How to Get Paid to Buy an Apartment Building with Other People’s Money!

 

 

 

Greetings,

My name is Jeffrey D. Smith, and I am a Commercial Real Estate Entrepreneur. Are you interested in the huge rewards of investing in commercial real estate, but you don’t have money or credit? Most real estate investors start small with single family housing, and they promise themselves to move up to commercial real estate and apartment buildings when they save enough money. They get stuck in the rut of single family houses, fixing and sell, or fixing and renting, struggling with high debt cost, low or negative cash flow, tenants, toilets, and turnover.

Maybe you’ve tried some “creative financing” ideas on single family houses, but with very limited success? I’ll clue you in on a secret: Creative financing works best on larger commercial properties than single family houses! Why? Multiple streams of income from multiple tenants and the lower per-unit cost!

A 100 unit apartment building with a per-unit cost of, say, $25,000, and a monthly rent of $650 ($65,000 gross rent per month) is far superior than a single family house that costs $200,000 and a monthly rent of $1,200.

The house is not cost effective unless you can pay all cash from your own bank account. Your return on equity ($200,000) for the house is roughly 6.20%, assuming $1200 for property tax, $500 annual for insurance, $300 annual for repairs and maintenance. Your monthly cash flow averages about $1030. If you get a loan to buy the property, then most of that cash flow goes to the lender. $160,000 (80% Loan to Value) at 6.0% per year for 30 years is $959, leaving only $70 per month for your cash flow (that’s 2.1% yield on your $40,000 equity investment).

Why is this such a lousy deal? Because houses are valued according to comparable sales, rather than income valuation! You cannot compete against the higher prices paid by owner-occupants. An owner-occupant will pay more than the property can afford as a rental. The owner-occupant gets the benefit of living there, and the future benefit of paying down the mortgage and building equity.

Here’s the real kick in the head: Your single family house is either 100% rented or 100% vacant! If you financed the house with debt and have a vacancy for just one month, you could lose more than your entire net cash flow for the full year!

I’m here to say that you don’t have to start or stay with single family houses!

Stabilized apartments maintain 90% or more occupancy throughout the year, they are professionally managed (you just manage the managers), and the financing and cash flow are calculated from the net income. The income valuation uses the cost and structure of financing to determine how much to pay for the property. Your cash flow is locked-in when you calculate the amount of debt that the property can support according to the required cash flow after debt.

When you buy an income property, whether an apartment building or an office building or a warehouse, you are buying an income stream. Therefore, you must calculate a valuation for the property based on the value of that income stream.

The value of the income stream is expressed as the capitalization rate (also called the “CAP rate”). The CAP rate is a blending of the cost and structure of the financing (debt and equity) to acquire the property. The property pays for its financing from its Net Operating Income (NOI). The ratio of the NOI divided by the Annual Debt Service (ADS) is called the Debt Coverage Ratio (DCR).

The DCR is a very critical number, because it expresses how much of the NOI is dedicated to debt service and how much is left for your Cash Flow Before Tax (CFBT). The CFBT is your income stream (profit) from owning the property.

I know this seems complicated. Most real estate “guru” and some CCIM (Certified Commercial Investment Member) brokers don’t understand income valuation. I can teach you in just a few minutes how to master Income Valuation in seconds!

For example, the 100 unit apartment building grosses $65,000 per month or $780,000 per year. Even with vacancies and expenses at 60%, that’s a Net Operating Income of $312,000. If you pay all cash $2,500,000, then your annual yield (capitalization rate) is 12.48%.

So, a 100 unit apartment building seems nice, but you don’t have $2,500,000 sleeping in your checking account? That’s the beauty of commercial real estate! Real estate is a borrowed money business! You’re expected to finance the property with Other People’s Money (OPM)! If you fully finance with Other People’s Money with a Debt Coverage Ratio (DCR) of 1.5411, annual interest 5.89% over 20 years, the net cash flow is over $109,000 per year after expenses and debt service. The property is professionally managed, so you won’t worry about tenants, toilets, and turnover!

Now here’s the real gotcha!

However, it seems like commercial lenders only lend to people who can prove they don’t need the money! Have you ever tried to get approved for commercial financing and sadly realized that, even though the property is the primary qualifier for the loan, the lender also wants you to qualify with experience and assets? The lenders want to see your financial statement of assets to prove your commercial experience. How can you get the commercial experience when you first need commercial experience to qualify for financing? It’s like trying to decide which came first, the chicken or the egg?

Wealthy people have financial statements. Non-wealthy people have credit reports. The commercial lenders only want to lend to people with impressive financial statements that prove financial literacy.

Most commercial lenders won’t lend more than 70% of the property value. If you bring your own 30% cash (plus closing costs), then your return on equity (yield) is actually less than the capitalization rate! That’s badly structured financing.

Learn from me how to structure the deal the right way, so that everyone, including the lenders, get fairly compensated for their risk.

What you need is leverage for financing and experience.

Here are the basic secrets of commercial real estate:

OTHER PEOPLE’S MONEY!

OTHER PEOPLE’S EXPERIENCE!

Would you rather have 100% of a very small pie with single family houses or would you rather have, say, 40% of a very large pie with commercial real estate? I think it’s obvious. There is so much private money available for commercial real estate, the amounts are staggering! That money is owned or controlled by people who understand a good deal, they know the risks and rewards of investing, and most important they don’t have the time to find great deals on their own.

Private financiers need you to put together those great deals for them, and they want to pay you for your effort! They are thrilled to write the check, because they know how much money they will make! They are thrilled to qualify for the financing, because they know how much money they will make! How do they know how much money they will make? You ran the numbers and showed them how much money they will make!

You can be a Commercial Real Estate Syndicator!

As a syndicator, you get paid to buy the property, you get paid a percentage of ownership, and you get paid a percentage of the exit strategy (e.g., resale profit). In the above example, you could get a premium fee of 4.0% of $2,500,000 (that’s $100,000) for finding the deal, and you could get 40% of the net cash flow (that’s another $44,000 per year). When the property is sold, you’ll get 40% of the future profit! And your private financiers are thrilled, because they are realizing 22% return on equity (cash on cash return)! The tenants are paying down the debt, so your private equity financiers also get the benefit of principal reduction, and you get paid 40% of that created equity!

A syndicator is a special kind of entrepreneur. A syndicator uses other people’s money and other people’s experience to acquire commercial real estate. A syndicator gets paid to buy income property for other people. The other people qualify for the financing, they qualify for the experience, and they provide the equity cash investment. A syndicator can also use upfront money from select private financiers to cover earnest money deposits and due diligence cost, in exchange for giving them a greater percentage of the deal! This is the ultimate “Nothing Down” real estate investment business!

As a syndicator, you will operate your business as a professional:

  • Get paid to buy income property for other people (your private financiers).
  • Get paid a generous percentage of the cash flow with no liability on expenses. That’s an infinite yield, because you have no net cash invested.
  • No (or very little) qualifying on the commercial financing.
  • Your private financiers and your selected professional property management company qualify for the commercial financing, not you!
  • Get paid a generous percentage of the profit when the property resold.
  • When you use an experienced attorney for the paperwork, you don’t need a real estate broker license, because you are a principal party to the contract!
  • Understand how the Time Value of Money can make you wealthy and financially free!

An asset puts money in your pocket. A liability takes money from your pocket. Assets are positive cash flow. Liabilities are negative cash flow. Wealthy people don’t work for a paycheck, because a paycheck from a job can go away with very little warning. Instead, wealthy people work to build or to acquire control of assets that put passive income into their pockets.

“Rich” is measured by the size of your bank account. “Wealth” is not measured by the size of your bank account. Wealth is measured by time. That is, the amount of time that you can survive your expenses with passive income and no paycheck from a job. Wealth is the measure of the positive cash flow from passive income assets compared to the negative cash flow of your expenses (liabilities).

Ask yourself this question and be very honest: If your paycheck disappeared today, then how long can you survive on your passive income? If you’re like most folks, the answer is very sobering and sad. Even when you have an MBA (Major Bank Account), unless you have a way to replenish it, you’ll soon run out of money. Most folks survive on paycheck to paycheck, and they would be devastated if they lost their JOB (Just Over Broke).

It’s time for you to learn how wealthy people think about money, and how they use money to make more money. It’s time for you to learn the difference between a paycheck and a stream of passive income from positive cash flow assets.

When you understand the Time Value of Money and how to calculate the Income Valuation of an income property, then you have the power to acquire assets for wealthy people and they will gladly pay you a fee and a percentage of ownership of the asset. Wealthy people don’t care how much money it costs; they care how much money it makes! If you can show them how to make double digit yields on their investment, backed by solid commercial real estate, then they will beg to be on your Very Important Person (VIP) list for deals!

It all comes down to the numbers. You must understand:

  • The Time Value of Money.
  • How to calculate the income value of a property.
  • How to structure the deal so you can get paid as a syndicator.

I can teach you how to calculate the income valuation and syndication parameters for a structured financing deal. It all comes down to an easy yet powerful spreadsheet and my 56-minute video presentation.

I simplify all of the algebra and jargon. With just a few numbers plugged into the spreadsheet, you’ll know exactly how much to offer on an income property, how much your private financiers will invest and how much they will receive, and most important you’ll know how much you will be paid to buy commercial real estate for other people.

When you arm yourself with the power of the Time Value of Money and the knowledge of structured financing, you can buy income properties with none of your own money, get paid (cash out) at closing, get paid a percentage of the cash flow, and get paid a percentage of the profit when the property is resold.

Order now for $97, download now, get started now!

Add to Cart

Order now for $97, download now, get started now!

Add to Cart

Order now for $97, download now, get started now!

Add to Cart

Order now for $97, download now, get started now!

Add to Cart

Order now for $97, download now, get started now!

Add to Cart

Order now for $97, download now, get started now!

Add to Cart

Order now for $97, download now, get started now!

Add to Cart

Order now for $97, download now, get started now!

Add to Cart

Order now for $97, download now, get started now!

Add to Cart

The 40-minute 56-minute mp4 training video plus the software bundle would cost you many times more in a classroom setting with a live instructor, plus travel time and other expenses. You can order now and download now this essential education from me for pennies on the dollar compared to live classroom training.

When you order now for $97, you get:

  • My 40-minute 56-minute mp4 video PowerPoint presentation that demystifies Income Valuation and Syndication. I teach you about the language of real estate finance, the multiple levels of financing (called “tranches”), the time value of money, the cost and structure of financing, and most important how to structure a syndication to get paid to buy income property for other people.
  • A macro-enabled Microsoft Excel 2016 Pro-Forma Stabilized Income Property spreadsheet. This easy yet powerful spreadsheet lets you specify the cost and structure of financing, and then it instantly calculates the dollars and yields for your syndication deal. You can instantly recognize a great deal! Let the amateurs and the financially illiterate buy the losers! You will focus on the winners!
  • You get several mp4 video tutorials for the Pro-Forma Stabilized Income Property spreadsheet.
  • Four Microsoft Word 2016 Mail Merge Templates for generating a Letter of Intent, Common Equity financing summary, 1st and 2nd tranche private financing summaries. Also a “Common Debt” financing summary when you want to borrow the equity investment, rather than bring in equity members.
  • You get 130 mail merge templates.
  • You get 40 spreadsheets.
  • Two mp4 video tutorials for the mail merge templates that are specifically designed for the Pro-Forma Stabilized Income Property spreadsheet.
  • A bonus 17-minute mp4 video tutorial showing the simplified algebra for calculating the Capitalization Rate and the Return on Equity (also called the Cash on Cash Return) according to the cost and structure of financing.
  • A macro-enabled Microsoft Excel 2016 Private Financiers spreadsheet. This is a “data filter” database for managing your own list of private financiers. This spreadsheet quickly and easily filters your list of private financiers based on your specified criteria, and then generates a mail merge sheet. Then you can use Microsoft Word 2016 to pull in the filtered list for mail merging with your own mail merge templates, or just copy-and-paste the filtered email addresses into Microsoft Outlook 2007 and then email blast your latest deal to your private financiers.
  • An mp4 video tutorial for the Private Financiers spreadsheet.
  • A “Master Lease and Option” spreadsheet for calculating the seller financing parameters for taking over an income property with a “Master Lease and Option”. Includes mail merge templates for generating a “Letter of Intent” with all of the seller financing parameters, and contract addenda. Includes a PDF tutorial file that explains how to analyze and negotiate for a Master Lease and Option.
  • Nine mp4 video tutorials for the “Master Lease and Option”, spreadsheet and mail merge templates.
  • The PDF Quick Start Guide that explains Income Valuation, the basics of syndication, and where to look for private financiers.
  • Bonus mp4 video tutorials on how to generate a basic financing request package and a syndication package (pitch book to send to your private financiers) as a PDF file with the ProFormaStabilized.xlsm spreadsheet. Just fill in the exhibit sheets and push a button to generate the PDF file and then email the PDF file to your commercial broker or lender.
  • Bonus worksheet for analyzing distressed properties for later refinancing or sale, with updated presentation sheets for sending to a commercial lender or for sending to your private financiers for syndication.
  • My 28-page PDF Special Report – Strategic Real Estate Investing that provides in-depth explanation of Time Value of Money, structured financing, income valuation, and syndication parameters for you to get paid to buy income properties. This is “Nothing Down” on steroids!

Add to Cart

Order now for $97, download now, get started now!

Jeffrey,

You have done it again. This course has over delivered by 1000%! One of the spreadsheets has 31 tabs to other sheets!

Jeffrey Smith’s course “Introduction to Income Valuation and Syndication”, is a must for serious investors.

I highly recommend this course.

Harry

LaSalle Commercial Investors, LLC

Jeffrey, your material is well written and explained in a way that makes you see the whole picture regarding buying and selling Real Estate. Your methods taught regarding the commercial real estate aspect are second to none. You give a complete break down on how to structure a deal as well as how to get the real numbers from the deal. I have both of your courses and I can say it was the best money spent on learning the Real Estate game from a real player. Jeffrey always updates his course material and he sends free updates regarding his strategies he is currently using. Thanks

P. Smith

Over 3 years ago, I purchased a Seminar and Boot Camp products from a well known “Guru” that was always attempting to sell me more products. I could never connect all the dot’s in their system and just didn’t understand why it wasn’t working for me. Then I purchased Jeffrey Smith’s “Ultimate Online Bargains” Educational Material for pennies on the dollar compared to the “Guru’s” products. The first benefit was that it was an intelligent approach to a logical process. I soon realized why the products from the “Guru” did not work for me. The “Guru’s” products were filled with “holes” in their information. I later found out that the “Guru” would reveal what was in those “holes” in their information for a few thousand dollars as a consultation charge. Jeffrey Smith’s educational material filled in those holes and things started to make sense. In addition, his customer service is second to none. There is no reason to waste time with those so-called “Guru’s”. I’m just glad I discovered the Ultimate Online Bargains when I did before I got into trouble with those other products. — E. Jones

Jeff has programmed the spreadsheets very completely, and extensively incorporates the variables of income producing properties like none that I’ve seen before. I’ve been totally satisfied with the fact that I don’t have to worry about so many financial metrics and functions when I’m analyzing an income property that it’s hard to realize that it is available at such a small price, but one that provides so much value.
Thanks Jeff, for your efforts in producing this product suite. — D. Green

I am glad to have access to such a comprehensive commercial property valuation system. Jeffrey Smith provided great customer service to me on every occasion. When I needed updates for the package he provided the latest information. His system and spreadsheets allow me to put together detailed commercial real estate presentations that are key for marketing. I have recommended his Income Valuation and Syndication system to others and will always incorporate his concepts and spreadsheets into my marketing materials.
Thank you, D. Porter, Business Consultant

You have my 60-day no nonsense guarantee!

If within 60 days of purchase, you are not completely satisfied with this software and document bundle, you can get a full refund with no questions asked!

Free updates for 12 months! During the next 12 months after you order, anytime that we improve this product, we’ll send to you a fresh download link for free!

There are only one or two times in a person’s lifetime when opportunity is knocking on their door. The real estate meltdown has hit both residential and commercial real estate. Now is the time to capitalize on low prices, motivated sellers, and the vast amounts of private money sitting on the sidelines looking for great deals! If you wait until the crowd jumps in, then it may be too late!

Order now for $97, download now, get started now!

Add to Cart

P.S.: All income properties are always fully financed with some combination of debt and equity. The secret is understanding how to structure that financing to pay yourself to buy the property with other people’s money.

Order now for $97, download now, get started now!

Add to Cart

View Cart

Testimonials Disclaimer: The Federal Trade Commission’s newly revised Guidelines Concerning the Use of Endorsements and Testimonials in Advertising which became effective December 1, 2009 require the following disclaimer with regard to the endorsements and testimonials included in this site: None of the endorsements or testimonials included on this site depict earnings, revenue or profit results that a consumer should generally expect to achieve by using the advertised products or services. They only demonstrate exceptional results and are not intended to guaranty or to suggest that you will obtain similar results. The earnings, revenue and profit results which a consumer will generally achieve in circumstances similar to those depicted in the endorsements and testimonials on this site depend on many factors and conditions, including but not limited to, work ethic, learning ability, use of the products and services, business experience, daily practices, business opportunities, business connections, market conditions, availability of financing, and local competition, to name a few. Because of impediments due to any one or more of the foregoing and other factors, it is generally expected that no earnings, revenues or profits will be achieved with the use of any products or services advertised on this site in circumstances similar to those referenced in any endorsement or testimonial.

Be Sociable, Share!