Choosing the right loans

Choosing the right financing can make you rich. Yes, rich $$$! Remember that every time you buy, sell, trade, or refinance, you have options. And with those options comes opportunities. Anyone can become rich; they just have to plan for it. PLAN, is the key word here. So read on, it’s going to blow your mind.

Getting rich is not all fun and games, and being rich won’t make you happy. But if you start using your money to help others, it can make an ordinary life into a Purpose Driven Life. One dedicated to helping others.

Loans are the back bone of the Real Estate industry. Choosing the right one for every situation is tricky. There are a lot of misconceptions about which loans are best. There are hundreds of loans out there, and each one of them is used in different situations.

Here is the part that sets us aside from the rest of the lenders and Realtors out there: We believe that you should not only invest your equity, but that by buying one or two additional homes, your returns could far exceed what you are paying on your mortgage. For example, I have never had an investor make less than 30% on his/her money invested in an investment home. You just have to have staying power. What I mean by that is you must always keep enough money aside to pay taxes, maintenance, vacancies, and other miscellaneous expenses. That's where I come in. I can show you how to do this effortlessly and not affect your monthy cash flow.

When choosing a loan that is right for you, you have to coordinate it with the rest of your finances. I see so many people barely making it from month to month. Their only concern is finding the lowest interest rate for a fixed rate mortgage. You must remember that your mortgage is your biggest obligation and your greatest opportunity for growth that most people have.

Let me give you an example of what a loan should take into consideration:

1. All your existing bills and what you pay on them every month.

2. Your taxes, and how best to get the best tax returns.

3. Your savings and investments:

a. Start a savings program that can start bringing you in a return.

4. Life insurance. Yes. You have to protect your family if something happens

to the wage earners.

5. Low enough payments on all debts so you have money to invest.

6. An investment program that earns more money than you're interest on your

mortgage.

7. What bills do you have coming in? How are you going to handle them?

College

Funerals

Cars

Weddings

Medical exenses

Retirement

And a host of other things. Everyone is different. Each of my clients has different needs and obligations.

Many people think that carrying a smaller mortgage is safer. However, when you carry the biggest mortgage you can, you have transferred the risk back to the banker.

If I offered you an investment that could never go up in value, but might go down, how much of it would you want?

Home equity ie., equity buried within the home, could go down in value; however, the home goes up or down in value independent of your mortgage.

No matter where your property is located, the return on the equity is always the same -- ZERO.

Many Americans believe the following to be true:

1. Your home equity is a prudent investment.

2. Extra principal payments on your mortgage saves you money.

3. Mortgage interest should be elimininated as soon as possible.

4. Substantial equity in your home enhances your net worth.

5. Home equity has a rate of return.

I need to change your thinking here. Homes are designed to house families, not store cash.

I feel you should never own your home outright. Instead, get a big 30-year mortgage and never pay it off, regardless of your age or income. Forget about 15-year loans, never make extra payments, and forget about those biweekly mortgage payment programs. Owning your home outright is like having money buried under your mattress. None of that cash is earning you any interest. You wouldn't stuff $10,000 in your mattress, so why stash $200,000 in the walls of your house?

You must remember to conserve your equity not consume it. In Southern California there has been bad press about interest-only and negative amortization loans. They say people are buying more home than they can afford. The popular press, following conventional wisdom, frequently advises eliminating mortgage debt which acts as an inflation hedge, and results in the decline of local real estate values.

We show, under realistic circumstances, investors who mortgage their home can out perform investors without mortgage debt.*

*Journal of Financial Planning, September 2004

If you use your equity to create income, you will come out ahead. On the other hand, if you fritter away your equity, you are wasting your potential returns.

EQUITY REPOSITIONG:

Here is a thought: Why should you be taking the equity from your home and putting it into an investment?

1. Better return on your money.

2. Most retirements are not going to be adequate or keep up with the

economy.

3. You need to preserve your tax breaks, not only for now but for the

future.

4. When you retire, your income is going to be taxable. We don't

want to lose the mortgage tax deduction on your house.

5. Compounding your equity through investments should far exceed

your interest on your mortgage.

Here is an idea from Steve Marshall:

Banks borrow at one rate and lend at a higher rate. Banks will pay 2.5% for checking and will lend money out at 4.2%. This is how banks make billions of dollars yearly.

What you need to do is become the "BANK OF YOU." Yes,

YOU NEED TO BE YOUR OWN BANK.

Using the same principles banks and credit unions use, you can amass a fortune. A bank's greatest assests are its liabilities. You can substantially enhance your net worth by optimizing the assets that you already have.

Amortized loan ie., when you pay off a loan through amortization, it pays itself out and as you pay the principal, the interest goes down. Compounded growth, on the other hand, is the accumulation of dollars that compounds itself.

You have to start making your money work for you. Yeah, I know you are barely making ends meet now. How could you possibly go into more debt and think you are getting ahead? Well, it's that kind of thinking that is keeping you from becoming rich. A bank uses compound interest to get ahead. You can do the same by using compound appreciation in homes to become the BANK OF YOU. Remember, homes are a leveraged investment. We are going to be getting compound appreciation on our own money, but also on the bank's money. I'm sure you have heard of using other's people's money to become weatlhy. That is what we are going to be doing with equity repositioning.

You work all day doing your job. That's where you come up with the money to live on. Your expertise is not as a property manager, loan officer, or real estate expert, nor do you know all the strategies to make real estate work for you, but I do. You and I can become partners in buying and selling homes.

Check out my 15-year plan for turning your equity into one of the best retirment programs you've ever seen. In the 15-year plan, what I'll be trying to do is get you up to 10 to 15 homes as fast as possible and letting time take care of the rest. In the scenarios I use here, you will see how if homes only go up 8% per year, you could end up in 15 years with about $150,000 a year coming in. And if I can keep you in faster appreciation-areas, where the return is 10% or 15% or 20%, the returns could be in excess of a million dollars a year for the rest of your life. Now, I can't guarantee these kinds of returns. But, like most people say, "My home was the best investment I ever made." So why not buy and hold onto as many homes as you can?

That's the value of maximizing the returns on your mortgage, rather than having your equity tied up in the walls of your home. Your equity should be out there working for you. And that's where EQUITY REPOSITIONING really pays off. What I'm referring to is a better way to managing your equity.

If you are just getting by each month, you really need to start a savings program that compounds your returns. Homes do that very well.

1. They have compound appreciation.

2. They can be leveraged into.

3. You can get a return not only on your money, but the bank's money.

4. And homes are one of the fastest ways to gain equity.

5. Equity is what you use to get into commerical properties where you can

start living on the returns.

Check out how fast you can grow with me as your partner. And remember, I'm here to work with you for life. I don't care when you want to stop or start. I'll help you with every loan you need for your personal home and all your investment needs. I'll also show you how to keep extra cash to maintain it all, and I'll do all the management of the rentals. As they say, "There is never a bad time to buy Real Estate," only bad strategies for holding it. I'm a firm believer that you should never sell a home.

Mark Ross

President

(760) 213-3333