Why Most Real Estate Investors Will Lose Most of Their Properties!
Posted on November 11, 2015 byConsider this… You find a good piece of income producing real estate that you decide to buy.
You have little money to buy it, but you decide to use whatever money you have as part of your down payment.
You get qualified for a 90% LTV loan.
You call around and you are able to raise the remaining money from your close friends and family for the remaining down payment. You promise to pay them a generous interest rate of 8% for lending you their hard-earned money.
The following month, you find another good real estate property that you decide to buy.
You have no money to buy it, but you know you can raise the money.
You get qualified for a loan with 90% LTV.
You call around and you are able to raise some of the money from your close friends and family. Again, you promise to pay them a generous interest rate of 8% for lending you their hard-earned money. This time, you remember about a line of credit you have, and so you decide to use all of it to close the deal. Now, you have raised all the money to buy this property.
You are excited. You start feeling like a successful investor.
A few years later, you lose BOTH properties.
What went wrong?
It wasn’t the properties, they were great.
It was in the way you structured the deals, specifically the financing.
In this article, my goal is to simply OPEN YOUR EYES to something most investors never realized and don’t know is hurting them. You could be one of those investors.
The simple truth is MOST investors think they know how to structure deals correctly, when they actually don’t.
Would you want to wake up years from now and realize that you are about to lose everything because you failed to know this one critical skill – deal structuring?
That is precisely what HAS happened, and continues to happen, to far too many investors all around the country, and in fact all over the world.
The worst part of this is that these investors are losing their friends and family’s hard-earned money, ruining those relationships in the process. Needless to say, Thanksgiving will never be the same!
So consider a few basic questions:
- Most investors know how to measure return (upside of a deal), but do not know how to MEASURE risk, meaning putting a number to risk (downside of a deal)? Do you?
- What is the right LTV for your deal? (Please don’t say “whatever I can get from loan officer!”)
- What is the right return for your deal? (Please don’t say “as high as I can get”)
If you KNOW how to answer these 3 basic questions of deal structuring, then you are on the right track. Unfortunately, most investors cannot.
The good news is you can learn how to structure deals correctly in just 2 days by attending The Wealthy Code Workshop, and in the process elevate your game and vastly improve your investment decisions forever..
Here are the 3 skills every investor needs to master:
- Raising private money
- Investing in the right assets
- Structuring deals correctly
The problem is most people don’t even know anything about the last option (which happens to be a VERY important one). It’s time to become aware of it.
The question to you is simple:
What is the cost of not knowing this information?
And when will you find out it’s too late?
I hope I was able to open your eyes to something you should consider, a skill that most people are clueless about, that can give you the confidence to raise more money, close more deals, and create more wealth.