Self liquidating mortgage psychology on dating in the workplace
A closed school may be converted into condominiums. A buddy of mine owns a mortgage REIT and proudly announced recently the closing of a .6 million bridge loan to convert a former K-Mart building to a self-storage facility in Indianapolis. I sent my buddy an email congratulating him on the closing and his use of the interesting term, adaptive re-use. Its hard to argue with the proposition that the communists have You will recall that a fix and flip loan is a loan used to acquire a run-down home and to renovate it in anticipation of a quick sale.When a fix and flip lender orders the appraisal, he will ask the appraiser for two values - the current "as is" value of the property and the after repair value ("ARV").Gone are the days when millions of homes were in foreclosure, and houses could be purchased for a fraction of their replacement cost.The REO-to-rental industry to winding down to just a memory. Certificates of deposit are still paying less than 1%, and the long bond is still yielding less than 2.75%.If the after repair loan-to-value ratio was less than, say, 65% then the investor-flipper might be able to convince his fix and flip lender to allow him to put down just 15% of the purchase price of the run-down home.If the project has lots of potential profit, in other words, the after repair loan-to-value ratio is less than 65%, the investor-flipper might get approved with a credit score of less than 600 or with better credit but with no experience.
Wall Street is becoming the secondary market for private money loans.It therefore still makes sense for an investor in search of yield to buy homes and rent them out.An investor can still earn a handsome 5% to 7% return on his money.Ultimately the after repair loan-to-value test is a measure of the profit in the deal and of the wisdom of even doing the deal at all.At a recent conference, several fix and flip lenders reported that they had had investor-flippers actually for turning down their deals because the projects lacked profitability.