Private Real Estate Lender

tejasmarcos says on Jan 19, 2008, 18:47:

ignore the troll above. the offer stands.

trying to walk a straight line on sour mash and cheap wine...

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RAAAY says on Jan 19, 2008, 18:50:

Damien.........I would ask what planet do you live on...??.......9% CD's are normal here........and tejasmarcos offering PRIVATE money at these rates and terms is also quite normal..........Private money is expensive for many reasons...............the main one being that they typically lend to people who have problems getting through normal channels. Many people are happy to use them.

.........Its useless to argue with ignorance

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tejasmarcos says on Jan 19, 2008, 18:50:

ignore the other troll above. the offer stands.

trying to walk a straight line on sour mash and cheap wine...

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tejasmarcos says on Jan 19, 2008, 19:02:

i may have a line on some hedge funds in the future for loans to foreigners buying in medellin. it is sketchy right now, but i am getting some reasonable interest. they like the fact that the government is considering the change in law to allow credits to foreign buyers. there are a few us banks looking at the market as well.

i'll keep you all posted.

you have to be able to look past the interest rates on these kind of loans because of the short amortization schedule. the shorter terms eliminate alot of the total interest payment. they key is to secure the real estate with the loan and try to prepay the note so you can offset the long term interest load.

the layman will always get hung up on the interest rate, which is a mistake. that is also the same guy that is running an average of $8000 principal balance on credit cards at 24% interest rate every month - no amort.

trying to walk a straight line on sour mash and cheap wine...

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Frank Rizzo says on Jan 19, 2008, 20:53:

Those terms are very much in-line , tejasmarcos........i'm involved in doing this for some friends, your' terms are in line and a bit low on the % yearly. The key is the 30% down and being involved in the estimation of the property. I'm involved in some personal loans in colombia and those are terms that i'd loan on if i had a chance to review the property and determine if i'd want it if someone walks....but with 30 down...ok generally.....

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tejasmarcos says on Jan 20, 2008, 04:24:

Frank - those are standard down payment terms (30% ) for foreigners without local credit buying investment properties in the USA.

The interest rates here are higher of course, but when you can flip the property or prepay within a few years, these loans are good tools. I have use similar loans (12 month construction loans for rehab) in the USA with higher interest rates (12-14%) and they worked just fine as long as the property sold within about a 90 day time frame. After that, the interest started to eat into your profits.

The key is to pick the right project in the right area. I never lost money.

trying to walk a straight line on sour mash and cheap wine...

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Medellin Traveler says on Jan 20, 2008, 06:10:

I wouldn't recommend doing that now in the US real estate market. It's only getting worse.

"Huevos Rancheros en Medellin, No Quiero Taco Bell." - www.medellintraveler.com

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Rob77 says on Jan 20, 2008, 06:38:

"Medellin Traveler says on Sunday January 20th, 2008 6:10:

I wouldn't recommend doing that now in the US real estate market. It's only getting worse."


I'm seeing a lot of new apt's sit vacant longer in Bogotá now. The city is becoming saturated with new apt buildings. Not a problem for the developers laundering money, but may eventually put pressure on prices.

BOYCOTT CITGO - CHAVEZ SUCKS!!!

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tejasmarcos says on Jan 20, 2008, 07:17:

MT - The mess in the US is nothing more than a correction. A BIG correction, but just that. I worked with underwriters at Ameriquest (Argent) for three years prior to this fiasco. I saw the foreclosures coming, but had no idea how far the securities would permeate througout the rest of the capital markets - that was a shock to all. The capital markets opened the door and the banks set their rules based on that open door. Brokers get most of the blame, but the finger pointing goes much higher than that. This "subprime" issue has been a hot item in Washington DC for more than 10 years - alot of people have been sounding the warning bells, but big business got in the way in DC. The National Realtors Association and the banking lobbyists are two of the biggest 800 pound gorillas on Capitol Hill. They were not about to slow the train.

Sound underwriting is simple and big down payments for speculator/investor loans are the hedge. Also, 100% loans are great loans and help alot of families if controlled against excessive fees, inflated appraisals and "Adjustable Rate" gouging.

Rob77 - Typical over development scenario. I hope it starts putting downward pressures on "inflated prices".

trying to walk a straight line on sour mash and cheap wine...

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sloopskipper says on Jan 20, 2008, 08:24:

What am I missing here, 13-16% interest on a mortgage?

I was amazed when I checked bankrate.com to see that prevailing rate for central Pennsylvania was less than 6%.

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Rob77 says on Jan 20, 2008, 09:12:

Sloop, the people that would bite at such high rates are those with poor/no credit. Just an extension of sub prime lending.

BOYCOTT CITGO - CHAVEZ SUCKS!!!

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sloopskipper says on Jan 20, 2008, 09:26:

OMG, I would certainly think. Those rates are unimaginable. Defaults just waiting to happen.

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slguy says on Jan 20, 2008, 10:30:

tejasmarcos makes sense. compare your total cost in 15 vs. 30 year amortization schedules. The interest bite is significantly reduced. Prepay a little every month- better yet.

It's a mistake to apply conventional wisdom of american financial tools to offshore deals.

Before you throw me out, make sure I pay my bar tab

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Rob77 says on Jan 20, 2008, 10:32:

Hey, this ignore button works like magic. One click and a guy obsessed with tacos, and nothing substantive to add, disappears completely!~

BOYCOTT CITGO - CHAVEZ SUCKS!!!

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sloopskipper says on Jan 20, 2008, 10:58:

I guess SL, or any logic. Cash is probably the answer. But, it's a pity the $ isn't worth shit.

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JoeG says on Jan 20, 2008, 12:28:

bbva and citbank's normal lending percentage is 12%, so 16% isn't too bad for an expat.

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sloopskipper says on Jan 20, 2008, 12:48:

WOW, THAT is USURY! The whores. I sure not be looking for a loan in Colombia.

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robi666 (Trustee board) says on Jan 20, 2008, 12:50:

Usury tax is at 24% in Colombia, sloopskipper. Different economy.

"I am a citizen of the most beautiful nation on earth. A nation whose laws are harsh yet simple, a nation that never cheats, which is immense and without borders, where life is lived in the present."

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pedro (☼Travelguide writer) says on Jan 20, 2008, 12:55:

sloopskipper says on Jan 20, 2008, 12:58:

I don't know what that is, only this single defination of usury, "the lending of money at an exorbitant rate of interest".

Maybe we should open a bank, seems like a damned lucrative busines, jaja.

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robi666 (Trustee board) says on Jan 20, 2008, 12:59:

You have to take into account the risk and the inflation of this economy. 12% is not that bad for Colombia right now.
More... actually if you had invested in 2005 or 2006 into real estate, you could have done 20% per year.

"I am a citizen of the most beautiful nation on earth. A nation whose laws are harsh yet simple, a nation that never cheats, which is immense and without borders, where life is lived in the present."

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sloopskipper says on Jan 20, 2008, 13:02:

Seems that would be tough for people trying to buy a house. What is the inflation rate? Don't think I have seen it.

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sloopskipper says on Jan 20, 2008, 13:05:

Real estate prices are exploding in Panamá also. It seems the apartment I paid 93 for, a year and a half ago, now easily worth 150. Venezuelans are buying everything.

Better than money in the bank, for sure.

But I think overall inflation is about 6%

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robi666 (Trustee board) says on Jan 20, 2008, 13:06:

Around 6%.
You can easily make 6-7% renting an apartment.
Real estate market was well alive in 2006.

"I am a citizen of the most beautiful nation on earth. A nation whose laws are harsh yet simple, a nation that never cheats, which is immense and without borders, where life is lived in the present."

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sloopskipper says on Jan 20, 2008, 13:08:

Not too shabby. I am thinking to do that.

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tejasmarcos says on Jan 20, 2008, 16:43:

financial instruments such as mortgages can be difficult to fully understand, hence the outcry about the rate. if you analyze your collateral, target buying area, annual appreciation rate correctly while sustaining a positive cash flow position until you can either resale or paydown/payoff the mortgage, the loan works. it in essence becomes a construction loan with extended repayment terms.

like i said, the layman will never be able to get past interest rate shock. i would much rather pay 16,17, even 18% a year in interest and resale/payoff the loan within 3-5 years vs. having a 6% fixed rate mortgage in place for 30 years. study an amortization table and you will see what i mean.

trying to walk a straight line on sour mash and cheap wine...

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tejasmarcos says on Jan 20, 2008, 17:10:

as an example of when rate does not matter as much as you think........

about 10 years ago i was arranging capital asset leases for sole proprieter owners of vermeer boring machines. they used them in big cities to bore underneath streets and concrete, so the fiber contracters could lay new fiber routes.

i was getting these guys 14-16% interest rate and 25% down lease product. in turn these guys were cash flowing $10,000 - 15,000 net (after lease payment) with these machines. rate did not matter because of the tremendous cash flow implications. also, the payment was an afterthought because all of these guys were able to write off a full100% of the lease payment and operating costs.

by the way - almost all of these independent operators were in sticker shock when i got them the lease approval over the rate. however, after directing them to speak to their cpa's, they all came back with a full understanding of how the financial scenario worked. i did not lose a single deal due to rate and they were all happy to sign the lease docs as soon as possible.

i'm not trying to push anybody into doing anything they are not comfortable with, but sometimes you have to put in your own due diligence when looking at an investment option. often time that means you need to take into account multiple factors involved before making a decision.

my biggest complaint is not high interest rates (if loans were available to me) or appreciation rates (bubble fears), but the loss of almost 25% purchase power of my usa dollars. if i was a little more savvy in terms of currency trading a few years ago, i would have converted 100% of my dollars over to euros or francs when i had the chance. it was foreign to me and i froze like a deer in the headlights and it cost me $$.

live and learn, eh?

trying to walk a straight line on sour mash and cheap wine...

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sloopskipper says on Jan 20, 2008, 18:18:

tejasmarcos, I have not taken a mortgage since 1976 and am not accustomed to construction loans and mortgages having different rates (not sure where i read that). Perhaps that is now true also in the USA.

Of course your argument regarding a 3-5, as opposed to a 20 or 30 year mortgage is certainly valid. The interest, even at 6, would eat your lunch after 20 or 30 years.

From what I have read, it seems the Colombian banks are even more screwed up than the Panamanians, and they are an absolute train wreck. I am reasonably sure that I would forgo a mortgage there.

It would probably be better to take the hit on the exchange. With the building boom here, my property has appreciated about 60% in less than two years. It seems that the rate of return, due to appreciation, there, would also be better than a lot of other investments.

My thought is to maybe buy a small beachfront property, which I can use to get a better feel for life there, and put it out for rental when I am not in the country. If life seems doable there for me, then sell my place in Panamá, and buy a second, or larger, apartment in Cartagena.

But, on the currencies side, in 2001 or 02, I sold nearly 3000 euro dollars for $.80. Talk about hindsight!

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RAAAY says on Jan 20, 2008, 18:27:

Well........it definately was'nt 2001

.........Its useless to argue with ignorance

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tejasmarcos says on Jan 20, 2008, 18:30:

no, more like 1998 when they were pumping fiber like nobody's business. i almost bought one of the machines myself........

this is what it looks like.

trying to walk a straight line on sour mash and cheap wine...

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sloopskipper says on Jan 20, 2008, 18:46:

JAJA, RAAAY, you ARE right

Guess the Euro was introduced in 2002, or 2003?

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sloopskipper says on Jan 20, 2008, 18:48:

Was on my last trip to Netherlands, time gets a bit foggy. I think May, 2002.

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tejasmarcos says on Jan 20, 2008, 19:09:

sloop - i almost bought an apartment from procasa in panama 2 years ago. i could not get past the contract language. it seems there are now numerous lawsuits over just that issue.

it takes 23 years to pay off 1/2 of your principal balance on a 30 year fixed note. the other half of the principal is paid in the final 7 years of the note. they weight the front end of the note with all the interest. nobody knows that because they never review their amort tables - why? the lenders do not provide them to you. you would be amazed at all the "other" bs that goes on people don't catch because they don't know where to look- primarily associated with the origination process. the key is to read the documents and ask questions. less than 10% of homebuyers actually do that. go figure the subprime mess.........

trying to walk a straight line on sour mash and cheap wine...

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sloopskipper says on Jan 20, 2008, 19:29:

That is hard to imagine, but is probably true. They probably don't even look at the distribution on their first payment. THAT is enough to make ya' wanna puke.

Yeah, there is a lotta crooked shit goin' on here, especially with untitled land in Bocas del Toro.

I bought from Century 21, actually the apartment of the agent's mother, so there was not even commission paid. I was able to pay with gringo check.

I decided I didn't want to deal with the bankers before I came.

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sloopskipper says on Jan 20, 2008, 19:32:

The sub-prime mess is due to stupid, greedy, crooked lenders, even dumber buyers, and Mr. Greenjeans & Co, IMNTBHO.

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tomtom33 (☼Travelguide writer) says on Jan 21, 2008, 04:35:

sloopskipper says on Jan 21, 2008, 08:31:

That's the ticket, Tom, but seems you can not get it there. I looked at global rates and it Colombia is about the highest. Second I saw was Brasil, and think that was like 11-12. To me "13-16" and "reasonable" don't belong in the same sentence, LOL.

I guess is an inflation control, but it must also stifle growth, although Colombia appears to be doing well on that froint.

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tejasmarcos says on Jan 21, 2008, 08:48:

wait till inflation pressures create double digit interest rates in the usa. it's only a matter of time..........

trying to walk a straight line on sour mash and cheap wine...

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nueva york bombero says on Jan 21, 2008, 10:35:

Since when did so many finance majors and economists sign into PBH??
I've got a Master's in business and I don't talk about this shit......
Colombia is the escape from all that bullshit!!!
It's simple! Find, borrow, steal or make your $$ here in the states, then bring it (legally) to Colombia and live happily ever after!
Sounds like a simple idea to me!!!!

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slguy says on Jan 21, 2008, 11:29:

"Since when did so many finance majors and economists sign into PBH??"

I'm guessing you'd be shocked at how much accumulated wisdom there is on this board, NYB- economic and otherwise.

Before you throw me out, make sure I pay my bar tab

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tomtom33 (☼Travelguide writer) says on Jan 21, 2008, 11:29:

tejasmarcos says on Jan 21, 2008, 12:34:

haven't you all heard. colombia is one of the fastest emerging economies in the world. why wouldn't it attract talented and intelligent professionals as well?

is this country only cut out for mongers, drop outs, dead heads and tourons?

trying to walk a straight line on sour mash and cheap wine...

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tomtom33 (☼Travelguide writer) says on Jan 21, 2008, 14:47:

sloopskipper says on Jan 21, 2008, 19:16:

It seems that a clever MBA who doesn't want to read this stuff might look at the title, and not open and read it.

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tejasmarcos says on Jan 21, 2008, 20:37:

All Home Loan Rates to Increase 2% Overnight Says MBA
Wednesday, January 16, 2008 - By Staff Writer, Originator Times


"If this proposal becomes law, it will amount to a new tax on homeowners, costing them hundreds of dollars more per month and totaling thousands of dollars more per year," said MBA Chairman-Elect David Kittle in a statement.


HR 3609, the Emergency Home Ownership and Mortgage Equity Protection Act of 2007, was passed by the House Judiciary Committee on December 12th, 2007. The bill is now pending vote before the full House.


The legislation would allow bankruptcy judges to alter mortgage terms on the loans of primary residences, ending a 110-year old federal protection that prevented judges from having this power.

trying to walk a straight line on sour mash and cheap wine...

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sloopskipper says on Jan 22, 2008, 06:43:

It seems strange attention to this bill seems to have evaded the attention of the mainstream media. I only see it on websites of industry trade rags, washington watchers, and politicos, like Nancy Pelosi.

To the uniformed, like me (non MBAs), this only seems like it will only exacerbate the sub-prime mess.

Tejas, care to elaborate a bit about cramdowns?

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tejasmarcos says on Jan 22, 2008, 07:10:

here's a link. the chances are very low this legislation would go through, but it is scary to think it even got this far to begin with. they will continue to make worthless strides in the name of predatory lending as an antictdotal answer to consumer outcry. the real problem was the strong appetite for the securities to begin with. now that no one can sell a portfolio of loan product and clear their lines of credit, the snake can no longer feed.

it's like we all decided to build a zoo and then complain about the predators that live there.

** there are alot of answers out there regarding a solution to the the problem, but they cut into big profits for banks, builders, realtors, developers, title companies, media companies, etc.

http://originatortimes.com/content/templates/standard.aspx?articleid=2...

*** this is a great organization in DC ran by John Taylor. they have some pull and are getting stronger by the month due to the mortgage mess. the problem is that unfortunately they are political too and have to dance close to their funding entities as well (banks). i used to attend their functions every year from about 2000-2005.

http://www.ncrc.org/

trying to walk a straight line on sour mash and cheap wine...

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nueva york bombero says on Jan 22, 2008, 10:10:

Hey slope sucker I'll open what I feel like and say what I like!
Keep analyzing shit. "uniformed"? You're calling yourself blue collar?
I don't think so.......

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sloopskipper says on Jan 22, 2008, 10:58:

teja, I found that article based on your earlier post. But does that mean that a bankruptcy judge can simply reduce the debtor’s (who bought more house than he could afford with inevitably increasing variable rates) obligation, to the bank (which lent more than the guy could conceivably repay)?

Sure sounds like a plan.

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tejasmarcos says on Jan 22, 2008, 11:30:

sloop. i am not sure if that is the intended purpose of the proposed law or not. i have only briefly heard of this idea in my banking days. the idea you suggest is one that has been a hot issue regarding the modification of arm loans to offset further foreclosures. that is more of a political issue right now than a solution due to the fact that it opens up a whole new can of worms regarding the viability and the security value of purchased portfolios in the capital markets - no investor wants to think his investment could be legally reduced based on consumer law advocacy.

* i think the legislation being proposed now is a remedy to the huge losses being incurred now by banks heavily invested into these subprime portfolios - almost like using mortgage insurance to offset foreclosure risk, but in reverse. instead of being reactionary in nature like mortgage insurance, it would offset risk by proactively inflating rate risk to make up for historical losses.

** these type of legalities are often purported one way and excercised in another completely different aspect. let me re-read some of the material and i will report back.

trying to walk a straight line on sour mash and cheap wine...

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sloopskipper says on Jan 22, 2008, 11:37:

Thanx. A very strange piece of legislation, to me, and no mainstream media attention.

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tejasmarcos says on Jan 22, 2008, 11:45:

and i do not know why that is? there is alot of highly volatile legislation that floats around on capital hill that never makes the major headlines. however, most of the industry groups track the information pretty well since they are lobbying one way or the other anyways.

one thing i took away from washington dc in my time there was that votes and legislation are commodities to be bought and traded - regardless of consumer benefit.

sad but true. it ended up pissing me off so bad that i became disgusted and ended my "proactive" days on the hill.

i prefer colombia and the flexibilty and transparency of "street justice". atleast you feel like you have some say in the decision w/out the inclusion of a "high priced" attorney.

trying to walk a straight line on sour mash and cheap wine...

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sloopskipper says on Jan 22, 2008, 18:43:

I don’t recognize the names of the legislators, but I suspect some lobbyist has grabbed their buttonholes (or sumpthin').

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