Saturday, March 24, 2012
Monday, January 17, 2011
Making Money with Adsense & Affiliate Marketing
So, I make about $50-$100 from my blog through just AdSense. Before you say, "gee, that isn't much", realize I make much more than that from business deals I get through people who read my blog. I get people/companies looking to borrow money, companies looking to invest money in my clients projects, consulting jobs, (at $250 an hour) and those looking for information about what my blog is about. (Raising capital and finding investors)
A level one company makes money through selling its product or services.
A level two company is level one but also makes money through online advertising as we do through AdSense.
A level three company does 1 & 2 but takes advantage of affiliate marketing too.
I'm going to post a link about option two right now. I'll revisit this post to explain option three in the next week or two.
Check out this blog that gave me the idea to write this article.
http://adsense.blogspot.com/2010/05/adsense-revenue-share.html
As I work on this post, you will be the first to know about the research I've done if you become a follower. Thanks.
To your wealth!
Russell Roesner
415 680 3454
rroesner@equitycoalition.com
www.equitycoalition.com
Equitycoalition by Russell Roesner is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 United States License.
Based on a work at www.equitycoalition.com.
A level one company makes money through selling its product or services.
A level two company is level one but also makes money through online advertising as we do through AdSense.
A level three company does 1 & 2 but takes advantage of affiliate marketing too.
I'm going to post a link about option two right now. I'll revisit this post to explain option three in the next week or two.
Check out this blog that gave me the idea to write this article.
http://adsense.blogspot.com/2010/05/adsense-revenue-share.html
As I work on this post, you will be the first to know about the research I've done if you become a follower. Thanks.
To your wealth!
Russell Roesner
415 680 3454
rroesner@equitycoalition.com
www.equitycoalition.com
Equitycoalition by Russell Roesner is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 United States License.
Based on a work at www.equitycoalition.com.
Thursday, December 16, 2010
How do I become a lender with deeds of trust?
How do I invest in deeds of trust?
What is the process?
After the analysis, the broker usually will decide to do the loan and send the borrower an offer sheet outlining the terms of the loan. If the borrower accepts, the broker will then notify his investors there is a new loan to fund and send them an offering.
Most investors use a local private lender/broker who already is set up to do deeds of trust or hard money loans. The company will market to borrowers and when a loan comes in, they underwrite the loan just as a bank would. However, instead of the loan being funded by a bank, the lender will use investors like you to obtain financing. What do these brokers look at before deciding to offer a deed of trust to their investors? First of all, they look at both the borrower and the property to see if the loan request makes sense. Here is a short list of items they look at:
| Borrower | Real Estate |
| Credit Score | Condition |
| Income/Tax returns, W-2s, rents | Value |
| Assets-Cash , investments, Real Estate | Loan amount vs. value (LTV) |
| Experience-invested in RE before? | Title- liens currently against property? |
| Exit Strategy – How will loan be repaid? | Location |
| | Type - Commercial, residential, land, etc. |
| | Income – what is potential rental income? |
How do I decide if this loan (deed of trust) is for me? Unless you are making a loan yourself, you are probably putting a lot of faith in the broker who sent you the offering. A few questions to ask yourself and the broker come to mind.
- What is the loan to value? The higher the loan to value, the riskier the loan because if something should go wrong, there is less equity in the property if you have to foreclose and sell it to get your money back. Typically, 50-65% is the maximum you want to go.
- Can the borrower make his loan payments?
- If the borrower cannot pay, could we rent the property?
- Is the property in a stable market?
- What is the exit strategy of the loan? This is by far the most overlooked but most important question. After the loan comes due in 1-5 years, how will the borrower pay us off? A few ways are refinancing with another lender or selling the property.
- Does doing this loan make sense? Why can't the borrower do a regular bank loan? Find out!
So you have decided to make a trust deed investment. Now create your own loan criteria that you can discuss with the borrower or the broker.
Loan size preferred or amount you want to invest?
What areas will you lend within?
What is your interest rate return minimum?
What is your minimum and maximum loan term? Less than 1 year? 1,2,3 or even 5 years?
What is the maximum LTV you will go up to?
Where do I find available trust deed offerings?
We can put you on our mailing list and when new deeds of trust come available, you will receive a deal sheet with everything there is to know about the opportunity.
I still have questions.
We are at your service. Our contact information is below.
Russell Roesner
rroesner@equitycoalition.com
www.equitycoalition.com
415 680 3454
Friday, December 3, 2010
Hard Money: What is it and how to get it
Hard Money is a term for a loan product offered by private companies instead of the banks. It is also referred to as Private money, Private lending, and Bridge money. Usually the capital comes from private investors that live locally to where the loans are being made. Although the loan process is similar to a bank, there are distinct differences. First let’s compare bank money with hard money:
| Bank Money Drawbacks | Bank Money Benefits |
| Hard to get | Low interest rates: 4-6% |
| Takes a long time (45-60 days) | Low Closing Costs: 1-2% of loan amount |
| Minimum Credit Scores Imposed | Long Term: Up to 40 years |
| Property must be in good condition | Small down payment: As little as 3% |
| Only 4-6 loans per person | Available Nationwide |
| Personal Guarantee is required | Money is always available |
| Borrower cannot be a company | |
| Hard Money Drawbacks | Hard Money Benefits |
| High interest rates: 9-15% | Easier to get and to qualify |
| High closing costs: 4-8% | Quicker to close: 15-30 days |
| Short Term: 12-60 months | Credit not as big of a factor |
| Limited Area: Only lend locally | Borrower Can be a company: LLC, Corp |
| High down payment: Up to 40% | Personal guarantee variable |
| | Property can be in any condition |
Most borrowers who use hard money do it for the following reasons:
- They personally cannot qualify or the real estate does not qualify for a regular bank loan.
- They do not have time to wait for a bank loan to be approved.
- They want to borrow money with a business entity and/or do not want to personally guarantee a loan
Even though the rates can be high, hard money can be quite useful when an investor has an opportunity to buy a property for a low price and sell it for a profit. Simply put, hard money even with its drawbacks can be a great tool in providing the capital necessary to be a real estate investor.
How do find a private lender and get a hard money loan?
Please review the loan programs section of our website where you can learn more and inquire about a getting a hard money loan. Our contact information is below.
Russell Roesner
Equity Coalition President
San Francisco, CA 94104
415 680 3454
www.equitycoalition.com
Linkedin Profile
Blog
Sunday, June 27, 2010
Self Directed Ira's
There are a million posts about self directed IRA's already online. Most people by now already know what a self directed Ira is, but if you don't, here is a simple definition.
A self directed Ira is by definition an Ira account where you can make investments in non-publicly traded investment vehicles. Instead of being limited to stocks, bonds, mutual funds, etc., you can buy real estate, invest in tax liens, private placements, and much more.
So, what can't you invest in?
The IRS defines a prohibited transaction as follows: "Generally a prohibited transaction is any improper use of your IRA account or annuity by you, your beneficiary or any disqualified person. Disqualified persons include your fiduciary and members of your family (spouse, ancestor, lineal descendant, and any spouse of lineal descendant)."--Source IRS Publication 590
In other words, you can't make loans to yourself, your family, or buy real estate for personal use.
Why use a self directed IRA?
The number one reason for a self directed Ira is to invest in Real Estate. You can buy rental property, make high yielding loans on real estate to others, (deeds of trust), and of course join the millions of others in America making high returns in the fix and flip market.
How do I choose a self directed IRA company?
Although there are many to choose from in today's crowded market, I still prefer to go with companies that have been doing this the longest and offer the lowest fees. The annual fees and per investment fees can really get you so it is important to do your own research. I've found the following companies to be the best in my experience.
Equity Trust: http://www.trustetc.com/
Pensco: http://www.penscotrust.com/
Sterling Trust: http://www.sterling-trust.com/
How do I find good investment options for my self directed Ira?
My company offers deeds of trust and we work with a number of successful real estate operators who are looking for partners. Please review our website for more information.
www.equitycoalition.com
To learn more about self directed Ira's, I suggest going directly to one of the 3 Ira company links I posted above. There you will find lots of explanations and tutorials on self directed Ira's.
To your Wealth!
Russell Roesner
Equity Coalition President
San Francisco, CA 94121
Sunday, February 21, 2010
Raising Money for Structured Real Estate Deals
As I'm sure you know by now, my focus is creating structured bridge financial transactions for real estate investors. This article will attempt to explain common industry terms and how a deal is structured. I can't count how many times I hear the term investor used to describe 3 different players in the same transaction. For example, is the investor the equity participant, is it the lender, or is it the real estate operator setting up the deal? Let's go through it step by step by describing a typical transaction.Sponsor: The company or individual who is looking to raise money and has identified the real estate to be purchased or improved.
Investor: The money partner, sometimes an individual, sometimes a company, (private equity group) who is putting up the cash above and beyond leveraged or bank money. However, if 100% of the money needed to complete the project is debt, then the term investor might be used to describe the lender or debt partner.
Lender/Debt partner: The institution putting up the loan.
Structured Financial Transaction: Any deal structure where debt and equity are both used together to finance a deal.
Debt: The capital piece structured as a loan. It could be based on a percentage of purchase price (LTV or loan to value basis) , the future value once the project is finished, or it might be based on the cost to purchase in combination with the improvement costs and project expenses (LTC or Loan to cost)
The most asked question I hear is, “What does the equity share partner want in return for their money?” There are an infinite number of ways to structure a deal but I'm going to explain the two most common ways to calculate that number.
Pari Passu: Example 1: $1 million is the total cost projected for a purchase rehabilitation project on a 5 unit apartment building.
Use Of Funds: $595,000 purchase price*$250,000 for rehabilitation*$90,000 for Real Estate Broker Fees*$15,000 for mortgage brokerage fees*$25,000 for interest reserves*$25,000 for legal costs. Let’s say the sponsor has secured a $600,000 loan and put up personal guarantees for that loan. There is now $400,000 still needed to cover the project.
If an investor brought in $200,000 total and the sponsor put in 200k of his own money, then the deal would be split 80/20. 80% going to the sponsor and 20% going to the investor. 600k bank loan credited to sponsor. 200k credited to sponsor. 200k credited to investor = 80% to the sponsor and 20% to the investor.
Pari Passu: Example 2: $1 million is the total cost projected for a purchase rehabilitation project on a 5 unit apartment building.
Investor: The money partner, sometimes an individual, sometimes a company, (private equity group) who is putting up the cash above and beyond leveraged or bank money. However, if 100% of the money needed to complete the project is debt, then the term investor might be used to describe the lender or debt partner.
Lender/Debt partner: The institution putting up the loan.
Structured Financial Transaction: Any deal structure where debt and equity are both used together to finance a deal.
Debt: The capital piece structured as a loan. It could be based on a percentage of purchase price (LTV or loan to value basis) , the future value once the project is finished, or it might be based on the cost to purchase in combination with the improvement costs and project expenses (LTC or Loan to cost)
The most asked question I hear is, “What does the equity share partner want in return for their money?” There are an infinite number of ways to structure a deal but I'm going to explain the two most common ways to calculate that number.
Pari Passu: Example 1: $1 million is the total cost projected for a purchase rehabilitation project on a 5 unit apartment building.
Use Of Funds: $595,000 purchase price*$250,000 for rehabilitation*$90,000 for Real Estate Broker Fees*$15,000 for mortgage brokerage fees*$25,000 for interest reserves*$25,000 for legal costs. Let’s say the sponsor has secured a $600,000 loan and put up personal guarantees for that loan. There is now $400,000 still needed to cover the project.
If an investor brought in $200,000 total and the sponsor put in 200k of his own money, then the deal would be split 80/20. 80% going to the sponsor and 20% going to the investor. 600k bank loan credited to sponsor. 200k credited to sponsor. 200k credited to investor = 80% to the sponsor and 20% to the investor.
Pari Passu: Example 2: $1 million is the total cost projected for a purchase rehabilitation project on a 5 unit apartment building.
Use Of Funds: $595,000 purchase price*$250,000 for rehabilitation*$90,000 for Real Estate Broker Fees*$15,000 for mortgage brokerage fees*$25,000 for interest reserves*$25,000 for legal costs. Let’s say the sponsor has secured a $600,000 loan and put up personal guarantees for that loan. There is now $400,000 still needed to cover the project.
If an investor brought in the 200k and the sponsor brought in 200k, the deal would be split 50/50. Why the big discrepancy? Some investors count debt brought into a deal as money contributed by the sponsor while others do not. In this example, the 400k remaining gets 100% of the deal so 200k equals 50% of the deal and the sponsor and investor split the deal 50/50.
Understanding the subtle deal points and perspective of both sides of a deal empower both an investor and a sponsor. If you are providing the service of helping raise capital for your clients, you earn your commission and placement fees by helping structure the transaction through understanding the deal points.
If an investor brought in the 200k and the sponsor brought in 200k, the deal would be split 50/50. Why the big discrepancy? Some investors count debt brought into a deal as money contributed by the sponsor while others do not. In this example, the 400k remaining gets 100% of the deal so 200k equals 50% of the deal and the sponsor and investor split the deal 50/50.
Understanding the subtle deal points and perspective of both sides of a deal empower both an investor and a sponsor. If you are providing the service of helping raise capital for your clients, you earn your commission and placement fees by helping structure the transaction through understanding the deal points.
Preferred Return: Many sponsors offer a preferred return to their investors based on an annual percentage. This is the investors guarantee. All profits beyond the preferred return can be sliced and diced based on negotiation. Some sponsors keep 100% of those profits. Some do a split.
There again are many more deal points when structuring a real estate investment but the Pari Passu and Preferred return examples are a great place to start. Remember, if a sponsor is looking for investment capital and is asking for more than a lender will loan, typically more than 60% LTV or LTC, then the investor who brings money to the table to bridge that gap deserves a higher return than the bank. If the sponsor is asking for equity, they will have to pay for it.
To your Wealth!
Russell Roesner
Equity Coalition President
San Francisco, CA 94121
Thursday, February 4, 2010
Speed up your computer-Really!
I'm not a tech blogger but I found something so unbelievably helpful to my business, I had to share it. Up until now, I thought that the speed of my internet connection and ram were the main factors in how fast a web page would load. Friends, this is not so! The browser you choose to use is big factor and some hog more memory than others.
Each browser comes free and with default settings. Just out of the box, here are the rankings from my research. From fastest to slowest on average:
After reconfiguring Firefox following the FREE directions, not only does Firefox run 5 times faster, but my entire computer runs faster and so does Internet Explorer. Maybe I just got lucky, but using MakeTechEasier to make one browser faster seemed to speed up all the programs on my computer in general since all browsers take up so much of your operating system resources.
This will take you 10 minutes. As a disclaimer, I do not work for or advertise for any company I promote on my blog. Using their configuration tricks, I've just made my business much more efficient.
I hope this helps you as much as it helped me.
To Your Wealth!
Russell Roesner
Equity Coalition President
San Francisco, CA 94121
415 680 3454
www.equitycoalition.com
Linkedin Profile
Blog
Each browser comes free and with default settings. Just out of the box, here are the rankings from my research. From fastest to slowest on average:
- Safari
- Opera
- Chrome
- Internet Explorer
- Firefox
After reconfiguring Firefox following the FREE directions, not only does Firefox run 5 times faster, but my entire computer runs faster and so does Internet Explorer. Maybe I just got lucky, but using MakeTechEasier to make one browser faster seemed to speed up all the programs on my computer in general since all browsers take up so much of your operating system resources.
This will take you 10 minutes. As a disclaimer, I do not work for or advertise for any company I promote on my blog. Using their configuration tricks, I've just made my business much more efficient.
I hope this helps you as much as it helped me.
To Your Wealth!
Russell Roesner
Equity Coalition President
San Francisco, CA 94121
415 680 3454
www.equitycoalition.com
Linkedin Profile
Blog
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