BofA Gets Nailed with a $45 Million Penalty……Wow!

After years of trying to help home owners it was nice to see that finally the borrower was vindicated in the modification requests. Following is an accounting of Bank of America recent attempt with the modification process.

By Jenny Park | Geraci Law Firm

A California bankruptcy judge handed down a $45 million penalty against Bank of America Corp. (“BofA” or “Bank of America”), decrying the manner in which the bank treated a California couple who attempted to save their property from foreclosure.

Judge Christopher Klein, a federal bankruptcy judge for the United States bankruptcy court, Eastern District, stated the financial institution’s mortgage modification protocol and errant foreclosure on Erik and Renee Sundquist's home rendered them emotionally distressed. The case sheds light on how the mortgage industry’s inadequate loan servicing transactions negatively affect some borrowers. Judge Klein referenced internal procedural failures, claiming that Bank of America had scant incentive to change the loan terms in such a way that would preclude the 6% interest rate the bank was collecting from the Sundquists' loan.

The couple’s problems started in 2008 when the couple’s construction firm went out of business because of the economic collapse, and they purchased a less expensive house outside of Sacramento. They borrowed approximately $590,000 from a financial firm, later acquired by Bank of America, with promises from a loan officer that they could request a reduction in their monthly payments.

The couple ceased making payments in March 2009 following Bank of America’s refusal to consider modifying loan terms for customers who were current on their payment schedules. According to the court’s ruling, the Sundquists’ “sole reason for defaulting was acquiescence in Bank of America’s demand that they default as a precondition for loan modification discussions with Bank of America.” Over the course of the next few years, the plaintiffs submitted around twenty separate requests to modify their loan terms, which Bank of America either lost, deemed inadequate, or denied without explanation all the while repeatedly scheduling foreclosures.

The Sundquists filed for bankruptcy in June 2010. Doing so precluded a foreclosure sale on their property because of the automatic stay, but Judge Klein’s ruling claimed the bank, while knowing of the bankruptcy, unjustly reclaimed the home and issued the couple a three-day eviction deadline. According to the ruling, Bank of America even “staked out the premises, tailed the Sundquists, knocked on doors, knocked on windows, and rang doorbells, all to the terror of the Sundquist family." Eventually, the couple vacated the property, and Ms. Sundquist subsequently suffered stress-related heart attack symptoms that required hospitalization.

Bank of America representatives eventually reversed the sale and transferred title back into the Sundquists’ name without notifying the Sundquists or their attorney of the change. The couple eventually moved back in after several months only to discover that they were charged $20,000 during their absence by the homeowner association for neglected landscaping and maintenance.

Judge Klein’s 107-page ruling incorporated entries from Renee Sundquist’s personal journal that highlighted harassing encounters with Bank of America loan officers, and Mr. Sundquist’s suicide attempt following the couple’s frustrated discussion regarding their mortgage issues. Judge Klein awarded the Sundquists nearly $1.1 million, verified the remaining amount they owe on their loan, and fined Bank of America $45 million.

The $45 million penalty, which will be dispersed via grants to law schools and consumer advocacy groups, is intended to be substantial enough that it will deter future misconduct on behalf of Bank of America. Rick Simon, a spokesperson for Bank of America, claimed the Sundquists' issues originated before the implementation of the new loan procedures and criticized Judge Klien’s ruling for being unsubstantiated and breaking established precedent. Mr. Simon refused to comment when asked if Bank of America will seek an appeal.

However, in April, Bank of America filed papers requesting Judge Klein to reconsider his $45 million fine calling the amount “unprecedented in its magnitude.” In court papers, bank officials asked Judge Klein to amend his 107-page ruling against the bank, arguing that his “excessive” fine amount violates guidance from Supreme Court justices in 2008 meant to prevent outsized awards. The fine stands as the largest punitive damages award for violations of bankruptcy law’s automatic stay rules.

Dennis Notes:

When we were doing loan modifications, "losing paper" was a common problem when we worked with borrowers. It was an persistent and constant problem. But, I would say in BofA favor, it probably was not a deliberate attempt to stop the modification, when you look back at the tremendous volume of paper work that was required for a modification, and the number of people requesting modifications it was easy to get the documents lost. We developed specific procedures to submit the application and eventually solved the paper work problem. Another problem with paper work, was it became out of date after 30 days and had to be resubmitted (that's the story they told us). In the beginning BofA underestimated the amount of staff that was required for modifications, and the long process of modifications.

The second point, of BofA following the customer, as motioned above, is hard to understand. I've never encountered this situation directly from any bank/servicer. During this time there was an army of fix/flippers that wanted to purchase homes, and this is probably the people who were knocking on the windows and doors and following the borrowers. I did have one situation, where the servicer went in and physically took control of the properly by changing the locks and posting on the door. When we objected to this practice, the servicer referred us to the Promissory Note, which stated that the borrower gave the authority to do so. Which they borrower did.

The good part of all of this is that this horrible situation is over. At one time I counted over 1,000+ homes being sold at the court room steps in ONE DAY. Fortunately, now this has dropped to just a few per day. I do understand the pressure the borrowers had on them during this process, and personally I have experienced clients losing their savings, ending their life. It's good that this bad time is behind us and things are improving. I just wish I had all of my teeth that I cracked and ground down dealing with the modification process. Overall during this time we were successful in obtaining about 10% of the modifications. Of those only about 2% still own their homes today.

Dennis Dahlberg Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
Texas Tel:     (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701
 

About the Author:  Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years. 

Technorati Tags: private lenders,home flippers,hard money loan

BofA Gets Nailed with a $45 Million Penalty……Wow!

After years of trying to help home owners it was nice to see that finally the borrower was vindicated in the modification requests. Following is an accounting of Bank of America recent attempt with the modification process.

By Jenny Park | Geraci Law Firm

A California bankruptcy judge handed down a $45 million penalty against Bank of America Corp. (“BofA” or “Bank of America”), decrying the manner in which the bank treated a California couple who attempted to save their property from foreclosure.

Judge Christopher Klein, a federal bankruptcy judge for the United States bankruptcy court, Eastern District, stated the financial institution’s mortgage modification protocol and errant foreclosure on Erik and Renee Sundquist's home rendered them emotionally distressed. The case sheds light on how the mortgage industry’s inadequate loan servicing transactions negatively affect some borrowers. Judge Klein referenced internal procedural failures, claiming that Bank of America had scant incentive to change the loan terms in such a way that would preclude the 6% interest rate the bank was collecting from the Sundquists' loan.

The couple’s problems started in 2008 when the couple’s construction firm went out of business because of the economic collapse, and they purchased a less expensive house outside of Sacramento. They borrowed approximately $590,000 from a financial firm, later acquired by Bank of America, with promises from a loan officer that they could request a reduction in their monthly payments.

The couple ceased making payments in March 2009 following Bank of America’s refusal to consider modifying loan terms for customers who were current on their payment schedules. According to the court’s ruling, the Sundquists’ “sole reason for defaulting was acquiescence in Bank of America’s demand that they default as a precondition for loan modification discussions with Bank of America.” Over the course of the next few years, the plaintiffs submitted around twenty separate requests to modify their loan terms, which Bank of America either lost, deemed inadequate, or denied without explanation all the while repeatedly scheduling foreclosures.

The Sundquists filed for bankruptcy in June 2010. Doing so precluded a foreclosure sale on their property because of the automatic stay, but Judge Klein’s ruling claimed the bank, while knowing of the bankruptcy, unjustly reclaimed the home and issued the couple a three-day eviction deadline. According to the ruling, Bank of America even “staked out the premises, tailed the Sundquists, knocked on doors, knocked on windows, and rang doorbells, all to the terror of the Sundquist family." Eventually, the couple vacated the property, and Ms. Sundquist subsequently suffered stress-related heart attack symptoms that required hospitalization.

Bank of America representatives eventually reversed the sale and transferred title back into the Sundquists’ name without notifying the Sundquists or their attorney of the change. The couple eventually moved back in after several months only to discover that they were charged $20,000 during their absence by the homeowner association for neglected landscaping and maintenance.

Judge Klein’s 107-page ruling incorporated entries from Renee Sundquist’s personal journal that highlighted harassing encounters with Bank of America loan officers, and Mr. Sundquist’s suicide attempt following the couple’s frustrated discussion regarding their mortgage issues. Judge Klein awarded the Sundquists nearly $1.1 million, verified the remaining amount they owe on their loan, and fined Bank of America $45 million.

The $45 million penalty, which will be dispersed via grants to law schools and consumer advocacy groups, is intended to be substantial enough that it will deter future misconduct on behalf of Bank of America. Rick Simon, a spokesperson for Bank of America, claimed the Sundquists' issues originated before the implementation of the new loan procedures and criticized Judge Klien’s ruling for being unsubstantiated and breaking established precedent. Mr. Simon refused to comment when asked if Bank of America will seek an appeal.

However, in April, Bank of America filed papers requesting Judge Klein to reconsider his $45 million fine calling the amount “unprecedented in its magnitude.” In court papers, bank officials asked Judge Klein to amend his 107-page ruling against the bank, arguing that his “excessive” fine amount violates guidance from Supreme Court justices in 2008 meant to prevent outsized awards. The fine stands as the largest punitive damages award for violations of bankruptcy law’s automatic stay rules.

Dennis Notes:

When we were doing loan modifications, "losing paper" was a common problem when we worked with borrowers. It was an persistent and constant problem. But, I would say in BofA favor, it probably was not a deliberate attempt to stop the modification, when you look back at the tremendous volume of paper work that was required for a modification, and the number of people requesting modifications it was easy to get the documents lost. We developed specific procedures to submit the application and eventually solved the paper work problem. Another problem with paper work, was it became out of date after 30 days and had to be resubmitted (that's the story they told us). In the beginning BofA underestimated the amount of staff that was required for modifications, and the long process of modifications.

The second point, of BofA following the customer, as motioned above, is hard to understand. I've never encountered this situation directly from any bank/servicer. During this time there was an army of fix/flippers that wanted to purchase homes, and this is probably the people who were knocking on the windows and doors and following the borrowers. I did have one situation, where the servicer went in and physically took control of the properly by changing the locks and posting on the door. When we objected to this practice, the servicer referred us to the Promissory Note, which stated that the borrower gave the authority to do so. Which they borrower did.

The good part of all of this is that this horrible situation is over. At one time I counted over 1,000+ homes being sold at the court room steps in ONE DAY. Fortunately, now this has dropped to just a few per day. I do understand the pressure the borrowers had on them during this process, and personally I have experienced clients losing their savings, ending their life. It's good that this bad time is behind us and things are improving. I just wish I had all of my teeth that I cracked and ground down dealing with the modification process. Overall during this time we were successful in obtaining about 10% of the modifications. Of those only about 2% still own their homes today.

Dennis Dahlberg Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
Texas Tel:     (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701
 

About the Author:  Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years. 

Technorati Tags: private lenders,home flippers,hard money loan

Builds Relationships to Win in Real Estate and Life

How the Bourque Family Builds Relationships to Win in Real Estate and Life

Looking for inspiration and tips to win in real estate and in life? Chat with AR and Frank Bourque and they’ll fuel your passion for real estate and overall success.

Meet AR and Frank Bourque

AR began his real estate career years ago, helping his father locate, refurbish, and sell fix and flips in Massachusetts. With multiple talents and strong creativity, he branched out into interior design, home staging, and contemporary art. He still uses his interior design talents today to refinish fix and flips and turn them into his buyers’ dream homes.

AR also spent many successful years as a fashion model. Today he enjoys creating contemporary paintings, particularly sunsets. A member of the Scottsdale Arts Association and several other artist communities, AR’s gorgeous contemporary art has been awarded 1^st, 2^nd, and 3^rd place honors at multiple events. His paintings are available for purchase and can often be found displayed in homes staged for sale, thanks to his realtor friends and fans.

An Arizona enthusiast since the late 70s, AR decided to purchase his first Phoenix Fix and Flip area property 8 years ago. Now a contented Phoenician, AR looks forward to enjoying his retirement years in sunny Arizona.

AR and Frank met in Massachusetts and soon realized they were compatible both personally and professionally. Now a happily married couple, Frank handles the financial side of the family’s real estate ventures while AR coordinates property identification, contracts, design, refurbishing, and sale. An MBA graduate from George Washington University, Frank works in the corporate finance field handling a wide range of government and defense contracts in Mesa and elsewhere.

Building their Power Team

AR and Frank’s skills complement each other in a way that makes their business work. But they agree it takes more than just the two of them to build a successful real estate business and portfolio. They share that the key to success in life and business is relationships. To succeed in real estate, you must establish good relationships with real estate agents, financing companies, contractors, and more.

Frank shared that their success strategy revolves around building a real estate “power team.” He knows first-hand that strength in numbers creates wins. When building your team, he advises seeking professionals who are ready and able to assist you with your project with the shortest possible notice. The world of fix and flips requires speed and agility, so quick reliable team members are needed. Each person on the team must consistently put in their best effort, and you must be able to rely on their performance.

Funding your Fix and Flips

As part of their Power Team, Frank found and leverages the expertise of Matt Prosory at Level 4 Funding. Since he handles the financing for the Bourque real estate transactions, Frank knew he needed to locate a Power Team member who was professional, responsive, and could accommodate their business needs and timelines consistently. He found Level 4 Funding when searching the web for options, and says that Matt has been the perfect addition for the Arizona Hard Money finance role on in his team.

The Bourque family has completed 3 real estate loan transactions with Matt so far and is thrilled with the results. “We are extremely happy with Level 4 Funding and loan expert Matt Prosory,” Frank says. “The key to any business is service. And their service has been impeccable.”

"We are very proud and happy to have an individual like Matt on our team,” Frank continued. “He's a joy, and he makes it happen in the timeframe we need. He's part of our power team and saves us money." Frank explained that Matt has always been able to make the speed of the financing transaction match the speed of their purchase, whether it required a swift turn-around or an unexpected delay in securing the real estate occurred. Frank and AR recommend Matt and Level 4 Funding to others, and have given them a solid, well-earned place on their go-forward Power Team.

More Real Estate Pro Tips

When asked for additional real estate success tips, AR and Frank offer this advice:

Stay away from unscrupulous real estate training “gurus.” Many are “rip-offs” and though AR and Frank invested in a few, they didn’t feel any were worth their time or money. They learned best by doing—diving into the industry, and following in the footsteps of AR’s father.

Avoid a “get rich quick” mentality. The Bourques currently follow a deliberate, paced approach to real estate and aren’t rushing to get to the next level. Building your portfolio too quickly can cause financial strain and increase risk. Eventually they plan to boost their rental properties using a buy and hold strategy, as well as venture into commercial properties. But for now they’ll stay focused on building cash flow with fix and flips until they proactively reach their next milestone.

“Use it or lose it.” AR notes that the key to success in any endeavor is consistency. Whether it’s fix and flip real estate or art, you must consistently practice your skills to maintain and improve them. Real estate is no exception, so do the work and the results will follow.

Relationships are everything. The Bourques are proud of being together and building a strong relationship as a couple. Challenges in life come up, but it’s all about how you handle them and move forward that makes you stronger. They build and value their relationship with each other as well as their business partners. Relationships with others that have the same goal and vision and can help you accomplish it will bring lasting satisfaction and success.

Final Advice

Frank and AR agree that having a true passion for what you’re trying to achieve keeps you motivated and on track. It takes a lot of work, time, and patience to find and flip real estate deals. Some days it can be frustrating, but when that happens, look to your Power Team and lean on your relationships and keep moving forward. The HARD money you’ll end up with should boost your motivation too!

Whether it’s rallying their Power Team for their latest real estate find, or relaxing at home with their three Italian Greyhounds—Dove, Maya, and Ari, Frank and AR appreciate great relationships. Get your Power Team going, and start by adding someone like Matt from the Level 4 Funding team to handle your financing. The right relationships equal consistent wins.

Dennis Dahlberg Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
Texas Tel:     (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701
 

About the Author:  Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years. 

Technorati Tags: fix and flip,hard money lender,california hard money lender

How to Win in Real Estate: Tips from the Pros to Lower Taxes and More

 

How to Win in Real Estate: Tips from the Pros to Lower Taxes and More

Looking to grow your real estate portfolio wisely, reduce taxes, and increase your financial control? Then you won’t want to miss these tips from husband and wife real estate team Bill Slaughter and Laurie Goettl Slaughter.

Meet Bill and Laurie

Bill and Laurie Slaughter started growing their real estate portfolio 40 years ago when Bill purchased their first rental property. Over time they expanded their portfolio to as many as 49 rental houses and learned the ins and outs of real estate and property management. Today they run Clients First Realty, a team of nearly 150 seasoned real estate agents, most of whom have been in the business for over 18 years.

Bill is an active real estate broker who understands the market from the ground up. Before specializing in real estate Bill spent several years in banking and the auto industry. Never one to sit still, Bill was retired from the auto industry exactly 28 days when boredom kicked in and he dove head-first into real estate. He secured his real estate license in 2002, spent 3 years with HomeSmart, then got his broker’s license and launched Clients First Realty . Along the way he picked up several additional credentials and affiliations including Montclair Publishing’s prestigious Who’s Who in Real Estate Platinum Lifetime Member.

Laurie brings an equally impressive resume to the Clients First Realty team, including 30 years experience in bookkeeping, commercial and residential property management and lease accounting. A graduate of Hennepin Technical College in Minnesota with a degree in Management Accounting, Laurie obtained her real estate license 5 years ago and now serves as Vice President and Associate Broker at Clients First Realty. She handles all property management details for the family’s real estate portfolio along with her corporate responsibilities. Laurie also assists her own clientele in buying and selling real estate.

Tips from the Pros

With their team at Clients First Realty, Bill and Laurie have bought, sold, and managed over $1 billion in real estate, handled over 10,000 transactions and never had any negative claims. They proudly run a simple, clean operation and Bill still personally reviews every contract to ensure his clients receive the very best.

“Real estate is a patient investment gig,” says Bill. “People looking to make a quick buck and thousands of dollars in the first 30, 60, or 90 days are in for some disappointment. There are too many variables outside of your control—the business climate, political changes, buyers versus sellers markets, and more.” Real estate is not a get rich quick strategy, and you need to “be in the middle of it” to understand what’s happening.

Bill recommends the same success strategy he and Laurie have used to grow their portfolio. Buy properties and “glean a little income” for a minimum of 5 years per property. Then you can typically sell each property for a profit. The properties pay for themselves via the rental income generated, and your portfolio continues to grow at the right pace, with low risk.

Save on Taxes

One of the inside real estate tips Bill and Laurie use is leveraging a self-directed solo 401K. Many real estate investors are familiar with self-directed IRAs which allow you to add real estate to a retirement portfolio, but few have heard of the enhanced options available through self-directed solo 401Ks.

Self-directed solo 401Ks offer higher contribution limits, greater flexibility, lower costs, and better creditor protection than self-directed IRAs. Bill and Laurie use and recommend Broad Financial in New York for their solo 401K services, and they also opened a C-corp to get everything properly established. “It’s not that hard,” says Bill, “Just a matter of knowing how to do it.”

Speak to your tax and legal advisors to determine what’s right for your specific situation, but benefits of self-directed solo 401Ks include:

1. Higher annual contribution limits. Solo 401K plans allow for both employee and company contributions. For 2017 you can contribute up to $54,000 and up to $60,000 if you’re 50 years or older. Compare that to a self-directed IRA, which caps out at $5,500 this year, $6,500 if you’re over 50.

2. Choose a pre-tax or after-tax (Roth) format. Traditional self-directed IRA contributions can only be made in pre-tax formats. Solo 401Ks offer much more flexibility and can be established as a pre-tax or post-tax vehicle.

3. Tax-free loan option. You can borrow up to $50,000 or 50% of your 401K account value, whichever is less. The loan can be for any purpose. IRAs do not allow loans of any kind.

4. Use nonrecourse leverage and pay no tax. According to the IRA Financial Group, which was founded by tax attorneys, “With a solo 401K plan you can make a real estate investment using nonrecourse funds without triggering the Unrelated Debt Financed Income Rules and the Unrelated Business Taxable Income (UBTI or UBIT) tax (IRC 514). However, the nonrecourse leverage exception found in IRC 514 is only applicable to 401K qualified retirement plans and does not apply to IRAs.” Translation? Using nonrecourse financing legally avoids taxes when used by a solo 401K.

5. No custodian needed. IRAs require custodians, especially for real estate, and the fees can rack up. A solo 401K is a trust account, and you are the trustee. You open your affiliated bank account at any participating bank, like Wells Fargo or Washington Federal, and you control the funds.

6. No need to spend on an LLC. A solo 401K plan can make real estate purchases and other investments without the need of an LLC. The trustee (owner) of the solo 401K trust can take title to a real estate asset without an LLC. LLC fees can get expensive, so this saves both time and money.

7. Better creditor protection. The 2005 Bankruptcy Act protects all 401K plan assets from creditors during bankruptcy proceedings. Most states offer greater creditor protection for 401ks versus IRAs outside of bankruptcy as well.

Bill and Laurie leverage their solo 401K plans for these benefits, and they also say “it allows us to control [our retirement assets] in an area we know best.” They enjoy the tax benefits of borrowing money against their property portfolio through their 401K, and the tax-free earnings features offered by the Roth option.

Treat Business Relationships like Partnerships

Though their solo 401K is a good way to borrow up to $50,000, Bill and Laurie certainly know the benefits of finding the right partner for the majority of their real estate lending needs. For that, they have been working with Level 4 Funding for the past 2 years, and completed 4 real estate lending transactions with them so far.

Bill heard about Level 4 Funding through an online ad, and was “lucky enough to get connected with Matt.” Bill shares these thoughts:

“Matt is really a great asset—he’s quick, knowledgeable, efficient, and we’ve had nothing but good experiences with him and the Level 4 Funding team. They have made it real easy to go to closings—the money is there as expected with no problems. Professionalism is real important. I’m old-school and don’t change horses in mid-stream. So I don’t go anywhere else. Their servicing company Evergreen is easy to deal with and I can always find someone there to get questions answered.”

“It’s a good relationship and that’s what you look at in any business scenario. Business relationships should be treated like a partnership because we need them and they need us and it’s worked out really well. If you need something done, Level 4 Funding is the place to get it done.”

Bill and Laurie experience great success in real estate by practicing smart buy and hold strategies and looking for business and tax advantages like self-directed solo 401Ks. They are also adamant about finding and keeping the right business partners. “We really enjoy the relationships we have” says Bill, “including Level 4 Funding.” Connect with Bill and Laurie’s team at Clients First Realty for your next property purchase, and benefit from their experience and expertise.

 

 

Dennis Dahlberg Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
Texas Tel:     (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701
 

About the Author:  Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years. 

Technorati Tags: private lenders,home flippers,hard money loan

3 Thinks You Need to do If are Flipping LUXURY HOMES

 

House flipping continues to expand across the United States and, more recently, extending even into to the luxury real estate market. While many investors enter the arena of luxury home buying believing that they will quickly turn a hefty profit, it is important to understand a few obstacles unique to the high-end real estate market.

Budgeting is Essential when Fix and Flipping

The luxury real estate market caters to meticulous buyers who are often unwilling to accept homes that do not completely meet their demands. Investors may find it takes longer trying to sell a high-end home than flipping low-cost properties. In fact, Attom Data estimates luxury real estate sells on average approximately 208 days after being listed on the market. This fact only emphasizes the need to take a cost-effective approach, and why budgeting plays a crucial role in luxury house flipping.

Investors who solely rely on a home selling within three months of its initial listing date may find themselves losing substantial equity if the property takes additional time to attract a buyer. This risk is especially true if the investor took out a hard-money loan to finance the deal, as each additional month means another costly interest payment. The extended time could cut into profits and cause the seller to barely break even if he or she is not prepared to weather such delays. Luxury house flippers should always be ready for the unexpected by employing budgets that provide plenty of breathing room.

Home Upgrade Details Matter

High-end buyers are not typically concerned with reduced home prices, and therefore, do not want to purchase cheaply renovated homes. Kitchen renovations must be fresh and modern, and every bathroom in the house should have an underlying theme that speaks to discerning buyers. Paying the extra money for an experienced designer is the best way to ensure prospective clients will be willing to pay top market price for a renovated home. Investors should factor the additional expense of a style developer into their budget. This extra attention to detail will help to properly plan the central aspects of the home and prevent costs from spilling over from your profit pool.

Luxury Flipping with the Right Financing

Home flippers looking to finance large portions of their projects use private lenders extensively. Hard-money loans are a type of short-term, high-interest financing that is convenient for house flippers. The loans typically close faster than traditional mortgages, and the loan amount can be based on the future value of the property. This feature works well for flippers who like to preserve their capital for additional upgrades, to provide a cushion for unforeseen circumstances, or use for the escrow deposit on their next project.

However, borrowing against a higher loan-to-value means investors must budget wisely and borrow responsibly when venturing into the world of luxury house flipping. Charging certain expenses to an established line of credit makes more sense than asking a lender for more high-interest money to pay for needed renovations. Establishing a solid foundation and staying on good terms with multiple lenders will increase the likelihood of quickly obtaining your next round of financing for future projects.

Regardless of which route investors choose to finance their renovation efforts, it is important to note that luxury house flipping is entirely different from conventional house flipping. High-end buyers are more demanding and want their property in turnkey condition before they close. Striking the right balance between quality, attention to detail, and design will pay dividends with a shorter listing, a smaller punch list, and improved chances of earning a profit windfall.

By Melissa Martorella, Esq. | Geraci Law Firm

 

Dennis Dahlberg Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
Texas Tel:     (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701
 

About the Author:  Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years. 

Technorati Tags: private lenders,home flippers,hard money loan

Just What the Doctor Ordered: Buy One Property Annually to Retire Comfortably

Could adding one property per year to your rental property portfolio help you retire comfortably? For Dr. Dat Tran, this strategy is just what the doctor ordered.

Dr. Tran is an internal medicine physician practicing in the metro Phoenix area, with 35 prestigious years of medical experience under his belt. Originally from Japan, Dr. Tran moved to the US and ultimately to Arizona because it was where his wife truly wanted to be. He takes great pride in caring for his family, and for others.

When asked what his biggest motivation is in life, Dr. Tran says he finds true fulfillment in taking care of others. He loves the medical field and his daily ability to help and heal. But he also knows it’s time to start thinking about his retirement and securing a strong financial future for his family.

Securing an strong financial future

At the advice of trusted friends, Dr. Tran started investing in real estate and is slowly growing his portfolio of rental properties to help fund his retirement. Prior to 2017 he used a variety of lenders for his real estate purchases. Then a trusted colleague mentioned he should try Level 4 Funding.

Dr. Tran reached out to Level 4 Funding and connected with loan originator Mark Gowlovech. Having experienced mediocre service in the past when it came to loan requests, Dr. Tran was especially impressed with Mark’s speed and efficiency.

“Very fast, very quick, very helpful” said Dr. Tran of his experience with Mark Gowlovech. He is glad he took his friend’s advice and was thrilled with the results. With Mark’s help, Dr. Tran received his loan funds in record time and wrapped up his most recent property purchase in Avondale in March. Now he’s one step and one property purchase closer to retirement.

Could real estate fund your early retirement?

Dr. Tran is not alone in leveraging real estate as a key component of his retirement and financial strategy. Though the real estate market will always experience ups and downs, many physicians and other professionals still see it as a viable retirement funding solution.

Physician’s Money Digest reports that some successful physicians endorse a simple retirement strategy from their mentors—"Buy one real estate investment property a year." In one example, a well respected physician who was also a savvy real estate investor shared that he had “technically retired years ago, but had continued working simply because he enjoyed it.”His simple and effective strategy? You guessed it, buy one real estate investment property per year.

By the numbers

This retirement strategy is certainly not restricted to physicians. But can only one property per year truly make a difference? As this one-per-year real estate purchase model shows, by year 20 the numbers truly add up:

Assumptions:

· All properties purchased are single family homes.

· Each was purchased with 30% down private hard money loan, up to 4 properties financed at a time.

· Property values are modest, at only $100,000 on average.

· Average cash flow per property is extremely achievable—$400 per month.

· Once each property is paid off, it cash flows at $800 monthly.

· The Case-Shiller index was used to estimate a 3.4% property appreciation rate.

10 Year Summary:

· 8 properties were purchased in the first 10 years of this simulation model, just short of goal.

· 4 homes are completely paid off.

· Cash flow by end of year 10 is $57,600 annually.

· Portfolio property value is $750,000.

· Total investment so far is $300,000.

20 Year Summary:

· Properties continue to be purchased at an average of 1 per year.

· Portfolio property value is $2.8 million at the end of year 20.

· Cash flow reaches $172,800 per year.

The case study concludes that these are conservative estimates which most people can replicate. The numbers start to snowball around the 10 year mark, and many would agree that an annual income of over $170,000 in retirement qualifies as “comfortable” and then some.

Expand your funding options to escalate success

A 20 year retirement model looks great if you are 30 years old and want to retire by 50. But what if you’re a bit closer to retirement and need to escalate your plan?

One simple tweak is to expand your real estate purchase funding options. Rather than restrict your loans to just four at any given time (one of which is likely your primary residence), look to Level 4 Funding for greater flexibility and a longer runway in your financial plan.

You may run across a stellar investment property, hopefully one which cash flows for well above $400 per month. And you may have to act swiftly to win the bid. Your local bank will likely bog you down in a sea of paperwork and lengthy approval processes. Plus they are sure to have some sort of maximum property funding limit.

Keep things simple and follow Dr. Tran’s lead. When it comes to real estate financing he recommends Level 4 Funding. Just “go there and try them” he says, and experience their professional swift, service for yourself.

 

Dennis Dahlberg Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701
 
About the Author:  Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

Technorati Tags: Private Hard Money,Real Estate Investing

The 5 Benefits of Leveraging with Flip Loans

Whether you are still looking for the perfect prospect or have locked in on a neighborhood or unit you love, you're buying power is substantially increased with you utilize flip loans. Leveraging with flip loans allows you to grow your property investment business at a rate you truly want and allows you to purchase and work on more than one property at a time.

5 Benefits of Leveraging with Flip Loans

Timing

While your ideal dream of growing your investing empire may be to use cash or to leverage your own properties to buy additional locations, it will take time. If you are watching the market for deals or have closed in on a hot market with the right types of properties, you may not be able to afford to wait. Using flip loans from a private hard money lender allows you to acquire multiple properties as the same time. Since so much of your money is made on the purchase deal, being able to buy as many properties as you can allows you to perfectly time your deal and ensures that your ideal property doesn’t get away.

Scaling Made Easy

Once you’ve mastered the art of flipping a home or building, you’ll want to do it again and again. Using flip loans allows you to scale your business model up, once you settle on a plan and course of action that works for you. The ability to purchase and flip multiple dwellings at the same time allows you to quickly scale up your business and truly grow. If you have to wait for one deal to close before you start another, scaling and growing your investment portfolio will be much more difficult and time consuming.

Better Tax Deductions

The more homes you have, the more you’ll be able to take advantage of specific IRS tax breaks designed for investors. Since the IRS allows you to deduct for depreciation each year, you’ll be able to claim this benefit for each property you own. Multiple properties also allow you to take advantage of the 1031 Exchange if you sell a property.

Increased Income

When your home is rented out or flipped and sold, you’ll make money. Simple math says the more properties you own that are in habitable condition, the more income you’ll have coming in. Acquiring and rapidly flipping properties allows you to increase the income you receive via rental or sales.

Take Advantage of Low Rates and Prices

Home prices and interest rates won’t be this low forever. Buying now does more than expand your options, it locks in these low rates and prices for you for years to come.

The ability to scale up your business and purchase deals when you find them is a must if you want to make a serious go of it as a real estate investor. Leveraging with flip loans allows you to grow your business at a rate you want to – and to get all of the benefits of owning multiple properties at once.

Dennis Dahlberg Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
Texas Tel:     (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701
 

About the Author:  Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.









          

Technorati Tags: flip loans,private hard money lender