Index

Symbols
30-year lease 37
30-year self-amortizing mortgage 42
40-year mortgage 42
60 Minutes 52
100% loan-to-purchase-price ratio 47
A
abandonment 68
above-market price 41, 42
access to water 6
accommodation filing 16
accountant 55, 61
Accredited Investor 55
accrue 43
accruing interest 7
ad hoc guarantees 38, 66
adjustable rate mortgage 29, 42
advance-fee loan scam 22, 79
advertisements 45, 46
Affordable Merit Rate Mortgage 29
AFR 41
after-tax cost 70
after-tax debt-coverage ratio 12
agent 22
Alaska 31, 32
all-cash buyer 21
Allen, Robert 1, 8, 15, 80, 82, 87
Alt 97 Mortgage 30
American Bankers Association 53
amortization 42, 43
Applicable Federal Rate 41
appraisals 21, 47, 49, 50, 53, 61
appraised value 45
appraisers 10, 55
appreciation 11, 44, 67, 80
arbitration 4, 53, 55
assembly 45
assigns,or, phrase 81
Associated Press story 69
assumable existing mortgage 44, 49, 64
assumption 1, 22, 26, 63
attorney 55, 61
attorney fee 60
auctions 2, 45, 46, 47
B
bad credit 1, 62
bad foundation 46
bad real estate gurus 47
balloon mortgage 29, 43
balloon payment 35, 42, 52
banker 61
Bank of America 15, 16
bankruptcy 45, 56
bargain price 8, 45, 46
bargain purchase 5, 7, 10, 11, 45, 46, 47, 80, 85
Barron, Martin 17
basis 42
before-tax cost 70
below-market interest rate 41, 42, 44, 49, 50, 74
bidding 28
bi-weekly mortgage 44
board of directors 61
bond 51
bond leases 13
boot camp 1
borrower motivation 8
B rating 52
breaking even 12
Brown, Robert Wade 46
budget 77
builder auctions 45, 47
builder leftovers 45
Burnes, James 43
Buttes Gas & Oil Corp. 52, 54, 56
buyer’s broker commission 6
C
California Department of Real Estate 54
Cal-Vet program 35
cancel private mortgage insurance 29
capital gains 41, 42
capitalization rate 7, 11, 47, 85
cap on interest rates 44
carrying cost 46
cash basis taxpayer 43
cash equivalent 59
cash flow 3
cashing out 71
cash in your pocket at closing 71
cash-on-cash return 7
CCC rating 52, 54
Civil Code §2554.7 29
Clinton, Bill 29
Clinton, Bill and Hillary 4, 69
closing costs 6, 7, 67
combo fixed and contingent payments 44
commission 22, 57, 58, 74, 82
commission, buyer’s broker 6
Community 2-Family™ 33
Community 3-4 Family™ 33
Community 97™ 33
Community 100 Plus™ 33
Community 100™ 33
Community Customizer™ 33
Community Seconds® 34
complexity 69
concealing a material fact 75
concealment 75
concessions 69
condemned property 45
condo converter 18
condo reconversion 45
conforming 32
conservative appraisal 61
conspiracy 3, 20, 75
constant 47, 75, 81
Construction and Development Financing 68
construction lender 6
construction loan 46
contamination 46
contingency (lawyer) 57
contingent payment 43, 44, 60
conventional OREOs 45
corporate property 45
corporation 75
correcting title problem 6
co-signer 37
cost, after-tax 70
cost, before-tax 70
cost escalator 38
costs of foreclosure 53
coup 71
court costs 2
Creating Wealth 8
creative finance 43, 49, 65, 68, 69
credit 9, 11, 21, 23
credit application fees 63
credit card loan 3, 9, 42, 47, 48
credit check 49, 62, 63, 74
credit line 31
credit score 22, 31, 85
credit tenant 13
cyclical business 12
D
D.B.A. 55
DeBenedictis, Daniel 26
debt coverage ratio 11, 12, 13, 14, 15, 69, 85
debt service 11
debt-service capacity 14
deceit 3
Deceptive Trade Practices Act 56
decision-making unit 60
deductibility of the interest 34, 70
deed in lieu of foreclosure 68
default 70
default rate 53
deficiency 73
deficiency judgment 63, 73
definition 7
delinquency rate 31, 53
delinquent subdivision mortgages 45
delinquent tax auctions 45
Department of Housing and Urban Development 27
Depository Institutions Deregulation and Monetary Control Act of 1980 25
depreciation 41
depreciation deductions 42
depression, economic 13
deregulation of savings and loans 6
DeSoto, TX 6, 46
deus ex machina 66
development ready lots 45, 47
disabled 35
disclosure 4, 53, 57, 62
discount 42
discount lien release 45, 47, 74
distress 65
distressed-owner bargains 45
don’t wanter sellers 65, 66
Dorzback v. Collison court case 43
double-digit cap rate 47
down payment 47, 67, 77
due diligence 6, 56
due-on-sale clause 43, 44, 64, 65, 74, 75
dumb lender 5
Dupree + Scott 10
Dwyer, author 22
E
economic depression 13
employers 11
environmental problem property 45
equity skimming 5, 68
errors-and-omissions insurance policies 58
escrow fee 63
ethics 45, 49, 65
Everybody does it 69
excess loans over basis 44
existing options 45
Expanded Approval with Timely Payment Rewards™ 32
F
Fair Isaac Company 31
false statement 3, 20
Fannie 97® 33
Farley Realty Corp. 43
farms 35
Federal Income Taxation of Real Estate 43
Federal National Mortgage Association 27
Federal Trade Commission 29
felony 53
Ferraro, Geraldine 19
FHA (Farmers Home Administration) 25, 27, 28, 32, 35, 53, 73
FHA repos 45
FHLMC 100 30
FHLMC (Federal Home Loan Mortgage Corporation) 21, 27, 29, 30, 31, 47, 62, 74
FHLMC loan limits 31
FICO score 24, 31, 54, 70
Fidelity Federal Savings and Loan Association v. de la Cuesta et al. 74
finance professor 55
financially-sophisticated 55, 56
financial planner 55
financial status 4, 53
finder’s fee 22, 79
fire insurance 75
First Amendment 19
first-time home buyer 35
Fisher v. Losey 58
Five Great Rules of Selling 58
fixed-rate mortgage 34, 42
fix-up 46
Flexible 97™ 33
Flexible 100™ 33
flip 1, 22, 79, 81
Flip Wilson’s Geraldine 61
floating interest rate 34, 46
floor 44
FNMA 32, 47, 74
Forbes 68
foreclosure 2, 5, 8, 37, 42, 45, 62, 63, 65, 68, 69, 70, 75
Foreclosure Consultants Act 22
foreclosure expenses 2, 4, 69
foreclosure rate 53
Fort Worth, TX 6
foundation expert 46
foundation problems 46
Founders Title Company 16
Franklin (64 TC 752) 22
100
Little or No Money Down
fraud 28, 68, 69, 82, 83
full asking price 25
full disclosure 62
G
gain, taxable 68
Garn-St. Germain Depository Institutions Act of 19 74
Gatten, Bill 69
Geraldine, Flip Wilson’s 61
gimmicks 42
GNMA bond 70
GNMA (Government National Mortgage Association) 27, 47
good credit 5
government mortgage insurance 28
graduated-payment mortgage 43
Great Depression 13
Guam 31
guru, bad 42, 47
guru, real estate 55
H
Hambeuchen, 43 TC 77 22
Harris, Richard 68
Hawaii 31, 32
hedged ARM 42
Hierarchy of Need 61
high-credit guarantee 7, 50, 85
high-credit tenant 38
high-loan-to-value ratio 52
Holmes, Oliver Wendall 14
home building 6
home equity line of credit 30, 34
home-equity loan 9, 34, 71
home improvement loan 82
homeless 35
homeowner-association-dues foreclosures 45
Home Ownership and Equity Protection Act of 1994 35
Homeowners Protection Act of 1998 29
houses that smell 45
Housing and Community Development Act of 1980 25
How to Buy Real Estate for at Least 20% Below Market Value 9, 45, 46, 47, 74
How to Get Started in Real Estate Investment 8, 47
How to Increase the Value of Real Estate 6
How to Use Leverage to Maximize Your Real Estate Investment Return 37
HUD 18
HUD repo 28
Hud website 28
Hunt court case 44
hybrids 44
I
impound account 29
improvement, property 5
imputed interest 41
income 23
income verifications 53
infinite return on investment 6
inflated purchase price 22
inflexible lenders 49
infomercial 71
installment sale 60
institutional lender 64, 65
insurable interest 75
interest on interest 43, 44
interest-only mortgage 42, 43
interest rate 23, 27, 31, 32, 41
in the money 66
investment grade 51
investment objectives 4, 53
investment trust 55
IOU 51
IRS sales 45
J
jail 18, 68
Journal of Real Estate Taxation 43
judgment 63
judgment investing 45
jumbos 29, 32, 35
junk bond 51, 54, 80, 83
just for this one mortgage 37
K
Kiyosaki, Robert 81
Know Your Customer rule 4, 52
L
land contract 22, 64, 74, 75, 83
Land, Joe 17
Law Journal Press 43
Law of Real Estate Financing 22
lawyers fees 2
Lawyers Title News 43
lease 37, 74
lease option 1, 22, 64, 66, 75, 79, 80
legality 49, 56
legal newspaper ads 46
lender’s attorney fee 63
less than perfect credit 29
leverage 10
license laws 57
lie 15, 17
lien 47
lien priority 44
lien release 45, 47
life and remainder estates 45
limited partnership 4, 53
line of credit 35
liquidity 54, 71
listing agent 60
loan-to-purchase-price ratio 9, 45
loan-to-value ratio 9, 11, 15, 22
local homebuying programs 28
local newspaper 35
lock-in 65
long-term lease 13, 38
long-term tenant 37
Los Angeles Times 15, 17
low-cost area 28
lower cap rate 85
lower interest rate 42
low-interest mortgage 74
M
Madison, author 22
M.A.I. 62
mail fraud 3, 20, 75
Maslow, Abraham 61
maximum loan size 27
M.B.A. 55
McDonalds 77
mentoring 1
Merrill Lynch 54
Millionaire Next Door, The 78
minorities 35
mobilehomes 45
Moody’s 51
morality 49
101
Index
mortgage 3
Mortgage Bankers Association 53
mortgage-contingency 81
mortgage insurance premium 28
mortgage loan officer 55
mortgaging out 71
motivated sellers 1, 66
multiple listing service 46
Municipal Securities Rulemaking Board 4, 52
MyCommunityMortgage Tailored Solutions™ 33
N
name-change technique 75
National Association of Securities Dealers (NASD) 4, 52
National Bureau of Economic Research 12
Native American vet 27
negative amortization 43
negative cash flow 3, 11, 12, 67
negotiating 58
net lease 13
net operating income 7, 11, 13, 38, 43, 44
net worth 55
new-account questionnaire 4, 53
New York Stock Exchange 4, 27, 52
nonconforming 47
nonrecourse financing 22, 54, 68
notes 2, 3, 52, 79
nothing down 67
Nothing Down 1, 8, 15, 17
nothing to lose 67
NYSE 54
O
objection, overcoming 1, 79
on-line calculators 13
operating expenses 7
options 22, 45, 66, 74
or assigns phrase 81
ordinary income 41
OREO 45, 47
Original Issue Discount Rules 41
origination fees 49, 60, 63
or more clause 65
out-of-county landowners 45
overbuilding 6
overwhelming pet odor 46
owner occupant 8, 15
owner-occupied home 29, 44
owner unknown 45
P
Pacific Palisades 3
PAC Trust 69
paper down payment 1
Paraskeva, Alex 26
partners 1, 8, 22, 43, 44, 61, 64, 79, 81, 83
partnership 75
passive loss 70
past credit challenges 29
pattern of racketeering activity 20
perfect storm 6
perjury 53
permanent commitment 46
personal interest 34
personal liability 22, 63, 68, 69
phantom gain 44, 68
phony foreclosure 75
points 25, 27, 63
police officers 28
porous documentation 49, 64
portfolio lender 47
positive cash flow 12, 28, 38, 69
positive equity 69
positive leverage 10
postponements 46
Practical Ways to Make Money in Real Estate 26
predominantly speculative 51
preforeclosure houses that smell 45
preforeclosures 47, 75
prepayment bonus clause 42
prepayment penalty 49, 65
primary source of repayment 11
prior investment experience 4, 53
private limited partnership 55
private mortgage insurance 9, 28, 29
probability 4
probability of default 11, 53
probate 45
problem property 45
Professional Equities court case 44
profit 7
property improvement 5
property-wanted ads 45
prospectus 53, 54, 55
public housing residents 28
purchase-money mortgage 46
Q
questionnaire, new-account 4
quick-sale value 70
R
racketeering 20
raising rents 6
rating 54
Reagan, President 3, 4, 18, 20
real estate agents 65
real estate broker 22, 55
Real Estate Finance Techniques 34, 42
real estate investment trusts 55
Real Estate Investor’s Monthly 34, 42, 69
real estate license 57
Realtors® 62
rebate 3, 83
recession 12, 13
recording fees 63
redemption 45
references 61
refinance 8, 44
regulatory loopholes 45
REIT 5, 53
released from liability 26, 63
remainder estates 45
renegotiation 69
rental property 8
rent control, become exempt 6
repos 45
reputation 67
Residential Foundations, Design, Behavior, and Repair 46
retired couple 49, 50
return on investment 6
Revenue Ruling 69-77 22
Revenue Ruling 83-51 43
reverse-annuity mortgage 43
Rich Dad, Poor Dad 81
rights of redemption 45
Ringer, Robert 59
risk tolerance 4, 53
Robinson, Gerald 43
Rule 405 52
Rule G19 4
rule of thumb 13
Rural Housing Service 32
102 Little or No Money Down
S
safe-harbor 44
Safer, Morley 52
San Francisco Chronicle 35
saving 11
savings account 70
savings and loans, deregulation 6
scheming to defraud 19
secondary financing 15, 16
secondary source of repayment 11
second mortgage 32, 49, 52
second-mortgage crank 15
Section 371 20
Section 1001 19
Section 1014 18
Section 1341 20
Section 1961 20
Section 1964 (c) 20
secured loan 3
Securities and Exchange Commission (SEC) 55
self-amortizing mortgage 29, 35, 42, 43
self-employed 21
seller financing 46
seller loan characteristics 49
seller mortgage 54
seller rebate 83
seller take back 55
senior citizen 43, 54, 80
shared-appreciation mortgage 43, 44
shared-appreciation payment 43
sheriff’s execution sales 45
short terms 65
silent second 16
Single-Family Lease Options 22, 66, 80
skim rent payments 5
slippery slope 17
sloppiness 49
smelly houses 45, 46
sneaky second 16
snipe hunt 2
sole security 8
sophisticated 61
sophisticated seller 7
Southern California 10
S&P CCC 54
speculative 51
spouse 60
spouse’s name 82
Standard & Poor’s 51
State of Texas 37
state program 35
state usury law 25, 43
statutes of limitations 4
Stevens Brothers & Miller-Hutchinson Co. 43
stock broker 55
Stonecrest court case 44
stripping 35
subject to 1, 22, 26, 63, 73
subordinated debenture 52
subordination 52, 69, 82
subprime mortgages 30, 54
substance over form 22, 34, 44
Succeeding 78
suitability 4, 5, 51, 52, 53, 54, 55, 80, 81
sweat equity 82
syndications 53, 55
T
tax auction 45
tax ramifications 43
Tax Reform Act of 1984 41
Tax Reform Act of 1986 6, 34, 70
tax service fees 63
Teacher 2-Family 33
Teacher 97 33
Teacher 100 33
Teacher A+ mortgage 33
teachers 28
teaser rate 35
temptation 15
tenant credit 38
tenant-in-common interests 45
term 41, 47
terms, short 65
Texas 10, 12, 56
Texas Apartment Association Redbook 57
Texas Business and Commerce Code 56
third-party guarantee 36
three- and four-family mortgage loan 28
three- or four-family 28
time and effort 21
Time Magazine 17
time-value-of-money calculations 42
Title 18 United States Code Section 1001 3
title-company officer 55
title examination 16
Title I home-improvement loan 19
title problem 6
title problems 45, 46
toxic substance contamination 46
transaction costs 66
Treasury bond 70
triple damages 21
trust 74, 75
trust deed 3
Tucker v. Lassen Savings & Loan Association 73
Tufts court case 68
U
uncertain legal status 22
Uncle Louie 61
unconscionability laws 43, 44
unconscionable act 56, 58
understanding FICO score 31
United States Department of Agriculture 32
unknown owner 45
unsecured loan 3, 9, 24, 34, 37
unsophisticated investor 4
unsophisticated lender 4, 15
unsophisticated seller 61
unused credit lines 31
upgrading 5
used mobilehomes 45
U.S. Government bond 13
U.S. Supreme Court 74
usury law 25, 43, 44
V
VA 9, 15, 26, 28, 35, 53, 63, 73, 85
vacancy rate 12
VA certificate of eligibility 26, 85
VA dollar limit 26
VA Fee Appraiser 18
VA mortgage 25
vandalism 8
VA repo 26, 27, 45
VA website 25
verifiable expenses 44
Virgin Islands 31, 32
Voight court case 44
W
walk away 8, 9
Wall Street Journal 1, 51
Index 103
Warren, Gorham & Lamont 68
weasel clause 81
Wellenkamp v. Bank of America 73
welshing 66
whichever is less 45, 47
Whitewater 4, 69
Whiting, Percy 58
Winning Through Intimidation 59
win/win 58, 59
wire fraud 20
workout 68
worst case 42
wraparound 1, 44, 60
www.cdva.ca.gov/calvet/calvet.htm 35
www.entp.hud.gov/idapp/html/hicostlook.cfm 27
www.fairisaac.com 31
www.freddie mac.com/sell/factsheets/ltv_tltv.htm 29
www.frwebgate.access. gpo.gov/cgi-bin/get-cfr.cgi?TITLE=12&PART=226
www.ftc.gov 29
www.homeloans. va.gov/homes.htm 27
www.hud.gov/buying/buyhudhm.cfm 28
www.hud.gov/buying/localhomebuy.cfm 28
www.hud.gov/buying/mortprog.cfm 27
www.hud.gov/homes/index.cfm 28
www.hud.gov/howtobuy.cfm 27
www.hud. gov/news/release.cfm?content=pr01-034.cfm 28
www.hud.gov/qualify.cfm 27
www.hud.gov/refunds/index.cfm 28
www.interest.com/cities 35
www.johntreed.com/dueon sale.htm 73
www.johntreed.com/dueonsale.html 22
www.johntreed.com/Reedgururating.html#Anchor-Bill-49575 69
www.myfico.com 31
www.nber.org/cycles.html 12
www.pmstax.com/afr/ 41
www.sec.gov/rules/proposed/33-8041.htm 55
www.va. gov 25
www.va.gov 26
Y
Yellow Pages 35
yield 54
Z
Zaccaro, John 19
Zero-coupon bond 83
zero-sum game 58, 59
zoning change 6