Three Steps to Become the Bank in Commercial Real Estate | Real ...

Imagine being able to create a funding source from which you could easily and quickly draw upon funds to finance any commercial real estate investment in any market. I like to call it Become the Bank. This idea can become your reality in three simple steps.

With over $4 trillion within IRAs, 401(k)s and other qualified programs across the country, private equity funds can become available to YOU for investing in commercial real estate. First you must you learn about commercial real estate markets of opportunity, then communicate with and educate investors while you find a reputable IRA custodian Trust resource with a proven track record.

Since IRAs are an tax exempt entity, interest earned on the money loaned is tax-free or tax-deferred depending on your type of IRA. YOU Become the Bank by borrowing money from an individual IRA (not a financial institution) for investments. A savvy commercial property investor can borrow money from an individual IRA to complete an investment and pay the IRA back an amount of interest that is agreed upon in advance.

Lending institutions, insurance companies and venture capitalists have been using similar concepts to raise money for years. Commercial real estate investors can do the same thing by utilizing a self-directed IRA. Apply this concept to your commercial property investments, and you become more profitable while you stay ahead of the competition.

Become the Bank in Three Easy Steps

This commercial real estate example illustrate how this works and it also applies equally to other commercial property investments involving notes, tax liens, and private placements.

Step One. Remember, the availability of money is what is important here, not the cost of money. Find an investment property and negotiate a 75% or less loan-to-value ratio- give your investors safety for their investment. Most lenders will not even talk to you without substantial skin in the game in the financial market of today. (see our next article series) Build in an attractive rate of return to pay your investors out of the gross profit and leave yourself enough time, by writing a contingency clause in your letter of intent, then find your investors.

Step two. Present the deal to potential commercial property investors, look for business professionals of high net worth. These are often professionals that can withstand investment risk and are looking for above market passive income. It is important that you offer an attractive, preferred rate of return and structure the offer so they hold the first lien on the property. Present your private offering to qualified accredited and/or sophisticated investors. Explain the security they have in the transaction to them in your commercial property proforma. Remind your potential investors that their returns are tax-deferred depending on which type of IRA they have.

Step three. Complete steps one and two and educate your investors the investment advantages of using their self-directed IRA to invest in commercial real estate. One, two, three.

If your investors have established their accounts, and the particulars of the investment have been agreed upon, you are ready to utilize these funds to apply your investment strategy. When YOU Become the Bank YOU gain advantages previously reserved for lending institutions, insurance companies and venture capitalists:

o Multiple deals

o Increased profits

o Position yourself as a Kash King

o Get the investment before the competition

Become the Bank really means you have access to Private Equity just like a bank, then:

o Lengthy approvals are not necessary

o You reduce red tape

o You reduce potential credit risks

o Your personal funds stay in YOUR bank account

Do you want to learn more about Commercial Property value in today?s Market? If so, I suggest you check out why Doctors Invest to increase ROI. You don?t have to BE a doctor to invest like one.

Doctors Invest is the web host for the NEP Network? a national group of active networking investors. We focus on High Yield, Short Term commercial property opportunities and qualified business loans. Our members are all experienced accredited investors who understand the risks and rewards of investing. You do not have to be a doctor to invest like one.

Source: http://estate.max-rich.com/loan/three-steps-to-become-the-bank-in-commercial-real-estate/

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