Posts

Is Credit Card Stacking Really Going to Help You Fund Your Real Estate Deals?

/in , , /by

By Jessica Guisinger and Merrill Chandler

If you are a new or seasoned real estate investor and you have been looking for capital to fund your real estate deals, there is a good chance you have heard of credit card stacking.

Credit card stacking is the practice that credit brokers use to help individuals acquire credit by applying for multiple personal credit cards at the same time. The idea is that once you are approved for multiple credit cards, you can use the newly extended credit to fund your real estate deals. While getting multiple credit cards at the same time may initially sound like a great idea, doing so can create serious problems—especially if you attempt this strategy without fully understanding the consequences.

“I think just about the worst mistake I’ve ever seen an investor make is funding a deal by employing a credit card stacking strategy,” said Jessica Guisinger, the referral partner liaison with CreditSense, a firm that specializes in improving both personal and business fundability for real estate investors and small businesses. A cursory review of their website reveals they are nothing like a credit repair agency, but rather a Fundability Optimization firm, that gives its real estate investor students and clients a great deal of specialized insight into the inner workings of credit underwriting in general, and credit approvals in particular.

“We see a lot of offer there that offer investors “funding” to do deals, but in reality they are just managing credit card stacking [for the investor],” Jessica explained. “These companies do not disclose—and investors rarely know until it’s too late— that getting the funding they need by maxing out these new credit cards will absolutely ruin the investor’s chance of obtaining future funding, and it inevitably tanks that person’s personal credit profile and score as well. And to add insult to injury, the 0% offer that was so attractive almost always disappears when they try to liquidate their credit card limit for cash.”

What credit card stacking participants don’t know is that even if they pay on-time for the next 24 months, they will be flagged as high risk borrowers because lenders view this practice as an extremely high risk behavior. The investor will also be flagged as high risk because of the sudden spike in utilization (balance to limit ratio), and a demonstration of poor credit management.

“A far better solution is to use true business lines of credit as your funding source. When you have the right credit profile these lines of credit offer the lowest rates available and you can get these business lines of credit with full check-writing capability at 3% to 6% to fund your deals,” recommended Jessica. “This type of funding is not only check-accessible, but it is unsecured as well. This feature offers a huge advantage for real estate investors because it helps make them MORE fundable while improving their personal credit rather than destroying it.”

Many real estate investors assume they cannot qualify for unsecured business lines of credit, or that they will need to pay high interest rates in order to obtain them without ever discovering the truth. Jessica noted that with the right borrowing strategies, this is patently untrue. “A lot of real estate investors need help becoming fundable because they have been playing the funding game without knowing the rules. And, not knowing the rules is made even worse because real estate investing is considered a high risk business by lenders—they don’t want to even talk to you much less give you money,” she said.

Jessica continued, “Thankfully there is hope. There’s a way for real estate investors to get inexpensive money from top tier lenders. They simply need to learn the rules of the funding game and then play that game at a professional level. In fact, if you know what you are doing, you can obtain these unsecured business lines of credit and then strategically grow them to $1 million or more in real estate funding,” she said.

“Experts who help others acquire this type of funding do not just jump in without exploring the current fundability of an interested investor,” Jessica concluded. “If someone does not do a little bit of fact-finding and a comprehensive fundability analysis before they lay out a plan for you, be on alert,” she said.

 

Here’s Your Invitation To Ignite Your Investment Performance

/in , /by

By Carrie Cook

Still looking for better investment performance? How does $1M in tax free returns sound?

Securing strong investment yields is still one of the top priorities of all investors out there today. Of course big promises alone can’t be the single driving force behind investment decisions. Otherwise we’d all be off to the casinos in Vegas to go all-in on every next roll of the dice, and financial planners would be out of business. Returns are important, but so is diversification, tax planning, and finding sustainable investments.

The Search for Sound Investments

Finding sound, profitable investments and enough of them can be challenging. Some have very diverse stock portfolios, yet really have no idea what to expect from their performance. Many have added owning a home to their assets, and hope to gain from equity growth as they pay down their mortgages. Some take this further with direct investment in rentals. Rental homes can provide similar benefits to homeownership, but can also bring significant time demands and expenses. Then there are REITs, which promise ease of investing, but provide no collateral and present the same high volatility risks they are exposed to in other stocks.

Then there is trust deed investing. This may also be called ‘note investing’ or private lending. This is a sector loved by sophisticated individual investors and institutional investors for its simplicity, strong collateral, and of course the yields. These are the types of investments which have made the likes of Warren Buffett, Sam Zell, Blackstone, and Bank of America very wealthy.

President of Ignite Funding, Carrie Cook says it’s entirely “possible to invest $100k at 10% in mortgages for 25 years, and reap $1M in tax free returns.”

Ignite Funding

This is exactly the type of investments Nevada based Ignite Funding specializes in. Ignite Funding has been featured on Modern Living with Kathy Ireland and Bloomberg Television. Led by president and woman entrepreneur Carrie Cook the firm has been providing these elite investment opportunities for 21 years.

Ignite Funding offers qualified investors the ability to participate in their success by funding high quality borrowers in the real estate space. These trust deed or mortgage investments provide cash flow, above average yields, and the security of being backed by tangible real estate collateral.

Some big funds and new note brokers have recently made this space popular in heralding the benefits of investing in distressed debt and non-performing existing loans. In contrast Carrie explains that Ignite focuses on issuing new capital to strong builder developers with great track records. Specifically the firm’s president explains that they carefully curate “a pool of highly prized borrowers who have been in business for at least 10 years.” In fact, this lender-broker does not even operate a borrower facing platform. They seek out those they see are the most qualified. If builders do find them Carrie says they “accept only around 20% of the requests received.” The funds are used for acquisition, development, and construction, and target a 10% to 12% annualized return to investors.

This is NOT Wells Fargo

Among the refreshing differences that investors will find at Ignite Funding is a serious dedication to sustainability and transparency.

Those are words which are easy for companies to spout out these days to capitalize on trends. But this company proves it by really putting the information out there. Other CEOs, especially in this male dominated field might deem some of this transparency clearly unnecessary and going too far. Yet, it is clearly in favor of the investors, as it holds their asset manager to a high standard and ensures they are working hard to deliver the best results today and over the long term.

Some of the ways you’ll see this displayed via the firm’s website include a calendar of deals being funded, five years’ worth of detailed performance documentation, and even information on defaults. That’s right; no matter how diligent and careful you are some loans will default. Some big banks have become infamous for how they hide this information for so long. Not here. Carrie Cook’s team clearly displays any default information, along with the cures. The data is encouraging too, with the company recouping over 100% of investor capital even in some of the worst performance cases displayed. Carrie credits this success not only to the investors and borrowers involved, but her teams attitude of being willing to “run into the fire, not from it,” as well as the consolidated approach of completely in-house operations from origination to servicing and loss mitigation.

Who is Investing in Trust Deeds?

In addition to the very visible and notable examples of big funds and billionaires who invest in this asset class, there are a growing number of private individuals who are experiencing great results here.

Ignite Funding accepts a minimum investment of $10,000, though Carrie says “around 75% of clients are using their IRAs to invest,” which means they can invest a lot more. However, one of the best features here is that while adhering to Nevada’s strict sustainability standards, this type of collateralized investment is open to those earning just $70,000 or more each year, providing they are not investing more than 15% of their net worth.

For those interested in learning more about trust deed investing, how Ignite Funding protects its clients with multiple layers of security, and who want to soundly diversify their portfolios find out more online at IgniteFunding.com.

Disclaimer: Money invested through a mortgage broker is not guaranteed to earn any interest and is not insured. Prior to investing, investors must be provided applicable disclosure documents. Ignite Funding, LLC | 6750 Via Austi Parkway, Suite 230, Las Vegas, NV 89119 | P 702.739.9053 | T 877.739.9094 | F 702.922.6700 | NVMBL #311 | CACFL #603J286 | AZ CMB #0932150 and AZCMBBR #0121055.

 

 

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

/in , , , /by

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

/in , , /by

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.

Welcome To Your MONEY PATCH

/in , /by

By Tim Houghten

Money might not grow on trees, but funding portal Patch of Land may have invented the closest thing to it…

Whether looking to grow your real estate investments with access to attractive capital, or boost your yields with passive income investments, this is one patch of the web worth checking out. Named one of Entrepreneur magazine’s ‘100 brilliant companies of 2015’, Patch of Land brings a unique twist to real estate lending and crowdfunding, and the proof is in the performance.

PIONEERING WIN-WINS

While peer-to-peer lending, and crowdfunding has been catching plenty of media attention, it hasn’t always been a walk in the park for fundraisers and funders. Until now the two main challenges have been the amount of work required for project promoters, without any guarantee of funding. And then a lack of track record, and organization base investment decisions on for those looking to put their capital to work. Recently, Patch of Land co-founder and CEO Jason Fritton provided a new perspective on how Patch has created a new model of peer to real estate lending. There are two things which really separate this platform from everything else on the landscape:

1. Patch offers ‘Pre-funding’, gives you your loan, and then raises funds from the crowd

2. Patch works together with institutional lenders instead of trying to replace them

This creates a true hybrid where “real estate, finance, and technology, converge.”

The startup that Fritton describes as a “tech and efficiency company” shares some threads with other peer-to-peer, online mortgage lending, and crowdfunding sites. These are that real estate fundraisers bring their projects, which are ultimately financed by the crowd. It is the execution that stands out.

Fritton highlights that his company is the “first in market to directly secure fractional investors in real estate loans.” That means Patch of Land underwrites, and gives real estate investors and professionals the funding under the supervision of SVP of Underwriting & Acquisitions Douglas Cochrane. Then Patch of Land opens up the opportunity to a range of individual accredited investors and institutional lenders.

Now operating in 25 states, and with over $600M per month in funding requests the company is able to offer retail investors, hedge funds, regional and “community banks the yields they really want, along with efficiency in origination.” In fact, Jason explains that this enables these capital sources the freedom to participate in deals they could not do directly, while permitting more common sense underwriting of deals. Operating under SEC Rule 506(c) of Regulation D, this connector empowers those with projects to raise money cost-effectively without all the marketing and substantial filing expenses of going it alone. All while delivering the due diligence investors need and crave. As of September 25 th , 2015 Patch of Land had a solid track record of performance, with no principal or interest losses.

THE SECRET SAUCE

Fritton explains that a great deal of the success has come from “the privilege to hire experts in all areas,” to grow the California based Patch of Land team. The founding and executive team now spans a wealth of technology expertise, lending professionals with billions in transactions under their belt, along with an entrepreneurial marketing team with experience in organizations like Disney. Silicon Valley appears very bullish on investing in ‘The Patch’ too, with a successful, oversubscribed Series A round of funding topping $23M, achieved in early 2015.

So far Patch of Land has perhaps been most well-known for funding single family deals, but Jason tells us they have recently funded a Ramada flagged hotel, office, and retail buildings, and are testing moving into new construction financing.

Whether you’ve got deals that need funding, or capital that deserves higher yields, Fritton says “give us a try, and come grow with us!

More details, statistics on past performance, and online tools can be found at PatchofLand.com.