Credit Millionaire Credit Enhancement: How to be a Millionaire in a Decade

$197 Value

im Rohn, a professional speaker and trainer, impacted me at a young age when he said, Paulie, make a goal to become a millionairenot for the moneybut for what it will make of you to accomplish the goal. Youre about to have shared with you something that is reserved for very few people. The process is so elegant and impacting, some of you may think its too good to be true. Only true things can be good

coaching classes where we were told you could buy a home for no money down. We were told some motivated sellers will just give you their house. We were told properties of all types could be purchased for pennies on the dollar. We wanted to be wealthy by buying houses for between fifty to seventy cents on the dollar. But We were incredulous.

The biggest problem with the Its too good to be true fake criticism is that only true things can be good. Consider it, if something were false, fake, imaginary, artificial, or absent, etc. how could it be good in the most meaningful sense? It cant. While this in no way means that something which merely sounds good is real, it is important to remain open and directly test the claims of things which sound so good you want to take action immediately to acquire them. Like this product and our other courses and classes Donna and I sat in your very place. We attended training events, seminars and

Our doubt shifted immediately when applied action rendered outrageous results. Donna wasnt with me physically when the first home owner signed the deed to a house to our business just from knocking on the door and using the distressed owner scripts. For Donna and I, that experience was eye opening. We now understand that things which seem impossible to us are often very possible for others because they see it differently. Well return to this idea, after we expose you to how some wealthy people are ready and able to just give you millions

of dollars cash, for fifty cents on the dollar.

11) Use the cash flow from the projects to pay the interest only on your credit line. 12) When the CD matures, use the cash to pay off the principle of the credit line leaving you with all your assets debt free and owned only by you. There may be no such thing as a free lunch Yesterday I ate a free lunch. Of course we know there is no such thing, right? Yesterday, my friend Systems Steve Padilla purchased my lunch. It was not expected. It was not required. It was not a prospecting lunch for his business. It also wasnt Free. What I mean by that is, Steve did it out of friendship. The relationship we have over the years inclined him to do something nice for me. This is the power of relationships and this is where our course to credit millionaire status starts. Its not what you know Its not who you know While the credit enhancement program will allow you to be a multi-millionaire in a decade, some of us will have to take 11, 12 or 13 years because our first step may take a while. Step 1: Establish a relationship with a bank capable of handling transactions between $20-200-Million.

12 Steps to be a Credit Millionaire in a Decade 1) Establish a relationship with a bank capable of handling transactions between $20-200-Million. 2) Create or contract for deals which require between $9-95-Million with immediate cash-on-cash cash flows of 16-20% 3) Approach the bank with your business plan and ask for the loan 4) If denied, ask if you were able to bring a cash depositor for the full amount of the loan, who will leave the deposit as security for the loan, would the bank reconsider. 5) If the bank agrees, explain the credit enhancement process and get a commitment from your banker buddy to endorse you to the CFO of the bank. 6) Present the entire project to the CFO and get letter of commitment from same. 7) Send letter to the depositors private banking connections. 8) Wait as depositor negotiates with the bank on the interest rate for the super jumbo CD 9) On the day the depositor closes, you will also close on your loan buying the CD for 50-cents on the dollar. 10) Use the remaining funds to fund your projects and pay related fees

Dont be the banker Be the bankers best friend The first step is to establish a relationship with a banking institution. While you may already have the start of one, you need to qualify the bank. A great source for qualifying the bank is the Thomsons Bank Directory published by Thomson Financial Publishing.

entrepreneurial associations, consider joining The Chamber of Commerce local to the most branches of the bank or banks youve targeted. The US Chamber can be reached on the web at (www.uschamber.com) In many cases, the banks will be members of the chamber. This is a plus. You can also join other associations or at least meet the membership such as the Young Entrepreneurs Organization at (www.yeo.org). Ask these individuals if they bank, have past experience with, or know someone who does bank at any of the lending institutions on your short list. Using networking skills, earn the privilege of being referred to the bank by the person you know or meet. Sail the ship of relationships

Picture 1: Thomsons Bank Directory is a five volume set. You can likely find it at you library reference section.

Now that you have a foot in the door, you will want to begin establishing your relationship with the bank. While cruising toward super credit worthiness being who you are and having your relationship with the banker, assemble your income producing deals. Youre on to step 2. Step 2: Create or contract for deals which require between $9-95-Million with immediate cash-on-cash cash flows of 16-20%. What you owe, when you owe it on assets, is what youll be worth someday

With this directory, you will be able to determine the most local bank which will handle transactions in the tens of millions. Further, you will be able to see if the bank is potentially too large for you to and your needs. With your short list of banks, you will start to interview your network of associates of friends. If youre just getting started and you need some more financial and

Income producing assets are ones which produce cash or capital gains for you because you own them. It stands to reason, if you can borrow money to purchase these assets and you buy them at or below the market value, you will be worth at least the amount of money you borrow when the debt is paid. Now, if the asset produces income today and that income can be used to pay down the debt, buying these assets is like free money. Finding free money is your next step. It may seem odd to focus next on the deals when you dont yet have the loan; however, the size of this project is such that you want to have the deals first. Donna and I were frustrated when we got started because we only needed a couple million dollars for our deal. Lenders were resistant to lend on the project we had because of some governmental restrictions on the collateral. This led us to collateral enhancement; however, the smallest deal was ten times larger than we needed. We needed more deals and since each deal requires due-diligence, its wise to have them all lined up for the full amount first. By having all your deals on option agreements, contracts, business plans with commitments, etc.; you will avoid the frustrations we faced initially.

Because of the nature of the borrowing you will be doing, at a portfolio level (that means when you look at all the deals as a whole package neither just any one of them nor every one of them), the cash flow needs to be very high. Fourteen to twenty percent cash flow return is required as quickly as possible. Once you have the deals tied up in a bow, youre ready to go to the next step. Ready, Aim, Fire Step 3: Approach the bank with your business plan and ask for the loan. Construct a business plan, computer slide presentation, or any other organization to your loan request. Set the appointment with your banker buddy and pitch the package. If your buddy is not a lending decision maker, make the presentation anyway and then ask for the banker buddy to set up the meeting with the decision maker and join you for that presentation. Remember, to take your buddy out for a free lunch especially if someone else in the bank is the decision maker. When you make the presentation to the decision maker, expect that the loan will go to committee because of its size. Ask that you be allowed to make the presentation to the committee as youve worked very closely with the project for quite some time and the bank officer has only seen the project for about an hour.

If you get the loan, youre finished and you will likely make substantial money. Youll likely make even more than you would have with the collateral/credit enhancement. This is a good thing, rejoice. However, if the loan committee has reservations, move to next step. If at first you dont succeed, the bank didnt understand Step 4: If denied, ask if you were able to bring a cash depositor for the full amount of the loan who will leave the deposit as security for the loan, would the bank reconsider. You will soon notice this isnt exactly what youre going to offer. Specifically, youre going to ask to double the size of your loan request then borrow dollar for dollar the deposit. That you will be changing the size of the loan is of little importance at this point. Your goal is only to qualify the bank as a credit enhancement candidate. If you dont see it, its not meant for you to see DMX, Rap Musician Should they still fail to understand what you just offered, its time to ask your banking buddy for a referral to another institution on your list. Since most lending institutions are seeking to do two thingsacquire depositors and make prudent loans most banks will agree to your credit or collateral enhancement offer.

This allows you to move to the next step. Step 5: If the bank agrees, explain the credit enhancement process and get commitment from your banker buddy and the loan committee to endorse you to the CFO of the bank. The kind of finance deals you are establishing can only be authorized by a few executive level bank staff members. The Chief Financial Officer (CFO) is always authorized to do the kind of bank transactions required for the process. Further, it is a condition of the depositor that negotiations on the bank CD being created are conducted with a major bank executive. With the endorsement internally coming from important branch staff and the loan committee, you should be moved to the next step effortlessly. Even when you succeed, you often must try, try again. By this time, you may have given the presentation as few as two times and as many as several if you had to disqualify some banks along the way. Despite the repeated efforts, its time to present again. Step 6: Present the entire project to the CFO and get letter of commitment from same. Hopefully this is your last presentation. While the offer is beneficial to any bank, there may be some condition of the bank causing the CFO to reject the package.

Feel the discouragement, and go back to your banker buddy with your list of banks for the next round by referral. You will know youre practically home free when the CFO agrees to write a letter of interest and understanding regarding the enhancement program. 80% of success is talking to the right person The next step is simply to deliver the letter to the person who introduced you to credit enhancement. Step 7: Send letter to the depositors private banking connections. In many cases you will be handing the letter over to our CPA referral Michael Graff. There are other sources for credit and collateral enhancement. However, always be leery of any program where youre required to make a deposit, even into escrow, before funding is made. Michael Graff never requires any fees before your loan is funded. The wait doesnt make it all worth it, it just makes it long Step 8: Wait as depositor negotiates with the bank on the interest rate for the super jumbo CD. The depositor is treated like a private banking client. This means the depositors identity will be withheld from you until the end of the process.

Take no offense, if you had hundreds of millions cash, you might want your identity kept from desperate entrepreneurs. While I say that with tongue firmly in cheek, be aware that the wait is one of the most difficult parts of the process. Weve been in the holding pattern several times. Weve been there with others. One deal with a large Chicago bank came unraveled in this waiting period. I remember the eagerness and anxiety of myself and my borrower friend. Each day we waited, checked, comforted one another and waited again. The good news is, even when the deal came undone it was actually a comfort. We learned what not to do and having an answer allowed new actions to be taken. I guess you could say this is one area where the old saw No news is good news isnt. Even bad news is welcomed after a while. At the time of writing this, Im again in the holding pattern and the winter seasons holidays are approaching. Im bracing myself for long delays. If it were easy and fast, you would already know about it, wouldnt you? Eventually youll get to the next step. Step 9: On the day the depositor closes, you will also close on your loan buying the CD for 50-cents on the dollar.

This is when you do the kind of deal for cash money which attracted many of us to real estate. Imagine for a moment if a very wealthy person came up to you and said, I have a $20-bill here I will sell you for $10. While your incredulity may get in the way for a while, when you finally open up your wallet and buy, you get your reward. This is even better than doing discount real estate because the reason we do real estate investing is to make money, this is doing discount money. Of course, the money you used to buy the money is borrowed! The interest rate is sure to be over 6% even in the best of times. Since you only have access to 50% of the money, its like youre paying at least 12% once you use it all Clearly, you must use the money to buy assets. Since youve already lined them up, this should be no problem. In fact, it is the next step. Step 10: Use the remaining funds to fund your projects and pay related fees The closest thing to a free lunch Credit enhancement isnt cheep. The fees are at least $1-million. Add to this, there will be closing costs for your projects, the line of credit, etc.

However, its still the closest thing to a free lunch out there. Youre still getting $9-95-Million to buy your investment assets which you need never repay. What you will need to pay is the interest on the entire loan amount. This brings us to the next step. Annual income twenty pounds, annual expenditure nineteen pounds nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery. Charles Dickens Step 11: Use the cash flow from the projects to pay the interest only on your credit line. Now that you own or operate the projects, youre entitled to the cash each of them kicks off. Be sure not to spend it all. You will most likely need to apply some or all of the cash flow each month to the line of credit. While there may be little advantage to paying down the line because the balance is paid off in full in the next step, it is wise to save even more of the cash flow than you need for debt service. These funds are called reserve funds and they ensure that a temporary set back in cash flow will not cause you to be late in a payment. Three to six months of reserve are wise. If you can have this amount by the end of the first year, youre showing prudent financial management.

If the deals themselves do not allow for reserves to be gathered, look to liquidate some other assets to build up a reserve. While you may be ready for the last step, youll have to wait the ten years for the CD to mature. Step 12: When the CD matures, use the cash to pay off the principle of the credit line leaving you with all your assets debt free and owned only by you.

or do the deal in just 2 days, which is possible. Youre a rare individual: Thank you only 3% of all books go unread past chapter one Bonus 13th Step: Even before you own it all ten years later, thank all your mentors, helpers, and key people who influenced you to get where you are. In the words of Bernard Shaw: To withhold deserved praise lest it make the object conceited is as dishonest as withholding payment of a debt lest your creditor should spend the money badly. In that spirit Donna Fox and I, Paulie Sabol, thank you for learning the things you can use to become a millionaire in a decade.

But why does the guy give you $20-million for only $10M? You may be left with a single question about whats in it for the depositor. On the surface, it appears millions of dollars are being given up. Thankfully they arent or else the depositor would have to quit eventually. To keep it very simple, half comes from you and more than half from the interest paid on the CD. But the depositor isnt waiting ten years. By selling the future stream of CD income for a discount, he is paid something greater than $10M more. Consider, even if it was only $100,000 more than the $20M. The rate of return is phenomenal.
Rate =

When you are ready to begin the steps to Millionaire Credit Enhancement using our referral, contact Paulie and Donna at info@byspecialarrangements.com

$20,000,000 Rate = 0.005 * 36.5 *100% Rate = 18.25%

($20,100,000 $20,000,000) * 365 *100%

10

To make nearly 100% return on the money, a stream of $12,000,000 over ten years would need to sell for $10,500,000

Credit Millionaire Credit Enhancement: How to be a Millionaire in a Decade 2004 By Special Arrangements, Inc.