Re: To Ed, Thanks - Posted by Ed Garcia
Posted by Ed Garcia on July 31, 2001 at 10:11:08:
Mark,
If the banks are laughing, then I’m sorry to say that it’s your PRESENTATION.
Presentation is extremely important and goes hand in hand with a good solid Business Plan. If you have done your job right, and have structured your plan so that it is a good SAFE venture or loan for the bank, they are not going to laugh at you.
For starters, you never present your deal, requesting 100% financing. Curtain words can be turn off words for lenders or banks. You show the bank how you have structured you acquisitions, and that you purchase at lets say 65 to 70 % of Market Value, purchasing them with a built in profit structure. You also demonstrate to them that because of the way you purchase, that it increases your CASH FLOW in the event you have to hold the property as a rental. Banks will tell you that they value the property based on purchase price, or appraised value, which is ever LOWER. Don’t believe it, that’s one bank rule that can be bent or dealt with.
Not only do you show them that you’ve purchased below market, but have positive cash flow in the event you CAN’T SELL the property, allowing you to refinance it with a mortgage company, as an additional EXIT PLAN to remove it from your credit line.
Mark, thank you for the compliment on how I’ve shown you the light as far as what a bank has the ability to do. However, some how you have obviously missed some important aspects on how to work the banks. It’s not uncommon, and working banks and lenders, are most real-estate investors weakest aspect of the business.
No body teaches us “HOW TO GET THE MONEY”, and that’s why Terry Vaughan and I do a workshop titled “How To Get Lenders Fighting To Give You Money”.
Good luck Mark, and remember what Henry Ford said. “Failure is only the opportunity to begin again more intelligently”.
Ed Garcia