Credit Millionaire Enhancement

7/27/2019 Credit Millionaire Enhancement

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im Rohn, a professional speaker andtrainer, impacted me at a young agewhen he said, Paulie, make a goal

to become a millionairenot for themoneybut for what it will make of youto accomplish the goal.

Youre about to have shared with yousomething that is reserved for very fewpeople. The process is so elegant andimpacting, some of you may think itstoo good to be true.

Only true things can be good

The biggest problem with the Its toogood 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 goodin the mostmeaningful sense? It cant.

While this in no way means thatsomething which merely sounds good isreal, it is important to remain open anddirectly test the claims of things which

sound so good you want to take actionimmediately to acquire them.

Like this productand our other courses and classes

Donna and I sat in your very place. Weattended training events, seminars and

coaching classes where we were told youcould buy a home for no money down.

We were told some motivated sellerswill just give you their house.

We were told properties of all typescould be purchased for pennies on thedollar.

We wanted to be wealthy by buyinghouses for between fifty to seventy centson the dollar. But

We were incredulous.

Our doubt shifted immediately when

applied action rendered outrageousresults.

Donna wasnt with me physically whenthe first home owner signed the deed to ahouse to our business just from knockingon the door and using the distressedowner scripts.

For Donna and I, that experience waseye opening. We now understand that

things which seem impossible to us areoften very possible for others becausethey see it differently.

Well return to this idea, after we exposeyou to how some wealthy people areready and able to just give you millions

J

$197 Value

Credit Millionaire Credit

Enhancement: How to be aMillionaire in a Decade


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of dollars cash, for fifty cents on thedollar.

12 Steps to be a

Credit Millionaire in a Decade

1) Establish a relationship with a bankcapable of handling transactions between$20-200-Million.

2) Create or contract for deals whichrequire between $9-95-Million withimmediate cash-on-cash cash flows of16-20%

3) Approach the bank with yourbusiness plan and ask for the loan

4) If denied, ask if you were able tobring a cash depositor for the fullamount of the loan, who will leave thedeposit as security for the loan, wouldthe bank reconsider.

5) If the bank agrees, explain the creditenhancement process and get acommitment from your banker buddy toendorse you to the CFO of the bank.

6) Present the entire project to the CFOand get letter of commitment from same.

7) Send letter to the depositors privatebanking connections.

8) Wait as depositor negotiates with thebank on the interest rate for the superjumbo CD

9) On the day the depositor closes, youwill also close on your loan buying theCD for 50-cents on the dollar.

10) Use the remaining funds to fundyour projects and pay related fees

11) Use the cash flow from the projectsto pay the interest only on your creditline.

12) When the CD matures, use the cashto pay off the principle of the credit lineleaving you with all your assets debt freeand owned only by you.

There may be nosuch 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 StevePadilla purchased my lunch. It was notexpected. It was not required. It wasnot a prospecting lunch for his business.

It also wasnt Free.

What I mean by that is, Steve did it outof friendship. The relationship we haveover the years inclined him to dosomething nice for me.

This is the power of relationships andthis is where our course to creditmillionaire status starts.

Its not whatyou knowIts not who you know

While the credit enhancement programwill allow you to be a multi-millionairein a decade, some of us will have to take11, 12 or 13 years because our first stepmay take a while.

Step 1: Establish a relationship with abank capable of handling transactionsbetween $20-200-Million.


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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 ofone, you need to qualify the bank.

A great source for qualifying the bank isthe Thomsons Bank Directorypublished by Thomson FinancialPublishing.

With this directory, you will be able todetermine the most local bank whichwill handle transactions in the tens ofmillions. Further, you will be able to seeif the bank is potentially too large foryou to and your needs.

With your short list of banks, you willstart to interview your network ofassociates of friends.

If youre just getting started and youneed some more financial and

entrepreneurial associations, considerjoining The Chamber of Commerce localto the most branches of the bank orbanks youve targeted.

The US Chamber can be reached on theweb at (www.uschamber.com)

In many cases, the banks will bemembers of the chamber. This is a plus.

You can also join other associations or atleast meet the membership such as theYoung Entrepreneurs Organization at(www.yeo.org).

Ask these individuals if they bank, havepast experience with, or know someonewho does bank at any of the lendinginstitutions on your short list.

Using networking skills, earn theprivilege of being referred to the bank bythe person you know or meet.

Sail the ship of relationships

Now that you have a foot in the door,you will want to begin establishing yourrelationship with the bank.

While cruising toward super creditworthiness being who you are andhaving your relationship with the banker,assemble your income producing deals.

Youre on to step 2.

Step 2: Create or contract for dealswhich require between $9-95-Millionwith immediate cash-on-cash cash flowsof 16-20%.

What you owe, when you owe it onassets, is what youll be worth someday

Picture 1: Thomsons Bank Directory is afive volume set. You can likely find it at youlibrary reference section.
http://www.uschamber.com/http://www.uschamber.com/http://www.yeo.org/http://www.yeo.org/http://www.yeo.org/http://www.uschamber.com/


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Income producing assets are ones whichproduce cash or capital gains for youbecause you own them.

It stands to reason, if you can borrow

money to purchase these assets and youbuy them at or below the market value,you will be worth at leastthe amount ofmoney you borrow when the debt ispaid.

Now, if the asset produces income todayand that income can be used to pay downthe debt, buying these assets is like freemoney.

Finding free money is your next step.

It may seem odd to focus next on thedeals when you dont yet have the loan;however, the size of this project is suchthat you want to have the deals first.

Donna and I were frustrated when wegot started because we only needed acouple million dollars for our deal.

Lenders were resistant to lend on theproject we had because of somegovernmental restrictions on thecollateral.

This led us to collateral enhancement;however, the smallest deal was ten timeslarger than we needed.

We needed more deals and since eachdeal requires due-diligence, its wise tohave them all lined up for the fullamount first.

By having all your deals on optionagreements, contracts, business planswith commitments, etc.; you will avoidthe frustrations we faced initially.

Because of the nature of the borrowingyou will be doing, at a portfolio level(that means when you look at all thedeals as a whole package neither just anyone of them nor every one of them), the

cash flow needs to be very high.

Fourteen to twenty percent cash flowreturn is required as quickly as possible.

Once you have the deals tied up in abow, 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, computerslide presentation, or any otherorganization to your loan request.

Set the appointment with your bankerbuddy and pitch the package.

If your buddy is not a lending decisionmaker, make the presentation anywayand then ask for the banker buddy to setup the meeting with the decision makerand join you for that presentation.

Remember, to take your buddy out for afree lunch especially if someone elsein the bank is the decision maker.

When you make the presentation to thedecision maker, expect that the loan willgo to committee because of its size.

Ask that you be allowed to make thepresentation to the committee as youveworked very closely with the project forquite some time and the bank officer hasonly seen the project for about an hour.


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If you get the loan, youre finished andyou will likely make substantial money.Youll likely make even more than youwould have with the collateral/creditenhancement. This is a good thing,

rejoice.

However, if the loan committee hasreservations, move to next step.

If at first you dont succeed,the bank didnt understand

Step 4: If denied, ask if you were able tobring a cash depositor for the fullamount of the loan who will leave the

deposit as security for the loan, wouldthe bank reconsider.

You will soon notice this isnt exactlywhat youre going to offer.

Specifically, youre going to ask todouble the size of your loan request thenborrow dollar for dollar the deposit.

That you will be changing the size of theloan is of little importance at this point.Your goal is only to qualify the bank asa credit enhancement candidate.

If you dont see it,its not meant for you to see

DMX, Rap Musician

Should they still fail to understand whatyou just offered, its time to ask yourbanking buddy for a referral to anotherinstitution on your list.

Since most lending institutions areseeking to do two thingsacquiredepositors and make prudent loansmost banks will agree to your credit orcollateral enhancement offer.

This allows you to move to the next step.

Step 5: If the bank agrees, explain thecredit enhancement process and getcommitment from your banker buddy

and the loan committee to endorse youto the CFO of the bank.

The kind of finance deals you areestablishing can only be authorized by afew executive level bank staff members.

The Chief Financial Officer (CFO) isalways authorized to do the kind of banktransactions required for the process.

Further, it is a condition of the depositorthat negotiations on the bank CD beingcreated are conducted with a major bankexecutive.

With the endorsement internally comingfrom important branch staff and the loancommittee, you should be moved to thenext step effortlessly.

Even when you succeed,you often must try, try again.

By this time, you may have given thepresentation as few as two times and asmany as several if you had to disqualifysome banks along the way.

Despite the repeated efforts, its time topresent again.

Step 6: Present the entire project to theCFO and get letter of commitment fromsame.

Hopefully this is your last presentation.

While the offer is beneficial to any bank,there may be some condition of the bankcausing the CFO to reject the package.


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Feel the discouragement, and go back toyour banker buddy with your list ofbanks for the next round by referral.

You will know youre practically homefree when the CFO agrees to write aletter of interest and understandingregarding the enhancement program.

80% of successis talking to the right person

The next step is simply to deliver theletter to the person who introduced youto credit enhancement.

Step 7: Send letter to the depositorsprivate banking connections.

In many cases you will be handing theletter over to our CPA referral MichaelGraff.

There are other sources for credit andcollateral enhancement. However,always be leery of any program whereyoure required to make a deposit, eveninto escrow, before funding is made.

Michael Graff never requires any feesbefore your loan is funded.

The wait doesnt make it all worth it,it just makes it long

Step 8: Wait as depositor negotiateswith the bank on the interest rate for thesuper jumbo CD.

The depositor is treated like a privatebanking client.

This means the depositors identity willbe withheld from you until the end of theprocess.

Take no offense, if you had hundreds ofmillions cash, you might want youridentity kept from desperateentrepreneurs.

While I say that with tongue firmly incheek, be aware that the wait is one ofthe most difficult parts of the process.

Weve been in the holding patternseveral times. Weve been there withothers.

One deal with a large Chicago bankcame unraveled in this waiting period. I

remember the eagerness and anxiety ofmyself and my borrower friend.

Each day we waited, checked, comfortedone another and waited again.

The good news is, even when the dealcame undone it was actually a comfort.We learned what not to do and having ananswer allowed new actions to be taken.

I guess you could say this is one areawhere the old saw No news is goodnews isnt. Even bad news iswelcomed after a while.

At the time of writing this, Im again inthe holding pattern and the winterseasons holidays are approaching. Imbracing myself for long delays.

If it were easy and fast, you wouldalready 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 buyingthe CD for 50-cents on the dollar.


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This is when you do the kind of deal forcash money which attracted many of usto real estate.

Imagine for a moment if a very wealthy

person came up to you and said, I havea $20-bill here I will sell you for $10.

While your incredulity may get in theway for a while, when you finally openup your wallet and buy, you get yourreward.

This is even better than doing discountreal estate because the reason we do realestate investing is to make money, this is

doing discount money.

Of course, the money you used to buythe money is borrowed!

The interest rate is sure to be over 6%even in the best of times. Since you onlyhave access to 50% of the money, itslike youre paying at least 12% once youuse it all

Clearly, you must use the money to buyassets.

Since youve already lined them up, thisshould be no problem. In fact, it is thenext step.

Step 10: Use the remaining funds tofund your projects and pay related fees

The closest thing to a free lunch

Credit enhancement isnt cheep. Thefees are at least $1-million.

Add to this, there will be closing costsfor your projects, the line of credit, etc.

However, its still the closest thing to afree lunch out there. Youre still getting$9-95-Million to buy your investmentassets which you need never repay.

What you will need to pay is the intereston the entire loan amount.

This brings us to the next step.

Annual income twenty pounds, annualexpenditure nineteen pounds nineteensix, result happiness. Annual incometwenty pounds, annual expendituretwenty pounds ought and six, result

misery. Charles Dickens

Step 11: Use the cash flow from theprojects to pay the interest only on yourcredit line.

Now that you own or operate theprojects, youre entitled to the cash eachof them kicks off.

Be sure not to spend it all. You willmost likely need to apply some or all ofthe cash flow each month to the line ofcredit.

While there may be little advantage topaying down the line because thebalance is paid off in full in the nextstep, it is wise to save even more of thecash flow than you need for debt service.

These funds are called reserve funds andthey ensure that a temporary set back incash flow will not cause you to be late ina payment.

Three to six months of reserve are wise.If you can have this amount by the endof the first year, youre showing prudentfinancial management.


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If the deals themselves do not allow forreserves to be gathered, look to liquidatesome other assets to build up a reserve.

While you may be ready for the last step,

youll have to wait the ten years for theCD to mature.

Step 12: When the CD matures, use thecash to pay off the principle of the creditline leaving you with all your assets debtfree and owned only by you.

But why does the guy give you$20-million for only $10M?

You may be left with a single questionabout whats in it for the depositor.

On the surface, it appears millions ofdollars are being given up. Thankfullythey arent or else the depositor wouldhave to quit eventually.

To keep it very simple, half comes fromyou and more than half from the interestpaid on the CD.

But the depositor isnt waiting ten years.By selling the future stream of CDincome for a discount, he is paidsomething greater than $10M more.

Consider, even if it was only $100,000more than the $20M. The rate of returnis phenomenal.

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To make nearly 100% return on themoney, a stream of $12,000,000 over tenyears would need to sell for $10,500,000

or do the deal in just 2 days, which ispossible.

Youre a rare individual: Thank youonly 3% of all books go unread past

chapter one

Bonus 13th Step: Even before you ownit all ten years later, thank all yourmentors, helpers, and key people whoinfluenced you to get where you are.

In the words of Bernard Shaw: Towithhold deserved praise lest it make theobject conceited is as dishonest aswithholding payment of a debt lest your

creditor should spend the money badly.

In that spirit Donna Fox and I, PaulieSabol, thank you for learning the thingsyou can use to become a millionaire in adecade.

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

2004 By Special Arrangements, Inc.

When you are ready to begin the steps

to Millionaire Credit Enhancementusing our referral, contact

Paulie and Donna at

[email protected]
mailto:[email protected]:[email protected]:[email protected]

Documents

Credit Millionaire Enhancement