Wait! Don’t Sell Yet…

Wait! Don’t Sell Yet…

1031 Exchange for the Modern Investor

PART 1

 

If you’re to the point in your investing career where you’ve started buying and HOLDING, then you may need to learn a thing or two before you start shuffling your properties around. Instead of flailing around and making mistakes with large numbers, get to know your options.

If you’re selling an investment property with the intention of purchasing another and you don’t know what a 1031 tax exchange is, then sit down. Let’s chat…


A note: As the CEO of The Lee Arnold System of Real Estate, I do not often wear my “buy and hold” hat. I rarely recommend this as an investment option until you’ve reached a certain level in my Circle of Wealth. However, I still recommend this service for those who are buying and selling rentals.

And since Cogo Capital® doesn’t just offer quick turnaround, excellent terms, and millions to lend to investors, our loan officers would be happy to talk to you about your upcoming transitions.

If you’re ready to learn more about the CIRCLE OF WEALTH, click here.


How do you know if a 1031 tax exchange is the right move for you? First, let’s make sure you know what it is and the details of how to make it work for you.

WHAT IS IT?

This strategy allows an investor to “defer” paying capital gains taxes on an investment property when it is sold. Basically, when you sell an investment property you currently own (such as a rental), you can then purchase another property of “like-kind” (equal or greater value is preferred, we’ll go over that), and can do the exchange in your portfolio without paying capital gains.

So, if you have a property with plenty of equity and you want to use that as profit to purchase another property, that’s what this is for.

Why would you want to exchange properties?

  • It’s in a city or state in which you no longer live, and the care for that property has become a burden.
  • You want to upgrade from a smaller rental (a duplex to a four- or six-plex).
  • Your market is shifting, and you want to take advantage of the greater opportunity.
  • And many more reasons…

Traditionally, 1031 exchanges were used to quite literally swap one property for another of like-kind. Since the market has changed and morphed into something completely new since 1031s came into existence, it is now more likely you will find a property that is different than your current one. You may think this makes things tricky, but the process is still quite simple.

Simple or not, you need to know what the process looks like if you’re going to attempt it. But if you can refocus your investing without incurring tax liability, then it’s worth the due diligence. Whether you’re changing from a low-income (and therefore high-maintenance) property to a better one, or you’re switching locations, you shouldn’t need to pay significant taxes because of properties you purchased in the past.

The 1031 makes this possible.

WHEN TO DO ONE

Even if you didn’t initially purchase a property, you’d pay capital gains if you don’t do a 1031 exchange. So, if you’ve made some less-than-par investments (or if you’ve just had some bad luck), you can sell the investment without tax loss.

If you don’t know about this strategy, you may end up owing more than you made.

But, utilize this strategy, and you can be swimming in profit from a property that has appreciated. So, how do you use a 1031 tax exchange?

Plan for Your Loan

First, plan your move by exchanging one property for another property of similar value, Yes, step one is to plan, because although you may think you can just swap a house for one of equal or greater value, you still need to qualify for that much or more.

For instance, let’s say you purchased a rental property with the intention of occupying one of the units. Because it was owner-occupied—even if you’ve moved on since—you got that $400,000 loan with less money down. Now, with your financial landscape on a different field entirely, you can’t qualify for more than $350,000, especially since you’ll have to put 20-25% down. That’s great if you’ve amassed enough equity and have the funds, but until you know what you qualify for, you can’t just make assumptions.

To maximize your 1031, if you can’t qualify for at least the amount of your current properties, it may be wise to consider other options. Otherwise the tax deferment won’t make sense. (You can go slightly under, and we’ll talk about that later.) You could cash out and do a few private money loans with your money (your “skin in the game”), profit on a few deals, and then purchase big again.

To best understand this strategy, let’s discuss the four types of a exchanges for real estate, so you’re armed with the information you need before considering if this is right for you.

1- Simultaneous Exchange

A simultaneous exchange is just what it sounds like; it’s where the replacement property and relinquished property close on the same day. Any delay, no matter how brief, can result in disqualification and immediate application of full taxes.

There are three basic ways that a simultaneous exchange can occur.

  • The two-party trade, completed by the owners who, essentially, “swap” deeds.
  • The three-party exchange, completed when an accommodating party facilitates the transaction for the exchanger.
  • Or a simultaneous exchange with a qualified intermediary who structures the entire exchange.

2- Delayed Exchange

The first type of exchange isn’t as common as this one. A delayed exchange between like properties is more frequently used by investors. In this case, the investor sells or relinquishes the original property before acquiring the second.

The investor has 45 days to identify a replacement property after selling the first and has 180 days following that to complete the sale of the property. The extended timeframe and numerous tax benefits make this options the most popular.

3- Reverse Exchange

If you identify a replacement property before the first is sold, you can, in theory, “buy now and pay later.” It doesn’t work that simply, but you get the idea. A reverse exchange (or forward exchange) is accommodated with the titleholder identifies a replacement property first.

Before you do backflips with excitement that you can acquire a property without having to pay anything now, you will need all cash when making this exchange. Because many banks won’t offer loans for reverse exchanges, this can be tricky. You must start by identifying which property (or properties) you wish to relinquish from your portfolio.

Because it’s basically a delayed exchange in reverse, the rules are similar to the delayed exchange, you have 45 days to identify the property you will sell as the “relinquished property,” and then you have 135 days to complete the sale and avoid taxes and potential penalties.

4- Improvement Exchange

Let’s say you’ve identified a replacement property but it needs work. You can truck along with one of the first two options, or you can maximize your strategy by using an improvement exchange. This exchange, also known as a construction exchange, allows you to improve the replacement property by using the exchanged equity from the first.

This method, even more than the ones before, requires finesse. First, you must spend the entire exchanged equity on completed improvements or down payment by the last of your 180 allowed days. You must also have this property identified within the 45 day period required above, and the replacement must be of equal or greater value when deeded to you. Before you can take the title back from the qualified intermediary, all improvements must be finished.

This probably doesn’t scare YOU. If you’ve ever done a fix and flip, you know that time is of the essence for repairs, so 180 days should be nothing to you, especially if you’ve gone through any training with The Lee Arnold System of Real Estate. If you’re trained right on how to manage these projects, this is a valid option.


If you need to get plugged into a quality education that will prepare you for project management, help you understand and acquire private money loans, show you what to look for and more, then you’ve got to start somewhere. With so many options, why not consider one that has your best interest at heart?

You need a place to start. Go to FundingTour.com to learn more.


Instead of cashing out and paying taxes, trade without the obligation and you can maximize your portfolio. But just because you know the four main types, do jump in with both feet just yet! Next week, we’ll talk about the rules you need to know to make this exchange as smooth and profitable as possible.

Join us next time for more, but you don’t have to wait to talk to a loan officer about your deal! If you have a house under contract that you need a private money loan on, you came to the right place. As a full-service Private Money lender for real estate investors, we do most of the leg-work for you, while you build up your real estate portfolio and cash-flow all your deals.

To Your Success;

Lee A. Arnold

CEO

The Lee Arnold System of Real Estate Investing

Follow me on Twitter: @CogoCapital  and @LeeArnoldSystem 

Have a deal? Visit us at www.cogocapital.com to fill out your fast and easy quote. Want to learn more about COGO first? CLICK HERE to get to know all the ins and out!


Have a deal under contract that you would like a quote on? Let us know. You can fill out a quick questionnaire at CogoCapital.com to receive a rate quote via email or you can call us anytime at (800) 747-1104 to talk to a loan officer. With millions deployed and millions to deploy, we want you to get the capital you need for your real estate investing.


Image result for trustpilot 5 stars

Timothy just left a new 5-star review of Lee Arnold System of Real Estate Investing:

I would highly recommend this company to all first time investors that I come across that seek funding. I enjoyed the entire team that was out in Milwaukee to train those of us in attendance.

Gary Meyers and Jarrod done a wonderful job during this weekend. I really enjoyed the bus tour to the properties in South Milwaukee. Secondly, it’s a faith based company and this is very rare in the business and I see that God has blessed and will continue to bless those around Lee Arnold.

This is an education company as far as Real estate, training and funding. I wish I had met these guys a little earlier before I actually invested with the other companies which I won’t name. I am currently in debt to the tune of $100K due to the other companies. If I known what I know now, I could have bought 10 homes and be on my way to financial freedom.

I would like to thank the entire team that was in Milwaukee for the weekend for a wonderful experience and I hope that we meet again.

 


Check out our CATALOG now, or speak with a Business Development Consultant today by calling (800) 473-6051.

Pros of Your SDA

- - Entrepreneurship, Wealth

Pros of Your SDA

Self-Directed IRAs can be awesome.

 

If you’re familiar with what it is, you’re probably saying, “No kidding, Lee. I love using my SDA to buy real estate.”

Well, we have that in common.

But if you aren’t familiar with a Self-Directed IRA, it’s an IRA where you’re allowed to invest in nontraditional assets like real estate, private notes, and more (like private stock in companies and precious metals…anything you can think of that isn’t prohibited by the IRS). The Securities and Exchange Commission defines a self-directed IRA as “an IRA held by a trustee or custodian that permits investment in a broader set of assets than is permitted by most IRA custodians.”

And SDA can be a great tool to set you up for retirement and real estate success. Let’s talk about how you can make the most out of your SDA.

 

PROS

1. It’s easy to set one up. Other than a few forms to file and a copy of your driver’s license (depending on the requirements of your custodian), you’re basically good to go.

 

 2. They are easy to fund. You can make a one-time contribution or set it upas an automatic investment You can even use an employer’s pension plan from which to transfer money directly, or you can roll the money in. Be sure to deposit the money within the 60-day time frame required by federal rules. Otherwise, you can face penalties and taxes.

Any qualified retirement account can be rolled over into a self-directed IRA. 401k from an old company, thrift savings plan, 403B, 457 plan, any qualifying retirement plan; they’re all permissible to transfer into an SDA.

3. You get to be creative. You can’t invest in life insurance or No rugs, artwork, stamps, etc. You also can’t do any business with disqualified parties or use your SDA to invest in real estate that you will personally use. Otherwise, you’re are free to be creative. Having a self-directed IRAs allow you to leverage your expertise into your investments. So guess what? If you’re killing it in the real estate investing arena, you could be using an SDA to increase your advantages.

4. It can be lucrative. You have the opportunity to make high returns on investing and lending money. It isn’t always the case, but the opportunity is out there. Again, if you’re already making great real estate decisions, this can be an added bonus to all that profit.

5. You don’t owe the experts. In many cases, many IRA custodians don’t charge commission. When you manage your account yourself, my institutions won’t charge you a percentage of the earnings. Most SDA have flat annual fees and small fees based on your number of transactions but don’t charge custodial fees or percentages of your assets.

Check with your local IRA custodian for their guidelines. SDAs can incur higher administrative costs (due to an increased level of administrative oversight and required paperwork required). Those costs can often get passed along to you.

6. You get to be in charge. I don’t know about you, but I’m not content letting others make choices when it comes to my investing. Call me old school, but I don’t want my success in the hands of anyone else. I became an expert in my field to keep by making bold moves, and I continue to make them, proving to you that if I can walk the talk, you can do the same. Take charge of your finances, but first, take charge of your education. I became a pro in real estate investing first.

If you’re feeling lost without guidance, let us help you get back on track to your investing success.


Call (800) 473-6051 to speak with a Business Development Consultant today about the training you need to succeed.


Like most things, your five pros also come with a few cons.

There can be more pressure on you as a client. You have to find your own investments as your IRA custodian won’t offer investment advice on an SDA. However, with proper training, coaching, and council, you won’t miss the investment advice you got on your old IRA.

Also, just like cash, when you use money from your self-directed IRA for investments, that money isn’t insured. If you’re even on the fence about getting an education to go with using your SDA for investing

You’ll have to do more research and due diligence, but you’ll be able to perform the legwork on any piece of real estate you might invest in. It’s what we teach! Get plugged into the right training with LAS, and we’ll help! You can also speak with your CPA and tax attorney about how to better use SDAs for your investing benefit.

Be aware of the rules

You may get to be creative with a self-directed IRA, but that doesn’t mean you get to do whatever you want. Make yourself acquainted with the rules, especially at your custodian of choice. Understand each fee and why it’s being charged, know what you’re allowed to do, and avoid anything that might be considered prohibited.

It’s wise to also consult your CPA and tax attorney before making substantial changes to your portfolio.

Know Who to Go To

The majority of IRA custodians and trustees come from banks, insurance companies, mutual companies, and brokerage firms. These firms invest in the marketable securities they offer or sell; stocks, bonds, CDs, annuities, and mutual funds among the winners here. That means they may advise you against opening an SDA because they make little to no money when you invest in an SDA.

Do your research to find an approved institution so you can invest in the assets you prefer.

However you invest, invest smart. If you need help, we’re here to guide you.

To Your Success;

Lee A. Arnold

CEO

The Lee Arnold System of Real Estate Investing

Follow me on Twitter: @CogoCapital  and @LeeArnoldSystem 

Have a deal? Visit us at www.cogocapital.com to fill out your fast and easy quote. Want to learn more about COGO first? CLICK HERE to get to know all the ins and out!

 

P.S. This brand new book and DVD teaches
you how to not only find qualified borrowers
and complete the necessary due diligence to
uncover hidden gems, but also BE the stellar
borrower so you can get all the money YOU
NEED
 to buy all the profitable properties YOU
WANT!

FINALLY no more guess-work on how to lend or
borrow private money again!!!

Get Your Copy Today:  www.orderleearnold.com/truewealth

Slam Dunk of a First Year

- - Uncategorized

Slam Dunk of a First Year

Testimony of Dmitriy and Gaby Dyachuk

 

Dmitriy and Gaby’s journey with flipping houses starts as simple and honest as anyone’s: they attended a Funding Tour. Having shown interest in studying real estate investing, the couple committed to spending a weekend on their new idea. From gobbling up all the information they could in the classroom to taking full advantage of the bus tour with active participation, Dmitriy and Gaby knew this was for them.

Yes, their story is both incredible and inspiring, but it’s also simple. As a software testing engineer by trade, Dmitriy spent his days pouring into his career and together, they grew their young family by adding two little ones; now three years old and six months. With the joy of this young life and projected growth, they still wanted to accomplish something together and set their family up for the best future possible.

This is where they allowed themselves to dream and made a choice to spend a weekend learning from some real estate investing experts on their interested field. They may not have known it at the time, but the Funding Tour wouldn’t just be a fun event to attend and network at; it would be the pivot point for a cosmic shift in their financial landscape.

I love finding success stories in my inbox.

I do what I do—teaching in-depth and up-to-date real estate investing methods—for the stories. I want to hear them all, especially the ones that surprise and inspire. (If you have a success story for me, don’t be shy!) So, when I found this gem in my inbox, my passions reignited.

I hope you feel as empowered and enthused as I do reading this:


(paraphrased)

“Good Morning Lee,

I trust you are doing incredible! I have been looking forward to sending you this email today. You asked for my story, and I was going to send it after purchasing the property, but as time went on I thought I would rather wait a little more to send you also the other half of the story… after selling that property.

The house on Arbutus St was one of the three properties I had under contract. I was super excited to have my first three deals and was determined to close on all three properties. I got Arbutus deal from a local investor couple. In my due diligence, I confirmed that the numbers would work and ARV was 165k.

During the financing process, the appraisal came in at 115k, which I knew was absolutely wrong. But that changed the financing numbers, and I needed to come up with additional funds to be able to close on this deal and the third one.

Being a member of Lee’s Inner Circle and not knowing what to do at this point, I reached out to you for help. You quickly responded to my call and thought of a solution to close on this deal.

I talked to the seller about it, but the seller at first didn’t agree. So you took it a step further and reached out to the seller personally on my behalf. Lee, you used your expertise to negotiate with the seller to hold a second mortgage in this transaction! I am just so thankful that you and the sellers had faith in me to help me put this transaction together. And having invested in being part of Lee’s Inner Circle was one of the best decisions I’ve ever made. You enabled me to have such a tremendous resource. It has been a privilege to see you step in and have my back in this transaction!

Lee, my wife and I are so thankful for putting your trust in us and going over and beyond to assist us in closing these transactions. We are so excited that we didn’t lose the opportunity to have our first successful payday of about 53,000!

Lee, once again thank you so much! I am so excited to do more business with you and your company! We are about to close on our 4th property in about a week!

Thank you, and God bless you and your family!

Dmitriy and Gaby Dyachuk”


THEIR STORY

What started as a vested interest in investing quickly become a hot market for the Dyachuk’s. They knew they needed more than just a three-day intensive crash course, so they attended the Lee Arnold System of Real Estate’s Regional Rehab Clinic. Then, committed to their careers by becoming Lee’s Inner Circle members.

As stated in their letter above, the Dyachuk’s nearly lost the first property they had under contract because of the appraisal and funding. But, because they made an active commitment to their investing careers by becoming Lee’s Inner Circle members, they had expert advice at their fingertips to save the transaction. (And boy, are they glad they did when the payoff for that one house was about $53,000.)

They then put two more houses under contract and got funding from Cogo Capital for all three.

Having used extra funds to close on Arbutus property, Dmitriy and Gaby were tight closing on their third deal. But once again, they asked for help, and we considered all the details. With help, they structured a unique solution which worked out the timing of each project so that the funding would work.

Dmitriy and Gaby had some delays on the Arbutus project, which stayed on budget at $55k in repairs, and like many other first-time investors, it didn’t go very smooth. First, the contractor was doing big commercial projects simultaneously, and because Dmitriy visited the property nearly every day, he quickly realized nothing was getting done. The contractor’s commercial projects were clearly taking priority, and Dmitriy knew the delay would cost them money.

Because Dmitriy took the Cogo approach and wasn’t paying for work until it was complete, they didn’t get paid until the work was done, so… they didn’t get paid. One of the contractors’ former employees had his license. So, he took on the project with a helper and made some headway. But, the project it was too much for them alone and they went over schedule. What should’ve taken only three weeks took nine. But otherwise, the surprises came at a minimum.

The Dyachuk’s did an open house as soon as the job was done and got an offer the same day for $190,000 (remember how it didn’t appraise that high?) and they accepted it the next day, closing 40 days later. Their first project sold just over 6 months after closing on the purchase.

“When we sold Arbutus,” Dmitriy said, “we met with the seller after closing to drop off their check for the second mortgage,” (part of the creative deal they worked out). “We also have them a thank you card and a gift card to their favorite restaurant. Shortly after, they responded via email saying they have another property and are wondering if I’m interested. They even said if I needed them to hold a small second mortgage again they would consider it too!”

Another of his three projects was gutted to the studs at the same time, so it took longer. It also had some fun problems to sort out—like needing to replace the utilities at the street level. The first contractor was supposed to work on this one too, so they both fell behind. His one-man show wasn’t going to get them both done, so Dmitriy found a new contractor to keep progress flowing. They anticipate making about $30,000 net profit on that project. And, because they were able to take my advice to make all three projects happen, they still have a third to profit on.

WHAT’S NEXT?

The Dyachuk’s recently returned from Lien Abatement Specialist Certification and can’t wait to get back to the office in November for Master Lien Abatement Specialist training.

They still have two houses currently in rehab; one about to go on market and the other is mid-project. They just bought house #4 about a month ago and property #5 is under contract.

Dmitriy and Gaby believe in building up; building themselves up, building each other up, building their business up. They understand the importance of having an ongoing learning process and have no intentions of slowing down.

Dmitriy had nothing but great things to say about his experience with Cogo, and when asked what he likes best about working with The Lee Arnold System of Real Estate, he said this:

“I love that Lee uses case studies, which makes my learning more practical. I knew I was in the right system when we went on the bus tour during the Funding Tour. This gave me the hands-on knowledge and showed us what to look for.

“We’ve loved being a part of the Lee Arnold community and love being at the office. We don’t just learn to make offers, Lee helps us pay attention to every aspect of our business and guides us on deals—it isn’t just theory! It’s also amazing how Lee provides guarantees* with the in-depth training. The tough part for us was coming up with the money to invest, but knowing we could get it all back made it a no-brainer. We can learn from the best, have all the guidance we need, and make the money back so fast. But, more than that, we got an education from the master.

“They’re an incredible entrepreneurial company, and we’ve learned so much. If you want to be successful, you have to continue learning new things and put in the effort to be at the master level. From there, sky’s the limit!”

Thanks, Dmitriy and Gaby Dyachuk for sharing your story and lending your inspiration to those reading. If you have any questions about the training they received, call a Business Development Consultant today at  (800) 473-6051.

To Your Success;

Lee A. Arnold

CEO

The Lee Arnold System of Real Estate Investing

Follow me on Twitter: @CogoCapital  and @LeeArnoldSystem 

Have a deal? Visit us at www.cogocapital.com to fill out your fast and easy quote. Want to learn more about COGO first? CLICK HERE to get to know all the ins and out!

*Check with your Business Development Consultant on whether you qualify for a money back guarantee in YOUR program!  (800) 473-6051


To help distressed homeowners on a new level, consider training in the field of Lien Abatement.

This overlooked and little known investment acquisition strategy can result in a windfall for you and a better quality of life for the neighborhood in which the strategy is deployed.

Learn the secrets to securing the right to turn garbage into gold by following this strategy and becoming a Certified Lien Abatement Specialist.

Click HERE to learn more about getting properties for cents on the dollar!

Out-Earn Your Competition with One Little Step

- - Communication, Personal Growth

Out-Earn Your Competition with One Little Step

There are other investors in your area, no matter where you live. Do you want them to rise to the top, or would YOU like that position?…

If you’re more competitive than most, you are aware of their names, their jobs, and their earning potential. That’s okay, especially if it stirs your motivation or gives you a baseline to strive for.

But what can you do right now to pass your competition? How can you get the house first, make more profit, secure your name in the market?

Want to set yourself apart from other investors? Here’s one simple step that will skyrocket you closer to the top…

Follow up with people.

Yup. Those four little words will help you get there! Here’s how:

 

1. Know how often and how soon after making contact.

 

A good rule is to make contact with someone within three days of meeting them. From there, opinions vary. But you shouldn’t stop with one left voicemail.

2. Know who to follow up with.

 

Ideal clients are best, someone who has what you want (such as a distressed home owner). But actually, you should follow up with most people you come in contact with. Just because you’re always on your best behavior and trying to make the highest first impression possible doesn’t mean others are. If a potential brokering client seemed crabby when you met them, they may have just been having a bad day. Don’t miss out on potential clients on first impressions alone.

From there, get to know who you’re dealing with, so you can direct the conversation accordingly.

3. Keep track of when you follow up with people.

 

If you need a calendar or schedule just to track follow up times and appointments, then get on it. If you’re following my Rule of 56, you’re making a lot of connections. You should need a calendar to keep track of everyone, or you might not be as involved as you think.

4. Be flexible until you find the right approach.

 

Maybe you need to pick up the phone. Maybe email works better for some. With our ever-changing age of technology, some might prefer a text or a Linkedin invite. I always call when I can, but if you can’t get a response, try another method.

5. Know when to stop.

 

Have you called and emailed someone 10 times in a month and they haven’t made any attempt to return your messages? The chances are good that the client isn’t interested and your time is better spent with someone else. Not every connection you make will turn into a business relationship no matter how much or how well you follow up. Although following up will increase your business, sometimes it just doesn’t work.


To increase your chances of the follow-up working to your favor, keep these tips in mind to maximize your return, and make this process work for you:

1. Be authentic and work on building the relationship.

 

Authenticity and relationships go hand-in-hand. Get a little personal, too. What do they want? How can you help? What is their current situation? What are their family’s needs?

Not only will this help build relationships, but you’ll also find out information that is helpful when purchasing a house, building a client list for brokering, or selling llamas. Keep in mind, people don’t often remember YOU, but they will remember how you made them feel. Go into a follow-up conversation with an attitude, and they’ll remember. If you aren’t sincere when you follow up, people will sense it and treat you accordingly. Is that how you want to build your business?

2. Care about the call.

 

Don’t call your contacts when you’re in a rush or overly nervous. Take time to think about what you’re going to say, what the purpose of the call is, and the points you need to make, then be organized with your thoughts and give them the time necessary to have a conversation. When you are consistent, confident, and respectful, people can tell, and you will attract your ideal clients.

3. Don’t psych yourself out.

 

Ever person on earth puts on their pants one leg at a time. Even if you have a “high profile” client, they’re still human with wants, needs, and problems that you are helping to solve. You don’t have to become someone different to make people care about what you’re doing. Instead, you should strive to be the best version of you and be consistent. The person you are before you make a sale should be the person you are after. The person you are when you meet someone should be the person you are when you follow up.


If you know that you should follow up, but keep putting it off, this could be an indication that you’re associating the process with emotions like fear, nervousness, or lack of self-confidence. This is normal, but don’t stay there.

So, if you find that you’re always “too busy” to follow up with people, stop and assess what else might be stopping you, and take the time to tackle that problem. If you’re “too busy” to follow up, you’re “too busy” to be successful, and that’s a real issue.

Following up with people is an important part of your business. If you’re not doing it, you’re going to fall behind. It’s easier and cheaper to keep the contacts and clients you have than to continue building new ones. You might as well do it and double or even triple your success in business.

To Your Success;

Lee A. Arnold

CEO

The Lee Arnold System of Real Estate Investing

Follow me on Twitter: @CogoCapital  and @LeeArnoldSystem 

Have a deal? Visit us at www.cogocapital.com to fill out your fast and easy quote. Want to learn more about COGO first? CLICK HERE to get to know all the ins and out!


P.S. This brand new book and DVD teaches
you how to not only find qualified borrowers
and complete the necessary due diligence to
uncover hidden gems, but also BE the stellar
borrower so you can get all the money YOU
NEED
 to buy all the profitable properties YOU
WANT!

FINALLY no more guess-work on how to lend or
borrow private money again!!!

Get Your Copy Today:  www.orderleearnold.com/truewealth

From Distressed to Dreaming

You Can Help Take a Homeowner from Distressed to Dreaming

People lose their homes.

It’s an awful experience for most, and the situation comes with a myriad of emotions. Although you can help turn the situation into a win-win experience, if you don’t know how to properly tackle the sensitivity of the topic, you aren’t going to help anyone. Rather than shying away from experiences that can be emotional and uncomfortable, lean in.

Understanding the basics of an Equity Deal is a good place to start. To further your understanding of these processes, you need to understand the etiquette necessary when talking to a homeowner in trouble.

Put yourself in their shoes. Many owners who are on the brink of losing their homes are emotional, desperate, and/or in denial. You must be aware of their position and ready to step forward with confidence.

Tips for Working with Troubled Homeowners:

– First, you HAVE to be respectful. Smile and be courteous. Don’t present yourself as a money-hungry investor unless you want a door shut in your face. You are not doing them a favor, and you don’t have the upper hand. This is a win-win situation. If the owner feels you’re taking advantage of their plight, you won’t build any trust.

– Assure them that you will help if they’ll let you. You need to know what you’re doing (If you don’t, let us help you learn CLICK HERE to learn more about events coming up where you can learn the basics). Appearing as a novice investor will not gain trust. Practice with a friend or spouse if you need to, and deliver your polished pitch with professionalism.


– Explain that foreclosure is inevitable, and if they don’t take action now, they will lose their home at auction. But don’t ever threaten or say anything to purposely upset them.

– If they want to tell you their “sad story,” as many will, listen to them. You will likely learn a great deal about the history of the home and the loans associated.

– Be compassionate, sympathetic, and understanding of their situation. There’s no reason to be rude or disrespectful, ever.

– Don’t force the issue. If they aren’t ready or if you didn’t explain things well, leave and try another time.

– Dress business casual. You want them to feel relaxed around you, but know you are competent.


Now that you have some pointers, marry them with this simple process for a winning formula.

1. Contact the homeowner (or respond if they contact you). We’ve talked about how to do this before, but if you still need help getting started, PLUG.

2. Schedule an appointment to discuss in person how you can help, determining their needs and getting the appropriate paperwork signed. If the initial conversation happens on the phone, that’s fine, but express the importance of meeting face-to-face because you need them to sign…

3. Paperwork: You must get a homeowner to sign the proper documentation to begin working with them (each state and lender requires different paperwork, so do your research). Be sure to know what is needed and have it ready to be filled out.

a. Authorization letter: This lender-required document is vital in order to begin working together, stating specifically whom they may release any information to about the loan.

b. Purchase and Sales Agreement: This creates the ability to purchase the property IF the bank accepts the offer, allowing you to be the sole investor with whom the homeowner and bank can do business with. They can be at ease, however, because this document is only valid when the lender agrees to the purchase price or if you offer more than the homeowner owes.

Assure the homeowner that they are not signing their life away and should be comfortable with the process! This is simply a step they must take to get the ball rolling, but for you, it is the goal of the meeting.


To help distressed homeowners on a new level, consider training in the field of Lien Abatement.

This overlooked and little known investment acquisition strategy can result in a windfall for you and a better quality of life for the neighborhood in which the strategy is deployed.

Learn the secrets to securing the right to turn garbage into gold by following this strategy and becoming a Certified Lien Abatement Specialist.

Click HERE to learn more about getting properties for cents on the dollar!


To Your Success;

Lee A. Arnold

CEO

The Lee Arnold System of Real Estate Investing

To challenge yourself personally and in your business, CLICK HERE.

Follow me on Twitter: @CogoCapital  and @LeeArnoldSystem 

Have a deal? Visit us at www.cogocapital.com to fill out your fast and easy quote. Want to learn more about COGO first? CLICK HERE to get to know all the ins and out!

Communicate to Stop Wasting Time and Money

Communicate to Stop Wasting Time and Money

6 Keys to Contractor Success

There is no question. If you aren’t leading your contractors, they are going to “lead” you. The #1 snag investors experience with house flipping has to do with contractors in one way or another.

If you invest in a property that needs work, you are likely going to be involved with a contractor in one or more of the following areas:

The relationships between investor and contractor is vital to the success of any project, but can become trying when any of the following problems creep in:

  • Lack of communication
  • Poor communication
  • No communication
  • Misunderstood communication
  • Conveniently “forgotten” communication.

(Notice a trend?)

You must to be in continual and efficient communication with your contractors. No news is bad news.

Key #1 – Communicate with Your Contractor.

You need to know what is happening, when it’s happening, what the costs and projections are, what the deadlines are, how closely the schedule is being adhered to, etc. If you don’t know, they don’t know, so start the conversation.

Key #2 – Be Seen by Your Contractor.

Be a constant face on the job site. Show the contractor that you are hands on, that you will be there when you say you will and pop in unannounced to keep them on the job.

Key #3 – Don’t Bulldoze.

If you don’t want to get bulldozed by a contractor, return the favor and maintain a professional relationship. You can assert your stance as a professional AND be flexible to their advice regarding the project. That doesn’t mean you take every suggestion they make, but you should’ve accounted for appropriate changes in the budget and schedule when applicable.

Key #4 – Be Honest.

This is especially necessary to set up at the beginning! For instance, if you’re going to use a draw schedule, make sure your contractor understands up front how it’s going to work, when they will receive draws, how much, and what you are expecting. Then, don’t deviate from your word once the work begins. Don’t promise to give more than you can, and don’t give less unjustifiably. Remember, this relationship goes both ways.

Key #5 – Make Sure They Complete the Job!

There is little you can do to persuade a crooked contractor to finish a job—and you probably don’t want them to! If you’ve had a contractor abandon a job, your best move is to hire someone reliable to finish the job.

But, that’s not what I’m talking about. I’ve seen people make the mistake of paying the contractors when they’re “done” without doing a final punch list.

This is your job.

Do a final walkthrough with a roll of blue tape and a notepad. Mark up things like chipped paint, unhung towel bars, poorly done calking, or missing trim. Even the best contractors miss things, so get in there, create a punch list, and get the items knocked out as quickly as possible. Don’t pay the contractor’s final payment until this is all done!

Key #6 – Incentivize.

Time is money.

You know this. I know this. Contractors know this.

If you want a job done on or ahead of schedule, offer them an incentive.

It is possible to build lasting, cooperative, mutually beneficial relationships with contractors that last for the duration of your investing career. Don’t get discouraged if you find a dud. Network with other investors and with multiple contractors. Connect with a mentor or coach when things get sticky. And, most importantly, keep going!


If you know what you’re doing, flipping a property can be an amazing experience that puts MONEY in your pocket.

How would it feel to know exactly how to find, fund, fix, and flip a property using the very same methods Lee Arnold has used to become a real estate millionaire? Would it take the guesswork out if you could know these steps and the key to flipping houses with no money down?

If you don’t want to go into a project blindly (and why would you skip out on the potential to make more money and repeat the process for a long and lucrative career?), then keep reading for a limited offer on how you can become certified as a rehab specialist at a special discounted rate today.

TO LEARN MORE ABOUT SAVING ON THIS OPPORTUNITY TO BECOME A CERTIFIED REHABBER, CLICK HERE.

To Your Success;

Lee A. Arnold

CEO

The Lee Arnold System of Real Estate Investing

If you want to learn more about working with contractors, finding the right deal, writing offers, and so much more, join me for a FUNDING TOURRegister to attend an upcoming Funding Tour and immediately receive a $250,000 pre-approval letter for buying real estate investment properties!

If you’re interested in learning more about the education you can receive with the Lee Arnold System of Real Estate, call us at 800-533-1622. If you have a deal and would like to get a quote from a private money, visit cogocapital.com


South Carolina Borrower Made a $10,000.00 Profit on her First Flip!

How to Grow Your Greatest Asset

How to Grow Your Greatest Asset
If You Want Long-term Wealth, Do THIS…

 

How you spend your time shows me exactly what you’re committed to.

I have a simple formula for determining your level of success at a glance. With just two questions, I can predict your future income with near certainty:

  • How much time every day do you spend working on YOU?

and…

  • How much time every day do you spend working on your dream?

 

If I were to tell you that what you have now is only going to compound over time, would you believe it?

What is “Compound Interest?” For the specific definition, let’s turn to our friends over at Investopia:

“Compounding typically refers to the increasing value of an asset due to the interest earned on both a principal and accumulated interest. This phenomenon, which is a direct realization of the time value of money (TMV) concept, is also known as compound interest. Compound interest works on both assets and liabilities. While compounding boosts the value of an asset more rapidly, it can also increase the amount of money owed on a loan, as interest accumulates on the unpaid principal and previous interest charges.

(Read more at: investopia.com)

So…

If what you’re going to invest in creates interest—either as an asset or liability—then it’s going to compound over time.

And…

If you get more of back on a large asset because it has higher interest, then you should boost the value of your asset to grow it more rapidly.

Then…

It’s safe to logically assume that you should take your largest asset and pour into it with passionate vigor, right?

But…

What is your greatest asset at your present moment?

It’s you.

(Hint: it’s always you.)

Nothing will propel you toward your goals—be they financial, physical, relational, or other—than working on YOU.

Income seldom exceeds personal development.” ―Jim Rohn


Maybe you’ve been struggling to push past a plateau in your investing career.

Perhaps you’ve been hitting road blocks, unable to find distressed properties or get any of your offers accepted and under contract.

Or, you keep facing the same problem on repeat, hiring contractors who consistently go over budget and beyond the agreed schedule, causing you delays and frustration.

Whatever you’re dealing with, if you bring the problem back to the foundation of your investing career—youthen you can fix the problem. You can adjust your level of education to match your goals. You can understand where your fears stem from and how to conquer them, you can build a team, and you can get in the current of productivity which will lead you directly toward prosperous opportunities.


For more on Team Building, <<CLICK HERE>>
We’ll show you how to build your investing dream team, no matter which path you’ve chosen to focus on.
Don’t do it alone; help is an eager worker away.


“You cannot dream yourself into a character;
you must hammer and forge yourself one.”
Henry David Thoreau


 

To dig into where you need help with investing in your greatest asset…

First, answer these questions honestly:

  1. In the last three months, how many books have you read?
  2. In the last year, what new skills have you acquired?
  3. What financial investments and time investments have you made into bettering yourself?

Second, evaluate your dead time.

  1. When you get home from work, do you “punch out” mentally, too?
  2. How much entertainment do you consume every week (tv, movies, social media, partying, video games, random toiling that doesn’t produce much)?
  3. How many times a week do you say, “I’ll do that later” or “I wish I could learn something new, but I just don’t have any time?”

We want to believe we are working “so hard” at our goals. But often, that means we are merely pushing the boundaries a little. Arriving to work 15 minutes early or putting in an extra bird dog session over the weekend to discover distressed homes in your neighborhood. All these little steps will bring you closer to your goal… eventually.

But wouldn’t you rather get in the current of “workflow,” watching results populate all around you because you’re moving so swiftly and effortlessly toward your goals? You can do it the hard way, but don’t you want to do it the easier, better way?

Investing in yourself will never go out of style, never be overkill, and never be “for nothing.” I still invest in myself every year, all the greatest people do.

So, start with your education. Invest in your working knowledge and form a new skill. Then, push yourself and continue to invest deeply to get deeper results. Don’t just read free blogs and print out quote cards. Don’t just invest where it’s easy, but risk it all on yourself and go “all in.”

“Personal development is a major time-saver. The better you become, the less time it takes you to achieve your goals.” ―Brian Tracy

To Your Success;

Lee A. Arnold

CEO

The Lee Arnold System of Real Estate Investing

Follow me on Twitter: @CogoCapital and @LeeArnoldSystem

Have a deal under contract that you would like a quote on? Let us know. You can fill out a quick questionnaire at CogoCapital.com to receive a rate quote via email or you can call us anytime at (800) 747-1104 to talk to a loan officer. With millions deployed and millions to deploy, we want you to get the capital you need for your real estate investing.


Image result for trustpilot 5 stars

Timothy just left a new 5-star review of Lee Arnold System of Real Estate Investing:

I would highly recommend this company to all first time investors that I come across that seek funding. I enjoyed the entire team that was out in Milwaukee to train those of us in attendance.

Gary Meyers and Jarrod done a wonderful job during this weekend. I really enjoyed the bus tour to the properties in South Milwaukee. Secondly, it’s a faith based company and this is very rare in the business and I see that God has blessed and will continue to bless those around Lee Arnold.

This is an education company as far as Real estate, training and funding. I wish I had met these guys a little earlier before I actually invested with the other companies which I won’t name. I am currently in debt to the tune of $100K due to the other companies. If I known what I know now, I could have bought 10 homes and be on my way to financial freedom.

I would like to thank the entire team that was in Milwaukee for the weekend for a wonderful experience and I hope that we meet again.

 


Download your PDF here: RCP or visit https://leearnoldsystem.com/lp/catalog/ to learn about all of our certifications. You can bring your questions to a Business Development Consultant today by calling (800) 473-6051.


The Secret to Monetizing Every Time

 

The Secret to Monetizing Every Time

Flipping a house can be fun and profitable.

It can also be a frustrating nightmare if you don’t know what you’re doing.

Maybe you’ve seen one of the many TV shows on the subject, and in the span of an hour witnessed an entire property rehab, which drives up the property value, puts cash in the flipper’s pocket, and all they had to do was overcome 10 minutes worth of problems (usually a broken pool pump or another seemingly innocuous issue).

Now YOU decide to try it, and so you find a house on the MLS that seems cheap. Now the gears are really turning in your mind. You’re going to try this thing! Except then you get into it and realize it’s NOTHING like you see on TV.

Or…

You’ve seen the shows, and know a few people who’ve successfully flipped a property. Maybe you’ve even jumped on a webinar to soak up some extra knowledge, watched a few YouTube videos, and you’re ready to go. Good for you!

Only, you get into a project, quickly realizing you’re in WAY over your head. You’ll be lucky to dump the property without losing money, let alone MAKE any.

Folks. It doesn’t have to be like this!

If you know what you’re doing, flipping a property can be an amazing experience that puts money IN your pocket.

How would it feel to know exactly how to find, fund, fix, and flip a property using the very same methods Lee Arnold has used to become a real estate millionaire? Would it take the guesswork out if you could know these steps and the key to flipping houses with no money down?

If you don’t want to go into a project blindly (and why would you skip out on the potential to make more money and repeat the process for a long and lucrative career?), then keep reading for a limited offer on how you can become certified as a rehab specialist at a special discounted rate today.



This Tallahassee junker was turned into an ABSOLUTE head-turner, and the rehabber walked away with a HUGE profit: $105,000!!!

What she had under her belt going into this rehab? CERTIFICATION!

We want to get you to the next Certified Rehabber event on September 13 – 16th in Kansas City, Missouri so you can begin earning big, fat fix and flip fees too!

Learn how to grab your Certification today (PSST: We’re offering $1,000 off)
Go to: www.leearnoldsystem.com/1000off

This is the perfect chance to get several wholesale and fix and flip deals stocked into your pipeline THIS YEAR. That way the checks keep coming in, one after the other, after the other…


Q- Is it required to be a Certified Rehabber to qualify for a Cogo Capital loan?

A- No. But being certified as a rehab specialist ensures that you can take a project all the way through to completion, mastering the process and dialing into the details using proven methods used by Lee Arnold himself.

Q- I’ve done a project before, and it was successful. Can I still benefit from this certification?

A- Have you ever take a college-level computer programming course? If you used what you learned then today, would it be the most current, efficient way to program software? Point is, with his finger on the pulse, Lee Arnold and the Lee Arnold Team walks the walk every day by flipping dozens of properties a year. Learn from those who constantly advance, continually improve, and always hone in on what works. Even if you’ve done this before, there’s a chance you’ve missed out on PROFIT. If you don’t advance your education, you could miss out on even more.

Q- What’s the cost?

A- First, we’re offering $1,000 off for a limited time. Because this blog will exist long after the special is over, please note that you may not be able to receive the discount again. So HURRY to the link below to see if you can still benefit from this deal!

You can’t afford to miss an event that pays for itself after you complete your first fix and flip deal on time and under budget!

IMPORTANT NOTE:
We also offer you a Success Deposit! When you fix and flip your first deal using Cogo Capital money, bring us pictures and a testimonial, as well as a copy of the check, and you’ll get your ENTIRE investment back!

There’s nothing to lose and everything to gain, so <<CLICK HERE>> NOW to learn more and get started!

 

 

HERE’S THAT LINK AGAIN! <<CLICK HERE>> TO LEARN MORE OR CALL (800) 473-6051

 

Goals That Get You More

Goals That Get You More

 

No, you didn’t accidentally click on and old issue from January. Yes, we’re talking goals in August and September.

For anyone with school-age kids, this time of year can be all about preparation. You’ve spent your budget (and then some) on backpacks and sneakers, amping up your offspring to have the needed confidence to enter and tackle the upcoming semester with a steady stream of tenacity. You may already be sitting on the sidelines of pre-season football games, convincing your kids they can be champions.

What are you doing for your investing business?

If you aren’t setting new goals, obtaining new resources, and setting out a plan to trek a new path toward greatness, it’s easy to stop growing and become stagnant. You wouldn’t let your children stop learning and trying new things until they got it right, would you? Don’t stop pushing yourself, either.

Sometimes, like another child, we need to stay on top of our investment growth if we want to push and inspire ourselves and our clients toward greatness. If you haven’t made any goals since the new year, now is the time to set a few.

Maybe you want to invest in another duplex or 4-plex, but you don’t have 20% down for a traditional mortgage.

Perhaps you’re ready to try flipping a property to resell for profit, but you haven’t spent time looking at your financing options.

Or maybe you’ve made property acquisition goals for 2018 that you haven’t followed through on but would still like to.

With more than a quarter of the year left, and with the boom of summer behind us, there’s plenty of time to finish 2018 with a stronger real estate portfolio. With plenty of tools and resources to get you started, www.cogocapital.com can be your very own “back to school” resource for private money lending.


Don’t just stop at investing. 

If you need funding to expand your real estate portfolio and do those wholesale and flip projects you’ve had on your schedule since the beginning of the year, we’ve got you covered. But if you aren’t also expanding your skill set, you may be missing out on a growth opportunity that will yield you more profit and better opportunities in the future.

 

When was the last time you learned a new skill?

 

Bill Gates was once asked, “If you could have any one superpower, what would it be and why?”

His answer?

“Being able to read super fast.”

Of all the things he could have said, he chose to answer the superfluous question by addressing his reading ability. Why? Because he understands the principle we’re going to discuss today; the principle that each time you add a skill to your roster, you double your chances for success.

The more skills you acquire, the more times you increase your likelihood of success.

 

Not all skills are created equal and are subjective to the work you do. Learning to toss the perfect pizza dough won’t do you much good in the real estate investment field (unless you pay your contractors in pepperoni slices). But I want to share seven universally needed skills that will not only double your chances at success, they will pay off for as long as you live.


Here are 7 skills that might be challenging to collect but will last your whole life:

 

1. Being honest with yourself.

Mark Cuban, owner of the NBA’s Dallas Mavericks, co-owner of 2929 Entertainment and chairman of the AXS TV, and one of the main “shark” investors on the ABC reality television series Shark Tank said this;

“Know was you know and know what you don’t know and be honest about both.”

Too many people lie to themselves about their abilities, time, and ambitions, but rarely see it all come together because they aren’t honest with themselves. You can build upon little truths, but you can’t take a big lie and make it a reality.

 

2. Having confidence.

I’ve never seen someone with “natural ability” in everything they do. But I HAVE seen people who seem to be amazing at everything. How? They have confidence, and that confidence is their power to exceed their vision.

Like a muscle, you must work out your confidence in order for it to grow.

3. Listening.

If I could give you one take away, it would be this one: be the last one to speak. Give others the ability to say what they know is true. Then, bite your tongue from commenting and instead ASK questions, so you will understand why they have the opinion and not just what their opinion is.

Don’t listen to figure out when it’s your turn to speak. Listen to hear, analyze, and understand.

Once you’ve gathered everything you need to know, move on to the next skill…

4. Speaking up.

I once attended a real estate event with a gentleman whose main goal for attending was to network with others for his brokering business. There came a time in the day when attendees could line up by the stage to spend 30 seconds in front of the microphone to introduce who they are and what they do. I asked my friend, “So, you’re going to go up there, right?” and he shook his head, claiming he didn’t have anything to show.

I pulled out a piece of yellow paper, made him write his phone number in big numbers, and sent him up to say, “Hi, I have money to lend if you need it, here’s my number!”

Speaking up is invaluable, whether it’s on stage, in front of a room, on the phone, or participating in a meeting, God gave you a voice for a reason. Use it!

5. Manage your time.

We’ve traded effectiveness for business, and it’s killing productivity!

— Click here to read more on time management–

Don’t clutter your life with stuff that keeps you from being effective. Time is the only thing we spend that we can never replace. Don’t waste it.

6. Be someone who doesn’t whine.

It isn’t productive to complain about what you don’t have, how you compare to others, what isn’t happening, etc.

Train your brain to look for the opportunity in every hurdle instead of seeing the hurdle in every opportunity, and I guarantee you’ll become unstoppable.

“I don’t like people being negative, whining, or moaning. If you’re in a situation you’re not in control of, just change.” Keith Barry

7. Being consistent.

You can outperform anyone who is more knowledgeable, talented, gifted, or privileged than you by simply being consistent. It’s called a grind for a reason.

“Success isn’t always about greatness. It’s about consistency. Consistent hard work leads to success. Greatness will come.” Dwayne “the Rock” Johnson

“For changes to be of any true value, they’ve got to be lasting and consistent.” Tony Robbins


These are all internal skills, ones that relate to any profession. But the principle that learning new skills doubles your chances at success is equally true when you acquire skills related to your business.

What skills can you pick up to benefit your business? If you can’t think of any, borrow from this list:

– General Contracting Skills
– House Inspection skills
– Project Management
– Design (think fliers, banners, bandit signs, business cards, etc.)
– Design (think staging)
– Color Coordination
– Social Media Management
– Ad Writing
– Effective Communication
– Scheduling
– Budgeting
– Acquisitions
– New Marketing Skills
– Accounting

Have a specific hole that can be plugged with a new skill but don’t know how to obtain it? Give us a call and we’ll help you find the training you need 800-533-1622.


You don’t need to know everything. Remember how we talked about doing a S.W.O.T. Analysis and playing to your strengths while hiring out your weaknesses? (CLICK HERE to read more.) But if learning something new today will increase your chances of success tomorrow, then why not pick up a new skill?

Still having trouble deciding what to learn next? I challenge you to practice my 8 skills above while attending a Funding Tour. Not only are you going to pick up many new skills, pump your brain full of information, and jump start your career. Sign up today for a tour in a city near you.


For investor lending, Cogo Capital® offers quick turnaround, excellent terms, and millions to lend. Cogo Capital® serves both local and national real estate investors, real estate agents, and private money lenders in quality, multiple loans.

We look forward to funding your success!

To Your Success;

Lee A. Arnold

CEO

The Lee Arnold System of Real Estate Investing

Follow me on Twitter: @CogoCapital  and @LeeArnoldSystem 

Have a deal? Visit us at www.cogocapital.com to fill out your fast and easy quote. Want to learn more about COGO first? CLICK HERE to get to know all the ins and out!

It’s Too Bad… (A Hard Look at Why Some Deals Fail)

- - Borrowing, Getting Started

It’s too bad so many people don’t succeed at getting funding and successfully profiting on a deal.

It’s not that the process is impossible, many people just tend to “go for it” without considering what they could do to improve their success rate.

I tend to talk a lot about what NOT to do in Real Estate Investing. Sometimes, it seems like I speak more on this subject than what you SHOULD do (but logically, I don’t). I’m truly looking out for your best interest when I make these posts, because no matter how much training I offer over at The Lee Arnold System of Real Estate, and no matter how many articles I post about the subject of best investing practices, there’s always a way to help you improve.

Unfortunately, private money mistakes are common. The sad truth is that some people will never get funding because they don’t know what they need to succeed. Others may receive funding on a deal, only for the property plan fall apart along the way

These are the top 3 reasons you either won’t find financing or you won’t make money on your deal.

3. They believe approval is contingent upon their personal financial history, therefore never structuring the deal right or even taking the leap to look for funding.

MONEY FOLLOWS DEALS!

The thing that matters most in private money lending is that you have a good deal. But I understand the confusion. Let’s run a scenario:
(This is what most people believe happens)

You: Hey! Can you lend me $100,000?

Lender: For what?

You: I’d like to find a property to flip.

Lender: Have I lent to you before? Do you have a history with me? How much experience do you have? Do you have the expertise needed to find a good property? How much money do you have to put down?

Yeah. That’s not the way it works. If you’re going to turn to a private money lender for a loan option, this is how you SHOULD expect it to go

You: Hey! Can you lend me $100,000?

Lender: For what?

You: I have this great deal! Here is the address, the lot size, the bed/bath count, comparable surrounding sales and the after repair value (ARV), and here is the profit margin. And (most importantly), here is the contract with my explicit, contractual right to purchase this property with the amount of money I need to borrow.

Lender: Great! We have something to move forward on. Let’s get started on the process.

2. They don’t understand the importance of the 70% rule.

If you aren’t getting funding, math may be the reason. I can’t tell you how many times I’ve heard, “But I got the property for WAY less than the ARV/asking price/appraised price. Why won’t you fund my deal?”

It comes down to a simple equation.

You don’t make money when you sell a flipped property, you make money when you buy it. You need to purchase a property right, or you’re already on the wrong foot. So, how do you determine how much to off on a property in order to make money on it? The formula is easy!

Take the ARV (after repair value of the property, i.e. the retail value), multiply it by 70%, and subtract the cost of repairs. Whatever is left is your MAO (maximum allowable offer).

Let’s say you want to put an offer in on a property that has an ARV of $200,000. Take $200,000 x 70% = $140,000. If the renovations will cost $40,000 (get several estimates by licensed and bonded contractors), that’s $140,000 – $40,000, which = $100,000. The maximum amount of money you should offer on this property is $100,000, and if you can get it for less, you’ll make more!

So, $200,000 (ARV) x 70% = $140,000

$140,000 – $40,000 (rehab cost) = $100,00 (MAO)

It depends on the deal and your history with investing, but you can expect to get funding between 60% and 70% of the ARV.

1. They lack the education on how to structure a deal.

It’s truly a shame when people let a potentially profitable flip turn sour because they miss managed the project. Think about it. You spent a weekend at an event, learn the basics, find a property that is ~60% of the ARV, get it under contract, secure funding through Cogo Capital (or another private money lender), only to pour month-after-month into the mismanagement of the rehab because you jumped in too soon.

Should you have avoided the deal because you didn’t have enough education?

No.

Becoming a Certified Rehab Specialist doesn’t take year’s worth of education or the student loans of an average bachelor’s degree (that’s an average of $5,750-$15,680 per year for four years, and that’s after average scholarships, grants, and student aid). No, a certification through The Lee Arnold System of Real Estate won’t cost you that by a long shot.

In fact, we’re running a limited-time special NOW, giving you $1,000 off. CLICK HERE to learn more.

If you don’t know what you’re doing, the best place to start is by cozying up to someone who does. Not only will a good education, mentor, or coach save you a lot of unnecessary time, cost, and headache, you will learn faster and turn a profit sooner.

Whether you want to expand your investing business by getting your Certification in Private Money Brokering, become your city’s GO-TO investor to snatch up properties for pennies on the dollar by becoming a Certified Lien Abatement Specialist, or you want to make sure you are flipping houses like the pros from day one by becoming a Certified Rehabber, you aren’t going to get a deal like this on such a pivotal moment in your career for long.

 

 

 

 

 

 

 

 

Or, call 800-533-1622 today to speak for your FREE educational consultation and to see what the Lee Arnold team can do for you.

 

 

 

 

To Your Success;

Lee A. Arnold

CEO

The Lee Arnold System of Real Estate Investing

Follow me on Twitter: @CogoCapital and @LeeArnoldSystem

Have a deal under contract that you would like a quote on? Let us know. You can fill out a quick questionnaire at CogoCapital.com to receive a rate quote via email or you can call us anytime at (800) 747-1104 to talk to a loan officer. With millions deployed and millions to deploy, we want you to get the capital you need for your real estate investing.

Image result for trustpilot 5 stars

Timothy just left a new 5-star review of Lee Arnold System of Real Estate Investing:

I would highly recommend this company to all first time investors that I come across that seek funding. I enjoyed the entire team that was out in Milwaukee to train those of us in attendance.

Gary Meyers and Jarrod done a wonderful job during this weekend. I really enjoyed the bus tour to the properties in South Milwaukee. Secondly, it’s a faith based company and this is very rare in the business and I see that God has blessed and will continue to bless those around Lee Arnold.

This is an education company as far as Real estate, training and funding. I wish I had met these guys a little earlier before I actually invested with the other companies which I won’t name. I am currently in debt to the tune of $100K due to the other companies. If I known what I know now, I could have bought 10 homes and be on my way to financial freedom.

I would like to thank the entire team that was in Milwaukee for the weekend for a wonderful experience and I hope that we meet again.