Kathy Kennebrook Discusses Owner Financing and Work For Equity To Get Your Homes Sold Quickly-Part 2

Image by Gino Crescoli from Pixabay

By Kathy Kennebrook

The other way Kathy Kennebrook offers owner financing to a buyer is by holding a small second mortgage for them for part of her profit on the deal. This is personally one of her favorite ways to sell properties. Often having this opportunity available makes it easier for your buyer to obtain their first mortgage and gives you monthly cash flow for part of your profit. You actually end up making more on the deal this way since most of the buyer’s monthly payment to you on the second mortgage is interest.


Image by Clker-Free-Vector-Images from Pixabay

Kathy Kennebrook will typically hold a second mortgage for her buyer’s with a three year balloon. At the end of the three year period, they still end up owing her most of the principle of the original loan. This can become a nice stream of income for you both on a monthly basis and long-term. You end up getting a big check when your property is sold, then smaller monthly payments for a period of time, then another big paycheck at the end of the buyer’s balloon.


Image by OpenClipart-Vectors from Pixabay

The other method Kathy Kennebrook suggests using to sell properties is to owner finance the sale of your property for your buyer, and then sell the note to someone else at the closing table. If you structure your deal correctly, you usually end up being paid between 90-93% of the total amount in cash when the closing takes place. In this instance, if Kathy Kennebrook knows she is going to sell the note at the closing and take a lump sum cash payment, she makes sure she has sold the property for its full retail value or a little more. This way Kathy still gets a big paycheck and most of the value of her property’s sale.

These are just a couple of other methods you can use to sell houses that will drive buyers to you even in a sluggish market because you are offering your buyers assistance that most other sellers are not.

For more information on selling homes on a Work For Equity Plan, check out part three of this article. In the meantime, visit Kathy Kennebrook’s website at for even more information on buying and selling homes quickly in any market.


Kathy Kennebrook Discusses Using Owner Financing To Sell Properties Quickly

Image by Jens Neumann from Pixabay

By Kathy Kennebrook

Using a work for equity plan to sell houses or owner financing to sell properties is a good plan for getting homes sold quickly in any market especially if they need rehab. So let’s first talk about owner financing properties.

I believe that owner financing is another good way for you to sell your properties quickly and for long term profits. Many sellers do not offer owner financing so this is another good way for you to drive potential buyers to your properties even in a down market. I suggest simply advertising that you are offering financing assistance for your buyer. Many times you will have a buyer who has a significant down payment; they just can’t qualify for a loan for whatever reason at that moment.

Usually if I owner finance a property, I at least want my buyer to have halfway decent credit or at least workable credit that can be cleaned up over a period of time. I have a wonderful broker in place that helps my buyers clean up their credit issues. You can sell your properties using owner financing one of two ways. If you sell a property that has an underlying mortgage, you could do a wraparound mortgage with your buyer.


Image by Merio from Pixabay

A wrap around mortgage is simply a mortgage that wraps around the underlying note. I would absolutely suggest using an attorney to put these deals together for you so it is done correctly and in a way that allows you to foreclose out the note if your buyer stops paying.

So how does a wrap around mortgage work? What this means is that your buyer pays you a mortgage payment each month on your property and you pay your underlying mortgage. The difference between these two payments is yours to keep as monthly cash flow as long as taxes and insurance are handled.


Image by jessica45 from Pixabay

If you have used an attorney to do the wrap around mortgage for you, your buyer is going to be responsible for the taxes and insurance on the property and will provide you with proof that these have been paid.

For more information on owner financing properties and wrap around mortgages, visit Kathy Kennebrook’s website at for even more information on buying and selling properties quickly in any market.


The Federal Reserve Rolled into the US Treasury and Economic Forecast

By David Mashian

In March of 2020, the single biggest news event of the decade hardly got any news coverage, and that is the Federal Reserve just got rolled into the US Treasury Department. This happened in the midst of the COVID-19 pandemic, so such massive news got drowned out by Corona Virus news and concerns. Most people don’t know what the Federal Reserve is or was. To put it simply, The Fed was a privately-owned banking cartel owned by foreign and domestic wealthy banking families who controlled the economic system of the United States by controlling its money supply. With this single act, the US government now owns “The Fed” and has the ability to govern its own financial destiny without acquiescing to a third-party entity whose interests are not aligned with WE THE PEOPLE. We, through our elected officials, now control our own money supply. THAT IS HUGE!

usa-1026228_1280This bodes well for our economic recovery as a result of the COVID-19 pandemic that paralyzed the US. President Trump, through the US Treasury, now has full control over spending money to stimulate economy. As a result, it looks that the US is at the start of a golden age.

With this new power, President Trump can stimulate the economy in the following ways:

  • Historically Low Interest Rates – Interest rates will be maintained at zero until 2022 to be able to stimulate the economy through liquidity and cheap money. We will see continued purchases of homes and a boom in the refinancing of single-family residences – keeping more money in people’s pockets instead of interest payments.
  • Easy Lending Standards and Lots of Stimulus Money – The Federal Government has already provided PPP loans, SBA COVID-19 Disaster Loan Assistance, unemployment benefits, and much more to keep people afloat while we work through the aftermath of this pandemic. There will be more to come, and since President Trump controls the Federal Reserve by way of the US Treasury, there are no obstacles.

Economic Forecast: We Had a Pause – Not a Crash

keyboard-393838_1280I believe we will bounce back soon, be it V-shaped or U-shaped recovery. We have a pro-business President who understands that small businesses are the backbone of the country. There will be lots of investment money available to businesses going forward. In fact, the new version of the Federal Reserve is establishing the Main Street Lending Program to support lending to small and medium-sized businesses that were in sound financial condition before the onset of the COVID-19 pandemic.

There are many factors that still hold true despite the Corona Virus lock down, including a strong jobs market and strong stock market.


  • Strong Jobs Market – People (employers and employees) are eager to start work after being cooped up self-isolating for so long. Similarly, the employers looking to fill positions before the lock down are still looking to fill positions. Also, many of the people who could not work during the pandemic are basically on hold, and will be back at their jobs once the COVID-19 situation clears up. We saw a pretty fast bounce back with the first reopening, and it will things will bounce back again once the coast is clear of COVID-19 in this second wave.
  • Stock Market Strong – The stock market is still strong, and did not suffer a meltdown as a result of the pandemic. Most importantly, people’s retirement funds are secure and confidence in the economy to go back to work is stable. This may largely be a product of unprecedented government and central-bank support, and a lack of compelling alternatives to equities.

Going Forward


  • setting-2473875_1280USMCA Trade Deals Just Took Effect July 1 – The new United States-Mexico-Canada Agreement (USMCA) is a mutually beneficial win for North American workers, farmers, ranchers, and businesses. This will create more balanced, reciprocal trade that supports high-paying jobs for Americans and grows the North American economy.
  • Huge Infrastructure Investments – The Trump administration is preparing an up to $1 trillion infrastructure package focused on transportation projects such as roads and bridges and 5G wireless infrastructure and rural broadband. All infrastructure improvements have the added benefit of creating secondary and tertiary jobs that support the initial infrastructure jobs.
  • Elimination of Payroll Taxes Likely – President Trump is pushing to eliminate payroll taxes. This should boost the economy by putting more money into the pockets of Americans resulting in higher spending for goods and services, speedier repayment of debts, and a faster return to normalcy. This amounts to slightly higher real wages for workers at no higher cost to the employer.

We are in the midst of a recovery, and in the worst-case scenario if we don’t see a recovery, the Federal Reserve can still lower interest rates to negative. Yes, that’s right, negative interest rates. This sounds odd, but many countries around the world, such as Japan, Denmark and Switzerland, currently have negative interest rates. Similarly, right now, the Eurozone, Norway, Sweden, and Bulgaria are at 0% interest rate, with Israel, the United Kingdom, Canada and Australia being near 0%. It is a real possibility.

One thing is clear, we are in the midst of a paradigm shift, with a change of perception of money and how money is used and transferred. The power structures that controlled the economic and political systems have changed and more is to come. The once unimaginable is becoming real, and I see great progress for humanity and the planet as a result.

I hope you have found this newsletter helpful. Please feel free to contact me anytime.

Nationwide Real Estate Lending
Contact me now for more information:
David Mashian
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Dr. Teresa R. Martin, Esq.

Indeed, financing is a сruсіаl piece оf thе puzzle fоr almost еvеrу buѕіnеѕѕ. Unless you hаvе ассеѕѕ tо enough саріtаl tо bооtѕtrар your buѕіnеѕѕ оr raise it frоm family and friends, chances are you’ll need a loan оr investments.


Whеn a conventional bank lоаn іѕn’t rіght for уоu, оr іf уоu’rе lооkіng fоr аn аddіtіоnаl іnjесtіоn of саріtаl tо grоw уоur соmраnу, thеrе аrе рlеntу of оthеr орtіоnѕ. Hеrе аrе five аltеrnаtіvе wауѕ tо fіnаnсе уоur startup оr grоw уоur ѕmаll business.

1. Love Money

Thіѕ is mоnеу lоаnеd bу a ѕроuѕе, раrеntѕ, family or frіеndѕ. A bаnkеr соnѕіdеrѕ this as “раtіеnt саріtаl”, whісh іѕ money thаt wіll bе rераіd lаtеr as уоur buѕіnеѕѕ profits іnсrеаѕе.


When borrowing lоvе mоnеу, уоu ѕhоuld bе aware thаt:

  • Family and frіеndѕ rаrеlу hаvе muсh саріtаl.
  • They mау want to hаvе equity in your business; bе sure уоu don’t gіvе thіѕ аwау.
  • A buѕіnеѕѕ relationship with fаmіlу оr frіеndѕ should never bе taken lіghtly.

2. Rеtіrеmеnt Funds

Aѕ wіth bоrrоwіng money frоm friends оr fаmіlу to buy a buѕіnеѕѕ, some mіght соnѕіdеr uѕіng mоnеу frоm a rеtіrеmеnt nest-egg rіѕkу. That ѕаіd, іt саn оftеn be аn effective wау tо invest in your еntrерrеnеurіаl endeavors аnd hаѕ hаd ѕuссеѕѕful оutсоmеѕ fоr mоrе аnd more of today’s buѕіnеѕѕ buуеrѕ. As lаіd out bу the government’s ERISA law , уоu саn іnvеѕt уоur existing IRA оr 401(k) funds tо the рurсhаѕе of a buѕіnеѕѕ wіthоut tаkіng аn еаrlу dіѕtrіbutіоn and іnсurrіng реnаltіеѕ.

It’ѕ even роѕѕіblе tо соmbіnе mоnеу frоm your rеtіrеmеnt fund with loans аnd other fundіng mеthоdѕ fоr grеаtеr flеxіbіlіtу. Mаnу еntrерrеnеurѕ choose tо іnvеѕt in a buѕіnеѕѕ thеу control because thеу believe thе grоwth opportunity іѕ greater and wаnt tо dіvеrѕіfу a роrtіоn оf their rеtіrеmеnt holdings оutѕіdе оf thе ѕtосk market.

3. Angel Іnvеѕtоrѕ


Angel іnvеѕtоrѕ іnvеѕt in еаrlу-ѕtаgе оr ѕtаrtuр соmраnіеѕ іn еxсhаngе fоr a 20 tо 25 percent return оn thеіr іnvеѕtmеnt. Thеу hаvе helped to ѕtаrt uр many рrоmіnеnt companies, including Gооglе аnd Cоѕtсо.

Angеlѕ are generally wealthy іndіvіduаlѕ or retired соmраnу еxесutіvеѕ whо invest directly in ѕmаll firms оwnеd bу оthеrѕ. Thеу аrе often lеаdеrѕ іn their оwn field who not оnlу contribute thеіr еxреrіеnсе аnd nеtwоrk of соntасtѕ but аlѕо thеіr tесhnісаl аnd/оr mаnаgеmеnt knоwlеdgе. Angеlѕ tend to fіnаnсе thе еаrlу ѕtаgеѕ оf thе business with іnvеѕtmеntѕ іn thе order оf $25,000 tо $100,000. Institutional venture саріtаlіѕtѕ рrеfеr lаrgеr іnvеѕtmеntѕ, in thе order оf $1,000,000.

In turn for risking thеіr mоnеу, thеу reserve thе rіght tо ѕuреrvіѕе thе company’s mаnаgеmеnt practices. In concrete tеrmѕ, thіѕ оftеn іnvоlvеѕ a ѕеаt on the bоаrd оf dіrесtоrѕ аnd an assurance оf trаnѕраrеnсу.

Angеlѕ tеnd to keep a lоw profile. Tо mееt thеm, уоu hаvе tо соntасt ѕресіаlіzеd аѕѕосіаtіоnѕ or ѕеаrсh websites оn аngеlѕ.

4. Sеllеr Financing

Inсrеаѕіnglу tоdау mоrе buѕіnеѕѕ-fоr-ѕаlе trаnѕасtіоnѕ are resting оn a ѕеllеr’ѕ wіllіngnеѕѕ tо finance аt least раrt оf a sale. In a dеаl that includes ѕеllеr fіnаnсіng, the seller takes раrt оf thе purchase рrісе іn саѕh аnd the rеmаіndеr in thе fоrm оf a рrоmіѕѕоrу nоtе that the buуеr wіll рау bасk with іntеrеѕt оvеr a period of three-to-five years. Thіѕ hаѕ bесоmе еѕѕеntіаl; buуеrѕ аrе having dіffісultу ассеѕѕіng funds through trаdіtіоnаl mеthоdѕ, thеrеfоrе there’s a natural grаvіtаtіоn tоwаrd ѕеllеr-fіnаnсеd buѕіnеѕѕеѕ tо hеlр offset ѕоmе оf the cost uр frоnt.

Conversely, ѕеllеrѕ whо соntіnuе tо ѕау nо tо seller financing are fіndіng it difficult tо сlоѕе a deal, аnd as more оf thеm have rеаlіzеd thіѕ, there has bееn an іnсrеаѕе in seller-financed buѕіnеѕѕеѕ on thе mаrkеt. If you’re іn thе mаrkеt fоr a small buѕіnеѕѕ іt’ѕ іmроrtаnt to bе aware of alternate fundіng орtіоnѕ, but know thаt in some саѕеѕ it’s still possible tо bоrrоw frоm a bаnk. Government ѕtіmuluѕ аnd bаnk роlісу have bееn trуіng tо рrоmоtе ongoing ѕmаll buѕіnеѕѕ lending, аlthоugh mаnу bаnkѕ аrе still mоrе соnѕеrvаtіvе thаn thеу uѕеd tо bе аbоut when аnd to whоm thеу’ll lоаn mоnеу.

5. Crоwdfundіng


Crоwdfundіng оn ѕіtеѕ such аѕ Kісkѕtаrtеr and Indіеgоgо саn gіvе a boost tо fіnаnсіng a ѕmаll buѕіnеѕѕ. Thеѕе ѕіtеѕ allow buѕіnеѕѕеѕ to рооl ѕmаll іnvеѕtmеntѕ frоm a numbеr оf іnvеѕtоrѕ іnѕtеаd оf hаvіng to lооk fоr a single investment.

Mаkе ѕurе to rеаd thе fіnе рrіnt оf different crowdfunding sites bеfоrе mаkіng уоur choice, аѕ ѕоmе ѕіtеѕ hаvе рауmеnt-рrосеѕѕіng fееѕ, оr rеԛuіrе buѕіnеѕѕеѕ to raise their full stated goal іn оrdеr tо keep аnу оf thе mоnеу rаіѕеd.

Tоdау’ѕ business-for-sale marketplace is full оf еxсіtіng орроrtunіtіеѕ that wіll аllоw уоu to take your dеѕtіnу іntо уоur оwn hands, аnd wіth vаrіоuѕ options аvаіlаblе thеrе’ѕ no rеаѕоn to lеt a ѕhоrtаgе of traditional capital ѕоurсеѕ gеt in the wау of уоur dreams.


Dr. Teresa R Martin

Dr. Teresa R Martin, Esq. is a Motivational Speaker, Author, Million Dollar Real Estate Wealth Coach, Business Strategist, and Legal Counsel. She is living the life she loves and can teach you how to do the same!

As Founder of the Generational Wealth Zone Group, Teresa Martin formed the original vision for a group of companies that would help clients create, manage, protect and grow their wealth. She is dedicated to showing individuals and entrepreneurs how to become financially empowered by turning the work they love into a profitable and sustainable business.


Is Credit Card Stacking Really Going to Help You Fund Your Real Estate Deals?

By Jessica Guisinger and Merrill Chandler

If you are a new or seasoned real estate investor and you have been looking for capital to fund your real estate deals, there is a good chance you have heard of credit card stacking.

Credit card stacking is the practice that credit brokers use to help individuals acquire credit by applying for multiple personal credit cards at the same time. The idea is that once you are approved for multiple credit cards, you can use the newly extended credit to fund your real estate deals. While getting multiple credit cards at the same time may initially sound like a great idea, doing so can create serious problems—especially if you attempt this strategy without fully understanding the consequences.

“I think just about the worst mistake I’ve ever seen an investor make is funding a deal by employing a credit card stacking strategy,” said Jessica Guisinger, the referral partner liaison with CreditSense, a firm that specializes in improving both personal and business fundability for real estate investors and small businesses. A cursory review of their website reveals they are nothing like a credit repair agency, but rather a Fundability Optimization firm, that gives its real estate investor students and clients a great deal of specialized insight into the inner workings of credit underwriting in general, and credit approvals in particular.

“We see a lot of offer there that offer investors “funding” to do deals, but in reality they are just managing credit card stacking [for the investor],” Jessica explained. “These companies do not disclose—and investors rarely know until it’s too late— that getting the funding they need by maxing out these new credit cards will absolutely ruin the investor’s chance of obtaining future funding, and it inevitably tanks that person’s personal credit profile and score as well. And to add insult to injury, the 0% offer that was so attractive almost always disappears when they try to liquidate their credit card limit for cash.”

What credit card stacking participants don’t know is that even if they pay on-time for the next 24 months, they will be flagged as high risk borrowers because lenders view this practice as an extremely high risk behavior. The investor will also be flagged as high risk because of the sudden spike in utilization (balance to limit ratio), and a demonstration of poor credit management.

“A far better solution is to use true business lines of credit as your funding source. When you have the right credit profile these lines of credit offer the lowest rates available and you can get these business lines of credit with full check-writing capability at 3% to 6% to fund your deals,” recommended Jessica. “This type of funding is not only check-accessible, but it is unsecured as well. This feature offers a huge advantage for real estate investors because it helps make them MORE fundable while improving their personal credit rather than destroying it.”

Many real estate investors assume they cannot qualify for unsecured business lines of credit, or that they will need to pay high interest rates in order to obtain them without ever discovering the truth. Jessica noted that with the right borrowing strategies, this is patently untrue. “A lot of real estate investors need help becoming fundable because they have been playing the funding game without knowing the rules. And, not knowing the rules is made even worse because real estate investing is considered a high risk business by lenders—they don’t want to even talk to you much less give you money,” she said.

Jessica continued, “Thankfully there is hope. There’s a way for real estate investors to get inexpensive money from top tier lenders. They simply need to learn the rules of the funding game and then play that game at a professional level. In fact, if you know what you are doing, you can obtain these unsecured business lines of credit and then strategically grow them to $1 million or more in real estate funding,” she said.

“Experts who help others acquire this type of funding do not just jump in without exploring the current fundability of an interested investor,” Jessica concluded. “If someone does not do a little bit of fact-finding and a comprehensive fundability analysis before they lay out a plan for you, be on alert,” she said.



7 Personal Finance Questions to Ask Yourself Before Getting a Mortgage

By Dr. Teresa R. Martin, Esq.

Are you ready for a mortgage? It’s a big step that requires careful planning. A mortgage will affect your financial future for years to come.

Before you sign that mortgage, consider these finance questions:

  1. What is your credit score? Credit scores affect mortgage rates.
  • Before buying a house, check your credit score. Should you raise your score to get a better interest rate? In general, high scores with no late payments during the last three years are enough to get good rates.
  1. Are you capable of handling maintenance costs? It’s important to consider the cost of maintenance before buying a house.
  • The mortgage is only one part of the total cost of owning a house. Maintenance is another important piece. Will you be able to pay for a new roof or air conditioning system when the current ones wear out?
  • Does your monthly budget include enough savings for maintenance?
  • It’s also important to consider DIY projects and hiring others to complete tasks. House maintenance can involve expensive and ongoing projects. Are you ready to pay for these costs?
  1. How secure is your job? Before signing a loan, evaluate your job security. Will the work last? How will you handle changes?

  • Evaluating your job future is part of planning for a home purchase.
  • Consider emergency funds and savings in your plan. If your job situation changes, will you be able to continue making monthly mortgage payments?
  1. Do you have the necessary financial paperwork? Mortgage applications require a great amount of paperwork. Lenders can ask for old tax statements, check stubs, savings account statements, and other information.
  • If you have a high credit score, you may get a no documentation loan.
  • It’s rare to get a no documentation loan, so it’s better to be prepared by checking your files and collecting the financial papers you may need.
  1. Did you calculate the hidden expenses of owning a home? Home ownership comes with multiple expenses that go beyond appraisal fees, property taxes, mortgage closing costs, and insurance.

  • One of the hidden expenses of moving to a home is more bills. If you’re used to renting, then home ownership can change your monthly bills by adding new ones. You’ll add trash collection, water, recycling and sewage in most locations to the expense list.
  • Home insurance is higher than renter’s insurance. In addition, older homes cost more.
  • Homeowners’ association fees are becoming more common in neighborhoods. You may be aware of condominium association fees, but are you ready to pay homeowners’ fees?
  1. Do you have an emergency fund? Emergencies can vary from broken dryers to flooded patios, so you need to be ready for anything. Is your emergency fund big enough to handle common, unplanned expenses?
  • Emergency funds are a better option than credit cards or loans. Putting enough money aside can help you avoid new debt.

  1. Are you applying for other credit? Mortgage lenders can see applications for other types of loans on your credit report.
  • Applying for other types of credit while trying to get a mortgage can hurt your loan. Mortgage companies view these applications as risks, so it’s better to wait before trying to get another credit card.
  • Applications for new credit lower your credit score and affect interest rates.

A mortgage is a responsibility that affects multiple areas of your financial life. Before you buy a house, consider how your current financial situation will be affected and plan for emergencies.

Dr. Teresa R. Martin, Esq.

Dr. Teresa R. Martin, Esq. is the founder of Real Estate Investors Association of NYC (REIA NYC). REIA NYC ( is a premier real estate investment association serving the New York City marketplace. Its primary focus and mission is “helping our members build, preserve, and harvest multi-generational wealth” in the areas of real estate investments, business ownership and personal development.



A New Era Of Zero Interest Rates?

By Fuquan Bilal

We could soon be in a new era of zero interest rates. What will it mean for investors, the markets and you?

Could We Have Negative Interest Rates?

The president has been pushing for lower interest rates. We could even potentially see zero rates and even negative interest rates. The fed already recently cut key rates, and more reductions could come in 2020. This may sound crazy at first, but it has been done around the globe at various times and has worked.

While everyone enjoyed pointing fingers at different parties in the wake of 2008, one of the biggest factors that actually caused the crash was rising interest rates. If they get it right this time, lowering rates could help the economy remain afloat and avoid falling into the abyss again.

The Impact

The most widespread outcome of this is it costing people to have money in the bank. It probably already does when you add up all the fees and charges. Yet, when banks start charging every interest for having money on deposit, there is going to be a massive need to find somewhere else to park money and invest it. Real estate is of course a nice solid alternative. Cutting out the banks as the middleman and directly investing in mortgage notes and funds can also be a smart way to turn those losses into net gains.

Negative interest rates also mean it will cost banks and lenders to make loans. The negative interest is applied to paying down your outstanding balance each month. There are other ways lenders can make up for this money, but clearly they will be pickier about who they loan to.

Perhaps most significantly for investors, a new period of mortgage originations with near zero or negative rates means soaring appeal and demand for older higher rate notes, including nonperforming and re-perfoming loan notes. 8% and even 4% notes will become far more valuable.

Those who acquire those assets early stand to win big as this unfolds.

Investment Opportunities

Find out more about investing in secured debt and real estate, go to NNG Capital Fund


Fuquan Bilal

Fuquan Bilal founded NNG in 2012 with the principal mission of capitalizing on the growing supply of mortgage notes in the interbank marketplace. Mr .Bilal utilizes his 17 years of residential and commercial real estate success to identify real estate opportunities and capitalize on them. To date, he has successfully managed three private mortgage note funds that primarily invest in singlefamily performing and non­performing mortgage notes. His financial acumen and proprietary set of investment criteria enable him to purchase underperforming real estate assets at a deep discount of face and market values, thereby increasing the value of the assets. This, coupled with his ability to maximize the use of leverage, enables him to build strong, secured portfolios with solid passive income flows.


Fire Your Real Estate Banker!

By Mark Willis, CFP
Lake Growth Financial Services

“A banker is a fellow who will lend you his umbrella when the sun is shining, but wants it back the minute it begins to rain.” — Mark Twain

Ain’t that the truth? As we look ten years back on the Great Recession, we can see how much has changed, and how much more has stayed pretty much the same. Home values are up again to 2007 levels. Unemployment is down to pre-crisis levels. The stock market is hitting record highs as I write these words. And yet, not much has changed since 2008 or since Mr. Twain wrote those humorous words – bankers control the money supply, and just when you need the money most, they are there holding all the umbrellas.

I have no problem with bankers, personally. Some of my best friends are bankers!

In fact, as investors we’ve been taught to use “other people’s money” (also known as OPM) as leverage to help us gain traction in real estate or to get ahead in our business. Other solutions include getting a business line of credit to buy new equipment, or securing a mortgage on an investment property to renovate and flip a property. These are the standby solutions used by many Americans.

But ask yourself – who are the “other people” when OPM is your strategy for leverage? (Remember, leverage can work both ways – for andagainst you!) And what do other people want so badly that they’re willing to part with their money and hand it to you? Were you just handed an umbrella on a sunny day?

When banks control the environment where your money lives, they win every time. When you control the financial environment in which your money lives, you win.

34% of all American income goes to servicing debt. If time is money, as the old saying goes, that means a full one-third of the day is spent working as slaves to a bank! Think of how many folks you know who are in debt up to their eyeballs and working 60+ hours a week, or stressing over non-paying tenants, or feverishly rushing from property to property, hoping they can sell a property before the balloon payment comes due.

For many real estate investors, the road to becoming a wealthy landlord turned south toward the highway of serfdom, with their banker holding the upper hand.

Is there any other way? How can someone who has skill and passion for real estate or their business keep control and a sense of sanity amidst a world gone insane? Is there a way to break free of financial slavery to the banks?

Yes, it’s simple.

Fire your banker!

Where is it written that you have to service your debts and pay off a banker before you can enjoy the fruits of your investment? Who says you have to pay interest on your properties, effectively turning all your real estate assets into liabilities? Where did we get the idea that banks were the only ones who could provide the function of banking in our society?

You can be your own source of financing – you can rid your financial portfolio of your banker and provide the function of banking yourself.

How? The answer may shock you. I’m talking about a modernized form of dividend-paying whole life insurance. It works like a source of capital, a bank, to provide a guaranteed pool of money liquid and available for whatever you need. The funds you accumulate in your life insurance grow safely and predictably every year, guaranteed – no matter what’s happening in the stock market. You can use the equity in your policy like a line of credit to yourself – and you have complete control over how, when and if you pay your money back to your policy. You are in complete control of the entire process.

When most people see the words: whole life insurance, their mind turns off. Mine sure did! I was taught to avoid whole life insurance even in my earliest days as a financial planner. Since then, I’ve come to see how useful and valuable a properly structured, dividend-payingwhole life policy can be, when issued from a mutual life insurance company that offers non-direct recognition loans. This vehicle helps my clients overcome the inertia of opportunity cost, accumulate a powerful warchest of capital, and deploy liquid capital for their real estate ventures.

It matters where your money lives. As a CERTIFIED FINANCIAL PLANNER™ I have investigated nearly every financial strategy available to investors. Well over 400+ products are available and tens of thousands of uses of those products have been hocked and sold to folks looking for that golden goose that will just help them sleep better at night. Financial pundits and Wall Street advisors will tell you that whole life insurance is the devil, and while I’m sure I’ll be ostracized by mainstream financial advisors for saying this, I think every person should at least KNOW that becoming your own source of financing through a properly structured whole life policy is an option worth investigating for yourself. Besides, if mainstream financial advice got us into the mess we are in, maybe it’s time for a new way of thinking!

We’ve had two major market crashes since the year 2000. Do you think another one will happen in your lifetime? Do you want your reaction to the next market crash to be the same as the last one? If you’d like to not only protect yourself from the next recession, but actually anticipate and take advantage of it, prepare for it now by doing what the banks do, not doing what they tell you to do. Banks purchase a huge amount of life insurance to run their businesses. Prepare by becoming the banker by using a form of capital that banks themselves take advantage of (Google “Bank Owned Life Insurance” to see what I mean).

Imagine we’re in the middle of another financial calamity. Everyone is seeing their 401(k) values drop and real estate prices are plummeting. Your friends are nervous about losing their jobs.

But instead of fear and instead of begging a banker to lend you his umbrella, you’ve established yourself as your own source of capital, using the cash value in your properly designed life insurance policy. You’re in control. When you see the real estate values crashing, instead of fear, you see opportunity. You borrow from your own policy’s cash, and within 3-5 days your policy’s cash value is direct deposited into your bank account and you’ve got cash at closing. No tax obligations, no government red tape. You are in control.

With this kind of leverage, the kind of leverage you own, you can borrow from your policy and still have it earning interest as if you did not take the loan. You read that right. That’s a rare feature often misunderstood and overlooked by most insurance agents. And when it’s properly implemented into a policy, you overcome the biggest hurdle in the financial universe – opportunity cost, and giving you uninterrupted compound growth – what has been referred to as the 8th Wonder of the World. You can pay your policy back on your own terms, when and if you choose. Do you think that will make you more or less competitive as an investor? Could this help you with more than just investing? How about buying the stuff of life – cars, medical expenses, paying off debt… which financial situation would it NOT make sense to be the banker?

The only thing better than being debt free is to be the banker. Then you’re the one lending the umbrellas!

There’s more to this than just picking up the phone to call your local insurance guy. Most insurance agents (and certainly most Wall Street brokers) have neverheard of this strategy, and you don’t want to put your money with an “I’ll just Google it” advisor. If you’d like to talk to someone who has been specially trained and authorized to specifically design a Bank on Yourself policy as described above, please contact us at hello@lakegrowth.comor call us at 1-800-962-9141.


Top FIVE Alternative Financing Available to Entrepreneurs

by Teresa R. Martin, Esq.

Financing is indeed the most crucial of the puzzle for almost every business. Unless you have access to enough capital to bootstrap your business or raise it from family and friends, chances are, you’ll need a loan or investments.

When a conventional bank loan isn’t right for you, or if you’re looking for an additional injection of capital to grow your company, there are plenty of other options. Here are five alternate ways to finance your startup or grow your small business.


This is money loaned by a spouse, parents, family or friends. A banker considers this as “patient capital”, which is money be paid later as your business profits increase.

When borrowing love money, you should be aware that:

  • Family and friends rarely have much capital.
  • They may want to have equity in your business: Be sure you don’t give this away.
  • A business relationship with family or friends should never be taken lightly.


As with borrowing money from friends or family to buy a business, some might consider using money from a retirement nest-egg risky. That said , it can often be an effective way to invest in your entrepreneurial endeavors for more and more of today’s business buyers.

As laid out by the government’s ERISA law, you can invest your existing IRA or 401(K) funds to the purchase of a business without taking any early distribution and incurring penalties.

It’s even possible to combine money from your retirement fund with loans and other funding methods for greater flexibility. Many entrepreneurs choose to invest in a business they control because they believe the growth opportunity is greater; and they want to diversify a portion of their retirement holding outside of the stock market.


Angel investors invest in early-state start-up companies in exchange for a 20 to 25 perfect return on their investment. They have helped to startup many prominent companies , including Google and Costco.

Angels are generally wealthy individuals or retired company executives who invest directly in small firms owned by others. They are often leaders in their own field who not only contribute their experience and network of contacts, but also their technical and/or management knowledge.

They tend to finance the early stages of the business with investments in the order of $25,000 to $100,000. Institutional venture capitalists prefer larger investments, in the order of $1,000.000.

In turn for risking their money, the reserve the right to supervise the company’s management practices. In concrete terms, this often involves a seat on the board of directors and an assurance of transparency.

Angels tend to keep a low profile. To meet them, you have to contact specialized associations or search websites on angels.


Increasingly today’s more business-for-sale transactions are resting on a seller-s willingness to finance at least part of the sale. In a deal that includes seller financing, the seller takes part of the purchase price in cash and the remainder in the form of a promissory note that the buyer will pay back with interest over a period of three-to-five years.

This has become essential; buyers are having difficulty accessing funds through traditional methods, therefore there’s a natural gravitation toward seller-financed business to help offset some of the cost upfront.

Conversely, sellers who continue to say no to seller financing are finding it difficult to close a deal, and as more of them have realized this, there has been an increase in seller-financed businesses on the market. If you’re in the market for a small business it’s important to be aware of alternate funding options, but know that in some cases it’s still possible to borrow from a bank.

Government stimulus and bank policy have been trying to promote ongoing small business lending, although many banks are still more conservative than they used to be about when and to whom they’ll loan money.


Crowdfunding sites such as Kickstarter and Idiegogo can give a boost to financing a small business. These sites allow businesses to pool small investments from a number of investors instead of having to look for a single investment.

Make sure to read the fine print of different crowdfunding sites before making your choice, as some sites have payment-processing fees, or require businesses to raise their full stated goal in order to keep any of the money raised.

Today’s business-for-sale marketplace is full of exciting opportunities that will allow you to take your destiny into your own hands and with various options available there’s no reason to let a shortage of traditional capital sources get in the way of your dreams.


Dr. Teresa R. Martin, Esq. is a motivational speaker, author, million-dollar real estate wealth coach, business strategist, and legal counsel. She is living the life she loves and an teach you how to do the same!

As founder of the Generational Wealth Zone Group, Teresa R. Martin formed the original vision for a group of companies that would help clients create, manage, protect and grow their wealth. She is dedicated to showing individuals and entrepreneurs how to become financially empowered by turning the work they love into a profitable and sustainable business.



Dealing With “Balloon” Payments

By Bruce Kellogg

“Amortizing” Versus “Balloon” Notes

An “amortizing” note is one where the principal amount is paid off over the term of the loan. A “balloon” note is one where the payments are not sufficient to retire the debt, and an outstanding balance is due at maturity.

What Is The Problem?

The problem arises when the borrower does not have the funds necessary to pay the “balloon” amount when it comes due. Oh, oh! So, here are some ways to deal with that!

Refinance the Property

The first recourse for an owner who wants to keep the property is to refinance either the property itself, or another property in the portfolio. This is a good approach as long as financing conditions are favorable. If conditions are not favorable, other approaches will need to be considered.

Sell the Property

If the owner does not care to own the property any longer, they can sell it and have the sale pay off the loan. Or, they can sell another property to pay off the loan. If conditions are not favorable for selling, again, other approaches will need to be considered.

Renegotiate With the Lender

This is not an ideal approach because the borrower is negotiating from an inferior position. The lender “has the upper hand” because they can always foreclose. So, the borrower should offer the lender a monetary “inducement” for an extension, either a fee, an increase in interest, or payment amount, or both. But, it gets the job done! (Unless the lender says, “No”!)

Protective Note Terms

The best way for a borrower to protect themselves from becoming in an uncomfortable position is to negotiate protective terms in the note in the first place. One might be called a “rollover clause” or an “extension”. Here, for example, the borrower gets a time extension, say two years, for a 2% interest rate increase. This must be written in the note as one of its terms.

Another approach is to convert the note into an amortizing one when the balloon payment is due. Again, these terms need to be negotiated when the note is written and included with the other terms. In some cases, lenders do not need a cash payoff and enjoy receiving reliable note payments from a proven borrower.

Bring In A Cash Partner

If the above approaches aren’t working, the borrower can bring in a cash partner. This basically involves selling a partial interest in the property for cash to pay off the “balloon”. An escrow is recommended with title insurance, and an attorney should draw up an agreement between the parties, who might not be familiar with each-other.

Return the Property to the Lender

This is the least-desirable alternative in most cases. It involves giving up. If it’s going to be done, it needs to be done right, with an escrow, deed with a “Deed-in-Lieu-of-Foreclosure” recitation, title insurance, and transfer of any rents and deposits back to the lender. The lender should cancel the note, and return the original to the borrower. The lender should also record a “Full Reconveyance” in the escrow to clear the title.

File Bankruptcy

This is an alternative, but a risky one. The day a bankruptcy is filed, a 30-day “Automatic Stay” of all collection actions is established. After 30 days, the lender can file a “Relief from Stay” request to foreclose on the property. There is a hearing, and in the case of homeowners the bankruptcy judge will urge the parties to work something out. In the case of investors, the “sympathy factor” is usually low because investors are considered to have resources and several years to handle the “balloon”. The lender is due the money, the judge is likely to rule. (i.e., no relief!)


A “balloon” payment is one of those things that isn’t a problem, until it becomes a problem. It is best to deal with it up-front, in initial negotiations, when the note is originated. During the term of the note, keep working to pay it off. If the due date comes and the payoff funds are not in-hand, find expert help. You’re going to need it!

Good luck!


Bruce Kellogg

Bruce Kellogg has been a Realtor® and investor for 36 years. He has transacted about 800 properties in 12 California counties. These include 1-4 units, 5+ apartments, offices, mixed-use buildings, land, lots, mobile homes, cabins, and churches.

Mr. Kellogg is a contributor and copy editor for two national real estate wealth-building magazines: Realty411, and REI Wealth Mag.

He is available for listing, selling, consulting, mentoring, and partnering. Reach him at, or (408) 489-0131.