Issue #2101
- WEALTHY: How to bypass banks and finance all your real estate deals on your own terms (Alan Cowgill)
- HEALTHY: Surprising protection from summer sun damage (Dr. Al Sears)
- WISE: Woody Allen on money
ALSO IN THIS ISSUE:
- Thank your customers, over and over again (Michael Masterson)
- A lesson on speechmaking from Abraham Lincoln (Virginia Avery)
- It’s Good to Know… about eating bugs
- Add "depredation" to your vocabulary
Imagine Knowing of a Casino Where the Dealer Tipped His Hand Before You Made Your Move and Didn’t Care How Many Times You Beat Him.
When would you stop going there?
This is nothing to do with games of chance, but I hope your answer to that question would be a resounding, “NEVER!!” Assuming you’re sane that is… Well, that is a virtually PERFECT analogy of the power of the insider signal!
It’s often said, “The Stock Market is just a big casino”. And it’s true. But the important omission in that statement (to keep the masses out!) is the dealer in this casino tips his hand to the select few… the insiders.
Such powerful knowledge could make YOU very rich indeed… Click here to learn more…
"Money is better than poverty, if only for financial reasons."
Woody Allen
Becoming Your Own Bank
By Alan Cowgill
Susan was the last to report. With no small sense of accomplishment, she told the room of 227 attendees that she had managed to secure $1.5 million in commitments from private lenders. When we added the commitments obtained by other students at my recent Private Money Bootcamp in Las Vegas, the total was over $73 million.
It’s always gratifying to help beginning and seasoned investors alike get past one of the hurdles slowing their progress: not having enough money to do their real estate deals. In all, over the last few years, my Private Money students around the country have reported acquiring financing commitments of more than $425 million!
And it doesn’t just work for houses. Last year, one of my students, Robert Anderson, used private money to purchase a $1.8 million apartment building. He used one of the techniques I teach to structure the deal so that he had no payments until the property sold.
He sold it eight months later for approximately $3.3 million. After paying the bank back the loan plus approximately $255,000 in interest, he walked away with a $1.2 million profit for himself. And that was Robert’s first real estate deal.
Of course, I use these same techniques myself. I’ve bought over 200 homes and small multi-unit properties since my first real estate deal back in 1995. Today, my team and I buy an average of five to seven houses a month. All of it is done with private money.
I wouldn’t have it any other way.
- With private money, you can do all-cash deals… scooping up bargains that are off-limits to investors who depend on bank financing.
- You provide your lenders with a high-yield, safe alternative to the stock market.
- You don’t have to wait three or four weeks or more, as you do with bank loans, so you can buy under-market deals from sellers who need to sell now.
- If you’ve quit your job to become a full-time investor, the bank quits you. That doesn’t happen with private money.
- You set the terms of the loan, not a bank
- Every successful deal creates more funds for your next deal. Your lenders want to put their money to work with you again, and often refer other potential lenders to you.
- You don’t have to deal with providing the stacks of tax returns, applications, and endless forms required by banks
- When you buy a property at a good enough discount, you can borrow the entire purchase price from your private-money lenders, plus closing costs and repairs. That’s not going to happen with a bank.
- You never pay the outrageous fees set by hard-money lenders
- You can structure some deals so there are no monthly payments. (I’ve done this with about half of mine.) This solves potential cash-flow problems on major rehabs or luxury homes
Those are just some of the benefits. And the best part is that, once you understand a few key concepts, building your private-money network is easy.
But there are a few things you have to make sure you do right first.
Marketing and Presentation Skills Are Key
You need to know how to market for private money. There are things that will work, and things that won’t… and things you can say, and things you can’t.
You need a clear, credible, and benefit-filled presentation. If you just try to "wing it," you may end up turning a potential investor off by coming across as someone who is unprepared and not serious. And how many times can you "go back to the well" once you’ve made a less-than-favorable impression?
As you expand your private-money network, you need to make sure you’re following all state and federal rules and regulations. In most states, you can build a network of a few dozen lenders without filing a bunch of paperwork. Go beyond that number, and you must do the filing. Cross state lines, and there are other docs to file. And there are regulations to follow if you "pool" money.
Those rules and regulations apply only when you cross certain thresholds. And they’re not too cumbersome if you just take the time to understand them and do what you’re supposed to do. So here are a few pointers…
Keeping in the Good Graces of the Securities & Exchange Commission (SEC)
When it comes to complying with SEC regulations, you will be in one of three situations.
1. You don’t have any private lenders, but are ready to jump in the water and start bringing them on board.
STOP!!
First, you need to do the following:
1. Create your disclosure document to be handed out to lenders.
2. Understand your state’s SEC compliance threshold.
3. Find an SEC attorney and let him in on what you are doing.
4. Complete your disclaimer statement.
Whether or not you have to file with the SEC depends on how you decide to operate.
- If you are going to work with family, friends, and associates and stay under your state’s compliance threshold, you don’t need to file.
- If you are going to advertise, pool money, work with strangers, cross state lines, and/or go beyond your state’s compliance threshold, you’ll need to file with your state’s SEC office before you approach your first private lender. (You will also need to notify your state’s SEC office before you get your first private lender if you are in one of 10 states that require you to do so.)
2. You have a few private lenders, but are under your state’s compliance threshold.
You need to do all the above, plus complete a form to let the SEC office look back to see what you have been doing.
3. You are over your state’s compliance threshold, and have made a mess.
In this case, hire an SEC attorney and let him guide you through the jungle. You won’t like it, but I believe it’s better to put all your cards on the table face up and take your spanking rather than wait and hope you don’t get in trouble.
The bottom-line…
You’re dancing with a gorilla. Why take a chance? There are rules on how to play the game. The SEC controls the rule book, and they are there to protect the consumer, not you.
The easiest way to be in compliance is to take the appropriate steps before you secure your first private lender and start your business off on the right foot.
I find that many real estate investors are scared of the SEC. If they would only follow the rules from day one, they wouldn’t have anything to worry about.
[Ed. Note: Alan Cowgill is the president of Integrity Home Buyers Inc., and is the nation's leading speaker on private-money financing. Join Alan on a teleconference call this July 24th as he reveals private-money financing techniques you can use to purchase any type of real estate.]
In the Past Five Years He Has Closed Out Dozens of Gains Like:
3,851%
2,912%
2,445%
Now, This Ultra-Successful Private Speculator Has Agreed to Lead a Select Few to Riches…
Keep reading to learn how you can join him…
If It Weren’t for Your Customers, You’d Be Nowhere
Most of your time is spent figuring out how to get new customers – but some of it must also be spent thinking about pleasing the ones you have.
So spend a few minutes – right now – thinking about your customer. Not from your point of view, but from his. If you asked him to characterize himself in relationship to your business, he might remind you that…
- He’s the responsive guy who answered your plea with: "Me! Please! Me!"
- He’s the brave guy who bet his reputation on the promises you made.
- He’s the guy who invested his time in you. His time and his money.
- He’s the generous guy who helps pay for your mortgage, your children’s clothes, and your family vacations.
- He’s the understanding guy who has tolerated your mistakes and exaggerated promises and is still willing to give you another chance.
As Harry Beckwith pointed out in Selling the Invisible, your customer is the guy who has "laughed through the best, suffered through the worst, and said nice things about you to other people."
If you don’t feel indebted to your customer, you should. And if you’re not constantly letting him know how much you care, you’re making a big mistake. Write an e-mail. Make a phone call. (If you are an employee, your customer is also your boss. Think about it. Do the right thing.)
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Ravi Lai
The Most Important Ingredient
When Abraham Lincoln was president, he often slipped out of the White House and went to the New York Avenue Presbyterian Church to listen to Reverend Phineas Gurley’s sermons. Reverend Gurley would leave the door to his study open so Lincoln could sit in there and hear the sermon in private.
One evening, an aide asked Lincoln what he thought of the Reverend’s offering. Lincoln replied, "The content was excellent… he delivered with eloquence… he put work into the message."
"You must have thought it an excellent sermon then," said the aide.
"No," said Lincoln.
"But you said the content was excellent, that it was delivered with eloquence, and it was the fruit of hard labor," said the aide, puzzled.
"That’s true," replied Lincoln. "But Dr. Gurley forgot the most important ingredient. He forgot to ask us to do something great."
When preparing your next presentation, spend some time thinking about something great that you can ask your listeners to do. With that objective in mind, putting your talk together becomes immeasurably easier – and makes it memorable to your audience.
In Lincoln’s Gettysburg Address, he asked his listeners to do something great. He asked them to resolve."… that these men shall not have died in vain, that this nation, under God, shall have a new birth of freedom, and that government of the people, by the people, and for the people, shall not perish from this earth."
What great thing will you ask your next audience to do?
[Ed. Note: Virginia Avery is a communications specialist who has trained thousands of individuals to make more dynamic presentations. Become more confident and persuasive in just two days with her Presenting Yourself Professionally workshop.]
Lower Your Risk of Skin Cancer
By Al Sears, MD
Dermatologists usually ignore any evidence that diet and skin cancer have a direct connection, or that sunlight helps protect you from deadly cancers. And though sunlight actually prevents some types of cancer, they spend most of their time telling you to stay out of the sun altogether.
That’s why I was pleasantly surprised to read a new study published in the Journal of the American Academy of Dermatology which found that green tea drinkers were 20 to 30 percent less likely to develop two forms of skin cancer: basal cell carcinoma and squamous cell carcinoma. The study also provided more proof that EGCG – a powerful antioxidant in green tea – can reduce burning on UV-exposed skin. The protective power of EGCG comes from its ability to prevent and repair the cellular damage caused by overexposure to the sun.
[Ed. Note: Dr. Sears is a practicing physician and an expert on heart health. Learn how to apply his winning heart-healthy strategies in The Doctor's Heart Cure.]
It’s Good to Know: You Probably Ate a Bug Today
Take a look at the label on your favorite food or beverage. You may find that you’ve been ingesting dried bug parts, albeit in minute quantities, without knowing it. (Sorry, vegetarians.)
Cochineal extract, sometimes listed as E120 or Natural Red 4, is a red dye used in all sorts of foods, from fruit juice to yogurt to popsicles to liqueurs to sausages to pie filling. It is derived from the dried body of the Dactylopius coccus,an insect that is native to South America and Mexico. Process the extract further, and you end up with a red dye used to color cosmetics and fabrics – one that is more effective than any artificial red dye yet developed.
(Source: the FDA and the Food Standards Agency)
The Internet Money-Making Secret of a Desperate Housewife.
More bills than money. Dave, bless his heart, was trying, but he just couldn’t keep their heads above water.
Vicky and her husband Dave were caught between a rock and a hard place.
Vicky couldn’t stand to see the pain on Dave’s face.
That night fate intervened… Vicky got her hands on something very special.
What she saw changed her life… forever!
- Patrick Coffey
Word to the Wise: Depredation
"Depredation" (dep-ruh-DAY-shun) – from the Latin for "plunder" – is an act of preying upon or despoiling; a raid.
Example (as used by Andrew Powell in Harper’s Bazaar): "For the moment, Kioni remains a precious fragment of the old Mediterranean, the one that existed before the depredations of pollution and crass, exploitative development."
[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
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I enjoy ETR first thing every morning..I see the acronym ETR as Eager to Read….Thank you..Ravi Lai
Great Stuff.