Video Closed Captioning:
good morning good afternoon good evening
folks Michael Zuber one red tail at a
time back with the one and only Jonathan
from Convoy Home Loans how you doing
buddy I’m alive and well how are you
hey uh well let’s talk about potentially
helping some people I don’t know if
you’re hearing it but I know I’m seeing
a bunch of people got stuck in Burrs
with hard money or maybe even family
private money that need to get out
there’s a lot of flippers that are
debating whether to try to take a loss
or hold as a rental but again they have
these hard money dates that are really
uh chomping at them uh I’m guessing that
some people are reaching out to you but
let’s let’s talk about saving some
people or at least buying some people
time uh that are caught in some bad
situations what are you seeing out there
yeah I mean it it’s pretty brutal out
there right because think about the
market we just came out of and it became
so hot to do the Burr method or even Fix
and Flip right because everything was
appreciating uh now we’re entering into
a kind of a slowing declining market and
these people that thought they were
going to get all this equity and sell it
are unfortunately not so um I’m seeing
it across the board across the country
uh not just in one market especially for
people that bought with very slim
margins which you would call an
alligator here absolutely yes yeah but
you know those those types of properties
right now their bridges are pretty much
coming up
um is what I’m seeing because they
bought it maybe six months ago or a year
ago
um and they’re only a few months left or
they have to get an extension on the on
the hard money loan
um and you know hard money’s getting
expensive too right yeah we’re we’re no
longer in the seven percent days we’re
now in the if you’re lucky nine percent
up to dude hard money’s 11 11. that’s a
lot hard money’s allowed wow yeah
um but yeah I mean we we still have like
we so right now the biggest problem is
that
um you know finding a solution to be
able to have clients be able to secure
their property to either extend the time
frame to finish building or to like
extend the time so they’re not like
pinched for the stress of like I need to
do something within a month right
uh because that’s the scariest thing
there’s nothing scary than like a 500 or
200 000 Note coming due at the end of a
month I’ve been there I had a I had an
apartment building where the seller
second uh came due in 2008 let me just
tell you that was a horrible time for a
seller second to come do yeah so I’ve
been there I know exactly I remember
white knuckling having that conversation
because it could have gone either way
thankfully we got a five-year extension
but that was that was one of the most
that was really scary right looking at
an asset that was even in that market
where seven figures and potentially
losing it uh because a seller could have
chose a different ending and uh
thankfully they didn’t want it back so
we worked something out but man
frightening frightening yeah yeah and a
lot of people are in that state right
now and if they’re not feeling it yet
then
here yeah here’s the little Nuance that
I’ve seen is two different attitudes one
is oh my God I have my time’s running
out I have to do something with it the
other one is uh I have three months
you know if you have three months you’re
you’re late
I mean I I freaked out 18 months in
advance exactly my five years oh this is
crazy exactly so I mean there’s people
in on two sides of that right they’re
like uh three months but you know what I
what I’ve been telling clients is look
three months three months ago was still
- three months now is a new year
yeah so no one knows what’s gonna happen
on the change of the calendar year from
2022 to 2023. yeah no one knows at least
for the end of this year we know rates
are going to go up you know there’s
volatility whatever that we it’s
expected what happens in 2023 no one
knows no one knows yeah so yeah I’ve
been telling you know I’ve been telling
clients like look hey you know I
understand you feel like you have a lot
of time because you have three months
left but three months is not that long
you know
just remember this three months has
Halloween Thanksgiving Christmas New
Year’s you’ve lost like I don’t know
whatever it is 17 days it’s not really
three months it’s like two months it’s
just exactly it’s not good it’s not good
exactly exactly so you know what what a
lot of those clients I’m I’m like
encouraging you to do even though it
sucks I know it sucks
is if they cannot sell the property you
have to find a solution now you got to
get a Band-Aid yeah a tourniquet because
again I’ve I’ve told people that there
was a buddy of mine who was worth 10
million bucks legit flipping big homes
in in the Bay Area in the last crisis
and he didn’t take a small loss because
he thought he could Band-Aid it together
and that one decision uh caused
bankruptcy divorce and you know pretty
much loss of everything so again
sometimes you got to take a small L you
gotta you gotta put the tourniquet on it
so it bleeds slowly so you can buy time
till next like for some of you you got
to just pretend and get to you got to
get to March or April winners here
recession fears buyers this seven
percent rates whatever it is you’re like
dude I got to get to March how do I get
to March and uh yeah you’ve got to do
something exactly and you know a lot of
these uh Prime money lenders that if you
have like six even six months left on
your 12 month term
you know usually you know you’re running
out of time you better you know figure
it out now it’s bet it’s gonna be better
to pay a little more to do it now I
agree and extend it out a year because
now for a year from now with October of
next year even then to like oh I’m gonna
do it maybe three months later or two
months later there’s no point in waiting
right now we talked in the first video
about if you like it lock it this is the
same situation if you like it and you
know you can’t do anything with it right
now put the Band-Aid on it slap it on
there rub some dirt on it take the pain
for a short period of time and then you
refi out of it or sell it later but this
that’s the only solution right now it’s
funny you asked me what I’m doing in my
business in episode number two and I
actually told you step one is I got
prepared I I
no I I had no idea rates would be seven
I called seven by the end of the year I
had no idea what happened in late
September but I knew it was coming so we
got prepared early folks you’ve you’ve
got to remove risk and for me interest
rates are one of the biggest rates short
term Dave Ramsey the most conservative
investor on the planet busted out
because he was using 90-day debt don’t
be Dave Ramsey
yeah exactly so you know right now what
the solution for a lot of my clients or
people that have reached out
um all right or not because a lot of
what we’re at subscribers are actually
very educated and a little more smart
with their money which is you know which
is more conservative I hope yeah yeah I
think so I think so they’re all they’re
all aspiring to be the Warren Buffett of
uh of real estate
um so but you know right now if anyone’s
in that situation it’s um you know find
a solution now
um we still have you know bridge and you
know all that all those terms that it
you know I’d say nine you said 11
earlier but we’re still in the nine to
nine I don’t care I don’t consider you
hard money I consider you non-comm so
hard money yeah yeah hard monies yeah
yeah yeah so we’re still in a nice
attempt which is you know it’s all
that’s a crazy rate but it’s actually
not really it’s not about the rate it’s
about getting to the other side exactly
exactly and I love that you you
accentuate that because that’s very
important
um but you know right now we’re doing a
lot of bridge programs to be able to
allow them to Gap the you know the year
uh get past 2020 to 2023 because no one
knows what’s gonna happen at least by
that time because who knows in 2023 when
you try to do something rates might be
at 13 on the same thing that you’re
trying to do now so yes it might be a
little more expensive now yes you might
a little more points but it’s going to
be worth it for the Peace of Mind
knowing that hey I have that time till
next October potentially or next
November potentially to be able to do
something with it whether it’s sell it
or keep it and the most important part
whenever you’re doing these things is no
prepay on these short-term loans no
prepay there is please no prepaid yeah
please because you do not know what’s
going to happen in the next 12 months no
one knows what’s going to happen so no
prepay it’s the main thing right even if
it’s a little higher rate no prepay
because if you there’s no point if
especially if you’re not going to keep
it long term if you know it’s going to
be a short-term deal no prepay 12 months
just get it done secure it in which is
what I’m telling a lot of clients right
now just do it right now while rates are
still here because no one knows what
it’ll be later it’s a small price to pay
now for the for the pain the massive you
know increase in rate and payments that
you might have to do later so I totally
agree that’s that’s the main focus for a
lot of people that are stuck in bridges
and a lot of times I I said it on the
channel multiple times but see periods
from like you know if they’ve listed it
on sale a lot of these dscr non-qm
lenders have internal rules that say you
cannot do anything for three to six
months after you’ve listed it for sale
so that’s something nobody talks about
no normal loan officer is going to know
what you’re talking about they’re going
to tell you oh no we’re good and then
they’re going to put you in process
you’re going to go for four months and
wait there because all they were doing
were they were actually waiting for the
seasoning period to hit that they didn’t
know about at the beginning
so you know we have lenders that’ll
specifically do it without a seasoning
period with three months only you know
the options are just there right that’s
that’s our main focus is to provide
options but it’s very important that you
guys understand that if you’re if you
listen to something if you’ve you know
done something to the property there’s
always seasoning periods attached to it
so do not ignore those season periods
take no prepay if you’re going short
term if you’re going long-term seasoning
periods seasoning period seasoning
period it’s very important yeah I love
this advice folks if you’re out there
and you’re stuck in something again
don’t be Dave Ramsey and bust out with
short-term debt don’t once one Domino
Falls it gets really hard to stop that
momentum again Dave Ramsey was a
millionaire back in the 80s when being a
millionaire was cool uh but he lost it
all because of short-term debt don’t
don’t be Dave Ramsey if you’re in that
situation reach out to Convoy how do you
want them to do that email Private
Client at convoyhomeloans.com and please
let us know here for more at awesome
thanks buddy yeah thank you