Entry Strategy

- - Borrowing

 

What’s in a name?

We’ve discussed exit strategy, process, acquisitions, and many things in between. Let’s talk about entry strategy, specifically the name

There are as many answers to the question of entry strategy as there are options to purchasing real estate. There is flexibility in mixing business and personal, the purpose of the property, interest rates, and taxes. Let’s focus on the name under which you should purchase a house to fix and flip so you can maintain better control over your exit strategy.

Why does your exit strategy determine your entry strategy?

If you are buying a property with the intent purpose to flip it, buy it under an LLC.

If you’re buying with the intention to hold the property–meaning you’re going to borrow hard money as a short-term bridge, fix the property, and refinance in your name to then hold long-term, then finance it in your own name.

If you’re going to bring in a credit partner–someone who has a great credit score and will qualify for a refinance–then you will finance it in their name.

Why is this important, and how does it affect your exit strategy? If you buy it under an LLC and determine that you can’t sell it or flip it, then have to refinance it and hold it long-term, here’s what happens;

– You bought it as an LLC,
– You then need to deed it to yourself to get financing,
– You then deed it out of yourself and back into the LLC for asset protection,
– All of this results in a clouded title.

If you’re going to sell that now to an end-user buyer, they’re going to have a hard time getting financing because you’ve clouded the title and made getting a loan nearly impossible without 8, 10, or even 16 months of seasoning.

Guess who has to cover all those costs.

You.

Let’s get you in and out as soon as you can to turn a good profit, and onto the next property. Don’t get stuck with a financially draining property because you didn’t plan for an exit strategy.

That’s why your entry strategy for a property–under whose name you purchase the property–is important. As always, talk to your lender about your options and requirements. Questions about financing? Call Cogo Capital at (800) 747-1104 to talk about terms.

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. Whether it’s for wholesale, rehab, or buy and hold for long-term cash investment deals, Cogo Capital delivers fast and easy access to Private Money. We’re an equity-based lender which means we care more about the property’s merits, and don’t focus on poor credit, or some of the other factors conventional lenders use to rate the risk.

We offer a full service Private Money platform that will help you through your entire deal from application to closing. You don’t have to make any awkward phone calls to strangers for funds or worry about drafting documents, the HUD 1 statement, or pulling title.

Whether you need fix and flip loans, a rehab ARV loan, or a cash-out refinance, just fill out the quick and easy application above and we’ll be on the way to getting your deal funded. After reviewing your application, and provided your property is under contract, we’ll contact you for the rest of the information.

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.

Author: Lee Arnold not only teaches real estate investors how to successfully invest in real estate but he also regularly invests in the local Spokane market using funds from Cogo Capital. He and his team buy distressed properties and turn them into flagship homes, attracting new buyers and money into the local economy.

Not only does he do this in the local community, but he also helps many communities throughout the nation. With a comprehensive educational program and a private capital network, Lee instructs thousands of people every year on how to safely and wisely invest in real estate. He then gives both new and seasoned investors road maps to invest, and the funds necessary to purchase and rehab properties in communities all over the country.

 

Partnering with an Agent


How To Find An Agent For Your Rehab Investments

If you do not have your real estate license (you probably know by now that I recommend you hang your sign with me at Keller Williams if you’re a real estate investor, but that’s a blog for another time), you must find a quality agent who can get you as many listings as possible, fitting your rather unusual criteria, perceiving a minuscule commission rate from your bargain, and… they are thrilled about it.

What a dream team.

You can find and keep an agent like this for a long time, and it can be a mutually beneficial relationship. But you just need to take some burden off your agent and clearly relay your minimal expectations.

What Should Your Agent Do?

Since you will be looking at so many houses and making few deals, you only want your agent to send you listings (daily) and submit your offers.  That’s all. Don’t make them driving you all over town, pull comps on every home you are interested in, or present offers when you aren’t really ready to move forward. You should know how to do all of this, and your participation will take the edge off their (frequent) work with you as well as keep you involved in what you must be involved in.

A rare showing or comp pulling is okay, but only if you can’t gather the information on your own.

What Should You Do?

When looking for an agent, it helps to share the following:

  • Be honest about your experience; how many houses you have flipped?
  • Tell them you are a real estate investor looking for x number of houses to buy per x amount of time (i.e.3-4 houses every 6 months).
  • Tell them you do not expect them to show you the houses, only to make your offers.
  • Tell them how many offers you are probably making per month in order to get X number accepted.
  • Bring up how most banks pay agents a minimum commission (versus percentage) so your agent can still expect decent money- which you want them to have.
  • Finally, iterate, highlight, and say it with conviction, “I highly value your time and won’t waste it.”

Consideration equals loyalty.

You want to find an agent you can stick with so live up to your promises and expectations.  If you find an agent that is ready to jump on board with the above acknowledged, you are in business.

If you need help getting a private money loan in your backyard, visit  us at www.CogoCapital.com or call a loan officer today at (800) 473-6051Cogo 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.

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.

Finding the Ugliest Houses for Your Next Fix and Flip

When you’re just starting in real estate investing, it can be daunting to consider the entirety of your home town (or nearest urban area). But it doesn’t have to be. You can get started by simply getting to know your neighborhood better!

Real estate investing has an equation.  Like any bit of “mastery” where the general populace thinks “easy” but never gets close enough to try (because really, where to begin?), real estate bargain hunting is an art (sales/negotiation) and a formula (the piece of the equation we will be discussing in this blog post).

How To Farm Your Neighborhood For The Ugliest, Most Perfect Fix and Flip Investment

Part of doing your first deal right (so you maximize your profit, minimize your upfront costs) is educating yourself about your market.  Too many in real estate are proactive and experienced for you to disregard qualifying yourself and extending your local knowledge.  The following information will give you a solid foundation to build upon until you get in your groove and can assess a property’s value without even seeing it.

Drive the Area

Spend a few weeks looking around at homes in the area.  Look at their construction, learn the average prices.  KNOW YOUR MARKET.

Attend Open Houses

When you visit open houses on the weekend, you get a chance to network with the real estate agents (have you partnered with one yet?)  and owners (bring your business cards-word of mouth referrals are the most powerful).  You will become familiar with the typical architecture, pricing and property features in the neighborhood.  You will better understand property values and house styles.

Find Vacant and Ugly Properties

When you are driving around, look for places with no window shades, newspaper piled up, garbage, overgrown grass, etc.  If you are unsure whether a property is vacant, knock on the door.  Ask the owner if he is interested in selling, and if he is not the owner (rental property), ask for the owner’s number.

Get In Touch with AWOL Owners

If you find a vacant property, ask neighbors if they know the owner.  Usually, they will be helpful because ugly houses hurt their home’s property value.  You can also ask the mailman (ask for forwarding address), and if you still have no luck, leave a business card.  When you get home, look up the owner’s address and name.  Call your local tax assessor’s office or by looking up the recorded deed filed with County land records.

Other public databases include infousa.com which will search through the Driver’s License Bureau and the Department of Motor Vehicles.

Look for Tagged Properties

Some areas will “tag” a house that has code violations.  These violations often reflect the vacant or neglected property.  You can ask your city for a list of tagged properties or find out where it is publicly recorded.


When you spend the first few weeks educating yourself, it will pay off in significant savings (and headache).  Save the extra money for rehab (that’s a substantial and surprising enough investment in itself).  And if you play all your cards right (plus you’re lucky), you’ll save that big payoff for your efforts… and inspiration.

If you need help getting a private money loan in your backyard, visit  us at www.CogoCapital.com or call a loan officer today at (800) 473-6051Cogo 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.

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.

Best Investing Neighborhoods

Do you know the best place to invest in real estate?

No matter where you are in the country, you’re near a prime location. And you don’t need an in depth analysis to give you a radius of quality investing homes and neighborhoods near you.

With all the potential real estate in your city, county, and state (and the whole of the country) you may be tempted to invest in a market with which you’re unfamiliar. Perhaps you’ve recently traveled to a FUNDING TOUR and though the town was out of your normal area, you found some quality looking investment properties on the bus tour and are tempted to put in an offer.

Although experienced investors spread their wings a little further, I rarely recommend it and don’t invest outside of my county, no matter what deals students bring to me.

But, if you want to be successful faster, you really shouldn’t go further than the area in which you live.

If you use the 25-mile radius rule of thumb, you’ll save time, money, and headache.

Here are my top reasons why the real estate in the 25-mile radius around your home or place of work will make you millionaire faster than trecking all over the country will.

Don’t get me wrong, Cogo Capital will fund anywhere you need funding. (For more on locations and states where Cogo Capital funds real estate, visit us at https://cogocapital.com/ or call a loan officer today at  (800) 473-6051.) But you need to make a decision about the radius and locations you will invest in, and remain consistent to your commitment to reap the following benefits.


  1. You won’t waste time, money, and resources on the road. Driving all over is clunky, it doesn’t make sense, and it takes too much effort for too little profit. If you spend your time driving from place-to-place, you have less time to spend managing a flip, listing a wholesale, or selling a rehabbed home. You’ll have a car with a lot of miles and a workload you can’t manage. (I recommend saving those miles on your rig for a family trip this summer!)
  1. You’ll save yourself potential headaches. Take it from someone who had to drive over an hour in the middle of the night to attend to an emergency. Being in proximity to your property means that if you need to be there fast, you can.
  1. You’ll be an expert. It takes a while to get to know all the neighborhoods in a 25-mile radius, but if you can spend your time learning the nuances of the streets, the school districts, the demographics, and (most importantly) the comps in those neighborhoods, you’ll be better at your game.


  1. You have less to cover when driving for dollars. Don’t tell me there aren’t deals around you. Even if you’ve driven every single street in the 25-mile radius, by the time you’re done, there could be an abandoned house on the street you started on!
  1. You’ll build your network faster. If you stay in your area, you’ll get to know contractors, subcontractors, wholesalers, and real estate agents quicker and better. You’ll have those extra subs in your back pocket to call when the one you’ve hired no shows for the job. You’ll build your team faster and with less trial and error.
  1. You’ll know how to buy. This is the most important reason because you make money when you buy, not when you sell! Spend the time in your area meeting wholesalers, responding to bandit signs, putting out your own bandit signs, searching for abandoned houses, researching auction houses, considering listings on the MLS.
  1. Less Taxes to file. Unless that’s your thing; filing taxes in 7 states because that’s where all your properties were. I like to streamline my business better than that.

Confine your area and you’ll maximize your business. Remember the term, there are riches in niches? This goes for your location, too.


If you need help getting a private money loan in your backyard, visit  us at www.CogoCapital.com or call a loan officer today at (800) 473-6051Cogo 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.

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.

Does Your Offer Have Teeth?

 

Are you able to properly present an offer on a property, without wavering or back peddling?

If you struggle to make offers on real estate, either out of timidity, uncertainty, or naivety, then rest assured. I can train you to have better results.

Broad offers with little to no direction or education lack more than conviction. You must be presenting three-tiered offers that are appropriate to the situation and property in question; offers that will benefit the seller, allow enough room to make a profit, and result in a gain after being sold quickly on the retail market. And I can train you on how to do just that (stay tuned for contact information if you’re interested in learning more).

But, for argument’s sake, let’s say you have your offers right. You’ve stacked and tiered your offer appropriately, but can’t seem to put anything under contract.

How you SOUND when presenting an offer or connecting with a homeowner could have more weight than you think.

When you present an offer to a homeowner, does your delivery establish the image you want (the knowledgeable, confident persona that will ultimately get you a signature) and reinforce your offer, or will your delivery undermine your offer?

When speaking with owners of distressed properties, there are nuances to the conversations that you should take to heart and form into your habits and behavior. Let’s discuss a few.


YOUR TONE

If you have a homeowner who is motivated to sell and interested in your offer, but you say something that doesn’t sit well with them (we all do it eventually), there are two ways you can respond.

Let’s say they’re offended by your offer (as they should be sometimes; if they’re delighted by if then you probably offered too much). They immediately fly off the handle, berating you for offering such a disrespectful amount. How do you respond?

1) “What are you TALKING about?! That’s the BEST offer you’re going to get! You need to calm down and look at the numbers, and then you’ll THANK me for offering so much!”

or

2) “I understand you’re shocked by the numbers I’ve presented. Perhaps we can better discuss what your goals are because if you want more money, the sale of this property could be delayed significantly, in which case, it might not be in our best interest to work together. Tell me again why you want to sell this property so quickly?”

#1 adds fuel to the fire (or at best, they’ll suggest you switch to decaf) where #2 gives you back the control and maintains that the important thing is that you connect on a resolution that will benefit you both.


“Define what your brand stands for,
its core values and tone of voice,
and then communicate consistently in those terms.”

Simon Mainwaring


BE SPECIFIC AND HONEST

If you go into a conversation with an owner of a distressed home and start making outlandish promises that have nothing to do with your true mission statement, it’s going to be obvious. Even if you can sell water to a drowning man, you won’t get far with a false mentality.

Let’s say you begin discussing the sale of a distressed home with an out of state homeowner who wants to dump a duplex fast. If you go into the conversation promising how it’s your passion to reinvent the community when that isn’t true for you but you believe it’ll give your offer “an edge” over the competition, then your dishonest promises could eventually surface and give you a bad name. AND the homeowner might not care because they just want fast money for their property, anyway. Especially if there is a claim of passion without supporting evidence, the result of which could be compromised credibility.

If you’re honest about your intentions (without disclosing things you aren’t comfortable sharing) and specific about your plan, then your words have more gravity.


“My parents taught me honesty,
truth, compassion, kindness
and how to care for people.
Also, they encouraged me to take risks,
to boldly go.
They taught me that the greatest
danger in life is
not taking the adventure.”

Brian Blessed


DON’T JUST TRUST YOUR VERBAL CUES

If you meeting someone in person to present an offer, your nonverbal cues count for just as much as your words. You should express the same gravitas with your eye contact, firm handshake, and hand gestures as you do with the language you speak.

Whether you know it or not, most people [uninfluenced by drugs or alcohol] can correctly identify the sincerity and power of a person by their body language. If you’re dishonest or attempt to skirt around questions simply because you don’t know the answer, then your behavior will eventually be recognized.

Go back to the basics here. Offer a firm handshake; look people in the eye and address them as Sir, Ma’am, or Mr. Jones, not “Hey Jim”; nod occasionally when people speak to assure them that you’re listening.

Maybe you’ll find there are exceptions to these old rules, depending on your area, demographics, and/or existing relationship with the seller. But if you’re at a loss on where to start, I recommend the basic forms of etiquette and practice. Who you are in the “real world” will reflect who you are in business transactions. Strive to be your own personal best every time.


“I have no contracts
with my clients;
just a handshake
is enough.”

Irving Paul Lazar

(We suggest you have contracts.)


YOUR WORDS

If it’s true that 55% of the recipient’s understanding of a conversation happens on the nonverbal level (i.e., you’re judged more on your body language than your words), then it’s enticing to attempt to master your facial expressions more than your investing knowledge.

I would never recommend that a firm handshake and sincere eyes trumps a factual understanding of the necessary processes. Though it’s important to be aware of how you appear to others during business transactions, what you say and present is vital.

Your knowledge of the content of which you speak is what makes you a leader in the conversation. You know why you’re offering what you are, you understand the process that will take place once a house is under contract, you know the end result where the seller doesn’t. You must explain and express as much as you feel necessary and be available to answer questions as they are asked.

Don’t let this be daunting. If done enough (and if you’re following my Rule of 56, you’re making plenty of offers to be well-practiced on your verbiage), then you will eventually know the answers to all the potential questions people ask. I’ve spoken to thousands of sellers and a question has yet to shock me. Well, unless you consider that one time where the inquiry consisted of my tolerance of the property being used as a burial ground…

For more on understanding the necessary steps to the process of property acquisitions, visit www.LeeArnold.com or call NOW to speak with our team at (800) 473-6051. You must understand enough about investing to answer the basic questions homeowners ask. And if you don’t, it behooves you to find the answers first. We can help with that.


“Any fool can know.
The point is to understand.” 

Albert Einstein


Whether you know it or not, life is a series of presentations. Just ask Kim Dower and Tony Jeary who wrote the book “Life Is a Series of Presentations: 8 Ways to Punch Up Your People Skills at Work, at Home, Anytime, Anywhere.”

The way you speak has just as much if not more power than the words you say and put into writing.

Now, does this mean you need to be self-conscious about every interaction you have in your business? Absolutely not; especially since we all have so much room to grow…


“Without continual growth and progress,

such words as improvement,

achievement, and success have no meaning.”

Benjamin Franklin


…But you should be aware of the way you speak to people, how you interact on the phone and in writing, and make adjustments where necessary to drastically improve your interactions.

The question, at this point might be, “Lee, why are you going into all this? If I’m writing good offers, isn’t it just a numbers game? The more interactions I have and the more offers I give, the more properties I’ll gain control over, right?”

You can look at it that way, and it might not hurt you.

But I’m in the business of helping investors make the most out of their investing skills, time, energy, and efforts. If I can help you improve one aspect of one process, it’s not only going to improve your results (purchasing more homes to wholesale or fix-and-flip), it’s going to set you up for future success in your investing business.

I want you to succeed so you can email me and say, “Lee, that really worked! One small shift and I got a house under contract!” Then, I want to fund that deal!

If you need help with your delivery, let us know. You could qualify for a 30 minutes free call with a Business Development Consultant. Simply call (800) 473-6051 to schedule your consultation today.

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.

When you come to Cogo Capital® looking for a private money loan on a property under contract, we’ll assure you have 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.

Financing Q&A

It’s time for another Q&A, and once again I’m excited.

I receive frequent questions about financing. I’d rather get the same question a thousand times than never have you ask. But though engagement is key, I love when I get the opportunity to disclose a few answers, to the more regularly asked questions.


Q- Do I have to be educated by The Lee Arnold System of Real Estate Investing to get funding from Cogo Capital?

A- No.

You can apply for and receive up to 90% of value on the property even if you’ve never even been to a Funding Tour.

Now, it’s true that you can get better rates and more funding by being a student or having been a student of the system, but it isn’t required. Unlike banks, who review and lend based on the borrower’s credit and the shape of the property, Cogo Capital is a private money lender who look at the appraised value, the borrower’s experience, the equity in the property, and the exit strategy.

However, we do understand that if you know what you’re doing and you’ve received a quality education on what you’re doing, then you are less of a risk, and part of lending is risk analysis.


Q- How does Cogo Capital work, and how do I get started?

A- Great question; it’s easy!

A real estate investor (you) identifies a great real estate deal in a good equity position.

Once you have the deal under contract, start by filling out an easy one page application, which you can view at www.cogocapital.com.

Cogo Capital then reviews the application and contacts the real estate investor for additional information. Cogo Capital then researches, reviews, and assembles all the due diligence items, which includes title insurance and a third party appraisal.

Secured Investment Corp provides the loan package to a select lender’s network. One of the lenders who likes the parameters agrees to lend on the deal. Secured Investment Corp then works with the select lender to wire funds to an outside escrow agent who prepares closing documents which are sent to a closing agent.

The loan is closed, and Secured Investment Corp sets up serving payments. Borrower (you) makes monthly interest payments into the serving company who then pays the lender. You pay off the loan, and we do it all over again!


Q- I’ve heard it said that equity is wasted money. Is this true in real estate investing and why?

A- Equity comes with limits.

If you own properties with significant equity in them, and you know for a fact that you cannot leverage or borrow any more money against them, you should consider selling them because the equity is tied up.

It’s trapped and it does you no good just sitting there.

Equity is one of worst investments. You can’t spend equity. When you come to me at an event and say, “Hey, Lee, I have a powerful real estate portfolio. I’ve got a million dollars in equity,” my advice to you is sell every single one of those properties that make up that million and take all of the cash from those sales and go buy a larger piece of property with higher incomes and higher cash loads and income potential. In doing so, you get the full value and benefit of the entire million dollars from a standpoint of leverage. The 1031 exchange allows you to put all of the proceeds from the sale towards the down payment of the larger asset. It’s a much better strategy than just sitting on all that equity.

As an example: If you have a piece of property that has $50,000 or more in equity and you discover that you can’t get a line of credit against it, there’s nothing you can do with the equity except let it sit there. Consider putting that property up for sale, doing a 1031 exchange, and now using a hundred percent of that equity as down payment into a larger, higher-income producing asset class, like a duplex, triplex, four-plex, commercial building, or car wash, and just keep rolling that money.


Q- Should I “go big or go home” and pursue the biggest properties to flip first? Then, I would have all the income I need for smaller real estate investing!

A- It’s an ambitious goal, one that would likely result in what I call “Ambitious Procrastination.”

This is what happens to people when their aspirations are so high that it becomes a “someday” scenario 99% of the time. And you know what they say about “someday”… that’s right; it never comes.

But, let’s argue that you actually can perform this feat (going from Zero to Giant, fast), here’s why you shouldn’t:

You do yourself a tremendous disservice when you pursue properties that are in the jumbo category because only jumbo lenders can participate in this segment of the market, which represents approximately 4% of investors.

Now if you pursue properties where your retail price does not exceed the FHA cap for your area, you’re more likely to get funding and more likely to easily find an end buyer. You can research the FHA cap for your ZIP code or your county (Google provides excellent answers). For example in my market, the FHA cap is about $285,000. Because of this, I avoid buying any property where the retail exit exceeds $285,000. I know that 80 percent of the buyers that I’m going to be marketing to are going to be getting a FHA or other government-backed loan.

I don’t want to price myself out of the majority audience of buyers so I’m going to buy below the FHA cap and then know, without a shadow of a doubt, how to renovate the property so that it conforms to FHA underwriting. If you don’t know what the FHA underwriting guidelines are, again, Google FHA guidelines for renovations on and repair on a resell.

Certain things have to be done with the property to qualify it for an FHA loan. I use private money to acquire real estate that does not qualify, and then through renovations on and repair, I make sure it qualifies for the end retail buyer. Also, unlike banks’ funding, which must meet agency (Fannie, Freddie, FHA) requirements; private lenders do not need to meet these requirements. It is completely at their discretion on where to deploy their capital.


If you have a question that you don’t see an answer to, you can find out quickly and easily by calling the following numbers:

Have a question about the Lee Arnold System or Real Estate Investing, upcoming events, educational training, or coaching? CALL a Business Development Consultant today at: (800) 473-6051

Have a question about Cogo Capital, applying for a loan, the loan process, or any terms associated? CALL a Loan Officer at: (800) 747-1104

We’re here to answer your questions and get you connected with the information you need to make educated decisions about your investing career. If you don’t ask, we can’t answer; so let us help!

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.

When you come to Cogo Capital® looking for a private money loan on a property under contract, we’ll assure you have 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.

Ask Yourself This Question

 

If you want to simplify hard money and almost guarantee that every deal you bring in will get funded, ask yourself this one question:

“If I were the lender, would I lend money on this deal?”

If you look at a deal and critically think whether or not you would accrue the risk involved, you can better understand if it’s worth lending on said deal.

Now, that might seem too simple, and if you don’t understand how funding works, the question isn’t going to do you any good. But, if you understand how to make sense of the numbers, and if you know what constitutes a good deal, then you’re more likely to make sense of why a deal isn’t getting approved.

Don’t get disillusioned by lending. Understand the makeup of a deal worth lending on.

That being said, let’s help you identify what constitutes a good deal.

First, you want to have a deal that is HIGH YIELD and LOW RISK.

How do you calculate this?

You need several numbers in front of you; the purchase price, the estimated repair costs, the ARV (after repair value) and the maximum percentage of the ARV a lender will give you for the project. This could be 55%, 65%, or other. So, if you have found a house that has an ARV of $100,000 and the purchase price is $70,000, that’s 70% of the ARV and you aren’t going to get a loan to cover the full amount let alone the repair costs. 70 cents on the dollar looks like a good deal until you factor in repair and holding costs.

Start with the final selling price and work backward to deduct the selling cost, profit margin, renovation cost, and buying costs. Don’t forget to factor in holding costs and margin for error. You figure out your MAO (maximum allowed offer) by first determining the ARV of a house.

Though you don’t need a background in real estate to flip a house, you do need to make sure that the time and money you are investing (whether the money is yours or a lender’s like at Cogo Capital) is well spent and maximized.

Fix and flip education teaches you:

  • How to find funding
  • How to find, negotiate and close a great deal
  • Which materials are trending
  • Which high price items are worth the investment
  • Which materials can be low-cost
  • How to hire contractors for the lowest cost
  • How to manage contractors to meet timelines
  • How to market your property
  • How to yield the highest profit
  • And much more

Essentially, getting an education in the field minimizes your risk and maximizes your profit potential. You’ll go into the industry confident and knowing what to do, when to do it, and why.

If you’re interested in getting started, be sure to check out the Cogo Capital Funded “FUNDING TOUR.” Click Here for more information and to see if we’re coming to a city near you!


To learn more

about determining the 

VALUE of a Property, CLICK HERE


Hard money works like this; say you need $100,000 for 6-12 months for the residential housing market (or 18-36 months, as commonly found in the commercial sector). A lender could charge you 5 points, which is $5,000, and you’ll also pay interest monthly.

$100,000 @ 5 points ($5,000) + 15% interest payment is going to run you $20k (I’m using simple, noncompounded numbers here for this example). That’s $20,000 spent for the $100,000 over the duration of the loan.

So, when is it a good time to borrow hard money? When it’s a good deal. If that $100,000 means you can fix that property up with a net of $50,000 made, then if you have to spend $20,000 to make $30,000, that’s a great deal!


If you want to

learn more about what to

Expect from the Loan Process, CLICK HERE.


Remember, my fiduciary obligation to our lenders is to assure their money is going into good investments, but my fiduciary duty to YOU is to make sure you aren’t getting over your head on a bad deal.

If you’re hearing “NO” from us or any other lender out there, it’s because your deal is too risky. Not getting a deal funded that you’ve worked hard to get under contract sucks; I get it. But you know what’s worse? Losing money on a deal because someone lent you money on a deal that didn’t have the makeup to be a 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 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.

When you come to Cogo Capital® looking for a private money loan on a property under contract, we’ll assure you have 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.

Speak with Your Wallet

What does your recent investing say about you?

And before you click out of this article because you don’t believe you’ve made any investments lately, I assure you that you’re making investments daily and they each say something about you.

Are you familiar with the phrase, “You speak with your wallet?” It means that how you spend your money is an indicator of what is important to you. For instance, if you want to support fair trade coffee companies that provide farmers an escape from poverty through sustainable partnerships, you’re going to buy coffee that has that little “Fair Trade Certified” logo on the package. If you support pet adoption over puppy mills, you’re not going to buy a dog from an unreputable pet shop.

Easy, right? Where you spend your hard-earned dollar is the best way to be “heard” by your favorite (or least favorite) companies. Show me your wallet, and I’ll show you where your loyalties lie.

But what about all those unnecessary purchases you make without even thinking? What do those spending habits say about you and your devotion to your business and your future?

“I don’t have money to spend on my business.”
“I wish I could grow my business, but I don’t have the capital.”
“It’s easy for him! He had money to invest.”
Or, my favorite, “Well, it takes money to make money and I don’t have any.”

Let me ask you this…

Are you spending $20 a week on business cards to hand out at auctions and networking events? Or are you spending $20 a week on morning lattes? And that hundred bucks you used for dinner at Chotchkies last Friday night? You could’ve put that toward bandit signs or a website. What about the long weekend to the theme park with the kids or grandkids? That cash would’ve gone a long way in a starting a rehab project.

I’m not saying you should avoid living your life, but if you want to change your financial landscape, you need to make some tough choices. I read a book called Rich Dad Poor Dad back when I was making $3.90 an hour as a bag boy at a grocery store. It gave me a new perspective on my vision and changed my life’s direction. In it, Robert Kiyosaki said;

“The phrase ‘I can’t afford it’ shuts down your brain and lets you off the hook. It also brings up sadness, a helplessness that leads to despondency and often depression.

‘How can I afford it?’ opens up the brain. It forces you to think and search for answers. It also opens up possibilities, excitement, and dreams and created a stronger mind and dynamic spirit.”


By now, maybe you feel that itch to find some money to invest.

Good! But, wait…

There’s a reason why the book Rich Dad Poor Dad has been purchased over 26 million times, yet very few of the people who read the book implement Kiyosaki’s teachings and see financial growth. I believe in truth and preparation over candy-coating, so let’s get real about this for a minute.

Say investing in your business is like trying to drop 20 pounds. You start by implementing manageable changes in your habits, like taking the stairs instead of the elevator. On your ascent up the first flight, you suddenly feel your calves ignite in a fiery blaze while your thighs scream in protest. Do you stop and wonder if you’re climbing the stairs wrong? Do you give up after a few flights because you don’t see any weight loss?

“I tried investing, but it didn’t work for me.”
“I spent money marketing myself once, but no one responded because the method was wrong for me. I won’t waste money like that again.”

When we try anything new—be it investing or exercising or learning a new skill—there’s a level of discomfort that accompanies the change. Instead of viewing the discomfort as in indication that you’re doing something wrong and your efforts aren’t working, lean into the pain and learn from it. By changing your relationship with discomfort, you can go from giving up (trying not to feel the discomfort) to pushing those “muscles” until you grow stronger.

“Whenever you feel ‘short’ or in ‘need’ of something, give what you want first and it will come back in buckets. That is true for money, a smile, love, friendship. I know it is often the last thing a person may want to do, but it has always worked for me. I just trust that the principle of reciprocity is true, and I give what I want.” Robert Kiyosaki

Next time you see an opportunity to invest and that little voice nags you with a shrill lie that it isn’t worth the discomfort of change, disrupt the narrative and take action.

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.

When you come to Cogo Capital® looking for a private money loan on a property under contract, we’ll assure you have 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.

Broker Clientele Building

Do you know the fastest way to build your clientele?

If you are a Private Money Broker, you may be paying HIGH opportunity costs by not maximizing your clientele.

 

With $77 Trillion sitting in bank accounts, savings, and retirement accounts in America, there’s no shortage of investable money. Additionally, 30% of all real estate is owned free and clear.

 

With all the real estate owned in America, can you wrap your brain around how much equity that is to tap into?

 

In short, there’s a whole of money out there that doesn’t know what to do with itself. It’s sitting in IRAs and 401ks and bank accounts, and it’s waiting to be deployed.

 

If you’re a broker, consider yourself an “Agent of Deployment.”

 

With all that money out there, you clearly can’t blame a “shortage of funds” for a stall in the deals you broker. Money is looking for a place to go where it can grow. Money wants someone to swoop in and take control of it, someone to place it where it can mature. But does money trust YOU?

 

How much of other people’s money do you have under management? That will dictate if money trusts you.

 

When you compare apples to apples (good broker to good broker), some are getting all the business while others are fighting tooth and nail to close only a few deals a year.

 

Why?

 

There’s a clear reason. The private money brokers who are getting all the business are active at one simple thing…

 

Is it a website or business cards or a suit or knowledge that makes the difference?

 

No.

 

The #1 way to increase your business is to use 3rd party endorsements and testimonials.

 

This results in referrals. Referrals are the key! People will give you money faster if someone else told them to give it to you than if you ask for it yourself. Referrals are a strategic tool in marketing, and you need to start revolving your business around them if you want to stay in business.

 


Take a few minutes to consider the following 10 questions about how well you are (or aren’t) soliciting endorsements, testimonials, and referrals.

  1. Are you asking for testimonials from clients?

 

Attract other high-value prospects with evidence that you walk the walk. For some of our testimonials, click HEREHERE, or HERE!

 

  1. Are you asking for referrals?

 

If not, create a way for clients to recommend people to you and your services. Have you ever notice that when we ask for video testimonies at the end of an event, we do it in front of a wall plastered with our logo? Can you get clients to fill out a simple survey on your services? Can you link your website to social media and ask your satisfied customers to spread the word? Are you actively promoting on social media in a way that people can easily share, retweet, and email your content to others?

 

  1. Are you following up to see if people need anything else after working with you?

 

Repeat clients are more likely to give referrals. Are you active on LinkedIn, keeping people you’ve worked with in the past engaged?

 

  1. Do your current clients know all the services you offer?

 

Don’t assume everyone knows the full scope of your business. We have content up all over–websites, emails, radio stations, etc.–and even a business as large as the Lee Arnold System of Real Estate has to constantly remind our clients of all the ways we can help!

 

  1. Are you asking people to hand out your cards to other potential clients?

 

Don’t assume that if someone is happy with you, they will pass your information on.

 

  1. Are you asking new clients how they heard about you?

 

If they give you names of the person who referred them to you…

 

  1. Are you recognizing and thanking the referrals you get?

 

It’s important to express appreciation to those who connected a client to you, helping to ensure that they do it again.

 

  1. Can you provide valuable content to your referral sources?

 

An email list with a roundup of (occasional) updates can be helpful to others in the industry. If you share unique content, people are more likely to remember your name, use your services again, and pass your name to others.

 

  1. Are you treating people you work with like allies/partners?

 

Let them know that you view them as a strategic partner and encourage them to see you in the same way. This creates an active channel to share professional referrals.

 

  1. Are you providing a remarkable service?

 

Do people WANT to refer you to others? If the answer is “no” (even questionably), then you need to address any glitches you have and plug informational holes by educating yourself with the latest industry knowledge (I suggest attending one of our Private Money Broker events, call 800-533-1622 to speak with a business consultant and find out which one is right for you).

 

Be on top of your game and referrals will role in.

 

With a proper, honest assessment of the questions above in mind, where can you improve? What do you need to focus on to gain a new layer of a client base?

 

The most important thing you can do is to ask.

 

Open mouth, open 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!

5 Easy Steps to a Quality Marketing Plan

Real Estate Marketing is often overlooked by amateur investors, which is a shame because it’s one of the fastest ways to grow your business. In fact, if you aren’t marketing, it doesn’t matter how good you are at what you do or how amazing your offer is to your ideal client. If you aren’t reaching the people you want to work with to get the opportunities that will advance your real estate investing career, then you’re running a ghost of a business.

Marketing is key.

Marketing creates leads, which creates clients.

Everyone needs a marketing plan, but few know how to put one on paper, track the analytics and results, optimize the routine for success, and repeat for long-lasting results.

You may know what it’s like to work with leads, even if you don’t market too much. If you’ve been hustling long enough, you may have some leads without a mass marketing strategy. In fact, I’ve seen people stumble on leads and have those leads turn into successful projects. But it doesn’t happen often, and why place all your bets on a rarity?

Let’s get you a system for marketing to bring in consistent leads so you can scale up to a successful, sustainable business.

You get a lead, you work the lead, and it either turns into a new project/property/broker client, or it doesn’t. Then, you must start over with this lead cycle.

But if you aren’t marketing, who’s lined up for your next lead cycle?

If you don’t have consistent marketing that drives consistent leads, you are going to make different decisions with the small number of leads than you would with a steady amount. You could end up exhausting a lead or giving into a deal that won’t result in maximum income because you were afraid that if you stood your ground, you’d lose the only opportunity you have.

It’s a numbers game out there. You need your choice of projects to assure you get the ones that will make you money, and you need leads to have those opportunities.

Consistent marketing will get you those steady leads so you can put together more deals. And to have consistent marketing, you’re going to need to invest.

Either you’ll invest money
or you’ll invest time.
Or both.


 You should have 3-5 marketing strategies for your real estate investing business.

A strategy would be bandit signs, “driving for dollars,” direct mail, cold calling, etc. Websites, blogs, craigslist and social media presence are also good ways to create leads.

Some of these strategies are free (Craigslist, driving for dollars, blogs), but take an investment of time.

Other ones will cost you financially and require a minimal time commitment (bandit signs, direct mail, web hosting, social media ads).


You could hire out your marketing right away to minimize your time commitment, but it’s going to cost you more financially and won’t be a 100% relief of your time because you’ll have to handle the hiring of and management of your marketing team. If you choose this route–either through an agency or an in-house team member–you run the risk of it not working (but you can mostly defer that risk by heavy vetting and due diligence… but that doesn’t save you time, does it?).

Or, if hiring a marketing team works and brings you leads, you run the risk of not knowing how the process works and being unable to repeat it yourself. This chains you to outside help, and though I strongly encourage outsourcing where needed, you must know the basics of marketing to be able to repeat it.


Whether you advertise with flyers, by passing out cards at your local REI groups, with networking relationships (which can be extremely lucrative), or you dip your business into all of these strategies, the important thing is to figure out which work for you and be consistent enough to collect data.

Don’t put all your eggs in one basket, though. Diversify!

How many hours or dollars do you have to invest to get a lead?
How can you streamline what you do to make it easier?
Are there any strategies that you can automate?


 Plan Out Each Strategy

Once you know which strategies you wish you employ, you need to get detailed by breaking these strategies down into reportable steps. What do you need to do to carry these forms of marketing to completion?

Do you need to write ad copy (or multiple versions to do A/B tests)?
Do you know who you’re marketing to? What demographic? Which areas?
How are you going to send the right message to your ideal client?
Do you know keywords to use in your titles and subject lines?
How are you going to record your leads (and their information) so you can properly follow up?


 Determine Your Budget

Determine both your financial and hourly budget.

It’s ambitious to say, “I’m going to get 100 new leads this week!” But you need to have an estimate of where those leads are coming from, how much time and money you have to invest to set those channels up, how much time and money it takes to work those leads, and be able to budget all of it.

You can reach any goals you desire, but it’s important to start with what you CAN do and improve from there. If it takes you 10 hours to produce your first 10 leads, then how many hours will it take to produce 100 leads? 100, if you stop growing.

But, let’s say the following week, you put the same 10 hours in and get 20 leads. You’ve doubled your output by improving your system for marketing. How do you grow? Funny you should ask…


 Schedule Your Marketing with KPIs

It doesn’t do you much good to collect a bunch of leads if you aren’t determining if they’re good or not.

I can give you tens of thousands of leads in two seconds. Go pick up your phone book. “But those aren’t good leads,” you say. Bingo.

You want a lot of leads, and you want appropriate leads. The only way you’re going to be able to determine if you are producing good leads is by keeping track of them, where you acquired them, how you work them, and the results they bring. You can find software to help, keep a spreadsheet on your computer, or just track them the old fashioned way on paper.

The important thing is that you track them and find ways to improve.


 Delegate and Outsource

Once you know what process works for you, you can hire out some or all of it. Get a member of your team who can put those tedious tasks to work for you; writing email copy, craigslist ads, ordering banners, stuffing envelopes, etc. You can even have someone track the results of each lead.

But you still need to keep your finger on the pulse.

It’s probably not a secret that I don’t do my own marketing. I’ve been in this business a long time, and I’ve taught thousands of people and seen so many success stories come out of my system that I’d be here all day listing them if you let me! If I were consumed with marketing efforts, I wouldn’t have time to explore new strategies, open new classes, scale the company, and change lives.

I wouldn’t be where I am unless I outsourced the marketing, and neither will you. But first, know what you’re doing and how it works, and then KEEP your finger on the pulse of it.

Remember my formula:


Keep marketing. Try different things. Switch it up when the times change and old strategies stop working. Don’t be afraid to invest the time to make it work. Few things are as important as marketing.

And if you’re feeling lost, have you considered getting help?

We can connect you with a real estate coach to help you with your investing strategies and methods. Give us a call to see if you’d be a good fit for this program; not everyone is. We only work with people who are serious about growing and highly motivated to make the necessary steps to be successful. If that’s not you, just keep coming back to our blogs to get the information you’re looking for. But if you’re serious about being a success story, give us a call and we’ll find a way to help. (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 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.

When you come to Cogo Capital® looking for a private money loan on a property under contract, we’ll assure you have 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.