How to Buy Apartments With No Money Down

by Early To Rise (10/16/2007)

Issue #2174

  • WEALTHY: There’s never been a better time to buy THIS type of property (Dave Lindahl)
  • HEALTHY: A fall fruit that shows promise against prostate cancer (Kelley Herring)
  • WISE: Charles R. Swindoll on opportunity

ALSO IN THIS ISSUE:

  • A good way to suck up to powerful people (Michael Masterson)
  • If you missed ETR’s Bootcamp… (Suzanne Richardson)
  • It’s Fun to Know… about runway ads
  • Add "concatenation" to your vocabulary

== Highly Recommended ==

Revealed: Probably the Biggest Red Herring in History!

While the world’s been stock watching (and losing!), the elite quietly play a different game with different rules…

Feeling cheated and disillusioned by the stock market? Sure, you may have made a good trade here… but then lost on another. The people dutifully pour their hard-earned cash into investment banks to put into the stock market for them… and those investment banks gladly oblige, for a fat fee… which they invest somewhere else! I’m no conspiracy theorist, but in my opinion the stock market is really a diversion for the masses… a distraction from where the BIG and consistent money is made… in the world’s money mountain. And when I say “Money Mountain,” I speak quite literally… the BIGGEST mountain of money on the planet. Click here to read more…

"We are all faced with a series of great opportunities brilliantly disguised as impossible situations."

Charles R. Swindoll

How to Buy Apartments With No Money Down

By Dave Lindahl

I do lots of different types of real estate, but my main investment moneymaker is apartments. Yet, in my travels around the U.S., I constantly hear the same old objection: "I love the idea of apartment cash flow, but I absolutely hate the idea of tenants!"

Just between you and me, I like to hear people say that, because it keeps the competition down. If everyone knew how easy it is to hire a good building manager and get regular passive cash flow - but no calls - from tenants, it would be a lot harder for me to do deals. Meanwhile, it’s been even easier for me recently because of the high-profile media coverage of the skyrocketing foreclosure rate and the sub-prime mortgage meltdown.

You see, the current housing market has an upside that few people are talking about: the fact that that there’s rarely been a better time to buy and own multi-family properties.

Why? Because even though the woes of the residential housing market are making it more difficult for the average person to get a home loan, people still have to live somewhere. As the owner of more than 3,100 rental units, I can tell you that a tight credit market is very good for my business.

So ignore the hogwash about real estate investing being "dead." We’re only getting to the good part, where the dabblers and wannabes move on to other activities, leaving less competition for the rest of us.

And let me tell you a secret that most would-be investors don’t know: You can reap profits from apartments even if you don’t have two pennies to rub together for a down payment.

Why People Who Can’t Get a Home Loan Can Still Make Big Rental Profits

There are many good lenders around the country that will fund your multi-family deal. The best part is that they will look at your deal first, before they look at you.

The lending institution’s first priority is to make sure your property will have cash flow after all expenses. Then they’ll take a look at the "debt service ratio." This is simply the number of times your property’s gross income will cover its gross expenses. Lenders want to see a debt service ratio of 1.2 or higher. A number less than 1 means that your gross income from the property won’t cover your gross debt. That’s not good, because you’ll be losing money every month.

Here’s the best part of the calculation: The bank is going to take 75 percent of the property’s net cash flow and add that to YOUR income to help you qualify for the loan. In a sense, the bigger the property you buy, the easier it is for you to qualify.

If you don’t have a down payment, you still have the option of using a hard-money lender instead of a bank. Most hard-money lenders will loan you 100 percent of the loan amount, as long as you buy the property below 65 percent of its after-repaired value.

That may sound difficult at first, but think about what it means: 65 percent of after-repaired value. Say you buy a property for $650,000 that has low rents or low occupancy. Once you increase the rents or occupancy, that property may be worth $1,000,000 or more. In that case, you’ve just bought your first million-dollar property with no money down.

With so many motivated sellers in the market today, you can also combine owner financing with third-party financing and, if need be, with equity investors… to end up with your first seven-figure deal with no money down from you.

If numbers that large make you nervous, take a zero off the end of each one in the example above. Start where you are comfortable and work your way up.

This may all sound like nice theory to you, but I assure you it works. When I started investing in apartment buildings, I didn’t have a job. My previous business (a landscaping company) had failed, and I had a whopping $800 in my bank account.

I bought three three-family properties using the first technique I just described. They all needed repairs. I bought them cheap enough (with a 65 percent loan to after-repaired value) that I didn’t have to come out of pocket for the purchase or for any of the rehab money. A hard-money lender covered it all.

The properties cash flowed properly, so I covered all of my debt with my income. (Hard-money debt is usually 15 percent interest or more.) With the income from all three properties, I was able to qualify for long-term financing from a local bank.

Then I was off and running. What a country!

The same strategy can work for just about anyone. For example, one of my students, John Yu, goes to college full-time. I recently received a message from him saying that this method has allowed him to make more than $50,000 since last January. And he’s just one of the successful investors I know who are cashing in on apartments in today’s market.

Sure, you should invest carefully. Sure, there are markets on the downturn. But many of these are providing great opportunities - even for no-money-down purchases. And if you know where to look, and how to invest, you can even find solid opportunities right in your own backyard.

[Ed. Note: Dave Lindahl went from an $800 net worth to a passive income of hundreds of thousands of dollars and a multimillion-dollar net worth in less than five years. He did it by becoming the "Apartment House King." Today, his portfolio has over 3,100 units. Tomorrow, in an exclusive interview with Main Street Millionaire's Justin Ford, Dave will reveal his strategies for making big money from apartment buildings. This call will be free, but spaces are strictly limited. Click here to reserve your slot.]

== Highly Recommended ==

Let the Demise of the Dollar Lead You to 1,000% Gains

As the dollar continues to erode, so will the accounts of those who rely solely on the usual stocks and bonds. But the demise of the dollar won’t be a calamity for everyone…

Click here If you want to learn how to protect your wealth… AND make the kind of gains that most people could never dream of… returns like 5,131% in just 30 months!

A Good Way to Suck Up to Powerful People

By Michael Masterson

If there is someone in your industry whom you admire, someone successful that you’d like to know, make it a goal to get to know him. You will be surprised to discover how often you can make such a connection, even if you are a relative "nobody." And if you get a few such connections, one may turn out to be very helpful.

To become friendly with a senior executive where you work, find out what important successes he has had in the past and learn about them. Then find a way to ask how he did what he did. He will be flattered by your interest.

To become friendly with someone "out there" in the industry, find out if he has written anything and read it. If he gives a speech, get a copy of it and study it. Do whatever research you need in order to be able to speak to him about his life and ideas with some authority.

People like to talk about themselves. If you show a genuine interest in someone - even an important person - chances are, he’ll return the favor.

[Ed. Note: Get Michael Masterson's insights into becoming successful in your business and personal life, achieving financial independence, and accomplishing all your goals on his brand-new website. You'll find updates on all of Michael's books, news on upcoming ETR events, Michael's blog, and room to send in your comments and questions. Check it out today.]

Reader Feedback: "Nice guys say ‘no’ all the time."

"Thanks for your article ‘A Former Corporate Chicken’s Guide to Being Tough.‘ Having grown up in business in rough-and-tumble Chicago, and now having lived in the South for almost 10 years, I have developed my own mantra to address the polite issue.

"When in doubt, I remind myself ‘You can confront problems without being confrontational.’ This reminds me to continue to press my position home in a way that would not embarrass me in front of my mother. Note (and I think you’ve written on this before): I’ve fully prepared myself as to what conclusion I can accept and just politely walk away from what I cannot agree to. Nice guys say ‘no’ all the time, just like nice girls do!"

- John D. Porter
Charlotte, NC

ETR Insider Report: The Biggest Take-Away

By Suzanne Richardson

What’s the one thing you MUST do before you start your own business? You should ask yourself one crucial question.

Michael Masterson addressed this urgent topic at last week’s Info-Marketing Bootcamp, which was - according to everyone who’s attended an ETR Bootcamp before - the best, most-informative Bootcamp ever.

In addition to Michael, we heard money-making strategies from master marketers Rich Schefren, Patrick Coffey, and Sandy Franks. List-building expert Andrew Palmer revealed 10 surefire steps to launching an online business… Alex Mandossian talked about how to take advantage of his own secret wealth-building weapon: the teleseminar… John Phillips exposed some of the biggest secrets that Google tries to keep under wraps… and copywriting gurus John Forde and James Sheridan wowed the attendees with their detailed suggestions for how to write killer copy.

It was exhausting - and for all three days of the conference, the 210 attendees were buzzing with everything they’d learned.

Alex Mandossian (who also emceed the event) started every presentation by asking audience members to shout out their biggest take-away from the previous day. Here are some of the responses:

  • When you have a business, you need to focus everything on the customer and the customer’s requirements.
  • Prioritize the one thing that will give you the most cash flow in the beginning, then you’ll have time to figure out the rest.
  • Most people don’t know they have a problem, so your job as a marketer is to show them that they have a problem and that you have a solution.
  • Test everything - test your copy, test your advertising strategies, test your product.

And perhaps the most powerful lesson of the whole event (and the one crucial question I mentioned above): Can you sell your product? Because if you can’t sell your product, you don’t have a business.

As you can see from just these few ideas, we covered a LOT of ground.

But don’t worry if you didn’t make it to Bootcamp. I took notes on each presentation. (I swear my suitcase is a lot heavier than it was when I got to Florida!) And over the next few weeks, I’m going to share some of the juiciest and most important information our speakers handed out.

[Ed. Note: ETR has created a brand-new Info Marketing program that reveals all the nuts and bolts of starting your own powerhouse Internet business - from learning how to pick a product and set up a website, to discovering copywriting secrets from the masters, techniques to help you create an e-mail list, the best ways to market your product, and more. Sign up for our hotlist and you'll be one of the first to hear the details of this exciting new program.]

The Power of the Pomegranate

By Kelley Herring

A glass of pomegranate juice a day may keep prostate cancer at bay.

The first clinical trial of pomegranate juice in patients with recurrent prostate cancer was recently conducted at the University of California, Los Angeles. The researchers found that polyphenols in pomegranate helped reduce levels of prostate-specific antigen (PSA), inhibit growth, and cause apoptosis - or programmed cell death - of prostate cancer cells in vivo (in the body).

The patients in the study enjoyed eight ounces of pomegranate juice daily, which contained 570 mg of polyphenols. To get the benefits, mix up your own pomegranate spritzer with one cup of sparkling mineral water, two ounces of pomegranate juice, and a lemon wedge.

[Ed. Note: Kelley Herring is the founder and CEO of Healing Gourmet (www.healinggourmet.com ), a multimedia company that educates the public on how foods promote health and protect against disease, and is editor-in-chief of the Healing Gourmet book series, including Eat to Fight Cancer. You can learn more about how simple lifestyle choices can improve your health by reading ETR's free natural health e-letter.

Correction: In the 10/16 issue of Early to Rise, we mistakenly said that polyphenols cause apoptosis of prostate cancer cells in vitro. Instead, polyphenols cause apoptosis of prostate cancer cells in vivo.]

It’s Fun to Know: Runway Ads

A U.K.-based company has found a new way to advertise - and it can only be seen from the air. The advertisers are about to deploy football-field-sized ads around airports to catch people’s eyes as their planes land or take off. The ads could even be lit up at night (where local laws allow it). The company behind the project says it has secured space in London, Geneva, Atlanta, Los Angeles, Tokyo, Dubai, and Abu Dhabi. The first ad will go up next to the Dubai airport next month.

(Source: Reuters)

== Highly Recommended ==

The Only Three Ways to Grow a Business

Did you know that there are only three ways to grow a business?

1. Increase the number of customers.
2. Increase the average transaction value.
3. Increase the frequency of repurchase.

Find a way to maximize each one, and your business will experience an astonishing rate of growth.

In his "9 Pillars of Business Growth" program, acclaimed consultant Jay Abraham outlines hundreds of proven, frequently unrecognized, and almost totally underutilized ways to grow these three key areas of your business. If you own a business (or would like to), be sure to take a look at Jay’s program.

- Patrick Coffey

Word to the Wise: Concatenation

"Concatenation" (kon-kat-uh-NAY-shun) - from the Latin for "to chain together" - is a series of interdependent or interconnected things or events.

Example (as used by Henry Gee in In Search of Deep Time): "The process of fossilization and discovery is a concatenation of chance built upon chance. It’s amazing that anything ever becomes a fossil at all."

[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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