Chasing Infinite Returns Using Real Estate Investor Financing

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http://www.Hasslefreecashflowinvesting.com If you are a real estate investor, you are trying to control more assets and reduce your liabilities. A savvy real estate investor knows that good debt can work for you; it can be an asset rather than a liability. If you would like to learn how to create good debt and use that debt as a powerful wealth creation tool, this FREE webinar is for you! Professional real estate investor David Campbell and world-class financing strategist Graham Parham will teach you how to use creative and conventional financing to increase your cashflow and real estate investor profits.

If you can borrow money at a fixed interest rate of 4% and invest conservatively at 6% profit or better, how much money would you like to borrow? Let's see... I can borrow $100 and invest it to make a $6 dollar profit. After I pay $4 of interest there is $2 of profit left over for me to keep... Making money on the bank's money is called arbitrage and it's the way people get rich in real estate. It is almost impossible to create a fortune in real estate without the responsible use of leverage (debt).

If you could buy property with 100% financing and produce positive cashflow, how many of those properties would you like to own? If you said "AS MANY AS I CAN GET!" you've got the right idea. As a real estate investor wouldn't you like to realistically know how many you can get? If you know the rules lenders are working with, you can develop real estate investor strategies to use these rules to your advantage. If you don't know the rules, you can't play (at least not very well).
david campbell _ graham parham

Our panel of experts will help you unravel the mysteries of real estate investor financing. You'll learn:

1) How to prepare your balance sheet, credit score, mindset, and acquisition strategy to borrow money from banks at unbelievably low interest rates.

2) Creative real estate investor strategies to buy income property using low interest rate loans when you have cash but no credit and no income!

3) Creative real estate investor strategies to buy income property using low interest rate loans when you have a good job and good credit, but limited amounts of cash for the down payment!

4) How to create double digit, triple digit, or even infinite returns using arbitrage - e.g. borrow money at a fixed rate of 4% and invest it for virtually guaranteed profits of 6% or better.

5) How a real estate investor can leverage even small amounts of equity in their existing real estate to buy more income property.
WE'VE SAVED THE BEST REAL ESTATE INVESTOR NEWS FOR LAST.

Would you like to know how to refinance your primary residence and rental properties at today's low interest rates, even if you have NO EQUITY? It sounds crazy but it's true. We'll help you take advantage of the government sponsored HARP program that helps underwater homeowners and real estate investors take advantage of today's unbelievably low interest rates.

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Chasing Infinite Returns Using Real Estate Investor Financing

  1. 1. www.HasslefreeCashflowInvesting.com Chasing Infinite Returns Using Real Estate Investor Financing
  2. 2. www.HasslefreeCashflowInvesting.com Today’s agenda 1) How to prepare your balance sheet, credit score, mindset, and acquisition strategy to borrow money from banks at unbelievably low interest rates. 2) Creative real estate investor strategies to buy income property using low interest rate loans when you have cash, but no credit and no income! 3) Creative real estate investor strategies to buy income property using low interest rate loans when you have a good job and good credit, but limited amounts of cash for the down payment! 4) How to create double digit, triple digit, or even infinite returns using arbitrage - e.g. borrow money at a fixed rate of 4% and invest it for virtually guaranteed profits of 6% or better. 5) How a real estate investor can leverage even small amounts of equity in their existing real estate to buy more income property. 6) How to refinance your primary residence and rental properties at todays low interest rates, even if you have NO EQUITY
  3. 3. www.HasslefreeCashflowInvesting.com David Campbell - Founder Hassle-Free Cashflow Investing Former high school band director Self-made multi-millionaire Real Estate investor / developer / broker +$800 million in transactional experience Financial educator / author / speaker Houses, condo-conversion, multi-family, winery, resort, office, retail, medical office, production home buildingFaculty Member: Investor Summit at Sea with Robert Kiyosaki Regular Contributor to the Real Estate Guys Radio Show
  4. 4. • Mortgage specialist for over 15 years.• Over 22 years in sales, marketing, and customer service.• One of the top mortgage producers in Dallas-Fort Worth, TX.• Focus on residential lending and residential investor financing.• Active real estate investor.
  5. 5. RELATIONSHIPS IDEAS OPPORTUNITIES NOT a sales pitchNOT investment, legal, or tax advice
  6. 6. PrimeLending Locations• We currently have over 200 offices in 41 state with this national representation, we are well equipped to provide loans in ALL 50 states. I Can Provide You Loans in All 50 States
  7. 7. MINDSETArbitrage is the investment strategy ofborrowing money to invest for a profit.
  8. 8. RULE #1 of Hassle-Free Cashflow Investing CAP Rate > Interest Rate positive leverage infinite ROI
  9. 9. www.HasslefreeCashflowInvesting.com CAP > interest rate • $100k price x 6 CAP = $6k NOI • $100k debt x 5% interest rate = $5k expense • $6k income - $5k expense = $1k profit infinite ROI
  10. 10. Case Study No financing = No Arbitrage6 CAP > 7% Interest Rate = Negative Arbitrage6 CAP > 5% Interest Rate = Positive Arbitrage
  11. 11. No Arbitrage NO MORTGAGE Price: $100,000 6 CAP $6,000 NOI n/a n/a mortgage $0 Interest Cost $6,000 profit$100,000 invested 6% ROI
  12. 12. No Arbitrage Negative Arbitrage NO MORTGAGE Interest > CAP (Bad) Price: $100,000 Price: $100,000 6 CAP 6 CAP $6,000 NOI $6,000 NOI n/a 7% Interest Rate n/a mortgage $80,000 mortgage $0 Interest Cost $5,600 Interest Cost $6,000 profit $400 Profit$100,000 invested $20,000 invested 6% ROI 2% ROI
  13. 13. No Arbitrage Negative Arbitrage Positive Arbitrage NO MORTGAGE Interest > CAP (Bad) CAP > Interest (Good) Price: $100,000 Price: $100,000 Price: $100,000 6 CAP 6 CAP 6 CAP $6,000 NOI $6,000 NOI $6,000 NOI n/a 7% Interest Rate 5% Interest Rate n/a mortgage $80,000 mortgage $80,000 mortgage $0 Interest Cost $5,600 Interest Cost $4,000 Interest Cost $6,000 profit $400 Profit $2,000 profit$100,000 invested $20,000 invested $20,000 invested 6% ROI 2% ROI 10% ROI
  14. 14. Essential Resources• cash• cashflow• credit LIMITED• equity• time LIMITED and INFINITE• talent• strategic relationships INFINITE• control of an opportunity
  15. 15. Income DTI cash reserves Mortgage Credit Collateral property type FICO conditionexclusion events location LTV
  16. 16. Historically low interest rates Why NOW is the time to buy real estate!
  17. 17. Home prices have returned to the long term trend lineWhy NOW is the time to buy real estate!
  18. 18. Home pricesbelow CPI CPI median home pricesWhy NOW is the time to buy real estate!
  19. 19. interest rates and median prices home price are low interest at the same rates time Why NOW is the time to buy real estate!
  20. 20. Investor Loan Programs 1 – 4 Loans 20% Down Payment available for Single Family 30, 20, 15, & 10 Rate Programs Adjustable Rate Loan Programs Minimum Credit Score of 620 Cash Reserves – 6 Months on Subject and 2 current H.E.L.O.C. Fund allowed No Gift Funds allowed
  21. 21. Investor Loan Programs 5 - 10 Loans 25% Down Payment available for Single Family 30 & 15 Rate Programs 5 Year Adjustable Rate Loan Program Minimum Credit Score of 720 Cash Reserves – 6 Months on all properties owned H.E.L.O.C. Fund allowed No Gift Funds allowed
  22. 22. Loan Programs Fannie Mae Home Path Programs Fannie Mae Home Style Programs Cash Out Refinance (Seasoned & Non- Seasoned) We honor 1031 Exchanges (No Entity Vesting) H.A.R.P. 2.0 Refinance Programs
  23. 23. (H.A.R.P.) Home Affordable Refinance Program Highlights• More Appraisal Waivers offered• More flexibility in tranference of current private mortgage insurance• Unlimited Loan to values available with certain servicers and loans without Private Mortgage Insurance!• Loan-to-value up to 125% with or without private mortgage insurance• Owner occupied, 2nd home and investment properties 1-4 units• Additional DU Refi-Plus programs• Unlimited # of properties owned 24
  24. 24. (H.A.R.P.) Home Affordable Refinance Program Requirements• Current mortgage must be owned or guaranteed by Freddie Mac or Fannie Mae• Current mortgage must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009• Current mortgage cannot have been refinanced under HARP previously unless it is a Fannie Mae loan that was refinanced under HARP from March-May, 2009• Current loan-to-value ratio must be greater than 80%• The borrower must be current on the mortgage at the time of the refinance, with a good payment history in the past 12 months 25
  25. 25. Can you qualify for a mortgage? Determine your debt-to-income ratio. If a loan program uses a 28/36 qualifying ratio, it means you are allowed to spend no more than 28% of your gross income on monthly mortgage payments, and no more than 36% on total debt. This includes debts such as car and school loans, credit cards, child support and alimony. If a person earns $60,000 per year, their monthly gross income is $5,000. Under the 28/36 guidelines, their maximum monthly mortgage payment should not exceed $1,400, while their totally monthly debt should not exceed $1,800. Down payments are generally paid in cash, due at closing, and are based on a percentage of the selling price of the sales price. You can make a down payment of 20% or 25% to get a better interest rate and reduce your DTI ration.
  26. 26. How many properties can I afford? On rental properties, we will give you 75% of the gross rent toward your qualifying ratios We will also give your credit on any addition rentals properties that you may be purchasing at the same time. If property in tenant occupied at the time of purchase, we will give you 75% of the TRUE gross lease amount. If the property is not lease out at the time of closing, we will still give you credit of the true comparable market rents determine by the appraiser.
  27. 27. www.HasslefreeCashflowInvesting.com How does this work? Scenario 1 Scenario 2 Sales Price $100,000 Sales Price $100,000 Loan Amount 75% $75,000 Loan Amount 75% $75,000 PITI Payment $682.00 PITI Payment $682.00 75% of Lease $750.00 75% of Lease $750.00 PITI payment $682.00 PITI payment $682.00 Qualifying income $0 Qualifying income $68.00 Non-Seasoned Seasoned Landlord Landlord Over 2 Years Under 2 Years
  28. 28. Applying for the Loan Make Loan Application  Apply Online  Phone Application Discuss your loan application in great detail with your loan officer. Choose a product that make since for your financial needs and commit to a rate lock. Review your loan disclosures, sign, date, and return with any requested documentation.
  29. 29. www.HasslefreeCashflowInvesting.com Applying for the Loan Sending loan documentation Email – Preferably in PDF form Toll free fax (All faxes go directly to me) Express Mail, FedEx, or UPS (No Snail mail) Third party vendors will be ordered, i.e. Appraisal, Title, Survey, and Insurance. Once all needed documentation is in our office, the processor will organize and submit the loan to our in-house underwriters for loan approval.
  30. 30. www.HasslefreeCashflowInvesting.com Underwriting And Closing Once the loan is reviewed, validated, and conditionally approved by the underwriter, we will notify you on any loan conditions that needed to be cleared for closing. After all conditions are satisfy, the loan is sent to our closing department. Loan documents are drawn and sent to the title company with closing instructions.
  31. 31. www.HasslefreeCashflowInvesting.com Closing and Funding The title closer will prepared the HUD settlement statement for our approval and will be set to the borrower in advance for their review. The title company will coordinate with the borrower on where to send the closing documents. The title company can also send the documents to a mobile notary for your convenience or you may choose to use your own notary.
  32. 32. www.HasslefreeCashflowInvesting.com Closing and Funding Once the closing papers are signed, notarized and returned to the title company, the closer will forward to PrimeLending for funding. Our closing department will validate the necessary signed documents and if complete will fund the loan.  Primelending funds and your fund will be sent to the title company in order to complete the closing.
  33. 33. www.HasslefreeCashflowInvesting.com DO’s and DON’T
  34. 34. www.HasslefreeCashflowInvesting.com What to DO during your loan process! Be responsive and don’t delay the process Inform us if your address changes from what appears on your original loan application. Full Disclosure is recommended Obtain homeowner’s insurance with minimum coverage equal to the amount of your total loan or the replacement value of the house. Call my office with your agent’s name and phone number at least 10 days before closing.
  35. 35. www.HasslefreeCashflowInvesting.com What to DO during your loan process! Let us know of any “Family Trust” requirements at the time of loan application. All revocable trusts have to be approved by our attorneys. We will need ALL pages of the trust document. Keep all documentation (or a “paper trail”) on any large deposits into your account. A “paper trail” is composed of the copies of all paperwork necessary to prove a financial transaction: copies of all checks, deposit slips, loan paperwork, forms to liquidate assets, etc.
  36. 36. www.HasslefreeCashflowInvesting.com What NOT to DO! Acquire any additional credit lines or make any large purchases on existing credit without first consulting us. For example: Purchasing a car or buying appliances for your new home will change your debt-to-income ratios. Change jobs without consulting us. A change in compensation may affect your ability to qualify. Borrowers must have a two-year history of bonuses and/or commissions to be counted as income. Lenders may verify employment on the day of closing as a quality control check.
  37. 37. www.HasslefreeCashflowInvesting.com What NOT to DO! Negotiate your contract with an allowance and expect to get money back at closing. An allowance can be used to pay closing costs and/or prepaids. Co-sign with anyone to obtain a line of credit or make a purchase. The payment will show up on your credit report as an additional debt. DON’T ASSUME ANYTHING!!!
  38. 38. www.HasslefreeCashflowInvesting.com Questions FREE Consultation: David@HasslefreeCashflowInvesting.com
  39. 39. David@HasslefreeCashflowInvesting.comwww.HasslefreeCashflowInvesting.com www.HasslefreeCashflowInvesting.com GParham@PrimeLending.com www.GrahamParham.com

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