Closely Guarded Millionaire Secrets to Invest in "Real Estate" with "NO Money Down" Part 2

Dario Lorenzo has been buying and selling real estate for over 20 years. He knows the business of real estate investment: from buying at the right time, finding the right property, making the right improvements, and selling at a point in the market cycle that produces the highest possible profit.Dario began investing in real estate in Canada where he grew up. While learning the business, Dario began to research different markets including the United States.Knowing how to recognize emerging markets is one of the key factors in Dario’s successful investments, especially in markets with bad economies. Once the economies improved, Dario created tremendous value in his real estate assets.With the techniques he developed, Dario has been able to buy and sell real estate worth over $100 million dollars. He knows how to structure deals especially those done with no money down and other creative financing methods. Now Dario is ready to share that information with you.Dario speaks from his own extensive experience when he shares his techniques. Some of these investment methods are commonly used, others are less known. All Dario’s tips are useful, whether you are just starting out or you have all your money tied up in other investments.Not every deal can be done without money down. However, having knowledge of these techniques will help you analyze opportunities that come your way so that you can identify those that can be successfully executed with no upfront money.For investors who want to control as many properties as they can, Dario’s tips are essential. Here’s the second part of hi's checklist for creating new wealth.

12. Issue Stock
Form a corporation and issue stock to sellers for their equity. It solves their management problems and starts a real estate business for you. They get an equity position in the company.

13. Acquire with Future Profits
Acquire the property at an agreed price, with the seller's equity to be paid out of future profits as the project is turned around.

14. Hard Money Loan
When you're investing in multi-family properties, hard money is also called "mezzanine financing". If the loan-to-value ratio is 65% or below, many mezzanine lenders will finance you with no money out of your pocket. Why? Because the value is in the property. If you default, they simply take the property, sell it for 85% of value, and still make money.

15. Family Loan
Do you have a family member with big bucks? Or a family member that has a lot of equity in a property that they can loan you some money from? Perhaps some family members have a lot of money in a savings account that they would like to get a bigger return on. Whatever the case, go to your family first and see what they will do to help you out. If you're smart, you will make it worth their while: either give them a decent interest rate on the money or (even smarter) give them some equity in the deal... perhaps 5%.

16. Acquire with a First and Second, then Sell the First for Cash
Buy a property with the seller carrying back both a first and second mortgage. Make the closing contingent on locating a buyer for the first at an acceptable discount, with the cash going to the seller as down payment.

17. Land Sale/Leaseback
Offer to acquire the improved property, subject to finding a purchaser who will buy the land under the building out of escrow, and lease it back to you subject to the existing financing. Cash from the land sale goes to the seller as down payment. You get depreciation on the improvements, and you can also deduct lease payments.

18. Pledge Future Income as Down payment
If you have a secure job or future investment income, negotiate with the seller to have your bank deduct a specific amount from your checking account each month until the amount the seller wanted as down payment is made. As additional security, you can give the seller a mortgage on other property to secure your performance under the agreement. You get immediate ownership and the seller eventually gets the down payment.

19. Lease Interest as Down Payment
When you are buying from a seller who is also a property user, offer one year's income in the form of free rental as down payment. The seller gets continued use for one year in lieu of cash down. You get ownership with all its burdens and benefits, but with no outlay of cash.

20. The Performance Second
Used in variations involving cash as well as sometimes without cash, the "performance second" is designed to test the seller's faith in the value placed on the property. Buy at the seller's asking price with payments on the second mortgage subject to the income on the property. If income is less than the seller has represented, then the payments he receives on the second will be less than he would like. But if the net income is greater, the payments increase. The second mortgage amortization is consequently tied directly to property performance.

21. Broker as Lender
If you are working with a successful broker, don't count him out as a lending source. Considering that he will receive a commission out of the down payment, there is often the possibility that he might like to make a sound investment at a high interest rate, using in part the cash he receives as commission; that's cash he will not receive if your deal doesn't go through.

22. Line of Credit
Take out a line of credit secured by you personally, your property, another property you own, or—if you own a business—against the business or against your accounts receivable.

Now You’re Ready to Buy Multi-Family Properties with No Money Down

As you can see, there are many different ways to structure apartment deals with no money down.

The more creative you can get, the more opportunities you will have to get into more deals, and the faster you will create your own real estate fortune. All it takes is this checklist and your own imagination.

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Who is Dario Lorenzo http://www.squidoo.com/dario-lorenzo

Dario Lorenzo
Affinity Investments
Vancouver BC V6Z 3B8
604 688 2521
http://www.affinityinvestments.ca/
facebook.com/dlorenzo
http://twitter.com/dariolorenzo
http://www.youtube.com/darioflorenzo
http://dariolorenzo.wordpress.com/


Other Articles
http://discoverfinanciallyfreedom.blogspot.com/2009/06/difference-between-urgent-and-important.html
http://discoverfinanciallyfreedom.blogspot.com/2009/05/ideas-and-action.html
http://discoverfinanciallyfreedom.blogspot.com/2009/05/financial-mess-real-deal.html
http://discoverfinanciallyfreedom.blogspot.com/2009/05/jobs-is-working-online-at-home-way-to.html

Closely Guarded Millionaire Secrets to Invest in "Real Estate" with "NO Money Down" Part1

Dario Lorenzo has been buying and selling real estate for over 20 years. He knows the business of real estate investment: from buying at the right time, finding the right property, making the right improvements, and selling at a point in the market cycle that produces the highest possible profit.
Dario began investing in real estate in Canada where he grew up. While learning the business, Dario began to research different markets including the United States.
Knowing how to recognize emerging markets is one of the key factors in Dario’s successful investments, especially in markets with bad economies. Once the economies improved, Dario created tremendous value in his real estate assets.
With the techniques he developed, Dario has been able to buy and sell real estate worth over $100 million dollars. He knows how to structure deals especially those done with no money down and other creative financing methods. Now Dario is ready to share that information with you.
Dario speaks from his own extensive experience when he shares his techniques. Some of these investment methods are commonly used, others are less known. All Dario’s tips are useful, whether you are just starting out or you have all your money tied up in other investments.
Not every deal can be done without money down. However, having knowledge of these techniques will help you analyze opportunities that come your way so that you can identify those that can be successfully executed with no upfront money.
For investors who want to control as many properties as they can, Dario’s tips are essential. Here’s his checklist for creating new wealth.


1. Owner Financing
A typically common way to buy a property with no money down is to use owner financing. This occurs when an owner agrees to finance all or some part of the purchase price, instead of getting the cash now.
You'll be surprised how many people own their properties free and clear, and are willing to finance the entire amount or a good portion of the mortgage. Usually, though, you will be getting secondary financing from the owner. That means you will get the majority of the money (the first mortgage) from another source, like a bank, and the seller will give you the rest in the form of a second mortgage.
There are four types of owner financing that you could ask for:
Type 1: Ask for the principal to be paid at a certain later date. If you notice, I didn't mention monthly payments for interest; only that the principal be paid at a later date. Why pay monthly payments or interest if you don't have to?
Who would go for this? Most sellers won't... but some will. You only need one to get yourself a great deal, so ask for this each time. If they do insist on interest or payments, go to the next offer.
Type 2: Principal divided into monthly payments. Again no interest; you're paying off 100% principal. That's a great deal for you!
Example: A seller agrees to finance $100,000 over 20 years. 20 years times 12 months per year is 240 payments. $100,000 divided by 240 equates to payments of $417 per month.
Type 3: Ask for interest-only payments, with the principal to be paid off with a "balloon" (also called "bullet") mortgage in 5 years.
In this example, we offer 8% interest on $100,000 of owner financing. Multiply $100,000 by .08 and get $8,000. Divide the $8,000 by 12 and get a monthly payment of $667 per month. You then must pay off the entire principal balance at the end of the fifth year. You would typically do this by either selling the property or refinancing it.
Type 4: If the owner insists on getting principal and interest, then you would structure the deal accordingly. Owner financing, $100,000, 8% interest, amortized over twenty years with a five-year balloon.
Your principal and interest payment is amortized over a long period—twenty ­five years—because the longer you make the amortization period, the lower the monthly principal and interest payments will be.

2. Borrow from a Private Lender for Down Payment
If you've got a great deal, but don't have the money for a down payment, find a private lender. This is any individual that has extra money set aside that you can use for your purchase.
The person can be a family member, friend, dentist, doctor, dry cleaner, a member of your real estate investment club, etc. Private investors are everywhere; you just need to start asking.
What do you ask for? Ask if they have money in an RRSP saving account or a savings account that they would like to get a return on, of 8-10%, secured by real estate.
After you get one or two lined up and you start to use them successfully, watch what happens. They will tell their friends, who will tell their friends, and so on. It is human nature to brag at cocktail parties or at the gym about what a great investment you just made. Before you know it, you will have all the funds you need, and your business will explode.

3. Personal Loan
Take out a personal loan at your local bank for the down payment. Don't use the same bank that you used for your first mortgage on the property.

4. Subject To
Just like single family houses, you can take over multi-family properties subject to the existing mortgages. The mortgage stays in the current owner's name, but the deed is transferred to your name.
It’s is a great way to take over a property with no money down. This situation usually arises when the property is not performing and the owner is in trouble with the bank.

5. Equity Partner Investor
This means you will share what equity is created in the property with an investor who will give you the money for a down payment.
For example, an investor gives you 20% of the purchase price to put down on a property. In return for this down payment, the investor will get 20% of the monthly cash flow, and 20% of the profits upon the sale of the property.
Additionally, the 20% that is put down will be treated like private money. Private money is a second mortgage on the property. Depending on the interest rate environment, the rate for the private money is 3-4% higher than banks are getting for primary financing.

6. Equity Share Owner
You can also do an equity share with the owner. The owner transfers title to an entity in which the two of you are partners. The property is refinanced for the purchase price. The owner gets out as much of his equity as he can, and becomes an equity partner for the rest.
For example, an owner has a property he is selling to you for $1,000,000. His current mortgage amount is $650,000. He transfers the title, and the property is refinanced for $800,000. He gets $150,000 of his equity and he becomes an equity partner for the remaining $200,000.
The benefit to the owner is that he gets 20% of the monthly cash flow, plus his 20% equity stake will be worth more when the property appreciates.

7. Repair Allowance
When using a repair allowance, you inspect the property and determine what needs to be done in repairs. You add up the cost and have that money given back to you at the closing.
Doing this gives you money for closing that you wouldn't have had. You can use this money for a down payment. I know someone who bought a property for $800,000 and got a $100,000 repair allowance. Not only did he use that for his down payment, he did some repairs that needed to be done immediately. He's planning on using the rest as a down payment for another property!

8. Refinance with Seller Carrying Back a Second Mortgage
This scenario is very similar to the Equity Share Owner situation but the owner does not become an equity partner; he becomes a second mortgage holder. You save a great deal of money in the long run, because you do not give up 20% of the profit and 20% of the equity.

9. Bartering
Just as they did in the old west, you can barter the down payment for anything else that you hold ownership to. This includes equity in other real estate, notes you own, personal property, services...the list does not end.
Use your imagination, and get creative. Perhaps the seller has a need that you can fulfill.

10. Use Part of the Seller's property as Collateral to Borrow Down Payment
Many times you will buy a multi-family building that has several different parcels associated with it. To get the down payment, get the property under contract and coordinate the sale of one of the parcels to use as your down payment.
A real estate investor colleague of mine is using this technique to buy a 100-unit complex. The property was built with the intention to sell as condos, so each unit was separately deeded. My colleague is selling 40 of the units to other investors, making enough profit to purchase his 60 units, free and clear.

11. Substitution of Collateral
If you are purchasing a property below value (property A) and own a property that is being used as collateral for the financing that is on it (property B), you may be able to transfer the collateral from property B to property A. This would free up the equity in property B to be used as the down payment.


Who is Dario Lorenzo http://www.squidoo.com/dario-lorenzo


Dario Lorenzo
Affinity Investments
Vancouver BC V6Z 3B8
604 688 2521
http://www.affinityinvestments.ca/
facebook.com/dlorenzo.
http://dariolorenzo.wordpress.com/

Other Articles

• http://discoverfinanciallyfreedom.blogspot.com/2009/06/difference-between-urgent-and-important.html
• http://discoverfinanciallyfreedom.blogspot.com/2009/05/ideas-and-action.html
• http://discoverfinanciallyfreedom.blogspot.com/2009/05/financial-mess-real-deal.html
• http://discoverfinanciallyfreedom.blogspot.com/2009/05/jobs-is-working-online-at-home-way-to.html

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The Difference between Urgent and Important

In Stephen Covey’s book “The Seven Habits of Highly Effective People” Stephen talks about the difference between Urgent and Important matters, and how dividing our time between these two types of activities or tasks can make us more effective or less effective.
It’s amazing how something that comes up can urgently demands our attention almost always seems to appear important. But is it really? Understanding how to distinguish the two as separate has really been an eye-opening experience for me and has helped me prioritize how I spend my time each day.
Urgent matters demand our immediate attention; we react to them urgently, drop everything now to deal with this matter. It could be something as simple as answering the phone when it ring while we are in the middle of working on and article that requires our focus and concentration.
If you have friends like me I’m sure you have one who’s permanently and constantly in crisis mode, constantly putting out fires, busy, busy, busy running around from one crisis to another. Now, have you noticed, that this person is frequently stuck somewhere falling short of their goals because they never have the time to get to the things they say really matter to them?
Now don’t get me wrong, I am not saying that urgent matters are always not important. A true crisis must be given the attention it requires. But a task—something like checking and replying to emails every time one comes in to your inbox-must must wait so you can work on the actual important issues that will get you closer to your goals
Important activities or task are those that help us get closer to the goals we have set for ourselves. Important activities or tasks frequently are things we must do on our own initiative, without some kind outside condition creating a sense of importance. Important things or issues come in all sizes, but usually require planning and great effort, sometimes simply to prevent situations from becoming urgent. For example, taking care of your own finances now is important because it could help you avoid a future consumed by debit brought on my years of careless over spending. (I keep a monthly budget and I regularly track and update my monthly budget since having this epiphany!)
By ignoring these important Activities or tasks early in the day or early in life, they always have a way of escalating into urgent issues.
If you’ve read this far it’s probably become apparent that one thing that’s extremely important is to separate important activities or tasks from the urgent ones and to assign them the appropriate time to deal with them. Once you’ve decided that something is important, it is your responsibility to assign a sense of urgency to it and make sure you get it done. If you’re an entrepreneur like I am, think about all the aspects of your business that are urgent as opposed to important. Consider doing what is did by delegating urgent tasks an assistant. My effectiveness dramatically increased 100 folds because I start spending by far the greatest percentage of my time attending to the important activities or task that did two things, increase profit and grow my business. If you take care of the important activities or task you’ll keep them from becoming urgent and reduce the amount of time dedicated to crisis management in your business and personal life.As a close friend once said to me, time for mortals is finite. In fact, we never really know when we’ll run out of it. To make matters more complicated, there turns out to be truth in the old saying that you never have enough time to do everything you’d like to do. So you really must decide what is important to you, and then take care of business!

Who is Dario Lorenzo

Dario Lorenzo
Streamline Marketing System
Vancouver BC V6Z 3B8
604 688 2521
http://www.streamlinemarketingsystem.com/

facebook.com/dlorenzo

Dale Carnegie Quotes

Dale Carnegie Quotes

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How to Invest in Today's Market

While depressed stock prices present lots of opportunity, your long-term investing strategy shouldn't change with the times.

By Walter Updegrave, Money Magazine senior editor
June 4, 2009: 6:09 AM ET
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NEW YORK (Money) -- Question: I believe that along with a recession comes a great opportunity to invest and make significant long-term gains. I'm under 30, I contribute to my 401(k) plan and I'm willing to take risks. What are my best options in today's market? --Lyle, Fort Lauderdale, Florida

Answer: Hey, I'm with you. Although they can be painful, recessions not only wring a lot of the excesses out of the economy and markets, they also set the stage for people who invest in stocks that have been pummeled to potentially earn some impressive gains.

For example, if you had invested in stocks in December, 1974, which was the trough of the severe 1973-1975 recession, you would have earned a 37% return over the next year, a 16% annualized gain over three years and 15% annualized for the five years ending in December, 1979. That's a huge increase over stocks' compound annual return of roughly 10% since the mid-1920s.

That said, I'm not a big believer in trying to exploit the economy's recovery for even bigger gains by targeting your investing toward specific industries, sectors or other niches.

If you're really interested in building a nest egg over the course of your career that will sustain you in retirement, I think the best course is to adhere pretty much to the same investing strategy today that you would (or should) employ at any other time -- that is, maintain a broadly diversified blend of different types of stocks or stock funds, and throw in some bonds or bond funds for stability.

I realize that this puts me at odds with much of the investing world -- both financial firms and the investment "punditocracy" that espouses its views in articles, blogs and cable TV appearances. Much of what you hear or read nowadays consists of people trying to predict what sorts of stocks or funds might deliver outsize gains as we emerge from recession.

Indeed, recent research from Wasatch Funds makes the case that small-cap stocks are the place to be when the economy is coming out of recession. The report notes that small-caps have outperformed large-caps by almost a two-to-one margin (34% vs. 18%) in the year following the last nine recessions.

And a new study by Russell Investments says that value stocks typically beat growth shares in the early periods of an economic expansion, and that this tendency is strongest in small-caps.

I have no reason to doubt the information in either report. But having read them, I'm not going to run out and load up on small company stocks, value shares or, in an attempt to get the best of both worlds, small-company value stocks.

Why? Well, it's easy when you're looking backward to know when you should have gotten into small-caps or any other sector. After all, with the benefit of hindsight you know exactly when past recessions ended. But we don't know when this recession will end (or, for that matter, whether it already has). So when, exactly, do you move into small caps? Now? A month from now? Two months? Get in too early -- or too late -- and the extra gains might be smaller or might not materialize at all.

Besides, it's not as if all economic and market cycles play out exactly the same. In fact, the Russell report notes that the 2001 recession was an anomaly compared to the other three it examined, and thus resulted in a very different pattern of small-cap growth vs. value returns.

Given the stock market's strong rebound (so far at least) from its March lows, it's understandable that many people are beginning to regain a bit of confidence about investing in stocks. In general, that's a good thing.

But let's not get overly exuberant here. If anything, the events of the past year or so have shown that we're not exactly savants when it comes to predicting short-term investment performance.

So while I'm still confident in stocks' ability to deliver robust gains over the long-term -- especially when you buy them at depressed levels in the wake of a crash -- I'm not inclined to make big bets that a particular sector of the market will outperform another over a relatively short period of time. I'm just not convinced that investors -- pros or regular Joes -- are prescient enough to make such calls and nimble enough to get in and out at the right time.

Bottom line: If you want to capitalize on this recession to boost the eventual value of your 401(k), contribute as much as you can and maintain a diversified mix of stocks and bonds that's appropriate for your age and risk tolerance.

Given your age, that will probably mean investing between 80% and 90% of your 401(k)'s assets in stocks. Believe me, that's plenty enough risk. You don't need to compound it by engaging in a guessing game about which segment of the market might deliver the biggest gains in the next year or two.

Want a Money Makeover? E-mail us at makeover@moneymail.com.


Who is Dario Lorenzo http://www.squidoo.com/dario-lorenzo


Dario Lorenzo
Streamline Marketing System
Vancouver BC V6Z 3B8
604 688 2521
www.streamlinemarketingsystem.com
http://www.myspace.com/473417936

Discover How YOU to can be Financially Free: Why "Carbon Copy Pro Requires an Application#links#links

Discover How YOU to can be Financially Free: Why "Carbon Copy Pro Requires an Application#links#links

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Jeff Learner is my coach and mentor and he will explain why you need to go through the Application Process.

To complete your Application click here.

We simply can't work with everyone. Remember, for things to change for you, YOU have to change. And you'll have to do so ASAP. Jeff and I help you. No worries. Jeff has helped and coached many already...and the numbers are growing daily...It's your turn.

Remember, included with your Application Kit is the breakthrough "Inside Out" DVD (a $149 stand alone value). This was filmed to show you the "insider secrets" to making a five-figure monthly income ($10k or more per month) from home in the 21st Century by industry legends Jay Kubassek and Mike Dillard "Inside Out" Preview .

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Who is Dario Lorenzo

P.S. If you're ready for a business with 80% profit margins,no employees, no inventory, no overhead, and a proven marketing system then apply right now to join my exclusive marketing team at Streamline Marketing System.

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