Dear Real Estate Entrepreneur,
It wasn’t until a couple of months ago that I was finally able to fill in a missing puzzle piece to help my students in getting true no-cash-no-credit real estate deals while drastically minimizing the risk. This can give you a very distinct advantage of cashing in on cash flowing properties while putting in NO MONEY of your own!
As many of you know, I got involved in real estate investing 20 years ago as most investor start off: flipping SFRs (single-family residences). Back then there wasn’t an option of “transactional” or “wet” funding to use to flip houses like there is today. So, begrudging, I had to fork over a very small investment (less than $5,000) to acquire a townhouse that I ended up making a small fortune on when I did flip it. But, smart real estate investors will finally figure out that flipping houses really isn’t the way to go, especially when they get tired of paying high capital gains taxes on their property flip profits.
In 2001 I got involved in commercial real estate investing when a real live “mentor” told me about investing in apartment buildings. I haven’t looked back since, as I finally understood that REAL wealth in real estate investing is in the passive income cash flow and NOT in flipping or banking on appreciation (especially when the economy starts to give out).
Why Traditional Lease Options Are Considered HIGH RISK and Why You Shouldn’t Do Them!
My first couple of deals were with one owner. He owned 2 apartment buildings and he agreed to allow me to “take them over” with something called a lease-option deal. He was an older man, was ill, and couldn’t wait to get out of the business of self-managing these 2 buildings. Little did he know that he was to become the single person that would completely change my life for many years to come.
Back then when I started in this passive income real estate business, doing lease-option deals was insecure at best because the entire deal relied on a single document/contract that could be “pierced” at any time, mostly by the party (property owner) who had the most to lose and the most to gain in the deal.
After only a handful of deals doing lease-options in the very beginning of my passive income real estate investing career, I decided that I didn’t want to take the risk anymore; this would be after I lost a deal to a greedy apartment building owner who “took back” his property after I cured his vacancy problem during the lease-option term.
How did he take it back with an “iron-clad” lease-option contract in place?
Simple. After I cured his vacancy problem from just over 60% to way over 80% within the first 90 days, he decided that he didn’t want to give up his property anymore. (Why would he?) So, he hired an attorney who scoured through the agreement and he found a small loophole that suggested I “breached” the contract. The property was legally turned back over to him within less than a week after that.
And that’s how the ball bounces when you’re dealing with unscrupulous people in this business. Unfortunately, there are A LOT of those running around in the world of commercial real estate.
How I Unlocked the Secret Behind Lease-Option Deals to Protect Both YOU (the Buyer) and the Property Owner (the Seller)!
Last year I came across another lease-option deal. The property wasn’t performing anywhere near what it needed to be at in order to qualify for a conventional mortgage. After the contract “breach” scam with that apartment building owner many years before, I was gun shy about doing another lease option deal without some “insurance” that I wouldn’t get burned again.
I went to my attorney who referred me to someone else who unlocked the key to how I could do these lease-option deals while being fully protected.
It’s called a land trust. (In some states it’s referred to as a “land contract.”) This is what makes the deal “iron clad” without having to go through the escrow process.
But first off, why do a lease-option deal to begin with? Why not just buy the property?
Buying the property requires a cash down payment of 20% in most cases. (Some smaller banks will allow for a 15% down payment and will carry an 85% LTV.) Also, you’ll need to have some pretty solid personal credit to get a commercial loan in this day and age.
But even if you do have the cash and credit to pull off the deal, you won’t get a really good (below market) price on a property in this hot real estate market UNLESS you are buying a property that is considered “under-performing.” An under-performing property is a property that has a less-than-85% occupancy level which is the base requirement of most commercial lenders to get the best possible interest rates and loan terms. A lower occupancy level puts you into the clutches of a hard money or bridge lender which means high interest rates, high points, and basically getting screwed over in a dark alley by a guy named “Uncle Guido.”
Getting a land trust in place isn’t complicated but many attorneys (a) don’t know about it, and therefore (b) won’t do it. Instead they’ll offer you some other legal service in an effort to take your money (usually creating a lease-option contract) which isn’t what you want or need to be able to protect your investment in this.
I was very lucky to find the attorney I did to help me create this seamless and effortless land trust strategy that anyone can do to legally take over any property (house, condo, townhouse, apartment building, MHP…ANY PROPERTY!) legally.
This attorney I worked with on getting this land trust together made the process super easy for ANYONE to do this as long as you know what type of paperwork has to be filed and HOW to file it!
Regular Lease-Options = NO Legal Ownership vs. Land Trusts = COMPLETE Legal Ownership
The different between a lease-option and a land trust is that the lease-option method DOES NOT allow for the change of ownership on the property. This creates a high risk situation (as explained above) where you could lose the property back to the legal owner since it doesn’t go through escrow and there’s no new grant deed showing new ownership information filed with the county. Yes, there’s a contract in place but that doesn’t mean they won’t fight you in court over some nonsense legalese if they really want their property back.
And…if you take a property that is under-performing and make it into a cash cow cash flowing property, they WILL want their property back. And when an owner of a property wants their property back and they are still legally on title, they WILL find a way to get it back even if they have to drag you to court until you cry “uncle” because you don’t want to pay the huge legal bill by going through court for 2 to 3 years!
With a land trust, even though you don’t go through the legal process of escrow and having a new grant deed filed with the county to show new ownership, there is still a legal document (the land trust) filed with the county showing a “change” of ownership. The seller of the property is basically putting their own property into a trust but naming you the director (who makes ALL the decisions surrounding the property deal) and they are merely the beneficiary of the property (as to stay compliant with their mortgage terms and conditions).
This makes it IMPOSSIBLE for the seller to go back on the deal if he/she later decides that he/she would like the property back due to your kick-ass work on bringing their under-performing property back to a cash flowing cash cow of awesomeness.
For the first time, I’m bringing real estate investors of ALL KINDS the full thrust of everything you’ll need to make this type of land trust lease-option deal work from finding the properties to creating the proposal so that the seller will readily agree to the legal paperwork needed (with full instructions) for deal execution to how to financially structure the deal so that you CAN close escrow within a 36-month time frame as to legally possess the property out from under the land trust!
But, that’s not all…
The Newest TRUE 100% LTV Method: The 100% LTV Bond Funding Program
Many of you already know that I have a broker who handles the 100% LTV Bond Funding Program. Truth is, it’s not enough to have his name and phone number. You have to know how to financially balance these deals (because a 100% LTV carries A LOT of weight on the cash flow) including how to get the 1% to 2% cash (of the asking price) that the Bond Funders will be REQUIRED to see.
Yes, they will want to see that you have 1% to 2% of the purchase price of the property that, by the way, MUST exceed $1,000,000 in order to do a deal like this.
This is the most cutting edge method to use when getting a property deal in this super hot real estate market. However, the most challenging part of using this strategy is making the numbers work. You’ll have to get a property that’s below market value in most cases to make the numbers work. And, to do this, it means you’ll be focusing on properties that are under-performing.
Yes, the Bond Funders WILL fund a property that is under-performing but it has to be reasonably “stable” and not a total mess of a deal. They don’t want abandoned/vacant properties that need tons of rehab. But they WILL fund something that has a mass upside potential because…they want their investors to make money!
Unlike what some may think, bond funding is NOT a free grant program. It’s like any other loan that has to be repaid back. What “bond funding” denotes is that there is an organization that pools money together from a variety of accredited investors who are essentially throwing their money in something like a mutual fund. This organization acts as a liason between the investors and the investments that will make these investors their money. So, they look for cash flowing assets and people who will actively manage these assets; this is where you come in since you will be helping these investors make money on their investment into the “pool” of funds.
The “loan” will be on an interest-only basis and will be between an 8% and 10% interest rate. So, on top of making a 100% LTV work, you also have to balance the higher interest rate. The good news is that you’ll use this as a “bridge” between acquiring the property, bringing it up to speed (if it’s under-performing and/or needs minor rehab), and then cashing this loan/fund out with a conventional loan once the property appreciates after a short time.
And then there’s the old-fashioned way…
Get Cash, Buy Real Estate and Then GET RICH!
I have a brand new streamlined method in building fast business credit to use to get cash for real estate down payments, due diligence, and even minor rehab.
The process is very simple. You repair/rebuild your personal credit within 6 months using my very simple strategies. Push that personal mid-FICO up over the 700 mark then the sky’s the limit. You can start a new S corporation (business entity) with an EIN and start getting business credit cards and lines of credit.
In turn, you use this cash to acquire real estate.
Well, there’s one thing you have to know first and that’s a SPECIFIC TYPE of real estate that I recommend you invest in to make this work. After all, you’ll be able to gain access to about $50,000 to $100,000 in cash within just a few months and that’s not going to be enough money to leverage a piece of real estate that’s $3,000,000 (unless you’re acquiring it with the 100% LTV Bond Funding Program).
There is a SECRET STRATEGY in exactly how to use this business credit cash to get hand-over-fist rich by not only targeting a specific property SIZE but a specific property TYPE that I’ve never revealed before!
This, of course, will be fully covered in the No-Cash-No-Credit 100% LTV Real Estate Cash Flow System!
Raising UNLIMITED CASH from Private Investors Using My Most POWERFUL Ad & Proposal Secret
I’ve been using this method for years but I don’t think that my students fully understand it. Either they don’t believe that something so simple and easy to do is something they also can do or they gloss over how powerful and effective it really is.
There is a “trick” to this, though. It’s a trick that many of my students miss because they’re sloppy or lazy. First off, it’s not enough to just have a kick-ass cash flowing deal that you’re trying to raise down payment funds for. It’s not even enough to be able to write out a simple ad to put online to start attracting investors. And it definitely isn’t enough to offer a potential investor a piece of the action (which you don’t have to do, by the way) in exchange for the cash.
In fact, almost ALL of my students FAIL MISERABLY at this one little “trick” or secret in attracting funds from private investors which I have been able to successfully do for many years now.
And no, I no longer offer my investors a piece of the action anymore. I don’t have to. I “borrow” the money and keep 100% of ALL my equity in every deal. Yes, YOU can also do this. And yes, it’s easier than you think but ONLY IF you know how to pull it off.
Plus…you have to know WHERE to find these investors (especially to keep legally compliant with the SEC). And it does go beyond just using the Loopnet Big Board. You have to go a step further which I’ll show you in this mind-blowing all-inclusive No-Cash-No-Credit 100% LTV Real Estate Cash Flow System.
My Cornerstone No-Cash-No-Credit 100% LTV Real Estate Cash Flow System is NOW HERE!
This is the course that I only wish I had enough knowledge to put together only a few short years ago. Except that I didn’t have the knowledge. I was mainly missing the components to getting lease-option deals together in a low-risk legally compliant way. I didn’t discover all of the elements to this part until only a couple of months ago. Since then, I’ve been putting it all together straight from my attorney to ensure that my students have all of the elements needed to pull off these types of deals.
But I didn’t want to stop there.
I wanted to include all of the most powerful strategies on doing TRUE no-cash-no-credit deals which included the 100% LTV Bond Funding Program, raising business credit cash for deals, and raising private funds from investors.
This is when I realized that I also have little-known cutting-edge components to add to all of those elements too that I’ve never revealed to my students before now!
For those of you who have gotten ANY of my other real estate courses including the Apartment Building Cash Flow System, Commercial Cash Flow System, Mobile Home Park (MHP) Cash Flow System or ANY of the others I have, this course is the NEXT STEP if you want to do no-cash-no-credit deals. If you’re just starting out with me and want to take that first step, THIS is the course you want to start with! It’s one that’s been in the making since 2001 and it’s finally here!!