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 [ 2 posts ] 
 How I Became a Hard Money Lender 
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Joined: Mon Sep 13, 2010 1:47 pm
Posts: 45372
Post How I Became a Hard Money Lender
How I Became a Hard Money Lender
by: Barrett Niehus

Unlike other investors, my venture into real estate was a natural extension of my secondary business as the IP Ware software developer. However, opportunity and perseverance beget wealth, or at least a decent side income.

Aside from my ventures into lease optioning residential property, I and my partner have managed to acquire a number of properties with our own credit. However, when looking at our finances and the return we were getting for the amount of effort involved, we both decided there must be a better way. That is when it occurred to me. Instead of trying to leverage our existing assets for a diminishing return, perhaps we could be the bank.

Here is the scenario as it has played out. First of all, we control a decent number of properties with our own credit. Most were purchased with 100% financing using multiple capital sources. However, each contains only a primary lean and is financed using standard mortgage terms. Subsequently, there is a 20% secondary credit position available on each of these properties.

Now normally, an investor would use this 20% equity stake in the existing properties to leverage the purchase of more properties. However, our approach has been a bit different. Because interest rates are so low, we can borrow against the 20% equity position in each of the properties and loan this money to investors who need short terms financing to control and rehabilitate properties. Essentially, we are using our existing properties as collateral to borrow money at the going finance rate and loan it out at substantially higher rates of return. We have become the bank.

For investors who need money fast, this system works out beautifully. They pledge their property as collateral, and we loan out up to 75% of the purchase price. All parties benefit, and investors with opportunities that do not need long term financing have a source of funds to do their deals. Everyone wins.

If you are thinking of setting up this type of program yourself, there are a significant number of legal caveats that you must be aware of. The first is the company funding the second lean holder position on your existing properties must be aware of and amicable to what you are doing. This is a legal requirement of which there is no way of avoiding without committing fraud. Next, the usury laws in your state determine the maximum interest rate you can charge your customers. There are a host of additional laws that are more specific to the lending process, but a good lawyer will help you work through them.

Regardless, there is a decent return to be made helping others do their deals. Use your existing properties to secure the funds to lend, and make sure you have an experienced lawyer to help you sort out the details.

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About The Author


Barrett Niehus is a principal for IP Ware Commercial and Residential Real Estate Investment Analysis Software http://www.freetrainer.com




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Sat Jul 14, 2007 7:20 pm
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Joined: Mon Sep 13, 2010 1:47 pm
Posts: 45372
Post 3 Simple Keys Will Make Your Customers Stick
3 Simple Keys Will Make Your Customers Stick
by: Denise O'Berry

Do you spend a lot of time and energy courting prospective new customers, hoping to pump up your bottom line? If so, you're probably missing an untapped source of sales that exists right inside your company -- there's truth in the statement that your customer list is your most valuable asset.

There's a gold mine of opportunities to make easier sales and create a loyal following of customers that will return time and again by using your existing customer base to grow your sales. But when I ask small business owners what action they are taking to keep in touch with current customers, the answer is normally "we don't."

How do you turn a pile of dusty invoices and sales receipts into profit generators for your business? How can you create loyal customers who will return time and again to increase your small business bottom line? There are three keys to creating customer loyalty.

1. Know Who They Are

Do you? Compile and maintain a list of your customers. Track their habits. Monitor your list so you know when they are doing business with you differently. Then ask why.

2. Know What They're Worth

I overheard a remark the other day. It was, "Oh, that lady. I barely pay attention to her. She comes in twice a week, but only spends about five dollars. What a waste of my time." Have you had the same thought about any of your customers? Before you dismiss the customer that only spends five dollars, take a look at her long-term value. How often does she purchase over time? How many people does she refer to you that have the same spending habits? A $5 customer can really be worth over $50,000 in the long term and should be treated like a queen.

3. Take Action

Your customers are busy people. They need to be reminded that you exist and how you can eliminate their pain (wants or needs). Have you ever received mail from a company and decided to save it so you could "check them out later?" Then you find that piece of mail in your "to do" stack months later and realize you never contacted them. Your customers do that too. You have to remind them. Often.

Customer loyalty is not rocket science. But it does take consistent effort. Over 90% of small business owners are letting money walk out the door of their business each and every day. Are you one of them?

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About The Author


Denise O'Berry helps small business owners identify and execute the steps necessary to grow their business. Find out more at http://www.targetreferrals.com
denise@whatspossible.com



Copyright © 2001-Present ArticleCity.com

This article was posted by permission.


Sat Jul 14, 2007 7:23 pm
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