Easy Real Estate Financing

One reader's success story. This is an unsolicited comment we received by letter at our office in January.

SUCCESS IN TWO BUSINESSES: “As I said in our phone talk, I’m very active as a commercial real estate investor. I currently own 84 apartment units in the Bronx, NY. My monthly income is about $8,400 net after all expenses and mortgages are paid. My income alone on this building is about $100,800 per year.

“I only buy owner-financed buildings and I get great interest rates and terms. I’m currently negotiating with the same owner for his other building having 97 units. This building will net $9,700 a month, giving me a combined cash flow of $18,100 per month. I learned all my skills through your real estate books.

“I get my due-diligence money for real estate investments by specializing in hard-money loans as a Financial Broker. I closed on a recent deal last month which was for a $2,700,000 loan and my fee was 1%, or $27,000. My family lives on my real estate income so all my Financial Broker fees go straight into my bank account for future real estate deals. I am now working on a $9-million deal and my fee will be 1%, or $90,000. I get great results advertising in the IWS Newsletter.

“Right now I see my Financial Brokering business doing $25,000 to $30,000 a month. This is not bad for an ex corrections officer who resigned after 9 years on the job, even though all my friends thought I was a fool not to stay for the full 20 years to get a tiny pension. These same guys call me to say they have to take a job to support their families, after they retire. I ask myself: ‘Who was the fool?’” By letter from New York

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OWNING REAL ESTATE HAS MANY ADVANTAGES. One of the best advantages is that it can make you a millionaire sooner than you think. But some people prefer not to own real estate. Instead, these people:

• Lease real estate at the lowest price they can get.
• Lease the same real estate at the highest price they can get.
• Earn their profit on the difference leasing prices.

ONE OF THE BEST EXAMPLES of this method at work is that used by a successful real estate wealth builder:

He leased trade show exhibit space for 25 cents per square foot. Then he turned around and leased the same space to trade show exhibitors for $25 per square foot! His income from the exhibitors to whom he leased a total of 150,000sq ft = $25 X 150,000 = $3,750,000. The cost to him of this space = $0.25 X 150,000 = $37,500; profit = $3,712,500!Of course, he had NO ownership of the real estate he leased and then sub-let to others. This didn’t bother him since he had the immediate profit from sub-letting his leased space.

YOU CAN ARRANGE SIMILAR DEALS with many different kinds of real estate. Thus, you can:

• Lease residential apartments and sub-let them to others at a higher rent than you’re paying.
• Lease commercial space for stores and sub-let it to groups of merchants needing a minimum amount of area.
• Lease open land and use it for parking or temporary storage of large construction equipment.
  

YOUR WHOLE KEY IN EARNING FROM REAL ESTATE you don’t own is to have a sub-let clause in your lease. Write the lease so there is no restriction on your sub-letting of the space you rent. Then you can:

• Sub-let your space to anyone of your choice.
• Sub-let at a rent YOU set based on the tenant YOU find.
• Sub-let to as many tenants as you choose.
  

SUB-LETTING REAL ESTATE can give you instant income when you receive your security deposit and first month’s rent. Try it and see!

WE ALL HEAR TALK ABOUT the "sub-prime mess" and the foreclosure fallout. Does such talk mean that real estate is no longer a good investment? No! Real estate is still the best investment you might make! Thus:

Two years ago one of our readers bought a vacation home in an upscale area. He paid $700,000 for the vacation home, using all borrowed money. For 49 weeks of the year he has a local real estate agent rent the house to vacationers, giving him an excellent income that more than covers his mortgage payments. Just this month, 24 months after buying the house using borrowed money, he was offered $1.4-million for the house he bought for $700,000, using borrowed money.

THUS, IN 2 YEARS, THIS BWB earned a gross profit of some $700,000. That's $350,000 a year, or $29,166 per month, or $972 per day for a 30-day month. And all of this took place while this BWB held another job. So what lessons can you draw from this?

Here they are:

1. Real estate in wealthy areas is holding its value because buyers of such properties have not been affected as much by any economic downturns.
2. Real estate in wealthy areas continues to rise in value because desirable properties have an ongoing appeal to buyers who have money.
3. Real estate in wealthy areas is much easier to finance with borrowed money because lenders are happy to loan on properties in well-known upscale communities.
   

TO LOCATE FOR-SALE PROPERTIES, in upscale areas, take these easy steps as soon as you know what types of property you want to handle:

1. Contact upscale real estate brokers in the area. Tell them you're interested in buying higher-priced properties. Ask them to see if you can get into some properties with owner financing. This will help you get into good deals with zero cash.
2. Get the word outto wealthy people that you're interested in making quick deals for properties they want to get away from.

Surprising as it may seem, wealthy people DO, occasionally, want to get rid of properties in a hurry. That's where you come in! You take over the property with a low-cost Option and make every effort you can to sell it before your Option expires. What you're doing is building your wealth on the wealth of others!

People often say to me, "Ty, if financing real estate is so easy, why don't you give us a few real-life examples of how it works?" Here, to answer that question, is a recent letter received from a successful user of easy real estate finance:

"I read your book 'How to Make Millions in Real Estate in Three Years Starting with No Cash' two years ago, and I started using your methods immediately. My first two deals weren't so hot (I was too eager to close and didn't do enough up-front due- diligence), but I'll make money on them all the same. These were two small commercial strips in Chicago, IL. I bought them with basically no money down (for one property the seller held paper; the other was financed through the SBA [Small Business Administration]).

"It was on my third try that I really hit a home run. This was an industrial center we acquired with a construction loan. I renovated it, and leased it up within 8 months (a year ahead of schedule). For this deal I raised most of the equity from friends and family, after negotiating the bank down to a 10% equity requirement.

"So here's where I am, barely two years after reading your book: Total cost of three properties = $4,670,000; current value, based on rent roll = $6,730,000. That's about $7-million in property value bought with only $150,000 of my own money--ALL of which I borrowed with 2nd and 3rd mortgages on my house. After paying ALL monthly mortgages AND expenses, I'm clearing about $20,000 per month. Thank you warmly for your encouragement and advice in your books, newsletter and telephone calls." By Letter from IL.

This reader built an income of some $240,000 per year for himself in just two years time! And much of his income will be sheltered by the legal and legitimate depreciation of his properties.

This is a good example of what well-planned real estate financing (borrowing) can easily do for you. Also, his equity (what he owns of these properties) is: $6,730,000 - $4,670,000 = $2,060,000. So this ambitious reader converted some $150,000 of borrowed money into more than $2-million in property value in just two years. He "grew" his borrowed money by nearly $1-miilion per year, when you factor in his $150,000 investment of borrowed money!

We call the financing this reader used "Zero Cash Financing." Why? Because NO MONEY COMES OUT OF YOUR BANK ACCOUNT OR YOUR TROUSER POCKET OR PURSE! By carefully figuring your costs, including the loans you take to buy an income property, you can get a Positive Cash Flow (PCF) from each property every month! In fact, you MUST have a PCF from EVERY income property. If you can't get a PCF, don't buy the property.

And if you have trouble "working the numbers" of an income property, I'll be happy to do it for you free of charge if you're a subscriber to one of my two newsletters, International Wealth Success Newsletter and Money Watch Bulletin. You'll quickly learn if a PCF is possible from an income property you select!

To learn more and subscribe to either of my newsletters, just go to iwsmoney.com
and click on IWS Newsletter or Moneywatch Bulletin on the left side navigation bar.

We have many other letters and examples showing how readers of our books, courses and newsletters are earning large incomes using easy real estate finance. All of these letters are available for viewing at our main office in New York. Look for more letters detailing actual cases in future posts on this blog.

DOWN PAYMENT GRANTS CAN HELP YOU

IF YOU WANT TO BUY YOUR FIRST HOME, or if you want to buy a rental property to increase your income, check your local housing authority. Why? Because this agency may:

· Offer Down Payment grants to pay for your first home.
· Have the names of local programs offering Down Payment grants in your area.
· Know of real estate agents familiar with local Down Payment programs that might help you.

WHY ARE SUCH PROGRAMS AVAILABLE? For a number of good reasons that we’ve mentioned in IWS (International Wealth Success Newsletter)many times, namely:

1. Real estate ownership—in general—is good for you and for the local area in which you plan to live.
2. Real estate ownership is good for your local economy.
3. Real estate ownership is encouraged by banks and other lenders because they earn money from mortgage loans.
4. Real estate ownership leads to higher home values in your area.
5. Real estate ownership improves family life and living standards.

DOWN PAYMENT ASSISTANCE PROGRAMS, and data about them are often available through lenders in your area. And, happy thought:

· Some Down Payment Assistance programs are available for homes bought for rental income purposes.
· Allowing new BWBs (Beginning Wealth Builders)to buy property for income purposes with no down payment, or—in some areas—a modest $100, or so.
· Getting the new BWB (Beginning Wealth Builder)started in property ownership for
income purposes leading to better-kept homes in the area.

HOW CAN YOU GET STARTED WITH SUCH A PROGRAM if you want to buy your first home, or an income property? Here are your simple steps to take:
1. Contact your local housing authority—see your Government pages in your local phone book.
2. Or ask IWS (International Wealth Success)for the name of the program in your area
when you purchase one of our real estate success kits. Go to our website, www.iwsmoney.com, and click on Real Estate for full info on these excellent guides to real estate success.

4 SIMPLE WAYS TO MAKE MONEY IN REAL ESTATE QUICKLY

THE BIGGEST SECRET IN REAL ESTATE IS TIME. Given enough time, almost all real estate will rise in value. But suppose a BWB (Beginning Wealth Builder) is impatient. How can he/she earn money in real estate faster? Here are 4 ways:
1. Work with “post-auction” foreclosures; don’t buy at auction.
2. Flip properties instead of holding them for rental income.
3. Use options to control real estate until you sell it.
4. Buy tax liens with the hope of a big payday at a later date.

“POST-AUCTION: FORECLOSURES are properties you buy AFTER the auction ends. These properties:
· Were passed over by the auction attendees.
· May not be as attractive as other properties.
· Could need repairs or cosmetic spruce-up.
· BUT CAN OFTEN BE BOUGHT FOR $100 DOWN!
· You help the seller (usually a bank) get the property off its books. So they sell at low cost, and will often pay the closing costs for you, just to help you out.

FLIPPING PROPERTIES GIVES YOU IMMEDIATE INCOME from real estate. You flip a property by:
1. Buying at low cost.
2. Making needed repairs.
3. Selling quickly at a profit.
4. Using your knowledge of what will sell in the area to choose properties that will “move” fast.

AN OPTION IS A LEGAL DOCUMENT PREPARED by an attorney that allows you to control a property for a stated period of time—30, 60, 90 days, etc. During this time you can:
1. Buy the property at a stated price.
2. Sell the property to a buyer of your choice at any price.
3. Lease the property to a person or firm.
4. Control a property at low cost—as little as $100.
5. Profit in a big way by selling quickly at a high price.

TAX LIEN CERTIFICATES give you control of a property at low cost.
And if the owner does not pay you off, plus interest, the property can revert to you. Again, you get control quickly, and you can profit handsomely.

Go to my website, www.iwsmoney.com, to find many resources that will help you earn more money in real estate, more quickly. And you can call me at 516-766-5850, day or night, for answers to your questions about these resources.

Tyler G. Hicks

Would you like to get started in investment real estate on little, or no, cash and come away with a bundle of money? If so, consider Florida pre-construction real estate. Here's why:

WHENEVER A BUILDER STARTS putting up a new multi-family residential property, he/she wants to sell as many units as possible, as soon as they can. To achieve this goal the builder will often:
*Offer pre-construction deals with little, or no, money down.
*"Throw in" an extra bedroom, bathroom, etc., as a bonus for early buying.
*Give other valuable benefits--such as a better view, higher floor, etc.

WITH JUST A SMALL DOWN PAYMENT, and in some cases, no down payment, you can "lock in" a valuable apartment unit, or several of them, for future sale at a good profit. Here's how it can work for you:
1. The construction will typically take 6 to 12 months, or longer, for most well-built units today.
2. During construction the price of labor, materials, and land, will usually rise, making your unit(s) worth more than you agreed to pay for it, or them.
3. Finished residential units in your building will therefore be priced at a higher level than you agreed to pay in your purchase contract.
4. Result? You have locked in the price of a valuable asset without doing anything more than signing a few papers and putting down a small amount of money (or no money), while taking a calculated risk that your unit, or units, will rise in price.
5. Potential rewards for YOU? Some Beginning Wealth Builders (BWBs we call them) report profits of $25,000 or $50,000 per unit sold, depending on the price of the unit. Others earn $5,000, $10,000, etc., per unit.

WHERE CAN YOU FIND SUCH PRE-CONSTRUCTION UNITS? One of the best places we know of is in the State of Florida, on either the East or West Coast. To ensure that you get the best units:
1. Visit the area that interests you. The cost of your trip will be tax-deductible if you buy one or more units.
2. Pick the best location in the building for your unit. Water or bay views will usually sell well when you're ready to put your unit on the market.
3. Compare construction methods of the various buildings you consider. Remember: Good construction costs more but sells at a higher price!
4. Get to know the property you're buying units in. Pick the best units you can afford. Why? Better units will earn you a higher profit!
5. Visit my website: www.iwsmoney.com. Check out my "MULTI-FAMILY HOME RICHES KIT". It will give you dozens of good ideas on financing, and profiting from, Florida pre-construction real estate. And if you buy the KIT I'll mentor you in your pre-construction career, every step of the way!

Tyler G. Hicks

People call me--again and again--saying "I found this beautiful 20-unit garden apartment house for sale that shows a great cash flow. But I can't get financing. What should I do?"

The simple answer is: FIND A LENDER THAT SPECIALIZES IN GARDEN APARTMENTS!

Remember--REAL ESTATE IS THE WORLD'S BEST BORROWED-MONEY BUSINESS! In real estate everyone--including lenders--expects you to borrow the money you need. Real estate investors rarely pay cash for income properties. Instead, they BORROW the money they need. And their borrowing makes lenders happy! Why?

Lenders earn more from the loans they make than from any other investment they make. So lenders seek to make more loans because these loans increase their income. And you can help increase a lender's income, while raising your own tax-sheltered cash income, by borrowing for your income real estate, instead of taking cash out of your bank to buy the property you want.

But how do you increase your success rate in getting real estate loans? The answer is:
1. Deal with lenders who specialize in your type of property.
2. Find lenders who will both deal with your credit-rating situation (if it's a problem) and with the type of property you seek.
3. Use the lender's Loan Application when you apply.
4. Type the Loan Application throughout. The only handwriting on a Loan Application for an income property of any type should be your signature!
5. Don't hassle the lender for a fast answer. Lenders have their approval proedures and they insist on following them. Demanding a fast answer only irritates your lender. So be patient and wait for the answer from your lender. Doing so may get you the APPROVED response you're seeking!

So how do you find the right lender for the real estate property you want to buy?

For years my staff and I have researched real estate lenders of all types. Result? We have thousands of real estate lenders categorized under the following headings:
Property Type
Loan Types
Loan Purpose
Lender Types
Lender Subtypes
Lender Organizations
Specialty Lenders
Private Lenders
Poor Credit Lenders
Miscellaneous Lenders

These lenders are available in our books and newsletters. Contact me if you have an especially challenging loan situation. I may be able to direct you to a suitable lender. This could make your life a lot easier!

Tyler G. Hicks