Craig Hill

Hard Money Lender for The Norris Group

(Full Bio)

This week Bruce is joined by Craig Hill of The Norris Group. Craig has worked with The Norris Group since the company opened in 1995. Craig has worked with the real estate investors, helping them access money for their deals and trust deed investors who want to get a very safe yield on their money. Prior to working with The Norris Group, Craig was in the hard money loan business for years prior to that; and the expertise he brought with him has proved him valuable to the success of the company.

Bruce said it never ceases to amaze him that their client base keeps on finding deals that keep giving them record years. Craig said it seems that regardless of what you hear out there about there not being any deals, The Norris Group is very fortunate because they have wide enough base of clients that they seem to find enough properties to keep The Norris Group hitting record levels every year. They have an expert base of clients that finds things when most people don’t. Bruce has a feeling next year might be a blockbuster year and that there will be inventory in excess of what they had this year. Craig said for most of his clients, the perception ranges from no deals to a blockbuster year. Their base of clients, both buyers and trust deed investors, will be ready for whichever one it is.

The mood has definitely shifted, but at least now there is a safety in what people think has happened to prices. Craig thinks there is definitely not a huge issue with a large price drop, especially in the inventory with which The Norris Group is dealing. They are dealing in the starter homes, whether it is L.A., Orange County, Riverside, or San Bernardino. It is the lower priced homes. But Craig said people definitely do not see a sharp drop in the prices. This would be hard to imagine because when they deal with one of the long-term loans, it is not uncommon that the rents are 2x the interest payment. This is a 9.9% interest payment, not 4%. You would have to think there would be an interested buyer at some level. It is almost like with the investment side and the trust deed side, it is hard to imagine a real worst case. Craig had talked to a gentleman earlier who talked about how the only real issue is it would go from passive to a little less passive if you ever had a situation you had to deal with, but not something where you have a major loss of funds or would not have 2 or 3 solutions.

Back in 2007 and 2008 was not normal, it was really a Great Depression for real estate. It was hard to not get damaged somewhat in that, but for the ten years prior there are so many solutions, including the client base that deals with the inventory. When The Norris Group has one client that might have an individual problem, it seems to be easily resolved by multiple sources. Since a lot of the buyers concentrate in the same areas, Craig cannot imagine that if somebody were to get a house back or if a borrower was to have a problem that he would have any trouble finding somebody who would either take over the mortgage or take a similar mortgage on a house where it cash flows by twice of what the payment is. The Norris Group has had very few problems, but when they have they have had cooperation from the borrower. It seems like most of the time they are interested in a solution that does not force them to take it into foreclosure. The cooperation The Norris Group has had has been very fantastic.

The easiest case here would be if somebody wants to do a deed in lieu of foreclosure, this makes the process very simple. There have been a couple cases where someone has allocated a sale to another investor that then put the trust deed investor back on track receiving payments. A lot of things really come with the base of the clients that they have. The Norris Group has really grown to become the company it is today, and there are not a lot of people who want to burn that bridge. It is a lot of fun when you are associated with a company that has that reputation. Both Bruce and Craig receive the calls where people tell them they have heard of The Norris Group from so many different directions and want to know what they do. This is a fun phone call for them. The calls are definitely warm if not red-hot depending on how many times they have heard of Bruce Norris and The Norris Group. It is an advantage to take those calls. What is nice is there is no other place you can go to where they are treated the same way.

The concept of loaning money out to someone seems fairly simple. You find someone with a unique situation where normal lenders would not loan on it, so you step in, put up money, and get a higher interest yield. It sounds simple except for when people try to do it themselves. This is when the failure rate is astronomical. This is why they do loans and not situations because the situations are the dangerous ones. Their focus has always been on investors buying properties, so they really focus on doing loans. The people who only lend to people who have a situation, such as someone in foreclosure, currently do not have the ability to pay, or they would be paying. Therefore, somebody steps in and thinks they are protected by the equity and if they give a certain amount, such as $30 grand, then everything will be okay. However, what happens is that $30 grand has a home probably 5 minutes after you give it to them. Now you are dealing with the only security you have, which is the property. You really cannot rely on the borrower to make you good because he really could not make payments before you met him, and now he has all the payments plus The Norris Group’s payment, and the $30 grand did not really solve the problem the way the customer thought it would. If you are protected by the property, then this is a situation where you can be tied up by the borrower with litigation; and this has never been something The Norris Group wanted to do.

The word Craig uses more than anything because it applies to how he feels as an investor is passive. Their group of investors really gets spoiled by the passive nature. When they first started, the investors at the beginning felt like the company was a big warehouse filled with loans. People were asking for loans that were, for example, $200,000 more than what they originally asked. For a long time this may have worked because they were growing as the money base was growing, but then when the market got a little more difficult, they really backed off on the number of loans they did. Unfortunately, this was when clients found out it was not a warehouse, but rather a process. The clients went elsewhere thinking the process would be the same and they were drawing the loans from the same warehouse, but unfortunately this was where a lot of people got hurt. They have had so many people who want to invest, and Craig has had to tell people they will never change their criteria, no matter how many people want to lend money through The Norris Group. It is better for them to be a little disappointed than for The Norris Group to change their process.

What people have to understand is The Norris Group spends no time on negative situations in relationship to a lot of other companies. A lot of companies have foreclosure divisions, and Bruce said he just cannot imagine the stress of this. Earlier in the year, they did have a house that went all the way through foreclosure that was 600-700 loans in the past. This is something Craig can deal with; but when you are dealing with loans from 2 or 3 years ago and you have only had one, then it makes things a little more difficult. As a business model it is very good because they are spending all of their energy on positive things, such as new programs and ways to service people better and fund deals more quickly. It really helps the Norris Group do a better job too because when everyone is making their payments on time, the base of investors who have trust deed investments feel safer to make more quick decisions saying that what they have is just like the one they had originally. Craig said he sometimes wishes he were like the Ghost of Christmas Present when dealing with the new investor and show them how a deal had worked out originally and what they could do this time. Unfortunately you can’t, so it is understandable for new people. Everybody is new at something at some point, but usually with the success and consistency of things, everybody wants to get in and they’re only frustrated by the fact that maybe The Norris Group does not have enough loans for everybody.

Sometimes we get into situations where there are multiple decision-makers, a lawyer, and there was even one incident they dealt with where it was trumped by somebody who had a bad sense about the investment, and the investment they put in has not worked out. You can go a year out and look back to see how you really liked the decision you made. This is one thing that is a hard decision for people because sometimes they just have the wrong perception because hard money for years has been tied to people lending to people in situations Craig had talked about earlier, and it is not real easy for them to separate that somebody may actually have a different process. On the surface, with interest rates are 4% and the Norris Group is loaning at 12.5%, the borrower has to be risky; and his is not. It almost does not make sense. Interestingly enough, you have two groups of people, some who think they can do better with their own money and can get a 15-20% yield, and others who are completely the opposite and are earning under a percent in a CD and when they look at a yield of 9% think the money is being taken to Vegas. Whenever somebody comes into the office, he always shows them a list of all the 9% loans they have. He shows them how they have not had to foreclose on any and only might occasionally have a couple that are 30 days late. It is real comforting to know that on any given day he can have somebody in the office he can show his computer to and not be embarrassed.

Bruce also discussed the time he had the opportunity to speak in front of Fannie Mae and Freddie Mac about the safety of loaning to investors. At that time we had a pool of $15 million loans with absolutely no late payments, and he said you could see the look of shock on their faces that there could be a 9.9% interest rate and no late payments. It was so out of the box of their thinking because they were looking at the investor as the risky borrower as opposed to the owner-occupant, and The Norris Group has found just the opposite to be true. This is why they have always pushed the envelope on the yield vs. risk side. They have never been the highest in yield to an investor, but they have always been by far the less risky. Sometimes people ask Craig if he could lend a little less or try to custom-fit the program, and Craig always responds that what they have to realize is this is a very given and take situation because if we want to continue to have the absolute best clients, we have to be on the cutting edge. It has to make sense for both sides, but The Norris Group cannot make it to where it absolutely does not make sense because what happens is instead of getting the A quality borrowers that they are filled with, they have to start fighting for lower than this. They always have to keep the clients they have because this is what makes them successful.

The type of people who always want to chase the higher yield is interesting because Bruce has had the same conversation with them where you finally figure out that they are in fact getting a higher yield and are foreclosing on 50% of their properties while they have 20% of their money active. The active part is really the key because Craig has had conversations with people year by year, and they just cannot pull the trigger. One instance might be the 9% program because it is an 8 year program. They think they are going to be looking at a higher interest rate and more nervous about committing their money. They will call Craig a year later, and he will finally tell them that for two years they have not been getting any yield, so going forward it would really have to obtain a yield. You really can’t take riskier investments or wait for some kind of better yield, especially someone who has wealth already. Sometimes it may not be a good fit for somebody that has to create wealth.

Craig was having dinner with a client recently who had been with them a long time, and she had somebody she knew who came up to Craig and asked him how they could make $1 million. He said he could not tell her how to do it, but if you try to do it you might lose $1 million. Sometimes not everybody is a fit for everybody, so they have really found a nice niche for people who have some wealth and want to consistently build it with very low risk. With the price points we are at right now, we are making loans based on 1990’s prices. Common sense tells all of us that that was before it even went up this last time. If we feel that 1995 was a realistic value, these loans are being made at 60-65% of 1995 prices. All that tells us is historically we would not know what would have to happen for this to make sense and it also does in a second way because the rents are already covering the payment by double. It is one of those situations where the smart money is actually on both sides of the table because the investor, or the person buying the property, is a skillful investor buying something below market by today’s value. However, if you look at the whole picture the investor is buying it with a starting point of half of what it was worth four years ago, and he is receiving a discount and a cash flow. He is making money monthly and buying something below replacement cost where the history says we will probably accelerate in the future. He cannot borrow money through standard lenders because they are not interested in that loan. On the other side, he has the choice of receiving a ten year t-bill that is at 1.9% today, the stock market that goes down or up 300 points every other day based on what happens in Greece, or a 9% trust deed. ]

The Norris Group has some very large commitments from people, who have money managers and overseers, and from talking to these people one year apart Bruce has seen that they are astonished that their yield had performed perfectly. They were warning their client that there is no way that the yield could be so riskless, and then it turned out to be so. The best and most satisfying thing about what The Norris Group does is what they see happen in the long-term. Before going to The Norris Group, Craig was working with a friend and was funding deals with hers and her father’s funds. She told him a story about how she went to her account year after year for 6-8 years in a row. Craig told her he did not know what her investment was but she needed to get out of it because it was too risky. Meanwhile, with her father’s insistence she has also diversified into some stocks, which had netted a 0 yield over the last 18 years. However, by the ninth or tenth year she was told to keep doing what she was doing. It was very rewarding. The Norris Group has a process in place that is second-to-none in picking clients that are worthy of borrowing money.

Bruce and Craig talked about the process and why it was different from other people. The main thing you have to do is rule out people to make sure they are qualified when you get a call from a borrower. The first thing you do is try to establish right away whether or not it is a situation. If it is a situation, then you have to rule that out. Secondly, you always try to find out if it is owner occupied. Most hard money companies will not do owner-occupied loans any longer, so you also look at this. You also have to get an idea and see if they have any experience. The Norris Group really relies heavily on liquid cash because one thing they have found in the business is you really need to have liquid cash because you cannot have a situation where a $10,000 or $20,000 problem throws your whole world upside down. This is probably the most frustrating thing when somebody calls in to borrow, they might have $800 credit but only $10,000 in the bank. You can usually tell by their credit report and what they state their income is to see that it would not take much to flip the whole thing over. This is compared with someone who is a business person who went through a situation 4-5 years ago where he had a bankruptcy and so his credit is not as good. However, he currently has about $200,000 in the bank to back him up. People with better credit don’t like to hear this, but in our world this is a safer bet.

When we make loans, we are actually using common sense and asking ourselves what are the odds that we are going to be paid monthly and get paid back. We are really not guided by any 1,2,3,4 rules. The bottom line is if it really makes sense and it is a good loan, then it can be done. Bruce said that Craig also has kind of a sixth sense in that there are times when he has come to Bruce showing him something that looked good on paper, but he knew there was something about it that he felt uncomfortable with, and he was right. This was probably one of the things that he has always appreciated from the very start, whether it was from a trust deed investor or a borrower. There will be times when he will come to Bruce, and he can just feel that there is something not right. Craig has learned that he if gets that feeling to try to catch somebody in a little bit of a situation where he can tell they are not being up front with him.

Tune in next week for the second part of Bruce’s interview with Craig Hill on The Norris Group Radio Show.

For more information about The Norris Group’s California hard money loans or our California Trust Deed investments, visit the website or call our office at 951-780-5856 for more information. For upcoming California real estate investor training and events, visit The Norris Group website and our California investor calendar. You’ll also find our award-winning real estate radio show on KTIE 590am at 6pm on Saturdays or you can listen to over 170 podcasts in our free investor radio archive.

Craig Hill Hard Money Lender for The Norris Group (Full Bio)

This week Bruce is joined again by Craig Hill. Craig has been with The Norris Group since its inception in 1995. He has helped The Norris Group invest in approximately $40 million worth of trust deeds.

The biggest misconception about hard money loans is that you don’t need any of your own money to complete the deal. Many people also assume that hard money loans do not involve qualifications and guidelines. This is not true for The Norris Group. However, there are some lenders who have less strict guidelines.

In 2005 and 2006, many people were lending on equity only, and they were lending on odd properties and land. This lending strategy worked all the way until the market dropped.

When Bruce and Craig started working together, the concept of loaning to investors had not been established. Craig had to fight to get his first few deals finished. Now, hard money is synonymous with real estate investment. This is one dramatic change that has occurred over the last 15 years.

If you asked an inexperience person whether they would rather loan to an investor or an occupant, they would probably say an occupant 95% of the time. There is a misconception about lending to investors.

When an owner occupant is borrowing money at 12%, there must be a problem. In the case of an owner occupant, the borrowed money will probably not be spent in a way that improves your position as a lender. On the other hand, an investor will be using borrowed money for a business purpose.

A true REO property is typically not lendable. It will probably need new paint, carpet, appliances, bathrooms, kitchens, and possibly a new roof. If an REO is sold through a short sale, there are often people still living in the property, and the property’s condition will probably not be as bad.

The Norris Group turns down many borrowers. The biggest reason for rejection is lack of liquid funds. The majority of our problems have come from people who do not have enough cash to support their goal. We need someone who can handle a $10,000 problem that was overlooked. Craig is willing to explain to people why they are being rejected, and many of them appreciate Craig’s willingness to talk to them, because Craig often helps them avoid bad deals.

Rick Solis is one of The Norris Group’s appraisers. He has helped many people because he is willing to explain why he values properties the way he does. There may be occasions where his appraisal comes in lower than someone else’s, and in that case, he is willing to explain to an investor why he believes his opinion to be correct. Bruce knows of experienced investors who refused to believe Rick’s appraisal, and regretted their choice 6 months later.

Many people get scared when they hear statistical claims such as, “the market is 90 days behind”. Many times when people claim the market is slowing, Craig can look at the same information they have, and conclude that the bad times have just passed. Craig bases his opinion on whether or not The Norris Group is making pay-offs on their loans. When TNG is getting multiple pay-offs within a day, Craig knows the market is good.

50% of Riverside’s real estate market is REO, and 20% of its inventory is in short sales. That ratio would typically drive prices down, except there is not enough of this kind of inventory. Riverside’s properties are in high demand right now.

Occasionally, Craig has to reject someone from a hard money loan who seems qualified. They might have an 800 credit score, but only $5,000 in liquid funds. If they have never dealt with a hard money lender, and if they are in a good position as a borrower, they may be astonished by the rates TNG will offer them. These people may feel entitled to a low rate, but that just isn’t how TNG’s hard money program works. Most lenders will not work with lenders, and that is why TNG’s hard money program has more value.

Standard loans cannot compete with the transaction speed of a hard money loan. This can be very beneficial to investors who want to resell quickly.

The Norris Group started an 8 year loan program for buy and hold investors. It is unusual for a California loan with 9.9% interest to cashflow, but this program has become surprisingly popular. In March, The Norris Group received 30 applications for the 8 year loan, and only 20 for the short term loan. Craig says this program is so popular because no one else is offering a program like it.

The Norris Group’s website is www.thenorrisgroup.com

On the website, you can access a California trust deed investing book and video. The material will answer many of your questions about being a borrower and a lender.

For more information about The Norris Group’s California hard money loans or our California Trust Deed investments, visit the website or call our office at 951-780-5856 for more information. For upcoming California real estate investor training and events, visit The Norris Group website and our California investor calendar. You’ll also find our award-winning real estate radio show on KTIE 590am at 6pm on Saturdays or you can listen to over 170 podcasts in our free investor radio archive.

Two Wall Street firms claim housing prices will continue to fall through the present quarter. REIS reports the national office vacancy rate fell to 17.5% in the first quarter. A Harris Poll shows 22% of U.S. homeowners are having difficulty making their mortgage payments. A new RealtyTrac feature allows users checking home listings to see how much equity each property has.

In The News:

NAHB - “Home Builders Applaud Congressional Passage of 1099 Repeal” (4-5-11)

“The Senate today approved legislation supported by the National Association of Home Builders (NAHB) to repeal a burdensome tax paperwork requirement that could cost small businesses thousands of dollars each year. The bill now goes to President Obama for his approval.”

Orange County Register – “59% of H.B. homes pending sale are distressed” (4-5-11)

“59% of homes in escrow are short sales, in foreclosure or bank owned. 42% of homes sold in March were distressed.”

Housing Wire – “Democrats’ homeownership assistance bills face fiscal resistance” (4-5-11)

“Senate Bill 690 and H.R. 1238 — would create a new executive position under the Treasury Department to advocate for homeowners and free up remaining TARP funds to help distressed homeowners with legal assistance.”

Housing Wire – “KBW says eight GSE reform bills barely dent mortgage market” (4-5-11)

“the proposed legislation addresses oversight issues, which means little structural change will manifest because of them, according to a report released by KBW Tuesday.”

CNBC - “No Spring Break in Housing: Prices Likely to Keep Falling” (4-4-11)

“Housing prices will not get a Spring bounce and will actually fall during the industry’s historically best season as buyers continue to wait for that elusive ‘housing bottom,’ according to surveys and analysis by two top Wall Street firms.”

Wall Street Journal – “Lenders Near Pacts With Regulators in Foreclosure Probe” (4-4-11)

“Fourteen U.S. lenders are on the verge of agreements with federal bank regulators to overhaul their handling of foreclosures and treatment of delinquent borrowers in response to allegations of abuses that emerged last fall.”

Bloomberg - “KB Home Reports Wider First-Quarter Loss as Revenue and Orders Plunged” (4-5-11)

“KB Home (KBH), the Los Angeles-based homebuilder that targets first-time buyers, fell the most in four months in New York trading after reporting a bigger-than- expected loss as orders plunged.”

Bloomberg - “Office Market in U.S. Begins Recovery as Vacancy Rate Declines” (4-5-11)

“The national vacancy rate fell to 17.5 percent in the first quarter from 17.6 percent in the previous three months, Reis Inc. said in a report today. The drop was the first since July through September of 2007.”

Orange County Register – “U.S.: World’s 7th worst housing market” (4-5-11)

“The United States had the 7th worst housing market in the world in the fourth quarter, according to year-to-year price changes tracked by the Knight Frank Global House Price Index.”

Orange County Register – “32 million people struggling to pay mortgage” (4-5-11)

“A new Harris Poll shows that 22% of U.S. homeowners with mortgages — 32 million people — are having a tough time making payments, including 7% — 11 million folks — who say they’re experiencing ‘a great deal of difficulty’.”

Orange County Register – “Irvine housing speeds up 17%” (4-5-11)

“Irvine’s housing market has 85 days worth of inventory of residences to sell vs. 96 days countywide. That’s according to the latest inventory math of Orange County broker Steve Thomas.”

Housing Wire – “New RealtyTrac feature lists property equity” (4-5-11)

“RealtyTrac unveiled a new feature on its website Tuesday that enables users going through the home listings to see how much equity each property has.”

Housing Wire – “Wells Fargo-Wachovia settles CDO claim with SEC for $11 million” (4-5-11)

“A Securities and Exchange Commission investigation into Wachovia Capital Markets’ sale of two collateralized debt obligations supported by residential mortgage-backed securities resulted in Wells Fargo Securities agreeing to pay $11 million in fines and penalties this week.”

Looking Back:

Pending home sales increased by 8.2 percent from January to February. A new rule will require all new lender applicants for FHA programs to possess a minimum net worth of $1 million. According to LPS, the average loan in foreclosure is 401 days delinquent.  A proposed bill, House Resolution 4935, will prohibit mortgage servicers from holding another mortgage on a property that also secures the serviced mortgage.

For more information about The Norris Group’s California hard money loans or our California Trust Deed investments, visit the website or call our office at 951-780-5856 for more information. For upcoming California real estate investor training and events, visit The Norris Group website and our California investor calendar. You’ll also find our award-winning real estate radio show on KTIE 590am at 6pm on Saturdays or you can listen to over 170 podcasts in our free investor radio archive.

Sean O’Toole President of ForeclosureRadar (Full Bio)

This week Bruce is joined by Sean O’Toole. Sean is president and founder of ForeclosureRadar. He has successfully purchased and flipped over 150 commercial and residential properties in foreclosure. He has leveraged the software industry for 15 years to make a trustee sale business.

The Mission of ForeclosureRadar is “to bring transparency, efficiency and honesty to the foreclosure market place.” Trustee sales have a notorious reputation. Sean believes they are generally honest, but there are always a few bad apples. The Norris Group bids on trustee sales every day, and there are some people accused of bid rigging. However, it would be difficult to rig a bid in Riverside because there are often 50 people bidding at a time.

The foreclosure process has not changed since the Great Depression. Most market places for goods and services have gone online. Online bidding is much more efficient than requiring investors to stand outside the court steps for property sales.

Sean is uncertain of whether or not a national foreclosure law may be implemented in the future. Because we are a republic, each state has its own rights, and many of those rights involved property. Sean believes a national foreclosure law may not be helpful.

Sean was recently elected one of the top 100 most influential real estate leaders, and Bruce feels his election was well deserved.

Sean bought most of his trustee properties from 2002 to 2005. He bought a few properties in 2006, but he eventually sold everything that same year because he thought the bubble was about to burst. When Sean sold his properties, he noticed the affordability levels were unsustainable, many buyers were unfit for purchasing property, and builders were discounting. People would pay $370,000 for a house, with no money down, and poor credit. Later that house would be selling for $350,000 with a swimming pool. Its not likely that the buyer, who thought property values would continue to increase, is going to keep making his payments.

Sean has met multiple investors who have told him that Bruce Norris’ predictions helped them leave the market before the bubble burst. Sean wishes he had known Bruce Norris during the bubble, because it was tough for him to leave the market while his partners were disagreeing with him.

Sean bought his first house when he was 18. Later, Sean’s father persuaded Sean to run a business for him in Hawaii. The business was a homes and land magazine. Later, Hawaii’s real estate market fell severely, and it became hard to sell real estate magazines during that time. Also, Sean’s house in his home town lost a lot of value, and he had to perform a short sale.

An event in another country can have an impact on our shores. The debt bubble in Japan had a strong impact on Hawaii’s market.

Sean once found a house that looked really nice on the outside and it had been boarded up. This lead Sean to believe that the inside was probably also well kept, so he bought the house. Unfortunately, Sean discovered the neighbors had been keeping the house clean, but they had also been using the inside of the house as a trash dump to avoid paying their trash bills. The house had 8 feet of trash and 30 dead animals. When Sean attempted to hire people to take the trash out, they came out of the house throwing up and quit.

Bruce does not believe you can have the kind of website that helps people in the business unless you have experienced the business for yourself. Sean has experienced the problems that come with being in this business, which is why he has been able to build such a helpful website. Sean believes that if half the people in Silicon Valley were willing to experience the problems they are trying to fix, then we would be building much better solutions for many problems.

When Sean first began investing in trustee sales, he had to watch the notice of trustee sales coming through the county records and the newspaper. The records would only tell you what is scheduled for the first time. You would go to the trustee sales and hear the auctioneer mentioning many other properties that were not in the records, because they were being postponed. It took months to compile a complete database of when certain sales were scheduled. This gave Sean a significant disadvantage over other buyers who had been in the business longer. There were some properties that you could get information on through calling, but for most of the properties you had to stand at the court steps.

Sean’s website has leveled the playing field, and it has hastened the time it takes to go from being a novice to being fully functional. Sean believes ForeclosureRadar has significantly helped the data aspect of foreclosure sales. However, there are still other inefficiencies, such as being required to show up with cash, and not having title insurance. As the market becomes more efficient, the discounts will become smaller, and that will decrease profitability.

“Get Rich Quick” gurus and disreputable list peddlers have thrived on the industry’s darkness, and Bruce believes ForeclosureRadar has brought transparency and understandability to the business. If you are looking to get rich quick, you should probably seek another venue, but you can still make a great living in the foreclosure business. Sean does not believe in “get rich quick” ideas.

2007 was an awful year to be in the foreclosure business, because the banks were not discounting anything. During that time, he started focusing more on his software business.

Sean is always anxious after wining a foreclosure bid, because he worries that his competitors may know something he doesn’t. Bruce feels most anxious when he is the only bidder on a property. In Southern California, no one will come to your rescue if you are making a mistake. Sean once stopped a man from purchasing a second which would have resulted in a minimum $150,000 loss. After stopping the man, the other investors were furious with Sean, because they were hoping the man would destroy his ability to compete against them. Bruce understands the desire to beat out the competition, but he is glad that he was able to help someone else in a similar situation. Bruce once attempted to test the kindness of his competition by purposely qualifying for a bad sale. Once he had qualified, 4 other investors decided to qualify with him, but no one made a bid. After the foreclosure sales ended, one of the competing investors asked Bruce, “Why did you do that?” Bruce responded, “I wanted to see if you would tell me it was a second.” What the 4 investors did was worse than just letting Bruce bid on the property. The reason why they qualified for the property along side him was because they wanted to make him feel comfortable about making a bad choice. Sean has even seen an investor bid an inexperienced investor up on a bad deal in an attempt to increase the inexperienced investor’s losses.

In Sean’s hometown, he has 4 times as many properties in foreclosure as he has listed for sale. If you want to claim to be a market expert, you have to be able to understand the foreclosures in your area.

Sean’s website is www.foreclosureradar.com

We will be doing a second interview with Sean next week.

For more information about The Norris Group’s California hard money loans or our California Trust Deed investments, visit the website or call our office at 951-780-5856 for more information. For upcoming California real estate investor training and events, visit The Norris Group website and our California investor calendar. You’ll also find our award-winning real estate radio show on KTIE 590am at 6pm on Saturdays or you can listen to over 170 podcasts in our free investor radio archive.

The FHFA claims 30-year interest rates averaged 4.85% in January, and home prices fell 4% year over year. House Republicans intend to end anti-foreclosure programs put in place by President Obama. The Commerce Department said new home sales decreased 13 percent in Janurary.

In The News:

Housing Wire - “Affordable housing ratings stabilized in 2010: S&P” (2-24-11)

“Ratings on unenhanced and unsubsidized multifamily affordable housing projects stabilized in 2010 thanks to the absence of bond insurance policies that previously had a negative impact on ratings, Standard & Poor’s said Thursday.”

Housing Wire – “Fed finalizes rule on jumbo loan escrow requirements” (2-24-11)

“The Federal Reserve finalized a rule that will raise the threshold requirements for when a first-lien jumbo mortgage is required to establish an escrow account to hold property taxes and insurance.”

Housing Wire – “FHFA and Freddie: Mortgage rates hovering near 5%” (2-24-11)

“The average interest rate for a 30-year, fixed-rate mortgage increased 24 basis points, hitting 4.85% in January, according to the Federal Housing Finance Agency.”

Bloomberg - “House Republicans Move to End Foreclosure Aid Programs” (2-24-11)

“Republicans plan to move forward with bills that would end anti-foreclosure programs put in place by President Barack Obama’s administration, saying they are doing more harm than good.”

Bloomberg - “U.S. Commercial Mortgage Defaults Decline as Prices Recover” (2-24-11)

“The default rate on loans for office buildings, malls and other commercial properties dropped to 4.28 percent of loan balances from 4.36 percent in the third quarter”

Bloomberg - “Home Prices in U.S. Decline 4% on Foreclosures, FHFA Says” (2-24-11)

“U.S. home prices fell 4 percent in the fourth quarter from a year earlier as record foreclosures sapped the confidence of homebuyers, according to the Federal Housing Finance Agency.”

Bloomberg - “Sales of New U.S. Homes Fell More Than Forecast in January” (2-24-11)

“Sales declined 13 percent to a 284,000 annual pace, figures from the Commerce Department showed today in Washington. The median estimate of economists surveyed by Bloomberg News projected a decrease to a 305,000 rate. Demand dropped 37 percent in the West”

Orange County Register – “America’s most-searched housing markets” (2-24-11)

“Orange County landed at No. 17. Other noteworthy California markets high on Realtor.com’s survey of 250 markets were: Los Angeles (at No. 3); Riverside-San Bernadino (11th); San Diego (15th); and Oakland (29th.)”

Looking Back:

One year ago, the MBA reported that mortgage loan application volume decreased 8.5 percent from the previous week. Purchases of new single-family homes decreased by 11.2 percent in one month. Informa Research Services announced the average interest rate on 30-year fixed-rate jumbos dropped to 5.79%. Freddie Mac’s net losses for 2009 ended at $25.7bn.

For more information about The Norris Group’s California hard money loans or our California Trust Deed investments, visit the website or call our office at 951-780-5856 for more information. For upcoming California real estate investor training and events, visit The Norris Group website and our California investor calendar. You’ll also find our award-winning real estate radio show on KTIE 590am at 6pm on Saturdays or you can listen to over 170 podcasts in our free investor radio archive.

The NAR said existing home sales rose 2.7% in January. The FHA’s REO inventory has increased 47% year over year.  A California judge upheld the rights of the Mortgage Electronic Registration Systems to the trust deed, granting MERS the right to foreclose. A Federal Reserve economist predicts the government will soon provide an alternative to the national homebuyer tax credit

In The News:

NAR - “Existing-Home Sales Rise Again in January” (2-23-11)

“Existing-home sales1, which are completed transactions that include single-family, townhomes, condominiums and co-ops, increased 2.7 percent to a seasonally adjusted annual rate of 5.36 million in January from a downwardly revised 5.22 million in December, and are 5.3 percent above the 5.09 million level in January 2010.”

Mortgage Bankers Association – “Mortgage Applications Increase in Latest MBA Weekly Survey” (2-23-11)

“mortgage loan application volume, increased 13.2 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 14.8 percent compared with the previous week. The Refinance Index increased 17.8 percent from the previous week. The seasonally adjusted Purchase Index increased 5.1 percent from one week earlier.”

Inman - “New CoreLogic market reports incorporate MLS data” (2-23-11)

“CoreLogic’s Listing and Market Activity Report — the first in a series of new products the company is developing to generate revenue from the data it receives from cooperating MLSs — provides key information including updated listings, comparable sales, property valuations, days on market, price trends and inventory.”

Housing Wire – “FHA REO inventory up 47% from one year ago” (2-23-11)

“The Federal Housing Administration held 60,739 properties repossessed through foreclosure on its books as of December 2010, up 47% from the year before.”

Housing Wire – “Freddie Mac finalizing major revamp of mortgage servicers” (2-23-11)

“Freddie Mac is in the final stages of changing how its 1,400 mortgage servicing companies handle its loans, and will implement a new scorecard measuring their performance. Furthermore, the government-sponsored enterprise is announcing that it will case review the way servicers treat delinquent borrowers, in order to ensure quality control.”

Housing Wire – “Bank failures hit 18-year high in 2010″ (2-23-11)

“The Federal Deposit Insurance Corp. held 884 financial institutions on its ‘Problem List’ as of the end of 2010, and the 157 insured banks that failed was the highest amount since 1992.”

Housing Wire – “MERS rights upheld in largest foreclosure state” (2-23-11)

“An appellate judge in California last week upheld the rights of the Mortgage Electronic Registration Systems to the deed of trust, giving MERS the right to foreclose, according to court documents.”

Housing Wire – “Fannie Mae to start grading mortgage servicers” (2-23-11)

“Fannie Mae will launch a new program for evaluating the performance of its mortgage servicers over the next 30 days. The Servicer Total Achievement and Rewards (STAR) program will gauge how servicers support the housing recovery and keep homeowners out of foreclosure.”

Housing Wire – “Fed economist pushes homebuyer tax credit alternative” (2-23-11)

“A Federal Reserve Bank of Cleveland research economist predicted Wednesday that the government would soon provide an alternative to the national homebuyer tax credit that expired in April.”

Bloomberg - “Existing Home Sales in U.S. Probably Fell in January From Seven-Month High” (2-22-11)

“Sales of U.S. previously owned homes probably dropped in January from a seven-month high, showing any recovery will take time to develop, economists said before a report today. Purchases decreased 1.1 percent from December to a 5.22 million annual rate, according to the median forecast of 73 economists surveyed by Bloomberg News.”

Looking Back:

The NAR predicts that the commercial real estate market will not recover until after 2011. In California, single family home sales decreased by 3 percent during January. The Standard & Poor’s index shows that national home prices increased slightly during December. 702 banks made the ‘Problem List’ for the FDIC in 2009.

For more information about The Norris Group’s California hard money loans or our California Trust Deed investments, visit the website or call our office at 951-780-5856 for more information. For upcoming California real estate investor training and events, visit The Norris Group website and our California investor calendar. You’ll also find our award-winning real estate radio show on KTIE 590am at 6pm on Saturdays or you can listen to over 170 podcasts in our free investor radio archive.

The MBA reports $110 billion in commercial and multifamily mortgages were originated in 2010. 36,500 mortgages were modified through government and proprietary programs in December, according to Fitch Ratings. Altos Research announced plans to release a new, forward valuation model for real estate. S&P claims 80% of the loan modifications that took place over the last 3 years defaulted again within 2 years.

In The News:

Mortgage Bankers Association – “MBA: Strong Fourth Quarter Drives 2010 Commercial/Multifamily Mortgage Bankers Originations 36 Percent Above 2009 Levels” (2-7-11)

“Mortgage bankers originated $110 billion of commercial and multifamily mortgages during 2010 – an increase of 36 percent from 2009″

Mortgage Bankers Association – “MBA: Only 11 Percent of $1.4 trillion of Non-Bank Commercial/Multifamily Mortgage Debt Set to Mature in 2011″ (2-7-11)

“Of the $1.4 trillion balance of outstanding commercial/multifamily mortgages held by non-bank investors, only 11 percent of the total ($155 billion) will mature in 2011, and 9 percent ($125 billion) in 2012″

Press Enterprise – “Surveys project Gen Y’s impact on for-sale and rental housing” (2-7-11)

“Gen Y forms a large consumer group–even a bit larger than the Baby Boomers, according to a report published by Meyers LLC, an Orange County based real estate research company. Meyers cites a report by the Marcus and Millichap commercial brokerage that 20-to-34 year olds constituted a 65 percent share of job gains in 2010.”

Washington Post – “Republicans call for swift action to weaken Fannie and Freddie” (2-7-11)

“Republicans unveiled a four-point outline of how they want to overhaul the nation’s troubled mortgage system, including shrinking the number of mortgages owned by the troubled companies.”

Housing Wire - “Mortgage modifications drop 57% from 2009 peak: Fitch” (2-7-11)

“Servicers modified 36,500 mortgages through government and proprietary programs in December 2010, down 57% from the peak of 86,500 in April 2009, according to Fitch Ratings.”

Housing Wire – “Altos unveils forward-looking valuation model” (2-7-11)

“The AltosEvaluate forward valuation modeling forecasts changes in a property’s sale price three, six, or 12 months into the future based on the strength or weakness of any local real estate market.”

Housing Wire - “BarCap reveals a new mess in mortgage servicing: Remittance reports” (2-7-11)

“For modified loans, remittance reports are not specifying the exact amount of forgiveness, forbearance and the recapitalization of principal. But they are added to the cash flows, confusing investors who can only see a hole of information between the beginning and ending loan balance.”

Housing Wire – “Fannie Mae multifamily funding drops 14% in 2010″ (2-7-11)

“Fannie Mae financing for multifamily properties in 2010 dropped 14% compared to 2009, with substantial decreases in funding to manufactured housing communities and senior housing.”

Housing Wire – “S&P: Loan mods fail to keep distressed borrowers afloat” (2-7-11)

“The New York-based rating agency said 80% of the loans cured by a modification in the time period stretching from 2007 to 2010 defaulted again within 24 months.”

Housing Wire – “FDIC will base insurance charges to banks on risk, not deposits” (2-7-11)

“Banks that take more risk with their investments will be forced to pay more in insurance costs to the Federal Deposit Insurance Corp., according to rules finalized on Monday.”

Bloomberg - “REITs Seek to Lure Pension-Fund Money From Private Equity” (2-7-11)

“The National Association of REITs found that a portfolio 30 percent invested in commercial property shares delivered a higher return relative to one more heavily tilted toward private-equity funds, based on a study to be published today on the group’s website.”

Housing Wire - “U.S. Homeowners in Foreclosure Process Were 507 Days Late Paying” (2-7-11)

“U.S. homeowners in the foreclosure process were an average of 507 days late on payments at the end of last year as lenders handled a record rate of mortgage delinquencies, Lender Processing Services Inc. said today.”

For more information about The Norris Group’s California hard money loans or our California Trust Deed investments, visit the website or call our office at 951-780-5856 for more information. For upcoming California real estate investor training and events, visit The Norris Group website and our California investor calendar. You’ll also find our award-winning real estate radio show on KTIE 590am at 6pm on Saturdays or you can listen to over 170 podcasts in our free investor radio archive.

The CBIA reports total building permits issued during 2010 increased 23% from 2009. Statistics from Trulia show that owning a home is cheaper than renting one in 72% of the largest cities in the United States. Commercial property values rose 0.6% in November, according to Moody’s.

In The News:

Los Angeles Times – “Estimate of mortgage interest tax deduction’s effect on federal deficit is lowered” (1-23-10)

“$88 billion less in revenue losses are now projected over the next three fiscal years — than the committee estimated early in 2010.”

CBIA - “It’s Official: 2010 is Second-lowest Year on Record for Homebuilding in California” (1-24-10)

“CBIA said just 44,601 permits were issued statewide last year for new homes, apartments, condominiums and townhomes, up 23 percent from 2009, but down 31 percent from 2008, which had held the distinction of the second-lowest total on record with 64,962 permits issued. Records began being kept in 1954 with the lowest yearly total set in 2009 with 36,421 permits issued.”

Inman - “Cheaper to buy than to rent in 72% of largest U.S. cities” (1-24-10)

“Despite the rising number of renters across the country, it is cheaper to buy a home rather than rent one in 72 percent of the 50 largest cities in the U.S., according to an index released by real estate search and marketing site Trulia.”

New York Times – “Mortgage Giants Leave Legal Bills to the Taxpayers” (1-24-10)

“Since the government took over Fannie Mae and Freddie Mac, taxpayers have spent more than $160 million defending the mortgage finance companies and their former top executives in civil lawsuits accusing them of fraud.”

Housing Wire – “Moody’s CPPI rose 0.6% for November, down 4.3% since May” (1-24-10)

“The price of commercial property rose 0.6% in November, marking the third-consecutive month of gains following sharp declines for the previous three months, according to Moody’s Investors Service.”

Housing Wire – “Campbell Surveys: Strong distressed property sales bookend robo-signing debacle” (1-24-10)

“First-time homebuyer activity remained relatively strong last month, though still near historic lows, as purchasers rushed to close transactions before interest rates rise further, according to housing industry consultancy group Campbell Surveys. In December, the firm’s HousingPulse distressed property index shows these transactions make up 47.2% of the market, up from 44.5% in November and nearly matching the 47.5% peak reached in September.”

Housing Wire – “JPMorgan: Annual homes sales must average 5.5 million to absorb liquidations” (1-24-10)

“JPMorgan Securities said existing home sales need to average about 5.5 million units a year to absorb a projected 2.25 million to 2.5 million in liquidations.”

Orange County Register – “Demand for O.C. homes jumps 10%” (1-24-10)

“Demand, the number of new pending sales over the prior month, increased by 10% in the past two weeks, adding an additional 194 homes, and now totals 2,154 pending sales. That’s virtually identical to 2009 when it posted 2,146. Last year, there were 393 additional pending sales, but everybody was poised to take advantage of the $8,000 first time home buyer tax. From here, expect demand to continue to improve as the market prepares to enter the spring market, the strongest time of the year for Orange County housing.”

For more information about The Norris Group’s California hard money loans or our California Trust Deed investments, visit the website or call our office at 951-780-5856 for more information. For upcoming California real estate investor training and events, visit The Norris Group website and our California investor calendar. You’ll also find our award-winning real estate radio show on KTIE 590am at 6pm on Saturdays or you can listen to over 170 podcasts in our free investor radio archive.

The Commerce Department reports housing starts decreased in December. However, Fannie Mae expects housing starts to triple by 2013, and the nation’s largest home builders announced plans to increase activity by 10%.  RealtyTrac claims foreclosure starts in California decreased 33% in 2010.

In The News:

Mortgage Bankers Association – “Applications Increase in Latest MBA Weekly Survey” (1-19-11)

“The Market Composite Index, a measure of mortgage loan application volume, increased 5.0 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 6.4 percent compared with the previous week.”

New York Times – “U.S. Housing Starts Slowed Sharply in December” (1-19-11)

“Housing starts in the United States dropped to an annual rate of 529,000 units, the Commerce Department said on Wednesday, down from November’s 553,000 and well below forecasts of about 550,000 in a Reuters poll. At current levels, starts account for less than a quarter of their boom-time peaks.”

Housing Wire – “Bair pushes for foreclosure claims review panel” (1-19-11)

“Federal Deposit Insurance Corp. Chairman Sheila Bair wants a foreclosure claims commission set up, similar to the one established during the oil spill crisis in the Gulf of Mexico last year, to help homeowners victimized by improper foreclosures.”

Housing Wire – “December home sales down 5% over a year: RE/MAX” (1-19-11)

“After five consecutive months of declines, monthly home sales rose 13.2% in December from the prior month, according to the RE/MAX National Housing Report released Wednesday.”

Housing Wire – “Fannie Mae: Housing starts to triple by 2013 to nearly 1.5 million” (1-19-11)

“Despite the still fragile housing market, Fannie Mae expects housing starts to triple by 2013. According to the agency’s economic outlook, housing starts are predicted to increase 17.3% and hit 710,000 this year, with another 47% increase to 1.1 million in 2012 and another gain of 42% in 2013 to nearly 1.5 million.”

Housing Wire – “Foreclosures increase 2% in 2010, decline in hotspots” (1-18-11)

“ForeclosureRadar, which tracks foreclosure data on the West Coast, reported 338,999 foreclosure starts in California in 2010, down 33% from one year prior. Arizona filings fell 18% to 119,790, and Nevada filings fell 19% to 86,010.”

Bloomberg - “Biggest U.S. Homebuilders Take Over Market as New-Home Sales Begin Rebound” (1-18-11)

“D.R. Horton Inc., Lennar Corp. and Toll Brothers Inc. are among companies planning to boost their community counts by at least 10 percent this year after writing down property values, buying land at discounted prices and obtaining financing unavailable to smaller, closely held builders.”

Bloomberg - “Wells Fargo Refuses to Settle Fannie, Freddie Refund Demands” (1-18-11)

“Prodded by lawmakers, Fannie Mae and Freddie Mac have pressed banks including Wells Fargo to buy back mortgages that were based on faulty data about the homes and borrowers. Wells Fargo said today in its fourth-quarter report that demands from the government-owned mortgage companies declined for a second straight quarter and now stand at $1.5 billion.”

Bloomberg - “Global Commercial Property Investment May Rise 25% in 2011, JLL Reports” (1-18-11)

“Investment in commercial property may rise by 25 percent worldwide this year, after returning confidence produced the most deals in the fourth quarter since 2007, Jones Lang La Salle Inc. said.”

Looking Back:

One year ago, MDA Dataquick’s monthly report showed that 22,328 homes were sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange County in one month . AFIRE conducted a survey in which 51 percent of foreign investors claimed the US provided the best opportunity for capital appreciation. Builder confidence decreased from the previous month. Fitch Ratings saw many positive signals for housing and other related industries which they believed would lead to a strong recovery.

For more information about The Norris Group’s California hard money loans or our California Trust Deed investments, visit the website or call our office at 951-780-5856 for more information. For upcoming California real estate investor training and events, visit The Norris Group website and our California investor calendar. You’ll also find our award-winning real estate radio show on KTIE 590am at 6pm on Saturdays or you can listen to over 170 podcasts in our free investor radio archive.

 

Greg Norris

(Full Bio)

Craig Hill

(Full Bio)

The Norris Group

This week Bruce is joined again by Greg Norris and Craig Hill. Greg is the vice president of TNG Auctions. He buys properties and resells them. Craig has been working with Bruce for 15 years, and is responsible for speaking to all potential borrowers for The Norris Group.

TNG gets many calls from new investors who tend to have some misconceptions. One of the biggest misconceptions these investors have is that they don’t need to use personal cash when using hard money loans. Craig suggests that borrowers have $30,000 for every $100,000 you desire to borrow. Also, many people believe that having credit issues will disqualify them, but credit issues can be ignored if they have an appropriate amount of cash. On the other hand, there are some investors with 800 credit scores and minimal cash reserves who will probably be disqualified.

If a house is worth $100,000, $75,000 should be the total between the purchase price and repairs. People do not understand that you cannot effectively invest in a house with very little money.

There are many lenders who will make a loan regardless of whether or not it will be profitable for the investor. The Norris Group offers investors another level of protection, because we have an appraiser with an investor background. Craig estimates that TNG’s appraiser prevents 2 to 3 investors every week from getting a bad deal. Once someone gets a deal, Craig prefers that the investor send him the property info immediately. There are many people who overlook details like “year built” or “lot size”. People treat investing in real estate like people who gamble in Vegas; they believe they cannot lose.

Sometimes investors start with something that is above their level of experience. In Bruce’s bootcamp, he takes his students to a home that is above their experience level, and asks them to estimate repairs, so they can learn to stay away from those homes. Craig has noticed that many investors tend to undervalue the cost of repairs and overvalue the sale price. People have come to Craig with an interest in buying property, but he can easily tell whether or not those properties are profitable by seeing who is selling them. If Craig notices that the seller is an experienced investor, that gives him a clue the property is not selling undervalued.

Relying on other people to give you all your buying, repairing and selling numbers is probably not a good idea, especially if those people are on commission. If an agent claims he can sell a property for a certain price which is contrary to Craig’s judgment, Craig suggests the realtor should not charge for the purchase of the property, and only take commission after the sale.

Appraisals have gotten better, in Greg’s opinion. This is partly because of a more stable market. Many short sales are pristine. To determine whether or not a property’s value is accurate, you need to look at all the properties sold within the last 3 months and pending sales. Sometimes you will see houses pending at a high number, but are also short sales; that is obviously not the right number. Sometimes the sold properties in the MLS are not actually sold. You need to know when to speak to a Realist about whether or not a sale occurred.

One of Greg’s most difficult jobs is to appraise a property for the future. He has to take into account which season he will be selling in. This winter has been odd for TNG, because half our properties are pending. Usually properties take longer to sell in the winter. Greg attributes this to the lack of inventory. There are not an overwhelming number of REOs on the market, so sellers still have some power. Also, TNG probably has the only fully repaired product. Greg has gotten better at pricing as well.

It is still hard to know what an appraiser will appraise a TNG house for. Currently, Greg’s least likeable appraisers work for VA, and FHA appraisers are now better to deal with, because FHA allows Greg to use appraisers that understand how to properly appraise a fully repaired house. Appraisers have recently taken a cut in their pay, so they may not look closely at your property unless you get their attention.

Getting a hard money loan is very costly. Craig has received calls from investors who hung up immediately after hearing his hard money interest rates. However, using hard money over a regular, cheaper loan gives you more freedom to do more and make more. One benefit of using hard money loans is that you don’t have to fear not finding necessary cash. When you have a business relationship with someone who is counting on your closing, you cannot go knocking around the neighborhood to find a quick $100,000.

There are some occasions where people receive a “yes” from a lender, but later get cancelled on. If TNG says yes to a deal, the deal is done and funded. TNG only gives borrowers a hard time during the initial process, so that we can know the deal is going to be profitable. This is why agents and escrows like working with TNG, because they know that if TNG gives a commitment, then the deal is going to work.

People might think that TNG’s business model is very simple and easy to replicate, but it isn’t. We have built good relationships with our business partners, which allows us to do business with ease. TNG even passes on a few deals just to maintain respect from its partners. Building a team that trusts you can take years.

When Bruce and Craig first met, the common idea of value was what someone paid for it. If a piece of property was said to be worth $90,000 but was sold for $60,000, then the value was believed to be $60,000. Bruce and Craig disproved this idea, but it was very difficult for Craig to approve Bruce’s loan.

All of Bruce’s seminars make it easier for Craig to do business, because many of TNG’s new clients know a lot about the company. Many of TNG’s clients have had the opportunity to hear Bruce speak, and they’ve researched TNG through our website. This helps Craig as a lender because not only do his clients know how TNG conducts its business, but they also know that we are trustworthy. Some of Craig’s clients trust TNG’s decision making ability more than their own, and that is why they work with him.

Greg’s favorite type of inventory are standard track homes. Greg does not like properties on large lots. Anything over 20,000 square feet is usually bad inventory. Also, he does not like areas that are poorly planned. For example, there are some neighborhoods where there may be one property built in 1960 next to another property built in the 1970s. There are exceptions to this, but Greg prefers to buy safer inventory with more mass appeal. Newer homes are typically more attractive, and they require fewer repairs. Greg has been surprised by how many people are still more attracted to larger homes. He does not mind buying properties on small lots so long as that kind of inventory is selling well in its area.

When Greg is estimating a property’s value, he tries to think of what a property’s resale value will be after 30 days. He has to consider what it will take to attract a buyer within 30 days. There are occasions when he must cut his values, because 5 REOs drop into the market at one time. Greg reviews his asking price once a week for every property TNG owns.

Greg has had a lot of trouble with pool homes. He has spent $25,000 on pool repairs, which wiped out his profit. However, pool homes are not always problematic, and Greg has profited from buying them.

Greg prefers to rely on his own knowledge at a trustee sale. Sometimes he receives friendly advice from other people, but not often.

For m ore information about The Norris Group’s California hard money loans or our California Trust Deed investments, visit the website or call our office at 951-780-5856 for more information. For upcoming California real estate investor training and events, visit The Norris Group website and our California investor calendar. You’ll also find our award-winning real estate radio show on KTIE 590am at 6pm on Saturdays or you can listen to over 170 podcasts in our free investor radio archive.