Instead, he died owning two houses with a combined value of less than $200,000, with almost no cash in the bank, and living mostly off Social Security.

Dad was a sort of real estate pioneer. He was smart, a millionaire back when a million dollars was real money, one of the founders of Cincinnati REIA, and the teacher of what was probably the most popular real estate investing class in Southern Ohio.

Through DECADES (he bought his first apartment building in 1964 and his last rental house around 2004) of work and sacrifice, he built a portfolio of about 100 apartments and 150 single-family houses.

And then he got Alzheimer’s.

Long before the official diagnosis, we could all see that something was wrong with his executive functioning.

A roof would leak, and he would spend weeks waffling about whether it needed to be repaired or replaced. Properties sat vacant longer and longer and deteriorated further and further. The manager of one of his apartment buildings essentially stopped managing it, leaving a heavily mortgaged building with a broken boiler and only two tenants in 13 units—one of whom wasn’t paying.

Dad knew, at least off and on, what needed to be done.

But increasingly, he couldn’t make himself do it.

And because his entire identity was wrapped up in being the brilliant real estate expert and self-made millionaire, he became fiercely protective of his right to keep running the business. Even after he understood that he had Alzheimer&rs ... Read More…

 

Ok, so this is me making the craziest-sounding post I've ever made here, but here goes.

I've talked to a lot of people now who've both been in real estate for decades AND who've done a lot of different kinds of deals, and so far, they all agree that we eventually develop what I call "Real Estate Spidey Senses".

What it feels like from the inside:

You’re looking at a deal where everything seems perfectly fine. The numbers work. The seller/borrower/partner is agreeable and aligned. Maybe the title and inspections even look clean. Nothing has actually happened that should make you nervous.

But something...

...Maybe it's in the seller’s story. Or a single conversation you've had with the proposed partner, out of many. Or the way the deal is coming together.

Something you can't put your finger on makes you think:

"This deal is going to blow up."

You can’t tell exactly HOW it’s going to blow up. You can’t point to a specific problem. You just have a feeling that something you don’t know about yet is going to present itself—and when it does, the whole thing is going sideways.

(There's a reverse to this, too: the rare scenario where the seller has said "No" in a seemingly no-going-back way, or maybe even signed a contract with someone else, and your spidey-tingle says, "I'm going to buy this one...")

Since in real life, I have very little in the way of "intuition", I have to think that tis is long-term, accumulated pattern recognition.

After y ... Read More…

If you don’t do subject to, this probably isn’t going to interest you a lot, but if you do, here's a weaponized autism evaluation of the new FHA modification rules for ya:

I just talked to about the fifth FHA-insured loan holder in three months who re-defaulted after a loan modification in which both the interest rate AND the payment went UP.

I KNEW something was up, because after years of hearing, “We’ll just take all those back payments and shove them into a zero-interest, zero-payment partial claim second that you don’t have to worry about until you sell the house or pay off the first mortgage,” this seemed like a pretty clear change in HUD policy.

So I finally got curious and looked it up this morning.

And sure enough, the policy really did change on October 1, 2025.

Before then, FHA servicers were still using the COVID-era loss-mitigation rules. One of the most common solutions was to put the missed payments into a “silent second” owed to HUD—the thing called a “partial claim mortgage.”

Those were great for homeowners and, assuming we understood that the time bomb was there, for us as sub to buyers.

Because those partial claim mortgages have no interest, no monthly payment, and they let the homeowner keep the original first mortgage—with its original interest rate and payment.

That was obviously a HUGE benefit to someone with one of those 2.5%, 3%, or 4% loans.

But…and maybe right ... Read More…

Note: Laws and regulations regarding the advertising, registering, and formalization of private loans vary enormously state-to-state. Generally, these rules apply to the borrower rather than the lender, but even lenders should be aware of what the laws in your state say about these transactions. Of course, this article is not intended as legal, accounting, or other professional advice. Always consult with your legal, accounting, or other professional before making any investment.  Further, nothing in this article should be construed as an offering or solicitation of a security. 

Private lending is a strategy in which even moderate-income investors can easily get involved.

There are plenty of real estate entrepreneurs and rehabbers who want to borrow your money; if you let it be known you have as little as $20,000 to lend in most markets, someone will be right there ready to put that cash to work.

If all goes as it’s supposed to, it’s a truly hands-off investment; you just sit back and collect checks. And the return is oh-so-much better than other fixed-rate investments; you can expect to average around 6%–8% per year total (because higher-rate loans are generally also shorter-term; when you loan money to a rehabber at 12%, but he only uses that money nine months a year, that still works out to 8%).

But the big fallacy of private lending is that YOU, as the private lender, don’t need to know very much to assure that the deal goes well. A ... Read More…