Category "Borrowing"

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!

What to Expect When You’re Expecting (Private Money Loan Edition)

- - Borrowing

When you’re new to private money lending, the process can feel daunting when you don’t know what to expect.

It can feel like being a new parent, jumping head-first into a process you don’t feel qualified to take on!

It doesn’t have to feel that way at all. We’re here to walk you through it so you know what to expect, when, and why. Though your specific questions are best answered by a loan officer directly (call 800-473-6051 to speak with one NOW!), we can scurry over the basics today to give you a big-picture understanding of the process.

With that in mind, we’d like to show you what a typical process for a private money loan looks like in a few simple steps. This way, you know we’re working hard FOR YOU, and can understand what to expect along your private money journey!


 It all starts with a great deal on a house. From there…

 

Step One- A real estate investor identifies a great real estate deal in a good equity position.

Step Two- The real estate investor puts the deal under contract and fills out an easy one-page application, which you can view at www.cogocapital.com.

Step Three- COGO Capital then reviews the application and contacts the real estate investor for additional information.

Step Four- COGO capital researches, reviews and assembles all the due diligence items, which includes title insurance and a third party appraisal.

Step Five- 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.

Step Six- 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.

Step Seven- The loan is closed and Secured Investment Corp sets up serving payments.

Step Eight- Borrower makes monthly interest payments to the serving company who then pays the lender. The borrower pays off the loan, and the lender and the borrower do it all over again.

Step Nine- Do it again! It is a constant cycle.


What about common questions?

One of the questions that we have been asked over the years that we have been lending money is why we lend predominately at five points and 15 percent interest. First, we need to make sure we know you can perform. We then want to reward our more astute borrowers, who have never missed a payment and are doing volume, as well as the borrowers with good to excellent credit. We pride ourselves on giving all real estate investors access to the capital necessary to build up their real estate portfolios and investment careers.

That is why we lend on the assets and not a person’s past credit history.

We’re here to serve you with excellent rates and unbeatable terms.

But we can all work to make this process a little smoother and a faster.

If you’re working on a loan that you want to be done quickly and correctly, you’ve come to the right place. Now, let’s maximize your contribution with some carefully placed sweat-equity in the process.

Top things you can do to assure a more expedient loan process:

– Have your documentation ready and return it promptly.

– Watch for emails and communication when we need your signature. It happens all too often that a loan is held up because of one needed DocuSign signature that sits in your inbox for a week.

– A loan can be stopped or slowed down during processing when the borrower doesn’t look at the Needs Lists. When a loan officer sends out a specific form that needs to be taken care of, act quickly.

– Talk to us. A lot of people feel they can complete a file without asking questions, but it’s usually faster to ask and get it right than send in the wrong information. You can always call us at (800) 473-6051 to clear up any inquiries or to get support.

It may seem like a lot up front, but most things worth doing often do. We are here for you every step of the way, so don’t hesitate to reach out for guidance. Your success is ours, so let’s make you successful!

If you’d like to read more about the KEY to Success, <CLICK HERE!>

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!

Planning Your Project

 

Planning Your Project

 

With each passing day, your loan costs you a little more.

Don’t get discouraged…get organized!

The best way to assure that you’re maximizing your profits on any given project is to make sure you’re maximizing your time. Well, okay. The BEST way is to buy the property at the right price–we make money when we BUY, after all, and we realize that money when we sell. But I digress…

Time is money, but unlike money, you can’t get your time back.


TIME IS UN-REFUNDABLE. USE IT WITH INTENTION.


Even the experienced investor may need his or her loan for the full term (6-12+ months). Even though an investor can get a project done in the recommended 45 days of renovation, there are many factors that could extend the project. Sometimes a home doesn’t sell right away once complete, sometimes you can’t predict that there will be mold that will need to be addressed or you could be stalled out on the process of permitting.

But besides the schedule crushers that you can’t control, there are steps you can take to assure that you’re making the most of your TIME investment.


If you’d like to read more about making the most of your time
and how time “management” is a myth, <CLICK HERE>


GET THE RIGHT FUNDING

 

You need a deal before you can get funding. But, if you want to make the most of your time on a project, find a few funding options before you stack and offer and write that contract.

First, you must understand more about what makes private lenders different from conventional bank loans, (For a comprehensive breakdown, <CLICK HERE>).

Then, shop around for what you need. When you have the right funding and understand the process (if you don’t, talk to your friendly loan officer today by calling (800) 473-6051. We’ll answer all your questions!), you can still expedite the process to assure fast funding and a more stably funded project by following a few guidelines.

Get the right funding, and get it when you need it! We’re happy to help.


DELEGATE

 

You can’t get everything done alone.

For each project, get bids from at least three contractors. Look for any discrepancies between the proposals and address them.  Look for someone both competent and honest.  When flipping multiple times, you can work with the same contractors, earning both discounts and loyalty.

But why delegate when you can do the work yourself?

If you’re a handy person, you may be tempted to lay the flooring on a project to save some money, paint the walls, or weed the backyard. Easy fixes, right? Why pay someone else to do them?

This is an object that comes up on the regular. I’m not going to tell you not to help out on your projects–we all need to roll up our sleeves sometimes and get in there to get it done right–but you need to look at the cost. If you can hire someone to come pull weeds and throw down a basic landscape for $14/hour, and you believe you’re worth more than $14/hour, then by doing the work, you’re giving yourself a massive pay cut.

It behooves you to hire out the elements of a project so you can spend your time focusing on managing the current project well and getting another deal under contract. If you can’t find another house to flip because you were too busy painting the basement, then you’re out more money than you saved.

You can hire people to do small jobs, you can’t hire people to run your business for you.


FOLLOW UP

 

Follow up- the most important part of delegating is following up. Following up isn’t just for acquisitions and contracts, you must follow up with your contractors and stay on top of their work and schedule, especially as it pertains to the schedules of others. If your electrician is running behind schedule, your drywall guy isn’t going to be able to get until the wiring is redone. And if your drywall guy is only available during a short window, you may have to hire someone else. If it takes you three days to find someone else, and they’re not available for another week, you could have to reschedule your painting and finishing.

You can prevent most of the headaches that arise by following up, confirming, and communicating with your contractors.

 

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!


NETWORK AND BE PREPARED

 

Things come up.

Maybe the chimney needs repair and your regular mason broke his foot and can’t work. If he’s the only mason you know, it’s naturally going to take you longer to find, vet out, meet with, get estimates on, and decide upon a replacement.

Keep your rolodex  (or you cell phone directory) full of reasonable and reliable contractors of all varieties.

How?

Well, the more projects you do, the more people’s numbers you’ll have handy. You’ll also be able to live and learn, kicking the duds who aren’t doing their jobs to the curb. All of this takes time, thought.

The fastest way to fill your back pocket with good contractors is to network with other people who are doing what you’re doing. This is why I have the RULE OF 56. Just be aware that if you get the name of a good contractor,

No contractors available for smaller things? Take a page out of Deepa Quadir-Alam’s handbook and have a good handyman to fall back on. To read more of Deepa’s latest success story, <CLICK HERE>


EXIT STRATEGY

 

Have a strong exit strategy. I can’t emphasize enough how much a good exit strategy WILL change your investing career.

If there’s any one thing that stalls a process more than anything else in the world, it’s a project that isn’t working out the way you planned and now you can’t get out.

If you don’t have an exit strategy, a project that takes a turn for the worst could become a money pit and fast. If you’d like to learn more about how to create an exit strategy for each stage of your project, join me on Monday, March 5th for my CEO Fireside where I’ll discuss this and much more. <CLICK HERE> to register!


By anticipating the needs of a potential project, you can assure that your project is scheduled properly, that your funding ducks are in a row, and that you have a plan for anything that could happen.

And when you effectively and efficiently manage projects, you can do multiple ones, do them quicker, and snowball your investing career.

If you’d like to dive deeper into becoming the best project manager you can be and how that will impact your investing career, talk to one of our Business Development Professionals about taking the Project Management Specialty Class. If you’re going to invest in fix and flip properties, it doesn’t make any sense not to learn how to best manage your projects. Call us at (800) 473-6051

To Your Planning;

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!

Are Flipped Houses Bad for the Housing Market?

Do Flipped Homes Dramatically Change the Housing Market?

When it comes to investing in distressed homes, I’ve heard it all.

You probably have, too, especially if you’ve been in the industry long enough and have explained what you do to enough of your friends and family.

Most recently, I had the opportunity to tackle a concern from an upset buyer who claimed that the rise in renovated houses was ruining the housing market. Coming to Spokane, Washington from a larger market where home prices had risen steadily over recent years, he noticed a correlation between the higher number of area investors and associated the two. According to him, flipped properties forced surrounding housing prices up so high that he could no longer afford to live in his desired neighborhood.

But does his concern hold water?

Do increased home values affect the economy?

Or is this a chicken vs. egg argument?

The economy is cyclical, with natural periods of expansion and recession. As such, one can assume the housing market is, too, and that anything that drives up the housing market—such as increasing home values—affects the economy. But does it?

In this business, we work off percentages and margins. In a volatile economy, those margins shrink, and when the economy is good, we have more opportunity to profit.

If the economy is doing well and unemployment is low, the demand for housing increases, and in turn, so does the cost of housing. Conversely, when the economy drops, and budgets tighten, the money allocated by the average American family for general upkeep on a property is shortened to cover the basics, like the mortgage, and housing values decline. Stretch this out long enough and extreme enough, and neighborhoods values reflect the dropping home values.

It is fair to say that the economy influences the housing market more than the housing market influences the economy.

Regardless of how simplified we’ve made the economic cycle here or how many details we’ve left out, the real issue is why anyone would believe flipped houses in any neighborhood would affect their buying power. It sounds to me like we’re dealing with a potential homeowner who would rather avoid bringing value and motivation to his market rather than live among distressed homes.

Instead, flipping breathes new life into communities by giving qualified buyers a chance to live in their dream home and adds value to the hardworking homeowners in the area who don’t want to live among run-down properties.

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.

Let’s make our communities stronger, increase values, and make real change in this oscillating world.

If you want to make a difference in your area’s communities, join us at the Lee Arnold System of Real Estate’s Master Lien Abatement specialty lab. To learn more about acquiring houses for pennies on the dollar, becoming the go-to investor in your town for nuisance properties, and flipping for huge profit, <CLICK HERE> or call NOW at (800) 473-6051. 

Your Neighbor;

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!

Small House, Big Payoff

Nathan Brown had always watched the flipping shows on TV and talked about one day doing a project, but it wasn’t until he returned from a vacation when he realized it was time to do something about it. With instruction and guidance from Lee Arnold of the Lee Arnold System for Real Estate Investing, Nathan took the plunge.


“After so many HGTV, DIY Network and Do It Yourself home shows, we knew it was time to take the plunge. Calling COGO capital was the first step in a great decision. Talking with Lee and his staff, they helped me choose a property, line up financing, establish remodel goals, stage the finished rooms, list and ultimately sale the house. Our first real adventure out in the house flipping world was a little scary, but they put at ease with some guidance and direction from Lee. It was just the shoulder we needed to lean on. I have to say, we went over budget, but still made 6-months of income in 6 weeks. Thanks again COGO Team!”


After finding a small property to start on—540 square feet to be exact—Nathan purchased the property at the wholesale price of $50,000.

Construction took about 7 weeks and $14,000—a little higher than he originally budgeted, but with the project done in plenty of time, the experience went smooth. Other than having to jack the floor up a few inches in the bathroom and raise the height of the roof, the only major rehab cost went into rewiring the entire electrical system in the house. Big ticket items aside, the rest of the repairs were cosmetic, and none of the rehab went over schedule.

He was able to get the house on the market in the 3rd week of October. By December 3rd, he received an offer, and they closed on January 4th for a total of $99,900.00.

After all the holding and closing costs, Nathan pocketed a net profit of $25,031.

When asked if he had any “Aha!” moments, Nathan replied by explaining how he’d never do a house with one tiny bedroom again! He realized it was too small for his big dreams (540sq. feet, remember?), but with the total profit he earned, Nathan admitted, “I’d take those projects all day long!”

After taking a small break, Nathan plans to do more projects and implement what he learned in a larger property.

Nathan raved about Cogo, saying the loan process was “easy and seamless.”

His experience with the Lee Arnold team was instrumental in his success, too. “It was nice to have staging help and to bounce rehab ideas off the team. Any questions I had I was able to pose them and get real-time answers. I’d always wanted to do a flip, but when the rubber met the road, I still had a lot of things to learn and was grateful for my support.”

We can’t wait to see what Nathan Brown does next!


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.

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!

*definition provided by our friendly and comprehensive friends at Wikipedia

 

To learn more about attending a Funding Tour near you, visitFundingTour.com

 

Determining Your Property Values

Determining Your Property Values

Before you place a bid at a foreclosure auction, you need to understand what a home’s value is. You should also know the property’s lien position, do a title search, understand your exit strategy, and get your financial ducks in a row.


To read more about the other steps <CLICK HERE>


1) Drive by the Property

We need to drive by the property. Do not buy a property if you or someone you trust and are working with drives by it.

If you buy a property at an auction, you own it. You can’t give it back; there are no representations or warranties made at the time of the sale. Auctions are buyer-beware, with zero liability to the auction house. And if you drive out to the property and the house has burned to the ground, then guess what? You just bought a pile of ashes.

Driving by the property also helps you to understand the your market.

When you see For Sale signs in these areas, pull the fliers. Look at the square footage, the year built, the quality of construction, the asking price, and the days on market. Get more familiar with the values of real estate in your market.

Then, as you get better, you don’t have to drive all these properties. You can then just pull up a property on Google Maps, check out a 360-degree view of the street, and you’ll have what you need.

But if you’ve never purchased a property at auction, you need to drive out to the properties.

2) BPO

BPO, or Broker Price Opinion, comes from the multiple listing agent. In other words, “A broker’s price opinion is the process used by a hired sales agent to determine the potential selling price or estimated value of a real estate property. A BPO is popularly used in situations where a financial institution believes the expense and delay of an appraisal is unnecessary.”*

This tool is used by brokers and agents, lenders and mortgage companies, and loss mitigation companies. Each state has different rules and regulations for these services, such as providing the service if the the property is occupied at the time of sale. So do your research and  get acquainted with how it will work for you.

3) MLS

Here’s one piece of advice that I give all my private clients: If real estate is going to be your career path, I highly recommend that you get your real estate license. What it does is give you instant access to pull value on a property yourself.

I’ve been a licensed agent for over 15 years, and I’ve never not been able to participate in a deal because of my licence, so don’t believe the excuse that having this license limits you in term of investing.

I will often use an agent to get an opinion on value, but I will always pull my own comps to determine the value of a property.

4) Zillow

Zillow is also a great tool.

I use it because it has the most information in the shortest period of time. I will use it to sneak a peak at a property and increase my interest, but I would never use it alone to buy, acquire, or bid on a property.

The only tool I’m going to use to support or substantiate money is the MLS. It’s real-time value, days on market, comps, and more. You can gather information from all the sites (Realtor.com, Trulia, Zillow, etc.), but it isn’t going to be real-time and will cost you hours.

Bottom line, if you’re going to turn this passion of real estate into your profitable and long-term career, you should have access into the MLS at a click of your mouse. It’s the best data you can get.

5) Tax Assessed Value

The TAV is defined as the most amount of money the associated municipality can tax you on the value of the real property without you challenging them about the real value. In some states, it’s 80-90% of the FMV (Fair Market Value), but in states like California, it is 100% of the FMV.

In today’s market, most municipalities have over assessed property values in their district so that they can keep their tax base high.

(If you have a property that you know is valued at
$120,00 and the TAV is $180,000, challenge it!
Get your taxes down so you can save more money annually.)

What we’re looking for by pulling the TAV is the year built, the size of the lot, who has owned the property in the past, and who currently owns the property. We want to determine if there are any tax liens on the property and what the bed and bath count is. Often times, the floor plan will be included with the TAV, especially on newer construction because they have to present the floor plan to the building commission to get building permits in order to get a certificate of occupancy.

If this is included, take full advantage and look at the floor plan configuration. The floor plan is a big deal when selling a house quickly. If you walk in the door and WHAM! There’s a bathroom wall that hits you in the face and separates you from the openness of the living area, you’re not going to have a quick or easy time selling that property.

Remember, people buy property based on feeling. The price is secondary. If the potential buyer doesn’t get an immediate rush when walking in the house of “Wow! I like this place,” then you’re not going to sell it. That’s the real value of looking at a floor plan before buying a house at auction.

6) Comps

Get at least 1 listed comp within one mile of the subject property and the remainder within 5 miles.

The smaller radius you can get to the property in question, the closer you can determine the value.

Why do we want the comps to be as close to the property as possible?

Neighborhoods are fickle. We’ve all driven through neighborhoods that are just beautiful, and then a few blocks later, you’re wondering where you put your concealed weapon to ensure your safety. So the further out your comps reach, the more risk you inherit with those numbers.

Do your evaluation as close to the property in question as you can to assure you’re maximizing your understanding of the property value.

Look for at least:
3 Recently Sold
3 Currently listed


When you understand the property’s value to the best of your ability, you can maximize your foreclosure auction profits by determining your maximum bid.

But this isn’t just for auctions. Before you make offers on a property, you need to have all the numbers on paper for yourself to determine your maximum offer, your rehab costs, what you would wholesale the property for, and what the ARV (After Repair Value) is on the home.

Part of understanding a home’s value is understanding the value of your time. By doing a bit of due diligence on the front end, you can avoid getting into a project that won’t yield you the income you desire and are worth.

Thankfully, if you go through Cogo for you private money loan, we won’t let you get into a property that we know will lose you money. Our application process includes items for this reason; to assure that we are only loaning out on properties that won’t get you into trouble.

You’re in good hands with Cogo.

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.

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!

*definition provided by our friendly and comprehensive friends at Wikipedia

 

To learn more about attending a Funding Tour near you, visit FundingTour.com