Thoughts of a Newb

Secrets to Earning Safe 10% Returns on Your Hard Earned Money (Part 2)

In this article I will discuss some of the most common questions asked about investing in real estate. While I hope to answer as much as I can in this series of article, I am always open to answering more! If you have more please feel free to contact me with any other questions!

Who Borrows at High Rates and Why?

Investors like us do, because we have learned in our business that it’s not the cost of money that matters, but quick access to the funds so we can capitalize on opportunities.

Our company can acquire good deals in properties because we can act with lightning speed and can close with cash. Private loans give us this competitive advantage over other investors who take weeks to go through the bank approval process in order to purchase properties. Plus, lets be honest, have you tried to get a loan at the bank recently? It's nearly impossible unless you are willing to sacrifice your first born child!

Additionally, if a real estate investor locates a good deal on a property, many times the bank wants to loan on the purchase price not the value of the house, thus penalizing the investor for finding a great deal. Having access to money is generally a deciding factor in investing in real estate, so paying a higher interest rate is irrelevant when compared with the risk of losing the deal.

Is my investment really as safe as it sounds?

Yes! We as investors always follow these common sense guidelines that we’ve talked about. Your money will grow two, three, or even four times faster than your current investments and you maintain control. Not to mention that if the house burns down its been insured which means you will at least get your money back! Can you say the same about stocks?

Each one of our properties that we acquire is put through a rigorous financial evaluation in order to evaluate the profitability before the property is ever purchased. By only investing in the relatively smaller number of houses that meet this rigorous criteria we are able to grow your money exponentially faster!

Remember that making loans is a business and should be treated like a business. If you set up a simple system and let the professionals implement the system, your loan portfolio can be hassle free and produce staggering yields.

How do I use my IRA’s or pension plan?

Making real estate loans is a widely accepted use for IRA’s and other Retirement Plans. Most people do not know that you can make private mortgage loans using the funds which are already in your IRA’s and other retirement plans. Think of the power of loaning out funds at high interest rates that are Tax free or Tax Deferred!

In order for you to use retirement accounts for loans they must first be administered by a third party custodian. One custodian we commonly work with is Equity Trust Company. You can visit them on the web at www.trustetc.com or simply talk to us and we’ll help you with the set up of your account.

After selecting your custodian, you simply send a transfer form to them and they’ll do all of the work for you. Once you’ve done that you are ready to make private mortgage loans.

From there, you simply notify your custodian about the investment you are looking to make and send the check for the gross amount of the loan. Even better, we can do all the work for you and you just sign few documents, sit back, relax and wait for your money to grow tax free or deferred like grass on a spring morning.

Secrets to Earning Safe 10% Returns on Your Hard Earned Money (Part 1)

Please take time to read this entire series of posts since the following information could increase your investment yields by thousands of dollars in the coming years.

We are a group of professional real estate investors and we would like to introduce you to methods that give you greater control over your investments and safely make them grow at two to five times your current rate. Does this sound too good to be true? Well, the truth is, it is not. Many private investors just like you are currently enjoying these rates of return with minimum or no risk.

Smart investors have been utilizing this investment opportunity for years. In fact, there have been entire companies built around this strategy.

This is a very safe investment that produces a high rates of return while at the same time provides higher level of security and liquidity.

You've seen how unsure and volatile the stock market can be. Do you want your future to be controlled by the events that take place on the other side of the globe? Well, maybe it's time to consider alternatives

Over the next several posts I will be covering how these investments work and why you need to be a part of them! Stay tuned only if you want to build REAL wealth.

Private Loans Secured by a Mortgage

So, what is a Private Loan? It is a loan made to a real estate investor that is secured by real estate. Private Loan Investors are given a first or second mortgage that secures their legal interest in the property and secures their investment. Try finding that with stocks! We are not talking about high Loan-To-Value (LTV) ratios the banks and savings and loan institutions make on homes. We offer very low LTV ratios to our Private Lenders to increase security of the loan. Our standard LTV ratios are under 75% of the value of the property securing the loan and frequently as low as 60% to 68%. This means additional security on the investment.

For example, if a property is valued at $100,000, you, as a Private Lender, will never have to loan more than $75,000 dollars on the property. That's a 75% loan-to-value ratio. This is obviously a much safer approach from that taken by conventional lenders. These banks get into trouble because they make loans at an 85%, 90%, or even 100% loan-to-value ratio leaving them no equity for transfer costs, if they are ever forced into a position where they have to take back the collateral property.

You, as a lender, will never lend more than 75% LTV. As a lender, it is in your best interest to minimize risk and maximize return and this is why a loan should never be made without a 25% safety net. We don't violate this rule, because your security is at stake.

The next article will cover some frequently asked questions about investing in real estate. If you want to know more NOW about truly building your wealth, then contact us at TrueWealth@arcaneproperties.net.

Thanks for reading!
-Bob McIntosh
Arcane Properties
www.arcaneproperties.net
www.highrates4you.com

Listings from a D-list Agent

So I felt some background here might be appropriate as this is my first post...

I currently own 8 rental units in two buildings, I began to realize that while I am experiencing positive cash flow it wasn't enough to continue to fund purchases I wanted to make. As such I decided to venture into the rehab world to help raise capital for my buy and hold long term strategy. With that in mind I talked to a Real Estate Agent who I found on Bigger Pockets and began!

So after a while of searching through potentials, having two properties under contract when I went to put in an offer, and a lot of other unwanted delays I had finally found a place that fit my price range, profit range, work range, and area restrictions. I walked through the property twice (the first time I went after another property that ended up being under contract by the time I put in an offer). Both times the potential of this place was enormous. With that in mind I made an offer on the property. Since this place was a bank owned property I was ready to wait, a week if necessary before getting antsy and bugging the listing agent again. So I waited and to my surprise it only took 1 day for the listing agent to get back to me. What luck I must have to get back this quickly, either they are ready to accept anything (since the property had been listed for nearly 4 months) or they have just outright stricken my deal down. However optimism prevails in my general thoughts so I was excited.

That's when I read what they sent back. We had submitted a standard NJ Contract as our offer (as per their request to do so) and they had marked the whole thing up with red ink. In addition they had attached a list of demands that no standard buyer could hope to achieve. Let us examine this for a minute.

They ask for the standard NJ contract, and yet they mark the whole thing up with red ink. Why ask for a "Standard" contract if you don't like the way it reads? Why not send over to any agent asking what you are really looking for?
The list of demands and I do mean demands, it's as if they are holding this property hostage and won't give it up until we comply with their every wish and desire. While the list was quite long (nearly half a page typed) I want to highlight just a few. The first being that we obtain the mortgage for the property before closing. I would love to be able to work with a bank who says sure thing Bob, here's $180,000 without knowing you or what you are buying. Their other major demand was that we pay all their fee's, such as lawyers, processing, etc.. AS WELL as ours!

All said and done this guy was looking for cash offers. Now if he had just put in his original listing that he was looking for cash offers only then it would have saved me, and I'm guessing a lot of others, a whole lot of wasted time. If that's the way this agent wants to play the game then I hope that his property continues to languish for another 4 months.

As a side note, I later found out that this particular agent apparently has a reputation for being an a-hole and has been doing this with all of his listings. Time to move on to the next place! Maybe the 4th one is the charm?

-Bob