Never Lose a Good Deal for a Lack of Money
Issue #1982
- WEALTHY: 6 reasons to beef up your private money network (Justin Ford)
- HEALTHY: Heart disease protection in the candy aisle? (Jon Herring)
- WISE: Famous lyrics from the Great Depression
ALSO IN THIS ISSUE:
- When offering a discount is a bad idea (David Cross)
- The morning "staple" that could stall your career (Michael Masterson)
- It’s Fun to Know… about the English language
- Add "litany" to your vocabulary
He’d Have Called Them Crazy - Or Worse!
With the Internet, it’s now possible to spend no more than a few dollars, write a couple of very basic ads, and have instant access to millions of potential customers all in a matter of minutes.
If anyone had told Jim Sheridan he could bank thousands in just 24 hours. . . without any product of his own. . . without spending a penny on getting it or promoting it, he’d have justifiably said they were nuts.
But Jim made a decision that he would overcome his skeptical nature and give it a go. Boy, is he glad he did! That one deal alone banked him $187,296 in one day.
The great news is - you can copy Jim’s plan exactly. The program is called Instant Internet Income and I guarantee it does exactly what it says it does.
Take a look at how Jim brought in over $175,000 in a single day!
- Patrick Coffey
"Brother, can you spare a dime?"
Yip Harburg
Never Lose a Good Deal for a Lack of Money
By Justin Ford
I probably left over $1 million on the table during my first years as a real estate investor.
I remember the four-unit I could have gotten for $160,000 that sold for $300,000. The duplex a block from the heart of downtown, not yet listed on the MLS and offered for a song at just $120,000. It would be a quarter-million-dollar property within two years. And I can’t forget the renovated triplex that cash flowed like an ATM and was available for $165,000 - about 25 percent below comparable properties and in the middle of a rapidly improving (and appreciating) neighborhood.
I knew these were among the best deals on the market. But I didn’t even make an offer. I was in the middle of another deal each time, so my money was "tied up." And there was no way the bank was going to lend middlin’-credit-me money for two properties at the same time.
So I hoped the deals would wait while I tried to scrape together more savings, looked for a partner with good credit for the bulk of the down payment, and got ready to make a joint application for another bank loan.
But the deals didn’t wait. Each of these six-figure winners passed by me like fastballs thumping into a catcher’s mitt.
I never even got the bat off my shoulder.
But that was before I understood the concept of private money.
Today, I realize one of the keys to snatching up the best deals on the market is being ready. That means having your cash ready to go. But most investors do it backward, just like I used to. They spend a lot of time finding the deal. Then, once they do, they go out and try to get the money.
Often, that works. But sometimes you lose extraordinary deals because you simply can’t move fast enough.
So wouldn’t it be a lot better if you had your funding lined up all the time? And not just for the down payment, but for the entire purchase, rehab, and closing costs? And not just for one deal, but for as many cash-flow, under-market deals as you could find?
I think so. That’s why I’m in Dallas - along with about 200 investors from all over the country - at Alan Cowgill’s "Where to Get the Money Bootcamp."
Alan has been a real estate investor for the last 12 years, but his business really took off once he figured out how to develop a network of private lenders. Today, he buys and sells, on average, five to seven houses a month - more than he used to do in an entire year. And he has more money available to him than he can use.
As Alan detailed to us yesterday, here are just a few of the key benefits of building your own network of private lenders:
- Cash is king in a rising foreclosure market, which we’re facing today in much of the country.
Sellers in pre-foreclosure often can’t wait the 30 to 45 days or so it takes for a buyer to get a bank loan. Yet, if you set up your network of private lenders correctly, you’ll be in a position to close in five days or less in many cases.
- Private money allows you to do deals many banks won’t touch.
This is especially true with non-performing apartment buildings. These are buildings that may be largely vacant because of neglected repairs or bad management. If you know what you’re doing, you can buy them at big discounts and make the repairs, bring in new management, or both. The result is you can create instant value in the property to the tune of hundreds of thousands of dollars. Then, once the building is performing at 90 percent occupancy for six months or more ("stabilized," as bankers refer to it), it becomes much simpler to lock in competitive-rate, long-term bank financing and pay your private investors off if you so choose.
- Private money allows you to do "short sales."
In a nutshell, a short sale is when you get a purchase contract on a property that has little or no equity. Then you create equity by negotiating a significant discount on the mortgage. This is a huge area of pre-foreclosure investing. But once the bank agrees to discount the loan, they’re going to want you to come up with the money in 48 hours or less. That is only possible with your own cash, ample credit lines, or private money.
- You don’t need excellent or even good credit to build up a network of private money lenders.
You do need to learn how to find good, undervalued cash-flow deals. But you don’t have to deal with the hassle of credit scores, bank applications, tax returns, etc. Your first network of private money lenders can come from friends, family, and associates. And if you follow Alan’s guidelines, they’ll be well protected and you can begin investing in undervalued properties even if you haven’t yet built up your credit.
- You’ll never have to pay the sky-high rates and fees of hard-money lenders.
Hard-money lenders will lend up to 100 percent of the purchase price as long as you’re buying at 65 percent or less of the appraised value. Trouble is, they often charge twice the going bank interest rate and huge fees and prepayment penalties that can equal 10 percent of your purchase price.
- With private money, you - not a bank and not a hard-money lender - set the terms. So you structure your loans in a way that makes sense for the deals you’re doing.
Alan also covered in detail how some of the documents should be handled to successfully fund a deal with private money, including the note, mortgage, lender’s title insurance, and hazard insurance. He showed how money in individual retirement accounts (IRAs) can be used by private lenders to fund your deals, and he showed how your lenders can easily convert their IRAs into self-directed IRAs that are capable of making mortgage loans.
He covered much more than I can possibly do justice to in this short space. But here’s a simple action you can take today that can make a big difference in your real estate investing career:
Make a list of potential private lenders for your real estate deals. And keep educating yourself on how to identify good-value, cash-flow real estate deals. When you put the two together, you’ll be able to provide people with a much higher return than they’re getting in their savings accounts, T-bills, or CDs. And you’ll do it with an investment secured by real estate bought at a good price. Last, but not least, you’ll never again have to pass up an exceptional opportunity in real estate … just for a lack of money.
Tomorrow, I’ll share more of the private money techniques Alan’s divulging at his Bootcamp.
[Ed. Note: To learn more about the private money techniques Alan Cowgill and his students have used to raise over $125 million for their real estate deals, click here.]
The IPO market is SIZZLING…2007 will be known as the year of the IPO millionaire. Will You Be One?
Let’s face it…
It seems like everywhere you turn, businesses are offering WiFi access. Whether it’s McDonalds, Starbucks, Holiday Inn or even your neighborhood bar.
We just can’t seem to escape the Net, as consumers are demanding wireless Internet access in more and more spots across the globe.
In this free report, you’ll learn about the new technology that’s 5,000% more powerful in reach and strength than WiFi.
Click here for all the details:
A Classic Mistake in Selling
By David Cross
Diamonds may be a girl’s best friend but my girl prefers emeralds. So a few weeks ago, I set off to hunt down a pair of emerald earrings for her birthday.
I found them in a small, out-of-the-way shop on a quiet side street. The store was empty - a bad sign for a jeweler on what happened to be the day before Valentine’s Day. I almost passed it by.
I ventured in, and they had exactly what I was looking for. Emeralds are not cheap, but the price was just right, too. I couldn’t believe it. The tick of an old grandfather clock added to that perfect moment, and I probably stood there for all of 10 seconds, silently enjoying it. But that 10 seconds must have seemed like an eternity to the store owner, who jumped in with: "And we’ve a sale on for any Valentine’s Day gift purchases, which gives you a 20 percent discount off that price."
"I’ll take them!" I practically shouted.
The shopkeeper was making a classic mistake in selling, assuming that price was the only thing standing in the way of his making the sale. Instead of offering me the discount, he could have said, "Are they for someone special?" or "They’re beautiful, aren’t they?" or "I imagine someone special would be thrilled with those on Valentine’s Day!" or "We have some lovely gift wrap - would you prefer black or gold?"
Anything would have been better than, "Here’s a discount!"
Many online marketers make this same mistake by offering "money off" deals without first segmenting out the different types of customers in their database.
By checking the purchase history of your customers - including how recently and frequently they’ve bought from you - you’ll find that there are (1) some who tend to buy immediately and probably don’t need an incentive discount, (2) some who need more time or more information before making a purchase (and probably also don’t need a discount), and (3) some for whom price may be an issue.
Don’t be too keen to offer discounts to everyone or you will end up discounting to customers who would have bought from you at full price.
[Ed. Note: David Cross is Senior Internet Consultant for Agora, Inc, in Baltimore. David is one of the experts featured on ETR’s Internet Marketing DVD Library, where you’ll learn dozens of unique and powerful strategies for starting and running a profitable home-based Internet business, attracting throngs of eager customers, earning ten times more from existing customers, and tripling your profits this year.]
Notes From Michael Masterson’s Blog: Tapping the Power of Your Morning Routine
Did you know that some "successful" execs work on e-mail all morning - sometimes even all day?
According to Jim Citrin’s article "Tapping the Power of Your Morning Routine" on Yahoo! Finance, many business leaders are chained to their inboxes:
"I do e-mail from the minute I get up [5:15 a.m.] and all day long, finishing around midnight," said Ursula Burns, No. 2 executive at Xerox.
Lou D’Ambrosio, CEO of Avaya Communications, told Citrin that he is on e-mail one minute after waking up and relies on it to jumpstart his day.
I don’t know Burns and D’Ambrosio. They are probably fine executives and may have found a time-management system that works for them. But here’s what I think: When you spend your day processing e-mails, you risk becoming more of a follower than a leader.
If you want to be a good corporate soldier and step up the corporate ladder to the beat of a metronome, you can do it by following that path. But it is not the way to develop a career in leaps and bounds … or to change your life.
I found long ago that constantly staying on top of e-mail was a major hindrance to productivity, and I’ve been passing on that message for years.
If I took the time to stop, check, and answer every one of the hundreds of e-mails I receive every workday, nothing else would get done. So here’s my advice to you:
- Don’t let e-mail dictate your schedule. Open your inbox twice a day, at most. Don’t try to "keep up."
- And instead of starting your day by answering e-mails, begin with an hour of focused work toward one of your four major life goals.
- Michael Masterson
[Ed. Note: To read more of Michael’s unedited, uncensored (and sometimes unexpected) ruminations, check out his blog here.]
And learn how you can be part of an exclusive group of 25 to 50 ambitious businesspeople that Michael will be leading through an elite 5-day program that can help you dramatically increase the profitability of your business here.]
A "Prescription" for Chocolate
By Jon Herring
Several years ago, I went to visit my brother who was serving in the Peace Corps in the mountains of Panama. Every morning, we began our day with a rich cup of some of Central America’s finest coffee. That is, until we reached the San Blas Islands.
The San Blas are inhabited by the Kuna, a strongly knit tribe of Native Americans. Instead of coffee, the Kuna drink a beverage made with cocoa. And though they’re probably not aware of it, the cocoa is rich in heart-healthy antioxidants and other beneficial nutrients. I was reminded of this when I read a recent study showing that the Kuna Indians who live on the mainland have a high incidence of heart disease and high blood pressure, while those who still live in the Islands (and consume this beverage daily) have an extraordinarily low incidence of those conditions.
Certainly there can be other dietary reasons why the Kuna living in cities have health concerns that the islanders do not. But this study strongly supports the results of other recent studies, including one published in the Journal of Clinical Nutrition which showed that the consumption of cocoa caused a "striking blood flow response" to the brain and improved brain function.
The Journal of Clinical Nutrition study was sponsored by Mars Inc., the company that makes M&Ms, Snickers, and Twix. I have no problem with their research - but don’t get the idea that a Snickers bar is going to do the trick. Besides being full of sugar, milk chocolate has very little cocoa. Instead, choose a high-quality dark chocolate - the more bitter, the better. Or buy a container of organic, unsweetened cocoa powder (NOW Foods makes the brand I buy). Mix it with water or milk and drink it several times a week. If you prefer it sweetened, add a few drops of stevia.
It’s Fun to Know: About the English Language
The 10 most commonly used words in English are: the, of, and, a, to, in, is, you, that, and it. The 10 most commonly used letters are e, t, a, o, i, n, s, r, h, and l.
(Source: Dictionary.com and Letterfrequency.org)
Start Making Money Today
Interested in getting a nice little side-business going on the Internet? Or maybe even from your living-room table?
But you don’t have too much money, you don’t have too much time, and you’re not exactly Bill Gates when it comes to technology. Sound familiar?
A lot of people are in the same boat. The good news is that ETR has heard you. And now we’ve done something about it…
We’ve asked our colleague Marc Charles to be on the lookout for profit opportunities that can be run from a kitchen table, your desktop or out on the road.
Criteria? They’ve got to be inexpensive, easy to start, and still have great income potential, but without a lot of red tape.
They say when you’re first getting your feet wet with a side-business, the most important dollar to make is the first one. Well, Marc is an expert at taking beginning entrepreneurs and showing you how to make that first buck. He knows, because he’s done it dozens of times for himself, his family and his friends.
If you’ve been dreaming about starting your own business … now you can get started for about the price of 2 lattes.
And get this - you could be making money literally just hours from now. Imagine the feeling of finally getting a side business launched - TODAY!
- Patrick Coffey
Word to the Wise: Litany
A "litany" (LIT’n-ee) is a form of prayer that consists of a series of invocations recited by a clergyman that alternate with fixed responses by the congregation. By extension, we use the word to refer to any prolonged or tedious account.
Example (as used by Danielle Trussoni in a New York Times review of Sweet by Heather Byer): "Casanova’s memoirs would be nothing more than a pre-Viagra Superman’s litany of conquests if his adventures did not telescope the larger tragedy of committing slow suicide in the guise of love."
[Ed. Note: Become a more persuasive writer and speaker … build your self-confidence and intellect … increase your attractiveness to others … just by spending 10 VERY enjoyable minutes a day with ETR’s new Words to the Wise CD Library.]
Michael Masterson
Copyright ETR, LLC, 2007