After sending out the email about the bond program earlier this week, I've been getting flooded with emails from students who, apparently, are "thrown" by the term "100% Bond Funding Program" and think it has to do with bonds.
The term "bond" isn't really what it is when it comes to this 100% LTV funding program. If you take the word "bond" out of it, you'll be less confused.
The way I understand this program to be is that the funds are raised through a variety of different investors and thrown in a "pot." This "pot" for the investors becomes some type of bond that they derive a financial benefit from (in the form of derivatives or drips). Just like anyone who would buy into a bond or mutual fund, you would gain (ideally) a financial benefit from your buy-in as the asset (or program) makes money.
This bond program runs much the same way.
But it doesn't really pertain to you what happens with the investors on the back end because you don't handle any of these responsibilities. The liaison (or the company providing this 100% LTV opportunity to real estate investors like you) deals with the intricacies of how their back end investors are paid.
You, the real estate investor, just has to find a rock solid cash flowing piece of real estate that exceeds the $1 million required price point...and that's about it.
Please note that when working the numbers on my CFE (and if you don't have it, you can download it at www.monicamain.com/cfe) for your piece of property, you'll have to do things a little differently.
The default is for an 80/20 deal (80% LTV conventional loan and 20% cash down) which is the standard in this business.
However, since you are getting the 100% LTV, you'll have to make this change in the "financing" section of the CFE (in the top 1/3 of the "cash flow evaluator" tab). Further, make sure you put the interest at 10% (even though that's probably higher than what you'll actually get) just to make sure your deal still cash flows when it's all said and done.
Finally, under the loan points section (above "financing") you'll see a line that says loan points. The tricky part of all this is that the points are rolled into the deal or the loan. So, you'll actually have to add the points somewhere else on the spreadsheet; the best way to do this is to "zero out" the loan points and ADD 10% to the purchase price of the property, since this is how it will look in reality. (Unless you're coming out of pocket with the loan points as you do in most cases, you can't add the loan points in the regular section of the CFE as you would do for other deals.)
Once you make these minor changes to the CFE, you should then see if you still have (1) a strong cash flow, (2) a DCR exceeding 1.2, and (3) ideally a CAP that is at least 8% or higher.
By the way, now wouldn't be the time to get into a deal that is severely under-managed or under-performing because the numbers just won't work out right. Never walk into a deal where you have no cash flow or, worse yet, a negative cash flow. With these higher interest percentages and a rolled in 10% on the loan points, you'll have to make sure you are looking at a property that has a high occupancy level (over 90%) to make this work.
Also, what you lose on the 10% in rolled-in loan fees, negotiate with the seller of the property to chisel that 10% off the asking price which you'll be able to do 99% of the time anyway. (Most sellers list their property for more than they know they can get due to every buyer wanting to negotiate lower: this is always how real estate has been. List higher, expect a lower sale price.)
For more information on how you can get in on this 100% LTV program, click on this link now: http://www.monicamain.com/detroit_seminar_videos_2014
Years ago I started sharing this story with my students around Thanksgiving about why I hate pumpkin pie; how my mom used to make pumpkin pies from scratch and she's make so many of them that she's force-feed the remaining balance (usually upwards of 6 or 7 pies) of what she couldn't give away to friends and family to both me and my brother.
And how, to this day, I absolutely refuse to eat pumpkin pie. In fact, I really don't likeany pie at all. My brother Jason also feels the same way.
Interestingly enough, my daughter had her first "Thanksgiving feast" at school where she got to eat pumpkin pie. She told me that it was so disgusting that she spit it out in a trash can.
And I laughed. I thought it was funny as hell. Could she have gotten the anti-pumpkin pie gene from me? (Nice thought, although I believe that would be considered scientifically impossible considering that my experience with pumpkin pie was entirely "environmental," if you know what I mean.)
I went on to say that the problem with the pie she ate was that it was store-bought. And the baked goods they sell in a store isn't nearly as good as the real thing. But I couldn't help myself in telling her my experience with real homemade pumpkin pie and why both me and her Uncle Jay refuse to eat any pie at all. She didn't say much other than to boldly state that she loves apple pie, as it's the greatest pie in the world, according to her.
It's interesting how life works, isn't it? I've come to understand so much about life in having a child's eyes to see the world through. And it's made me so grateful for all the good and even the challenges I face on a week-to-week basis.
If you think about it, no matter how hard things get, we really do have it good. At least that's the way I see it. So many people are sitting in war-torn countries, some are homeless, and some are even missing limbs.
We are blessed in so many ways and it's pretty easy to forget about all these daily miracles we get to reap. But maybe today, just once, we can see it for what it is and feel that deep sense of gratitude for everything we have and for everything we are.
If you're one of those people who actually believes you have nothing right now to be grateful for (hey, maybe it was a tough year for you) then at least feel grateful for whatcan manifest in your life in the months to come.
What a lot of people don't realize about me is that I don't care about any loss that may happen in my life (except for what's not replaceable). Why? Because I can create it again and again and again. I've taken a few major financial hits in my life. And with each time, I've gotten it all back plus some because I have the tools necessary to do it; these "tools" are nothing more than what I have stored in my brain.
When you're the goose that lays the golden egg and you know that you can create everything you want, it really does make a huge difference.
So, if this was a challenging year for you, be grateful for the amazing things that are coming up for you because you've done a few things that are pivotal in your life: (1) you've decided that you're not going to settle for less anymore, (2) you're going to get your ass out there and finally do this, and (3) you know that you can make this happen because you now have the tools to do this.
Last year I gave my students a tip on how to use the "holiday blitz" to remove some delinquencies off your credit reports. The students who used this strategy reported that they increased their personal credit FICOs anywhere from 38 to 81 FICO points just by using this strategy.
So, I'm going to up the ante this year.
I know, I know...sorry. You thought you were on the verge of enjoying a vacation, right?
Well, don't worry. This will actually only take you a few minutes of your time and it's only for those of you who desperately need to boost your personal credit FICO points.
It'll also cost you about $100 to do this because you'll be overnighting these letters via USPS Express (which costs $19.99 x 3 envelopes) and you'll need a current copy of your credit report (which you can get for $39.95 from www.Experian.com).
Click on this link to download the letters you'll be using: http://www.monicamain.com/credit_dispute_letters
But, the good news is that if you can get confirmation that all 3 credit bureaus (Transunion, Equifax, and Experian) received your dispute letter on Wednesday, November 26th (that's tomorrow), the 30-day clock immediately starts ticking.
And what happens then?
Most of their staff is either gone on vacation starting the lateral part of tomorrow through Monday. Those who are working aren't mentally "on the job" and are probably going to be pissed off that they're working when they believe they shouldn't be.
In case you don't know how imperative this 30-day period is (starting tomorrow), let's analyze this period.
Again, tomorrow is November 26th. Thirty days from now is Christmas Day. And nobody is there then either. In fact, during most of this next 30-day period, many of the credit bureau (and creditors including collection agencies, law offices handling collections, etc.) are taking loads of time off too.
Let me walk you through what happens when you file a dispute with the credit bureau. They receive your letter and have 30 days to investigate your dispute. During this investigation, they will send a letter to the creditors you are disputing and require that they send the appropriate documentation required to substantiate that the account(s) you are disputing is yours.
Except that during the "holiday blitz," many of these employees working for these companies aren't around, they're taking extra time off, and when they actually are working, their minds are elsewhere such as thinking about shopping, cooking, partying, etc.
And this is where your advantage comes in. If there is no response (or a late response) from any of these creditors or collection agencies, the delinquent account falls off your credit report.
Last year, because of a major hacking breach of security, the credit bureaus were blasted with disputes so they started using slick tactics to "buy time" in order to put off the 30-day time line. They would do things like sending letters back stating that they didn't believe the letter was a "valid claim" or that they needed "proof" of your identity such as a driver's license and utility bill.
So, here's what you're going to do (if you want to take advantage of this "holiday blitz"). You're going to download these letters that are in the Microsoft Word document format. There is one for each of the bureaus including their respective addresses at the top of each letter.
Next, get a copy of your credit report. If you received one recently (within the past 45 days or so) you can use that one. Otherwise, go to www.experian.com and download a new copy. Yes, it'll cost you $40. So what? You can also try some free services like www.creditkarma.com. You really don't need your FICO. You just need your delinquent or "negative/adverse" accounts.
Next, fill out each letter. Include your full name, current residential address, and your prior address if you've moved in the past 2 years. Include your Social Security Number and your date of birth.
The letters I've given you only has a section for one single disputed account. Copy the entire dispute section and keep pasting it underneath one right after the other for each account you will dispute. Put in the name of the creditor, the partial account number as shown on the credit report, and the dollar amount listed.
Remember, collection agency accounts (including those from a law office) will come off easier during this time than those from banks or very large lenders.
Print off your letters, SIGN the letter with a wet signature (use blue ink, if possible) then include a copy of your driver's license AND a utility bill of a major utility like the electric company or water company. Make sure the service address on the bill MATCHES the address where you currently reside. This will give them no excuse to kick out your dispute to buy themselves time.
Go to the post office and overnight Express each one in an Express envelope. You'll have tracking information for each one. And each bureau will receive this package tomorrow. This is when the 30-day clock will start.
What if you can't do all this by tomorrow? That's okay. You'll be working on doing this between now and throughout turkey day. If you need a little extra time, overnight express your packages out this Friday right after Thanksgiving or November 28th. The bureaus will receive your package on Saturday, November 29th. And yes, the 30-day clock starts ticking. This means the 30 days will end on December 27th...right after Christmas when people have, yet again, been off work and unable to respond.
Remember, the key element this year is to include a clear copy (preferably in color) of your driver's license and a major utility bill showing your current address. Include this set of copies with EACH letter you send out.
By following these instructions, you will make the greatest impact on boosting your personal FICO during this time over any other time of the year because of these holidays that create "stumbling blocks" for the bureaus and creditors to respond in time.
Finally, I should add one more valuable tidbit of information: Experian is the only bureau that will allow you to dispute your "hard" inquiries. So, on your Experian letter, mention that you are also disputing the following inquiries then list the name of the company that put the inquiry on your credit and the date of the inquiry. Doing this alone can boost your score 10 to 20 points alone with Experian. (The other bureaus won't remove hard inquiries but sometimes I ask them too anyway because you never know when they may change their policies.)
Again, here's where you can download these letter files so you can start getting to work right now: http://www.monicamain.com/credit_dispute_letters
See you at the top!
Your mentor,
Monica Main
www.MonicaMain.com
P.S. Don't want to fix your own credit? Our credit building service is now back after going on a "hiatus" from taking new students for almost a year. And yes, if you sign up now, we'll get your first set of disputes out during the "next wave" of the credit "holiday blitz" between Christmas and New Years. Here's a link with more information: http://www.monicamain.com/credit_building_service
P.P.S. Videos from the Detroit Underground Secret Event are selling like hotcakes. I also reveal some credit secrets during the event that will blow your mind. Here's more information: http://www.monicamain.com/detroit_seminar_videos_2014
Right now I'm in the midst of checking something out for myself, acting as my own "guinea pig" of sorts.
It seems that one of the hottest new ways of getting all the cash you need for investment real estate is in something called 144A Bond Funding.
And what this program does is nothing short of freaking amazing!
First of all, I should mention that getting 100% financing is considered the "Holy Grail" for real estate investing. Imagine never having to put in a single cent into a real estate deal yet reaping all of the cash flow profits. While I never thought this was possible before, I now know that it's possible through this very unique Bond Funding program.
Let me give you some of the highlights to this program that will blow your mind:
100% LTV
No personal guarantee
No credit checks
No asset verification (AKA no needing "financials")
No loss of equity in your business
Closing timeline: 90 to 120 days
Flexible repayment terms
And as long as you have a "stabilized" and strong cash flowing real estate property to invest in, you can use this Bond Funding program.
Now, before...you had to find a property that was $10 million or higher. Even worse, you had to show cash liquid in your bank account of 1% to 2% of that amount. That means your lowest end deal would have required you to show cash of $100,000 to $200,000. You would have been able to get something called a VOD (or verification of deposit) for this cash, even showing that the money belongs to you. However, VODs cost money and sometimes they're not cheap.
I never wanted to use the Bond Funding program because of this $10 million or higher threshold only because my deals are usually $3 million and under. So, I didn't feel that I had use for the program. That is...until now!
With this new change in the Bond Funding program, they will do deals as low as $1 million. Yaaahhhhh! That's what I've been waiting for! And to participate in the program, you have to show 1% to 2% liquid or, for a $1 million deal, that's only $10,000 to $20,000 in a bank account. (Again, you an buy a VOD which would be only a few hundred bucks or more to do for this much lower amount.)
Now, you don't have to put this 1% to 2% into escrow to close. They just need to see that you have this liquid.
Note: the points are high -- around 10 which accounts for 10% of the property purchase price. So, you're million-dollar property would have $100,000 in loan points. But this is rolled into your loan so NO POINTS UP FRONT! Whooooooo!!!
Finally: this is a fully amortized 30-year loan term (not interest-only unless you're doing construction). Yes, the interest will be higher than a conventional loan, somewhere between 5% and 10%...but who gives a crap?! You're getting a million-dollar (or more) apartment building (or other real estate) for NOTHING!
What's the catch? None that I can tell. But I'm just starting through the process right now. It seems that the way this program works is that they raise capital through a variety of different investors and corporations. They abide by all the Regulation D (SEC) nonsense while you derive the direct benefit from the program without any of the hassle.
How do they make their money?
Loan points (rolled into the loan) and the heavy-duty interest while YOU manage the asset (thus continuing to make them loads of cash for raising the initial capital for you).
Pretty freaking great deal, isn't it??
I have to be honest: I've never seen ANYTHING this incredibly freaking fantastic when it comes to getting money for cash flowing real estate where you DON'T have to share ANY of the equity or cash flow with someone else. You get all the profits/proceeds...but you're paying a higher interest rate.
Oh, wait. One more thing. The loan is -- ready for this?? -- NON-RECOURSE!! This means that you take NO personal responsibility for it and it doesn't show up on your personal credit report.
Double WHOOOOOOOO!!!!
So, how do you find out more about this Bond Program and how to take advantage of it?
Most of you know that I'm in a graduate degree program for an MFA in creative writing. Initially I was going to do the UCLA certificate program but then decided to go for the gusto and actually get a paper degree to hang on my wall.
So, here I am. This is the first "semester" of a total of seven and I got into this major argument on the phone the other day with the administrator of the program.
Let's just say that there are 2 things that occurred:
1) I don't put up with any "professional" who, well...isn't professional -- especially when it comes to writing. (Any "writer" that can't use spell check with today's high-tech one-touch-button software or is grammatically incorrect yet is a professor at a major university will beouted by me in 3 seconds flat. And no, in case you haven't figured it out, I'm not an ass-kisser, brown-noser like all the other students are.)
2) I don't need this degree for anything. In fact, right now it's turning into a joke as far as why I'm even in this program to begin with. I wanted to challenge myself but not by rocking the boat or bucking the system due to obvious inadequacies with their program. If I wanted a fight, I'd pick up the phone and argue with the IRS about how dodgy their rules and regulations are but...I'll skip that fight for now. You have to pick your battles wisely, you know.
I think part of the problem here is that I've been in "left-brain-mode" for so long that I can't click over the the right brain where I creativity lies. Or used to lie. I've been so real estate geared lately that I forgot what the definition of fiction is anymore.
So, the administrator of the program gets me on the phone the other night and immediately says, "You'll either respect the professors in this program or I'll kick you out of the program."
Not even a fraction of a second passed by before I replied, "Go ahead and kick me out."
I could hear how stunned he was by the response due the lack of his immediate response while as dead air dominated the other end of the phone for seemingly forever.
I love calling people's bluff because what these "creative types" especially don't understand is that I've been in the business world long enough that (1) I can read people like a book, (2) I won't be threatened under any circumstance, and (3) I simply don't give a shit about much of anything these days anymore.
Put someone -- anyone -- who is in a position of having nothing to lose while, at the same time, they just don't give a damn and see what type of result you'll get...especially when you call them on the phone to start yelling at them.
Furthermore, yelling at anyone on the phone usually gets you exactly nowhere. Neither do threats. Again, this is something that someone who isn't part of the business world would never understand.
And what gives me this arrogant attitude that I have?
I'm not sure it's arrogant. Okay, maybe it's "part" arrogance due to the fact that I don't need a shitty piece of paper to hang on my wall (that I'll have to pay a total of $45,000 for by the time everything is said and done) to make a million dollars a year, which is about what I make now. I make more a year than all those professors in this graduate program combined.
The other "part" comes from having an incredibly short fuse for dealing with bullshit due to the nature of my business and what I've been through in my life to this point. Apparently this university administrator is used to people quivering in their boots at the notion of being thrown out of school. Meanwhile I'm daring him to throw me out so I can save myself at least 40 grand that I would otherwise have to shell out to complete this program.
So, right now I'm sitting on the fence as far as the program goes. By the end of the conversation, it was completely different than how it started. It went from him wanting to throw me out to him trying to convince me to stay in. (I love turning the tables on people and making them think it was their idea all along.)
I need the program just to keep me more balanced. (Remember the left-brain right-brain thing I was just talking about?) Doing something creative keeps me balanced and energized so I don't completely derail or go all gangsta on somebody, possibly committing a completely avoidable homicide. (Yes, I get that pissed off sometimes. Dangerous, I know, especially when I'm behind the wheel.) The creativity helps me balance all this anger out.
As it stands now, I didn't get kicked out of school as much as I begged him to throw me out of the graduate program. What I absolutely love is having that sense of power whereas I don't need school or a shitty degree or any university administrator controlling my destiny.
Because I control my own destiny. I always have.
And so do you.
I write my own checks in life. I make as much money as I want. And everything I do outside of my businesses is just an "elective," if you will.
The other day I was watching some crap on TV and somebody was doing an interview of this couple who lost their home, cars, and everything else because the guy lost his "secure" job and couldn't find employment elsewhere. I found myself talking to the TV saying..."There's nothing more insecure than allowing somebody else to control YOUR destiny and YOUR life. Who ever told you that working for somebody else was secure, sucker? Maybe it's time you took the bull by the horns and started writing out your OWN paychecks. Start your own business, fool. Do something for yourself instead of whining on TV like a little girl."
There were some other choice words used but...I have to start hitting the "censor" button a little more these days, as my swear jar doesn't have any more room in it.
So, maybe I'm rough around the edges, not "polished," and a little too real. But I can show you how to write that check for yourself for whatever amount you want to make. Guaranteed.
And then nobody will ever be able to run over you again because the world -- YOUR world -- will remain firmly at the palm of your hand at ALL times.
Well, I'm back in Cali from Detroit. Physically I'm in one piece. Mentally...well, that's another story altogether. Usually I crash the day after I get back but...today is my "crash day," as I feel like I was hit by a train. Right now I'd rather be at home watching TV and ordering endless amounts of crap from the wheelbarrow of catalogs I received in the mail while I was gone. (I'm a mail order junkie on both sides; what can I say?!)
But here I am today. Holding up the fort. Keeping it all together. As always.
I'm also sitting here and recollecting what happened this past weekend. I'll admit that it was the most comprehensive real estate event I've ever done and I even impressed myself, which is almost impossible to do these days.
I'd also like to mention that it was the first time I actually felt threatened due to the weirdo stalker I had at this particular event.
Remember, I've been doing this for 12 years and I've never felt physically at risk before...except for this past weekend. It was the first time I felt like maybe I'm more vulnerable than previously thought.
What happened?
Well, I had this student who will remain nameless. He came in late and seemed harmless enough until he started apologizing profusely for being late. Here I am thinking, you came in late. So what? Your loss, not mine.
Then he proceeded to tell me about 3 times that his divorce is final. Again, so f****** what? I can care less.
But then when he started asking me about my marital status...it started getting kind of weird. By now we're at lunch time on Day One. I quickly dismissed myself from the conversation stating that we'd catch up later and secretly hoping that we wouldn't.
I should mention that this guy came in looking like a scruffy lumberjack wearing a dirty baseball cap and, I believe, a plaid shirt to fit the part of dirty hillbilly. I don't judge what people look like or want to wear to my events. It's none of my business...so long as they'redressed. But what happened next seemed a little weird...
We ended Day One and had our Platinum VIP line up by the lobby door to take the "people mover" through Detroit to Greektown. We went to a Greek restaurant called The Pegasus. Lumberjack dude turned into Dapper Don with the sole intent on fooling everyone. Apparently this sicko thought it would be funny to do this. He changed into a dark suit with a red tie, completely shaved, and looked like a totally different person.
Even more strange, he was trying to infringe upon everyone's personal conversations as if he was a spy with a microphone in his suit jacket pocket. He thought he fooled me too but I knew exactly who he was; I even blew him away when I reminded him of an email I responded to of his dating about 5 years back, almost repeating what I had said back thenword-for-word.
By the time we got back to the hotel bar where I was to meet the rest of my students, I felt like I had to "post" various students around me so that Lumberjack-Turned-Dapper-Don didn't get the chance to sit next to me. I even started moving around the bar to talk to everyone as he kept following me around.
Strangely, he didn't drink anything. Not even water. And he had this icy creepy stare that would even scare Hitler.
Day Two...I was already creeped out but I, of course, had to continue speaking. Throwing the events that occurred the night before into the back of my mind, I did a killer kick-ass job on Day Two but I called in executive protection. I should also mention to that, at about lunch time, I found out that I had two students who were packing some serious heat and they were looking out. (Thank you "Silent Warrior" and "War Hero." You two arefreaking awesome...and you know who you are! I owe you, big time!)
By the close of Day Two...and onto Mario's Italian Restaurant with my Platinum VIP, we loaded onto a bus. And yes, at this point I had full on executive protection in place. (Former Detroit P.D., if you must know.) Psychopath Weirdo was trying to sit next to me on the bus. Like that was going to happen. After all, he just had "one question" that he'd been pestering me about for the past several minutes. I told Psycho that I'd talk to him at the restaurant and never actually intending to.
Again, we made sure that he couldn't sit next to me by carefully placing various students, my bodyguard and Ron Espinoza next to me. Psycho had to sit the closest proximity to our table possible, nearly sitting on the person's lap in front of me. I noticed some odd behavior coming from Psycho including wrapping some scarf around his head (looking like a Taliban terrorist) and acting out some "scene" as in a movie or something. By this time I'm about 3 drinks in but I knew that things weren't going really well.
This is when my bodyguard informed me that Psycho was carrying a knife while someone else told me that he was sleeping in his car at night. Mind you, it had been snowing and the nighttime temperatures had to be somewhere way under 20 degrees!
Between my Silent Warrior and bodyguard quickly whisking me out of the premises with Tori (my student and helper), I felt like I was some important politician like a Senator or something whose life was in danger. I had these two guys packing some major heat and racing me out of the restaurant. (Replay of a scene in The Bodyguard with Whitney Houston and Kevin Costner running through my head...)
I ended up back at the hotel then downstairs at the bar where, before I know it, Psycho is back like the nightmare that he's quickly become. My bodyguard was in very close proximity, not letting anyone (especially the weirdo) sit next to me.
Finally he was able to sit in a seat directly in front of me where I -- without warning -- asked him point-blank in front of everyone what his pertinent question was. He responded by saying..."Uh, no question really. Just wanted to say, great event!" Or something else equally non-committal.
My bodyguard noticed that Psycho's knife disappeared, sometime around when Psycho noticed that he was packing a police-issued weapon. Maybe he stuffed it up his ass. Who knows.
What bothered me about this whole thing is that it made me think: what is this world coming to? I'm a teacher and now, from this point forward, I have to hire pistol-packing executive protection for every future event that I do. And that's not a good thing.
The good thing is that I've always been obsessive about security when it comes to my personal home including a wide array of cameras, a Fort Knox security system, and the whole nine yards. People always thought I was crazy. I guess I'm not that crazy after all.
But leaving Psycho behind for good (since he's permanently blacklisted from all future events), I knocked it out of the park with this past seminar event. This was a 100% real estate related event that I can say -- with 1000% conviction -- that has NEVER included so much information about getting started in no-cash-no-credit passive income real estate.
This includes the NEW 100% Bond Funding Program where you don't even need to have good credit or cash or income verification and they're not funding deals of $1,000,000 or more (instead of over $5,000,000 like it used to be). And the loan points are rolled into the loan so you don't have to come up with that up front either.
And I talk about land trusts for the very first time and how that works. And if you're not sure how that's relevant or how land trusts is a true game changer, I guess you'll have to watch the videos of the event to see how this all works.
This deal goes through the Thanksgiving holiday then...well, the price will go up about 100% for those who drag ass and procrastinate.
If you have any questions, call my office. But I recommend you go to the site first, check it out, read through everything, and listen to my 6-minute audio seminar. Check out the testimonials.
If you missed getting any other video set on any other seminar I've done, this is NOT the one you want to miss getting. This is a real estate investing game changer like you've NEVER seen before!
I keep getting these "jump-the-gun" questions about students wanting hundreds of thousands of dollars in business credit yet their personal credit sucks.
Talk about putting the cart before the horse.
First off, get that 2003 Ray Reynolds infomercial about the falsehoods of building business credit out of your mind for a second, okay?
The reality of the situation is that, because of what happened with the recent banking debacle circa 2005 through 2008 (where the banking system was days away from collapsing), things have changed, folks! A lot!
So...if you think you're going to be strolling into a bank and signing on a BLOC (business line of credit) for $250,000 without them pulling your credit or expecting you to agree to a personal guarantee...keep dreaming. Ain't gonna happen!!
Since 9-11 happened, as you may recall, we had something called the Patriot Act put into place which is basically a legal way of violating our privacy. Because of this, all loans are required (by federal law) to pull the personal credit of the "real person entity" applying for the loan to "tie" the loan into a real person and to make sure you actually ARE a real person (and not some company, offshore corporation, facade, identity thief, etc.)
So, unfortunately, there are many people out there who will bamboozle you into believing that there are loans where they don't pull your credit and/or there is no personal guarantee. While there are some types of loans that won't require a personal guarantee, there are no loans or programs offered by any legitimate bank or lender that won't ask for your personal credit to be pulled because, as I already mentioned, it's federal law.
Glad we could square that away.
The next thing I want to clarify or get straight is this..."Monica, I have a 530 FICO and I want to get a bunch of business credit cards and BLOCs. So, what do I do?"
Answer: Start rebuilding/fixing your personal credit first before you do anything with the business credit stuff.
(Is that clear enough?)
In order to benefit by getting "a bunch" of business credit cards and BLOCs is by having a personal FICO over 700. Period. There is no other way around it.
Now, I know I hear a few disappointing sighs but...guess what? You can actually boost your personal FICO in a snap if you know what to do. I've had students boost their FICO scores in as much as 100 points in a month. I've had students boost their FICOs 200 or 300 points inside a year.
Last year around this time I sent out a series of emails showing my students exactly what they needed to do to chisel off the most amount of delinquencies and "negative marks" off their credit reports within the shortest amount of time.
I call it the "Holiday Season Credit Blitz."
How does it work?
It's a somewhat known fact that when you dispute delinquencies on your credit report right before Thanksgiving and one again (after 35 days pass) right before (or around) Christmas, you'll be able to get more stuff off your credit reports than working on it for 6 to 9 months (or longer).
Why is this?
Since it is a "somewhat known" fact, a lot of people (including credit repair services and attorneys) submit dispute letters during this time, it overwhelms the credit bureau system. To top it off, the credit bureaus are understaffed during this time because their employees are taking more time off for the holidays, not to mention the federal "shut down" days of Thanksgiving, Christmas, and New Year's Day.
So, how do you make this work?
If you've been struggling to have things removed or -- even better -- you've never disputed anything before, now is the time to start...but not quite yet. You have to wait until next week to start submitting your letters into the credit bureaus. You shouldn't submit anything this week.
Now, one of the reasons this is so successful is that you "buy days" during this "Holiday Season Credit Blitz" time frame. When you dispute something on your credit report, the credit bureaus contact the creditor or collection agency requesting proof of your debt. During this "magical" period, the creditors and collection agencies are not only short-staffed during this time but the time starts ticking at 30 days the moment the credit bureau receives your letter. Everyone must respond timely otherwise the account has to come off. This is not as easily done during this period of time.
What do you do?
If you have anything you want removed off your credit report, the weekend before Thanksgiving is when you should create your dispute letters for any account you'd like removed off your credit report. On the Monday before Thanksgiving is when you should mail your letters.
Even better, mail each letter (there are only 3 total) with a delivery confirmation so the credit bureaus can't say they never got your letter (which they like to do during this "Holiday Season Credit Blitz."
I always recommend that my students do all this themselves. Me, I'm a control freak by nature and I like doing personal stuff myself. I recommend you do this yourself.
However, I understand people either don't have time, don't have the confidence, or they don't have the know-how to do this on their own. If that's the case, I recommend you look into my Credit Rebuilding Service which, for the first time in a very long time, is now back open and accepting new enrolled students.
And what if you want to do this on your own? I'm going to give you the letters you need without you paying a dime. Click on this link and download the letters you need to start preparing the weekend before Thanksgiving (to mail out the Monday before Thanksgiving) to all 3 credit reporting bureaus: http://www.monicamain.com/dispute
In order to make this work, you'll first have to pull your credit report at www.experian.com and choose the $39.95 option. Then you'll know what to put on the letters for your disputes to the credit bureaus. (Don't dispute with the creditor or collection agency. That comes later. Just focus on the credit bureaus for now.)
If you don't want to do this yourself, for the first time I'm offering a huge discount on my Credit Rebuilding Service which I'll never offer this much of a discount again. This deal ends tomorrow at the close of business.
The other day I had an IM session with my mentorship group and had a question from one of my students. It was about getting a short-term loan for cash to purchase real estate, mostly to flip property but this can also work for a buy-and-hold deal as well.
But he didn't want to get a loan because, well...he can't. His personal credit sucks and he didn't build his business credit yet.
So, I told him (and the rest of the class who attended the IM session) about a little secret that I've been doing for years that I guess I never thought of telling my students about before. And this is a secret to getting liquid cash for a deal without having to share any equity in a property.
I told him about how I raise liquid capital using the same method I use to attract new investor partners into my "web." I'll post a deal a proposal on the Loopnet Big Board(under "Looking for Capital/Investors") the same way I do when I attract investors to a real estate deal.
Except, well...I never, ever mentioned this secret to my students. And no, it wasn't like I was trying to evade telling you guys. It just never came up until the other day that maybe my students could benefit from this little strategy that I've been using for years.
So, here's how this works:
1) Figure out how much cash you need (based on a real deal whether this is for a down payment, rehab money, etc.).
2) Write out a short "proposal" that will be posted online.
3) Create a longer proposal (up to 3 pages) on exactly what the benefits of this loan will be to the prospective investor.
Here's a sample:
Headline: We Pay 18% Interest on Short-Term Private Money
"Seeking $150,000 to finance a highly profitable real estate acquisition in Texas for a 12-month term with a 15% interest to be paid out monthly. If interested, please contact us for further details."
And it's as simple as that.
Now, here's the deal: Before you give out any specifics on the property deal (like the address), it's best to have the deal under contract. You'll then have a contract with escrow instructions (for their depositing of the funds for the deal) for them to look at.
On the Loopnet Big Board, you have to post for a solid month. You'll get about 50 to 75 different responses. About 10 of them will be legitimate. So, instead of having only ONE deal needing this kind of cash, maybe it would be a good idea to have several deals lined up of the same caliber/price that would need the same exact amount of cash so you can make the most out of your one ad that you place for a month.
Worst case, you'll get your one investor to put in $150,000. Best case, you'll have about 6 to 8 deals going on at one time. How exciting is that?!
Now you know, in a nutshell, how to do it.
Of course, there's a little more to it such as how to put the deal under contract before sending the contract and escrow instructions over to the prospective investor and how to create a short legally-binding proposal. Since it's a lot of information, I'll be presenting that in Detroit next week along with a bunch of other cutting-edge information.
Here's something else that you need to know and really should consider doing if you have a personal mid-FICO below 680. You should fix and rebuild your personal credit. Right now I am offering a ridiculously low basement-bottom price (that I've never offered before) on my credit building service. Because we're coming up on the holidays, this is the best time to have things removed off your credit reports. This is why I'm offering this special for Veteran's Day. Here's more about it: http://www.monicamain.com/credit_blow_out
You'll get a kick out of this...for a couple of reasons. You'll realize what a bonehead one of my students is and, unfortunately, you may realize that you're being the same way after you've had a good laugh at the ridiculousness.
So...one of my oldest students (not by age, mind you) brags that he's been following me since 2002/2003-ish. So...do the math. That's a dozen years. I think he's one of my "oldest" students still around (although that will probably change after he reads this email).
Yet he doesn't own his own apartment building. He manages one, though. It's 66 units to be exact. And he boasts the fact that he's single-handedly brought it up from a 29% occupancy to full.
Good job. Glad you are making someone else rich while doing all the slave work for your boss. I'm sure he's proud.
But...because he's used to "managing" (not "owning," remember) a 66 unit, it's beneath him to own any building below that amount of units. He wants something bigger, he exclaims. None of this "smaller" building nonsense that I've been teaching my students will do underany circumstances.
It's almost like working for Microsoft as an employee, wanting to start your own business but your new business has to be a Fortune 500 right off the bat or...well, you just won't do it at all.
How stupid is that mentality?!
Yet, as history seems to be unraveling for this student, it seems that wanting to own something bigger is the only obstacle for him not owning anything at all!
By the way, do you want to know the fastest way to piss me off? Introduce yourself to me at any of my seminar events like this, "I've been a student of yours for a dozen years but I haven't done shit with any of your information yet."
Trust me when I say that more than a healthy handful of my students have done this and every time it's like listening to nails on a chalkboard through a double bullhorn.
For those of you who have been following me for that long -- or even the past year -- you'll know that I personally have DRASTICALLY altered my PERSONAL investing methodology and strategy to exclusively focus on smaller buildings for the following reasons:
1) No competition with the bigger investors.
2) Properties are "mom and pop" owned allowing for all kinds of creative financing, lowered asking price, land trusts/contracts, etc.
3) Cash flows, by "volume" are actually HIGHER than in a larger building; this is due to the LOWER operating costs by percentage against the gross operating income (gross rental receipts). By "collecting" a bunch of little properties, you can see your overall operating expenses stay a steady low 40% to 45% instead of paying 65% of your gross income out in expenses (as you do with larger buildings).
4) Qualification for smaller buildings is a CINCH, especially if you are a new investor with no management resume, no portfolio of buildings, no experience, and no assets to support a multi-million-dollar loan/mortgage as with what is NOW REQUIRED for you to acquire large multi-million-dollar acquisitions. Banks/lenders do not expect to see any of the above with a small building, as you are a new investor and everyone has to start somewhere.
5) A bank will put up with a lower personal FICO score and/or minor credit deficiencies when the loan risk isn't that high.
Yes, you can invest in larger buildings...as time moves on and as you put together your initial portfolio. But the biggest MISCONCEPTION there seems to be out there is that you need a 100+ unit building to retire.
And you don't. Far from it.
In fact, in my last seminar event, I did a presentation showing how any one of my students could get 3 buildings (all less than $500,000) which would result in a cash flow of $14,000 a month...IN YOUR POCKET. And they weren't large buildings.
If you can't retire on $14,000 then we need to talk. Even MY personal monthly expenses are below $8,000 a month and I own a million-dollar house and drive 2 luxury cars. So, if $14,000 a month can't work for you then...you're delusional, don't know how to use a calculator, or you're a drug addict.
So...I guess I lost a student because he's going to still be sitting around, hard headed as hell, and waiting for another dozen years to buy a building that's "at least" 66 units because, after all, he's been making someone else rich all these years by managing a building this size. And it would be "beneath" him to own something smaller than that REGARDLESS of how kick-ass it cash flows.
You know...like Forrest Gump says..."Stupid is as stupid does."
Hopefully you're not stupid like this, waiting around for no reason.
Now, part of the problem with this student (and many others) is credit. So, let's address that right now with a "solution" that I'm posing to ANY of my students who have a mid-FICO that is 680 or below. Click on this link for an audio seminar to listen to what I have to say about that: http://www.monicamain.com/credit_blow_out
The second part is that, as you know, I'm doing a 2-day event in Detroit, Michigan...starting next Friday. If you still want to go, you can still get in (barely). I'm sold out on Platinum VIP but I have room for a few more Gold VIP (since we had to expand the room). By volume of people, this is going to be my BIGGEST EVENT EVER! This will help you get the funds/cash for your deals. Here's the link on that: http://www.monicamain.com/underground_secret_event_in_detroit
If you have questions, call my office. I've been running my staff ragged and they're all hating me right now but...oh well. Life's a bitch when you work for someone else...which is why YOU should be looking to work for yourself as a successful real estate investor.
And since I'm giving you all the tools to work with, what's the problem??
