How to Get Private Lenders & Lines of Credit to Fund Your Business

In real estate, you don’t get what you pay for.  Instead, successful investors pay for what they get.  This is especially true for buying income properties. 

I saw a recent article with the headline “Office Fundamentals weaken in the 2nd Quarter (2008)”.   The article went on to point out that the vacancy rate in office buildings nationally was increasing due to decreasing demand even with low delivery of new space.  And that surburban offices are feeling the biggest crunch.  In fact, an accountant friend of mine, just gave up his surburban office in favor of his downtown office.

Obviously, this is a symptom of a weakened economy, brought by greedy banks that caused a mortgage crisis and credit crunch that are percolating through the economy.

Does this mean you should not invest in office buidings.  Not necessarily–especially if you only pay for what you are buying. For example, if you are considering a half-empty office building only offer a price based on the income from a half-empty building. In fact, considering the trend in office occupancy is negative, it is crucial to examine the stability of the current tenants in the property.

Also, just like we advise investors in single family homes to build a buyer’s list, buyers of commercial property need to created a “tenants list”. You also need to expect that in a buyers market, your prospective tenants are going negotiate harder for greater concessions, and lower rents.

You’d better take all these factors into your projections and factor them in to your offering price. Now, you may be thinking, “but, Richard, if I do that, who’s going to take that deal?” Hah. The answer is only the sellers who are motivated to do business with you on your terms. If not, NEXT! At least you’ve saved yourself the financial stress of a money-sucking investment.

I know it can be quite a chore to go through the complex analysis of the kind I’m suggesting. Well, I’m happy to say, you can cut the time to minutes if you use my Expert System, called the ‘Deal Evaluation Tool.’ Not only can you project for up to 10 years in the future, the profit, and cashflow of any type of property, and model any kind of scenario of financing, rent, and occupancy changes, etc. You also get expert advice on the amount of financial risk you are taking. A rosy profit picture isn’t worth much if the chance of failure is high. Anyway, if you want to get a copy of this amazing tool, just click here. (or you can get it for Free if you are a member of our Inner Circle).

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Posted to Commercial Lending, Institutional Lending, Marketing in Real Estate, Money & the World, Uncategorized
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Every real estate investor with half a brain, knew that when the banks started giving out ARM’s (adjustable rate mortgages) like candy, somebody was going to have to pay the piper someday.  Well that day has come!

But instead lambasting the banks who are now causing some much suffering throughout the economy, the Feds and Congress are devising “bail out” plans. Never mind the strapped homeowners who banks refuse to do workouts for… Nevermind the investors who can’t get lines of credit or investor home loans because of “tightened” credit requirements.

Just read the following sweet deal that the 2 largest mortgage lenders are getting, even though they’re losing massive amounts of money, and the equity from their stock price is in the toilet:

“The Fed said it granted the Federal Reserve Bank of New York authority to lend to the two companies “should such lending prove necessary.” They would pay 2.25 percent for any borrowed funds — the same rate given to commercial banks and big Wall Street firms.
The Fed said this should help the companies’ ability to “promote the availability of home mortgage credit during a period of stress in financial markets.”

Secretary Henry Paulson said the Treasury is seeking expedited authority from Congress to expand its current line of credit to the two companies and buy shares of the companies — if needed.”

Do you think maybe these institutions could extend investors (who really are the creative engines in the real estate market) increased lines of credit at lower interest rates?

Especially since real estate is really a good deal now for those who know how to choose wisely.  If you’d like to start choosing more wisely, and be able to convince private lenders of that fact, you should check out my Expert System called the Deal Evaluation Tool.  In not only precisely calculates your profit and income for 10 years down the road, it also quantifies the risk so you know what to avoid, BEFORE you sign the contract!

Posted to Business Lines of Credit, Commercial Lending, Institutional Lending, Money & the World, Private Lending
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How would you like to learn a game that could bring you hundreds of thousands, even millions to buy all the property you wanted. Yes, well then you’re gonna love learning the real estate investor version of the bank financing game.

Truth is borrowing from banks is probably the easiest and cheapest money you’ll ever find. Why? Because you don’t need to make a presentation or convince anybody to give you money. You just fill out forms, follow the rules and play the right strategy–and voila the money comes rolling in!

Remember playing ‘Monopoly’ as a kid. That game was all about the real estate acquisition and income game. Let’s call this game ‘Financing Mogul’. The goal is to acquire as much financing as possible for buying property. So, set a goal: $100,000, $500,000, $1million, $10million, and let’s play.

Now, I know that most real estate investors are freaked out about going to a bank to borrow money–fear of rejection, fear of liability. That’s because they don’t know the rules and they don’t know the winning strategies.

Banks based their lending decisions on set of fixed guidelines and rules. So to win the ‘Financing Mogul’ game, you need to learn the rules, and play a winning strategy. Now, I devote 3 chapters to this game in my “Show Me the Money” training manual (scroll down the right side of this page to get it).

Now, here’s the first rule - you need a good credit score. These days, that means a 680 to 700. Now, don’t get all discouraged if your not at that level. This is actually easily fixed.

First, stop doing stuff that lowers your credit–like paying late on bills. The easiest way to do this is to arrange with your vendors to automatically draft amounts out of your bank account. Or bank online and set up automatic monthly bill paying.

Second, check out RECreditHelp.com.

And even if your credit is in the 680-700 range, you’ll get even more money, more easily and more cheaply if your credit is in the 750-800 range. So, if you want to win the real estate financing game, run, don’t walk to to find out how you can improve your credit yourself.

Posted to Business Lines of Credit, Commercial Lending, Institutional Lending, Uncategorized
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I read an article where Donald Trump was quoted as saying:

“The problem that I see with the United States is that we’re no longer respected, we really aren’t,” lamented Trump, pointing out that there is plenty of blame to go around, starting with the political leadership. “I think that [perception] can be changed. We have the greatest people, the greatest businesses”

Now, Trump may be correct about less foreign investment in US real estate, but it’s not because we’re “no longer respected”.  That’s complete crap.  Whether we are respected or not, is not what determines how an investor invests.  It really has to do with Poor Marketing.  Now, the US government is certainly to blame for part of it.

For the rest, if you want to sell your property, you have to market.  And in a time of tight credit, you have to market harder.  That means understanding in detail  your target market.  And then with laser like accuracy, inundating that group with super-effective marketing campaigns.

So, stop worrying about what everyone else is doing or thinking.  Focus on increasing the power of your marketing.

Posted to Commercial Lending, Institutional Lending, Marketing in Real Estate
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Developing sustainable energy sources and reduction of greenhouse gases is a laudable goal that many share with the “green movement”.  Now, whenever trends become popular, marketers jump on the bandwagon to try to profit from it.  The latest addition to this trend is “green loans”.

Some banks (mostly community banks), and some larger institutional lenders are making noises about funding “green” commercial developments. What does this mean, aside from the press it’s designed to generate for the bank.

The answer is –not much.  If you and your project doesn’t qualify with the current restrictive criteria–credit, cash, debt coverage ratio, etc, no amount of green is going to help you get funded.  Now if you’re a A type borrower, going green may get you a marginally reduced interest rate.

Is it worth it?  Well remember, going green will help the environment and may marginally reduce operating costs, but the building cost is definitely going to be higher.  Are the green bank going to loan you more money?  Not one penny more than the underwriter’s LTV dictates.  And will appraisers recognize an increased value in a green development–nope.  Nobody’s changed the appraisal standards to bump the value of green construction. 

So if you’re looking for an edge, build green if it will help you sell or rent your property.  But don’t hold your breath for the banks to come running to help. 

By the way, if you want to know how to fund every deal you do, I’ve created the absolute best and most comprehensive funding manual you will ever see called “Show Me the Money“.  It contains step by step instructions on how to get money from private lenders, high net worth individuals, lines of credit, financial institutions, buyers, sellers, notes, and much, much more.   And, it’s a ridiculously low investment (for now!).  Click here and Get in NOW.

Posted to Commercial Lending, Institutional Lending
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The media has been bombarding us about the “mortgage meltdown” or the credit crisis, and banks have been wringing their hands and denying investors credit because of the terrible situation–Hypocrites!  It’s the institutional lenders that caused the credit crisis by handing out adjustable rate mortgages (ARM’s) like kids in a candy store.

What they did was actually quite clever–they exploited a loophole in their own underwriting rules.  You see, one of the key factors about whether a borrower will qualify for a loan is whether their income is sufficient to pay the mortgage they will be taking on.  Now, with ARM’s the initial mortgage payment for the first 6 months, 1year or longer, is very low.  It’s the teaser rate.  This is the rate the underwriters used to qualify applicants.  There were situations where a buyer earnign $30K could qualify to buy a $500,000 home!

However, when those rates readjusted to some base rate (prime, libor) + 5 to 10 points, the payments skyrocketed, often to many times the monthly payment.  For most, it was “game over”.  Foreclosures and bankruptcies ballooned to the full-fledged “Foreclosurethon” we have today.

Now the banks have “tightened” their lending requirements to show how concerned they are.  My prediction is that this will last for about a year.  Then, there will be some new scheme, because unless lenders lend, they can’t make money.

By the way, if you want to know how to fund every deal you do, I’ve created the absolute best and most comprehensive funding manual you will ever see called “Show Me the Money“.  It contains step by step instructions on how to get money from private lenders, high net worth individuals, lines of credit, financial institutions, buyers, sellers, notes, and much, much more.   And, it’s a ridiculously low investment (for now!).  Click here and Get in NOW.

Posted to Commercial Lending, Institutional Lending
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