loan. This is for investment property; if you are looking for a loan on a personal residence the terms would be completely different
60-70% LTV
1.3 DCR(Debt Coverage Ratio)
15 Year Amortization
6.5% Interest
6 months of payments deposited in there bank. I guess this is some sort of a safety net for the bank to have on hand if you do not pay
I am not saying that you could not find a better deal. I am just saying these are the general parameters of a new loan. I send a RFP to about 20 banks. Four banks were interested enough in giving me a term sheet. All four banks I had done a significant amount of business with in the past.
mitdino Uncategorized
I believe generally it is best to do the exact opposite that everyone else is doing. Or at least completely ignore what other inversors are doing. You should have your own hurdle rate and when you meet that you pull the trigger
mitdino Uncategorized
Jeff asked: what are the current foreclosure laws in the state of Nebraska? All the banks that we work with have told us that if a customer defaults and the bank ultimately sales the property for less than what you owe, the borrower owes the difference. In the owner occupant world I have seen it more times than not were the bank chooses not to go after the difference. In the investment world it is very different. Several banks that had borrowers default tell me they will chase these borrowers to the end of the earth to get paid. Ask me the question again in a year, I will have allot more information then.
mitdino Uncategorized
This is an interesting article from the wall street journal about weather you should default or not. In Nebraska it is a relatively small problem compared to Arizona, I think this fact is just one more reason that Nebraska is going to have a much easier time coming out of the recession. is be a better place to live. One the reasons is that the government in many of the states that have had a lot of strategic defaults will compensate by over regulation this will lead to a non pro business environment.
http://online.wsj.com/article/SB126100260600594531.html?mod=WSJ_hpp_LEFTTopStories
mitdino Uncategorized
In the sprit if getting great ideas from someone else, here is a link to Ernie Goss’ latest post. I am a firm believer in that capitalism drives all decisions. Banks are capitalists at heart
http://economictrends.blogspot.com/2009/12/feds-interest-rate-policy-not-helping.html
mitdino Uncategorized
As many of you know I like to talk about the ideas of other people. I heard a very interesting fact from out Pastor Mark Ashton in church this morning. In true Dave Paladino fashion he quoted someone else saying this but for the purpose of what I am talking about I will give Mark credit for the one that told me this interesting little fact. Most of that has to do with I did not write down who Mark got this research from. A researcher asked a bunch of nonegarians (I will let you Google this) what they would have differently in their life.
I would like each of you to rate yourself on a scale of one to ten on how you are doing on each of these and add them up for a total score. Ten being best, I will put my score down so you have something to compare to.
#1 Take more risks.
This for me is easy. Kevin Meyer, a client and friend of mine told me a long time ago, “the truly successful people are ones that have taken the greatest risks”. Since then when I am given a choice I always take the riskier path, all things being equal
Dave Paladino’s score=8. I always thing there is room for improvement
#2 Reflect more
The essence of this is that we spend more time being thankful for the things we have accomplished. I am terrible at this. I have gotten a little better lately. I ran a 3:50 marathon and I still think I am a crummy runner. How many people can even run a marathon? or if they can actually do it?
Dave Paladino’ score=2
#3 Leave a legacy.
I have been thinking about this a lot lately. We have been dealing with a lot of older owner’s portfolio’s lately. Owners older than 70 with portfolios they have owned for a long time. Many of these owners, including former partners, have done a terrible job at leaving their affairs in order for their families to take over. I encourage each of you to realize that at some point you will not be able to handle your business affairs and someone else will need to care for not only you but also all the things you have in life. If you own a business, make sure that the business is to a point where someone can step in and take over. Better yet if you own a business, sell it well before you can no longer care for it. This thought has always been in the back of my mind. I run my companies so someone else could easily take over. More so with Dino’s Storage, less so with Landmark
Dave Paladino’s score=4
Dave’s total score=14 out of 30
How did you do?
mitdino Uncategorized
This little fact is a huge surprise. I have been spending a significant amount of time on the phone with banks, borrowers, equity partners, suppliers, contractors, trustees and even widows and pastors about the current state of lending as it applies to individuals. I just found out that Arizona and California are non-recourse states when it comes to mortgages on your personal homes. What this means is if you have a mortgage on your personal home and you either default or do a short sale the bank cannot come after you for the difference of what the house sold for and what you owe. Wow!!!! What is next?????
mitdino Uncategorized
Just about when I want to move out of the cold weather in Nebraska I read articles like the one in Forbes. Omaha was rated as the fastest city to come out of the recession. Here is the article
http://www.forbes.com/2009/11/19/cities-recovery-unemployment-lifestyle-real-estate-top-ten.html
mitdino Uncategorized
I have a question. If a borrower gets foreclosed on or does a short sale, do you think that the borrower should owe the bank the difference in what they owe and what the bank got. For example say a borrower owes $125,000. But they can only sell there house for $100,000 net of selling expenses. Do you think the borrower owes the bank the $25,000? I would love to get some comments on this one. I will post everyone’s comments
mitdino Uncategorized
