Category: Podcast

136 – Changes in the Residential Lending World with Graham Parham

YouTube Link: https://youtu.be/AT6x3ViRPos

Article Link: Text “simple” to 314-665-1767 to download the Hui Google Drive files and the 2018 Rental Property Analyzer

For a free electronic version of my bestselling book in 12+ categories text the word “ebook” to 587-317-6099.

Please help the show by leaving a review: http://getpodcast.reviews/id/1118795347

Join the Hui Deal Pipeline Club! SimplePassiveCashflow.com/club

Pardon the grammar – I’m an Engeneer, Enginere, Engenere… I’m good with math!

________Here are the Show Notes________

Graham Parham: New Awards:

  • #1 in units at Highlands Residential Mortgage for 2017
  • #11 in state of Texas and 92nd in the US according to The Scottsman Guide and
  • Mortgage Executive Magazine – 1% top originators in the US
  • Top Ranked – Ask A Lender

 

Discussion today is 1-4 unit income properties, not owner-occupied.

  • 20% down on first ten financed properties? 25% for 2-4 units?
  • DTI considerations when using HELOC from primary residence to invest?
  • Credit scores down to 620. Max. credit score that helps?
  • Reserves?

New Fannie Mae Reserve Requirements for Investors with Multiple Properties Owned

The Old requirements were six months Principle, Interest, Taxes, and Insurance (PITI) on the subject property and two on all other properties up to 4 leveraged 1 – 4 family properties excluding the primary residence. Properties 5 – 10 would require six month PITI on all properties.

The New requirements are based on a percentage of the unpaid principal balance on each loan excluding the primary residence.

 

  • If a borrower has 2-4 financed properties, the reserves of 2% of the unpaid principal mortgage balances are required, excluding the principal residence and the subject property.

 

  1. If a borrower has 5 – 6 financed properties, 4% of the unpaid principal mortgage balances are required, excluding the principal residence and the subject property.
  2. If a borrower has 7 to 10 financed properties, 6% of the unpaid principal mortgage balances are required, excluding the principal residence and the subject property.

The aggregate UPB calculation does not include the mortgages and HELOCs that are on

  •               the subject property,
  •               the borrower’s principal residence,
  •               properties that are sold or pending sale, and
  •               accounts that will be paid by closing.

The subject property will still have monthly reserve requirements based on the total mortgage payment (PITI). Reserves are funds that you have access to liquid or non-liquid.  Reserves are funds you need to have after the closing your transaction. Funds for reserves cannot be your funds for down payment or closing cost.

Fannie Mae now will allow for 100% of the Non-Liquid funds, not 60%

Non-Liquid funds can be used for reserve requirements.”

 

  • IRA’s

 

  • 401K’s

 

  • SEP Funds

 

 

 

Gifts are NOT allowed on an investment property.

  •      Investor interest rates how much higher than owner-occupied?
  •      Mortgage sequencing. Example: if buyer wants to buy in Memphis today, Jacksonville next month, how should they plan?
  •      Overall, lending climate more lose or tighter than 1 year ago? 5 years ago?
  •      What should a prospective borrower do before contacting you?
  •      1031 exchanges Cost and funding
  •      What cost are covered in the exchange

What is UP with interest rates?

4 Factors that determine your mortgage interest rate:

  1. Credit Score

Credit Scores Adjustments

  •   740 +
  •   740 – 720
  •   720 – 700
  •   700 – 680
  •   680 – 640
  •   640 – 620
  1. % of down payment 20% or 25%
  2. Loan Amount Adjustments
  3. Property Type

What about the 15 Year fixed?

Does it make since to pay points?

What is the difference between Mortgage Brokers and Mortgage Bankers?

What are overlays?

Does Fannie Mae have a black list?

Are Appraisals regulated and by who?

Is there an appraisal black list?

What happens if the appraisal does not come in a contract price?

Closing cost differences between lenders

Should I pay cash for my investment properties or use leverage?

The next example will show the benefits of using 20% down leveraging for properties versus buying one property and paying CASH.

If you pay $150,000 in cash for one property, your net cash flow is $1245.00. By putting 20% down with an 80% loan to value and a 5% interest rate, your net cash flow is reduced to $600.81. Let’s not stop there. Keep in mind that 20% down payment on a $150,000 home is only $30,000. If you bought FIVE $150,000 homes and put 20% down on each with the same loan terms and monthly rents, you could increase your return on investment by $1759.05 a month to $3004.05. Invest your money wisely.

The net cash flows do not take into account the annual city, county and state property taxes and the annual hazard insurance. The numbers may vary considerately by the taxing authorities. You will have to include that information in your bottom line.

Graham W. Parham has been a Mortgage Loan Officer for over 18 years with 25 years

in sales and marketing. He is a leader of financial expertise in the North Texas

residential real estate market, developing a significant following among homebuyers

and investors. Known and respected industry-wide, Graham’s production consistently

ranks him as a top producer in this market place. According to Scottsman Guide

Graham ranked 92 nd in the US loan originators.

Graham offers invaluable insight into a purchaser’s likely requirements, providing an

exceptional business ethic of customer service and respect, catering to their needs from

pre-qualification to closing. He is a truly dedicated person, who strives to ensure that

each transaction is handled in a timely and stress free manner. By employing these

standards, Graham has established a solid reputation for going the extra mile to put

together the absolute best financing available for his clients. Graham prides himself on

staying ahead of the curve, keeping up to date with the latest products and industry

trends.

As an active investor himself, Graham has a strong insight on what his investment

buyers are looking for to accomplish their short and long term goals. Knowing that

investment loans strongly scrutinized, it is up Graham his team of underwriters who

understands rental property loans versus that of an owner occupied residence. His

general knowledge of REO properties and Turnkey providers coupled with a strong

operational staff allow his loan closings to be seamless and “On Time Every Time”

Highlands Residential Mortgage, LTD. is completely submerged in the real estate

investing industry and has access to many lenders nationally. Our clients benefit from

up to date guidance on all conventional investor loan programs, and less known

creative financing strategies. Knowing that an investment loan will be far more

scrutinized, it is Graham Parham and his team of underwriters who understand a loan

processed for a rental property versus that of an owner occupied residence.

Just as you would not seek legal counsel from someone who does not have a law

degree, nor should you trust a loan originator for your investment property loan from

someone that is not an investor themselves. Highlands Residential Mortgage, LTD. is

an unparalleled mortgage lender whose delivery sets us apart!

Graham Parham’s team mission is to consult every investor based on those

individualized situations and goals. Whether you are buying your first home or

investment property, we carefully look at your options that will give you the best

opportunity for success. Because we know how important your investment financing

strategy is, our extensive research and knowledge of those programs will be brought

forward in educating you as an investor, throughout the lending process.

“My goal is to continue assisting my clients for life and help them meet the ever-

changing needs life throws our way!”

To get access to the lending guide please sign up below:

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135 – Interview – Financial Advice from a Broke Millenial with Erin Lowry

Erin Lowry (https://brokemillennial.com/) is the author of Broke Millenial, a book about how to stop scraping by and start getting your financial life in order.
She talks about how she learned about finances at a young age, how she gave up her dream school so she could live her dream life, and how living in New York inspired her to write her book, Broke Millenial.
“Invest your spare change,” may be a catchy line but you really can’t invest your spare change to wealth. It has to be more than spare change.
In the financial world, you are above nothing. Just because you have a college education doesn’t mean that is your way out of financial difficulty. You also need to be prepared to take non-professional jobs or jobs that might be below you.
Just like in any financial goal you have to figure out how to take a high-level idea and break it down into smaller parts. Think of whatever your long-term financial goals are and work backwards to break it down into something that is actually more achievable. A lot of people in their early twenties have beautiful, lofty dreams but no tangible steps on how to get themselves there.
Podcasts are great sources of information.
Saving is important but earning more is bigger. To earn more is a key part of building wealth.
The biggest thing when it comes to feeling in control of your money is that you have to identify what you truly value. Don’t allow other people to dictate where you should spend your money.

133 – Veteran’s VA Loans & Other Financial Wisdom

David from Military to Millionaire

Currently still enlisted in Army and spent some time as a recruiter

Don’t blow you money on a nice car

VA Loan – 0% down home loan for a primary residence with no private mortgage insurance (PMI)

You can buy up to a 4 unit

Move and buy at each difference duty station

Generally, 410K loan is the max with exceptions for high price areas like Hawaii

Relocation benefits

Do you stay enlisted in the military

Don’t underestimate the tax-sheltered allowances and perks

134 – Investing in Diamonds

I currently have a verbal agreement to put together a long-term joint venture.

I’m engaged and in the due-diligence period with multiple extensions.

Traditionally a down payment for such a transaction is a ring. Hopefully, if you have not gone through this experience before, you will learn about procuring this rare commodity. If not, I hope you find it entertaining.

For those who haven’t caught on yet – I’m talking about diamonds.

I think everyone knows that you get ripped off at a retail brick and mortar jeweler… even Fred Meyer Jewelers because you have to pay for all the overhead and compete with unsophisticated buyers. Plus I don’t like all the sleazy sales tactics and it is a huge time-sucking experience.

In the back of my head, I know the diamond market has to be rigged sort of like the sunglasses world where all the brands are owned by Luxottica and there is price rigging involved.

Now some people say they can haggle for a better price in person, but that takes time. Also, I am in the “first stage” of learning: I don’t know what I don’t know.

I turned my attention to the top 3 sites using Google and Reddit forums.

1) Blue Nile

2) James Allen

3) Rare Caret

I was happy with getting approximate “market value” on the website. I trusted the overall grading system in an online store.

What I really like about these websites is that they allow you to sort hundreds of diamonds in online spreadsheet form with a sort feature based on different attributes.

This might be review but the big four C’s are Carat-weight, Colour, Clarity, and Cut. Unfortunately, you cannot buy the 5th C – Confidence.

(Not to be confused with the three C’s of evaluating people into your network: Character, Competence, Commitment.)

If you would like to know more than the 80% of people, take 10 minutes to read this article to determine the quality & value of diamonds, via the famous 5cs of diamond grading.

Now, in my humble opinion … real talk here…  the most important factor is size. So Carat Weight is numerouno. Most people cannot tell you the difference between the other three attributes; they only see how big the freaking thing is.

For those who know a thing or two about diamonds, Cut is the second most important thing. Cut is the sparkle-factor, how much the diamond shines based on the angles of the Cut. I went and got the top grade Cut because that is a big wow-factor (second to of course how big it is).

The other two attributes, Colour and Clarity, I frankly don’t really care. Some people could actually like a little color or whatever that clarity thing is. So I set my search criteria to have all the levels in those two categories. One exception is that I just did not put the worst-grade Colour and Clarity in my selection. This for no good reason other than not wanting to have the worst one (as vain as it sounds). Call me dumb, but I feel embarrassed when I order the cheapest wine on the menu…I always go for the second cheapest.

Rare Caret seemed to have the best selection of diamonds, but their ring selection seemed to be lacking. So after a side by side comparison of Blue Nile and James Allen, I found James Allen to be ~5K cheaper for the same diamond.

At the end of the day, I knew what my budget was so I was just trying to get the best bang for my buck. In other words, the money was allocated and this is how I mentally process non-income producing assets.

Unfortunately, I was not able to use Mr. Rebates – a go to for getting a few percent points of cashflow by going through a simple shopping portal. Nor was I able to find many coupon codes using RetailMeNot.com or navigating their email digital marketing campaign. Most sophisticated marking emails are laced with smart links to kick out a discount coupon based on what links you click in the email and if you do not buy right away to get you off the fence as a buyer.

Sign-up via my link for all your future online shopping: http://www.mrrebates.com?refid=413597

You can spend a fortune on Carat-weight, Colour, Clarity, and Cut…but the most important 5th “C” of all, Confidence.

A lot of my high net worth single friends (who by the way get a lot of dates) don’t see the value of getting married in this modern era (other than if you would like to have kids). I definitely understand that perspective to some extent. This makes buying an archaic stone that may or may not have been a blood diamond just another thought to complicate things.

But as a recovering cheapo – simplepassivecashflow.com/cheapo – I understand that money is not evil and can buy a variety of things including freedom, time, and happiness. This purchase is a perfect example of that.

The way I see it, marriage is a lot like playing with leverage. It is a little more risk than going it alone, but the reward (if done right) is disproportionately greater (per the Shape Ratio’s risk-adjusted return).

My first plan was to make the big reveal in a new Honda CRV. Note – at this moment I’m over the whole Mercedes, Tesla, wealth-based off of the car I drive. Instead, I am striving to achieve the financial freedom level I am looking for.

I even had my VA scrape a lot of Honda contacts to do my normal email blasts to put multiple dealers against each other. By the way, I lease cars because I did the math and it makes more sense for sophisticated investors who get higher than average returns.

I got the car but scrapped the idea because my buddy mentioned… “dude – you don’t want to propose at a car dealership.”

Takeaway here is that everyone has a blindspot and its good to have people around you to bring up counterpoints.

Thanks for following Simple Passive Cashflow. Onward and upward.

 

131 – Takeaways from #FinCon18 and Side Hustle stories

 

Just got back from FinCon2018!

 

What’s that?

A pretty impressive event. Its where 2000 financial bloggers, you-tubers, and podcasts this year gathered around all this money.

In 2006, I started reading financial blogs. Sole of my favorite was getrichslowly, Wallet Hacks, and of course mr money mustache. FinCon started in 2011 with just a couple hundred people.

Real estate investing is a minority. 95% of people are debt adverse and about the 4% rule. Buying cash so so debt. Living small is selfish? Make 150k a year and retire when you are 35…

The Millionaire Next Door book is not the type of lifestyle I would like to live.

A lot of financial advisors which I don’t really like.

I am cool with how it is enough to be happy and content.

Other Findings:

New investment account that incorporates mobile interfaces and suto-AI. Mint app has click to invest and banking apps have click to refi. It’s a little dangerous.

A cool 5% instant liquidity online savings bank that invests in inventory loans. Let me know and I can connect you with that as I try to do more due diligence on my own.

Liberty health share – religious-based health insurance

Side gigs – consistent theme from high performing growth mindset W2 employees who are not getting fulfillment at their bureaucratic day jobs.

Interviews to follow in video…

Please share this with friends because if you don’t soon you won’t have any friends to have mid-day lunch with when you not doing anything
Interview 1: Michael – Financiallyalert.com –
Interview 2: Spendlessgreen.com
Interview 4: Alex – http://dailyps.com & nguonline.com

129 – Matt Theriault – Changing strategies in this market

YouTube Link: https://youtu.be/SkY5izkbkoQ? sub_confirmation 1


Audio Version: https://youtu.be/cIYy9ViRoSw? sub_confirmation 1

Article Link: Text “simple” to 314-665-1767 to download the Hui Google Drive files and the 2018 Rental Property Analyzer

For a free electronic version of my bestselling book in 12+ categories text the word “ebook” to 587-317-6099.

Please help the show by leaving a review: http://getpodcast.reviews/id/1118795347

Join the Hui Deal Pipeline Club! SimplePassiveCashflow.com/club

Pardon the grammar – I’m an Engeneer, Enginere, Engenere… I’m good with math!

________Here are the Show Notes________

I worked with Matt’s team way back when in 2014 buying turnkeys. Simplepassivecashflow.com/turnkey Since then it is interesting as times change how his strategy has changed.
We just completed the last deal for an Mobile home park. Which is a little different than apartments.
Please leave an iTunes review – Help fight negative one-star review

Earning $30,000/mo through single-family homes and seller-financed notes.

Epic Real Estate started selling turnkey properties in 2009.

Built successful portfolio, but returns lowering. However, real estate always a good purchase to buy and hold long-term.

Amortization, depreciation, appreciation, and leverage (wealth multiplier) all make real estate investing attractive.

Focusing more on lease options now for C- and D-class properties to rent properties and eventually sell them to tenant.

Went from 7-figure year as a musician to bankrupt at 34. Found real estate mentor at grocery store and life changed.

Real estate is the final frontier for the average person to have a legitimate shot a creating wealth.

Paid $22,000 for mentorship in 2006. Everyone thought it was insane, but helped him get started.

People who made it were ready for it. “Move faster than your doubts.”

Find the deal first and then the money will find you.

Authored book “Do Over” that chronicled struggles and how he built his real estate empire.

Be intentional with who you surround yourself with. Peer pressure works.

Always be looking for a coach and outgrow them. Results accelerator.

Spends $100,000/year on masterminds – worth being around the right people of doers.

Goal was to increase passive income and decrease expenses. In 4 years became “retired,” but wants to be wealthy; not just financially independent.

Bookkeeper should be the first role you should outsource. Transaction coordinators and marketing person also helpful.

Hardest part of the business is to find the deal and get into contract.

Visit www.epicrealestateinvesting.com to check out the Epic Real Estate Investing Podcast.

127 – Estate Planning and Asset Protection with Lawyer Andrew Howell

YouTube Link: https://youtu.be/zaHW3_OEU8Y? sub_confirmation 1

Article Link: Text “simple” to 314-665-1767 to download the Hui Google Drive files and the 2018 Rental Property Analyzer

For a free electronic version of my bestselling book in 12+ categories text the word “ebook” to 587-317-6099.

Please help the show by leaving a review: http://getpodcast.reviews/id/1118795347

Join the Hui Deal Pipeline Club! SimplePassiveCashflow.com/club

Pardon the grammar – I’m an Engeneer, Enginere, Engenere… I’m good with math!

________Here are the Show Notes________

Estate planning
Guests I have are giving insights but always hire your own person because these things require personalization
I try to bring guests on and ask the questions that I think you folks would ask.
I believe you need to have a basic level of knowledge before engaging with a professional
For those of you who are in the Mastermind and my current investors you will hear about my Fort Knox strategy which makes LLC enitites creation look like childs play
Email me any questions to feature on the next ask Lane podcast or monthly email newsletter
Andrew L. Howell is the Co-Founder of the law firm, York Howell, with a focus on asset protection.

Many useful tools out there, but where do you as an investor fall on the asset protection spectrum?

Two fundamental risks: 1) Asset-based risks 2) Direct-based risks

Real estate considered as “hot” assets because liability risks are greater – more than equity.

Liabilities both inside and outside the asset.

Typically form a holding company to hold limited liability companies to abate asset- and direct-based risks.

Holding properties in one LLC basket is good, but still risks if something happens in one property.

Concentrate on family protection first (trust, wills, etc.). Then move to next level of asset protection planning.

If own property out-of-state, advise on setting up a parent LLC in states with charging-order protection.

Tough LLC rules and taxes for poor California residents!

Need to do your due diligence on reviewing PPM’s – especially who you are doing business with.

Asset does not create liability risk for LP’s; only GP’s.

If you get personally sued, can go after your MFH syndications and other assets even as LP.

6% of current generation feels obligated to give back to kids. Instead of giving, create a bank.

Create purpose when setting up your trust.

Please reach out to teamandrew@yorkhowell.com and visit www.yorkhowell.com.

126 – Gino Barbaro talks Apartment Investing


YouTube Link: https://youtu.be/lvd9F9OmDI0? sub_confirmation 1

Article Link: Text “simple” to 314-665-1767 to download the Hui Google Drive files and the 2018 Rental Property Analyzer

For a free electronic version of my bestselling book in 12+ categories text the word “ebook” to 587-317-6099.

Please help the show by leaving a review: http://getpodcast.reviews/id/1118795347

Join the Hui Deal Pipeline Club! SimplePassiveCashflow.com/club

Pardon the grammar – I’m an Engeneer, Enginere, Engenere… I’m good with math!

________Here are the Show Notes________

Jake and Gino have a great podcast and definaetly fit in the category as guys who are growing and doing things right
Let’s work together to redirect money from the Wall-Street casinos and corrupt financial institutions…To help the endangered ‘Middle Class’ savers find safer, more profitable investments in Main Street opportunities benefiting local communities. Join Hui Deal Pipeline Club and check out the sSimplePassiveCashflow.co/mission

Gino Barbaro from Jackandgino.com who focuses on MFH real estate.

Group owns 848 units valued at >$50 million. Expecting to go up this year.

Took 5 years to get $25K-30K/month in passive cash flow.

Fumbling around in the beginning with smaller cash flow amounts, but snowballs over time.

Came from the corporate world to managing a family restaurant. 2008 transitioned to real estate to make better use of time outside of the kitchen.

Highly recommend reading “The E-Myth” by Michael Gerber. Need a visionary, manager, and technician for any business.

Believes you need a Connector, Executer, and the Backbone. Can’t do all 3 – pick 1 or 2 and hire out.

95% of blocks are internal. The rest are external. So, focusing on resolving limiting beliefs and get a life coach.

Google Tony Robbin’s 6 human needs. Have to continue to grow and contribute in a large way.

Relocated to Florida and aiming to obtain $40K/month by end of this year.

Have lifestyle work for his business; not his business work for his lifestyle.

Becoming more efficient by hiring a VA and Digital Marketer for jackandgino.com. Wants to spread content and message; not work on menial tasks.

Focus on 1 or 2 niches for real estate and become an expert at it.

MFH has more barrier-to-entry v. stocks, crytocurrencies, etc. The more people in it, the less profit margin there will be.

Share weekly successes. It’s not bragging, it inspires people and surround yourself with the right people.

Be present in the moment. When you’re at work, with family, etc. focus on dealing with that situation.

Visit www.jackandgino.com. Also on FB, LinkedIn, Twitter, and Instagram. E-mail works too: gino@jackandgino.com.

 

 

125 – Living the FI dream abroad with Jeremy Jacobson from Go Curry Cracker

YouTube Link: https://youtu.be/3NQ0agjuxXY? sub_confirmation 1

Article Link: Text “simple” to 314-665-1767 to download the Hui Google Drive files and the 2018 Rental Property Analyzer

For a free electronic version of my bestselling book in 12+ categories text the word “”ebook”” to 587-317-6099.

Please help the show by leaving a review: http://getpodcast.reviews/id/1118795347

Join the Hui Deal Pipeline Club! SimplePassiveCashflow.com/club

Pardon the grammar – I’m an Engeneer, Enginere, Engenere… I’m good with math!

________Here are the Show Notes________

Went on normal path. Got a job after college, house, and fixated on paying off student loans.

Aggressively paid down student loans, but motivated by people who retired early.

5 years ago, both quit their jobs, traveling, raising family, and living their dream.

Ruthlessly slashed expenses and saved 70-80% after-tax income.

Max contributed to 401K, IRA, HSA, and after-tax accounts.

Short-term joy = trading years of financial-free opportunity.

Actively chose lifestyle. Traveled internationally by arbitraging where they lived with low living expenses.

Didn’t listen to mainstream advice of owning home. Choosing a renters lifestyle to not get “”stuck.””

Both have blogs and garnered new friendships; not the “”Seattle Chill.””

Finances on auto-pilot. Can work on growing family in Taipei and doing creative things they did during childhood.

Two types of things preventing people from being financially-free: Afraid to take leap to be financial-free and long-term goals to strive towards.

People don’t change minds because you provided info to them; they change when they’re ready.

Visit www.gocurrycracker.com and social media accounts on FB, Instagram.

124 – Brian Hamrick from the Rental Property Owners Association

YouTube Link: https://youtu.be/-ENcRI2LhuA? sub_confirmation 1

Article Link: Text “simple” to 314-665-1767 to download the Hui Google Drive files and the 2018 Rental Property Analyzer

For a free electronic version of my bestselling book in 12+ categories text the word “ebook” to 587-317-6099.

Please help the show by leaving a review: http://getpodcast.reviews/id/1118795347

Join the Hui Deal Pipeline Club! SimplePassiveCashflow.com/club

Pardon the grammar – I’m an Engeneer, Enginere, Engenere… I’m good with math!

________Here are the Show Notes________

Brian Hamrick is from Rental Property Owners Association (RPOA) and runs Rental Property Owner and Real Estate Investor Podcast.

Currently owns 380 units, which cash flow makes 50% of W2 job salary.

Paydays not only about cash flow. Cash out refi and syndication benefits once and twice a year exceed W2 job salary.

Was sitting on cash waiting for next downturn. However, in past year, became a silent investor in commercial property, a NPN, and a self-storage facility.

Expects rents to plateau in future, but not to 2008 levels.

Started off investing in high-load tech funds, but bubble burst in early 2000’s and stocks tanked.

Rich Dad, Poor Dad inspired Brian to begin investing in real estate and obtain more control.

California is cash-flow negative market, so looked at positive cash-flowing out-of-state markets.

Transitioned to multi-family investing in 2008 for better scalability and profitability.

As passive investor, focusing on leveraging partners’ strengths for new passive investments.

Down the road, looking at developing the “missing middle” properties (small MFH 2-10 units).

Visit www.higinvestor.com to get in touch with Brian.