I assume you are here for a couple of reasons:
About Me
I am a lender through and through. I have bought and sold real estate, rented, leased, fixed up and all the rest of it. I have had many of ups and downs. I have used hard money, my own money, investors, funds, banks, and hedge funds. I like to think I have learned a bit about it. I am here to teach you if you would like. Before we start, we need to talk about interest and banks.
Banks
Four of the top ten most profitable companies in the US in 2018 were banks. It is amazing what they do. They take money from deposits, from people like you and me and then, based on how much they take from us, the banks then go to the federal reserve (Pseudo US Government) and borrow money from them at low interest rates. And then they take that money and lend it back to us at a higher rate.
Banks Are Loan Brokers
They borrow money from us (our bank deposits) and the government and then lend it back to us at a higher rate. That interest rate spread between what the banks borrow money at and what the banks lend it out is their profit. Yes, they have other fees, but this interest rate spread is their profit. What a great business plan.
Be The Bank
I want you to be the bank. Whether it is being the Loan broker finding me loans or the Investor using your own money to get higher than typical secured rates of returns.
Be The Bank
Keep this in mind! Banks do not make all the loans! There are millions of people who do not qualify for a bank loan. Here are some of the reasons:
These people need money and they are not afraid to pay more than a bank will charge. This has created a very lucrative marketplace as these people have great business ideas and have a need for borrowing money. Since they do not qualify for bank financing they go to alternative lenders, also called hard money loans.
More than 33 billion dollars are lent out annually from alternative or hard money lenders!
That is what I am, and I am hoping to teach you how to be as well.
Investing to me is about two topics.
Rate of Return (Interest)
&
Risk
Interest and time are what makes your money grow. It is the building block of wealth. If you invest your money at a small interest rate your money grows slow. If you invest it at a high rate of return your money grows quickly.
Look at the Charts Below
This represents what your initial investment of $100,000.00 would have grown to if you invested it at the listed interest rates for the time specified.
Return in Ten Years
| Starting bal. | 3% APR | 8% APR | 13% APR | 18% APR | 23% APR | 28% APR |
| $100,000.00 | $134,391.64 | $215,892.50 | $339,456.74 | $523,383.56 | $792,594.61 | $1,180,591.62 |
Return in Twenty Years
| Starting bal. | 3% APR | 8% APR | 13% APR | 18% APR | 23% APR | 28% APR |
| $100,000.00 | $180,611.12 | $466,095.71 | $1,152,308.78 | $2,739,303.46 | $6,282,062.15 | $13,937,965.75 |
Return in Thirty Years
| Starting bal. | 3% APR | 8% APR | 13% APR | 18% APR | 23% APR | 28% APR |
| $100,000.00 | $242,726.25 | $1,006,265.69 | $3,911,589.80 | $14,337,063.84 | $49,791,285.99 | $164,550,455.70 |
Let this sink in and imagine what your investments could return you at a high interest rate vs. a lower interest rate.
Now you say, what if they do not pay me back?
Banks Make 2 Types of Loans:
What is the difference between secured and unsecured?
Unsecured: If the borrower does not pay you back you have to sue them.
Secured: If the borrower does not pay you back you foreclose and take your collateral back
This is where the (Risk) part of the equation comes in. I always have security. If someone does not pay me back, I always have a hard asset to collect from. Just like a pawn shop that lends against a wedding ring. If the person pawns the ring and does not pay the pawn broker back the pawn broker sells the ring. And if the pawn shop owner does his job right, he sells the ring for much more than he lent on it. That is what I am. A real estate pawn shop. If I make a loan, I take real estate for collateral. And to keep my loan safe (Low Risk) I will only lend half (50%) of the value of the real estate.
I have seen many a people walk into high return investments with unscrupulous or uneducated con men with no security. At the end of the day most of these people lose their money. Why, High Risk. This is my first commandment.
FIRST COMMANDMENT: (Though shall only invest in low risk.) You can venture out and jump into high risk but just remember it is a gamble and be prepared to lose. Long term gamblers rarely prosper. I would not recommend it.
SECOND COMMANDMENT: Always have twice the loan amount in collateral, also called 50% loan to value.
These courses are about two things:
I want to suggest to you that your long-term goal should be to be an investor. Receiving what I call mailbox money. This is money that you make regardless of what you do. It comes in the mailbox and you take it to your bank. I hope to be able to provide you with a strategy to do just that. Along the way I will give you suggestions, ideas, and help you to believe in yourself so that you can do it. For I know you can. If you want to. Therein lies the secret. You must really want it.
I would suggest that you pass on the TV, less time at the Bar, less time arguing with your wife or husband and commit to learning about lending. It is a fascinating topic that could be a metaphor for life. For its principles are exactly life’s principles. I want you to think about that as well. The secret to this course is baby steps. Do not get overwhelmed just do what I say, and I believe you will reap the rewards.
FYI: I am a health fanatic. I believe that your life successes are most likely a product of the way you think and treat your body. If your body is strong and healthy so is your mind. Your mind will give you the determination, ideas, and strategies you need to succeed. So, along this journey I want you to commit time to your health. Again, this will be in baby steps. I have seen many people start a health program that is destined to fail because they cannot sustain it. It has literally taken me 10 years to get to a point where it is harder for me to not work out than it is to work out. This is because I have done it for so long and I reap the rewards of health because of it.
To begin with I just want you to go on a 30-minute walk once a day. If you are an avid exerciser, forget my suggestions. These suggestions would be for those of you who do not exercise and don’t eat well. I promise you that your successes in financial wealth will be equal to your commitment to your physical health. In addition, you will feel much better about life when you feel great. I want you to. And you can. Sorry, I got sidetracked.
I have found nothing more rewarding and safer in the real estate investment world as lending. I have, borrowed, bought, fixed up, rented, and sold. It works and can be profitable. However, it can also be very risky, time consuming and NOT FUN. I talk a lot about this in my book. If you have not read it do it, as it will tell you why I love lending as opposed to buying real estate.
This Is My Typical Loan
I charge 10 points and 18% interest for each loan I make. The points are the fee I charge for making the loan and the interest rate is what I charge per year on the money I loan. For example. If I lend someone
Loan amount: $100,000.00
10 points I charge: $10,000.00
18% APR: $18,000.00
Payoff in one year: $128,000.00 (The profit being $28,000.00.)
APR stands for annual interest rate.
Therefore, I received a 28% return. Compare that to the returns a bank gives of 1% and you know why I lend.
I will include many sample loans so you can see how interest works. This should get you excited to get into lending.
When I started I had very little money and borrowed from others to make this program work. I will show you those transactions as well along the way.
Sample Loan
Brown’s Canyon Loan
Mr. D wanted to borrow money from us to purchase a property in Browns Canyon Utah. He had arranged with seller of the property a purchase price of $1,200,000.00. The owner was willing to allow Mr. D to borrow $528,500.00 from us in first position and then he had agreed to carry the remainder behind us in a second trust deed position. Mr. D did not make payments timely and there were some added fees and penalties added to the loan. We collected $693,213.26 on November 21, 2012. Because of the short duration of the loan we were able to realize a 96% annualized rate of return. We believe the property was valued at the sale price and therefore our loan amount turned out to be a 44% loan to value (LTV). We shall talk about loan to value later.
| Loan Date | July 18, 2012 |
| Loan Amount | $528,500.00 |
| Points | $53,500.00 |
| Broker Fees | $36,000.00 |
| Payoff Date | November 21, 2012 |
| Payoff Amount including Payments | $693,213.26 |
| Annualized Rate of Return | 93% |
| Profit | $164,713.26 |
I would be happy to show you how to do this!
The price of this program is $49.00 per month for as long as you would like to enroll.
You may cancel at any time.
This is what you get!
Order the Diamond Package today for $49 per month!
Cancel anytime.
If you want to talk to me more about it, call or email me.
Dave Knudson
801-750-3838
dave@gravitycapllc.com
