A New Era Of Zero Interest Rates?

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By Fuquan Bilal

We could soon be in a new era of zero interest rates. What will it mean for investors, the markets and you?

Could We Have Negative Interest Rates?

The president has been pushing for lower interest rates. We could even potentially see zero rates and even negative interest rates. The fed already recently cut key rates, and more reductions could come in 2020. This may sound crazy at first, but it has been done around the globe at various times and has worked.

While everyone enjoyed pointing fingers at different parties in the wake of 2008, one of the biggest factors that actually caused the crash was rising interest rates. If they get it right this time, lowering rates could help the economy remain afloat and avoid falling into the abyss again.

The Impact

The most widespread outcome of this is it costing people to have money in the bank. It probably already does when you add up all the fees and charges. Yet, when banks start charging every interest for having money on deposit, there is going to be a massive need to find somewhere else to park money and invest it. Real estate is of course a nice solid alternative. Cutting out the banks as the middleman and directly investing in mortgage notes and funds can also be a smart way to turn those losses into net gains.

Negative interest rates also mean it will cost banks and lenders to make loans. The negative interest is applied to paying down your outstanding balance each month. There are other ways lenders can make up for this money, but clearly they will be pickier about who they loan to.

Perhaps most significantly for investors, a new period of mortgage originations with near zero or negative rates means soaring appeal and demand for older higher rate notes, including nonperforming and re-perfoming loan notes. 8% and even 4% notes will become far more valuable.

Those who acquire those assets early stand to win big as this unfolds.

Investment Opportunities

Find out more about investing in secured debt and real estate, go to NNG Capital Fund

 

Fuquan Bilal

Fuquan Bilal founded NNG in 2012 with the principal mission of capitalizing on the growing supply of mortgage notes in the interbank marketplace. Mr .Bilal utilizes his 17 years of residential and commercial real estate success to identify real estate opportunities and capitalize on them. To date, he has successfully managed three private mortgage note funds that primarily invest in singlefamily performing and non­performing mortgage notes. His financial acumen and proprietary set of investment criteria enable him to purchase underperforming real estate assets at a deep discount of face and market values, thereby increasing the value of the assets. This, coupled with his ability to maximize the use of leverage, enables him to build strong, secured portfolios with solid passive income flows.

Fire Your Real Estate Banker!

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By Mark Willis, CFPⓇ​
Lake Growth Financial Services

“A banker is a fellow who will lend you his umbrella when the sun is shining, but wants it back the minute it begins to rain.” — Mark Twain

Ain’t that the truth? As we look ten years back on the Great Recession, we can see how much has changed, and how much more has stayed pretty much the same. Home values are up again to 2007 levels. Unemployment is down to pre-crisis levels. The stock market is hitting record highs as I write these words. And yet, not much has changed since 2008 or since Mr. Twain wrote those humorous words – bankers control the money supply, and just when you need the money most, they are there holding all the umbrellas.

I have no problem with bankers, personally. Some of my best friends are bankers!

In fact, as investors we’ve been taught to use “other people’s money” (also known as OPM) as leverage to help us gain traction in real estate or to get ahead in our business. Other solutions include getting a business line of credit to buy new equipment, or securing a mortgage on an investment property to renovate and flip a property. These are the standby solutions used by many Americans.

But ask yourself – who are the “other people” when OPM is your strategy for leverage? (Remember, leverage can work both ways – for ​and​against you!) And what do other people want so badly that they’re willing to part with their money and hand it to you? Were you just handed an umbrella on a sunny day?

When banks control the environment where your money lives, they win every time. When you control the financial environment in which your money lives, you win.

34% of all American income goes to servicing debt. If time is money, as the old saying goes, that means a full one-third of the day is spent working as slaves to a bank! Think of how many folks you know who are in debt up to their eyeballs and working 60+ hours a week, or stressing over non-paying tenants, or feverishly rushing from property to property, hoping they can sell a property before the balloon payment comes due.

For many real estate investors, the road to becoming a wealthy landlord turned south toward the highway of serfdom, with their banker holding the upper hand.

Is there any other way? How can someone who has skill and passion for real estate or their business keep control and a sense of sanity amidst a world gone insane? Is there a way to break free of financial slavery to the banks?

Yes, it’s simple.

Fire your banker!

Where is it written that you have to service your debts and pay off a banker before you can enjoy the fruits of your investment? Who says you have to pay interest on your properties, effectively turning all your real estate assets into liabilities? Where did we get the idea that banks were the only ones who could provide the function of banking in our society?

You can be your own source of financing – you can rid your financial portfolio of your banker and provide the function of banking yourself.

How? The answer may shock you. I’m talking about a modernized form of dividend-paying whole life insurance. It works like a source of capital, a bank, to provide a guaranteed pool of money liquid and available for whatever you need. The funds you accumulate in your life insurance grow safely and predictably every year, guaranteed – no matter what’s happening in the stock market. You can use the equity in your policy like a line of credit to yourself – and you have complete control over how, when and if you pay your money back to your policy. You are in complete control of the entire process.

When most people see the words: whole life insurance, their mind turns off. Mine sure did! I was taught to avoid whole life insurance even in my earliest days as a financial planner. Since then, I’ve come to see how useful and valuable a ​properly structured, dividend-paying​whole life policy can be, when issued from a mutual life insurance company that offers non-direct recognition loans. This vehicle helps my clients overcome the inertia of opportunity cost, accumulate a powerful warchest of capital, and deploy liquid capital for their real estate ventures.

It matters where your money lives. As a CERTIFIED FINANCIAL PLANNER™ I have investigated nearly every financial strategy available to investors. Well over 400+ products are available and tens of thousands of uses of those products have been hocked and sold to folks looking for that golden goose that will just help them sleep better at night. Financial pundits and Wall Street advisors will tell you that whole life insurance is the devil, and while I’m sure I’ll be ostracized by mainstream financial advisors for saying this, I think every person should at least KNOW that becoming your own source of financing through a properly structured whole life policy is an option worth investigating for yourself. Besides, if mainstream financial advice got us into the mess we are in, maybe it’s time for a new way of thinking!

We’ve had two major market crashes since the year 2000. Do you think another one will happen in your lifetime? Do you want your reaction to the next market crash to be the same as the last one? If you’d like to not only protect yourself from the next recession, but actually anticipate and take advantage of it, prepare for it now by doing what the banks do, not doing what they tell you to do. Banks purchase a huge amount of life insurance to run their businesses. Prepare by becoming the banker by using a form of capital that banks themselves take advantage of (Google “Bank Owned Life Insurance” to see what I mean).

Imagine we’re in the middle of another financial calamity. Everyone is seeing their 401(k) values drop and real estate prices are plummeting. Your friends are nervous about losing their jobs.

But instead of fear and instead of begging a banker to lend you his umbrella, you’ve established yourself as your own source of capital, using the cash value in your properly designed life insurance policy. You’re in control. When you see the real estate values crashing, instead of fear, you see opportunity. You borrow from your own policy’s cash, and within 3-5 days your policy’s cash value is direct deposited into your bank account and you’ve got cash at closing. No tax obligations, no government red tape. You are in control.

With this kind of leverage, the kind of leverage you own, you can borrow from your policy and still have it earning interest as if you did not take the loan. You read that right. That’s a rare feature often misunderstood and overlooked by most insurance agents. And when it’s properly implemented into a policy, you overcome the biggest hurdle in the financial universe – opportunity cost, and giving you uninterrupted compound growth – what has been referred to as the 8th Wonder of the World. You can pay your policy back on your own terms, when and if you choose. Do you think that will make you more or less competitive as an investor? Could this help you with more than just investing? How about buying the stuff of life – cars, medical expenses, paying off debt… which financial situation would it NOT make sense to be the banker?

The only thing better than being debt free is to be the banker. Then you’re the one lending the umbrellas!

There’s more to this than just picking up the phone to call your local insurance guy. Most insurance agents (and certainly most Wall Street brokers) have ​never​heard of this strategy, and you don’t want to put your money with an “I’ll just Google it” advisor. If you’d like to talk to someone who has been specially trained and authorized to specifically design a Bank on Yourself policy as described above, please contact us at ​[email protected]​or call us at 1-800-962-9141.

Top FIVE Alternative Financing Available to Entrepreneurs

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by Teresa R. Martin, Esq.

Financing is indeed the most crucial of the puzzle for almost every business. Unless you have access to enough capital to bootstrap your business or raise it from family and friends, chances are, you’ll need a loan or investments.

When a conventional bank loan isn’t right for you, or if you’re looking for an additional injection of capital to grow your company, there are plenty of other options. Here are five alternate ways to finance your startup or grow your small business.

LOVE MONEY

This is money loaned by a spouse, parents, family or friends. A banker considers this as “patient capital”, which is money be paid later as your business profits increase.

When borrowing love money, you should be aware that:

  • Family and friends rarely have much capital.
  • They may want to have equity in your business: Be sure you don’t give this away.
  • A business relationship with family or friends should never be taken lightly.

RETIREMENT FUNDS

As with borrowing money from friends or family to buy a business, some might consider using money from a retirement nest-egg risky. That said , it can often be an effective way to invest in your entrepreneurial endeavors for more and more of today’s business buyers.

As laid out by the government’s ERISA law, you can invest your existing IRA or 401(K) funds to the purchase of a business without taking any early distribution and incurring penalties.

It’s even possible to combine money from your retirement fund with loans and other funding methods for greater flexibility. Many entrepreneurs choose to invest in a business they control because they believe the growth opportunity is greater; and they want to diversify a portion of their retirement holding outside of the stock market.

ANGEL INVESTORS

Angel investors invest in early-state start-up companies in exchange for a 20 to 25 perfect return on their investment. They have helped to startup many prominent companies , including Google and Costco.

Angels are generally wealthy individuals or retired company executives who invest directly in small firms owned by others. They are often leaders in their own field who not only contribute their experience and network of contacts, but also their technical and/or management knowledge.

They tend to finance the early stages of the business with investments in the order of $25,000 to $100,000. Institutional venture capitalists prefer larger investments, in the order of $1,000.000.

In turn for risking their money, the reserve the right to supervise the company’s management practices. In concrete terms, this often involves a seat on the board of directors and an assurance of transparency.

Angels tend to keep a low profile. To meet them, you have to contact specialized associations or search websites on angels.

SELLER FINANCING

Increasingly today’s more business-for-sale transactions are resting on a seller-s willingness to finance at least part of the sale. In a deal that includes seller financing, the seller takes part of the purchase price in cash and the remainder in the form of a promissory note that the buyer will pay back with interest over a period of three-to-five years.

This has become essential; buyers are having difficulty accessing funds through traditional methods, therefore there’s a natural gravitation toward seller-financed business to help offset some of the cost upfront.

Conversely, sellers who continue to say no to seller financing are finding it difficult to close a deal, and as more of them have realized this, there has been an increase in seller-financed businesses on the market. If you’re in the market for a small business it’s important to be aware of alternate funding options, but know that in some cases it’s still possible to borrow from a bank.

Government stimulus and bank policy have been trying to promote ongoing small business lending, although many banks are still more conservative than they used to be about when and to whom they’ll loan money.

CROWDFUNDING

Crowdfunding sites such as Kickstarter and Idiegogo can give a boost to financing a small business. These sites allow businesses to pool small investments from a number of investors instead of having to look for a single investment.

Make sure to read the fine print of different crowdfunding sites before making your choice, as some sites have payment-processing fees, or require businesses to raise their full stated goal in order to keep any of the money raised.

Today’s business-for-sale marketplace is full of exciting opportunities that will allow you to take your destiny into your own hands and with various options available there’s no reason to let a shortage of traditional capital sources get in the way of your dreams.

ABOUT THE AUTHOR

Dr. Teresa R. Martin, Esq. is a motivational speaker, author, million-dollar real estate wealth coach, business strategist, and legal counsel. She is living the life she loves and an teach you how to do the same!

As founder of the Generational Wealth Zone Group, Teresa R. Martin formed the original vision for a group of companies that would help clients create, manage, protect and grow their wealth. She is dedicated to showing individuals and entrepreneurs how to become financially empowered by turning the work they love into a profitable and sustainable business.

 

Dealing With “Balloon” Payments

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By Bruce Kellogg

“Amortizing” Versus “Balloon” Notes

An “amortizing” note is one where the principal amount is paid off over the term of the loan. A “balloon” note is one where the payments are not sufficient to retire the debt, and an outstanding balance is due at maturity.

What Is The Problem?

The problem arises when the borrower does not have the funds necessary to pay the “balloon” amount when it comes due. Oh, oh! So, here are some ways to deal with that!

Refinance the Property

The first recourse for an owner who wants to keep the property is to refinance either the property itself, or another property in the portfolio. This is a good approach as long as financing conditions are favorable. If conditions are not favorable, other approaches will need to be considered.

Sell the Property

If the owner does not care to own the property any longer, they can sell it and have the sale pay off the loan. Or, they can sell another property to pay off the loan. If conditions are not favorable for selling, again, other approaches will need to be considered.

Renegotiate With the Lender

This is not an ideal approach because the borrower is negotiating from an inferior position. The lender “has the upper hand” because they can always foreclose. So, the borrower should offer the lender a monetary “inducement” for an extension, either a fee, an increase in interest, or payment amount, or both. But, it gets the job done! (Unless the lender says, “No”!)

Protective Note Terms

The best way for a borrower to protect themselves from becoming in an uncomfortable position is to negotiate protective terms in the note in the first place. One might be called a “rollover clause” or an “extension”. Here, for example, the borrower gets a time extension, say two years, for a 2% interest rate increase. This must be written in the note as one of its terms.

Another approach is to convert the note into an amortizing one when the balloon payment is due. Again, these terms need to be negotiated when the note is written and included with the other terms. In some cases, lenders do not need a cash payoff and enjoy receiving reliable note payments from a proven borrower.

Bring In A Cash Partner

If the above approaches aren’t working, the borrower can bring in a cash partner. This basically involves selling a partial interest in the property for cash to pay off the “balloon”. An escrow is recommended with title insurance, and an attorney should draw up an agreement between the parties, who might not be familiar with each-other.

Return the Property to the Lender

This is the least-desirable alternative in most cases. It involves giving up. If it’s going to be done, it needs to be done right, with an escrow, deed with a “Deed-in-Lieu-of-Foreclosure” recitation, title insurance, and transfer of any rents and deposits back to the lender. The lender should cancel the note, and return the original to the borrower. The lender should also record a “Full Reconveyance” in the escrow to clear the title.

File Bankruptcy

This is an alternative, but a risky one. The day a bankruptcy is filed, a 30-day “Automatic Stay” of all collection actions is established. After 30 days, the lender can file a “Relief from Stay” request to foreclose on the property. There is a hearing, and in the case of homeowners the bankruptcy judge will urge the parties to work something out. In the case of investors, the “sympathy factor” is usually low because investors are considered to have resources and several years to handle the “balloon”. The lender is due the money, the judge is likely to rule. (i.e., no relief!)

Conclusion

A “balloon” payment is one of those things that isn’t a problem, until it becomes a problem. It is best to deal with it up-front, in initial negotiations, when the note is originated. During the term of the note, keep working to pay it off. If the due date comes and the payoff funds are not in-hand, find expert help. You’re going to need it!

Good luck!

 

Bruce Kellogg

Bruce Kellogg has been a Realtor® and investor for 36 years. He has transacted about 800 properties in 12 California counties. These include 1-4 units, 5+ apartments, offices, mixed-use buildings, land, lots, mobile homes, cabins, and churches.

Mr. Kellogg is a contributor and copy editor for two national real estate wealth-building magazines: Realty411, and REI Wealth Mag.

He is available for listing, selling, consulting, mentoring, and partnering. Reach him at [email protected], or (408) 489-0131.

Yield Compression – Why are rates in California for alternative real estate financing declining in a rising interest rate market?

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By Edward Brown

 

The Prime Rate has been slowly increasing over the past six months, but real estate financing in the alternative sector in California has actually decreased. Why?

Competition between private lending companies in real estate [also known as hard money lenders] has increased over the past five years. This has led to brokers shopping around on behalf of their borrowers to get the lowest rates and points. Too many lenders have had a tremendous influx of capital from the private sector [investors] because of the low rates that banks pay on deposits as well as the volatility in the stock market that has spooked investors.

Prior to 2013, the difference in rates charged by private lenders and the Prime Rate was about 5%. Although the Prime Rate stayed stagnant up until 2018, the rate differential shrunk to about 3.5%. This yield compression was primarily due to the typical economics of supply and demand. There was too much of a supply of money pouring into California by investors, as these investors saw that real estate in California had not only stabilized [since The Great Recession], but had increased substantially, lowering the perceived risks of making private loans.

The default risk of making fairly conservative loans [less than 70% LTV of purchase] was minimized even further by an increasing real estate market. By the time the loan was eventually paid off due to refinance or sale of the underlying property, the LTV had gone down to as much as 40-50%. This was especially true in the fix and flip market for seasoned borrowers with good track records. Although real estate prices seem to have cooled off from the frenzy of buyers [especially those who continually paid over asking price], many of the larger lenders in the fix and flip market have gone as far as lending over 80% of purchase and up to 100% of the anticipated rehab. The amazing part is that these lenders are willing to lend their money out to these fix and flippers at rates as low as 7% and 1 point; this is unprecedented. Not only are these lenders taking more risk than in previous markets, but they are doing so at extremely favorable rates. One can only come to the conclusion that these lenders have a tremendous supply of capital that needs a home; especially those lenders who have investors who are promised a preferred return [usually in a Fund vehicle]. In these cases, idle money is a yield drag to the Fund and jeopardizes the payout to not only the investors but the profit to the manager as is typical in a mortgage pool Fund.

Idle money in a Fund is usually held in a low interest bearing account at a bank awaiting deployment. These deposits need to be liquid, as most private lenders market themselves as speedy – one of the advantages over a typical bank. In addition, their private placement memorandums dictate that idle funds be held in an FDIC insured account; thus, the low yield on these deposits to the Fund.

When borrowers shop around for California lenders, they may find two to five lenders willing to make them the loan they need at favorable terms. Most of the time, the borrowers enlist a mortgage broker who does the shopping for them. Although the mortgage broker may have favorite lenders he/she works with, the broker also knows that many sophisticated borrowers work with more than one broker, so it is the first one who can get the deal done who usually wins out. In addition, the broker realizes that some commission is better than none. Many times, these brokers quote lower than normal rates and points in order to secure the deal. What once might have been quoted as a 9.5% and 3 point deal is now hovering around 8.75% and 1.5 points. [As pointed out earlier, certain fix and flip lenders are charging even less.] The lender usually charges points, so both the broker and the lender are earning less on each transaction because of the lowering of the points that have to be shared between them. Most of the interest rate is earned by the lender’s Fund, but there is overhead that needs to be subtracted as well as the preferred return promised to the investors of the Fund. A 7% preferred return is not uncommon, but, the economics appear to dictate that a preferred return of closer to 6% may be on the horizon.

If interest rates paid by banks to depositors stay relatively low, then investors may not balk at a lower preferred yield; however, if the Prime Rate continues to rise, one might believe that interest rates on deposits at banks will follow. At some point, in order to attract investors, private lenders will have to increase the rates paid to their investors. The only way to do that would be for these lenders to start increasing the rates they charge borrowers, as profit margins to the lenders have been squeezed to its lowest level in many years. It will be those lenders who can run their companies “lean and mean” who will have the advantage in this market and the one to come.

Outside of California, lenders have enjoyed higher yields, but that comes with the potential instability of the real estate market. Many investors have chosen to take the path of least resistance – location, location, location, and stay conservative by earning less than other states may provide, but potentially reducing the risk. Generally, stable California markets have severely reduced the risk of loss of principal and, consequently, produced lower yields to investors/lenders. However, since a loss of 20% of principal in one year means that one has to make 25% the following year just to breakeven over the two year period, the prudent investor/lender might be wiser to accept a lower yield and not balk too much at a lower yield; thus the quandary of investing in California.

Edward Brown

Edward Brown currently hosts two radio shows, The Best of Investing and Sports Econ 101. He is also in the Investor Relations department for Pacific Private Money, a private real estate lending company. Edward has published many articles in various financial magazines as well as been an expert on CNN, in addition to appearing as an expert witness and consultant in cases involving investments and analysis of financial statements and tax returns.

 

Free Money….. No, Really! It’s True!

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By Reggie Brooks

Our Government makes hundreds of different programs available to distribute billions of dollars to us in the form of grants, low interest loans, and subsidies. The money is then appropriated by politicians who are smart enough to know that the best way to keep their jobs is by funneling Government money into the communities they serve. That’s where we can step up and reclaim our money.

It’s Our Money Anyway

I say reclaim because it’s our money in the first place. The Government takes the money from us in the form of taxes, then gives it back to us in the form of grants, low interest loans, and subsidies. Here’s the kicker…The Government only gives the money back to the people who learn how to get it. You have to learn how to ask for it! If you can follow instructions on an application, the chances are pretty good that you can get a grant for something.

Free Money For Almost Anything

Do you have an idea for a business? Want to invent something? Need help with living expenses? Want to change your career? Want to buy or fix up real estate? There is Government, Corporate or Foundation money that can help.

How about $30,000 to tag Grizzly Bears. Not that daring? How about $96,000 to study fish. Or $43,000 to become a French Chef. Or over $148,000 to rehab an apartment building. Sound too good to be true? Well, it’s not. There are far greater stories.

Uncle Sam Can Be Your Very Generous Partner!

You have to see the bigger picture. To us real estate investors, Uncle Sam is our best friend and a great financial supporter. If you’re a beginning investor, Uncle Sam’s going to help you by guaranteeing that you get a decent loan to buy your first house or apartment building. There are many first time homebuyer programs that were created for that purpose. If you’re having trouble coming up with enough money for a down payment, he makes it possible for you to buy with a 3% down payment (FHA), or a 0% down payment (VA). Then he makes the IRS give us a lot of tax breaks because we now own property. He even helps people in areas where people have trouble paying their rent under the Section 8 Subsidy Program. Our partner, the American Government encourages us to keep America strong by using these programs. When you learn how to use these programs, the financial rewards can be substantial.

Let The Government Help You To Make Money

Of the many different types of financial assistance available to us, I especially like the Rental Rehab Loan Program. Here how it worked for me. Several years ago, I purchased a four unit building that had my friends wondering if I had lost my mind. The units were one bedroom, one bathroom each, and were inhabited by four elderly ladies who had been living there from 21 to 24 years. The problem was that their rent had never been raised! The total income from that building was around $460 per month! FOR THE ENTIRE BUILDING!! No, I’m not crazy. I did my homework and I found a Government program called the Rental Rehab Loan Program. The program required that I borrow at least $5000 to be used for upgrades in the building. The benefit to me was that I received the money at a very low interest rate, and (much more importantly) the tenants would qualify to go on the Section 8 Government Subsidy Program!

A Great Win-Win-Win Deal

All four of my elderly tenants were existing on a very meager social security income. They lived in the fear that whoever buys the building will want to raise the rent. They knew that the market rent was around $625 per month, and they knew that they could not afford it. They all thought that they’d end up homeless on the streets. They had no idea that these wonderful Government programs existed. I borrowing as close to $5000 as I could (I wanted to maximize my cash flow), and started the work on the property. When it was all over, I ended up with a really nice building with 4 wonderful senior citizens as tenants. I increased the income from the building from $460 per month to around $2600 per month thanks to my partner, Uncle Sam.

Everyone Was A Winner

Everyone won in this deal. The Government won because they were able to get the money out into the community where it could do some good. The tenants won because they were able to stay in the homes they’ve been in for over 20 years. They actually ended up paying less toward their rent because of the Section 8 Subsidy. I obviously won because I was able to take a non-performing piece of property and turn it into a success. Thank you, Uncle Sam!

Do I Need To Have Good Credit?

That depends on which of the many programs you’re applying for. There are some programs that are project based. In other words, if your project fits a certain category, the project itself can qualify for the money. It could be the real estate, the area, the tenants, or the business that qualifies, not you personally. If it’s a program that requires you to personally qualify, then your credit can become a factor. But understand this. There are programs that are designed for people with bad credit. There are even programs that require you to be turned down by a bank before you can qualify for the money!

So, How Do I Go About Getting This Free Money?

I’m going to give you a thumbnail sketch of how to go about getting this free Money. My obvious limitation is that I don’t have a full day to teach you in great detail. My hope is that what I share with you in these pages begins your great adventure in getting this money. As you begin your wonderful journey, please understand that there is a degree of work that is necessary. You may find that many phone calls and follow up are required to nail down that particular grant you’ve been pursuing. Make the phone calls. Do your follow up work.

You may find that the program is no longer in existence. Don’t despair. There may be 2 or 3 other programs under different names that have replaced the cancelled program. So don’t quit. There are so many different Government programs. Thousands of ways to qualify under different application processes. There are thousands of different corporation grant funds, foundation grant programs and non-profit organizational grant programs. If you can’t qualify for 1 program, there might be 5, 10, 25, or 50 other programs that you can qualify for.

Use The Resources That Are At Your Fingertips

The first thing to do will be to make contact with the organizations that provide the money. One of the best sources to find these organization is your public library. Ask the librarian to help you locate Corporate and Foundation Grant Sources. There are literally thousands of corporations and foundations that give away money every year. Why? Because our system makes it very attractive for corporations who earn a lot of money to give it away and write it off rather than keep it and be taxed on it. And when you factor in the great PR they get for giving money away, it’s a pretty good win-win deal.

Your Project Should Be Within The Grant Giver’s Guidelines

Once you’ve made your initial contact with a potential funding source, ask them to send you all the information they have on their grant criteria. It will more than likely come to you in the form of applications and guidelines. These guidelines will usually lay out what it takes to get funding from them. Your project must fit their funding criteria. If it doesn’t, go and find another source for funding.

Requesting Your Grant

When you’re ready to request your grant you’ll need to do so using two documents. One is a Grant Proposal, and the other is the Letter of Appeal. The difference between the two documents is that the Letter of Appeal is a summary of the Grant Proposal. If you’re requesting a grant of $2,500 or less, you can usually accomplish that by using the Letter of Appeal only. If you’re looking for more, you’ll have to use the Grant Proposal and the Letter of Appeal.

When you find the right funding source for your project, this is when you write your proposal and your appeal letters. Submit your proposal to as many funding sources as you can find. There are not many restrictions on the number of grants that you can receive. Why not get five grants instead of one? Why not ten grants instead of five. Get the picture?

Remember, You Are Entitled To This Money!

As I mentioned before, these are your tax dollars at work. Do not feel guilty! It’s your money in the first place! Uncle Sam is a very generous partner who wants to keep America strong. He does this by making funds available to be used for specific purposes. Some of those “purposes” that Uncle Sam allocates billions of dollars for are in the area of real estate, small businesses, and education. I challenge you to learn about the programs that are available for you and take advantage of them. They are there for you to use, but only if you’re willing to learn how to use them. Have a grand – Grant Adventure!

 

Reggie Brooks

Reggie Brooks, is an international speaker, author and educator, dedicated to inspiring others to achieve personal success through real estate investment. He is also the #1 Vacant, Abandoned & Distressed Property Specialist in North America.

Having risen above a life of poverty, he has achieved what many people consider to be impossible. He went from making $36,000 per year at the local telephone company, to making over $40,000 per month in his real estate business. Today, Reggie delivers his personal philosophies for success at major business venues and expositions throughout the United States. Reggie attributes his success to faith, dedication to success, and to the invaluable coaches he has had along the way.

Cogo Capital: Still Dishing Out the Dollars to Fund Property Deals

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By Tim Houghten

Cogo Capital’s founder, Lee Arnold, reveals his unique approach to funding real estate entrepreneurs, and how millions of dollars are being poured into nationwide deals through Cogo Capital.

This is Your Moment & Cogo Capital Wants to Fund it

Lee Arnold says Cogo is attracting a windfall of new loan requests from real estate investors. Many requests are coming from other lenders who are starting to throttle their funding, revise their appraisals downwards, and turn away all but the most experienced investors.

Meanwhile, Cogo Capital says it is funding 99% of all the incoming applications that meet its parameters. It certainly helps that Lee’s firm is willing to loan up to 90% LTV and 100% of rehab costs, and still beat any competitor’s offer. As a direct lending solution, they also have the ability to fund fast and make common sense underwriting decisions.

Cogo makes loans on:

  • Non-owner occupied residential properties
  • Commercial real estate
  • Land development deals
  • Fix and flips
  • Wholesale and ‘wholetail’ deals
  • Rental properties

While Cogo helps others grow their real estate portfolios, it is also making strides and growing too. Cogo just added ID and AZ to its markets, leaving very little territory unserved — they even offer loans in Alaska and Hawaii.

In our exclusive interview with Lee, he mentioned that while there is no question the US real estate market is going through a correction, he does not see a crash coming like we experienced in 2008. He says “there is too little inventory, and too much demand.”

And he should know a thing or two about market cycles. Because he started investing in 1996, he’s been through 3 major dips already. Through strategic and purposeful action, and a whole lot of grit, he is still in business. As a result of these experiences, Lee looks at correcting and declining markets with optimism. He points out that even a modest correction is great news for serious real estate investors. It weeds out the looky-loos, allowing the actual, hard-working real estate investors more room to buy and sell and/or buy and hold.

He commented that for years the serious investors have “been tolerating the HGTV wannabes,” who have driven up prices by overbidding on properties. He believes many of these “fly-by-night” investors will become stuck in the months and years to come because they don’t know how to operate in a normal or declining market. Serious investors do.

If you’ve been waiting for better value deals, this is your moment, and this lender wants to fund your deals.

Enter The Circle of Wealth

Cogo Capital is just one of the group of companies in Lee Arnold’s portfolio.

His other companies include:

The Lee Arnold System of Real Estate Investing, which trains real estate investors on how to find and purchase profitable deals

  1. Secured Investment Corp, which provides a platform for lenders looking to earn double digit returns in one-off loans or through one of its long running funds
  2. Lake City Servicing, which gives lenders peace of mind and true passive income by servicing their private loans for them

While Cogo Capital is open to any investor, Lee says those who have gone through the Lee Arnold System often enjoy an 1,800% increase in their chance of getting funding. Because they have gone through the comprehensive educational arm of the company, these clients know what to look for, how to make the right offers, and how to structure their transactions.

Through this methodically designed system, Lee has been involved in more than $1B worth of real estate transactions. That includes flips, fund transactions, and making private mortgage loans. From this viewpoint, this industry veteran noticeably sees things very differently than the average newcomer, bank loan officer, or infomercial guru.

He believes in only making loans to investors who can be successful. He’s more interested in the client’s success than the possible equity grab should the loan go into default. Therefore he’s not afraid to tell you when you are taking on a lot of risk for less-than ideal reward, even if your loan request checks all the boxes.

And even if you come to Cogo, and you don’t quite make the cut, or you are taking on a new project you really don’t have experience in, Lee says he can introduce you to other experienced investors in your area who you can partner up with. That way you can secure the funding and get the deal done.

Lee Has Lofty Goals for His Clients

Lee encourages all his clients to begin building their wealth and real estate portfolio with wholesales and fix-and-flip projects before they venture into the realm of rentals. Why? Because when buying rentals too early, they won’t have the bankroll to weather any of the potential challenges common to rentals. One AC unit blown, one roof lost in a storm, one non-performing tenant or drawn out eviction, and you can end up in foreclosure yourself.

Instead, Lee teaches his clients to take a very different and intentional approach to real estate investing. He has two stated goals for them:

  1. Get up to $250k liquid cash in the bank as fast as possible with flips or wholesaling
  2. Then get to $1M in net worth to become accredited investors. At this point they can qualify to participate in more exclusive investments like one of the Secured Investment High Yield Funds, which historically pays out 12% returns over the last five years straight.

You Can Keep Your Skin at Cogo Capital

One of the big things that separates Cogo Capital from the rest of the pack is its favorable terms on funding.

Historically, most private money lenders demand more ‘skin in the game’ from borrowers. Lee says Cogo would rather you keep more money in your pocket so that you can go out and do more deals.

Cogo loans up to 90% LTV and 100% financing for rehab and repair costs. So, as a flipper, you just need 10% of the purchase price down, your closing costs, and enough cash to get you through the first renovation milestone.

For a quick way to estimate how much you should really be paying for a property, how much you should be budgeting in rehab, and what you can expect to borrow or pay out of pocket, CogoCapital.com offers a simple, easy-to-use tool. It will take your ARV and the level of rehab needed (light, medium or heavy) and base it on the living square footage of the home. This tool will then give you your MAO (Maximum Allowable Offer) and a clear insight on how to plan your investment.

There are three other factors impacting rate and terms:

  1. Credit
  2. Experience
  3. Cash in bank

Although Cogo does look at credit, they love helping new investors and accept borrowers with bad credit and inexperience. That being said, if you come to the table with good credit and experience, you do get a bump up in terms. Average funding time is just 72 hours, depending on the project and how quickly you provide the needed details on the deal.

Need Some Education?

Take Him Up on His Offer to Pay for Your Funding Tour Tickets

For those that want to meet the team in person and learn more about how to profitably do real estate deals in this market, Lee highly recommends getting out to one of the upcoming live Funding Tours.

These 3-day events show you how to find deals and discounted properties, put you on a bus to tour opportunities so you know what to watch out for in the field, teach you how to write offers, and even get you funded live.

Find out the event dates near you at www.FundingTour.com.

This year the $497 tuition fee is even being paid for by Lee’s fund company, so you can attend absolutely free!

It All Starts with the First Deal…

…And Cogo is ready to fund it for you!

Get started at CogoCapital.com, run your deal scenarios, get your proof of funds letter so you can make stronger offers, and discover a new partner for fueling your investment goals with Lee Arnold and Cogo Capital.

 

 

 

Just DO It: BE the difference you want to make

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By Karen A. Walker

You want to make a difference? Start by BEING the difference. And if you’re serious about being the difference, start with trust.

Famed leadership consultant Stephen R. Covey said it best: “Trust is the glue of life. It’s the most essential ingredient in effective communication. It’s the foundational principle that holds all relationships.”

John Aaron and Gene Simmons, co-founders of Florida-based Prestige Executive Funding, have each independently put mutual trust and the strength of honoring their word primary in their real estate and lending relationships long before they partnered together to better serve their sophisticated clients.

In fact, trust is so fundamental to everything they do in business that it’s second nature to them, and to their team. 

Trust is an integral part of every transaction in which they participate, regardless of client sophistication, background or anything else…. that is, regardless of anything else except the equal trustworthiness of their clients and their arrangements.

Noteworthy

This year, at age 29, John Aaron was featured in Forbes magazine’s “30 under 30” highlight.   He achieved consistent success in the fix and flip marketplace with, according to Forbes, more than $100 million in residential properties purchased and flipped at the time of the article.

Gene Simmons, co-founder and co-president of Prestige Executive Funding, says Aaron has about 80 properties in his portfolio at any given time. Parlaying his residential fix and flip success into the commercial arena, Aaron is also purchasing large commercial apartment buildings, developing modern waterfront properties, condominiums, hotels and retail properties.

But Aaron would rather DO it than talk about it.  He’d rather lead by example than tell you what to do.

For Aaron, his early character traits and principles of good business remain the same as they did when he first started: Focus, Integrity, Quality, Consistency, a lot of Hard Work, and Giving Back.

Just for the record, Giving Back is a core motivator for Aaron.  Years ago he launched a nonprofit foundation and, as Simmons describes his young, motivated and sharp partner, “Aaron is always doing stuff for the community.  He’s at soup kitchens a lot and helping homeless and those in need. He likes going into an area, purchasing retail and bringing much needed jobs and opportunities into areas where people are struggling. He does at least five major service-oriented events a year. That’s a big part of who he is.”

New York to Florida

Gene Simmons comes from the other side of the real estate development and investment business; the lending side.  Originally from New York, he relocated to Florida years ago.

At this point in his career, with more than 20 years experience in mortgage and loan business, he’s seen his share of ups and downs in the industry.  He’s also seen—and chosen to live by—the timeless principles of good ethics and honoring one’s word, regardless of what this or that other lender is doing.

Those principles have served him well, even through some wild years for some sectors of the lending industry.  But Simmons never veered from his core path of excellence in service, good ethical practices, and high-quaiity loans.

For Simmons, it’s not solely about the money or the profit.  He takes a longer view.  For him, it’s always been about building solid, trustworthy and valuable, long-term relationships with his clients.  This makes his partnership with Aaron a solid one.

Early mentors

Both Aaron and Simmons know their area of expertise so well that they practically could do it, excellently, in their sleep.  But when you talk with either of them about their beginnings, they are each quick to point out excellent mentors in the beginning of their careers.

For Simmons it was an early boss in the loan business.  The man was renown for not only his nimble and creative loan solutions, but also, and more importantly, for the ethical way he did business. Every. Time.

For Aaron, it was a real estate investor guru. Again, this mentor was bold, challenging his mentees and always available when a student needed help. Above all, he was ethical to the core, and Aaron valued that.

But mentors without students who are willing to follow the advice of their mentor yields no fruit.  The students themselves have to be willing to DO what they are challenged to do, even if it is out of their “comfort zone” and doesn’t seem to make sense at first. 

Both Aaron and Simmons were willing to take those newbie leaps of faith, to take advised action, to “just do it,” but only because of the high level of proven trust they each had for their early mentors.

Now they, in turn, are trusted guides for their team, for each other, and for their select clientele.

Customized Solutions

“Each deal we do is customized,” says Simmons, whose first-hand, creative, ethical funding examples lie ready for sharing when the need arises.

“We are a full service commercial lending source,” continues Simmons, who often recognizes ethical, creative financial solutions that are unique for each client’s situation long before others even—if ever—figure them out.

“Our staff has over 30 years experience and are able to structure financing requests in just about every aspect of commercial lending. We cater to Corporate Executives, Music Industry Executives, Entrepreneurs and Professional Athletes as well as Entertainers and Actors from Television and Film. We pride ourselves in being extremely competitive and honest . We work closely with our more than 100 institutional relationships in order to meet our client’s customized needs, and to guide our clients every step of the way.”

Prestige Executive Funding primarily serves sophisticated clients since they are capable of, and truly enjoy, providing customized, sophisticated solutions that create exciting win-win-wins for all parties, including the local community.

Summary

In sum, Prestige Executive Funding (FundMePrestige.com) finances and provides a wide scope of investment opportunities and solutions, including Office, Industrial/Warehouses, Multifamily, Mixed Use, SBA, Lines of Credit, International, Churches, Equipment Financing, Factory, Hotels/Motels, Hard Money Loans, Private Equity Mortgage, Bridge Loans, and Development Financing.

What do you call any partnership with two trail-blazing, ethical real estate investing and lending entrepreneurs? Unstoppable. Successful. A win for all parties.

Put a more practical way, Prestige Executive Funding provides access to institutional capital, family office funds, and direct private money for funding all types of real estate investments. Lending in all 50 states. Up to 90% LTV, Prestige Executive Funding represents a group of investors who have financed more than two billion dollars worth of loans nationwide. Loans from $1 Million to 100+ Million.  Learn more at www.FundMePrestige.com.

STRATTON EQUITIES’ HARD MONEY MEET AND GREET ON MAY 22

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Loan Officers, Real Estate Agents, Developers and Investors are invited to the Son Cubano Restaurant in West New York in May to learn more about Stratton Equities

April 17,2019- Parsippany NJ – New Jersey based Mortgage Lender, Stratton Equities, is making noise with their launch event; The Stratton Equities’ Spring Meet and Greet on Wednesday, May 22. To RSVP or learn more information about the Spring Meet and Greet follow the link here: https://strattonequitiesspring2019.splashthat.com/

Stratton Equities is a leading Nationwide direct Hard Money Lender that offers the most diverse array of programs in Today’s industry. Providing loans such as Hard Money, Private Money, Fix and Flip, Stated Income, Commercial, and more.

The Parsippany, NJ, flagship location is home to Founder, serial entrepreneur Michael Mikhail, and hungry Loan Officers that close their first loans in an unheard of previously – 4-6 weeks- and now they are ready to make a splash in the fast growing Mortgage lending industry with their upcoming Meet and Greet event.

After their soft launch in mid-2017, Stratton Equities focused on building their foundation of providing the most innovative programs at the lowest rates.

In early 2019, Stratton Equities became listed in the Scotsman Guide and focused their efforts on expanding outreach with the creation of their Seasonal Meet and Greets.

The focus of each event is to connect Loan Officers, Real Estate Agents, Developers and Investors– face to face- with curated one on one meetings during an entertaining affair focused on showcasing the high quality and luxury lifestyle that Stratton Equities possesses.

On Wednesday, May 22, The Stratton Equities’ Spring Meet and Greet will commence at Son Cubano Restaurant in West New York, in partnership with Remax Realtor Carlie Carreira and Media Partner, Realty 411.

Attendees can enjoy signature themed cocktails, the New York City skyline, and tasty appetizers, while they network with top influential members in the industry.

All guests will be able to take home a Stratton Equities’ VIP Gift Bag filled with products from their sponsors: Simplicity Title, Design + Build Enterpríses, United Real Estate New Jersey, Nationwide Property & Appraisal Services.

To find out more about Stratton Equities, please visit www.strattonequities.com

For more information about the event and to RSVP, please visit https://strattonequitiesspring2019.splashthat.com/

All press or media inquiries should email, Jordan Elizabeth Gelber at [email protected]

Meet Your Creative Financing Experts Rebecca Rice & Jim Beam

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By Sandy Fox

Our 5th Annual Los Angeles Real Estate Investors’ Expo will feature some remarkable experts. On that day, we will spotlight Rebecca Rice and Jim Beam, industry leaders in a little-known financial area. They’ve perfected a way to turn a unique and specific kind of life insurance policy into a reservoir of money you can use to simplify your real estate investing. More than that, the strategy actually compounds and increases the ROI on your investments.

A Financial Vehicle That Compounds Your Investments

When you hear from Rice and Beam you’ll find a financial vehicle beyond what most investors use. Typically investors turn to cash, mortgages, private lending or a combination of the above. Each has its own costs and limitations.

Beam, who started as a real estate investor in Florida said, “We worked awfully hard to make our money. And it seemed like someone was always standing there at the end of the day with their hand out to take our money. Closing costs, fees, taxes, interest rates.” He felt there had to be a better way.

His search led him to Rice and her specially constructed policies. He learned a way that he could:

• Keep his money safe and private

• Borrow money at low cost or net-zero cost

• Avoid credit checks and bank approval for loans

• Gain tax-free retirement income

• Loan his business money and save on taxes

• Pay off debt faster

• Create an emergency fund that earned interest four times higher than most banks pay

He now helps other real estate investors learn how to take advantage of this system. This type of insurance policy is not new. It’s has been around for centuries and is tried and tested. Currently banks, businesses, and high net worth individuals use it to preserve and grow their money. But Rice and Beam offer a unique structure that makes it a powerful tool for even the small real estate investor.

SHE BROKE THE GLASS CEILING

Rice discovered Nelson Nash’s book, “Becoming Your Own Banker,” over 25 years ago. She recognized the revolutionary technique and became a protégé of Nash, building on his philosophy with concrete action plans.

It became her passion to help as many people as possible. “I help people see how money really works in the economy. It’s often not the way you think it does,” Rice says. “I love to show my clients how to reduce their debt in an extremely short period of time — faster than they ever thought possible.”

Through the years she’s structured Living Benefit policies for people from 21 to 93 years old. “Each is unique,” Rice says. “I’ve helped people profit who could only start with $100 a month. And I’ve worked with people who wanted to contribute a million dollars a year. Whatever your income or investment goals, you can use this to take control of your money and grow it faster and safer.”

Rice’s passion and dedication to her clients made her extremely successful. She became the first woman to be the top-performing agent at Mutual Trust. Then she went on to break the glass ceiling at Massachusetts Mutual as the first woman in its 170-year history to become the top life producer. She is also one of only three policy agents endorsed by the Palm Beach Letter, a financial newsletter.

Because she has written thousands of policies—and uses many of them herself — she knows every nuance of how to structure it to benefit you.

YOU NEED AN EXPERT

On the owner’s side, a policy looks deceptively simple and is easy to use. But the creative side takes an act of genius to give you all the benefits and advantages necessary to use it effectively in your business and investing.

Rice always learns what her client’s goals are. Then she tailors a Living Benefits policy specifically to meet those goals. Some want a pool of money to run their business. Others need free access to money for real estate investing or hard money lending. And some have their top goal to safeguard their wealth and transfer it to the next generation.

“It’s possible to accomplish all those goals without invading lifestyle money,” Rice says. Lifestyle money is what you live on after paying your bills and Uncle Sam. Rice’s brilliance is that she frees up money for you to invest from other sources. Often it’s from the debt payments you are already making.

PUTTING YOUR POLICY TO WORK FOR YOU

“The simplest way to use your Living Benefits policy is with hard money lending,” Beam says. “There are hundreds and hundreds of folks out there who are in need of hard money lending.” Beam works through organizations that send out leads for people who want to borrow the amount of money you have to invest —whether that’s $10,000 or $150,000 or more.

And the Living Benefits policy creates a vehicle to amplify the investment. “You borrow against your policy at 5% and you put it out on the street to go to work at 10% or 12% plus points,” Beam says. “But you’re still earning 5% on those same dollars within in your policy! Wow, what a platform to work from!”

Beam’s strength is that he can guide real estate investors in the best ways to take advantage of this platform for their specific goals.

There are a number of ways to take advantage of the policy. One of their clients buys HUD houses to rehab and rent.

Although her Living Benefits policy is only a few years old, she’s been able to use money from her policy to cut costs and increase returns.

• Used for a down payment for a conventional loan and saved the cost of mortgage insurance

• Used for repair costs on the house and avoided the expense and effort of a construction loan

• Kept an “emergency fund” that earns 5% or so on that money instead of a bank’s pitiful near zero rate

• Used a regional bank for a 5 year balloon loan with much lower loan origination costs and interest rates. She can do that because this system pays off the bank loan in just a few years—well before the balloon kicks in and interest rates rise

The client says, “The best part is that I end up with a house AND all the money that would have gone to mortgage payments!”

Can This Work For You?

You can learn more about investing in real estate using a Living Benefits policy when you attend national Realty411 events where Rice and Beam will be featured speakers. Plus, look for future issues with articles explaining in more depth how to increase your real estate returns using a Living Benefit policy.

Learn more with Rebecca Rice’s book, “Multiply Your Wealth: Essential Secrets for Financial Freedom.” Contact her directly (501) 868-3434 or online at www.rebeccarice.net – You can connect with Jim Beam at (239) 591-3781 or email: [email protected]