Chat 8-15-05 with Mortgage Broker John Isgrig
Posted on August 15, 2005
NKEM: HI
NKEM: good evening everyone
Peter: Good Evening nkem
Al_Lee: logged in early and find that there are 5 people already here!
Bob_Carr: I listened to your show yesterday Al,it was good
Al_Lee: Bob, than you. I plan to have lots more good shows, too. Some
with Mike as my guest!
Ralph_Roberts: hi guys
Ralph_Roberts: and hi Kim
Kim-OH: Hi Ralph
Kim-OH: Hi Al
Bob_Carr: Hi Kim
Kim-OH: Hi John, thanks for joining the chat tonight
Kim-OH: Hi Bob
Mike_Summey: Hi everyone
Al_Lee: I am using my laptop because we have a storm threatening to blow
in and the laptop will not crash whenthepower fails. Neither will my desktop,
but the monitor will go black adn the laptop is better in a storm. That means my
typien will be unusually bad tonight
Ralph_Roberts: there’s Mike Summey <———
Kim-OH: Mike, you are late LOL
Kim-OH: Al, how is your wife doing?
Al_Lee: Hi, Kim.
Al_Lee: Hi, Mike
Mike_Summey: It’s not 8:00 yet, but it looks like I’m late.
Bob_Carr: Hi Mike
Kim-OH: Mike I was just kidding with you some, but yes we are here with
bells on LOL
Al_Lee: My wife id doing very well. The surgery was a complete success
and she just has the normal month or healing and recuperating from major surgery
Mike_Summey: You guys need to go after John tonight and let me rest. He’s
the expert tonight.
John_Isgrig: Thanks Mike
Kim-OH: Al that is great news
Peter: Hi
Peter: good evening everyone
Mike_Summey: I spent the morning at the doctors’s office with my mother
who is 85. They found a breast tumor and it looks as if she will have to have
surgery.
Al_Lee: OK, Mike–John, what tyep of loans should a long-term investor
use? 15-year, 30-year, Fixed-rate, Adjustable-rate, Interest-Only ???
Kim-OH: Mike, I’m sorry to hear that and I hope that all will go well for
your MOM
Mike_Summey: Good question Al. You know my feelings, so I’ll defer to
John.
John_Isgrig: In this market, I would say 30 year fixed
Al_Lee: Mike, I hope your mother’s surgery goes as well as my wifes’s
did.
Peter: Mike I hope your mother gets well soon
Kim-OH: Mike the outlook for breast cancer survival has never been
brighter than it is now
John_Isgrig: Interest only if the present cash flow isn’t sufficient
Mike_Summey: I think she has caught is early enough that it won’t be a
big problem.
Peter: Hi John
Al_Lee: Mike, I think you know my feelings, too. Let’s get the
third-party opinion and maybe we will have some lively discussion tonight
Mike_Summey: Hi Mark
MarkNC: Hi Mike, everyone
Peter: Yes lets ask John….what is the best mortgage for long term
investors (buy and hold types)
Mike_Summey: Al, it looks as if John agrees with you.
Peter: Hi Al how are you doing?
John_Isgrig: The difference between arm’s and Fixed isn’t wourth the risk
Peter: Great
Mike_Summey: Hi JS
Al_Lee: Mike, for what it is worth–if I ever again have to deal with any
serious illness and surgery, I will go first to Southwestern Medical Center in
Dallas. I cannot say enough for them. They are probably the best in the world
for some very complex procedures
Peter: John….how can an ivestor keep on getting best interest rates for
30 fixed….
Al_Lee: Peter, i am doing well. And yourself?
Peter: I am doing good too Al..thanks
John_Isgrig: I would find a good broker or banker, and make sure that
they have access to competitive lenders/pricing
Al_Lee: Mike, OK, I already like this guy, John.
Mike_Summey: Al, I knew you would.
Peter: John…can an investor ever get interest rates close to owner
occupied ones?
Mike_Summey: John and I think a little differently which is why I asked
him to join us.
Mike_Summey: Hi Dean & Penny
Mike_Summey: An nicoleb
Peter: Mike…how differently you and John think?
dean: hi everyone
John_Isgrig: The lower the ltv, and the higher your credit scores, the
closer you will come.
Al_Lee: fyi, I have done detailed spreadsheets that shwo theat my returns
are higher both short-term and long-term if I use 30-year fixed-rate with a
10-year interest-only option.
nicholeb: Hi, y’all!
Kim-OH: Hi Penny
MarkNC: So John, how much a a jump in rate should one expect for an
investment property?
Penny: Hello everyone!
Al_Lee: the computations assume reinvestign the cash-flow, of course
John_Isgrig: Typically 1/2% higher to 1.0%,
Mike_Summey: Al, it the assumption that I have a problem with. It just
doesn’t happen.
Mike_Summey: Hi Eddie
John_Isgrig: At about 65%, which I realize is rare, the difference is
probably 1/8th
EDDIE: Hello
Peter: John/Al…is it true tht if I chose 30 fixed with first 10 I/O I
get higher interest rate as opposed to regular 30 fixed
nicholeb: My husband is finally on board. I think he’s read the
Introduction of the book… not much more. Not much of a reader :/
John_Isgrig: No
Al_Lee: Mike, if the "investor" is a boob who can not manage
his money, you are right. If the investor is truly managing his finances, more
cash-flow means more capital and faster compounding of returns. I assume that
people will not just blow the extra cash
Mike_Summey: Al, John has never done a loan for me so I don’t have any
vested interest in him.
John_Isgrig: You may pay more 1 time at the table for the I/O option, but
normally your rate should be a little less
Al_Lee: Peter, I normally pay .25% higher interest rate to get the
Interest-Oly option and it is still a better investment deal
Peter: Al I agree with you there….if more cash flow invested
properly…yes you win…..if you just do the simple math I dont agree with you
Mike_Summey: My experience with most "investors" is that they
won’t keep up with the extra $50 - $100 per month until it builds up enough to
reinvest. The spend it.
Peter: Al…that higher .25 is what piches me…with IO option I dont see
much cash flow
Al_Lee: Mike, those are the people I refer to when I put "investor"in
quotation marks.
Mike_Summey: But Al, that is by far the majority.
Peter: Al do you take allyour loans with first 10 yr IO
John_Isgrig: Peter, you can find a lender without paying the extra 1/4%
in rate
Al_Lee: Peter, the cash-flow is higher with interest-only (fixed-rate)
because you are not paying any debt reduction. That means you can do with that
cash whatever you wish.
Peter: John if that happens that will be great
Mike_Summey: Al, you will have more cash flow than me during the first 10
years, but I’ll eat your lunch the last 15 when I don’t have any debt.
MarkNC: John, Is there typically a penalty in terms for owner carried
seconds?
Mike_Summey: Hi jr
Peter: but I though during first 5 yrs most of your payments is interest
Mike_Summey: Hi Pat
John_Isgrig: Conventional guidelines will restrict the terms of the
private second, but no penalty
Peter: Mark….did you mean owner occupied second home?
Al_Lee: Peter, I do if I can get it. On smaller loans it becoems
difficult to get I/O because the lender doesn’t reall want those small loans in
the first place. With loans over $75k, I pretty much always go for I/O
John_Isgrig: An exception would be to a highcltv, where your 1st mtge
rate will cost more or carry a higher rate
Al_Lee: Peter, during the first 10-years all of your payments are
interest (plus insurance and taxes).]
Peter: Al, isnt it true that in regular 30 yr fixed first 5 yrs you
primarily pay interest and very little principal
MarkNC: No, I meant the seller carrying the second, sorry trying to type
and talk at the same time.
Mike_Summey: Al, aren’t the interest only loans what Greenspan said is
causing "froth" in the real estate market?
Al_Lee: Mike, I can show you that I will come out ahead even in the
second 15 years. I will own 4 or 5 houses after 15 years using the same
investment capital over and over again. They will generate more cash flow and
more appreciation.
Peter: Mike I think that is IO with ARM
John_Isgrig: Mark, I am not aware of a penalty for a seller carried 2nd
jr: hi
Al_Lee: Mike, Greenspan is talking about Interest-Only arms (Adjustable
Rate Loans). I never recommend arms except in very, very special circumstances
Peter: Al I still dont like that extra .25% you have to pay for IO option
Mike_Summey: Hi reena
reena_ny: Hello everyone
Peter: I would go for ARM is interest rates are high and expected to come
down in future not in the current market right John?
Kim-OH: Hi Reena
reena_ny: Hi Kim
John_Isgrig: Many lenders are offering 30 yr fixed I/O products on
primary and 2nd homes, and will soon offer on investor properties, i feel
Al_Lee: Peter, if you lok at it emotionally, you will recoil from the
higher rate. If you look at it as an investor, maximizint the returns on your
money, you will gladly pay the higher rate for faster recovery of your capital
and faster compounding of your investment.
Mike_Summey: John, would you explain to everyone exactly what you do as a
mortgage broker?
Peter: Al I would like to take a look at your spreadsheet..where you
prove this!!
Al_Lee: Peter, if you have my spreadsheet (the latest version) you can
compare the returns for the same loan with I/O at .25% higher rate and you will
be surprised.
John_Isgrig: I basically match up a borrowers wish list with the most
competitive lender, price, terms, etc that suit that borrowers objectives
Peter: Al, I will download the spreadsheet and try to compute that
Mike_Summey: Hi bluelogic
Al_Lee: Go to www.TurnkeyInvestments.net adn click on the
"Spreadsheet Help" link near the top and follow the instructions. It
is free and you will like it a lot!
John_Isgrig: That includes how best to qualify that borrower for that
particular product
Peter: John….is it good idea to pay both mortgage broker fees and
origination points
reena_ny: I have a question on the difference between an S-corporation,
and an llc. Is there a difference? I have heard that an S-corporation provides
the same coverage as an llc, and is cheaper to maintain.
John_Isgrig: why would you do that?
Mike_Summey: A little news for everyone … I just turned in the
manuscript for our 3rd book today!
Al_Lee: John, did i understand that you hvae I/O loans with no increase
in interest rate? Do you just add soem points to the front end to buy the rate
down?
Peter: Great…Mike keep us updated when it is available to buy
reena_ny: Great. Looking forward to reading your new book.
MarkNC: Congratas Mike, you’re a writing machine
John_Isgrig: As a broker, I am dealing directly with wholesale lenders,
and they do not charge origination fees
Al_Lee: Mike, how about doing an interview this coming Sunday?
Peter: if the brokers shows that in the GFE and he is offering good
interest rates?
Mike_Summey: reena, an S Corp and an LLC are not the same, but I don’t
know how to expalin the difference.
John_Isgrig: Al - it depends on the lender. Many just charge a 1 time fee
at the closing of 1/4% of the loan amount
Mike_Summey: Al, I’d love to, but I’ll have to let you know a little
later int he week when I know if I’ll be here.
Mike_Summey: Hi justin
Al_Lee: Peter, I have seen circumstance where a loan through a broker was
cheaper than a loan direct from the "investor" bank that the broker
was getting the loan from. It soounds crazy, but I always use a broker.
John_Isgrig: Peter - A broker, must show all fees to him and to others in
the gfe, including Yield Spread Premium
reena_ny: Mike. Would you recommend an S-Corporation over an llc, or
vice-versa to protect investments?
Peter: John…what do you mean by show to him (did you mean show to
lender)
Peter: John, what is Yield spectrum premium?
Al_Lee: Mike, OK, that is fine. I think whatever phone problem we had a
few weeks back must be fixed as I have received calls both local and nationwide
recently. I don’t think we will have a problem.
Mike_Summey: reena, I don’t make recommendations on things I don’t know
enough aobut, but I hold all my properties in llcs.
Al_Lee: Peter, I think you are thinking of Yield Spread Premium.
John_Isgrig: Al , you are correct. I routinely broker loans through
lenders who resell them immediately to another "large" lender at rates
below what the "large" lender quotes
reena_ny: Thanks, Mike
Mike_Summey: Al, I’ll tentatively pencil it in and confirm later in the
week.
John_Isgrig: Peter- I mena that the broker must disclose to the borrower
all of those fees
Mike_Summey: John, why haven’t you ever gotten me any of the super deals?
Al_Lee: Peter, Yield Spread premium is the "fee" that the
lender (bank) pays to the broker.
John_Isgrig: No comment
Mike_Summey: John thinks I’m too hard to deal with.
John_Isgrig: Mike, you like the banks too much
Peter: John…what are the typical fees an investor has to pay
(origination points and other fees)
Al_Lee: Mike, with your properties in an LLC now, you have to use
commercial lending anyhow, don;t you?
Kim-OH: Mike, you hard to deal with, I find that hard to believe LOL
Mike_Summey: Al, I always have for the most part.
John_Isgrig: typically, 1% orig fee, $495 commitment fee, plus normal
costs
Bob_Carr: Reena,when the fellow was on as a guest a couple of weeks ago,
I remimber him saying don’t use s-corps foe real est
Peter: Al…what is commercial lending and how different it is from what
we are talking about
Al_Lee: John, do you do commercial loans, or just residential loans?
Peter: John, $495 is adjusted in the closing costs right?
John_Isgrig: I do both commercial and investor, and residential
Mike_Summey: reena, I believe Bob is right. Go back and read the
transcript from the chat with Garrett Sutton.
reena_ny: Thanks Bob. I will check into the chat transcripts. I have
heard that there is no difference in risk coverage but only in taxation.
Peter: If I am right commercial is for non residential properties right?
John_Isgrig: Peter, the $495 goes directly to the lender, and it is
included in the closing costs
Peter: okay John got it
Mike_Summey: reena, properties held in a single member LLC are treated on
your tax return the same as if you owned them in your personal name.
Al_Lee: Peter, the best deal you will ever find from corporate America is
the 30-year fixed-rate loan. It is available to individuals for real estate, not
to "entities". If an LLC ro corporation wants a loan for real estate
it will be a commercial loan that will never be 30-years fixed-rate. Usually
will have a 5-year "call" when you must renegotiate the loan and the
interest rate.
Mike_Summey: Hi elba
Peter: Al so that is similar to 5 yr ARM with baloon payment after 5 yrs
(negotiable after 5 yrs right)
elba_ny: hi honey, hello everyone
Al_Lee: Peter, exactly right. Not a good deal for you when rates are
liekly to be much higher in the future.
John_Isgrig: Al, that is correct, there are some "conduit
buster" lenders out there now, offering 30 year amortizations, on
commercial properties, with 10 year fixed rates, but have high pre-pay penalties
Peter: yes not a good deal esp right now!!
elba_ny: mike my husband and I loved your last book. thanks for writing
it.
JackB: Can you get a 30 year loan in your name and at closing do a quit
claim deed into an llc?
Mike_Summey: Thanks elba, I just told everyone right before you joine dus
that I submitted the manuscript for the 3rd book today.
Al_Lee: John, a 10-year rate fix is pretty good for a commercial loan,
but only one-third as good as a 30-year rate fix.
elba_ny: We will keep our eyes open for it.
John_Isgrig: Jack, it is done & It violates the terms of your deed of
trust
Peter: Al only if the interest rates are higher after 10 Yrs…what if
they are lower after 10 yrs
Al_Lee: JackB, that is not legal. I have talke dwith bankers about it and
you can hav eyour loan called due for transferring the title to the collateral.
Mike_Summey: elba, it will be out near year end.
Al_Lee: Peter, if is a might y big word. I the queen had b…. she woeul
be the king
elba_ny: Thank you. Al lee my husband and I willbe joining your club
soon. we will like to see what it can do for us.
Al_Lee: Peter - if you get a 30-year loan at 6.5% today and rates are
lower in 5 or 10 years, you can refinance and lock in the lower rate. If rates,
on the other hand, are higher in the future–no problem, you have a fixed-rate
loan!
Peter: Al….don’t you transfer your properties to LLC after closing and
let the banker know about it…I heard most of the times they dont have a
problem if you still personally guarantee the loan….Mike isnt this what you
do? John is this okay to do?
John_Isgrig: JackB - when the lender reviews your insurance policy from
time to time, that is when they normally catch on to the fact that you have
transferred title, and violated the "due on sale" clause in your deed
of trust
Peter: Al you are right there? thx
JackB: So what is the best loan to get if you are a small investor?
Peter: John how do the lender catch it from the insurance policy?
Al_Lee: elba, I will be very happy to have you. I think teh club can do a
lot for you. It has been working well for about 3 years since we started it up.
Mike_Summey: Peter, I transferred all of my properties to llcs a couple
of years ago. I notified my banks and none of them had a problem with that
because they still hed me on the loans.
John_Isgrig: Peter, I have done that myself, with the written permission
of the lender only.
JackB: I did the quit claim deed on the advice of my mortgage broker
Mike_Summey: Hi mauggie
JackB: That is what he suggested.
Kim-OH: Hi Dwayne
mauggie: Hi there!
Kim-OH: Hi Mauggie
Peter: so John, that means I should first get written permisison from the
lender and then go ahead and do it
John_Isgrig: Peter - they will see that the named insured has changed
from you personally to your LC
Mike_Summey: Hi Dwayne
Peter: thanks John
Peter: Hi Dwayne
Al_Lee: John, I believe it is importatn to say with the written, not
verbal, permissionof the lender, not the broker–I think that will be difficult
to get if the loan is a conforming loan, won;t it?
John_Isgrig: Peter, yes if you want to be safe
Peter: Al did you mean with conforming loans it will be difficult to get
permission?
John_Isgrig: Al - you won’t get permission form a conforming lender
Al_Lee: Peter, yes
Al_Lee: John, that is what I was tryign to say
Peter: but most of our residetial loans are conforming isnt it?
Mike_Summey: I don’t think I have any conforming loans, so I’m not a good
example.
Peter: Mike isnt that the case with you…how did you get permission?
elba_ny: Al Lee my family lives in TX. and we are looking foward to
investing there.
Al_Lee: Peter, the best deals are the conforming loans usually
Peter: conforming loans are less then 330,000 right?
John_Isgrig: Peter, they vary. Many investors seek bank loans because
they have more flexibility
Al_Lee: elba, i was born in NY and now live in TX
JackB: what is the best loan to get if you have aproperty you want in an
LLC
Peter: Al I was too in NY before I moved to CA
elba_ny: Coool.
Mike_Summey: John/Dwayne, what’s the maximium number of confirming loans
one borrower can have?
Peter: Mike good question?
Dwayne_Wiseman: Hi, Peter, Kim, Mike and John I. I have got the little
guy tonight so I will try to hang around.
Al_Lee: Us New Yawkaz is populatin the nation
John_Isgrig: To obtain a conforming loan, you can have no more than 10
mortgages, including your primary
Mike_Summey: Thanks John.
Kim-OH: Dwayne, would you chose another color, the green is a little hard
to read for my old eyes LOL
Peter: John what does one do after 10?
John_Isgrig: Peter, go to banks, or non-comforming lenders
Mike_Summey: Kim, enlarge the type several sizes. Click on the + sign
Al_Lee: Peter, I can asnwer that because I have considerably more than
10. You pay a little higher rate for non-conforming loans !
elba_ny: Maybe someone asked this question. What is a new investor to do
to optain their first financing
Kim-OH: Mike I have done that LOL
Peter: Great got you
John_Isgrig: Many non-conforming lenders will do up to 90% LTV on
investor properties, and some up to 100%
Peter: the higher the ltv the higher the rate…right John?
JackB: John, What type of loan would you recommend for my first rental
house?
Mike_Summey: I never made a conforming loan even when I could … too
much paper work.
John_Isgrig: These loans will carry a higher rate, and usually arms, and
usually prepay penalties,
Peter: Mike what additional paper work for conforming loan?
John_Isgrig: Mike- that is trus, especially for investor properties
elba_ny: Hey.
Al_Lee: Peter, I have dozens of 30-year fixed-rate loans, but most are
not conforming to Fannie Mae guidelines. None of the lenders wouel likely give
permission to transfer title to the property to an llc, though. I have asked
that question because I have over 100 club members and many of them have that
same idea.
Mike_Summey: John would you explain the extra paper work for Peter?
elba_ny: What kind of financing can a first time investor get in TX?
Mike_Summey: elba, as a first time investor, you may want to look at the
conforming loans even though the paper work is much greater.
John_Isgrig: Peter-tax returns, leases, explanations, verifications of
insurance/ taxes on each property, explanation of losses, etc
Al_Lee: elbe, very good. We have lenders as strategic partners who
specialize in investor loans in Texas
Peter: I just applied for a 30 yr fixed conforming loan for an investment
property….do you think I will have problems later on tranferring it to an llc?
Al_Lee: Peter, I know you will have problems. I also believe there is no
good reason to do the transfer.
John_Isgrig: Peter- just know that they can and will call your loan due
if you are caught
JackB: Anyone know of a good investment broker in St. Louis, MO?
Mike_Summey: Peter, if the LLC is a single member LLC and you notify the
bank, I don’t think they will have a problem.
elba_ny: Thank you both. Mike we will look that up. Al lee I"m
really liking your club even more now.
Peter: what if I try to obtain written permission from the lender
Peter: yes Mike it will be single member llc?
Al_Lee: Mike, you are right if your loans are with a local bank and are
commercial loans, but these guys are (rightly) talking about long-term real
estate mortgages
John_Isgrig: Peter- you may get written permission from your bank but not
from a lender that sells their mortgages to fnma or Freddie mac
Peter: John I used a broker….I dont know whom is he going to sell
John_Isgrig: Typically your bank is not going to sell a loan with a 5
year balloon
Mike_Summey: Peter, if you transfer to a single member llc, it is treated
the same on your tax return and you will still be personally liable on the note.
If the LLC creates a different ownership, such as a multi-member llc, the bank
will probably have a problem.
Peter: Got you Mike thanks.
John_Isgrig: Peter - you normally won’t know who the lender will be, and
even if you do, it can be sold again , and again..
Mike_Summey: Peter, keep in mind that I don’t have any qualifying loans
so things may be different on those.
reena_ny: If the two members of the LLC are the same who mortgage from
the bank, will the back still have a problem?
John_Isgrig: reena- it is a case by case basis, depends upon your banker,
and strength of the borrowers
Mike_Summey: reena, I don’t know about that.
Peter: one question…is it true that investors can’t or shouldn’t obtain
conforming loans….esp new investors like us
reena_ny: Thanks.
JackB: What type of loan is recommended for new investors?
John_Isgrig: Peter - get as many as you can now while the rates are still
low. Then, after 10, loook to the banks, and non-conforming loans through a
broker
Al_Lee: Peter, the 30-year fixed-rate loan is a special good deal offered
to individuals only. It allstarted with the VA after wwii, then came fha, Fannie
Mae, Freddie Mac. These loans are not offered to entities, only individuals. If
you get the loan as an individual and then transfer the collateral, you got the
loan under false pretenses. You will get the loan called, and coudl face
criminal charges (defrauding a federally insured institution).
John_Isgrig: Al - violation of the due on sale clause will get your loan
called, just as going into defoult will. It is a violation of the terms of the
deed of trust, but not a criminal offense
Peter: Mike and John do you agree with Al on this?
Al_Lee: If youstill want to do that quit claim trick after that, nothing
anyone says will dissuade you and you will have brought on the penalties
knowingly. There is also no reason to do what youwant to do. There is nothing
wrong with owning RE in yoru own name. If you have a special liability
sensitivity, you need to invest in a limited partnership, not start an LLC
Peter: John I dont have that kind of downpayment to get as many of them?
Mike_Summey: Hi Scott
Scott_T: Hello Mike
John_Isgrig: Mike- sure.. isgrigfinancial@charter.net I can do commercial
loans anywhere, but only residential in NC
Peter: Al I heard that in LP you are liable for your partners debt if he
goes bankrupt or something?
John_Isgrig: Let me clarify that… I can only do residential in NC
Scott_T: Can anyone tell me a good Mortgage Broker in nyc?
Mike_Summey: John, I sent you that message outside the chat, but thanks
for the info. Everyone, there’s the email address if you want to use John for a
transaction.
Peter: John how abt residential in Texas
John_Isgrig: Peter - Find a good broker in Texas, ask around with other
seasoned investors
Al_Lee: John, I coudl be wrong on the criminal charges, but if you
knowingly accept the loan under false pretenses that could be interpreted as
fraud, couldn’t it? I know that if you only did it once that law might not
pursue you, but if you do it serially, you might have a problem.
Dwayne_Wiseman: John, What kind of LTV can you do on a commercial loan?
elba_ny: Peter look into tortuise club.
Al_Lee: Peter, what yousaid aboput an LP is entirely wrong, you are
describing a GP.
John_Isgrig: Al- I’m not an atty, but have never heard of anyone facing
criminal charges for that.
Peter: Yes elba….I am seriously considering tht…are you a tortoise
member yet?
elba_ny: We will join next month peter
reena_ny: Have a good evening. Bye now.
John_Isgrig: Depending on the property, 75% - 90%, typically
Dwayne_Wiseman: I agree with John I haven’t heard of anyone facing
criminal charges but have heard of larger banks calling the note due.
Al_Lee: Peter, if you do join the Tortoise Club, though you may not do
what you are talking about withteh quit claim. You will be removed from the club
for doing that.
elba_ny: bye reena.
Mike_Summey: goodnight reena
Peter: Great elba do you live in tx…i live in CA
elba_ny: NYC sir.
justin: I’m trying to get a 80/20 loan and currently comparing costs.
From the builder I get the incentives when I use their lender, but with all the
incentives the total to close comes out evens out. Does anyone know why that is,
or is someone not telling the whole story?
Peter: Al for doing what…tranferring property to an llc?
Dwayne_Wiseman: John, these days are you doing more commercial or
residential or 50%/50%?
John_Isgrig: Dwayne -75% residentail, 25% commercial
Al_Lee: elba, I took my daughters (9, 7) to NYC in December before
Christmas. They had never sen it before and we had a ball. It is a terrific
place to visit. I also grew up there, so I know my way around and coudl be their
guide.
Peter: justin ….compare the builders lender (with discount) and some
other brokers….go for what works best for you
Al_Lee: Peter, yes
John_Isgrig: Justin, can you get a good comparison on APR from both
sides?
elba_ny: Good for them.
elba_ny: Its a wonderful place to visit.
Al_Lee: elba, where in the city do you live?
justin: both are stating 5.875 with 1.6~ discount
Al_Lee: I graduated fro Seward Park Sr. Hi on E. Grand
elba_ny: Downtown Brooklyn.
John_Isgrig: Justin, are both loans 80/20 in theform of 2 loans?
Scott_T: John, I’m new to both investing and the usa, do you have any
tips on getting a mortgage? I have about $70,000 in the bank but I need to get
started investing.
Mike_Summey: John, what can you do on a $5+ million commercial loan.
justin: yes… the second loan is 7.5 …
Peter: just so that means you are taking 100% ltv
John_Isgrig: Scott - get acquainted wit a good broker, and find out what
you can qualify for, then go find the property
John_Isgrig: Mike- What type of property
justin: yes
Mike_Summey: Office building
Dwayne_Wiseman: John, Spoke with Neal H. on Saturday and he stated homes
up to $2mm in the Asheville area are continuing to sell quickly. Homes priced
over the $2mm mark are taking a little longer.
Peter: second one 7.5 looks okay to me…but first one is at the higher
end
Scott_T: John, thanks. Anyone you would recommend in nyc?
Peter: what do you think John?
John_Isgrig: Mike, there is 30 year amort money out there, with or
without recourse. To get a fixed rate, you can get 5, 7, 10 years, but will have
a pre-pay, can be assumed for a fee, etc
Al_Lee: Mike, I was browsing on eBay the other day and saw an old
Studebaker for sale in Ashville, nc.\
Dwayne_Wiseman: Mike, What was the normal nice home selling for in
Asheville 10 years ago?
John_Isgrig: Scott- Sorry, don’t know any there
Peter: another question….my GFE states prepayment may apply towards
interest…what does "may" mean how does it impact me?
Mike_Summey: Dwayne, my guess is $400K
Dwayne_Wiseman: John, I meant to ask you what have you heard from
realtors in WNC lately about the market?
Mike_Summey: today over $1,000K
John_Isgrig: Peter- Truth in lending form is comfusing. If it says
"may" apply, you need to assume that you have a pre-pay penalty.
Peter: I see only two bokes…may and will not
John_Isgrig: Peter- If you are not sure , ask. If it is an old loan, get
out a copy of your note and find the language
Peter: will not for sure….pre pay penalty….what is may then
Mike_Summey: John, most very low initial rate loans have pre pays, right?
Peter: I asked my broker specifically and he said there is no pre payment
penalty?
John_Isgrig: On investor properties, yes. In NC no pre-pay penalty is
allowed on primary under $150,000
Peter: John what is an old loan?
John_Isgrig: Mike- conforming investor loans do not have pre-pays
Mike_Summey: Peter, it is one with long grey hair.
elba_ny: Al Lee it was nice talking with you. Mike thnaks again for the
book and your advice. i need to put my baby to sleep.Good nite everyone. Ill
have to read this again. thanks john for coming.
Peter: what abt conforming owner occupied ones do they too have pre pays
John_Isgrig: Peter- I was speaking of a loan that you may already have,
but were unsure of whether it had a pre-pay
Mike_Summey: Goodnight elba.
Peter: no I am speaking of one I applied and abt to close
Al_Lee: goodnight, elba
John_Isgrig: Peter - they cannot, unless over $150,000. Most do not
however
Al_Lee: I need to go put my 9-year old baby to sleep. School is starting
this week!
Mike_Summey: Goodnight Al
John_Isgrig: Al- Thanks
Peter: yeah…its school season again
Peter: Good nite Al and elba
Al_Lee: Goodnight, all. Mike, email me about the interview. We will have
a good one, as usual!
Peter: welcome Glen
Al_Lee: John, nic eto meet you. Hope we can do business some day
Mike_Summey: I have my 23 year old baby out at the pool with his
fraternity brothers. I’m going to have to go check on them soon also.
Mike_Summey: Hi Glen, where you been?
John_Isgrig: Al- enjoyed it,
Glen: Mowing
Glen: with the lights on
Glen: looks like I missed a good one
Dwayne_Wiseman: John, what are you hearing from the realtors in WNC about
the market?
Mike_Summey: Glen is fromSpartanburg, SC. I spoke for his group a couple
of months ago.
John_Isgrig: Dwayne- getting very expensive, very fast
Peter: John I still dont understand the difference between…pre payment
may/will not apply towards interest? can you pls help me there
Glen: Mike, we’re still experiencing the great effects of you speaking in
Spartanburg. thank you!!!
Mike_Summey: My pleasure Glen
John_Isgrig: Peter - that term is used in a "disclosure form"
only. Unless the Promissory note contains a pre-payment penalty in it, you don’t
have one
Peter: great…so I need to look at the promisory note then….will my
lender provide me one at the time of closing?
Mike_Summey: Folks, we can’t keep John and Dwayne up too late, so if you
have any burning questions, please ask them now or forever hold you peace.
Mike_Summey: Hi kumar
John_Isgrig: Mike- I’ll save you a few of those great deals!
Peter: Mike did I ask good questions today as a new investor?
kumar: hey all!
Kim-OH: Mike thanks for arranging for John and Dwayne to join us
Peter: hi kumar
Mike_Summey: Peter, yes you did. Thanks for participating and please join
us again each wieek.
Peter: thank Mike yes I will join again next week
Glen: Hi Penny ; )
Mike_Summey: Who would like to have a good CPA join the chat one night?
Peter: I would
Kim-OH: Mike that would be an interesting visitor for sure
Dwayne_Wiseman: John, Great job!!! Talk with you later.
Peter: I need to learn bookkeeping and stuff….sooner than later
Dwayne_Wiseman: Thanks Mike.
John_Isgrig: Dwayne- Thanks, talk to yu soon
Mike_Summey: My CPA is a former IRS fraud investigator. I will try to get
him to join us in a future chat.
Peter: thanks John, Mike Dwayne and rest
Mike_Summey: Goodnight Dwayne.
Kim-OH: Dwayne thanks for joining the chat tonight
Peter: that will be really great Mike to have him here
John_Isgrig: Peter- Good luck, happy investing
Kim-OH: John, good information thanks a heap
Peter: thanks John
Dwayne_Wiseman: Glad to do it. Got to get the little guy to bed.
Penny: Hi Glenn. Sorry, I’d stepped away from computer and forgot to sign
off.
dean: Thanks as always Mike. goodnight.
Mike_Summey: John, thanks so much for your input. You are welcome any
time you want to join us.
John_Isgrig: Mike- Great questions and commentary. Enjoyed it!
Ralph_Roberts: thanks for the great info, John
Kim-OH: Ralph thanks for your participation
Glen: G’night Penny. Night Mike.
Mike_Summey: John, your input was very helpful to those in the chat and
to those who will read the transcript over the coming months.
Peter: Good nite all
Ralph_Roberts: thank you, Kim
Kim-OH: Goodnight all, see you next week
Penny: i’m going to have to sign off now. Great chat, loads of info
tonight. Goodnight all. See ya’ next week.
Peter: see you next week
Ralph_Roberts: nite, Penny!
Mike_Summey: Goodnight all.
John_Isgrig: Good nite
Mike_Summey: Another great chat.
Ralph_Roberts: chat transcript will be posted shortly
Mike_Summey: Ralph is the best.
Ralph_Roberts: heh, heh
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