Good news and bad news...
First, the bad news. It seems that some of my students are using the 100% LTV Bond Funding Program incorrectly and therefore not finding success with the program as they anticipated (and I'll explain why in a second).
But...the good news. I have quite a few students who have successfully closed on deals using the 100% LTV Bond Funding Program since the beginning of this year.
I should also mention that I've closed 2 partnership deals using this program as well so...yes, this works.
Okay, let's talk about the boneheads who can't close using the Bond Funding Program. Why do I so disrespectfully call them boneheads? Because they are boneheads. That's why. They want to blame the system rather than blaming their personal inadequacy in following simple instructions.
And following instructions tends to be a re-occurring theme in whether people are successful in acquiring real estate, or not. (So, maybe -- just maybe -- following directions could be important in every aspect of real estate investing.)
Now, for those of you who are new to the 100% LTV Bond Funding Program, this is a cutting-edge new program where you can get a 100% LTV for your real estate deal provided that the deal is $1,000,000 or over. (It used to be $10 million then $5 million. Now it's down to a million. Pretty cool, huh?)
Essentially bond funding is like a "mutual fund" for private investors. They throw money into a pool, have not much of an idea as to what their money is funding (except that it's for real estate and other businesses), then wait to receive dividends as their money extracts interest. So, basically, this is a loan (as far as you are concerned). And no, this isn't grant money that you don't have to pay back. Again, it's no different than a loan. Period.
So, where do you fit into all of this?
You find a stable cash flowing piece of real estate, do the numbers to make sure it can support a 100% LTV, and then put it under contract.
THEN you submit for your approval on the 100% LTV Bond.
Back to the boneheads I was speaking about.
All of them -- yes ALL -- submitted their deals without being under contract. So, they'd get the approval on the bond but the seller would either (a) raise the asking price or (b) put it under contract with someone else by the time my student(s) had the opportunity to get the property.
Yes, that is what they would refer to as being "half-ass and backwards."
Putting a deal under contract isn't that hard, folks. You simply tell the listing agent exactly what you're doing -- even telling him or her that you're putting 100% cash into the deal with a clause about getting financing if needed -- and then lock it up. Make sure there's a clause where you can back out if you change your mind based on the results of your "final inspection."
And that's it.
Every student that has been successful getting their 100% LTV Bond Funding deal done has had their deal under contract BEFORE submitting in for approval. On the other hand, every student who has lost their deal, has done so because they DIDN'T have their property under contract before they submitted for approval.
Yet, again, they are quick to blame the system instead of blaming themselves for not following the instructions provided.
Here's another little "hang up" for some of my students who, again, don't understand the system in place.
The people funding these bonds need to see that you have 1% to 2% of the purchase price of the property. And my little secret for my students that is NOT supposed to be discussed with the money broker or the bond funding people is that you can use a VOD company to show these funds. A VOD company can show that you have any amount of money in "your" bank account (or an account with your name on it) for a small fee, of course.
So, for a $1 million deal, you'll have to show that you have $10,000 to $20,000 in a bank account somewhere.
And if you don't have it, go to a VOD (verification of deposit) company. Again, this is NOT something you divulge to the money broker or the bond funding people.
By the way, know how to operate a calculator. My money broker got into an argument with a student of mine over the phone who insisted that 2% of $10,000,000 is only $20,000. At this stage in the game, if you can't operate a calculator...just give up now. Don't bother. The rest of the road will be extremely treacherous for you.
One more thing, don't be going after these $10,000,000 deals if you can't show some realistic proof that you know how to manage a property this large. Your range should be between $1,000,000 and $3,000,000. And that's it. You can get your bigger deals later. First show these people that you can manage the property you get through their bond program then get a second and third property progressing up the financial ladder. Last time I checked, working your way UP is by climbing up and not just ending up there by helicopter in an instant with no progression.
This 100% LTV Bond Funding Program can work for buying businesses as well as working with other money-making assets and enterprises as well. It's not just for real estate.
All of this will be laid out including some of the changes that have occurred with the 100% Bond Funding Program, making it even more accessible to people who know how to use the program...at the May 15th and 16th Las Vegas No-Cash-No-Credit 100% LTV Real Estate Boot Camp Seminar.
And if you bring a deal with you (preferably on a printed out Cash Flow Evaluator), the money broker can take a look at your deal on site to see if it's even worth submitting for approval before going to the next step (which is securing it under contract THEN submitting for a formal approval).
This is something that my money broker usually never offers to do but he'll take a look at your deal for you IF you bring it. And he's only offering this option for this next event ONLY so...bring a deal!
I'm already getting very full on Platinum VIP. If you want to come as Platinum, now is the time to register because if you wait until the deadline for my special deal (which ends on Friday, April 10th), Platinum VIP will be sold out by then and you'll have to go on a waiting list.
Here's the link: http://www.monicamain.com/spring_blow_out
See you at the top!