Private Money411 Featuring Colony American Finance

SPRING 2016

HOW FAST ARE OUR APPROVAL TIMES? LET’S JUST SAY WE THINK A 3-MINUTE EGG TAKES ABOUT 2 1/2 MINUTES TOO LONG. FAST APPROVALS, QUICK CLOSINGS, COMPETITIVE RATES — WHEN YOU NEED TO MOVE FAST, YOU NEED TO CALL CIVIC. When the clock is ticking, the last thing you need is to get

• Funding in 4-10 days

tripped-up in red tape and paperwork. Relax. At Civic, you’ll

• Up to 75% LTV

get in-house appraisals in just 24-48 hours and funding in

• No minimum FICO

as little as 4-10 days. As a direct lender with access to our

• 24-48 hour in-house appraisals

own capital, Civic provides up to 75% LTV of as-is value with no minimum FICO

• Competitive fixed rates

requirement. Got a project in mind? Call us at the number below. We’ll show you

• Loan amount $100K-5 Million

how to beat the clock.

• Foreign National program

Corporate Headquarters 2015 Manhattan Beach Blvd, Suite 106 Redondo Beach, CA 90278

310.504.3618 / www.civicfs.com ©2016 All rights reserved. This is not a commitment to lend. Restrictions may apply. LTV limit is based on current, accurate appraised value. Civic Financial Services, Inc. reserves the right to amend rates and guidelines. All loans are made in compliance with Federal, State, and Local laws. Civic Financial Services, Inc. is a California Finance Lender under NMLS 1099109 and the California Department of Business Oversight license #603L321, AZ Mortgage Broker license #092863, ID Mortgage Broker/Lender License #MBL-8288, OR Mortgage Broker License #ML-5282, and WA Consumer Loan Company License #CL-1099109. Civic Financial Services, Inc. is an equal opportunity lender.

Money411 Money411 WINTER ISSUE 2015

Money411 P R I VAT E

CONTENTS

4

Publisher’s Letter: The Resources are Here

6

Zinc Financial Remains Bullish in 2016

7

Building Your Pool of Private Lenders

12 Learn About the Lone Star Real Estate Expo 14 REICredit.com: A Phenomenal Financial Resource 14 Exclusive: Disclosing Risk in Funding 20 Cover Feature: Colony American Finance 24 Private Money is Your Friend, Not Your Enemy 29 Investment Strategy: Discover Deeds of Trust 32 Hacking the Money: An Article by Fuquan Bilal

CONTACT US: 805.693.1497 or info@realty411guide.com

MEET THE NATIONWIDE TEAM OF

The Source for Real Estate Finance from Realty411guide.com

PRIVATE MONEY411

Cover: Executives from Colony American Finance are photographed in Irvine, Calif., for an exclusive cover feature in Private Money411.

Below: Mingle with hundreds of active investors in Southern California on April 21st, April 22nd, and April 23rd. Join us to celebrate our new issue. Private Money411 will be hosting industry gatherings in California and New York with a focus on private finance. For more information, please see pages 10 and 11.

Be social, look for Realty411 updates on Facebook, Twitter, LinkedIn, Pinterest, Tumblr, Google+ & more!

Important Disclosures for Our Readers: The information and presentations provided herein do not constitute an offer or solicitation to buy or sell securities or real estate. Please be aware that real estate investing can be risky. Realty411, the publisher of Private Money411, is not responsible for any information provided and/or statistical data presented, and does not reflect the opinions, advice or research by us. Readers are 100% responsible for their due diligence, for all investment information and for all decisions with respect to any potential investment or transaction. 411 recommends readers seek the advice of a trusted attorney, broker, CPA and/or financial adviser before investing.

Join Us for Events Celebrating Private Money411 on Both Coasts, see pg. 10

WELCOME

The Resources Are Here

Your Growth Depends On What You’re Willing to Handle Today.

I

investors. I spoke with one of their vice presidents at length as we were seated next to one another at the Texas Expo in San Antonio last year. After asking me a few questions about my portfolio and goals, he determined it was time to take full advantage of my hard-earned equity to continue to expand. It was a gentle nudge to get going and not become complacent, which I so appreciated.

It’s wonderful to have knowledgeable people around you to guide your direction. And, that is what we want Private Money411, and all of our issues and websites, to also do for you.

t’s the first quarter of 2016 and I’m so motivated to skyrocket my life, business and portfolio. I know you must be as well, since you are reading Private Money411 and as a frequent follower of our Realty411 network.

In this edition of Private Money411, our special financial supplement, we feature Colony American Finance on the cover. I’ve had the pleasure of socializing with their team members in several cities across the country, and I can say that they are truly a wonderful company with great resources for

Realty411Guide.com

PAGE 4 • 2016

Linda Pliagas, Publisher

Since 2007, when Realty411 began as a 12-page publication, our mission has been to provide our readers with the resources they need to be successful. It’s been a great journey, as I have seen our network continually expand and move forward. In the process, our readers and Continued on pg. 40

Private Money411

We lend on distressed Real Estate Investments!

A Real Lender with its Own Cash “Speed, Ease and Reliability!”

Program Highlights: • Up to 100% financing, for qualified borrowers • No pre-payment penalties • Loan amounts up to $1,000,000 • Rates starting at 9.75% • No primary residence Fees Vary. See website for pricing information

A Real Lender with Its Own Cash Speed, Ease and Reliability!

F I N A N C I A L , I N C.

California • Arizona • Colorado • Indiana • Michigan • New Mexico • Ohio • Texas • Washington • Tennessee Telephone 559.326.2509 Fax 866.602.8892 zincfinancial.net This information is for use by mortgage professionals only and should not be distributed to the general public. All loans are made in compliance with Federal, State and Local Laws. This is not a commitment to lend. Loans made or arranged pursuant to a California Lender’s License. Loans made or arranged in Nevada or Arizona must be represented and originated by a mortgage broker qualified to do business in that state.

Photograph by Wasin Pummarin, 123rf.com

Embraces 2016 with

AL

BULLISH

ADVANCE

“If it has a floor, roof, and some wood in between, we’ll finance it!”

Rehab Lender ZINC Financial Embraces 2016 with California-based direct rehab lender ZINC Financial charges into the market this year…

New Year, New Loan Deals, New Territory

BULLISH

ADVANCE

By Tim Houghten

As many investors have discovered, ZINC is extremely aggressive when it comes to financing distressed real estate. Todd says when it comes to approving loans, “the more distressed the better,” and “if it has a floor, roof, and some wood in between, we’ll finance it!”

L

ast year Realty411 broke the news of ZINC Financial launching two new investment property loan programs: the Rehab Pro-Velocity and the Buy and Hold program. We recently caught up with Todd Pigott, president of ZINC Financial. During our conversation, he unveiled just how well investors had taken to these programs, plus he made several new announcements.

For 2016, ZINC Financial is rolling into new states, dropping interest rates, and even participating in Joint Venture partnerships with select investors where ZINC will front 100% of the acquisition and rehab costs!

2016 Bulls and The ‘Desirability Matrix’ As word has spread and referrals have poured in, Todd says business “grew 40% in 2015.” The Clovis, California-based lender anticipates another 50% growth in 2016. “Our funding is quickly approaching ¾ billion in investor rehab loans.”

Todd Pigott shares much of the enthusiasm for the US real estate market in 2016, as Realtor.com’s forecast. Realtor.com suggests that while there will be some return to ‘normal’ this year, there is definitely reason to celebrate, and a high likelihood real estate will outperform last year. Todd sees “stable appreciation,” ahead, and perhaps even better than that. He reminds us that “interest rates and affordability have little correlation with any dampening of demand for American real estate.”

In fact, as property prices grow and the market continues to perform well, historic data suggests we’ll only see a snowballing in transaction activity and

Fix & Flip for Less ZINC Financial’ s president tells Realty411 that while much of the industry is head in hands, pulling out hair about the Fed raising rates, this mortgage lender has actually slashed interest rates for property investors. Pigott says the company has “lowered rates starting at just 9.5% for fix and flip loans, with as little as 1 point.” While these rates are reserved for well-qualified borrowers, rates this low are virtually unheard of for this type of funding.

Pigott says business at ZINC Financial “grew 40% in 2015”

Realty411Guide.com

PAGE 7 • 2016

demand.

There is no question that ZINC Financial is placing its capital where its predictions are. If lower rates, and new states, aren’t enough, just wait till you learn about this lender’s latest program…

100% Financing & Joint Ventures Last fall, ZINC Financial piloted a new Joint Venture program for experienced investors. Those with a proven track record of successfully fixing and flipping houses can now use this program to ‘partner’ with ZINC Financial and obtain 100% funding for the acquisition and rehab of distressed properties.

Continued on pg. 40

9 New States of Lending ZINC Financial has expanded lending to: 1.

2.

3.

4.

5.

6.

7.

8.

9.

CALIFORNIA WASHINGTON NEW MEXICO ARIZONA TEXAS COLORADO MICHIGAN TENNESSEE INDIANA Private Money411

Building Your Pool Of Private Lenders

I

By Carl Schiovone

n my previous article, “The Benefits of Using a Private Lender”, I touched upon some of the outstanding advantages when leveraging private lenders to fund your projects. In this article, I would like to do a deeper dive on this topic. One area that I see so many people struggling when trying to get their Private Lender program off the ground is attracting their initial lenders. Logically, if you’re a successful Investor with many completed projects in your portfolio, typically, people are ready and willing to throw you money based upon your past successes. However, for the investors who are either new to the real estate business or to private lending, this initial start-up may come with its share of barriers. With that being said, let’s talk about one of the most successful strategies to gain the confidence of your new potential private lenders or to scale up current lenders to a higher capital commitment level.

Realty411Guide.com

Conducting Before and After Open House Events Conducting open house events before you start your renovation phase and then again when all of the improvements have been made and you are in contract for sale will go a very long way in demonstrating your ability to select and manage a project.

This event is unlike the typical open house’s that real estate sales professionals conduct. Below is a suggested outline to follow that has worked very well for us in our events:

• Offer activity and negotiations • Contracted purchase price • Possible call to action (participate in your next project) Consider a Formal Presentation Using the format above as a guide, you should consider developing a formal presentation perhaps in PowerPoint or other presentation platforms; this will really give your event a more professional look. Alternatively, you can just provide them with a hard copy handout that you will go over. In the events that we have conducted, the financial aspects seem to hold the most interest and questions. Below I have included two slides that we use in our standard format presentation. They will easily and quickly give your audience a view of the project performance at a glance. I will also review the root causes if there was a big variance between the estimated and actual numbers. For example, as shown below, the “Actual” rehab costs came in about $10,000 over estimated due to unexpected issues discovered which we reviewed. However, we highlighted that the reserve budget covered this overage.

Before Renovation Open House • Your background (if there are people who don’t know you) • Overview of your business model and goals • Tour of the property • Why you selected this particular property and location • Description of the planned work scope • Buyers objections you plan on correcting • Overview of the project schedule Purchase price • Overview of the financial assumptions you have made going into the project • Marketing plans

Who to Invite to your Open House Events In order to achieve the biggest impact from your event, you should consider inviting the following: • Current lenders • New lender or partner prospects • Your real estate agent • Your attorney • Your banker

After Renovation Open House • Tour of the property (have the before renovation pictures posted) • Summarize any challenges and surprises • Review schedule performance and plan • Financial performance to plan • Lessons learned (sharing what went right as well as wrong and how you plan on leveraging this into your next project can be very powerful!)

• Marketing results PAGE 8 • 2016

Do a follow-up with your attendees After your events have concluded, it is critical to connect with the people who were in attendance.

Private Money411

“

I can’t tell you how many times I have seen this play out with my students.

Properly documenting your past performance in your Credibility Report will go a long way in securing new lenders.

This would be a great way to “get them to the next level”. In addition, they may be able to provide you with feedback on what they would like to see in future events.

Capture these events You may also want to consider capturing these events by doing a video. Think about the possibilities of packaging these videos for your marketing.

Planning your Open House Event Make sure to give people proper notification in order for them to attend and let them know that this event will last two hours (or whatever you have scheduled for) and that they should plan to be there for the duration. Remember, most people think about an open house as “stopping by” anytime during the scheduled time window. You may want to have chairs and even refreshments available. Special caution when

“

planning the “Before Renovation” event, you don’t want to have any health or safety issues present. I’m sure you can appreciate that nobody would want to be sitting in a house invested with fleas or covered with mold.

INVEST IN YOURSELF The latest strategies and techniques from leaders in real estate are at your fingertips!

Creating Your Process As you complete your open house events, you should consider making this event part of your standard word and create template that can be used in future events. You can have a blank template that can be filled with all relevant pictures and data. Using this approach, it will make it much easier to plan your next event.

In conclusion, the open house events can be a very powerful marketing tool in building your priContinued on pg. 42

Financial Overview

DIGITAL & INTERACTIVE

REIWealth mag.com

P R I VAT E

SUMMER ISSUE 2016

411

Industry Leaders are Welcome as Our Guests at Our Financial Events, Join Us! Reserve Your Participation @ 805.693.1497 Explode your influence and connections in the financial services industry.

Celebrate Our Financial Supplement and Learn from the Top Leaders of Finance in CA & NY. Private Money411 will host many important events in 2016.

Whether you are based in the West or East Coast, you will have the opportunity to network, learn, and mingle with extraordinary finance leaders and speakers.

Money411

Finance Conference

WEST - SOUTHERN CALIFORNIA

EAST - LONG ISLAND & NYC

Real Estate Finance Summit in So Cal

Real Estate Finance Expo with East Coast REIA

Network with the VIPs, Connect & Learn

Join Us in Manhattan - Visit New York City

Thursday, Friday & Saturday April 21st, 22nd and 23rd - 9 am

Saturday, May 14th - 9 am Saturday, December 3rd - 9 am

For information, visit REALTY411guide.com/events • 805.693.1497 • info@realty411guide.com

California and New York

LONE STAR Real Estate Expo

Houston - June 11th

Where Leaders Share their Secrets!

Successful Investors from Around the Country Unite for ONE DAY in Texas!

NETWORK, LEARN, GROW

The Lone Star Real Estate Expo expands into Houston. It’s the place to be this June!

Don’t miss the opportunity to learn from top investors who are actively investing in the Texas market! Many renowned speakers from throughout the country joined us for our first Lone Star Real Estate Expo in Arlington, Texas, including: Dennis Henson, Dr. Dolf de Roos, John Jackson, Brad Sumrok, Arnie Abramson, Tom Wilson, Tim Herriage, Merrill Chandler, Randy Hughes, Todd Dotson, Reggie Brooks, Rebecca Rice, Jim Beam, and many, many more. Don’t miss this exciting one-of-a-kind expo in Houston!

FOR VIP TICKETS: 805.693.1497

Dennis Henson

Dolf de Roos

Tom Jim Wilson Beam

Arnie Abramson

John Jackson

Brad Sumrok

TODD DOTSON

PLUS SO MANY, MANY MORE EDUCATORS!!

The Lone Star Real Estate Expo is Expanding!

To learn about this event, visit TexasLONESTARexpo.com

Scenes from Our First LONE STAR Real Estate Expo

Discounted Tickets Available

@ TexasLONESTARexpo.com Unite with Local and National Investors!

On June 11th,

HOUSTON

is the is the place to be.

Big State, Big Expo - 500+ Anticipated!

Network - Learn - Expand

Reserve Your Exhibitor Booth

For info: 805.693.1497

Real Estate

C-Corporations Life Settlements Limited Partnerships

Tax Liens Tax Deeds

Oil Life Insurance Art Antiques

Gems

Precious Metals

S-Corporations Alcohol Rugs Metals

Coins

Private Equity

Real Estate Alternative Natural Resource Alternative Private Industry Alternative Prohibited Investment

Timber

LLCs

Private Lending

Road Map of Alternative Assets

Unit Investment Trusts

Private REITs

Gas

Trust Deeds

Private Debt Private Placements

Mortgage Notes Promissory Notes

FREE YOURSELF FROM BAD CR E D IT

The FTC suggests that over 10 million consumers have errors on their credit reports. You might be at risk!

Remove negative items from your report* More than 92% of our clients see positive results within the first 90 days!* Get the credit score you deserve!

CALL FOR A FREE CONSULTATION TODAY

800-384-2709

*Client results vary. There is no guarantee that your results will match those above.

We count a single removal from all three bureaus as 3 removals.

Resource for Funding Deals.

In this interview with Bill Malone, we will learn the “Ins and Outs” of revolving corporate capital as used for the purpose of real estate investments.

Realty411Guide.com

Private Money411: Thank you for taking the time to speak with us today Bill. We know that you are very busy at this time of the year.

Bill Malone: Thank you for the opportunity to be in your publication, and share some knowledge about the unsecured corporate credit market and what it means to establish business credit for real estate investors.

PAGE 16 • 2016

Private Money411

Image copyright : Ratchanida Thippayos

REICredit.com is a Phenomenal

REICredit.com is a NEW financial website for dealmaking.

Learn more in this exclusive interview with Bill Malone, the CEO of REICredit. com. Malone is a specialist in the field of corporate finance; he has helped fund the investment transactions of hundreds of real estate investors.

PM411: What kind of capital do you offer for real estate investors?

Malone: We help our clients get access to unsecured revolving lines of credit for their businesses that will report to the business credit bureaus, Corporate Experian and Commercial Equifax.

PM411: We hear people talk about business credit all the time! How are you helping clients understand business credit?

Bill: Most people don’t realize that there are four main tiers of business credit. Most companies that offer business credit focus on the first three tiers, because they are easiest to obtain approvals.

For Example, a $30,000 BP card will allow you to purchase $30,000 worth of product from BP, but no other stores. (A BP card is typically suited for trucking companies that have large monthly fuel expenses) These accounts generally do not report to the personal credit bureaus, and are good if you are looking to establish a Dun and Bradstreet credit profile.

• Tier 3 accounts are personally guaranteed business credit cards that report to the personal and business credit bureaus.

The beauty of these accounts it that they can be spent

Most people don’t realize that there are four main tiers of business credit. Most companies that offer business credit focus on the first three tiers, because they are easiest to obtain approvals.

• Tier 1 credit is credit issued from small business to small business. For example, if I own a shoe company and purchase most of my shoes from a small local wholesale shoe store, I might be able to get them to approve me for a $10,000 line of credit to purchase their shoes on net 30 terms. This means that I can purchase up to $10,000 of their shoes each month, and I must pay off that balance every 30 days. This kind of line of credit can be reported to your Dun and Bradstreet profile, and is a good way for you to establish your Paydex score. These accounts will not report to the personal credit bureaus, and may or may not require a personal guarantee.

• Tier 2 credit is issued from a large corporation to a small business. For example, store cards from BP, Home Depot, Lowes, Staples, or U-Line.

A small business can get a line of credit from anyone of the companies above, and most of the accounts above report to Dun and Bradstreet. However, the spending on each of the accounts approved is restricted to the stores from which each of the cards was approved. These accounts may or may not require a personal guarantee.

Realty411Guide.com

anywhere where credit cards are accepted. These accounts typically do not report to Dun and Bradstreet, unless you “self-report” them, which means you add the account information to your Dun and Bradstreet profile manually.

The balances incurred on these business cards will affect the individual’s personal credit profile because these accounts do report to personal credit bureaus. If a business owner is having a high expense month on these accounts, then, the personal credit profile will be negatively affected.

At REICredit, we focus on helping our clients establish Tier4 accounts, which are business credit cards that do not report to the personal credit bureaus. Our accounts allow our clients to separate their business expenses from their personal credit report.

When clients work with us, we help them understand what is available in terms of business credit and what >

PAGE 17 • 2016

Private Money411

may be beneficial for them to establish for their particular company.

Many business owners believe that they must build a Dun and Bradstreet profile before first, before they can get access to the top tier corporate credit instruments.

By utilizing our network of lenders and high level banking associates, our clients are able to get approved for top tier credit quickly, even with brand new businesses.

Real estate investors may not see much of a need for Tier1 through Tier3 credit.

Having a $30,000 Staples card, for example, or a $10,000 line of credit from a local shoe store may not help a real estate investor finance rehab expenses.

Our business credit program gives clients access to capital they can use for any business expense without affecting their personal credit profile.

As an added bonus for coming through our funding program, clients are provided with a step-by-step PDF, which shows them how to establish their Tier 1 through Tier3 credit on their own, at no additional charge.

PM411: You mentioned that there is more than one business credit bureau. What are they?

Malone: There are three main credit bureaus of which small business owners should be aware: The first one is almost synonymous with business credit—it’s what everybody talks about because it is the easiest for businesses to get access to, but, it might not be the most helpful for a real estate investor. And that’s Dun and Bradstreet.

Dun and Bradstreet allows businesses to get a D&B Profile number for free. After paying a quarterly fee for their credit builder program, businesses can begin reporting their Tier 1-4 accounts. This reporting is what helps establish the D&B Paydex score.

The next two business credit bureaus are Corporate Experian and Equifax Commercial. These reports are primarily used by local, regional, and large big-box retail banks.

Just as it is important for an and individual to have a strong Experian and Equifax credit profile, a business should also have a strong Corporate Experian and Equifax Commercial report.

Helping our clients build their business credit profiles with these business credit bureaus also allows our clients to get additional perks from other major lenders in the future, as their profile ages.

PM411: Bill, what type of terms are available with your program?

Malone: We help our clients establish revolving lines of credit. This means the accounts can be charged up and paid off as often as the client wishes. These accounts come with a 0% interest introductory period for 6-12 months.

Instead of applying and re-applying for new loans to invest Realty411Guide.com

in real estate, our clients only need to apply one time to have ongoing access to capital through our revolving line of credit program.

For example, an investor purchases a property, and uses our revolving accounts to finance rehab expenses. Once the property is flipped and sold, the investor can pay off the balances on their revolving lines, and have capital immediately available to finance their next project.

A majority of our real estate investors take advantage of their 0% introductory periods and can expect to receive additional 0% interest offers on their accounts, after responsibly managing them for six months.

PM411: What if my investing company is brand new?

Can I still get capital?

Malone: Absolutely! A majority of our clients have brand new businesses. As long as our clients have an existing business and a strong personal credit profile, we can get them approved for real estate capital.

PM411: Do you require financials on the business or individual?

Malone: Our program is completed on a stated income application. For clients, this means they do not need business tax returns or collateral to get approved.

PM411: How fast can clients get capital from you?

Malone: Clients will be able to find out if they qualify within one business day. If the client qualifies and decides to proceed with the approval process, they can expect to have their approved capital in hand within three weeks.

PM411. What can the capital be used for?

Malone: The capital can be used for any business related expenses. Many clients use their approved lines to cover everything from accountant payments, rehab costs, materials, education, fuel, office supplies, etc.

PM411: How important is it for a real estate investor to establish business credit?

Malone: I believe it is imperative. Getting and establishing working capital is essential for any small business, especially real estate investors.

Over 200,000 new businesses are formed each year in the United States with half of them failing within their first five years. The U.S. Small Business Administration states the top two reasons for failure are: 1. Poor management and 2.

Lack of working capital.

Ensuring the success rate of any business requires reliable and obtainable financing, REICredit arms our clients with the working capital they need to succeed.

PM411: Thank you for taking the time to speak with us.

Malone: It’s a pleasure. Thank you for the opportunity.

PAGE 18 • 2016

Private Money411

Colony American Finance Provides Financial Solutions to Residential Real Estate Investors A Exclusive Report from Private Money411’s Cover Feature

A

ccess to capital has always been first priority for investors within the SFR rental and fix/flip marketplace. Many investors purchase their first few rental properties using more traditional methods such as the all-cash transaction, the tapping of family members or other private money sources, or simply by using conventional mortgage products. But what happens when an investor wants to expand his or her portfolio beyond a few properties? Enter Colony American Finance. Colony American Finance (CAF) is a non-bank, direct lender specializing in financing for residential, non-owner occupied rental properties, including single family residences, 2-4 unit buildings, small multi-family properties with 20 or fewer units, and even broken condominium projects.

HUGE MARKET OPPORTUNITY Statistics show that nearly 35% of Americans now rent instead of own. Drill further into the statistics and you’ll find that 54% of renters choose single-family homes or 2-4 family units. Consequently, it makes perfect sense that investors are looking to 1-4 unit residential properties instead of owning larger multi-family apartment style buildings, retail centers or office buildings. 1-4 unit residential properties have a lower price point, the ownership risk is spread out among multiple structures and the overall expense ratio is lower. Renters in single family housing also tend to pay their own utilities, maintain the landscaping themselves and have access to municipal water/sewer/garbage at a much lower rate than through private service, making property management easier for the investor.

Rental demand is projected to change significantly over the next ten years, primarily driven by the changing nature of the household. Baby boomers are moving in with their children or into senior housing and millennials are favoring renting over owning because of its flexibility and lower commitment level. Plus, with the volatility in certain markets, many former homeowners are now choosing to rent and preserve their capital by having a more fixed monthly housing payment. Being well versed in the changing market is the key to having a profitable portfolio.

Realty411Guide.com

FIRSTHAND KNOWLEDGE OF SFR RENTALS Colony Capital, Inc. (Colony Capital) and affiliated companies incubated CAF as a strategic extension of various Colony Capital affiliated investment vehicles and platforms, including Colony American Homes (CAH), an institutional owner and operator of approximately 19,000 SFR properties. In the wake of the financial crisis of 2008, CAH was formed to actively acquire, rehab and manage a large, nationwide portfolio of SFR rental properties.

CAF’s current Chief Operating Officer, Ryan McBride, knows exactly what it takes turn an idea into a realty.

As one of the cofounders and the head of acquisitions at CAH, he had the opportunity to help build the business from the ground up. He learned that physical presence in target markets is the key to really understanding the specific collateral and investment opportunities that exist within each region.

Because of this experience, CAF has built a “boots on the ground” approach with field presence in several regional markets across the US. Additionally, CAF has been able to leverage its relationship with CAH to better understand individual markets and their unique opportunities and challenges. This ultimately allows us to customize each loan opportunity to our borrowers’ needs,

PAGE 21 • 2016

Continued on Next Page

Private Money411

and gives us a huge competitive advantage over other lenders that have a centralized originations approach.

CAF has local origination presence in many key markets, including Arizona, Georgia, Florida, Texas and California, giving us a strategic advantage over competitors.

Our President and CEO, Beth O’Brien recently noted, “We’ve specifically gathered high quality originators across the country with various lending backgrounds.

Our innovative product combines both commercial and residential attributes, and we’ve put together a championship group whose collective background has been instrumental to our quick success.”

FLEXIBLE, LONG TERM FINANCING OPTIONS In the past, residential landlords have had limited financing options. Conventional financing allows for a maximum of ten financed properties and becomes extremely restrictive once a borrower has reached four loans. Local community banks are an option for some, but because of increased government regulation, banks have very strict qualifying standards and risk management guidelines. Private and hard money lenders will lend on non-owner occupied homes, but often at higher interest rates and with hefty upfront fees.

Because many investors seek out investment opportunities in areas with declining market values with high rental upside, being nimble is key. CAF prioritized its product development and created a loan product that could blanket multiple properties in one loan facility

while also being flexible enough with respect to the loan qualification process and financing terms. It’s important to note that CAF doesn’t impose a seasoning requirement for new acquisitions or for new leases. Plus, because we can lend in all 50 states, landlord investors can have a single term loan blanketing their entire portfolio, regardless of geographic area.

Our term loans are underwritten like a true commercial loan and are designed for investors with five or more investment properties. Each portfolio is underwritten on the value of the assets and the cash flow generated from those assets, and while we look to a sponsor’s credit history and experience, neither are the sole driver of loan approval. Rates are competitive with traditional FNMA loans, are amortized over thirty years and can be fixed for five or ten years. Loan amounts start at $500,000 and can go up to $100 million – and most loans are available on a non-recourse basis. Borrowers can also have multiple tranches of loans to facilitate estate planning or property management issues.

INNOVATIVE, SHORT TERM FINANCING OPTIONS Watch any cable network and you’ll see programs about how easy it can be to fix and flip homes. What they don’t always show you however is that those folks have corporate sponsors and financial backing making the process significantly easier than for the average layman investor.

CAF offers two products to help fund the hardest

Line of Credit Program

Term Loan Program

Capital for either rental aggregation or fix and flip strategies.

Financing for rented, stabilized portfolios (5 Property minimum).

Term: 18 to 24 months

Term: 5 to 10 years

Advance Rate: Lesser of 80% LTC or 70% LTV

Advance Rate: Up to 75% of the Value

Loan Amount: $1M to $50 Million

Loan Amount: $500K to $100 Million

Minimum Property Value: $50K per property

Minimum Property Value: $50K per property

Property Type: Single Family-Condos, Townhomes, Small Multi-family (1-4)

Property Type: Single Family-Condos, Townhomes, Small Multi-family (1-4)

Time to Close: Typically 3 - 4 weeks Realty411Guide.com

Time to Close: Typically 4 - 6 Weeks PAGE 22 • 2016

Private Money411

part of the project: The acquisition. Our fix and flip lines of credit start at $1,000,000 and top out at $50,000,000, meaning we have the ability to assist the smaller, local investor, as well as the larger, more institutional investor. Lines are revolving or non-revolving and are 18-24 months in term, depending on the line chosen. The line can be used at time of initial acquisition or as reimbursement of a prior cash purchase while rehab and sale is underway or until the investor can refinance into long term financing.

NON-BANK SINGLE ASSET LOANS This autumn, CAF launched a single-asset loan product designed specifically for the investor who doesn’t yet hold five investment properties, or for those investors who may not want to tie up all of their holdings into a blanket loan. The single asset product is a fully amortizing product with rates fixed for 30 years. Call 888-2953995 for more information on this single-asset product.

The following summarizes our short and long term financing options: Customer Experience is Key As with any financing transaction, customer service and communication is critical. From the very beginning, the borrower is involved in the process. CAF is constantly evolving its product offerings to match the investor demand while reducing complexity. By tailoring loan requirements to each borrower, CAF can offer a customized solution at an affordable price.

Per Ryan McBride, COO, “Our past experience with Colony American Homes as a landlord makes us more sensitive to borrower and property manager issues and needs. This focused understanding allows us to relate to and work with our borrowers.

“Colony American Finance was very helpful in financing our portfolio of single-family homes. Their rates were competitive and their service was extremely professional. I would highly recommend then to anyone looking to finance their own portfolio.” – Victor D., Investor.

investor looking to expand their holdings consider term loans and long term financing opportunities with CAF. Their rates, service and support are second to none. They are a valued member of our team.” –Chris Z, Investor.

Proven Management Our President and CEO, Beth O’Brien, brings over 20 years of industry specific knowledge to the firm. Prior to joining CAF, Mrs. O’Brien was Executive Vice President at Auction.com, where she was responsible for the residential capital markets division, setting the financing strategy for the platform. At Auction.com, she managed over two billion dollars of single-family and multi-family loan sales and multiple financing partners. She also founded a proprietary private money lender geared at the investor market. Ms. O’Brien holds a J.D. from Georgetown University Law Center a B.A. from the University of Pennsylvania and was named a Woman of Influence in Housing by Housingwire Magazine in 2014.

Serving as COO since August 2014, Ryan McBride also embodies the progressive spirit of CAF. Prior to joining Colony American Finance, Mr. McBride served as the Executive Vice President of Acquisitions/Operations at Colony American Homes where he was responsible for acquiring properties for the portfolio, as well as overall operational activities. Prior to joining Colony American Homes, Mr. McBride was a Senior Managing Director at Carrington Investment Services, LLC where he was responsible for directing the firm’s single-family residential rental strategy, capital formation and evaluating merger and acquisition opportunities. Mr. McBride holds an M.B.A. in Finance from The Fuqua School of Business at Duke University and a B.B.A. in Finance from The College of William and Mary.

A Billion Dollars and Counting We are proud to report that in September of 2015, we achieved the benchmark of closing over $1 Billion in new loan transactions within our first 18 months of operations.

With our experienced local originators, seasoned management, aggressive loan products, and positive client experience, we look forward to a long future of providing sensible, flexible loan solutions to SFR investors.

“CAF and their team have been a large part of our success in the Atlanta market. We highly recommend any Realty411Guide.com

PAGE 23 • 2016

- Written by Dennis Spivey

Private Money411

Private Money is Your Friend...

YOUR ENEMY!

By Charlie Fitzgerald with Civic Financial Services

F Realty411Guide.com

PAGE 25 • 2016

Copyright : Phasin Sritham

irstly, in the spirit of full disclosure, I am a Private Money Lender. I decided to write this in an effort to bring some level of education and understanding to this topic, for those people that may be looking for that. I am also interested in helping others to achieve their goals when it comes to real estate investments. I have been an investor myself since buying my first home in 1980. I have owned lots of properties since that time and I have been employed in the banking and finance industry since 1986 in some manner, shape, or form. For the last 16 plus years, I have been a Mortgage Broker, Mortgage Banker and Private Money Lender. I am currently an Account Executive for Civic Financial Services, offering retail and wholesale direct private money loans. >

Private Money411

Myth # 1: “Private Money is too expensive!” No, SOME private money is too expensive. Additionally, using private money without making sure that you are recovering the costs of that capital in your investment is where most people hurt themselves. Money is no different than any other “thing” you buy for use in your business. In the case of the Real Estate Investor, money borrowed, is used to buy property, in which we hope to earn a return (in up to 5 different ways) and so the cost of the money borrowed is just another “operating cost” of our business.

Myth # 2: “Private Money Lenders want me to default on my loan so they can take my property!” Not true. If we wanted property, we would just buy it to begin with.

We make money with money…you make money with properties. Together, we both make money. Classic win/ win. What a Private Money Lender really wants is for you to borrow our money, achieve your goals with it, pay us back on time with interest, and then do it again…

OPM=

and again…and again.

Myth # 3: “My bank can do a better job for me than a Private Lender can!” Well, that depends on what makes you happy and how much time you want to spend getting the money you need. In today’s lending environment, bank loans are a very frustrating process…even when they go as planned. The Dodd-Frank Mortgage Reform legislation has inundated the lending industry with layers and layers of additional regulations and guidelines that quite frankly, have made it a complete mess for both the lenders and the borrowers.

Qualifying for a loan today is tough. Borrowers that seven to eight years ago would sail through the lending process, now are finding the process somewhat like being drug through a knot hole. In the real estate investment world, nothing is truer than “time is money.” Being able to move quickly and fund quickly and turn your money over quickly is the key. Private Lenders have the ability to fund a loan for a borrower in 4-10 days. That’s a far cry from the 30-45 days average for a conventional lender today.

(After October 3, 2015…this will be even longer when the next major changes to the conventional lending regulations take place.)

If you are a real estate investor…I encourage you to consider using Private Money funding as an option to your own cash or other means for acquiring your properties and/or paying for the costs for rehabbing them (if applicable to your business model.) If I can answer any specific questions anyone has about this process, feel free to reach out to me.

Other People’s Money, and most of us have heard more times than we can remember that one should always use OPM to make Real Estate investments when possible.

Realty411Guide.com

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Private Money411

Copyright : Fotoluminate, 123rf.com

I

believe there is a great deal of misconception about what role a Private Money Lender plays and I also believe more people should use this avenue as a primary source for their real estate investment capital. In the simplest of terms, it’s the classic case of “OPM.” OPM = Other People’s Money, and most of us have heard more times than we can remember that one should always use OPM to make real estate investments when possible.

Doing so, does not come without costs, however, these costs are proportional to the benefit one may derive from using OPM. So, let’s look at some “Myths About Money.”

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STRATEGY

Deeds of Trust A Not so New INVESTING

M

any people ask why they have never heard of Deeds of Trust or Trust Deed investing. Is this concept “New”? Not at all. I can remember my neighbor telling a story of how farmers in his home town who were unable to obtain a bank loan to purchase additional farm land would approach another farmer in the community to lend them the money. A contract would be drawn up and filed with the county recorder office. A third party would act as the escrow holder until ownership title to the property is released to the borrower upon satisfaction of the debt. This was a common way to develop and construct in areas that were insufficiently serviced

Realty411Guide.com

by traditional banks.

Due to the rise of real estate securitization in the 1990s and the shift from “lend to hold” to “lend to securitize”, deeds of trust have become a common way for builders and developers to purchase real estate. Besides purchases, deeds of trust can also be used for loans made for other kinds of purposes, such as construction and development, where real estate is merely offered as collateral. Non-traditional or indirect financing offers benefits for the borrower that is not met through traditional bank financing.

Banks are limited in the amount of money, or the percentage of their lending portfolio, that can be lent out for commercial construction and development. Also, banks rely heavily on the creditworthiness of the borrower when evaluating loan requests. Trust Deed lenders effectively evaluate the borrower but focus on the collateral has a greater determining factor for a loan. Since these loans tend to be short-term, less than 5 years, higher rates can be charged and still be advantageous for the borrower when compared to the lengthy process involved to obtain bank financing, if a viable alternative.

Another primary reason for not hearing about Deeds of Trust investing has to do with geography and how home financing is executed. In 20 of the U.S. states the laws regarding financing of real estate purchased is regulated and facilitated under state agencies. These states use Deeds of Trust instead of traditional mortgage notes to execute home purchase transactions. In states that use deeds of trust, there are always at least three parties involved; the borrower, the lender, and a trustee who holds title to the property until the debt is paid. In the remaining states mortgages are used to facilitate residential lending direct from the lender to borrower. In mortgage states, the transaction involves two parties; the borrower and the lender. Should the borrower default on the loan, the lender must sue the borrower in a state court in order to take possession of the collateral property.

The term, Mortgage, is sometimes used when trying to explain Trust Deeds. However, the concept behind a mortgage and a trust deed are similar with some major differences. > PAGE 29 • 2016

Image: Jansucko, 1234rf.com

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Both mortgages and deeds of trust are essentially security instruments in the form of conveyances. Transactions involving deeds of trust are normally structured so that the lender/beneficiary gives the borrower/trustor the money to buy a specific property. The borrower provides the money to the seller of the property; the seller executes a grant deed giving the property to the borrower; and the borrower immediately executes a deed of trust giving the property to a trustee to be held in trust for the lender. An escrow holder is always used to ensure all of the “pieces” are in place so that the seller gets their money, the lender is protected by the ability to assume ownership of the property through the “power of sale” clause (should the borrower fail to pay), and the borrower gets access to their property.

How does this provide investment opportunity? By working with a company that underwrites deeds of trust, you can participate to be a lender without the hassle of underwriting the loan yourself. The company provides several safety nets by evaluating the borrower’s ability to pay, obtaining a property appraisal or broker pricing opinion (BPO), and ensuring title insurance is in place.

Many companies allow investors to pool their funds together for a particular project offering the individual the ability to invest with smaller dollar amounts and be a part of greater overall investment projects Anyone wanting to participate in the growth of communities while receiving 9%-11% annual interest can become a lender (investor) on a trust deed by checking out www.ignitefunding.com and talking with one of our qualified Investment Agents. Ignite Funding is redefining the standard for investor-backed lending.

For additional information, please contact: Carrie Cook, President, Ignite Funding ph: 877.739.9053 - www.IgniteFunding.com Money invested through a mortgage broker is not guaranteed to earn any interest or return and not insured. Before investing, investors must be provided applicable disclosure. Past performance does not guarantee future results or success. Ignite Funding requires a $10,000 minimum investment.

• Nevada Mortgage Broker License #311, Arizona Commercial Broker License CMB-0922050, California Finance Lender #603J286

Realty411Guide.com

PAGE 30 • 2016

Private Money411

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T

National Note Group 2013 Record of Success

his is where we start with OPM (Other People’s Money). Even sophisticated investors with several million to put to work can benefit from leveraging what they have. The world’s top individual investors like Warren Buffett and Donald Trump invest with other people’s money as the new rule.

And we’ve already seen how banks, mortgage lenders, and the largest hedge funds use other people’s money to make more money. And it just makes sense.

By multiplying what you have with leveraging you can reduce risk, enjoy more diversification and safety, and amp up returns.

All at the same time. You’ve got to invest that money wisely and safely, with as much care as your own, if not more. But it can help you, and them too.

There are a number of ways to raise and pool funds.

But before we dive into these, you’ve got to know your goals. And most importantly – your why. This is your compass.

Without your compass you are virtually guaranteed to end up at the wrong destination. And all it takes is to get off course by a couple of degrees and your destination can be thousands of miles away from where you wanted to go.

Now that we have your attention, isn’t it time you

partnered with National Note Group and invested in this alternative asset class, earning double-digit returns, while providing stabilization and diversification to your investment portfolio in the fast growing Mortgage Note Market.

NNG DE LLC 1 is a private fund, which was launched by National Note Group in March 2013 with the sole purpose to focus on investments in second lien mortgage notes.

The Fund is registered as a private placement under Sec 506 Reg D., and is incorporated in Delaware. The fund was created to provide accredited investors with the opportunity to purchase shares that represent a proportionate undivided interest in a portfolio of re-performing and non-performing second lien mortgages. Call today to get started.

NNG DE LLC 1 50 Loans closed in 2013

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12%

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Deed in Lieu

SO WHY?

Foreclosures

Why raise funds? Why invest? Why make more money?

Not that we should condone any of his actions by any means; but even Al Pacino’s character in the movie Scarface knew his why. Getting more money was just a means to an end. In this case it was to have more power and control over his life so that he could attract love and relationships. But he knew his why.

Too many fans of the film, and perhaps the populace in general today get hung up on the money. Just getting more money for the sake of it. And few remember >

Foreclosures

NNG DE LLC 1

1.888.604.3353 1135 Clifton Avenue, Suite 204 Clifton, New Jersey 07013 www.NationalNoteGroup.com

Continued on pg. 36 Realty411Guide.com

PAGE 32 • 2016

Private Money411

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Attracting Private Money, Disclosing Risk, pg. 15 Hacking the Money, pg. 32

money is very fluid. And unless you have a plan it will flow through your fingers like sand. It is either depreciating, or working for you.

So ask…How much money do I want to make? What will that money do for me, allow me to do?

Once we recognize that every single thing we do and say, and every single dollar that we spend or give away, is either taking us closer or further away from our why, the sooner we can begin to operate fully optimized.

This will all help you live intentionally, and get on the faster track to your goals. You’ll be able to pinpoint how much you need to earn in returns, and the investments you need to make to be able to achieve those returns and your goals. And you’ll be able to more effectively raise the funds to multiply all of this.

Traditional Leverage & Fundraising Channels There are many established channels for gaining more leverage to invest including: · Credit cards · Commercial real estate loans · Business loans · Personal and business lines of credit · Unsecured loans · Bank loans While it is important to use credit wisely, it is one of the most powerful tools available to investors. Good, bad, ugly, overused, or underutilized, we all have credit.

Again, this is one of those factors that is constantly either working for or against you. So make it work for you, wisely.

If you haven’t already this may be the ideal time to start developing business credit. Build credit for an LLC or other legal entity, which can leverage non-recourse loans, and separate your personal credit from everything else, while maximizing leverage capacity. Many will find that they can rapidly scale to wielding several million dollars very quickly.

RAISING FUNDS FROM FRIENDS & FAMILY One of the best and easiest sources of OPM is the friends and family you are already know. Those that already know, like, and trust you.

This can be a highly controversial source of funding for some. But it can be one of the best and most rewarding.

Some people rush to reach out to friends and family, and everyone in their old rolodex every time the get excited about a new way to make a dollar. Others are afraid to let their closest contacts down, put their most valued relaRealty411Guide.com

tionships in jeopardy, or to put their ego on the line. Both of these mindsets can be equally harmful, to everyone.

The Pros of funding from friends and family include: · · · · · ·

Efficient to raise Fast funding to put into play Zero hassle in qualifying Great terms A little patience & understanding when you need it Helping those you care about the most

Most of us have had that one ‘friend’ that has an incredible entrepreneurial spirit. They are filled with inspirational passion that overflows and bubbles over. Only they never stick with anything for long. Eventually, they only become your friend when they need early adopters or more cash.

Yet, if you do really have something valuable that can help those you care about, you are really doing them a disservice but not turning them onto it.

Imagine one of your friends or siblings having the cure to a chronic medical condition you, your spouse, or children had, but they never told you about it. This definitely applies to finances. If you can help others not just achieve their nice-to-have dreams, but to provide the essentials for their family, secure needed health care and education for their kids, and give them the ability to provide for themselves through retirement and to spoil their grandkids, you must.

You at least owe it to them to alert them to the opportunity.

THAT’S GIVING, NOT TAKING The best way to cross this bridge is often just to show them what it is doing for you. If that’s something they are interested in replicating for themselves, let them know how they can participate. If that means investing with you, or investing in you, that’s not taking; that’s helping them. Still, whether you go over this out at dinner, around your own kitchen table, or in your office, make sure they are investing wisely too.

Relationships are priceless. Great ones are rare and take work to develop, but can so easily be ruined. Maybe you’ll begin by giving them a copy of this article to read, or help them get other parts of their mindset and finances aligned first. But at least for me; if I ever accept investment funds from people I know (or anyone for that matter) I tell them not to invest any more than they can afford to lose.

“While I am 99% confident in this investment, crazy and unexpected things can happen. So if giving me that much money to put to work for you is going to mean you don’t speak to me again if lose it – don’t do it. Or start with a smaller amount.” Protect their interests, do everything you can to serve them.

PAGE 36 • 2016

Private Money411

THE JOBS ACT AND CROWDFUNDING The Jumpstart Our Business Startups (JOBS) act[2] came into play in 2012 and added a whole new dynamic to fundraising and investment capabilities.

Although the SEC is still clarifying and finalizing the finer points of the act and its various titles, the JOBS Act is empowering both organizers to raise funding from a broader cross-section of the crowd, and individuals to invest in a wider selection of investment opportunities. In some cases, such as in Florida, states have even paved the path and pre-empted further rulings by greenlighting expanded intrastate fundraising.

There has been a lot of buzz about the Security and Exchange Commission’s ruling on Regulation A+, which goes into effect in the summer of 2015. Regulation A+ has opened up the door for firms to launch ‘mini IPOs’ up to $50M far easier than ever before. It also tears down old restrictions so that regular individuals can be told about

crowdfunding portal, friends and family, partnerships, REITs, and participating in, or even creating your own fund.

STARTING YOUR OWN FUND Starting your own legitimate fund can be a great option for those serious about operating at the top of the note and debt investment field. Call it a fund, hedge fund, or becoming ‘the bank’; it’s a lot better than being a bank cashier, loan officer, or solo private money lender.

It provides the ability to accomplish a lot more, negotiate better discounts, and get access to inventory individuals simply cannot.

However, this is a totally different league than just investing in individual notes or properties; though there is nothing wrong with that. There is a right fit for everyone. But there is a substantial difference in operations, responsibility, and legal and accounting requirements.

‘If you want to become a fund manager, and operate a fund, the first real step is to talk to a law firm that really specializes in this area.’ investment opportunities and can invest in a wider variety of choices, even if they don’t meet the old ‘accredited investor’ requirements.

It’s really all about crowdfunding. Crowdfunding platforms have been gaining traction and evolving over the last few years. There are now well over a hundred crowdfunding website platforms ranging from donation crowdfunding via Go Fund Me, Kickstarter, and Indiegogo, to equity crowdfunding portals for startups, and specialized real estate crowdfunding options.

These online platforms make it ‘easy’ for individuals and companies to raise money. So far it has been used to fundraise for everything from eating burritos to the Hard Rock Hotel in Palm Springs.

However, while the websites and names are new, the concept certainly isn’t. Crowdfunding is essentially people getting together to fund things they care about, or which provide them a return for their investment. This has been done through various forms of partnerships, syndications, and groups for centuries. It’s been used to develop and control real estate since at least medieval times by kings and queens, and on a very small scale by families helping each other buy homes to live in.

When it comes to investing in debt and notes, various type of crowdfunding can be used. This could theoretically include donation crowdfunding, establishing a niche Realty411Guide.com

This is why most don’t even have this option on their radar. It’s why there are only a few thousand banks in the U.S., versus millions of real estate investors, and even more bank customers.

Setting up a multi-million or multi-billion dollar fund also requires a superior level of attention. It is not just a matter of filing an LLC online yourself for $100, and then hitting the ground running. Even though the JOBS Act has brought down many barriers, new regulations like Dodd Frank are continuing to make lending a murky and more regulated industry. It is essential to be on the right side of the law from day one, and have systems to keep your activities, marketing, and accounting in check.

Just a couple of paperwork mistakes can cost you a couple hundred thousand dollars, easily.

If you want to become a fund manager, and operate a fund, the first real step is to talk to a law firm that really specializes in this area. Securities attorneys and those that advertise help with organizing private placements are a good start. Saul Ewing is a large and popular firm in the northeast. They have offices throughout the major cities and business hubs of the region including Boston, New York, Washington, Wilmington, and Harrisburg. However, it is important that new entrants to this landscape don’t burn all their resources before getting started. Do always get the best legal and accounting >

PAGE 37 • 2016

Private Money411

help that you can afford. Don’t throw away money.

Wherever you are, there are bound to be firms in this domain offering free workshops and free private consultations. You may even run into them at local real estate and finance networking events, and investor groups, or even happy hour. If these attorneys charge $400 to $500 an hour, every conversation you have for free piles up the savings.

They’ll help you drill into your action and to-do list, clarify costs, tell you what you can’t do, what you need a license to do, and maybe even provide some great insight into what is working for others, and may even turn you onto money leads.

Remember that you don’t have to buy everything they are selling. Just get what you need. However, if you plan to raise millions of dollars expect professionals to charge a substantial percentage of that for top-level assistance; that can run into six figures once you get going.

You’ll also want to do the same with great accountants, bank managers and others.

RAISING PRIVATE MONEY TO BECOME THE BANK No matter which of the above channels you take to raising money, you’ll need to get good at presenting, pitching, and closing. You need to be able to clearly present the opportunity that is available, your strengths, how it helps, and how you’ll keep their money safe. This applies whether you are walking into a local bank for a loan, approaching a venture capitalist, or even trying to help your friends and family enrich their lives with smart investments. So where do you start? What materials do you need? How do you create more opportunities to raise money efficiently? How can you avoid self-sabotage by putting your foot in your own mouth?

THE WARRIOR POSE If you’ve ever practiced yoga, you’ll have seen the warrior pose. The warrior pose has several variations and advanced stages including the ‘humble warrior’. While a great warrior pose may be a feat in itself, it’s really used in the process of mastering one’s self, and increasing strength, balance, and flexibility in order to achieve even more in other areas of life, as well as more complex and advanced yoga routines.

Before rushing out to pitch private investors, or raise funds, it is crucial to get your pose right. This is your stance, mindset, and the core of the body that will deliver.

When raising private money you have to have the right stance, and be equipped to efficiently and effectively both raise money and deliver on the promises.

There is a clear and glaringly obvious difference between Realty411Guide.com

those that are trying yoga, or fundraising for the first time, versus those that have gotten some practice in. If you’ve ever tried yoga, you’ll already know all too well the wobbling, muscle contorting sensations, and visible clumsiness that comes as a first timer. And you wouldn’t pick an obvious first-timer as an expert yoga instructor would you? You want an instructor that looks and acts the part, and can help you get the same results. The same applies to investing, fundraising, and financial advisors.

So start by getting your stance right: Know your why Know how much you are going to raise, and by when Invest in your education, and have the knowledge you need Be supported by a great board of advisors and team members Develop great habits Create great branding and presentation materials Look the part Be confident You attract what you are. Money comes easily and frequently when you have the right stance and expectations.

Make sure you can check off the items above and you’ll find that money is far more abundant than you ever imagined.

All too often the biggest challenge is that we simply don’t set our expectations high enough. I remember when I started out raising private money and sharing these concepts and investment opportunities.

We began with requiring a minimum investment of just $5,000. In hindsight; that was ridiculously low. It meant a lot more work raising money from more people, rather than raising larger amounts from fewer people. Now having other sophisticated and experienced investors and money managers call in eagerly wanting to invest six figures is just a daily occurrence that happens on autopilot. If you’ve invested in yourself, in your fund organization, and are achieving solid results, you should be confident. Never undersell, undervalue yourself, and the value of your opportunity. That doesn’t mean letting your ego swell to gargantuan proportions. Just understanding how much value you really have to offer.

GETTING ORGANIZED Beyond organizing and formalizing your fund or business in terms of legal structure, accounting, and team members, the following are some of the specific items and tools that can be used in raising money… · Business plan · Credibility package · Prospectus or investment opportunity presentation · Pitch decks · Website

PAGE 38 • 2016

Private Money411

Fuquan Bilal

· · · · · ·

Blog FAQs An ‘elevator pitch’ Social media pages Email marketing messages Business cards

FINDING PRIVATE INVESTORS

Three Keys to Successfully Raising Capital: 1. Keep it simple 2. Don’t oversell 3. Pre-frame and win the capital before you pitch Create good presentation materials, deliver them at the right time, in the right environment, never act desperate, be confident, and over deliver on your promises, and you’ll never come up short of funds.

PRE-FRAMING Raising money isn’t about hard selling on the phone Wolf of Wall Street style. Some might do it that way, but I wouldn’t consider it to be the responsible or best way to go. If you are doing business right, and set up conversations well with good branding and deliver great results you shouldn’t have to ‘sell’. Their mind should be made up to do business with you, even before you have a serious conversation with prospective investors. The ‘close’ should just be a matter of them finding out how they can give you money to invest, signing any agreements, and wiring you the money. Good testimonials, visibility, and online branding materials can all help accomplish this with ease. Then even when you do make new contacts they can do their due diligence on you in seconds from their smartphones, on the spot.

CREDIBILITY & PRESENTATION PACKAGES Follow up conversations and communications will probably involve sending credibility or presentation materials.

These can take many forms such as pitch decks, printed prospectuses, or simply websites and emails.

They should look good, answer questions, and give confidence to readers. But they need to be simple. These are tools to facilitate, simplify, and streamline the process. They are to create action. If you make it too complicated, confusing, and just raise too many more questions, you’ll only be taking investors further away from investing with you, or stall them permanently. Be transparent, overcome objections in advance, use infographics, and include FAQs, but keep it simple, streamlined, and keep up the momentum.

Realty411Guide.com

So who do you present these materials to? Beyond the above fundraising channels; crowdfunding, friends and family, and institutional lenders, how do you find more investors to connect with?

There are millions of private investors out there today.

Some are full-time angel investors. Others run family offices. Then there are simply regular individuals with cash they need to invest, and get better returns on. Some are already very wealthy, some are actively looking for opportunities like yours, others are average individuals that aren’t aware of these options, but need a way to get ahead financially.

Seven ways to find more private investors: 1. Attending investment club meetings 2. Starting your own local investment club or meet up 3. Attending national events 4. Google Adwords 5. Blogging and other forms of content marketing 6. Social media marketing 7. Buying or renting lead lists Nothing is really private today. We may not always love how much our lives are tracked by websites, and how often that information is shared. But it can be really handy when you want to find private investors. There are mountains of data out there. It can be filtered and overlaid to help laser target those that are a great fit for investment opportunities. Between credit bureau data, social media profiles, and Google alone there is enough data to identify individuals by how much they earn, how much they are worth, where they are, and the types of investments they like. You can even find out their favorite brands, bands, how much they owe on their mortgages, and where they bank. These lead lists can be bought, borrowed, and rented for direct mail, cold calling, internet, and email marketing.

For both these new contacts and existing ones, make sure you put all their contact information to use to follow up.

Do so by email, phone, mail, social media, and in person.

Organize this. Personalize it. Automate it! Optimize your time and conversion rates by automating emails, social media, direct mail, and other contacts so that once a contact is made they are followed up with until they invest and refer others. And don’t stop there. Maintain contact with all of your regular investors, vendors, and strategic business partners. This can help generate a lot of repeat business and referrals.

PAGE 39 • 2016

Private Money411

Growth Depends On What You’re Willing to Handle, pg. 4

Rehab Lender Zinc Financial Embraces 2016, pg. 7

industry clients have inspired me to also push myself. In the past, with my professional and business life, I have tended to be conservative and not take a lot of risk; I just have always taken baby steps to ensure my safety as an investor and entrepreneur. It has worked well for me and my family for the past twenty years since I began to take real estate classes and actively manage properties. Ironically, it was around the same time I became a magazine publisher. But lately, thanks to the gentle nudges of those around me, and the guidance and support of my family, I have began to leave my comfort zone. Recently, I’ve been taking on added risks and making greater investments in my business, and in my life in general.

For example, I made a substantial investment purchasing a new domain, expanded our expos to new cities, approved capital improvements on properties, and also helped my husband expand his antique clock and watch business with new inventory. Now, I’m on the prowl for another property acquisition as well. I’m thankful that this vibrant industry keeps me on my toes and always pushes me to expand and grow... as a person, as a publisher, and as an investor.

At the time of our exclusive interview with Todd, he revealed that the firm had funded four JVs in just the last 30 days, three of which were in Indiana.

Fast Funding for Your Rehab Deals ZINC is a direct lender with its own capital. This is important because ZINC is not a broker that just brokers your loan. Todd shares that they send their own wires right from their office; clearly ZINC has the ability to actually perform when it comes to funding these types of loans, as they use their own cash, underwrite their own loans and make their own decisions in-house, unlike most shops.

Find out more about ZINC Financial’ s programs, closing times as short as seven days, and experience what an aggressive direct lender can do for you at ZincFinancial.net.

We Make the Deal Happen Private Mortgage Fund, LLC provides one to three year bridge and interim financing for non-owner occupied residential and commercial properties in California.

Contact us to learn how we can help you make close more transactions.

PRIVATE MORTGAGE FUND, LLC 23586 CALABASAS RD. SUITE 100 CALABASAS, CA 91302 • (818) 702-2551 Realty411Guide.com

Contact Elliott Kimmel: ekimmel@pmfundllc.com ext 7 or Gordon Van Dueck: Gordon@pmfundllc.com ext 9

PAGE 40 • 2016

Private Money411

Building Your Pool of Private Lenders, pg. 8

Schedule Milestones

vate lender pool. Just think about the response from your audience when you can successfully go through the project life and be able to demonstrate your performance results; this will instill confidence from your peers and the people you are trying to secure as private lenders or partners.

In addition, they will appreciate your transparency and hospitality in sharing this information. There is another factor to consider. The happier your private lenders are with your performance and their investment return, the easier it will be to bring them to higher level of commitments and ask if they could bring in other people they know. Talk about free marketing!

I want to wish you the best of success in rolling out your private lender program.

Carl Schiovone is a Performance Coach with over 33 years of experience as a Real estate Investor and REALTOR® and is President of Carl Schiovone & Associates Real Estate Coaching Inc. In addition, Carl is the President of East Coast Real Estate Investors Association located in New York. Please feel free to

contact Carl with any questions at 631-750-1563, or please visit their websites at www.EastCoastREIA. net, or www.CarlSchiovone.com

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PAGE 42 • 2016

Private Money411

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