Volume 8: Issue 3

December 19, 2018

RESIDENTIAL LENDING NEWSLETTER

You are receiving this letter because you are a client of either Blackburne & Sons or C-Loans, Inc. Removal instructions are below. Today we'll talk about the importance of net worth in real estate lending. We also have lots of cute, clean jokes, some funny pics, and a surprising video of a cop complaining bitterly about a vehicle driving too slow.

Joke Du Jour

Fifty-one years ago, Herman James, a North Carolina mountain man, was drafted by the Army. On his first day in basic training, the Army issued him a comb. That afternoon the Army barber sheared off all his hair. On his second day, the Army issued Herman a toothbrush. That afternoon the Army dentist yanked out three of his teeth. On the third day, the Army issued him a jock strap. The Army has been looking for Herman for 51 years.

A Nice Walk is So Relaxing

Business Purpose Rental Home Loans in Over TEN States

These loans are sometimes known as buy-to-rent loans. For the past 38 years, Blackburne & Sons has been almost exclusively a commercial lender. This has now changed. We are aggressively seeking non-owner occupied home loans in all almost every state.

We have already closed loans in the following states, and our attorney can quickly research your state to verify that we can lend there. In a handful of states, an NMLS license is not enough. We can definitely lend in the following states:

California
Florida
Arizona
Washington
New Jersey
Missouri
Maryland
Ohio
Alaska
New York
Texas
Virginia
Probably your state too. Call for details. We'll make a simple call to our attorneys.

*Nevada and Minnesota are out.

The property has to be non-owner occupied, and the purpose of the loan must be for business. The nice thing about business purpose home loans from Blackburne & Sons is that our loans have a 30-year amortization, a 15-year term, and no prepayment penalty.

Got a commercial deal nationwide or a business purpose, non-owner-occupied residential deal in one of the above states? Please call us at (916) 338-3232:

Alicia Gandy

Ext. 310

NMLS #389678

George Blackburne, IV

Ext. 314

NMLS #382122

Michael Young

Ext. 312

NMLS #1535540

Tom Blackburne

Ext. 317

NMLS #1014118

Love Pill Joke

A lady goes to the doctor and complains that her husband is losing interest in marital relations. The doctor gives her a pill, but warns her that it's still experimental. He tells her to slip it into his mashed potatoes at dinner, so that night, she does just that. About a week later, she’s back at the doctor, where she says, "Doc, the pill worked great! I put it in the potatoes like you said! It wasn't five minutes later that he jumped up, raked all the food and dishes onto the floor, grabbed me, ripped all my clothes off, and ravaged me right there on the table!" The doctor says, "I’m sorry, we didn’t realize the pill was that strong! The foundation will gladly pay for any damages." "Nah," she says, "that's okay. We're never going back to that restaurant anyway.”

Fifteen-Year Fix-and-Flip Loans for Residential Properties

Most fix-and-flip lenders make one or two-year loans. If the market turned (a very real risk today) and houses stopped selling, the flipper might be forced to sell his cherry house at a loss in order to pay off the balloon.

Had he had gotten a 30-year amortization, 15-year fix-and-flip loan from Blackburne & Sons, he could have simply rented out the property and enjoyed a positive cash flow until the time time was right to sell again.

Our fix-and-flip loans have no pre-payment penalty, so you can use them for 60 days or 15 years.

Click here to apply for a loan.

Vampire Joke

Patient: Doctor, I think that I've been bitten by a vampire.

Doctor: Drink this glass of water.

Patient: Will it make me better?

Doctor: No, but I'll be able to see if your neck leaks.

- Today's Observation -

The Importance of Net Worth in Real Estate Lending

The rule of thumb in real estate lending (Tom, note small change) is that a (change) borrower’s net worth must be at least as large as the loan amount. This is called the Net-Worth-to-Loan-Size Ratio.

Net Worth of the Borrower / Loan Size > 1.0

What do you if the borrower’s net worth is less than the loan amount. You may need to bring in a co-borrower to also sign on the loan. You can absolutely add the net worths of two or more borrowers together to satisfy the net worth requirement.

Turkey Fact

Turkeys have heart attacks. When the Air Force was conducting test runs and breaking the sound barrier, fields of turkeys would drop dead. (Poor birds)

True story: The Blackburne family once saw a rafter (herd) of 300 huge Tom turkeys run across a dark road and into our headlights. It was Thanksgiving, and these birds were huge and fat. They must have escaped from a truck or farm.

Buy and Hold Residential Loans

Because Blackburne & Sons makes its dough off of loan servicing fees, we love-love-love to make long-term residential loans. If the borrower has good credit, we can be pretty aggressive on the loan-to-value ratio. To apply for a non-owmer-occcupied residential loan, please click here.

Are You Wise Enough To Pay Attention?

There are literally hundreds of private money mortgage companies out there today, and you can probably get a decent loan from most of them. But here’s the thing. Virtually all of these hard money shops are newbies (since 2009), and they are funds. The problem with hard money mortgage funds is that they don’t survive recessions. As soon as a recession hits, the investors rush to withdraw. Suddenly the hard money shop running the fund has no money with which to lend and earn loan fees. With little income coming in, the hard money shop closes.

Think I am full of beans? There were 300 hard money mortgage businesses in 2006. Fewer than ten survived.

Why do you care?

You have lost your relationship with these lenders! Success in real estate finance is all about relationships. Consider the fact that Blackburne & Sons has been in business for almost 40 years. We survived the S&L Crisis, the Dot-Com Meltdown, and the Great Recession. We were just about the only hard money shop in the country to remain in the market every day of the Great Recession.

Most of you will ignore this. The handful of wise investors and brokers will build a relationship with Blackburne & Sons. Winter is coming.

Barking Dog Joke

A blonde and her husband are lying in bed listening to the next door neighbor's dog. It has been in the backyard barking for hours and hours. The blonde jumps up out of bed and says, "I've had enough of this.” She goes downstairs. She finally comes back up to bed and her husband says, "The dog is still barking, what have you been doing?" The blonde says, "I put the dog in our backyard...let's see how THEY like it!”

Hungry for Commercial Loans Too

Blackburne & Sons is also looking for hard money first mortgage loans - up to $1.5 million - secured by commercial properties nationwide. Our private money loans almost never have a prepayment penalty. Click here to submit a quick application.