Practical real estate financing advice that can creat wealth

Some Buyers who own multi family property are getting paid cash on some apartments and not reporting it therefore saving on taxes.

This is a huge mistake!

First of all it is against the law,

And second of all, your building is only worth according to the income it yields. if it yields less (according to what you report) it is worth less! Any commercial mortgage lender will give you a mortgage only against the income of your property and not merely on the comparable. And in most cases the income on the property needs to be substantiated before the lender can determine how big of a loan the property can support.

the same disadvantage you might also have when selling the property, since any savvy buyer will ask to see the schedule E of your tax return to substantiate income and expenses you might not get the full value.

So we as real estate professionals or mortgage professionals we have to advise our clients to shoot straight and reap the benefits.

Look at the taxes you are paying as an investment in the value of your property!

Just a thought

Joel Silberstein

Good after noon My friend's

 Having read my mentor's Tim Davis blog today where he wrote about whom responsability it is for this mess we are in. Tim assigns some or all responsibility to the consumer.

I agree with him but we cannot exclude the mortgage broker entirely who where supposed to inform their clients about the challenges down the road, and how the loan will preform in a few years from now and not just merely quoting rates, a trade that true mortgage planner's are conforming too.

 Furthermore, the banks who shut their doors they all originated Loans which no body in their right mind  would lend their own money on. 

A little more on that note, I spoke to an account representative today at Bank a. Bank a (as I would like to call them here)was the lender who used to buy all the loans from ABC and bank of Arizona and securitize those loans on the secondary market. When Lehman declined to continue to buy them toward's the end of this market as we know it,  thats when ABC and the like shut their doors.

But whats really interesting is, that Bank a is still in business and still originating no doc loans and stated stated loans and still doing most of what they used to do prior to this meltdown and for not so much higher rates. Their philosophy was, we do them but we need to add risk into the equation and they did. they did not dominate the market because they where always more expensive then ABC on the wholesale Level but guess what, they are still around!

Bottom line, Dont trade in your principals and ethics for greed, because greed tends to loose and then you can be left without anything so keep your principles and ethics.

Wow I cant belive I wrote that

Sincerely Yours  Joel Silberstein