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Investing Outside of the Box – Real Estate Note Investing Made Easy
BY PENNI Z (ZELINKOFF) / MAY 1, 2020 / INVESTOR
Did you know that there is an estimated “76% of American’s that are worried they won’t have enough to retire” according to a Forbes Article, April 2019. Fast forward to May 2020 and the market has shifted and is no longer the strong economic market it was 2 months ago and we are now wondering what the “new” future will hold, will we have a job, stressed about the stock market’s volatility and how will the real estate market fair post pandemic?
What would it look like if you could make money in an up or down market and not worry about the “market”? I would love to say something is recession proof, yet we can’t guarantee anything in life, yet this concept could be very close. The one thing I have learned in Real Estate over my 20 years of experience, is in a good market or a down market real estate investors always need money.
So, what would it look like if you could achieve a higher rate of return faster than traditional investing (5-7%) or savings account at (0-1.5%) annual rate? What would it look like if you created cash flow, build wealth and had the option to “retire” earlier and without the financial stress?
What would that look like?
What would it look like if you had an investment strategy that not only helped you achieve your financial goals it helped other entrepreneurs/business owners achieve their financial and retirement goals too. Wow, what would that look like, feel like?! A WIN WIN WIN!
There will be fall-out from Covid 19, that’s reality you don’t shut down the world and expect it to be normal, yet I’m optimistic and there will be a lot of new and existing opportunities that will arise from this experience, there always is – the key is to be ready.
Anticipating the shift in the real estate market is real, I have been in real estate for 20 years and every 7-10 years there is a shift, we just don’t’ know when and by how much. This time we know when, it’s now! The real question is by how much? Well that will show itself soon. Being on multiple calls with expert investors, financial advisors and bank representatives they all have said they believe that within the year or less it will turn towards a buyer’s market.
So when people ask an agent, “how is the market” no matter what kind of market it is they always say “good”. Why because you can buy and sell property and make money in any type of market and for real estate investors it’s preferable and generally easier to buy and build a portfolio in a lower priced buyers market. The key is to have access to cash and/or credit lines/lending. Yet as we know, in years with a down economy those are two areas that generally tighten up; Money and Lending.
A little history, for over a century we have been taught to invest our money in the stock market in various ways; stocks, bonds, futures, currency and mutual funds inside or outside our retirement accounts. Yet after all that “investing” year over year American’s are still worried about their retirement and money concerns. And if what goes up must come down, then there will always be an economic cycle so why not think differently!
“Even with the U.S. economy rounding into shape, 65 percent of Americans say they lose sleep over financial concerns, according to a survey by CreditCards.com. That’s just four percentage points fewer than the share of Americans who had money-related insomnia back in 2009, when the economy was a hot mess. In 2007, just prior to the Great Recession, 56 percent of Americans was losing sleep over financial worries, with the figure shooting up to 69 percent in 2009.”
BY ANNA ROBATON, APRIL 20, 2017 / 12:01 AM / MONEYWATCH
I Challenge you to NOT be a part of the above Statistics.
The above article was written during a strong economy, I’m curious how people are feeling today and how this statistical number has been affected? And yet because I’ve been here before; past behavior predicts future behavior, what goes up comes down and history repeats itself; this time I’m prepared and I want you to be as well.
We are taught to diversify our portfolio, you maybe diversified yet are still under one overall umbrella - Wall Street; mutual funds, stocks, bonds etc all tied to the stock market. If you are a savvy investor you have already or are willing to diversify your money into other investment tools like real estate.
For those of you who manage your own investment portfolio and are doing well, that is great, I challenge you to look into diversifying even more! For those that have money invested and someone else manages your account(s), which is Most Americans, you probably have no idea what you are invested in, how much your annual rate of return is on your money and have no idea the amount you are charged in fees associated with your account(s). If you don’t know the answer to these simple questions you should, go ask your financial planner today. And then have a second opinion, have someone else (independent) look at your portfolio from a financial “advisor” perspective to verify the facts. Then call me and let’s talk.
A special side note here: Women I challenge you to be bold and take charge of your money - we have been overlooked in financial management, investing education and money mentorship for decades. Now is your time! We typically don’t have the “Money talk” and are afraid to ask questions, or we get answers like don’t worry everything is taken care of, you are making money don’t worry or….
It stops here!! Ladies we Need to take our power back, educate ourselves and
Have a Voice and a Choice in our Financial Freedom.
It’s my opinion as well as other industry experts and financial advisors that I have spoken with that the real winners making money on our money is not us, it’s the institutions who manage our money. The financial experts say that on average an American who has their investments in a retirement account over the course of its lifetime with the up and down markets make an average of only 5-7% interest on their money over time and that doesn’t take into account inflation and taxes. No wonder we are all stressed about retirement and when we get there have less than we thought we would.
Take a look at today’s numbers for interest rates dated April 2020:
Traditional Investments: As of April 2020
Checking/Savings Account 0-1.50% apy
CD at Bank/Credit Union .25-1.65% apy
Money Market 0-1.80% apy
Stocks – vary average 5-7% average over time
Bonds – vary average 5-7% average over time
Retirement account 401k, Roth 5-7% average over time
Be Empowered: knowledge, mindset, mentorship and making forward thinking investment decisions that create results is empowerment! I want you to want to look outside the traditional investing box, outside the way we have always been taught to invest to a NEW World:
It’s a New Era, a New World, perhaps a Better World, A New Way of investing.
If we Know Better, we Think Better, we Do Better. – Penni Z
“To understand what this means, consider an investor who was unlucky enough to invest a lump sum in the stock market on the exact day of that October 2007 high. Provided he or she had the intestinal fortitude to stay with the investment through thick and thin, and reinvest all dividends along the way, the investor would now be in the black.”
How long did it take? This unlucky investor was under water for four and one-half years.
By: MARKHULBERT, COLUMNIST, MarketWatch
Instead of losing money for 4 ½ years during a down turn or any time really – if you had the availability to make money during this time at an annual average rate of return between 8-15%, what would you chose? Lose money or make money – I’m choosing to make money!!
Individuals around in 2008-2010 were most likely financially affected by the crash. The economy is having another shift and we now face another down turn that could be worse than 2008. If you were younger than 30 in 2008 you may not have experienced a direct effect though you saw the effects of the downturn of 2008 and now not only are your parents/grandparents/friends facing another down turn in their life-time SO are YOU. Article from bigger pockets on outlook: (biggerpockets article:) https://www.biggerpockets.com/blog/5-reasons-2020-recession-completely-2008?utm_source=newsletter
Now, I’m not a doom and gloom kind of person, and I’m not here to say investing the traditional way is wrong, I am here to challenge your thinking as an optimist, a realist, a real estate investor and Secured Asset Lender and to say there is another way to invest! It’s the perfect time to do something different and shift from the same old “traditional” way of investing. It’s ok to change your mindset and pivot your investing strategies. It’s easier than you think!
Take Action - Take Control
of your investing, your money, your results and your future!!
For those savvy investors who day trade, keep up with the stock market, economic indicators and help their financial planner manage your money this program works great for you because you like to DIY and be involved on the ground floor. For those less DIYers and more DIFM, (do it for me) personalities it is absolutely worth having a conversation of what that looks like for you and your options for adding Secured Asset Investing to your portfolio.
Secured Asset Investing gives you the POWER to be in control of your money. The appeal to this type of investment is that you can be any age, you can live anywhere, invest any time and anywhere in the US. By having various money sources available to use you can create the return you desire and the lifestyle you deserve. Once you learn the how to of Secured Asset Investing it is simple. With Secured Asset Investing you can create a higher average rate of return than “old” traditional investing strategy, without the stress of “watching the market”. There are two basic types of investing short term (1-12 months) or for those Set it and Forget it types there is longer term investing (12-84 months) Risk is minimized and management buy strategy, boundaries and evaluation just like other type of investing. And the great benefit is you secure your money (your asset) to a real estate asset with a secured note. Once you learn and understand the dynamics of Secured Asset Investing you will see there is much more upside than downside.
Why is Secured Asset Investing a viable investment strategy with plenty of upside in Today’s market and the future? It’s a relationship investment model where one person with money connects with one real estate investor in need of money on one investment property. Rinse and Repeat.
One to One to One – Transactional Secured Asset Investing
As we know in a down market money supply tightens, fewer lending options are available to real estate investors and yet real estate investors will still need access to cash to continue to run their business. Why not build a portfolio of result oriented investment options through lending on real estate transactions.
What if you took a reasonable percentage of your money from a saving account, investment account, retirement account, whole life insurance, inheritance, capital earned from your business and invested in
Secured Asset Investing - what would that look like to your bottom line?
Secured Asset Investing is a way to be involved in real estate without owning any property, managing any rentals, coordinating any fix and flip projects, negotiating with sub-contractors or working with other industry personnel:
- You are in control
- You chose the investments
- Negotiable Return on Investment (ROI)
- Multiple exit strategies for a Win Win – low risk structured investment
- Large group of investors to chose from
- Access to real estate investors in an up or down market (investors always need money)
- Money is secured by real estate
- Stay local or go national
- Sit back, relax and collect a check
You may ask why would a real estate investor use an individual investor/lender instead of a traditional lender? Great question, for many reasons:
- Property does not qualify for traditional lending
- Real Estate investor does not qualify for traditional lending (self employed, other)
- Traditional lenders do not like to fund fix n flips
- The “deal” doesn’t fit traditional lending guidelines
- After a certain number of “investment” properties the traditional lenders may not loan to an investor
- Guidelines have changed in traditional lending and money tightens
- Build relationships for multiple investment transactions
- More flexibility on amount of loan, timing on funding, letter of approval
- Quick Close
- Less red tape
- Real Estate investors are in business to make money and they understand there will be a higher rate to have this type of loan
What would it look like for you, your family, your future, your lifestyle, your retirement?
CREATE CASH FLOW
BUILD WEALTH - QUICKER
HIGHER RATE OF RETURN
PASSIVE INCOME BUSINESS
Here is what an average rate of return could look like as a Secured Asset Investor:
This real estate investor is a Landlord who has been in business for 5 yrs and has 20 properties. He has a strong track record, has references and success with high occupancy rate, solid rent pricing and management of his business and rental portfolio. He is looking for $100k loan for 5 yrs to purchase a duplex the terms are 5 yr loan, 10%, 2% points of loan and $1000 admin fee. The Secured Asset Investor is the “bank” yes the bank with a note, mortgage and is in 1st position with a recorded deed. There are very strong arguments why it’s good to be the “bank”. Learning to Lend is a profitable investment strategy – let’s look at the banks and mortgage companies and how much money they make on their “lending” business:
Traditional Mortgage Company:
30 year fix rate at 4% (today’s average interest rate) on $100,000 loan will make $71,870 over the 30 years, now multiple that by tens of thousands. Not a bad day at the office.
Back to our “example” of being the bank:
Rental Purchase Example: (Real Estate Investor working with a Secured Asset Investor)
Loan $100,000, 10% interest, 5 yr term (secured asset lender receives interest, points, admin fee and original principle back)
Payment is $833.33 to the lender, annual income is $10,000 - 5 year income is $50,000
Lender received at closing the 2% points or $2,000 and $1,000 admin fee
Total Amount earned on $100,000 loan for 5 years is: $53,000 vs. traditional investing
Example of traditional investing, if you kept your money in a CD at the bank or invested in the market, this is what you may have made on $100,000:
$100K 5 yr CD at 1.65% $ 8,250
$100k 5 yr retirement 5% $27,628
$100K 5 yr as Secured Asset Investor $53,000
If you main decision right now was to determine if you are a DIYer or DIFM person after having a Free Business Strategy conversation with us how hard would that be? For more information, learn about our training programs and to speak with us at Penniwize: email or text your full name, email address, phone number with SAI in subject to: firstname.lastname@example.org or text 702-518-5590
The materials and information shared by Penni Zelinkoff and/or Penni wiZe Empowerment Network LLC or Penniwize (collectively, “PW”) is not and should not be considered financial, investment, legal, or other professional advice. Instead, said materials and information are intended as an overview for educational and training purposes. PW’s blog, website, newsletter, presentation materials, and/or any other forms of communication may contain general information about legal, financial, investment and related matters. Additionally, in the event that third party information is included or presented within the scope of PW’s blog, website, newsletter, presentation materials, and/or any other form of communication presented by PW, such inclusion or presentation does not reflect the opinions of PW. In all cases, said information is not being delivered as professional advice and should not be treated as legal, financial, investment, or other professional advice. You must not rely on the information on this website as an alternative to professional advice from your attorney, financial or investment advisor, or other professional services provider. If you have any specific questions about any matter you should consult with the appropriate legal, financial, or other professional services provider.
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Today's Guest: Penni Zelincoff
Penni is a real estate investor, real estate lender and wealth empowerment educator. For over 18+ years she has built an extensive network of investors and real estate professionals. She is now teaching her proven formula for building wealth to the general public.
She is the CEO and Founder of di-veZt and The Penni Z Show. Our mission is to help a million lives – by empowering our clients to have a Voice and Choice in their financial freedom.
Penni trains her clients to minimize the roller-coaster ride that so many have experienced in life around finances. She believes that personal, professional and financial stability go hand in hand. She’s passionate about sharing her training and mentoring program with you. This opportunity to learn a very effective way to create cash flow and build wealth is powerful – it’s called “Secured Asset Lending”.
Penni's Online Presence:
- The Penni Z Show