Your SlideShare is downloading. ×
0
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Bi Solutions Private Lending 101
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×
Saving this for later? Get the SlideShare app to save on your phone or tablet. Read anywhere, anytime – even offline.
Text the download link to your phone
Standard text messaging rates apply

Bi Solutions Private Lending 101

1,154

Published on

Learning to Earn a higher Return - securely. This is a 1 hour seminar to introduce investors to earning 6% or more with Private Mortgage Lending.

Learning to Earn a higher Return - securely. This is a 1 hour seminar to introduce investors to earning 6% or more with Private Mortgage Lending.

0 Comments
1 Like
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total Views
1,154
On Slideshare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
0
Comments
0
Likes
1
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide

Transcript

  • 1. Private Mortgage Lending 101 … … Secure, Hassle Free, High Yields - Ron Nawrocki - Jim Williams – Joe Stachon Mortgage - Lynn Simonar – DHI Title
  • 2. WELCOME
    • We’re glad you found the time to be here
    • Hopefully you’ll be glad you came!
    • Feel free to ask questions during, at end, and 1 on 1 during our time wandering in the gardens
  • 3. About Me
    • Jim Williams, Senior Mortgage Consultant, Joe Stachon Mortgage
      • Residential lending & refinancing
      • Conventional & Jumbo
      • FHA, VA, USDA
      • Asset distribution income
      • Use of self-directed IRA’s
    • Partner with B.I.Solutions Corp. on using O.P.M.
  • 4. Investment Disclaimer
    • Nothing presented in this financial education seminar shall constitute the provision of investment advice by the presenters or any company sponsoring this seminar, and nothing provided or stated in the seminar should be interpreted as such.
    • In addition to and not in limitation of the foregoing disclaimer, the sponsors will not provide investment advice regarding any specific security or fund during this financial education seminar and nothing should be interpreted as such. No specific recommendations for the purchase or sale of any particular investment shall be deemed given to any attendees of this financial education seminar, and the mention of any particular security or investment is for example only.
  • 5. Outline
    • Brief Introduction
    • What is a Private Lender?
    • Why do it?
    • How? … an overview
    • Legal, Tax, Risks
    • Simplified, Safer Lending
    • Wine down!
  • 6. Introduction
    • How do banks make money?
      • Borrowing cheap – lending for more !
    • Do you think you could make money …
      • Borrowing at 0.5% … typical CD
      • Lending at 5.5%? … typical mortgage
    • How about lending at 6.5%? … real estate investors pay 1% more
  • 7. Bank Example … residential loan Banks make money on us! $ 8,000 $ 8,800 $ 800 Annually $ 667 $ 733 $ 67 Monthly 5.0% 5.5% 0.5% Interest rate $160,000 $160,000 Amount Profit Lend Borrow
  • 8. Bank Example … investor loan Banks make more money on investors! $ 9,600 $10,400 $ 800 Annually $ 800 $ 867 $ 67 Monthly 6.0% 6.5% 0.5% Interest rate $160,000 $160,000 Amount Profit Lend Borrow
  • 9. Example … loan using O.P.M. An opportunity to earn using O.P.M.? $ 1,600 $10,400 $ 8,800 Annually $ 133 $ 867 $ 733 Monthly 1.0% 6.5% 5.5% Interest rate $160,000 $160,000 Amount Profit Lend Borrow
  • 10. Conventional wisdom …
    • The year 2005 …
    • Invest with big name gurus with high returns
    • You can’t get ahead with guaranteed fixed return investments
    MYTH
  • 11. Reality on gurus with high returns …
    • Some are crooks
    • Know who you’re dealing with
    • Read what they’re investing in
  • 12. Google:
  • 13. Who is Ron (The Ronald) Nawrocki?
    • Phoenix area resident since 2007
    • Lived & worked in Europe from 1994 - 2007
    • Cornell Univ. Engineer and MBA in Finance
    • Manager at Xerox, Scott Paper, Bell Atlantic
    • CFO at Pepsi, Hortex, Pioneer Investments, McLane
    • Rotarian, Toastmaster, Who’s Who of Entrepreneurs, AZREIA, SW Valley Chamber, CrimShield, BBB
    • Author – “Investor Insights” in Hungary & Poland
    • Investor – 30 years
    • Full-time investor since 2001, CPS since 2007
  • 14. Evaluating any Investment … 4 tests
    • Liquidity
    • Safety
    • Rate of Return
    • Tax Consequences
    • Other: Social benefit
    Will Rogers: "I am more concerned about the return of my money, rather than the return on my money”
  • 15. Outline
    • Brief Introduction
    • What is a Private Lender?
    • Why do it?
    • How? … an overview
    • Legal, Tax, Risks
    • Simplified, Safer Lending
    • Wine down!
  • 16. References …
    • “ MAKE YOUR MONEY “PRIVATE MORTGAGE
    • MAKE MONEY FOR YOU” INVESTING”
    • - Amarjit Ahluwalia  - Teri B. Clark &
    • Matthew Stewart Tabacchi
  • 17. What is a Private Lender
    • Survey …
    • How many here are Private Lenders?
    • Any famous examples?
    • Warren Buffett
    • Carlos Slim
  • 18. Carlos Slim
    • Interested at 14%?
  • 19. Definition …
    • A private individual or company lending money against some collateral
    • Examples:
    • Bank CD’s … collateral is FDIC
    • Bonds … company assets as collateral
    • Loan to your relatives … collateral?
    • Tax liens – up to 16% in Arizona
    • How many here are Private Lenders?
  • 20. More examples …
    • “ Hard Money” loans to real estate investors … backed by deeds
    • Mortgage loans on income producing real estate … backed by deeds
    • Loan backed by Mortgage Loan (Deed)
      • Collateral Assignment
    • These are Private Mortgage Loans
  • 21. Outline
    • Brief Introduction
    • What is a Private Lender?
    • Why do it?
    • How? … an overview
    • Legal, Tax, Risks
    • Simplified, Safer Lending
    • Wine down!
  • 22. Why be a Private Mortgage Lender?
    • Bank CD’s pay you ( private lender ) 0.5% - 1.5%
    • Real Estate investors pay banks 6.0% - 7.0%
    • Cut out the middle man - earn 5.5% - 18+%
    • Why did Carlos Slim lend to NY Times vs. put money in CD’s?
  • 23. 4 Tests for any Investment
    • Liquidity
      • Monthly interest checks
      • Can have short maturities (6 mo. – 10+ yr.)
      • Can be sold or used to get Loan
    • Safety
      • Backed by Deed, Title policy, Insurance
      • Real estate does not go to zero
      • Value does not drop as interest rates rise
  • 24. But Banks are in trouble …
    • Do NOT:
    • Sell your loans with Credit Default Swaps
    • Lend 100% of the purchase price
    • Give the buyer Title to live in the Property
  • 25. But Banks are in trouble …
    • Lend only :
    • On income producing real estate ( not owner occupied)
    • To investors with good credit & assets
    • With a Corporate and/or Personal Guarantee
  • 26. 4 Tests for any Investment
    • Rate of Return
      • 6.0% and higher
      • Linked to mortgage rates for investors
    • Taxes
      • Fully taxable
      • O.P.M. used is tax deductible
      • Unless in an IRA
  • 27. Financial Headlines
  • 28. ‘The Ronald’ on Problems …
    • Biggest Problem – Banks aren’t lending
  • 29. More Headlines
  • 30. ‘The Ronald’ on Problems …
    • Biggest Problem – Banks aren’t lending
    • There are no problems – Only Opportunities disguised (Pepsi mantra)
    • (1+2) Banks aren’t lending is the Biggest Opportunity – For Who?
    Private Mortgage Lenders !
  • 31. 4 Tests for any Investment
    • Social Benefit
      • Private Lenders help the Economy … more than the Government !
  • 32. The Benefits …
    • We help people make money in Real Estate …
    • Who?
    • Home buyers who can’t get a mortgage
    • Fix & Flip Investors
    • Cities & Towns
    • Realtors
    • Mortgage Brokers
    • Title Companies
    Private Lenders ! Electricians Plumbers Inspectors Appraisers Painters Landscapers Bank shareholders! Investors ! Phoenix Economy!
  • 33. Outline
    • Brief Introduction
    • What is a Private Lender?
    • Why do it?
    • How? … an overview
    • Legal, Tax, Risks
    • Simplified, Safer Lending
    • Wine down!
  • 34. How? … an overview
    • YOU are the Bank !
    • Find & Check Borrowers
    • Evaluate the Deals
    • Determine what YOU want
    • Negotiate & Agree T&C’s
    • Close with Title Company
    • Cash your checks !
  • 35. Know the Documents
    • Note: Your agreement with Borrower
      • Personal Guarantee or Recourse
      • Property Taxes & Insurance kept current
    • Trust Deed: Pledges property if Note T&C’s not met
      • Must be recorded
    • Lender’s Title Insurance
    • Insurance: You must be Co-beneficiary or Mortgagee
    • Lender’s Instructions: How you want the deal handled
    • Good News: Title Company handles all these !
  • 36. Find Borrowers
    • Banks aren’t lending – Borrowers everywhere
    • Tell your network you are Private Mortgage Lender
    • Attend Business Mixers, Investment Clubs
    • Tell Real Estate Agents, Appraisers
    • Mortgage Brokers?
    • Simplest: Call ‘The Ronald’
  • 37. Check Borrowers
    • Experience in Real Estate
    • Are they making money?
    • Credit Report/Score
    • References, BBB
    • Visit properties (Current & Past)
    • Do they know more than you?
  • 38. Evaluate the Deals …
    • Fix & Flip vs Income Producing
    • Size of loan vs Your funds available
    • Terms requested
    • Location – NOT too important
    • Condition of property
    • Review a few before Lending
  • 39. Determining Value (ARV)
    • Appraisal
      • Most accurate, Most expensive
      • Difficult in Today’s Market
    • MLS (imapp) Comps
      • Square Footage & Value basis
      • Some neighborhoods have only REO (bank owned) sales
  • 40. MLS Comps
  • 41. Determining Value (Cnt’d)
    • County Appraiser, Recorder & Taxes
      • http://www.maricopa.gov/Assessor/Parcel Application
      • http://recorder.maricopa.gov/recdocdata
      • http://treasurer.maricopa.gov
    • For Income Producing
      • Value based on Rental Income
      • Hint: Value ~= 120 rent payments
  • 42. Appraiser
  • 43. Appraiser
  • 44. Recorder
  • 45. Recorder
  • 46. Mortgageable Equity
    • or Investable Equity
    • Not for Fix & Flip – Key for:
      • Income Producing Property
      • Lending against Mortgage Note
    • Factors in Equity , LTV ; Interest rate(s), Cash Flow to make all payments
    • Best Ref: Greg Pinneo (approx. $3,000 course)
  • 47. To do it on your own …
    • Come to our 4 hour course - $49
    • You’ll be ready to start looking for Clients that day
    • We have TOO MANY Clients!
    • Banks aren’t lending … great opportunity
  • 48. Outline
    • Brief Introduction
    • What is a Private Lender?
    • Why do it?
    • How … an overview
    • Legal, Tax, Risks
    • Simplified, Safer Lending
    • Wine down!
  • 49. Legal Aspects
    • Private Lending is not complicated
    • Title Co. handles most paperwork
    • B.I.Solutions has Lawyer retained with volume of loans taken & made – will soon get:
      • SEC registration
      • Hard Money lender license
    • Mortgage Pools require SEC registration – Avoid
  • 50. Legal Aspects
    • Lending to investors: “ Commercial loan on Residential Property ”
      • Does not fall under residential mortgage licensing
    • Several lenders partnering - Use LLC
      • NOT mortgage pool
      • Simple Operating Agreement to designate %
    • Or Largest takes 1 st position, next 2 nd …
  • 51. Tax Aspects
    • Interest Earned is fully taxable
    • Income tax deferred/avoided if loan in IRA
      • Must be self-directed
    • Borrower (if Company) should issue 1099-INT
    • Private Lender, like Financial Institution, must issue 1098 & 1096 to individual borrower
      • Can issue for company
  • 52. Tax Aspects
    • Using O.P.M.: must issue 1099-INT & 1096 to private lender to be investment interest (tax deductible), except
      • Corporation – Bank or B.I.Solutions
      • Using mortgage or HELOC
      • Credit Card 0% offer - transfer directly to borrower
  • 53. Tax: 1099-INT
  • 54. Tax: 1099-INT
  • 55. Tax: 1098
  • 56. Tax: 1098
  • 57. Risks
    • Lower risk than tax liens, bonds, stocks, angel investing, private equity, personal loans …
    • Borrower Performance (You’re the bank)
      • Foreclosure cost $2,000 - $4,000
      • Handled by Lawyer or Title Co.
    • Property Valuation
    • Cost & Time to resell property
    • Money on the side-lines earning ~0%
  • 58. Outline
    • Brief Introduction
    • What is a Private Lender?
    • Why do it?
    • How … an overview
    • Legal, Tax, Risks
    • Simplified, Safer Lending
    • Wine down!
  • 59. Do it Yourself Lending
    • Property? Property Property
    • Client Client Client?
    • ? ? ?
    • Lender
  • 60. Simplified Lending
    • Prop1 Prop2 Prop3 … PropX
    • Client1 Client2 … ClientY
    • B.I.Solutions
    • Lender Lend2 Lend3 … LendZ
  • 61. Simplified Lending … B.I.Solutions Corp.
    • Plus:
    • No need to find & check Clients!
    • Local, with track record of success, references
    • Backed by $multi-million portfolio, strong cash flow
    • Guaranteed repayment & interest payments
      • Regardless of Client payment
    • Referral based Clients calling weekly
    • Handles Credit checks, Valuation, Mortgageable Equity
  • 62. Simplified Lending … B.I.Solutions Corp.
    • Plus:
    • Chooses the best tenant/buyers and borrowers to fund
    • Handles all tax filings (except 1096 signature)
      • Including those for OPM borrowed
    • Low $10,000 Minimum – many loans to chose from
    • Minus:
    • Slightly Lower interest rate – How’s your wife?
      • But much higher than CD’s, T-Bills
      • But money invested the whole term
    • Only residential properties (for now)
    • Minimal involvement in multiplex apartments
  • 63. The Business
    • B.I.Solutions Corp. - 2 Divisions …
    • Buying Solutions – Home buyers – who can’t qualify for a mortgage
    • Investing Solutions – active real estate Investors who need “Fix & Flip” loans
    Banks aren’t lending – we have backlog of Clients
  • 64. 1. Fixed Rate*, guaranteed
    • “ BI MP3”
    • 6 mo.– 6.0% ( No early withdrawal penalty)
    • 12 mo. – 6.5%
    • 3 yr. – 7.0%
    • Monthly interest checks …
    • $10,000 minimum
    • Investment backed by full portfolio of properties
    • Plus my personal guarantee
    • * Rate based on investor mortgage rates at time of investment
  • 65. 2. Fixed Rate*, guaranteed
    • Investment backed by a specific Deed plus my personal guarantee
    • 12 mo. – 6.5%
    • 3 yr. – 7.0%
    • Creative investing:
    • Convert Bank CD, earn $00’s more
    • Take mortgage on home and earn $000’s/yr.
    • * Rate based on investor mortgage rates at time of investment
  • 66. Interest Payment
  • 67. Some Trust Deed Loans
    • Loan to Value (LTV) 65%; 1 yr ; 6.5%*
    • Phx03: $130,000; 4-plex; collateral assignment
    • Phx04: $180,000; 3-plex; “
    • Phx05: $94,500; “
    • Phx06: $ 94,500; “
    • AvonX: $100.000; “ (pending)
  • 68. Toll1: 9416 W. Williams St
    • 1,761 sf; 3 Bdrm / 2.5 bath
    • Parcel: 101-27-602
    • $1,295 lease payment (25% rebate)
    • Cash flow of $269/mo
    • Option for $194,900 – $205,470
    • Current 1 st position loan - $114,000
    • Mortgageable Equity (6.5%, 90% LTV): $26,000
  • 69. Some Trust Deed Loans
    • Loan to Value (LTV) 90%; 3 yr ; 7.0%*
    • Toll1: $ 26,000; 2 nd position
    • $140,000; 1 st position
    • Toll2: $ 29,500; 2 nd
    • $146,000; 1 st
    • Avon1: $ 32,000; 2 nd
    • $150,500; 1 st
    • Glen1: $145,800; 1 st (best deal)
  • 70. More Trust Deed Loans
    • Loan to Value (LTV) 90%; 3 yr ; 7.0%*
    • Phx02: $145,500; 1 st (pending)
    • Mesa2: $162,000; 1 st position
    • VerrX: ~$215,000; 1 st (new)
    • Phx04: $500,000; 7-plex; 1 st
    * Interest Rate & payments guaranteed, regardless of Client’s payments
  • 71. Bribe to fill-out Questionnaire …
    • We need your feedback to improve the seminar
    • If you fill-out the form:
    • Enter in today’s drawing
    • We cover your CD pre-payment penalty to get into a similar maturity Private Loan with B.I.Solutions (thru 6/30/2009)
    • We buy you dinner for people you refer that become B.I.Solutions private lenders (they might buy you 2 dinners!)
  • 72. Questions?
    • Q&A time
  • 73. BBB Website
  • 74. Website
  • 75. Contact
    • Ron Nawrocki (The Ronald)
    • B.I.Solutions Corp.
    • Verrado
    • 1-623-249-4792
    • [email_address]
    • www.TheRonald.us
    P roven, P rofitable, and P ositioned for Growth
  • 76. Security – Private Mortgage Loan
    • Any Private Mortgage Loan (should) have:
    • NOTE
    • DEED OF TRUST
    • LENDER’S TITLE POLICY
    • PROPERTY INSURANCE
    • B.I.Solutions also provides:
    • CLIENT INCOME
    • B.I.SOLUTIONS CASH FLOW & ASSETS
    • RON NAWROCKI’S PERSONAL GUARANTEE
  • 77. 4 Ways to Invest in Real Estate LOAN OWN
    • Do Nothing
    Lending
    • Fix & Rent
    Mortgage
    • Lease-to-Own
    • Private
    • Fix & Sell
  • 78. B.I.Solutions’ Investments LOAN OWN
    • Do Nothing
    Lending
    • Fix & Rent
    Mortgage
    • Lease-to-Own
    • Private
    • Fix & Sell
  • 79. Using IRA’s
    • IF you have a choice which money to use:
    • Use IRA - these are fully taxable:
      • 1. Fix & Sell
      • 4. Private Mortgage Lending
    • Use taxable money - these have tax breaks:
      • 2. Lease-to-Own
      • 3. Fix & Rent

×