Real Estate Investing Secrets Banks Don’t Want you to Know

Real Estate Investing Secrets Banks Don’t Want you to Know

Joe: Hey, it’s Joe Crump. Real estate investing secrets banks don’t want you to know. Banks make money with interest, by collecting interest. It’s pretty obvious. But we don’t think about it very much. We think of that as being a normal part of real estate investing. When in fact it’s one of the biggest expenses that you’re ever going to have as a real estate investor. It’s also going to be one of the highest risk things that you have to do, borrowing money. It’s going to put your credit on the line, it’s going to put all your assets on the line. It’s going to put your name on the line.

Joe: And it’s risky. It’s not a bad way to grow your business if you know what you’re doing and you buy properly, but if you make a mistake it’s going to take you under. And I speak of this from personal experience. In 1991 I had a $17M business. We were building houses all over the Hollywood Hills. And it was a pretty impressive business until the market turned on me. Because I was counting on appreciation. And we were doing new construction and I was building this wonderful business and then when the market dropped by 30% the banks came to me and said you know, you’ve got these construction loans. And you don’t have as much equity as you used to have. So you have to come up with more money so that we can get our loan to value back in place.

Joe: And of course I was so well leveraged at that point that I didn’t have the ability to do that. And I told them, I said, I don’t have enough money to do that. Just let me finish these properties and we’ll get you paid off. But they saw an opportunity and they decided not to do that. They took those properties back from me and I lost everything. And I lost all my equipment, all my building equipment, everything. Lost all my properties. Lost my credit. Lost my income. And I had to start from scratch.

Joe: And I had to learn how to do this in a different way. And that taught me how to do seller financing. And if you’re watching the videos that I’ve been sending out you’ll know all the different ways that you can do this. I have a whole zero down structure hierarchy and reasons that we use each type of structure depending on the deal, depending on the seller, depending on what we’re trying to accomplish.

Joe: And those deal structures are subject to, multi-mortgage, land contract/contract for deed, assignable cash deals and lease options. And if you learn all those structures and how they work you’ll be able to put deals together without using your credit and without using any money, zero down, and being able to put these types of deals together.

Joe: Now, the banks are still going to be sitting there and offering the money and especially as you start getting better at this there’s lots of banks that want to give me money. But they also want to take that percentage every month. And if I can do these deals without that percentage I can pay off my loans much, much quicker. I can pay them off in a third of the time. So if I have a 30 year mortgage with a 5% interest and I have a certain payment on that mortgage I can do a zero finance deal that has the same payment. But since it’s zero interest it’ll pay that off in 10 years or less.

Joe: So one-third of the time I can pay it off. So do I want to spend another 20 years paying off the bank? Or do I want to figure out a way to do deals that I can pay off in a fraction of that time and not have to make the bank the middle man who takes the lion’s share of the profits for 30 years? That’s the biggest bone that I have to pick with the mortgage companies. Yes, I can make money at it but it’s a lot slimmer and it takes a lot longer to make that happen. And I’ve done it and I still do it. I still have mortgages with banks but I do it a lot less in this past decade or so because I think what I’m doing now makes a lot more sense.

Joe: Anyway. If you like this video hit the subscribe button. Go to ZeroDownInvesting.com and find out about my six month mentor program where I teach you personally how to do these deals. Go to JoeCrumpBlog.com and sign up for my free newsletter and go to PushButtonAutomarketer.com and find out how I automate my entire business. Ninety percent of my business is automated. Nine percent of it is outsourced and one percent of it I do personally. You can do that same.

Joe: All right. Take care.