Kiss Banks Goodbye
Issue #2216
- WEALTHY: 14 major advantages to ditching your bank (Alan Cowgill)
- HEALTHY: Are you doing only half of what it takes to keep the weight off? (Craig Ballantyne)
- WISE: George Clason on money
ALSO IN THIS ISSUE:
- Why you may want to reconsider breaking new ground (Clayton Makepeace)
- Need a shave? Grab some paper (Charlie Byrne)
- It’s Fun to Know… about Braille tattoos
- Add "soi-disant" to your vocabulary
Welcome to the Turning Point in Your Life
How can it be a group of people in the same city, with the same education, upbringing, bank balance and opportunity make riches beyond their dreams, and others don’t??
Answer: They used a system… a set "proven" process which set them apart.
Want to know what this system is?
They followed a set of simple instructions which made money automatically come their way… money was attracted to them like metal to a magnet long BEFORE they became wealthy.
It was following these simple instructions I now call "The Billionaire Way" which gave ME an unbelievable ‘piggy-back ride’ from a simple insurance sales guy to founder of the world’s first TV shopping network.
"Money is plentiful for those who understand the simple laws which govern its acquisition."
George Clason
Kiss Banks Goodbye and Supercharge Your Investing Career With Private Money
By Alan Cowgill
When I started my real estate career, I heard about the necessity of finding private lenders. I even found two of them. But then I stopped because I didn’t get it. For four years, I continued to go to banks and jump through their hoops.
It wasn’t until I quit my job and found that banks would no longer loan me money that I realized I needed to bring private lenders into my life. Not only did everything change for the better when I took that step, I was kicking myself for not doing it from the beginning.
Whether you’re on the fence about private money or have never even considered it, you owe it to yourself to be aware of all the advantages.
The 2 Biggest Reasons to Use Private Lenders
I’ve always been unhappy with how long banks take to get the job done. I once waited more than four months for a bank to finance a house without a furnace. They weren’t sure they wanted to make a loan on that kind of house, even though that’s what my rehab business is all about. I buy ‘em ugly and cheap. Then I fix ‘em.
Just think. If I had used a private lender for the same deal, I could have bought the house, fixed it, sold it, and pocketed $20,000 in less time than it took to get to the closing table with the bank.
With private lenders, you have the funds available all the time. When a good deal comes your way, you can grab it because you know the money is waiting for you. While your competitors are scrambling around applying at the bank, you can make an offer and close the deal.
In short, the first major advantage of private money is that you can close a deal fast. (My rehab crew is all over a property like ants before the competition knows what happened.)
Another advantage of private money is that you don’t have to worry about monthly mortgage payments if you structure the deal correctly.
For example, my first private lender was my mother. When my dad passed away, Mom had insurance money. She proudly invested it in bank certificates of deposit (CDs). When I learned about private lending, I offered her an alternative. She loaned me $5,000 and received 10 percent interest in return. I paid her monthly, just like her bank did with her CDs. She was delighted… and so was I.
As my use of private lenders increased, I learned that some of them didn’t need monthly payments. I discovered that I could structure my loans so there was no payment until the property was sold.
Now my mom will always get monthly payments from me because she’s retired and depends on that income. But for anyone who can wait on their money, I’ll let the interest accrue. I may pay a little more interest to them, but it’s a small price to pay for the improved cash flow I enjoy.
But that’s not all…
12 More Advantages of Private Money
- The ability to get money fast often allows you to snap up good deals at a discount.
- There are no credit checks, and the loan doesn’t show up on your credit report.
- You have access to a potentially unlimited source of funds.
- Since you set the rules, you’re in control - not the bank.
- You can help your friends and family make extra money, and meet a great network of people.
- You can get some of your profit when you buy by borrowing more than the cost of the property.
- You’ll have the flexibility to do deals that banks might question (like my no-furnace bargain).
- You can make offers with confidence. No worries about bank delays or being denied financing.
- You can structure quick and more profitable exit strategies.
- You’ll save money on the deal in the short run and long run.
- Private money loans are cheaper than investing with a partner.
- You can build the foundation for a very profitable brokerage business.
Best of all, if you treat your private lenders right, they’ll be there for you again and again when you find hot opportunities in the future.
What to Do When You Get the Money
Once you’ve won over a private lender, you’ve taken on a responsibility to make the deal profitable for everyone. Here are three key rules I rely on in my own business:
- Make your interest payment when the property sells.
When I started using private lenders, I thought everyone would expect regular payments. So I paid all my lenders monthly. Later, I realized that everyone could benefit if I delayed payment until the property was sold.
By eliminating those monthly mortgage payments, I was able to supercharge my cash flow and dramatically cut down on office paperwork. Plus, there was a practical benefit that my investors really appreciated. When their money is applied to a property at closing, the interest rate clock starts ticking - even though it may take a couple of months to renovate the house and find a buyer or rent-to-own tenant and get the cash flowing. Adding interest helps make the seller willing to wait for that payoff. That way, you can do your work faster and give your lender a bigger chunk of money to lend back to you for your next project. Everybody wins.
- Only one private lender per mortgage.
I’m often asked if it’s possible to "pool" funds from more than one private lender. The best way I’ve found to do this is to give the first lender (the one with the most money) the first mortgage on the property.
If you need more money to do your rehab work, bring in a second lender and give them a second mortgage. In essence, they are your "bank" and get a mortgage (lien) on your property. Still need cash? Add a third lender and a third mortgage.
You can have as many mortgages as you like, as long as you don’t over-leverage the property.
- Keep your word.
I follow my agreement with each lender to the letter. As I said, I now make interest payments only when the property sells. But there are a few lenders I worked with early in my career (like my mother) who I agreed to pay monthly. I’ll stick to my agreement with them regardless of how long they invest with me. And since they love those monthly checks, they’ll probably be with me for a long time.
Many investors have watched a deal slip through their hands while they waited for a bank to approve their loan. Once you have private money available, that won’t happen to you. You can make an offer knowing you can go ahead and set a closing date… and leave your competition wondering how you did it so quickly.
[Ed. Note: Alan Cowgill’s Private Lending Made Easy program is the only one on the market that specifically explains how to find and manage private funds. A great way to get more information on this topic is to attend the free teleseminar Alan will be giving exclusively to ETR readers this week. It’s a no-cost way to build your knowledge base and find out if private money could help you increase your income. Reserve your seat now.]
The Greatest Medical Discovery of the Century
Scientists have discovered a remarkable substance that has the power to prevent diabetes, stop heart disease before it starts, and kill cancer cells on contact. In fact, this substance has been shown to prevent and treat more than 20 major diseases in all!
However, more than 85% of the population is deficient in this disease-killer at least part of the year. And believe it or not, medical professionals and health authorities actually advise people to avoid the single greatest source of this vital substance.
Click here to learn why you probably haven’t heard about this revolutionary discovery.
The Secret to Entrepreneurial Success
To be a successful entrepreneur, you need five things:
- A product that delivers a benefit people already want at a price they’re willing to pay…
- A strategy that puts your sales copy in front of your best prospects…
- Great headlines and lead copy that compel them to read your sales message…
- Sales copy that convincingly presents the reasons why the prospect should buy and overcomes any objections he might have, and…
- A quick, easy way for him to order.
Now you can do all that with a product that has already been proven to appeal to prospects, and where you’ll go head to head with well-established competitors. Or you can attempt to be a pioneer with something completely new.
If you decide to become a pioneer, you can do items 2 through 5 brilliantly and still fail miserably if your product misses the mark - if it doesn’t deliver a benefit your prospect intensely desires at a price he’s willing to pay. And when you’re a pioneer, your chances of missing the mark are substantial.
Pioneers are famous for winding up with arrows in their keesters. Given the choice, I’d rather compete in an established area.
[Ed. Note: Clayton Makepeace has spent the last 35 years creating direct-mail, Internet, and print promotions that have sold well over $1 billion worth of products. He publishes the highly acclaimed e-zine The Total Package to help business owners and copywriters accelerate their sales and profits. ]
Business Idea: Getting Shampoo and Shaving Cream Through Airport Security
By Charlie Byrne
Look for problems, present a solution, and you’ve got a working business idea. And where are there bigger problems than at airport security check-in lines?
Some clever entrepreneurs at Flight101.com are trying to turn one big annoyance - the 3-ounce carry-on limit for shampoo, shaving cream, etc - into solutions.
The online retailer now offers shampoo and shaving "papers." They’ve transformed liquid items into 30 sheets of paper packed in small plastic containers. The papers dissolve in water and foam up.
Of course, this begs the question: If "good guys" can turn shampoo and shaving cream into a "solid" form, what can the "bad guys" do?
But we don’t even want to go THERE, do we?
Maintain Your Metabolism
Getting older means losing muscle and a slowing metabolism. That’s a harsh fact. So you have to do something about it if you want to avoid gaining inches as you age.
Unfortunately, most people rely on modifying their eating habits to keep the fat off. But even if you eat well, according to a recent study, a sedentary lifestyle still leads to a loss of muscle mass. And when you lose muscle mass, your metabolism slows down.
In this study, American researchers put 24 young women through an extreme test. Each one was subjected to 60 days of bed rest. Eight women performed strength and endurance training several times per week, while another eight women ate a high-protein diet but did no exercise.
The no-exercise and bed-rest groups lost more muscle mass than the women who performed a short exercise program several times per week. The high-protein diet did nothing to help reduce muscle loss.
The researchers concluded that the only way to avoid muscle loss is through exercise. Use it or lose it!
If you are not on an exercise program, start by scheduling an appointment with a certified trainer to show you how to use resistance training and interval training to get maximum muscle-metabolism-boosting results in minimum time.
[Ed. Note: Fitness expert Craig Ballantyne is the creator of the Turbulence Training for Fat Loss system. For a free online source of information, motivation, and social support to help you improve your health, lose weight, and get fit, sign up for ETR’s free natural health e-letter.]
It’s Fun to Know: Braille Tattoos
German art student Klara Jirkova has created a type of tattoo for the blind. Jirkova uses surgically implanted balls made of either surgical steel, titanium, or plastic to spell out words in Braille. She says these unique tattoos are an ideal form of expression (she is an art student, after all) for the blind, as well as for their friends and loved ones.
(Source: Gizmodo)
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: Soi-Disant
"Soi-disant" (swah-dee-ZAHN) means self-styled or so-called. The expression is French for "oneself" + "saying."
Example (as used by Craig Offman in Time magazine): "The troupe, soi-disant egalitarians, mostly turn out to be royal phonies."
[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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