Lance Edwards Hi_ everyone. Welcome to - this is Lance Edwards by liwenting


									Lance Edwards:      Hi, everyone. Welcome to - this is Lance Edwards. Welcome to
            tonight's session. This is session number two of the Raising Private
            Money virtual boot camp Keys to the Vault. And we're going to go ahead
            and get started. It's the top of the hour. Congratulations to those of you
            who showed up here on time. We've got a - I've got a lot of stuff to cover
            tonight, but I'm going to leave a lot of room for interaction. We have a lot
            of room for interaction.

              So while people are coming on the webinar let me go ahead, clear the
              screen here and first of all begin with - I know some people just joined us
              on tonight's session. This is interactive and I've muted the line. You don't
              need to do anything right now. But when, you know, it comes time to ask
              question or interact, you can do it two ways. You can do it over the phone
              by pressing star six. You will unmute your line. Or you can type in
              questions on the panel that's on your screen, the control panel.

              For all client care questions, you can address them to
    , or you can call the office
              713-476-0102. Now for everyone's benefit the audio recordings from last
              week's session and the notes and the slides are up on the Resource Vault
              and everyone should have received an email on how to get access to the
              Resource Vault. It's at, And
              the way you register for that, there are instructions in the email, but you go
              in and you enter a user name and it will assign you a password, you get
              approved by our administrator and then once you're approved you'll get a
              response that gives you your password so you can get access. So we're
              going to be putting more resources, you know, of course, there will be the
              recordings from tonight's session going up tomorrow and other resources
              that we're going to be posting to the Resource Vault. There's going to be
              some checklists. We're going to be posting this week for you as well.
              This is material that's previously, you know, never been given out. So
              new resources for you guys. Also if you ever have - each week you'll be
              receiving an email of how to log on to these webinars. If for some reason
              you don't get an email, go to the Resource Vault because we put in the
              current week's webinar registration, you know, update it each week on the
              resource vault. So don't let spam filters keep you from getting on to these

              All right, now as a refresher, reminder we ask - and just, by the way, just
              so everyone knows, we have a couple people joining us here at second
              session, so welcome to them. Last week, as reminder, refresher for
              everyone, what we covered is - we'll spend some time on the orientation,
              getting you, you know, kind of laying out the format of the program. But
              we started with your reason why. Remember we talked about that's the
              most important thing. We talked about you need to understand - we need
              to have a context why raising private money is important to us and is our
reason why about creating wealth or creating financial freedom because
they're different. Financial freedom is about creating passive income.
Wealth is about creating net worth. And we need to get very solid on that
because that's going to tell us how we need to structure our deals which
then tells us what type of private money sources we want to be targeting.

And I think, you know, the presumption that I make for virtually everyone
on this call, not everyone, is that most people on this call are interested in
financial freedom, meaning passive income. You want passive income
fast so you can be able to replace your j-o-b. And that led us to explain
the type of person that we are targeting, the type of private money sources
we're targeting for that is someone who wants equity, not someone who
wants cash flow because we want the cash flow. We're willing to give up
equity in exchange for getting the cash flow.

Then we talked about the raising private money formula. We call this a
four part formula. There's four parts. There's predisposed, meaning we're
going to target people who are predisposed to investing whatever kind of
asset we're raising money for. Parts two and parts three are control and
low risk, which has to do with preservation of capital and a psychology
around raising money. We have to give our private investors feelings that
they have control if we don't perform or if things go wrong. Outside of
our control will they be able to have control? It's all about they need to
have those feelings of control. They need to feel like there's going to be
return of capital before we talk about return on capital.

And then part three was low risk. We need to demonstrate to them that
we've been very progressive and proactive and have taken a preeminent
position in mitigating all the risk factors as it relates to their - that - this
investment and their money. We need to demonstrate we've thought
through all the issues that are on their minds, so they're going to have trust
with us and can trust us to look after their interest.

And then the fourth part of the four part formula is high return. And high
return means high return relative to the low risk that we built into this
particular transaction. I mean, high return these days actually means many
times single digit returns.

So that was the raising private money formula. And that is the formula
that we are, you know, dissecting in detail through the next three sessions
starting tonight. And last week we started with predisposed. I opened the
door of predisposed sources and giving examples of that, or predisposed
sources to get your mind working about, you know, where are we going to
target these money sources that we're using to attract money? And tonight
we'll be talking about that in more detail.
            We provided a homework assignment at the end of the session - at the end
            of the two hours last week and I spent more time outlining the money
            madness contest, went through the money madness contest rules and many
            of you have signed up for that. So we'll be talking about that again later
            tonight. Again, each session tonight we're going to go to - I'm going to go
            to 11 pm Eastern. I'm going to give the homework assignment. If I still
            have more content to go, I'll give the homework assignment at 11:00,
            respect everybody's time and then I will continue. Okay? So just - so
            everyone from a timing standpoint knows what the schedule is here.

            All right, so let's begin. I gave homework assignment last week. And as
            part of that homework assignment asked you to listen to modules one and
            two and as much of three as you could in the Raising Private Money home
            study system. Those are the modules we have basically - we covered last
            week. So I wanted you all to hear the full course materials. And I also
            asked you to create your financial freedom number and I asked what's
            your number. (I'm like), "What's your monthly income that you need to be
            able to declare financial freedom?" And I also asked you to think about
            what vehicles did you want to use to create your financial freedom and
            what's your strategy going to be to get there, to hit your number? And
            then from there my homework assignment was to brainstorm and create
            your list of predisposed sources. Where would you go right now to go
            raise money for your deals? And then the optional homework assignment
            was to go and start your daily mindset routine by downloading the quick
            start audio off of Real Coach. And actually, someone emailed me - one of
            the comments I got after the session was over last night said, "Number
            four should not have been optional because number four is critical." And
            actually, she's right. So I'm hoping everyone did number four.

            So with that, what I want to do is tonight's session and continuing sessions
            going forward are going to be much more interactive than the first session.
            The first session I had to get a lot of grounding done. So I'm going to start
            off tonight, I want to ask for some volunteers, come on the line and tell me
            about your experiences with either any aha moments you had last week,
            any aha moments you had from listening to materials from the homework
            assignments and tell me about, you know, your experience in doing the
            homework assignment. So looking for a volunteer. Press star six and
            come on the line.

(Byron):    Hi, Lance. This is (Byron).

Lance Edwards:     Who's - did you say Bart?

(Byron):    Hey, Lance. This is (Byron) from Houston.

Lance Edwards:     Hey, (Bryon) from Houston. How are you?
(Bryon):      Hey, doing good. I think one of my aha I guess moments was listening to
              the modules and you were actually talking about how to present a deal.
              You know, a lot of us get up there and we just want to talk about the
              numbers and we just sit down and we wonder why no one comes up to us
              after the, you know, the real estate club or wherever we - it was just really
              cool to realize how I've been talking about my deals. I haven't really been
              setting it up, you know, I haven't set the investor up to know about what
              the risk is. I just go straight for the high returns and, you know, I don't
              really address any of these issues, so.

Lance Edwards:       Very good.

(Byron):      So it was really kind of eye opening to me.

Lance Edwards:      Very good. Thank you, (Byron). And thank you for showing up,
             too. Great job volunteering. Thank you so much because you are spot on.
             You're spot on. I tell everyone I go to these real estate clubs. I watch
             people present these deals and it pains me to watch how it's being done
             because it's such a wasted effort. You know, just changing the words
             around, just changing the emphasis will get much more, I mean, multiple,
             you know, several hundred percent better return than what they're getting
             from focusing on the high return. I heard another voice. (Carl), was that

(Carl):       That's me.

Lance Edwards:       How are you?

(Carl):       I am good. This is a lot of what I learned on the homework assignment.
              You said the private money home study system?

Lance Edwards:       Yes.

(Carl):       A lot of what I learned was reinforced of what I learned at your three-day
              seminar earlier this last month. It was a real refresher course than
              anything else. One thing I did learn was you talked on there about passive
              income vehicles and I think I might have found one over the weekend. I
              was at the Real Estate Club Saturday morning and they had a deal about
              the (Skyline) apartment complex.

Lance Edwards:       Yes.

(Carl):       And I have some money tied up in a (templeton) fund which is going only
              one way, which is down. My wife's been bugging me for a month to get
              out of that. So I - a brainstorm hit me Saturday morning. Well, why don't
               I just - instead of spending that money on debt, why don't I just get the
               money out and put it in this? And so most of Saturday afternoon,
               Saturday evening was spent with the guy that runs that project and we're
               going to move that money over there. I could get $100 a month, which I
               realize is really no big deal, but instead of losing the money, you know, I'll
               actually make money. And that was a brainstorm I had. I'm not sure what
               it was a result of, but because I knew about the apartment complex
               because I've been going to the meetings once a month. But for some
               reason something just hit me. I went, "Okay."

Lance Edwards:         You were open to it.

(Carl):        It's interesting how those things work.

Lance Edwards:     Yes, that's your - that's the reticular activating system in your brain
            searching out now. That's exactly what happened. You're open - you
            know what to look for.

(Carl):        And I know what my strategy is. Executing is a different story. But I
               know what my strategy is.

Lance Edwards:     Well, here's the - the other thing I would throw out, you know, of
            course you could use that money in your own deals or you can be a
            passive investor in this apartment?

(Carl):        Well, no, I’m going to put $10,000 in the deal, they pay 12% a year, 1% a

Lance Edwards:         Yes. Okay, cool, cool.

(Carl):        So I'll get 10 back.

Lance Edwards:      Now, you also know - use this system in reverse. Everything I've
            taught you about control and low risk, make sure they're building that in
            the deal to protect your money.

(Carl):        So we're going to find that out tomorrow night.

Lance Edwards:      You're going to - see, what you're going to find is you're an expert.
            This works the other way too. When you're the investor and you take
            these techniques, you know exactly how to make sure your money is
            doubly protected.

(Carl):        Yes, well, my wife gave me a speech Saturday afternoon. "(Carl), is that
               too good to be true?" She reminded me of (inaudible) and the Stanford
               Financial Group. I said, "Well, dear, let's do our homework. Let's go let
               them show us what they're doing and let's - before we say know, let's at
               least talk to the people first and see what's so impressed by the person
               doing the deal." She says, "(Carl), you can do business with them."

Lance Edwards:        Good, good. Great job, (Carl).

(Carl):        Our strategy is to do multifamily first because I think that's the quickest
               way to get retired.

Lance Edwards:        Right.

(Carl):        And then to go from there.

Lance Edwards:      All right. Very good. Thank you for sharing. Thank you. Great
             job showing up, (Carl).

(Carl):        No problem.

(Steve):       Can I add?

Lance Edwards:        Yes.

(Steve):       Am I on?

Lance Edwards:        Yes, yes. Who is this?

(Steve):       This is (Steve).

Lance Edwards:        Hey, (Steve).

(Steve):       How's it going?

Lance Edwards:        Good. How are you?

(Steve):       Good. I think going back to the material this week what really come out
               to me was the strategy of preeminence, getting - learning more about that
               and really understanding what it is and how to apply it.

Lance Edwards:      That's a great distinction right there, (Steve), because that is the
            heart of all this - of this whole thing - everything I'm teaching here and in
            business, for that matter, and.

(Steve):       Absolutely. So I went in and dove deeper into it to learn more about it.

Lance Edwards:        Great.
(Steve):       You know, so that my mindset will always be at the forefront that, you
               know, these are clients and not just investments.

Lance Edwards:       Exactly. And there's a lifetime of value associated with it. It's
             relationship you're developing here, not a one night stand.

(Steve):       Absolutely, absolutely.

Lance Edwards:        Great job, (Steve).

(Steve):       I think that was the main point this week going back through all the
               material and really gleaning it out of it.

Lance Edwards:      Okay. Excellent. Thank for showing up. Thank you for sharing,
             (Steve). Great job as always.

(Rich Hadden):        (Rich Hadden) from Ohio.

Lance Edwards:        Hey, (Rich).

(Rich Hadden):        How are you doing?

Lance Edwards:        Good. How are you?

(Rich Hadden):       Not too bad. I took a shot at it this week, too. I went over to a new
             real estate investment association and tried to gauge where everyone's
             level was and tried to see if I could (inaudible) up some money for the
             contest but every time I started to talk to people it seemed like they'd say,
             "What are you doing?" I'd say, "Well, I'm looking at multifamily
             apartments." And then all the sudden a glazed look comes across their
             face and they said, "Oh, apartments." And it goes right back into their
             single family mentality.

Man:           (Inaudible).

(Rich Hadden):        Yes, I got at least a dozen of those people.

Man:           (Hearing things).

Lance Edwards:     Yes, that means they may not be necessarily… They may not
            necessarily be predisposed to apartments.

(Rich Hadden):        Right.

Lance Edwards:        Yes.
(Rich Hadden):       And the more I talk to people, you know, that's what I heard. And
             then I - then it was a complete strike out because it happened to be that
             (Allen Calgill) was there that night raising or pitching his Raising Private
             Money and then suddenly everyone was charging, you know, had their
             mindset. They could do it on their own, so.

Lance Edwards:       Hey, but listen, (Rich), great job because when you - you took
             action. You took action. So now, you know, you're starting to use a
             system. And I mean, I'll tell you. One time I had a - here's the importance
             of predisposed - I had - I was doing an apartment deal and I had lined up
             $250,000 from a family that was going to fund a cash portion of the deal.
             And they were used to doing house rehab for their money. Well, two
             weeks prior to my closing I can remember to this day I was driving down
             the road here in Houston, they called up and said, basically, "Lance, we
             decided not to do the deal." "Oh, why is that?" "Well, we were thinking
             about it. What happens if everybody in the apartment complex moves out
             at the same time?" "What?" So that's where their mindset was going. So
             they were just, you know, shame on me, they were not truly predisposed.
             And one of the things we were talking about of being - session four. I
             called it getting the groom to the altar. So that's why we always have back
             up money sources.

(Rich Hadden):       You know, I found out that, you know, just talking to some of
             these people it was, you know, "Hey, I'm rich. I'm starting to work on
             multifamily apartments." "Oh, man, you shouldn't do that. You're going
             to get in trouble real fast with that." "Okay, thanks. Have a nice day."

Lance Edwards:        Yes, that's next.

(Rich Hadden):        That's the next one.

Lance Edwards:     That's next. That's next. Well, one of the things is when we talk
            about marketing for money you don't even necessarily need to mention,
            you know, about whether it's apartments or whatever it is.

(Rich Hadden):        Right.

Lance Edwards:       Just get them excited about the control, the low risk and then the
             high return.

(Rich Hadden):        Yes, I found that out the hard way again.

Lance Edwards:        That's okay. That's okay.

(Rich Hadden):        Good learning experience though.
Lance Edwards:      Fantastic experience. You got in the game. You're doing it, man.
            Great job, (Rich). Great job.

Man:          And, Lance, I'm sure that everybody moving out at the same time happens
              all the time.

Lance Edwards:      So, all right, so who else had an aha moment? Who else came up
             with some predisposed sources, went out, was testing the formula?

(Melanie):    Lance, this is (Melanie).

Lance Edwards:         Hey, (Melanie).

(Melanie):    Hey. I had - I just had an aha moment today. I was talking to a broker
              and it looked like a really good deal. He was just saying that, you know,
              about a year ago he probably would have already had about 20 offers on
              this particular property, but the way, you know, the economy is now, he
              said he's be happy to get a handful of offers. And but he was saying that
              he and another broker friend of his were talking about this property and
              that they would really love to buy it, but they don't have the money. And
              it just drove home the point that, you know, you could have all the
              knowledge in the world but if you don't know how to get money, you're
              not going to go anywhere. So it just really, you know, hit me hard today.

Lance Edwards:      Well, I mean, that is so - great point, (Melanie). That happens all
            the time. Now this is on the deal flow side, I'm talking about in this case -
            I know (Melanie)'s doing apartments, but many times you'll be talking to a
            broker or I've had it happen also with property managers who are
            operating the properties. And they'll be saying, "This is a great deal. I
            would do it myself, but I don't have any money." And, you know, they
            just don't have - they've got a mindset block. They don't know how to
            raise money. You come along and you say, "Well, I've got all the money
            we need." That actually is a way to endear yourself with brokers and other
            people. "I've got all the money I need." Now it's not your money. It's
            your ability to get access to money. So great distinction, (Melanie). Great
            distinction. So let's - let me take one more. Who worked on some testing
            the formula or creating a list of predisposed sources?

(Samuel):     Lance?

Lance Edwards:         Yes.

(Samuel):     Yes, this is (Samuel).

Lance Edwards:         Hi, Samuel, how are you?
(Samuel):      (Inaudible).

Lance Edwards:      Yes, I mean, this is actually the second occurrence that I know of
            amongst our group where we've had someone from Europe as perspective
            investors. So, yes, I mean, that's the power of the internet, right? Where
            you get worldwide access. Just so you guys are aware, now this is
            probably less true today but in Central Florida they were building these
            vacation homes right around Orlando, my brother's in this business, and
            the biggest clients they have are the Brits. They wanted to buy these
            vacation homes around Disney World and because the dollar was weak,
            you know, to the Brits it looked really, really cheap. And so there was a
            whole money source overseas. In this case they were buying houses, but
            the same money sources could be, you know, investing in any of our deals
            over here, you know, business or other real estate assets. So very great
            point, (Samuel). You're doing a great job. Great job.

               All right, let's do this. I'm going to…

(Scott):       (Inaudible).

Lance Edwards:      Yes, I'm going to talk about that in just a little bit later. Hold that
             thought. Who's asking the question?

(Scott):       (Scott) (inaudible).

Lance Edwards:       Hi, (Scott). Yes, I want to - give me - ask me again a little bit later
             in the session. So I'm going to show you exactly how to work - we're
             going to do SEC in detail in session four, but I'm going to start giving you
             some points about it later tonight in this session

               Okay, what I’m going to do is - let me mute the lines real quick, clear this.
               Let's see.

Operator:      All callers are muted. All callers are unmuted. All callers are muted and
               may unmute themselves by pressing star six.

Lance Edwards:      Okay. So real quick announcement. I’m going to have a - I've got
            a bonus for you guys and we're going to have a bonus session this
            Saturday. It's going to be at noon, eastern time and it's going to be a Q&A
            session. This is not going to be one of the formal structure sessions. It's
            certainly optional. But I'm going to be available at noon eastern this
            Saturday. You'll get an email with the particulars of it. We're just going
            to be Q&A for a chance to you - you know, if you have any open
            questions about anything with regards to the programs, you know, after
            tonight or particular deals, you're working to get funded and you want to
            talk through them, or you have questions on the contest or you just want to
see me. But, you know, detail questions on the contest. We want to have
- just be purely Q&A and be there for you guys. So look for your email
invitation for that, this bonus session. It'll be this Saturday.

All right, so for tonight we just did the homework review. Tonight we're
going to continue - we're going to really drill down deep into predisposed
sources. Tonight's session is solely dedicated to predisposed sources and
we're going to step through the seven categories of predisposed sources
and these are sources, many of which are not even described in the home
study system. These are some of the latest things that we're doing, some
of the latest techniques we're using to go raise private money. And then
I'm going to visit the strategy of own nothing, control everything and build
upon that. There's some extra twists to that strategy that I want to give
you guys because I think this is, you know, last week I talked about one
and done. Tonight I'm going to talk about own nothing, control
everything because this is a way, really, really powerful way that can be
especially relevant in a recessionary economy like we're in right now.

We'll have Q&A - I'll have Q&A breakpoints throughout tonight's session.
We'll be taking question and answer. Then we'll cover tonight's
homework assignment at 11:00 and then I'll have afterwards the answering
questions on - you know, updates, clarifications around the money
madness contest. So let's get started.

So this is section three - continuing from section three which we began
last week on predisposed sources. The reference here is the raising private
money home study module three in the home study system. And, again,
recall there are seven categories of predisposed sources. Now you may
recall in the home study system there were - we talk about five - I put a
little extra delineation to it, so there's really seven. We're going to step
through all seven of these tonight. Number one is the bank, number two is
the seller, number three is private investors, number four is broker and
intermediaries, number five is you, number six is other interested parties.
Now we're going to talk about barter in this portion as well because barter
is even more important during recessionary times. And then referrals,
power of referrals. In here I'm going to talk about also interweaving how
to use the internet on a number of these different categories.

So let's get started. Category one on banks, and let me give you some
background. You know, banks are going - when you're talking about real
estate and you're getting new loans or you're doing assumptions or you're -
banks are going to be, you know, the major lender on our deals, a major
predisposed source. When you're raising money to buy a business a bank
could very well be the bridge loan to get into the deal. So banks are
clearly a key part of it.
            Now on - talk about money being loaned to down real estate today, really
            the maximum LTV is like 70, 80% LTV was pretty much the norm. That
            has drifted down now to 75 and 70% on commercial real estate. We're
            looking at commercial real estate. Although you can get 90% loan to
            value on some FHA products. So when I say, you know, banks, I'm really
            talking about - you see on your screen here it could be a local community
            bank, it could, you know, it could be a large bank like Wells Fargo or it
            could be federal programs like FHA which are being sold through brokers.
            But I will tell you right now there are FHA products right now up to 90%
            LTV. They've got really some great financing products. So don't let
            anyone tell you that you can't get financing on these commercial deals
            because you absolutely can.

            Typically, talking about commercial deals, they're going to be set up just
            like a residential deal. It's going to be a 15 or 30-year or 20-year
            amortization, but it's going to have a balloon on it or some type of a short-
            term indicator anywhere from three years to seven years where - like for
            example, one of my commercial loans after - I have a five-year fixed rate
            at 7%, which we put in place two and a half years ago. That was a great
            rate then, 7% fixed for five years. At the end of five years it becomes
            adjustable and it's tied to the LIBOR.

            Many times these commercial rates at the end of the, say, five years will
            have a balloon payment, which means the note becomes due and we have
            to - basically what we did - at that point we either sell the property or more
            likely is we refinance the property and put a new note in place and pay off
            the old one. And, you know, this is different that residential in that
            residential is 30 years fixed for the whole 30 years. You know, if I get
            that with a commercial loan, it's going to be fixed for a maximum of 10
            years but more likely around five because they want to be able to play the
            market with interest rate swings. You're also particularly going to have
            prepayment penalties on these commercial notes.

            So the way we access banks is primarily through - it's going to be through
            a mortgage broker. That's the best way to do it. I don't recommend when
            you're going to raise money for your deal - I mean, if you have a great
            relationship with your local bank or your bank, you go talk to them. But
            otherwise it's more efficient to go access banks through mortgage brokers
            because they're going to know - be able to access different - many banks at
            one time and know all the different products they offer.

            We've got some noise on this slide. Let me - hold on. Turn it back.

Operator:   All callers are muted. All callers are unmuted. All callers are muted and
            may unmute themselves by pressing star six.
Lance Edwards:      Okay, now we've got a clear line. The other thing I want you to
            realize, when you're dealing with banks for commercial loans of any time,
            whether it's a loan for your business or for real estate, this is not like house
            loans where every house loan looked the same because it was being
            guaranteed by the government. In the commercial financing arena, it's the
            wild, wild west. Every bank can have set terms to whatever they want to
            put into that loan. So it's very important when you're lining up
            commercial financing with the bank you have your attorney7 review the
            documents. You want to - because this is wild, wild west. They can put
            any kind of terms in there, okay, including, you know, calling the note on
            their whim if they didn't like the way things are going. So you want to
            make sure, you know, you have an attorney involved when you're
            financing these larger deals working with, you know, a commercial bank.
            And you're going to have an attorney involved on the private money side
            as well. But don't think this is like, you know, houses. When you're
            buying a house, every residential loan's the same because they're not.
            They're - every one of them is unique. Every one of them is negotiable
            too. That's the other part of it.

               Now let's talk about sellers. And when I talk about a seller as a
               predisposed source, the first thing we want to be aware of is when we're
               talking about real estate, commercial real estate, many of these
               commercial loans are assumable. This is another distinction from
               residential. Many of these commercial loans are assumable. So you
               always want to ask. And the sellers existing mortgage could be the source
               of 70% or 80% of your financing or more by the fact it's assumable.
               Okay, and they could have some very good terms on it.

               The other thing we always want to ask, always, always, always ask when
               we're buying a business or buying property is ask the - we're going to ask
               the seller to do some of the financing. And I'll give an example here in a
               moment, but that financing could be in the form of a second mortgage.
               The seller's going to carry back - you know, part of the financing for
               maybe five years themselves on a second mortgage.

               Another thing you're going to ask for with a seller is they might not like
               the word second mortgage but if you ask, "I'm going to give you a down
               payment. It's just going to be deferred when I pay you. I'll pay you the
               cash a year from now." And interestingly I've had sellers accept that when
               they wouldn't accept a second mortgage. It really was just semantics. So
               you can, you know, sometimes approach it as a deferred down payment.
               In any event, the seller is putting up part of the finance. That's just less
               cash that I have to provide at closing by getting them to defer their down
The other option with seller financing is the lease option which we'll be
talking about tonight as the own nothing, control everything where they're
not actually going to sell it to us but they're going to allow us to lease it
with an option to buy. In that case, we're getting control. We're using the
seller's existing mortgage as the underlying financing and, basically,
getting control of their property for nothing, or very little, very, very little.
So that, when I talk about using, you know, getting the seller to finance is
not just a seller carrying back a second. It could be a lease option. It
could be a deferred down payment. You can be totally creative.

Now other in the category of seller for predisposed sources. Think about
this. If you're trying to raise cash for a deal, well, if you had just bought
somebody else's property recently, well, and they got - and that seller got
cash out of the deal, you could approach them and take, you know, talk to
them about taking the cash they got from their sell of their other property
to invest in your next deal, your next project.

See the story, I was doing this - I was buying a little triplex, I guess, a year
and a half ago on a flip. I was just - I was wholesaling. I was buying it. I
actually was flipping it. I had the contract and I was flipping it to another
buyer and the seller, you know, just prior to closing I went to the seller
and I said, "Hey, (Jim), what are you going to do with your cash out of this
transaction?" He said, "I don't know. Stick it in the bank." I said, "Well,
have you considered investing it in, you know, there's a project I have over
here." So I was talking to him about using the cash that he was going to
get out of the deal I was doing with him to roll that over into my next deal.
Right? He was a predisposed source. He was - clearly he was
predisposed. He was investing in real estate. So why not approach him
about taking the cash I was providing him through his sale and rolling it
into my next deal? You could do the same thing with other people's
previous sellers. This is where, you know, you're kind of doing a little bit
of spying at the real estate clubs. You know, who's your competition
buying from? Well, find out. You know, they're sellers and now have
cash in hand. Well, they might, you know, they might want to enjoy being
a passive investor in your real estate deals because I can almost guarantee
you the buyers are not asking them to take their money and roll over.
Nobody's thinking like this. You guys are now with this knowledge. So
there's a whole group. Whoever's doing the selling - is selling the
properties are a predisposed source to go invest in your deals.

Now another one, if you're - here's another thing when we talk about
sellers as a predisposed source. If you're out doing direct mail campaigns
to find motivated sellers of businesses or of real estate, you know, very
routinely we send out direct mails. Are you interested in selling your
property? Are you interested in selling your business? They call in
response to these letters. They prequalify themselves by the fact that they
call. You know, that means that they have some motivation. Well, many
times a lot of these, you know, these sellers or these owners are willing to
sell but at retail prices, prices that we don't want to pay. Well, rather than
throwing away that lead, here's what I suggest you do. If the person is not
willing to sell, you know, on a discount, then ask them this question, "You
know, I'm working deals all the time. If I come across a good deal and
need $100,000, should I give you a call?" Because what have I done
there? I've prequalified them as a potential private investor in a deal that I
may come across and they're predisposed because I - whatever an asset,
whatever campaign I'm running, let's say it's apartments, if they're an
owner of an apartments complex, then they are, by definition, predisposed
as someone who invests in apartment complex. So why not ask them, you
know, and kind of get them at least on my list of potential investors as
someone I might go to when I have a, quote, "a good deal?" So maybe I
might end up having them invest in my next good project I find or maybe I
end up flipping a property to them or deal to them. This will work for real
estate or for business. We want it so - again, I want you to think in terms
of who are all the different predisposed sources that we can be
approaching and lining up for our deals.

Now, what I want to - let me check something right here. Just - okay, so
what I want to come to now in sellers is we talk about seller financing -
and I promise to give you an example of seller financing. I've got two
here that I want to share with you and, you know, some kind of lessons,
tips from the field. So let me go to this next slide and give you an
example of what I call conventional seller financing.

Here's the example. We're - it's a property. It's $1 million purchase price.
It has - it's going to have a first mortgage balance of $80,000. Now in this
example at $800,000 - excuse me, not $80,000, $800,000. In this example
that $800,000 mortgage could be an existing mortgage that's assumable or
it could be we're going to put a new mortgage in place for $800,000. So
that leaves $200,000 balance to still be financed, right? There's an
$800,000 mortgage on $1 million purchase, so there's $200,000 we still
got to raise cash for or raise money for.

Well, in conventional seller financing, we would go to the seller and
propose to them that we put in place a second mortgage to them for say
$100,000 and I want to, you know, I'm going to - you're going to - I'm
going to have a mortgage - you're going to have a mortgage with me and
$100,000 of the purchase is I'm going to pay you over time. I'm going to
pay you an X percent, you know, very likely it'll be X percent on a five-
year balloon. After five years I'll refinance and pay off your note. The
other $100,000 is going to be cash, the transaction. It's not going to be my
cash but it's going to be cash that I’m going to raise from a private investor
or investors. So I've got three parties financing the deal. I've got the first
mortgage which is going to be bank financing. I've got $800,000. I've got
the seller financing $100,000 of the transaction. And the remaining
$100,000 will come from private investors.

Now when we talk about - it's going to be next session - structuring the
deal, I'm going to show you how to structure it, the $100,000 cash portion
from your private investor. But for now, let's just accept that you're
getting $100,000 from your private investors. So this is, you know,
classic, conventional, seller financing. But what I want to tell you guys is
always propose this. Always propose this because what you'll find on
these bigger deals is a seller will carry back most likely 10%, you know,
many times 10%, almost always at least 5% and sometimes the full
whatever the balance of cash portion is, in this case $200,000. You find a
motivated seller, you get the seller to carry back the $200,000, you assume
the $800,000 and there's no cash out of your pocket. It's all about, you
know, their motivation level.

All right, now let me give you a little twist on this and then we'll take
some questions. Another example of seller financing was called a wrap
around mortgage, a wrap around mortgage, a wrap. This is the same deal.
It's $1 million purchase, first mortgage is in place as a balance of
$800,000, but the first mortgage is not assumable in this example. The
first mortgage is not assumable.

Well, a way to address this is what's called a wrap around. Instead of
doing seller financing, it would be done a little bit differently. There
would be a wrap. The $800,000 first mortgage and the seller would say,
"Okay, I'm willing to carry back $100,000, but because it's not assumable,
let's do a wrap." Let's put a - and think of it like this. This new mortgage
is going to wrap its way around the old mortgage plus the extra $100,000
so that this wrap around mortgage would be for $900,000, 800 plus 100.
It would be for $900,000, let's say 7% for five years. And we would pay
the seller the note for the monthly mortgage payment for the $900,000
mortgage and then he would pay the bank the mortgage payment on the
$800,000 mortgage.

Now, typically when they do it, they're going to want, you know, a higher
interest rate on the wrap than they do on the first mortgage because the
extra money is actually money in their pocket, which is perfectly fine,
right, because they're getting paid 7% interest on $900,000 and then
turning around and paying the bank, you know, 6% interest on $800,000.
Very common in residential, you know, it's going on a lot these days. But
here's the thing, in - just like in residential, most times on a commercial
deal, that first mortgage, when you read the paperwork, read the language,
it'll say there is something called a Due On Sale clause. That Due On Sale
            clause says the bank has the right to call the full note due if there's a
            change in ownership, which would be the case here.

            Now it's not automatic that they're going to do that, but they have the right
            to do that. And so, what I always coach students on, when I'm coaching
            you guys on, recommending is don't ever do a wrap unless it's a bank
            approved wrap because I - you know, personally I sleep better at night
            knowing that I don't have, you know, a $1 million note that may be called
            out from under me at any time by the bank because it's different than

            Many times, you know, sellers are starting to propose this more and more
            often I'm finding now. The seller will actually suggest this as part of the
            negotiation. The seller will come back with this recommendation. And
            sometimes they'll say, "Well," you know, we actually had one - we've had
            one of the brokers tell us, "Well, we're not going to tell the bank about
            this. This is going to be, quote, a "silent wrap."" Don’t' do silent wraps
            because the risk goes with you as the new buyer. The seller's going to get
            - I guess the seller in this example is risking $100,000 of his equity, but
            he's still getting $800,000 cash at closing. And if the bank takes the note
            back, you're the one left holding the bag.

            So we only do bank approved wraps which means in your proposal if the
            want to do a wrap, say, "Sure, I'll be happy to do a wrap. But let's make
            sure it's a bank approved wrap," which basically means they're going to
            convert it into assumable mortgage. Important distinction and I just want
            to make sure we're being conservative here. I can sleep the night knowing
            that I'm teaching the most conservative way to approach these things
            because you're going to have sellers propose these wraps. I can tell you
            right now. This is going to happen. And they're going to want to do it
            without notifying their bank. Don't do it. Too many good deals to expose
            yourself that way.

            All right, with that, let me stop here and take some questions. I see some
            questions came in. And let's see what we got here.

(Mike):     Lance?

Lance Edwards:       Yes.

(Mike):     Hi, it's (Mike). How are you doing?

Lance Edwards:       Hi, (Mike), how are you?

(Mike):     Good. Question on the wrap around.
Lance Edwards:        Yes.

(Mike):       Will banks really approve a wrap around?

Lance Edwards:        They might. They very well might.

(Mike):       Yes, well it seems like it could be kind of spotty with the bank for them to
              even consider doing that, right?

Lance Edwards:     Well, you know, in today's environment, everybody's flexible,

(Mike):       Yes, I hear you.

Lance Edwards:       Everybody's really flexible. So things they might not have done
             last year they might very well consider this year. Some of them are not
             going to do it. But it's going to be - they're going to be more admitable
             especially if the current seller's behind on payments. They're going to be
             more willing to do that.

(Mike):       Absolutely. If the bank does approve the - do they structure the wrap

Lance Edwards:     Actually, I think the way it would more likely play out, they would
            probably change the note into an assumable mortgage. It's the same thing,

(Mike):       Should we get an attorney in on that?

Lance Edwards:        Yes, absolutely, always, always.

(Mike):       Okay, okay.

Lance Edwards:   Anytime - if you do this wrap or anytime you do any kind of
            commercial dealings, always bring an attorney.

(Mike):       Okay.

Lance Edwards:        Great question, (Mike). Glad to hear your voice, too.

(Mike):       Absolutely. Thank you.

Lance Edwards:     All right. I had a question that came in from (Terry). She says,
            "Whose name is on the new title on the wrap?" It would be your entity.
            Great question, (Terry). So it would be - it's not going to be your name
            personally, but let's say it's, you know, (Terry's LLC). (Terry's LLC) is on
               title and (Terry's LLC) is the borrower and the lender is actually going to
               be the seller. Even though it's going to be the seller that's going to be the
               lender subject to the bank note. So that wrap - let's go back here real
               quick. That wrap is kind of like a - think of it as a new mortgage where
               the lender is the seller and we are the borrower and we also are the owner
               of the property.

               All right, let's see. Let me go back here. Other questions are coming in.
               Feel free to come on the line if you have a question. I'm reading some off
               the panel right now.

               Okay, (Scott) has a good question. "How do you ensure that the seller
               pays the $800,000 loan on time?" Great point. And that's why if you're
               making the - if the payment is the same payment whether it's going to the
               seller or to the bank, you're really - you're better off paying the bank
               directly and then let the seller verify the payments being made and you do
               that over the internet. You both have access to the internet account and
               you can see the payments being made. If there's a distinction between let's
               say, in the example I gave, let's go back - well here it is. I'm paying - let's
               say the - I haven't done the math - so let's say the mortgage payment on
               $900,000 at 7%, that's going to be - what is that going to be? Like, I don't
               know $6,000, $5,000. And the note, the payment on the $800,000 is let's
               say $4,000. So I'm paying $5,000 a month, the bank's getting $4,000 and
               don't hold me to the math, I’m just making it up. What I would do is I
               would have a third party escrow service I would pay into. I would pay my
               $5,000 to the escrow service and the escrow service would pay the $4,000
               to the bank. Both parties, me and the seller could verify the payments
               were being made. And that way I know that it's being done. I think that's
               the best way to do that.

(Rich):        Lance, it's (Rich).

Lance Edwards:        Hi, (Rich).

(Rich):        Hi, I sent one in but I just want to go ahead and ask you what's typically
               involved in qualifying for a loan assumption with a bank?

Lance Edwards:       What's involved in qualifying with a loan assumption with the
             bank? You're going to have to - there's going to be basically getting - like
             getting a new loan. They're going to want to see - they're going to want to
             run a credit report on the new borrower. They're going to want to see
             financials. They're going to qualify just as if it's a new loan even if it's a
             non-recourse note, which we'll talk about here in a moment.

(Rich):        Yes, but they're going to look at the property right?
Lance Edwards:       They're going to look at the property but they're also going to look
             at the borrower.

(Rich):        Okay.

Lance Edwards:       They're going to look at the property. And the bigger the deal, the
             less they look at the borrower and the more they look at the property.

(Rich):        Okay, so as far as looking at say a $6 million deal, there's not too much
               that we have to worry about if we're a brand new entity or are they going
               to be really worried about that?

Lance Edwards:        They're going to be looking - they're still going to be looking at
             you. They're going to be asking questions about your experience and may
             even ask a question about your credit, even though it's a big deal. So now
             if it gets to the case where you don't have experience, we're talking about
             how to address that next week. I'll tell you right now. The answer is you
             bring in experience. You find someone with a resume and you're going to
             make, you know, you're going to use other people's resumes to build your
             project team resume and that's what you take forward to the bank. It's not
             (Rich Haddens) here, you know. It's (Rich Haddens)' team is here. This is
             the project team for this project.

(Rich):        Sure, that makes sense.

Lance Edwards:     And then if you need - let's say you need, you know, credit -
            deeper - someone with better credit. You go find someone with the credit.
            You can find a credit partner. You'll find a credit partner.

(Rich):        Another quick question?

Lance Edwards:         Yes.

(Rich):        On the seller financing, when we're talking about the seller taking back 10
               possibly 20% on that particular example.

Lance Edwards:         Right.

(Rich):        Don't we get into problems with the bank looking at the (inaudible) LTV
               being, you know, maxed at 80, 90%?

Lance Edwards:     Well, in this case, if it's, quote, "a silent wrap," they don't even
             know about it. And in their case, you know, that's why they may not
             approve the - I'm sorry. You're talking about seller financing?

(Rich):        Right, right, the previous example.
Lance Edwards:      Well, they're going to look at it and you're going to need to
            determine what's the actual value of the property. I may be buying it for
            $1 million, but maybe it's, you know, the retail value is $1.1 or $1.2.

(Rich):        Okay, so the LTV can be on the assessed value of the property versus

Lance Edwards:         That's the way we're going to present it to the bank, absolutely.

(Rich):        Okay.

Lance Edwards:         That's the way we're going to present it to the bank.

(Rich):        There's my aha moment. Thank you.

Lance Edwards:      You're welcome. You're welcome. Okay, let's see. Got some
            other questions coming in. (Zafar) asks, "So what is the real advantage to
            doing this deal as opposed to replacing the whole mortgage?" That's a
            great question and maybe - it may be at a very good rate on here. Now as
            rates are falling right now it's going to be less and less true. What was true
            up until the last few months, you could conk off a lot of deals that had
            rates around 5.5%. Meantime, they might be assumable or not assumable
            and with rates towards six and a quarter, 6.5. I gave you a point

               As rates are coming down, I think this becomes less and less attractive to
               go through all this. You might as well get a new loan. You might have a
               case - so here's another example where it could be an advantage. Let's say
               there's a lot of rehab involved in this project and it's going to be harder to
               get, quote, "good conventional financing. So you might have to do
               something like this in order to get you into the project to make - and then
               bring in private money making improvements and then refinance your way
               our. That can be a scenario or something like this. Maybe there's a tool
               you want to use.

               But you're right. If you can get new financing, you're going to be end up
               going the new financing route.

               Okay, let's see. (Thomas) asks, "In a wrap, how does a broker get their
               commission. Wouldn't they have the problem with wraps and options?"
               We'll get to options in a moment, but right now, in this case, we're going
               to talk about brokers, in a moment. If they want the deal done, they may
               have to make some concessions. They may have to agree to take some of
               their commission payment on terms and be paid over time. They may
have to agree to cut some of their commission payment. But I'll get to that
in a moment and I'll give you some details.

But, again, the broker's actually a predisposed source to the deal. They are
motivated. There is only one person less motivated than the seller. It's the
broker. You know, at the end of the day we need to raise some extra
money to pay the broker's commission to get him to agree to this smoking
deal, then we do that too.

Okay, next question. Let's see, "Can you use," okay, (Richard), I
answered your question. I answered that. Here's a question from (Kent).
"Can you use a trust to accomplish the wrap and/or a triple net lease?"
No, no. A trust is simply a way to hide the title. It's to hide title. It
doesn't work around - provide any work arounds for any of this. Trust is
just a way to, you know, not let people who owns the property.

Okay, let's see. Okay, (Tom) has a question. "I heard," excuse me. Let
me clear that Norton thing. (Tom) says, "I had heard from another
(inaudible) Guru the seller takes back - that if the seller takes back a 20%
second, they have to actually put the money in escrow, then get it back at
closing. Have you ever seen or heard of this?" No, no, I'm not even sure
what that means. If a seller takes back his 20% second, they have to
actually put the money in escrow, then get it back in closing. Have you
ever seen or heard of this? Okay, what that may mean, depending upon
the loan lender, they may or may not allow seconds. The lender may or
may not allow seconds. I am going to talk about this. When we talk about
structuring the deal next week as a work around for this because it is - and
I think I understand the question you're asking (Thomas). This happened
to me. The bank has the first position. They don't want anybody in
second position and it may be because they need to foreclose, they don't
want to go through the trouble of having to notify anyone else. But there's
a work around to that. I'm going to show you how to do that next week
and the way we talk about structuring deals. So hold that for then. Right
now I want to get everyone thinking in terms of possibilities. So right
now, everyone, just recognize that when we do seconds there's some ways
to do it that I'm going to call unconventional ways that I've used to work
around different various issues. Matter of fact, we had this come up on a
deal last year where we were - had had a student, was assuming a first and
the seller was going to carry back a second. And the bank had the
assumption would not allow the second. So the brokers made some
comment, "Well, of course you know you can't - everybody knows you
can't do the deal that way." He told my student this. So I got on the phone
with the broker, we had a little 10 minute chat, I explained to him how it
was going to be done and, you know, the broker of 20 years said, "I guess
that could be done that way." So don’t let anyone tell you nothing - don't,
as an aside, don't get into this hearing about, you know, this can't be done.
You should, you know, eject, reject those type of language all the time.
What do you mean it can't be done? It's never been done? Never? Can't
be done? Really? Don't let someone, you know, and don't let someone
who's had 20 years of experience, which may mean one year of experience
repeated 20 times, hold you back from anything. There's always a way
legally, ethically. Remember? Business equals marketing plus
innovation. That's where innovation comes into play. And I'm going to
show you that work around next week.

Okay, thanks for the question, (Tom). He was saying this was a
requirement from the lender, right. You're right. (Jerry)'s question, "My
whole world is a bit anti-commercial property as high risk. Where do I
find an experienced partner?" Well, we're going to be talking about this
tonight. That's part of your predisposed sources. I'm going to ask you that
question a little bit later on.

Okay, all right, let me - let's see. All right, there's some other stuff here.
I'm going to hold these other questions for a little bit later. Great
questions. I'll get to every one of them, guys. Thanks a lot.

So the seller, that they are your number one predisposed source. No one
wants the property sold as bad as the seller does. After that it's the broker.

All right, so let's go to category three of our predisposed sources, private
investors, private investors. And this is where the name of the game here
is networking, networking, networking. This is raising private investors
privately. And I’m going to be drilling in detail here. All the kind of
different - first of all, I want to open your mind up to all the possibilities of
private investors that you have access to now and then how to get access
to them. And this is - don't worry, this is not about conducting, you know,
luncheons for doctors and dentists. This is not that.

The other thing I will say, when it comes to raising private money, besides
networking it's about massive action, massive action. When we have a
deal raising money for - it's getting the word out. It's blitzkrieg. It's
working the network as fast and as hard as we can and I’m going to show
you tips for doing that, but I want to set that seed in your mind. Okay this
is not, you know, one day, two day stuff especially on a big deal this is
massive action, getting the word out.

So get your mind wrapped around that notion. So come up private
investors, so here they – you know they subset of that course friends and
family your approach is part of your network. IRA Networking events
clearly should be part of your network.
We talked about last week IRAs, you know, self (inaudible) IRA holders
are a great pre-disposed source for us because they don’t need cash flow,
they just want equity or long term appreciation.

So some of them are like (Intrust, Pensco, Guardian, excuse me, Guidant
Financial), mostly with (Intrust) because there’s a local office here and I
happen to be you know, good friends with the owner, but I would
encourage you to go to the (Intrust) sites and look at all their networking

It’s amazing the stuff they’re doing, I was on there today looking at it. If
you go to (, its run by (Quincy Long),
friend of mine he’s perhaps the most knowledgeable person in the country
on using IRAs to do real estate.

And look at his Web site, all the places where he’s speaking, all the events
that are going on, you want to tap into those things in your local areas.
Because many times they have networking events, where (Quincy) does
this, he hosts networking events where entrepreneurs come in with deals
and investors with IRA monies come in and they meet each other to do
deals right there.

Another group of private investor source, people that have been displaced
from their job, that’s going on right now, right? People that have been
displaced from their job, their 401K goes with them.

Once they leave their job, they’re free to convert that 401K into a self
directed IRA. They’re free to direct that 401K into a self directed IRA,
which they could then possibly invest in your projects.

 So you know in giving them a chance, because they’re coming out, think
of somebody – somebody right now that’s just been laid off, they’ve got
you know, that hammer. Their 401K in the stock market’s just been
hammered and so here’s a chance you know for you to come in and say let
me show you a way where I can help you recoup some of your losses, in a
conservative, protected real estate investment.

Of course another source network is real estate clubs. You should you
know residential and commercial. We heard Rich talk about he went to
his local (RIA) over the weekend, great job Rich, and was talking to
people about raising money for, in his case, apartments.

Well because that (RIA) is more inclined towards single family, you know
he had to deal with some of the mindset restrictions of those groups; well
we’re not limited residential real estate clubs. Go to commercial real
estate clubs if, Rich, if you’re looking for apartments go to your local
apartment association, start networking there.

Here in Houston we have you know there’s the Houston Apartment
Association, there’s the Texas Apartment Association, there’s the National
Apartment Association, if you’re into apartments.

There’s another group that (Jim Craig) one of our Platinum members, took
me to one time, he introduced me to it, here locally it’s called Cren
Commercial Real Estate Networking club they meet every Friday for
breakfast and stand up and talk about who has deals, who has money.

No one in that room has any mindset issues around doing commercial
deals. They understand how to raise one or two million dollars. Matter of
fact if you go in and tell them you’re trying to raise 20 for a house they’d
probably laugh.

So again, finding the pre-disposed groups, finding the predisposed groups,
now I’m not telling you – please don’t – I’m not saying don’t go to your
local (Rias) that are doing houses, go there because you are going to find
the people who are you know, not everyone’s going to have the same bias.

You go there for other resources if nothing else. I’ll talk about it in just a
moment. You want to be networking. This whole business is about
networking. Buyers at real estate auctions talked about that last week,
they go down there with flyers and hand them out or hire someone to go
hand out flyers and just say you know I have discounted real estate assets
for sale.

Give them a phone number, have them call you, clearly these people are
pre-disposed. Professional colleagues, people at your office in the
professions around you, you know they – you know talk to them because
even if they’re not pre-disposed and we talked about referrals, they will
know people who would be interested in funding your deals.

Other examples, Business Networking Clubs, you’re talking about
businesses you know getting into all your associations any of your
associations you’re members of are places to get the word out. Again not
just for the people that are in your immediate circle of influence, but all
the people in their network, which gets to be like a spider web?
If you’re involved with charities, you know one of the things I’ve always
said get involved with the fund raising department of charities. If you
want to be rubbing shoulders with people with money, be raising money
for charities so you get to talk directly to people with money so you get to
establish rapport and relationships and contacts so besides raising money
for the charity you can also be raising money for your projects.
This next one Spy on your competition, another reason you might want to
go to the Real Estate Clubs is to see who the other people are using for
their money sources and approach them and use the techniques I’m
teaching you here, how to craft your deal even more creatively and
innovatively where they feel like they have more control and less risk.

The members of your church, 1031 Exchangers, let me explain this 1031
is the exception of the IRS code which says if I’m selling a piece of real
estate and I want it – and I’ve made profit on, I’ve had capital gains, if I
want to avoid the tax, I can do a 1031 exchange.

I can take the profit out of this property when I sell it and move it into
another piece of real estate and as long as I do it on a timeline, there’s a
deadline, I’ve got to do it all within six months, if I do that exchange
within six months I don’t get taxed on the gain. That’s a big incentive for
1031 exchangers.

So if you’re selling a piece of property, clearly you want to target 1031
exchangers, because those are people that are pre-disposed, they have cash
that they have to invest in real estate and they’re on a deadline, okay now
you say well I don’t want to sell off my (Lance), I want people to invest in

In a moment I’m going to show you a variation of the owe nothing control
everything strategy where you can use 1031 exchangers, that’s coming up
in a moment. Here’s another one. Go research at your local courthouse,
or any courthouse for that matter, who has been doing, putting out doing
second mortgages on whatever type of asset class you’re interested in.

You can go find out who are all – you know that’s public record, who’s
been placing second mortgages on apartments on strip malls on retail
centers. There’s names and phone numbers and the amount loaned.
There’s a list of pre-disposed sources.

The thing I want to emphasize here, I’m going to talk about this again in a
moment. When you’re out networking, you’re talking to people you know
directly let them know about your opportunity even if they’re not
interested you always ask who do you know who might be interested in a
great investment opportunity secured by real estate, secured by business,
secured by cash flow, you fill in the blank.

And the more precise you are in being able to describe to that person the
better they’re going to be able to refer you to someone. Always be
looking for the referral. Always, always, always be looking for the
referrals to add to your list.
Okay, all right let’s see the next point I want to talk about here – now let’s
talk about the internet. How to get access to private investors over the
internet and there’s going to be a number of things I’m going to be sharing
with you here tonight.

One thing I want you to be aware of is what’s called (peer to peer
lending). It’s also known as social lending. Matter of fact if you were to
Google (peer to peer) lending or Google social lending these sites are
going to come up. I gave some examples right here (,, these are (peer to peer) lending
sites where investors or entrepreneurs get plugged in with investors.

You get to say I’m looking to raise this amount of money. Now the way it
typically works is fee based, they’re going to charge you say a monthly
subscription fee or it may be an annual fee or it may be a lifetime fee,
maybe I don’t 199 for a lifetime, 45 for year, I think (Bread Street’s) set
up you can only talk to – contact ten investors maximum per day and they
have you know different levels of service you can subscribe to.

It’s all fee based. You can use it – they’re mostly designed to be like I say
(peer to peer) where you’re looking to raise money as the entrepreneur and
you’re basically putting it out for investors to hook up with you. But
many times the brokers, money brokers are on these sites as well and they
will contact you.

That’s okay because they have access to their own network and referral
sources. These sites can also lead you to international money. Talked
about earlier (Sam Wayel) said he had some people come out of the U.K.
These sites are not limited to the U.S., Canada, North America you very
well may have people contact you from other parts of the world, but it’s
called (peer to peer) lending.

So you just basically put it out there. Now I will tell you, what’s kind of
interesting, we call it (SEC) there’s another site called
which actually – you can go look at it right now, they’re not taking
anymore entries because the (SEC) suspended them because they were
starting to get outside the bounds of the (SEC).

One of the things about (SEC) is you cannot advertise – you cannot
advertise for private investors. They look down upon that and so these
sites have been propagating and I guess if they’re operating on the fringe
is a way to describe it, and (Bread Street’s) open, (Go Big Network’s)
open, (Go 4 Funding’s), Prosper has been you know, I don’t know for the
cease and desist or but in any event, you go on the Web site and it’ll say
that they’re not taking any new clients or new members while they’re out
gaining their official securities registration. So they’re getting registered.
But these sites are out there and I used to believe they were mostly for
small amounts of money $25 thousand, $30 thousand but no you go look
at them they’re looking for people looking for funding businesses.

You know complete startup operations and you simply put your deal out
there and see what comes back. And for the little bit of money they
charge it’s probably worthwhile, it’s probably worthwhile. Now let me
talk to a new a category here and I want to go through this category then
we’ll take some questions.

This next category is Broker’s/Intermediaries – Brokers/Intermediaries
and to begin with I’m talking about the first of all when I say broker the
deal broker and the example of – someone just asked me a moment ago on
the apartment let’s say it’s the commercial broker who’s brokering the

They are a pre-disposed source so one thing that can be done is if there’s a
little bit of money needed to make the deal happen you or the seller may
need to go back to the broker and say you know we can’t come – you
know we’re done all we’re going to do.

So you may need to either cut you commission or be prepared to take
some of it back in a note. I did that on a deal last spring, the seller and I
had basically drawn a line on the sand that was a part from each other and
the broker volunteered they cut their fee in order to get the deal done.

Now I’m not saying this with the intent you go out and abuse brokers. But
I am saying that that are a pre-disposed source to your deal and if it’s just
a little bit between you and the seller many times that broker will concede
that as part of their commission or how it’s structured in order to get the
deal done.

That’s why on the question that came up “How would a broker get paid on
a lease options?” “How would a broker get paid on a (REP)?” What it’s
going to depend upon you know how ugly the deal is. I had you know had
students that were looking at a property that was just a mess, the broker
didn’t have any shot of selling it at all unless some creativity would have
brought to the table.

We brought the creativity in the form of lease option and of course the
first question of his mind was how am I going to get paid? Well I’ll pay
you – that’s a question for you and your seller, but if you can make this
happen maybe I can negotiate with the seller, I’ll pay you one third of it
now and two thirds of it over time.
Or I’ll pay you the other two thirds when I sell my option. Either way
you’re looking at getting nothing now by going a conventional route or
you go my route you have a chance of getting something. And in these
times, keeping this in mind guys, in recessionary and economy, everybody
is flexible. Everybody, somebody earlier just talked about the – was it
(Melanie) was saying you know the brokers aren’t getting like a lot deals
right now. Everybody is flexible. Something they might not have even
considered 12 months ago, they will entertain today. So don’t worry about
the broker.

Just worry about getting the deal done. All right, also about brokers now I
want to talk about brokers. Brokers – let’s talk about money brokers. So
actually there are two kinds of brokers I’m talking about here. There’s the
deal broker which could be a real estate broker or a business broker on
their commission.

The other kind of broker is the money broker. So make sure I didn’t –
hopefully I didn’t confuse you on that. There’s the deal broker, who can
put upon part of their commission and then there’s the money brokers.

Some money brokers can give you access to what’s called asset based
lenders, if you’re buying a business this is – these are lenders that will
loan money against the value of the hard assets, you know in business it
can be the physical equipment. If you have a lot of physical equipment
like a manufacturing concern.

Asset based lenders will loan money against the equipment value. Just
like in real estate, hard money lenders, hard money brokers will loan
money against the you know the value of the real estate and it’s usually
going to be no more than 70% but it’s going to be very fast, it’s going to
be generally asset based and not based upon the borrower and it can be a
quick way to get money for your deals.

Now it’s going to be at a higher interest rate but what’s cool now is those
interest rates which may have been prohibitive on a lot of deals 12 months
ago, they’re rates have come down so much that it’s actually something to
be entertained.

Especially if you get into a heavy rehab project which you’re getting it too
at a real discount. Hard money asset based lender’s can be a key pre-
disposed source. So we don’t reject them. Commercial lending brokers of
course they’re going to get access to banks and FHA financing more
conventional type loans for the first mortgage.

I don’t want you know when you’re trying to get access to bank financing
don’t go calling a bunch of banks there’s no point in that. Get a
commercial lending, commercial mortgage broker who already has those
contacts to work for you. Or you can get multiple ones working for you.

Now this next group Intermediaries, Intermediaries, these are people –
these are the ones you’re going to be talking too. They’re another form of
broker but they go by the term Intermediary because they tend to work on
bigger deals like three million and above where they’re going to move that
much money.

These are how you get access to the (Hedge funds) you get access to Wall
Street money; we get access to other institutional funds, high net worth
individuals. They are basically brokers but they go by the term
Intermediary, they go by the term Intermediary and these are where you
get the monies for the bigger projects where you get 100% financing.

When you hear us talk about raising money for $3 million deals, $5
million deals, $10 million deals, $20 million deals at 100% financing it’s
coming through Intermediaries. They’re going out and basically working
their network of entities.

(Hedge funds) in institutions that are looking to move single, big slugs of
cash into projects and what you’ll find if you go to them and tell them you
know I’ve got a $5 million project and I’ve got the bank’s going to finance
four million and I need one, they’re most likely going to say no we’ll do
all five we want total control.

The other thing about Intermediaries is you’ll find that for the most part
they’re interested in equity primarily. Not so much cash flow. Which is
great for us, right? Because we want the cash flow. So there’s a nice fit
there. So intermediaries, when we talk about doing these big deals is
going to be one of your key pre-disposed sources.

If you’re trying to raise $5 million you’re not going to do it you know
working the real estate clubs. You’re going to do it through
Intermediaries. There they’re going to tell you when you talk to
commercial lending brokers or hard money brokers they also have access
to private money sources. So you can be asking them as well.

Tell them what you want to do, here’s the project, I’m looking for it to
raise 100% financing, you know what products do you have or what
contacts do have? Now to get access to Intermediaries, here’s what you
can do, I want you to use the internet. Just go to Google any search
engine, but Google.

These are the key words you want to use – these are the key words you
want to use, Commercial Intermediary, if you’re looking for commercial
property deals. Real Estate Intermediary if you know, if there’s particular
asset class, you know, like apartments, apartment intermediary, also use
the keyword private equity, because that’s what they’re doing, they’re
basically putting up equity, private equity because that’s what they want at
a deal, they want equity.

So you can Google private equity, you can Google Hedge funds, you’ll get
all sorts of stuff you can sort through that trying to find the ones you can
contact for your deal. Investment group is another pretty good keyword,
trust companies. Now trust company’s going to give you – that’s a pretty
broad (bruss) you have to do some picking and choosing.
But clearly Intermediary combined with whatever particular asset you’re
looking for and the narrower the better and you’re going to go to these
Web sites, okay? Intermediaries, these are for your big deals. Don’t
really – don’t go to them you know practically anything less than $3
million. I mean you can but you’re probably going to find that – well you
can, but here’s what you do – here’s what you do.

If you have a million dollar deal – you should do this, go – use
Intermediary sites say I have a million dollar deal and they will say
probably, well that’s smaller than we like to do, so the question you
always ask, remember you always, always ask well who do you know
who’d be interested in funding this type of deal for a million bucks,
heavily secured by real estate?

And they will refer you to their contacts in their networks. So you should
go to them if nothing else for their referrals. We’ve seen that happen.
Everyone got that? Okay one more slide and I’ll take some questions.

Now dealing with Intermediaries there’s some important safety tips here.
You will most likely be paying them a fee up front. An advance fee and
that could be depending on the size of the deal, it could be $5 thousand or
it could be $15 thousand.

I think we paid you know I know one of my students have paid 5,000 to
go have them search $10 million. That’s basically their search fee, that’s
the money they want to get engaged to go do a search. The Intermediaries
don’t have the money, they are essentially brokers, they’re agreeing to go
hunt on your behalf to go you know, form out your deal, advertise your
deal to raise that money.

And so they want get – they’re going to get a little bit of a fee up front just
to go look and then they’re also going to get anywhere up to three points if
not more once the deal is funded, okay? Now you’re going to have to
build in their points as – now their points don’t get paid until closing.
And their points could even be financed out of the deal, but I want you to
know up front they’re going to want – they’re most likely going to want
money up front. So I want you to be wary because there are some
unscrupulous operators out there who have a great business as advertising
themselves as Intermediaries and collecting the upfront fees but not
delivering any funders, funding sources.

Because none of them are going to guarantee you a funding source to my
knowledge. So I want to make sure that you go in with your eyes wide
open and that you do your due diligence and here’s what I want you to do,
before you hand anyone any money there’s some things I want you to do.

I want you to check them out, internet’s a great place for that, Google
them out, check them on Better Business Bureau, there’s certain blogs you
can go to, here’s one right here I want you to use it’s called, this is a great site by itself by the way.
It’s mostly for mortgage professionals but there’s like a forum there where
people go in and ask questions about particular funding sources.

So you can post, you know, if you find an Intermediary you want to use
you can go in there and post, what do you think of such and such funding
group? People will answer or you may find that people you’re talking to
have already has comments made about them, because you can search – I
know in Mortgage Grapevine you can search, you know just search for
any phrase in there and find people, check them out.

So you can ask within and you can search out
see if there’s already some things posted. You also want to ask them for
references and by that I mean give me a list of your recent closings and
people I can contact.

Because you want to see that they are indeed closing deals, they’re not just
collecting the advance fees. I have not problem you know paying the
advance fee if we’re going to get the deal funded, we can always – we can
raise a few thousand dollars from any private source, but I don’t want, you
know, I don’t want to be paying a few thousand dollars just that you’re
going to, you know, go out and take you to make a couple phone calls and
not fund my deal.

So ask about their recent closings, get a list of recent closings, get people
that you can talk to, references. Have them give you a letter of intent of
what they were going to do. In that letter intent I’d want them to specify
what – how many funding sources do you think you can find for this deal,
what type of terms do you think you can get and what steps you going to
            Have something – basically this is the agreement, what’s your scope of
            work, I’m paying you to do something, put it in writing what you’re going
            to do and what result I should expect. Always get it in writing, don’t take
            it as a verbal. Get it in writing – get it in writing. Now if you can try to
            pay them upon them delivering you a lender which you accept.

            Now that may need a negotiation back and forth and maybe you give them
            some money up front and some on the back end when they deliver a lender
            that you accept. Because it’s not good enough that they deliver a lender
            that you know, doesn’t make any sense, it’s all negotiable – it’s all

            These are basically sales people, think of it as these are sales people and I
            don’t care how big and fancy their Web site is, (inaudible) it’s going to
            come down sales person’s ability to go raise you money. So push them,
            remember in recessionary times everybody is flexible and motivated, so
            push them.

            Don’t be intimidated by them, they’re just trying to earn a commission, so
            let’s make sure we got it documented what they’re going to do in order to
            earn that commission. They could be a great source of big bucks. 100%
            financing let’s make sure that, you know, they play ethically and with

            Which most of them do, but I want to make sure that you don’t catch the
            odd one. All right with that let’s take some questions; we got some
            questions that came on the board here and…

Mike:       (Inaudible)?

Lance Edwards:             Yes?

Mike:       Hey it’s Mike again.

Lance Edwards:             Hey Mike.

Mike:       Hey question on Hedge funds.

Lance Edwards:             Yes Sir.

Mike:       With the Hedge funds lends, because I’m working on some big ticket
            deals, are they known to structure deals with we get the 100% cash and
            they get – if I structure the deal where they get most of the equity are they
            up for that?

Lance Edwards:     Yes, absolutely.
Mike:         Awesome.

Lance Edwards:      Absolutely Man, I’ll talk about it detail, but let me give you the
            short answer to it Mike. I mean we’re seeing deals where they’ll take 30
            and 40% equity.

Mike:         Really?

Lance Edwards:        Yes and we’ve got…

Mike:         Awesome.

Lance Edwards:      So they’re doing, you know, something less than 50 be like 30 or
            40%, we have another one going on right now where they’re getting it’s
            actually a hybrid deal, they’re getting 8%, wonder how this working,
            they’re getting 7 or 8% interest and 25% of the equity in this one.

Mike:         Really that’s sweet.

Lance Edwards:     Yeah and that’s actually a group, that’s actually a group out of
            Canada which is a group of kind of like Senior Citizens who’ve pulled
            their money together, now they’re more interested in income that’s why
            they wanted some 8%, but they’re doing 100…

Mike:         It’s still a good deal though.

Lance Edwards:     It’s still a good deal and they are financed – this is the wholesale
            whole strategy, they’re putting up enough money to where this person is
            going to walk away with 200 thousand at closing and still…

Mike:         Wow.

Lance Edwards:        And still have 55 thousand cash flow per year.

Mike:         And they’re putting up 100% of the financing?

Lance Edwards:        100% including the rehab.

Mike:         Wow and you – and they’re holding – and then you can hold 75% of
              equity in that deal.

Lance Edwards:        Exactly.

Mike:         Oh that’s sweet.
Lance Edwards:        Which was worth as I recall like half a million dollars.

Mike:         Absolutely, nice.

Lance Edwards:        Yes.

Mike:         Nice.

Lance Edwards:        Yes.

Mike:         Thank you.

Lance Edwards:      You’re welcome and that came through you know, an individual
            intermediary – an individual intermediary which came through one of
            these sites, I just has a question here has any of your students used Go Big
            Network? I can – yes and this individual broker actually found this
            student, because she was on one of these sites, can’t remember which one
            it was, Go Big Network or Go 4 Funding, it was on one of these sites.

              The brokers are trolling these sites looking for deals to broker on.
Mike:         Wow. Hey (Lance) you know what’s a good site too I was on today I seen
              some pretty good folks on there it was trust companies.

Lance Edwards:        What’s the name of the site?

Mike:         Yes, I came across a couple of them today.

Lance Edwards:        What you Googled trust companies?

Mike:         Yes and there was some – there was a couple of them I’m going to check
              into tomorrow that will do 100% financing.

Lance Edwards:     Yes let’s put this down here, I got the (eagle pad) up here, let’s –
            that was one of the keywords I gave you guys is yes, Google trust
            companies. Now Mike was it hard…

Mike:         No it wasn’t hard (Lance), no they did everything, I just went into their
              site with commercial and it came up with all kinds of scenarios that they
              do the funding for.

Lance Edwards:        Perfect, great.

Mike:         I’ll definitely have some more information when I get in contact with
Lance Edwards:       Great – great and that’s what – really what Mike just did, this is
            what I’m looking for everyone in this group to do, share these resources
            because this is not about scarcity there is all these sources that are out here
            this is about master money, so through these out here guys. There’s plenty
            of money to go around, don’t take the scarcity mentality. But thanks a lot
            for that Mike, great job sharing it, appreciate it.

Mike:         Thank you.

Lance Edwards:      All right – all right had some comments here’s one Jeff said
            “Internet sources are a highly interesting item to a small town Mr. Mom
            who can’t travel easily for the next three months.” All right thanks Jeff,
            exactly. You get – I mean literally you get international access to the

              Let’s see here’s one from (Zephar) he had a comment, (Zephar) said “I
              talked – (Zephar) from Canada “I talked casually to one person and he
              happened to mention that he’s looking for shovel ready projects and he has
              an amount of money and then happened to talk to a person who has a
              Senior Citizen complex that they are wanting to get out of and get some
              money so they can do another project. So I’m starting to see how you can
              own nothing and control everything.”

              Thank you (Zephar) great comment, all right here’s (Sandwell) “someone
              on the call questioned whether the FCC would question me adding, raising
              the money on the internet; I must specify that my ad was a sale of an
              equity partnership in one of my multi-county investments.

              I believe this is the way I am covered.” That’s correct, so this is going
              back to if you’re, you know, you can sell anything on you know, by any
              means you want, we’re talking more on this when we get into session four,
              but if you’re, you know, and I’m talking about again later today, but
              you’re selling something and you sell that, you know, you can hire a plane
              and fly a sign over the city, that’s okay.

              (Zephar) asks “what’s the equivalent to an IRA in Canada?” I don’t know
              the answer to that, there is an equivalent if someone knows please type
              that one in.

Rich:         My names Rich.

Lance Edwards:        Hey Rich.

Rich:         Hey I’ll add one to your list of places to look on the internet.

Lance Edwards:        Yes.
Rich:        One I’ve been heavily going through is ( and they’ve got
             groups out there for everything you can imagine, basically you go in and
             you got (inaudible) right, you go in and you set your profile and then you
             can network with people all over the place all over the world really and
             they have groups targeted towards like (AgeOneVesters), Venture Capital,
             Commercial Real Estate, Commercial Real Estate Funding, it’s just a
             really good source and gotten lots of names off that.

Lance Edwards:      Thanks Rich because actually that’s a great (segway) and we’re
            getting ready to talk about that in just a moment actually, so great
            (segway), thanks. But thank you for sharing, absolutely, good job. Let’s
            see (Jim Craig) had a comment here he says (Lance) community banks
            have access to their own private lenders who helped form the bank.

             They are a good source for private money; usually the deal must be in the
             city or area for them to be interested. That’s a very good point and thank
             you Jim. One reason to go to community banks is sometimes a
             community bank has invested interest in seeing a project done.

             Like for example I know there was a project that I was involved in where
             we were revitalizing a completely abandoned property. Well the big
             banks weren’t so much interested, but a community bank was, it was a
             neighborhood revitalization project. So that’s another great source to be
             talking to.

             And like Jim says they have their own private money sources. Rich asked
             what type of expense can we expect from intermediaries. Like I say it
             could be $5 thousand to raise 10 million, I know of one student who had to
             pay – was getting ready to pay 13 thousand for seven million and then she
             checked them out and found out they weren’t a group to be dealing
             business with.

             And I think she ended up finding someone else at six thousand for that
             seven million, so you’re talking about you know $5 to 10 thousand which
             you know, if you don’t have it, you go raise that money, that I’m teaching
             you hear, don’t let that stop you.

             Question by Tom “how do the interest rates found by intermediaries
             compare to banks, if we did the 100% through them could we do it long
             term (inaudible) five to ten years?” Good question Tom they’re probably
             going to do a more – probably about five years it’s going to be there
             around their maximum time period.

             Their interest rate may be zero like I was saying to Mike; they may just
             want 40% equity in the deal. So we get 100% of the cash flow and 60% of
              the equity and on a big deal that can be one and done. So when I talked
              about one and done last week you know, it’s about doing the bigger sized
              deals and they don’t have to be giant deals, but they’re the bigger sized
              deals that we go find an equity – private equity person to bring in and do
              the deal.

              Now in the case of the other example I gave there was another private
              group, they were not a hedge fund they were just a private group of Senior
              Citizens out of Canada, now they did want some income, they wanted 8%
              - I think it was 8% interest or maybe it was seven, 7 or 8% interest plus
              25% of the equity.

              But that still meant it was a great deal, we got some static on the line let
              me clear this real quick. Okay so if anyone needs to come on just press
              star six, let me go on to the questions here that came in. Have you ever
              approached charitable endowments? This is from Paul.

              That’s a very good point, let’s put that down here, we came – we done
              something close to it, there was a group that we were presented through a
              intermediary that did something like that. They wanted to put – they
              wanted to only invest in projects where they were turning around in kind
              of revitalized areas – revitalization projects.

              It was very favorable terms. Very, very favorable terms, so charitable
              endowments means they’re talking about socially responsible investing
              which I’m talking about in a moment, can be a little niche in itself.

              Let’s see, let me bring this Tom says “I tried Googling Angel Investors
              plus the city you’re interested in and that is another good keyword.”
              Angel Investors plus as Tom’s saying, add the city you’re in. You want to
              find someone local or investing in your area, great thank you for that Tom.
              Thank you for sharing. Okay…

Mike:         (Lance)?

Lance Edwards:        Yes?

Mike:         Mike again quick question. How do you feel about conduit lenders?

Lance Edwards:      Link con to it. Okay, let me – conduit lenders are fine. Here’s the
            thing, conduit lenders for everyone’s background – conduit loans are very
            low interest loans and it’s usually if they’re formed, the group of investors
            are put together, they’re promised a yield of you know maybe 5% or less
            than five today and it’s going to be for the next 15 years.

Mike:         Okay.
Lance Edwards:      And – but they’re willing to put up their money because they’re
            guaranteed that rate for 15 years. Conduit loans are very good to you
            know you can use it to buy into a project; it’s going to have a low interest
            rate, which is going to help your cash flow.

              The challenge with conduit loans is that when it comes time for you to sell
              the property, you cannot pay off that loan, it has – if you do it’s going to
              cost you so much you wouldn’t do it. The pre-payment penalties are just
              you know, gargantuan.


Mike:         The terms with that?

Lance Edwards:         What’s that?

Mike:         Can you set terms?

Lance Edwards:      You can – no, pretty much no, I mean they’re going to – conduit
            by definition means you’re going to have to let it run its full course, which
            can be good or can be bad, but if you’re the owner, if you buy a property
            with a conduit, which means you’re – you have to assume it, there’s no
            other option, you have to assume, but that could be okay because it’s good
            cash flow to you, because its low interest rate.

              But if you ever want to sell the property you have to sell it to someone else
              who’s going to assume it which may or may not be a problem depending
              upon what interest rates are doing relative to the conduit rate.
              But also if you ever wanted to refinance your property to pull cash out, it’s
              going to be more difficult because you can’t pay off that conduit first

Mike:         They’re more interested in the cash flow than equity.

Lance Edwards:         Well they’re – no – all they want is income that’s all they want is

Mike:         Right.

Lance Edwards:         That’s all they want, yes they’re just a lender – they are just a

Mike:         Okay.
Lance Edwards:        So…

Mike:         But if you get a good rate and you get – and you keep all that equity it
              could be a good deal.

Lance Edwards:        Yes but think about you’re exit strategy.

Mike:         Yes exactly…

Lance Edwards:     Because if you’re adding value – if you’re adding equity to your
            property you cannot refinance and pull that cash out, because you can’t
            pay off…

Mike:         Right, right, right.

Lance Edwards:        That conduit note. So…

Mike:         Right, right.

Lance Edwards:        So you got to think of it that way Mike.

Mike:         Absolutely, absolutely all right thank you.

Lance Edwards:       You’re welcome. Okay Chuck typed in “(Lance), Steve and I just
             today heard about buying a (shelf corp.) in order to establish a credit
             history some instant we’ve been around awhile credibility et cetera, what
             have you heard about such things any positives, negatives?”

              Okay I just heard about this late last week, there are some private investors
              which are loaning money into projects, they do it through a (shelf
              corporation) which means that you go buy an old corporation that’s you
              know, not doing anything but the this – the corp. the (shell) entity has been
              there for awhile and so you can say this entity is going to fund the deal so
              this entity’s been around for five years so that’s credibility. That’s fine –
              that’s fine. What I’m hearing on those terms though is that they can be
              quite pricy where if you need to borrow $3 million they’re going to charge
              you 15% and they’re going to let you put it into the deal but you’re going
              to end up borrowing $3.5 million for a $3 million project.

              Which may be okay if your project can support that, but it’s pretty heavy
              on the upfront fees, beyond any of that (shelf corps) really it you know,
              haven’t seen enough of them to know if that’s good or bad but on paper it
              doesn’t sound – it sounds reasonable.

              All right (Lena) asks “What’s the deadline for 1031?” From the time you
              sell your property you have 45 days to declare which property you’re
going to buy and then from the time you sell your property you have six
months to close it.

And you work it through a qualified intermediary – 1031 intermediary.
Okay on the hedge fund, this is from (Nam) in the hedge fund or trust fund
wants equity are there any specific areas they want to focus or real estate
areas they want to avoid?

It’s going to vary and an intermediary’s going to help you – they’ll
navigate those waters for you. The intermediary whose looking out
searching, they’re going to navigate those, you know, figure out who’s
going to do that.

Okay, all right oh Steve had a comment here received the maps readout
today, awesome reading, great content, everyone should read this. Oh by
the way this is on our blog, this is what Steve’s referring to, thanks Steve,
it’s at ( you can check that out today if you’re

All right so let’s get back to more in pre-disposed sources I want to cover
and great questions guys. Great input too. All right so I just took some
questions. Okay the fifth category. This is category five of seven it is
you. And you may say wait a minute I came to this program because I’m
looking for other people’s resources and that’s fine, but it’s going to point
out some resources that may be available to you that you could draw upon
for a little bit of money, a fair amount of money, et cetera.

Because again when it’s raising private money we’re you know we’re
looking for everything, every source we can find. So some of them that I
put up here on the screen are you know credit cards.

You can use credit cards for short term in and out there’s some low APR
deals on credit cards or you can use it if you need interest money to get a
deal tied up, you need down payment money on small deals, you can use
credit cards.

You want to be careful with credit cards because even if it’s a 0% APR
offer, they’re going to charge you 2% of the balance each month, so from
a cash flow standpoint you need to be aware of that.

But personal lines of credit, business lines of credit you can you know,
with your LLC or if you have entity that’s been in place for two years you
can go raise business lines of credit. Again you can use that for interest
money to get into a project, use it for down payment monies.
Home equity lines of credit they tightened up on those but you can still get
home equity lines, I was the phone today with my bank was telling me
they’re still doing it, offered me a home equity line.

Again this could be more long term money. I have bought properties with
a home equity line of credit because its low interest rate, number one and
number two it’s deductible so you got kind of double advantage there and
you know a presumption you still have equity in your home.

But for many people that’s still the case, you can use that to actually buy,
to get into properties on a long term and it’s you know, many cases it’s
interest only. Equity and other assets that you have, could be collateral,
you know, equity in your business, equity in other real estate that you
own, equity in just any kind physical item, you boat, your car, so many
times we talk about seller financing the sellers wanting to carry back a
second, but they really want some extra collateral on the deal.

So you could offer, okay I’ll tell you what I’ll do, if you’ll carry back a
second, I’ll also let you have a lien against this other single family home,
rental house I have over here. That’s called a blanket mortgage, that
mortgage – their second lien will actually be attached to their property
plus your other property.

And you can do that as extra assurance to get – you know, show them
there’s again addressing the risk equation. Made it an even lower risk
because if I don’t perform not only do I get your property back but you get
my other – this property over here. You’re going – you’re better off if I
don’t perform than if I do perform.

I’ve done a risk reversal, I’ve removed any risk, you’re actually hoping I
don’t perform because you’re going to become farther ahead than when I
don’t perform. Now if you do that structure it such that if you’re using
another piece of property as extra collateral, structure it such that that lien
on that other property gets released after a year or two, once you’ve made
timely payments.

Because you don’t want to have the property overly tied up because you
may need it to do the next deal. So you could do a blanket mortgage
where you’re using your other property as extra collateral but structure it
such that you know, maybe I’d go in and say okay after the first 12 months
once I’ve had 12 timely payments, you’ll agree that will release the lien
against this extra collateral. Now this next item on here barter and trade.

Barter and trade this becomes even more important in recessionary times
when cash is tight for some people. Bartering, so let’s talk about that a
little bit, you know, in terms of taunt you a category of ourselves, how do
we bring something to the table, well this seller – maybe this seller would
love to have cash but okay I’ll tell you what, why don’t I barter, I’m an

Why don’t I you know, for the amount of money you want in cash I want
to put some of it up in trade as services, my professional services, we’ll
barter as an exchange for what you want for your equity in the property or
your equity in that business.

So you could trade your services or products. You could actually, you
want get really, you know, it’s the little bit fancy with it, you start trading
other peoples products and services. You find out what that seller would
need and if you don’t have those products or services, then you go barter –
find somebody who could provide that and you barter with them to
provide them with what they need so they’ll provide the seller the other

For example if I’m a CPA and the seller doesn’t need CPA services, but
he needs his house painted, well I’m not a house painter, well I could go
approach a house painter, painting contractor and tell him if you’ll agree
to paint this sellers house, I’ll agree to do your taxes for the next whatever,
next two years.

That’s an example of triangulating a barter exchange. It’s innovation.
Now this can be done on the small scale or can be on a large scale, I can
tell you barter by itself on a large scale if you’re involved in a barter it’s
extremely lucrative – it’s extremely lucrative.

There’s actually barter trade exchanges the biggest one is (
where you can actually go and you know if your seller needed someone to
paint you could actually go find the painter on a trade exchange and then
trade over the exchange. It’s a way to facilitate barter exchanges by
finding all these different tradable goods and services.

It’s called a barter exchange. ( keep that in mind because
you’re going to see and I’ll tell you right now you can expect to see more
things coming to you over the internet about barter and learning how to
barter in recessionary times.

You're probably going to see something neat coming out pretty soon.
Because this becomes – it’s a great kind of niche area most people don’t
even know about and in times like these, it always resurrects itself
becomes more popular just from a more practical standpoint in conducting
business. So again it comes from the category of you, your services, your
goods could be bartered to help get you into a deal. All right category six
other interested parties – other interested parties this is a category that I’ve
added, that is not in home study system.

And by that it’s really basically answering the question which you always
need to ask, this is at the core of the raising private formula and that is a
question I’ve got on the screen right here. Who is predisposed to see your
project be successful?

Who is predisposed to see your project be successful? You know who has
invested interest in seeing this project happen for me? That helps you
identify predisposed sources of resources not just monies but resources for
your projects.

For example property management companies, this was (Jim Craig’s)
idea, it was brilliant. He was putting together his deal he had about I don’t
know it was a pretty big due diligence effort on a big project and so he
went to the property management companies that he was interviewing that
were going to manage the project once he closed and he said listen if you
guys will come in and do the due diligence and put up some of the money
for the due diligence, I’ll give you an equity share in the project besides
giving you the contract for the property management.

Ingenious, right? And they agreed to it because they were predisposed to
see the project be successful. They’re going to be the ones adding value to
the project as a project management company, here’s a way they can get
an equity share in the deal, they just need to agree to be part of the due
diligence – fund part of the due diligence.

Rehabbers, contractors if you need to have rehab done on a property you
could either go raise money for a private investor, cash to go hire
rehabbers or you could approach rehabbers and barter with them to say I’ll
tell you what, I had this property under contract and if you’ll come in and
agree to the rehab I’ll give you X% equity.

You provide – you know you pay for the materials through your contacts,
you provide the labor and I’ll give you equity in exchange for your
resources contribution to the project. Well again in recessionary times
people are more flexible, more motivated, I’d been making that offer all
day long, because you’re going to find people willing to do it.

Next one City, Community and Neighborhoods funding for revitalization
projects, someone mentioned this earlier on the board a moment ago.
There are – there was a group that we were talking to – one of the students
was talking to a few months ago, they were only interested in doing big
projects where there was some type of revitalization.
They would do 100% of financing, it was very, very nice terms, I mean
very easy simple terms, but they wanted to see revitalization efforts going
on, they were – it was a philanthropy, it was a (philosothropic) group that
we found or the students found through a broker and an intermediary.

So again people want to ask how to I get access to these groups, don’t
worry about it you’re going to do it – you need to go through the
intermediaries, let them go find these groups, that’s what their business is.
Another group that’s socially responsible investing groups, there’s another
group that people that want to invest in projects which have social
redeeming values.

And if you Google that socially responsible investing you’ll find some
groups around there, again any kind of revitalization projects are taking –
putting businesses in place in you know, kind of a distressed
neighborhood, could be funding sources from you.

Again I’ve given these as examples of answers to the question, who was
predisposed to see your project be successful? If you’re turning around a
neighborhood, you know, a really distressed neighborhood the city may
have funding for you or can get funding for the project.

Because they are predisposed at seeing that blighted area turned around
and increasing the tax base off of it. And it buys them points (HUD) and
for – those are all – again how is predisposed to see my project be
successful? All right next category.

Final category, category seven is referrals – referrals. And one thing I
want you to always keep in mind referrals are the single, single most
important way to grow your business, is referrals. Referrals give you
better leads, referrals are free, it’s a higher quality of contact, they do more
business with you, better business with you, so no matter what your
business single referrals are the most important way to grow it.

So when it comes down to referrals all the sources I’ve already mentioned
up till now, however many dozens those were besides them being a source
they are also a source of referrals. So again we always ask, always ask
who do you know who might be interested in a great investment
opportunity secured by blank?

You can always – you can even open with that (inaudible) of line, when
you’re approaching someone because either they’re going to I would be or
I know someone. Always, always, always ask for referrals. So again I put
some examples up here friends and family, you may – earlier when I
mentioned friends and family as part of your network, you said well my
friends and family don’t have any money.
Okay well do they know someone who has money? Do they work for
someone who has money? They could be a great referral source. Your
past investor, this is going to put a big star next to that one. You know we
talked about this last week, the strategy of preeminence.

Once you get one or two investors word of mouth will take over from
there. This is where we take very, very, very, very good care of our
investors because they’re going to be sources of extra money themselves
for our deals, plus the referrals they’re going to generate is going to be
multiples and multiples of that.

Other referral sources CPA and financial planners, especially these days,
they’re trying to guide their clients on where to – what to do about their
401K’s, what to do about the 40% hits they took, 50% hits they took.

They don’t really have too many options most people are scared to go
back in the stock market, well wouldn’t you love to be able to have the ear
of a CPA or a financial planner who can develop a relationship with them?

Demonstrate to them how we have low risk projects where the investor
has control and a high return and develop the (rapport) and trust with that
financial planner so that they are willing to share, pass that onto their
clients to put into your projects.

Great source of referrals, attorneys same principal, work colleagues,
asking your work colleagues you know who do they know that would be
interested in getting involved in your projects? 1031 exchange agents, we
talked about 1031s before, the way you get access to someone who has
1031 monies to move is through exchange agents.

A 1031 exchange has to be through a qualified intermediary it’s called a
(lenagent) and so you develop relationships with them so that when
they’re approached by one of their clients who says I’ve just – I’ve got a
property – my property under contract and I’m going to need to have
another one lined up here shortly, you love to be able to have your deals in
front of the 1031 exchange agent so you can get the referrals from them of
the 1031 monies.

Now again you may say well (Lance) I’m not looking to sell my property,
I just want somebody to invest in it. In three more slides I’m going to
show you how to do that. Referrals by the internet let me do this I’m
going to give you a homework assignment and I’ll come back in a
This is what Richard mentioned a moment ago ( this is
social media, this was – this is – I’m sure you’re seeing this in the press
you’re not already active in it, it’s been getting a lot of attention lately,
social media, social media marketing, but one of the sites that from social
networking from a business contact standpoint is (
For example I’ve got a profile on there, I don’t know if you can see it but
it has my picture on it, my name, what I do and I have 179 connections,
these are people that I’ve – you know, former work colleagues, people I
know, I’ve invited to connect with me so I have 179 people that have
connected with me so they are my first generation of connections.

That allows me to have access to all of their connections. So within my
second generation, I have thousands of contacts. So my first generation of
contacts 179, my second generation gets into the thousands and what
(LinkedIn) allows – one of the things it allows me to do is I can be
referred by someone automatically through my – if there’s someone in my
second generation that I want to make contact with, I can ask someone in
my first generation to introduce me.

But (LinkedIn) shows me how I’m connected to people through what
routes, you know it said that we’re all connected within six degrees of
separation, well (LinkedIn) shows me within two degrees of separation, all
the people that are in my sphere. It's amazing to find out how (inaudible) I
don't know, I know of, but I've never met. But I know them through
another contact. That's one of the benefits of LinkedIn. It's really, it's

But another benefit is there are, you can go to LinkedIn and you can ask
questions about any topic. There are groups that are set up. There are
groups on commercial deals. There are groups on apartments. There are
groups on about every topic you can imagine.

You can go in and you can ask questions to the entire network and get
answers and see who is asking and answer the questions. You can see
how they're connected to you. (But) you can also research it.

For example, here I want, within LinkedIn and - I don't know if you can
see this. Let me circle it. There's a box here and there's a pull down box
here. It says Search Answers.

And I just, I typed in, I searched. I just typed in apartment financing. And
what came up, someone had asked a question. It said, "How can I finance
a 300-unit apartment complex (that needs work) by contributing collateral
with $200K in equity?"
Boom. It says, "I am concurrently considering purchasing a 300-unit
apartment complex in the U.S. that needs work, probably $3 million to $5
million, and is being sold for $1 million. Do you have any knowledge of a
debt/equity lender that can use the collateral in financed type of deal?
Creative ideas welcome."

Now if you scroll down there are people answering him. And the answers
he's getting are go see this person, go see that person, go see. They're
getting referrals. And you see what's cool is you can see who the referrals

Well you can click on their name in LinkedIn. You can see how to contact
them. But sometimes you're going to find out that the person being
referred to is already in your network like second generation.

So, you've already got like a, you (going) to get a connection. So, you can
ask questions like this person did. How can, you know, exactly what they
did, how can I finance - as a matter of fact what you can do tonight, one of
your homework assignments.

Go to LinkedIn tonight and just go to the very top that says Search
Answers and type search apartment financing. You'll see what I'm talking
about, this whole chain of answers that came up and all these referral
sources for funding.

You can put in commercial financing. Put in anything and start searching
it. All right, so if you have a deal you need to fund post it on LinkedIn.
And let the network give you funding sources. It's a cool thing.

This is brand new for me. I've just been recently started looking at this. I
have to admit we have not exercised it a lot. We're going to start now as
I'm starting to see the (palliative) social media sites, (so) the network sites.
But this is pretty cool. This is pretty cool.

On your, of course on your profile you can be answering people's
questions. You, another way you can answer people's questions, it gives
you more visibility. You know, there are all kinds of things you can do in

But the simplest thing you can do is an example this person did. (Marvin),
how can I finance a 300-unit apartment complex, blank, blank, blank,
blank. And let the network answer for you.

All right, now what I'm going to do is - top of the hour - let me give you
your homework assignment. And then we're going to - I got some more
content I want to come back to. But I want to respect your time for those
of you I know who may have to go to take care of kids or other family

So, let me go down here to the homework assignment real quick. I'll be
right - let's see, let me clear this screen. (I'm going to) jump through here,
giving my stuff away here.

All right, your homework assignment for this week is if you haven't
finished module 3 go, you know, either read it or finish listening to that.
And I also want you to listen to or read modules 4 and 7 in the Raising
Private Money Home Study system.

This is about structuring your deal and marketing for money. So, finish
module 3 if you haven't done that. And then do modules 4 and 7. And
next the second assignment I want you to search the internet for money
sources. And I want you to come back next week and share your
experience just like some of the people were doing tonight.

This group's going to be most powerful when you guys, you know, come
back with real stories and share with each other. Don't get hung up on the
scarcity mentality I've got to hold to myself.

I just, listen I just showed you, I lost count. I didn't count them. There are
plenty of sources out there. You guys need to be sharing them with each
other. So, anyway your homework is to go out and search the internet for
money sources. Write them down and come back next week and share
them, or share them this Saturday at our bonus session.

Third assignment, you found predisposed sources. I want you to present
your deal to a minimum of three predisposed sources and come back next
week and report on that. How did it go? Just like (Rich) was talking
about, you know, he had a learning experience talking to this particular
group. It didn't work out. That's fine. Everything happens for a reason.

People learned about predisposed sources. There are no failures. They're
all just learning experiences. So, go present your deal to a minimum of
three predisposed sources and report back on that next week.

Item number 4, from the quick start audio at your I
want you to be doing your daily mindset routine. I had declared this
optional last week. I really want you guys to do this for your good.

I haven't talked about, dwelled very much on mindset. We'll do that
maybe next week. But it's critical, especially when you start talking about
these extra zeros that your mindset be straight and your little voice not get
in the way, okay?
So, that's your homework assignment, those four things right there. So,
let's go back. And what I'm going to do I'm going to hold the question
until I get to this next part. So, let's do that.

What I want to talk about now is something I (actually) - those are the
seven categories of predisposed sources and ways to get access. Again it's
about massive action, networking, networking, networking.

I've shown you tremendous tools to leverage the internet today. And
something like LinkedIn can do the work for you. These other peer-to-
peer sites can do the work for you. Intermediaries can do the work for
you. Brokers can do the work for you. It's just getting the word out,

So, let's talk about a strategy here which is the one that I call own nothing,
control everything, own nothing, control everything which is also known
as a sophisticated lease option.

And this is a scenario where we're looking at a property, this case it's an
apartment, and it's low-occupancy property. It's got an out-of-state owner
and it needs $50,000 of moderate rehab. And it could stand a rent

And so the out-of-state owner's willing to sell it. And instead of buying it
I'm going to come in and put a triple net lease on it, a five-year triple net
lease. I'm going to have an option to buy it at a price of $1 million.

And my plan is I'm going to reposition this property. I'm going to do this
moderate rehab. I'm going to raise the rents, raise the occupancy which
will raise the income. It'll increase the value to $1.3 million.

And then once the rent increased the value to $1.3 million then I can either
buy the property for $1 million and have $3 million of equity or I can sell
my option because my option will be worth $300,000 at that point. I got a
creative value of $1.3 million. I have an option for $1 million. So, the
option is worth $300,000. Now if I need, I needed $350,000 of moderate

So, I simply go raise $50,000 from a private investor which by now you
should, I think that working on your mindset you should see raising
$50,000 would be a piece of cake. We just finished talking about how to
raise $3 million, $5 million and $10 million. You go post this on LinkedIn
and raise this money.
So, the beauty of this is I'm getting control over $1 million asset for
$50,000. If I had bought this property I would need to go put down at
least 20% which would be $200,000 and then raise the $50,000.

So, I would have taken at least $250,000 in cash to get control of the
property if I was buying it. Well you don't need to buy it. I just want
control. Control can be more important than ownership.

Control can be more important than ownership. That's why (we just) call
it own nothing, control everything. I'm using the seller's financing,
existing financing, by doing a lease option. I'm not assuming the note.
I'm just leasing it and optioning the property.

Now one thing you will want to check when you do this strategy is you'll
want to get a copy of their note, their mortgage, to see if the due on sale
clause considers a lease option as a trigger for due on sale.

Sometime the bank will write in there that you have a lease option of five
years or more. That's considered a sale of the property. Okay, well once I
know that that means my lease option should only be no more than 4
years, 11 months and 29 days.

Or my lease option is for no more than 4 years, 11 months, 29 days and I
have the right to assign this lease option to anyone I choose. So, in 4
years, 11 months and 28 days I assign it to another entity which I happen
to control and start all over again.

All right, that's perfectly fine. But you just need to know what constraints
you're operating under. So, anyway own nothing, control everything.
This is really especially key on turnaround situations where the owner
doesn't have the $50,000 capital to put into their property and the
property's going in a death spiral.

Because they can't do their rehab it has more deferred maintenance, more
deferred maintenance that are losing more tenants. So, they lose more
tenants. They have to lower the rent to attract tenants.

As they lower the rent they have a lower quality tenant. And they death
spiral down and down, down. It's only a matter of time until the owner
loses it. So, you come in and position yourself as the person with the
money. It's not your money, it's just your ability to get access to money.
And you have a plan to turn this around.

Now in your option you may, part of your option you may say I'll tell you
what, I'll give you, you know, 10% of the equity above $1 million for the
right to have access to your property.
You may have to negotiate that with your seller, but so what? You're only
in it for $50,000. And on the lease, your lease could be I will simply pay
your mortgage every month.

My lease payment will be the cost of your mortgage. I'll write a check to
the mortgage company and make the note every month. I'll do all the
repairs. I'll do all the management. I'll do all the operation. I'll pay the
taxes. I'll pay the insurance.

So, you're going to have, you're going to stop bleeding every month with
no hope to go to, you know, zero cash flow instead of negative every
month and a chance that when I get this thing above $1 million you're
going to get, you're going to share in some of the increase that I make.

And people are going to, you're going to find sellers and owners of
businesses and real estate and other distressed assets that will do this deal
all day long in today's environment because they're extremely motivated
and flexible because if they're listening to the news they think the world is

They think it's impossible to get new financing on this property. They've
already tried talking to the brokers and the brokers have turned them all
down because they think it's impossible to do as well. That's your
opportunity by being able to engineer these own nothing, control
everything type of transactions.

Now I want to show you two variations on this. First one, we talk about
barter. We're going to talk about the importance of barter. It's going to
become more and more important in this economy.

So, this is the own nothing, control everything with the barter variation.
It's the exact same deal. You see I got the same scenario up, but the
private money investors disappeared.

I still need to have the rehab done. I still need the rehab done. But instead
of raising $50,000 cash to go pay a rehabber I'll go strike a deal. I'll barter
with a rehabber.

I'll tell you what. I've got this great deal. I got it tied up. I got it under
control. You need $50,000 in rehab. It'll only cost you $10,000 in
materials plus your guy's time. If you'll come in and do the rehab, do it
according to my specifications I'll give you X percent in this deal.

Can you do the rehab and within 12 months I'll flip, I'll sell this thing or
I'll buy you out. And you're going to make, you know, $50,000 in the next
12 months on $10,000 in materials and $15,000 of labor that you're going
to donate.

You're going to be able to do those deals. You are absolutely going to be
able to do those deals. So, now you're into it for nothing. You know, it's
about, you know, predisposed, you know, as the entrepreneur we use the
time, talent and resources of others.

Those resources are not limited to cash. That's why barter's so important.
Those resources could be there, you know, their expertise. It's a little bit
of their cash because they're buying the materials. So, I guess you have
raised cash, but it's, you know, it's his cash.

So, there's, I mean there's a killer strategy right there. Doing these deals
where there's something, you're just having to, you know, arrange barter
agreements. There's no cash trading hands.

Remember I asked a question. Who, you need to figure out, who are the
people that are predisposed to see me be successful? Well clearly this
rehab contractor would be.

Now there's one other variation I want to show you. This is the own
nothing, control everything. This is the variation where we're going to
replace the seller. Remember earlier on tonight I talked about the use of
1031 exchangers as investors in our projects.

1031 is usually, you know, think of it as if I'm selling a property, if I'm
selling my property I'm going to sell it to a 1031 exchanger. That's fine.
But I can use 1031 exchangers as investors in projects that I want to

So, let's look at it. Here's the same scenario. I put the private investor
back in place. It could be the rehabber for that matter. So, I've got the
same property. I have the same lease, the same option.

In this example I'm going to raise $50,000 from a private investor to pay
for the rehab, but it also could be I could be doing barter. But instead of
doing the lease and the option with the current owner what I do (is get) the
owner to sell the property to a 1031 exchanger who's going to pay all cash
for the property.

Or it could even be partial cash and bank financing. In either event I'm
going to replace the seller with a new buyer. And then I put in place my
lease option with the new buyer, the 1031 exchanger.
Okay, so that's a way that I can use 1031 exchange funds to invest in my
projects where I retain control. The advantage (you do the) 1031
exchanger, there's a lot of cash in that deal, you can negotiate really great
prices by the ability to buy someone out for all cash and get discounted

So, in working out an arrangement where I tell the seller I'm going to pay
all cash for your property. I'm going to get the lowest price possible.
Then I find a 1031 exchanger to buy it.

And as part of my agreement with the 1031 exchanger I'm going to lease
to option it back from him or her, make the improvements and then turn
around and sell my option or buy out the 1031 exchanger, another very
powerful strategy.

So, what are the advantages of this, this own nothing, control everything
strategy? People to me own nothing, control everything is like the ideal
application of the raising private money formula because the owner is
predisposed, or the, you know, the owner is predisposed to do the deal.

Or if you bring in the 1031 exchanger they're predisposed to do the deal.
They've got to buy real estate. The owner has total control because I don't
own the property. They own the property. I'm just a tenant. If I miss a
payment all they have to do is evict me. There's no foreclosure. I'm just a
tenant. I'm the master tenant, but if I miss a payment it's just an eviction

There's not a foreclosure process. They have control. It's low risk because
they're not operating the property. If anybody, you know, there's an
accident on the property whoever's operating it is liable. Well the owner's
not operating it. My entity is operating in it, but I'm protected through my

But I've removed the owner from, you know, one degree of separation
from any risk of operations. And I'm not the owner, so I don't get a tax
depreciation credit. The owner gets the full tax depreciation credit and
they're not doing anything. They're totally passive.

And in this case that $1 million has depreciated over 27 years is . They're
totally passive.

And in this case that $1 million has depreciated over 27 years is $37,000
per year, tax depreciation credit they can put on their taxes. And if they
are declaring themselves as a professional, as a real estate professional
they can deduct that full $37,000 that year, each and every year.
The other thing about this, we're talking about FCC restrictions. We, I
alluded to this early on. I'll talk about it in full detail in session 4. But one
of the things we cannot do under the FCC guidelines we cannot advertise
to raise investors.

I can't go just put an ad on LoopNet Big Board which says, "Looking to
raise money." I can't go put an ad in the newspaper looking to raise
money. I can't broadly advertise. I have to work within my defined
group, within my network. I'll explain that more on session 4.

But if I'm selling a property I can advertise any way imaginable. I'm
selling the property. I'm selling something. So, when I'm using this
variation of bringing in a new buyer, say a 1031 buyer, then I can go
advertise property for sale, turnaround situation, earn passive income
doing nothing, totally secured by 100% control of the property.

I can advertise that on LoopNet Big Board. I can advertise that on LA
Times. I can advertise that in the Wall Street Journal, anywhere. I'm
selling something. I'm getting the same result. I still have control, but I
can advertise broadly and be still within full guidelines of (Externing)
Exchange Commission. I hope you guys see that. That to me is really,
really powerful. Own nothing, control everything.

Okay, with that now let me take some questions. Let's go back up here.
Let's go back. Oh, excuse me. Let's do this. So, let's see. If you have a
question you can type one in. And hang on because when we finish the
questions I'm going to talk about money madness contest.

So, our questions, okay, (Rich) says, "Lance, my hesitation has been FCC
compliance on" "My hesitation has been FCC compliance

Well the example I just showed is if I'm asking for referrals there's no
problem there. I didn't advertise. I'm asking for referrals. And they're,
you know, they're giving me names of people. These could be
intermediaries they're giving me names to. These could b professional
funding companies.

The one thing to keep in mind is also the FCC is in place to protect private
investors, individuals. If you're working with a hedge fund or an entity
that's different.

But in any event in LinkedIn they're (making) simply giving you referrals
to people to contact. So, that to me is not advertising. Now I'll tell you
right now I'm not a securities attorney. If you have any questions about it
contact a securities attorney, but the example I saw go call this guy.
          And when you go through that list what you're going to see many of those
          referrals are to like funding companies, brokers, et cetera, intermediaries.
          So, yes, somebody had a question.

(Rich):   Lance, this is (Rich).

Lance:    Hey, (Rich).

(Rich):   Hi, just to expand on that what I, the reason I mentioned that is I see
          people going out in these groups, you know, and they're posting the details
          of the deal. That's where I wasn't sure if that was crossing the lines or not.

          I mean they're saying hey, I've got, I'm looking to fund an apartment for,
          you know, similar to what we saw there earlier. I, that's where I guess I'm
          confused as to where the line's drawn on that.

Lance:    Well go look at that example I did tonight and scroll down. Go to the
          search, search and go to the box, search answers and see the responses that
          came back. Most of those responses, and not all of them, I didn't go
          through the whole list, but were to like brokers and intermediaries and to
          funding groups.

(Rich):   But there's no problem with the way (inaudible)?

Lance:    No the, where there's going to be a problem is if you're advertising and
          raising money from, you know, let's take an extreme, you know, senior
          citizens because you're running ads in the newspaper and you're soliciting
          senior citizens.

          The way I saw him do it he's asking for referrals to people who could help
          him fund a deal. And he, this is a professional business contact network.
          This is not intended for business contacts. So, they're getting him other
          business contacts, brokers, intermediaries. To me it's perfectly kosher.

(Rich):   Thanks for the clarification.

Lance:    I hope that helps you. Yes, to me, think, (inaudible) just a minute,
          LinkedIn is a business network, like a business network of people who
          can, you know, who are in the business of raising money.

          That's the way I'm looking at it. It's not going out and advertising to the
          general public. It's, you know, dealing with business professionals who
          are in the business of matchmaking money with deals. That's just normal
          business. Yes, who had a question?
(Carl):   Lance?

Lance:    Yes.

(Carl):   What's the name of that Web site linked?

Lance:    LinkedIn.

(Carl):   L-I…


(Carl):   (Inaudible). Okay this, I'm going to write .com, enjoyed it. I will talk to
          you Saturday.

Lance:    Okay. Thanks, (Carl). Okay I had a question came in from (Steve),
          "What do you offer the private money lender and how do you secure them
          on the lease?" Okay this is on - great question, (Steve) - this is on the own
          nothing, control everything.

          Let's go back to that real quick. This is, I should have said this. Thank
          you for pointing that out, very good question. Let's go back here. (Where
          is) the first example?

          There, the protection, you know, what's the protection for the private
          investor because we can't have, they don't, there's no lien they can put
          against the property because we don't own the property, although trickily
          speaking you probably could negotiate with the owner that they allow a
          lien on the property since you're bringing money into it.

          But let's say they don't agree to that. Their collateral is basically going to
          be a lien against the option because what we do own is the option. And
          the value has been created in the option.

          As we raise the value in the property we're raising value in the option. So,
          you can have a lean between the private monies against our option. And
          that can say that all, you know, all the private investor's money gets paid
          back first upon the sale of the option. And then the profits above that are
          split with me and the private investor. It can be as simple as that.

          So, there's two ways to it, (Steve). Number 1 you certainly would have a
          lien between the money and the option. And you could negotiate with the
          seller that as part of your willingness to come in and fund this deal, I'm
          going to bring my money there, but I'm going to want a lien against the
          property to secure the work we're doing on your property.
          So, I'm also going to want a second lien. I want you to agree to allow a
          second lien to be attached to your property for the amount of the money
          done for the rehab. You could do one or both of those ways to tell you the
          truth - great question. Okay let's get my - okay that was (Steve)'s

(Rich):   Lance, this is (Rich) again. Could I piggy back on that?

Lance:    Yes, please.

(Rich):   With the own nothing, control everything is this applicable if you're out of
          state? I mean can we negotiate these types of things with a rehabber out
          of state or do we have to actually be near the property where we can go in
          and talk with the rehabber and, you know, point out the things that we
          want to do?

Lance:    Well you could, to me you could do it anywhere in the country. And you
          can fund a rehabber that is good and recommended and you trust. And
          you might want to choose to have the rehabber do it. And you also might
          want to have a third party inspector be your second set of eyes that keeps
          an eye on things.

(Rich):   Okay, thanks.

Lance:    That would be the (adult suspenders) approach. Okay, (Scott) had a good
          question came in, "What's in it for the 1031 exchanger in the replaced
          seller variation?" - great question, (Scott).

          Let's go to that one. Okay here the 1031 exchanger, what's in it for them
          is we're going to negotiate - this is a good point. I should have mentioned
          this. Thank you.

          We're going to let them have, you know, part of the upside because my
          option in this case let's say they put $1 million in to buy the property. My
          option to them would actually be modified.

          It would say I can buy this property from you in year 1 for $1.1 million.
          In year 2 I have to pay you $1.2 million. In year 3 I have to pay you $1.3
          million. So, they could enjoy the appreciation gain as well by the fact that
          I'm raising the option price over time.

          Also I am paying them rent. If they paid, if they use their $1 million cash
          to buy the property I could say okay, my lease payment to you is I'm going
          to pay you $50,000 per year. That's 5% per year. So, you're going to earn
          5% on your money from cash flow plus 10% per year on the option prices
          going up.
So, combined you're going to have a potential of 15% gained per year.
And even if I don't exercise the option you're still earning 5%. And you're
going to own all the equity that's created in this deal.

Plus, and from a practical matter, whatever price I'm paying it for is going
to be less than what the property's actually worth. So, all the, let's say I
got in under contract for, you know, option for $1.1 million. It's worth,
excuse me, I got an option for $1 million. It's worth $1.1 million before
we do anything. So, there's $100,000 extra equity that belongs to the 1031
exchanger if I don't do anything.

So, I hope I answered the question. The 1031 exchanger is going to get
cash flow from the rent payments I make to them. And they're going to
get, you know, appreciation when I exercise the option.

Okay, let's go back to the questions. Okay, (Scott), so thanks. Yes, good,
(Scott), thank you. (Thomas) says, "How do you get the broker do a
conference call between them, you and the seller so you can ask the seller
to do the lease option?"

Well I would just simply write up a letter offer, send to the broker, and
you can make a condition of the offer. And I want to present this to the
seller. I want a chance to talk to the seller. You could simply do it that

I mean brokers are obliged, required to pass on all offers to their clients. I
mean we had, we were doing this on a deal earlier this year. And (Jim)
(inaudible) just kind of bypassed the broker and went and talked to the
seller directly when (Jim) was making his offer.

Don't get too hung up on that. You can always contact the seller directly,
especially if we're talking about the stress situations. These are going to
work best in turnaround plays, work best in turnaround plays.

You know, worse case if a seller, if a broker won't pass your offer on I
wouldn't have the hesitation to pick up the phone and calling the seller,
(mending) a letter. Don't let that hold you up.

Okay, (Tom) has a question, "If the 1031 exchanger has more money than
the property is worth would he/she have to pay taxes on the amount not
used in the new purchase? I ask this wonder what might hinder the 1031

(Tom), you're thinking too much. You're thinking of all the ways your
deal's not going to happen. You're making it too hard. If they have more
money to exchange in their deal they're simply going to split it into two

But if they couldn't split it, yes, they have to pay taxes on the amount they
couldn't move. We have an apprentice right now who's buying, you know,
two properties because he needs, he's got 1031 exchange money he's got to
move. But don't over think this. Don't over think this.

Okay, (Zafar) saying, "Can this be done for a business that does not have
any real estate?" Absolutely, you can do the exact same thing. You can
lease access to a business, have an option to buy it. You can absolutely do
this on a business, (Zafar), any kind of, virtually any kind of asset,
certainly an income-producing asset where you can increase the value.

But you can have an option to buy a business. That's the best common
way you, that's one of the ways you get control of a business with no
money. It's the same exact strategy. You do what's called an earn out.
You do what's called an earn out.

In the analogy of a business you would come in as, you know, a lease on
the business. You start running the business. You have a option to buy it
at a certain price.

Well you simply use your ability to generate more sales on the business to
increase the value of the business so you can use the cash in the business
to buy this current owner.

This is actually more common in business. This is more common in
business than it is in real estate. It's called a junior partner turnaround in
business, junior partner turnaround, or junior partner takeover. It's more
common in business than it is in real estate, so absolutely.

Okay, okay this one I answered. All right, so let's do this. We got,
covered, I got all the questions? And so let's go back here. One more
point I want to cover. Where's my, okay money madness contest, money
madness contest.

So, we have, you know, we should have received, everyone should have
received two documents. There's one email, two documents that went out
on Friday. Wait, (inaudible), excuse me, it went out on Wednesday.

It went out on Wednesday. It's one email and it had the contest rules, was
it an, a download and the non-disclosure agreement was a download as
well. If you want to participate in the contest you download the contest
rules, you sign it and fax it in.
             And when you fax it in we sent you an email back confirming
             congratulations, you're in the contest. So, if we received your signed
             contest rules you should have received an email.

             If you sent in the contest rules and have not received an email then I want
             you to contact my office because it means spam, (inaudible) got in the way
             or something happened.

             So, if you signed and sent in your contest rules and you did not get an
             email back by Friday of last week, if you sent it in last week, then contact
             my office. Email us at and we'll get that worked

             If you wanted to use our deals as part of the contest then you, we had to
             sign the non-disclosure agreement and fax that in. Same thing, if you, you
             know, if you, if we received a signed non-disclosure agreement you would
             have received the deals by Friday of last week. It was a zip file of eight
             deals that you would download.

             So, again if you sent in a signed non-disclosure, but did not receive an
             email with the deals I want you to also contact the office and we'll get you,
             to get those to you.

             All right, so any questions on that on the contest and/or any feedback from
             anyone that's in the contest? No questions on the contest? Let's see I have
             a question come in from (Patrick) (inaudible).

             (Patrick) says, "The summary sheet has just enough information for an
             elevator speech you can't present to an investor." Okay, (Patrick), come
             on the line. Let me understand exactly where you're coming from. Press
             star 6.

(Patrick):   Hey, Lance. This is (Patrick).

Lance:       Hey, (Patrick). So, you're talking about the summary sheet…

(Patrick):   The summary sheet, we don't have any numbers or anything to let us know
             the deal is a good deal. So, you basically something, you don't have any
             details. So, it's basically something you can't say to somebody close to
             you, or not enough to present to somebody you don't really know.

Lance:       Well give me an example. I'm not - give me an example.

(Patrick):   Okay I look at all the other sheets they sent. In other words there's no
             breakdown to show that these numbers are actually correct.
Lance:       That's right because here's, the job…

(Patrick):   (Inaudible).

Lance:       …here's what you want you to do with it. You're job is you're bird
             dogging for these, the owners of these deals. They are intentionally not
             giving out those details because they're not going to give out details to
             anyone unless a non-disclosure agreement is signed.

             So, here's the process. The task is to go approach predisposed sources and
             get their interest and say I can hook you up with the principles and provide
             you all the details if this is the kind of deal you can fund. But I'm going to
             need to hook you up with them. And they're going to have you sign a non-
             disclosure agreement and then they'll provide you all the details you need.
             We're intentionally doing it this way because…

(Patrick):   Okay, that makes…

Lance:       …you see, these are live deals. They don't want these deals going out
             without NDAs being signed.

(Patrick):   Okay.

Lance:       So, really it's using the information to gauge if the predisposed investor is,
             first of all are they predisposed to do this kind of deal? That's really the

(Patrick):   Okay.

Lance:       And then your job is to broker a…

(Patrick):   All right, all right, that clears it up.

Lance:       Does that help you? Okay good.

(Patrick):   Yes.

Lance:       Thanks for the question, (Patrick). And that's true for everyone. That, let
             me make that, yes, let me kind of share with you the sensitivity. These
             are, these eight deals are live deals that are money is being raised for, the
             addresses are not put on them for a reason. Each person you have to sign
             an NDA to get this information.

             And in respect to the people who are letting us, you know, borrow their
             deals we have to protect that. So, we really don't want any, each of them
to a person doesn't want anyone representing their deal as the expert
because they're not.

What they want is the contest participants, those of you that are using their
deals to kind of be like bird dogs to go flush out investor sources that are
expressing an interest. And then arrange a direct, a (telecall) with the
holder of the deal.

And then the deal holder's going to say great, we'd love to talk to you. I'm
going to send you a non-disclosure agreement, ask you to sign it before I,
and I'll give you all the information that you want to know.

That's the way we're doing it. That's the rules for everyone. That's the
rules for everyone. So, I hope you, everyone can appreciate because it's,
you know, out of their graciousness, you know, giving us these live, hot
active deals.

Okay, (Jeff) said, "I liked the elevator speeches on the deal sheet." Thank
you, (Jeff). I sure do appreciate that. (Scott) said, "The deals have large
spreads in the returns, 6% to 15%."

Yes, it is whatever, that's just, I left that. There was no constraints put on
it, just left it to each individual owner of the deal to express what they
were looking for. So, you, now you guys get to pick and choose which
ones you want to represent.

There's also varying amounts of money in there for them. Some of them
needed I recall earnest money of $70,000. Some of them needed $10
million to fund the deal.

So, that kind of gives you a chance to go try different predisposed sources,
right? You're not going to approach an intermediary on a $70,000 earnest
money deal, but you will about $10 million. $70,000 is something you
could do with the, you know, your real estate club or your own local

Okay, let's see. (Patrick), (Rich) had a question, "Lance, (do) you have a
breakdown of what kind of split we have for the two categories?" What
kind of split we have? You mean in terms of the participants? Well
people haven't declared yet. They haven't declared yet. So, we don't
know. They're going to declare when they submit their entries.

Okay, any other last questions? (Kent) said, "Great info tonight. Thanks."
You're welcome, (Kent). Thank you for your feedback. Any final
questions, comments before we call it a wrap for tonight?
(Zafar):   Yes, what was the typical split (deed) for, you know, the private investor
           that's putting in the $50,000 on that $1 million deal? What do you think
           will be a half-decent split that a private investor would take on?

Lance:     Oh, on the own nothing, control everything one?

(Zafar):   Yes.

Lance:     And who's this asking the question?

(Zafar):   Oh, (Zafar) from Canada.

Lance:     Oh, hey, (Zafar). Well you could do it, it really can vary. But it could be
           something like, and depending upon how much opportunity's in it for you,
           you would structure it certainly as, you know, all, the first 50,000 proceeds
           to straight to you to pay you off first.

           You're always paid first for the money you put into the deal. And then
           you're going to earn, I don't know, 10% return, 15% return over, and for a
           12-month project.

           It's kind of, it's what the market will bear. That's why we start, we're
           talking about marketing for money in the next couple of sessions. We're
           going to want to set an expectation. What are they expecting to receive?
           What are they looking for?

           You know, in some places it could be, you know, you could always go
           with the proposition how would you like to double your money in the next
           12 months. But you're probably giving too much away if you go out and
           do that.

(Zafar):   Okay. All right, thanks.

Lance:     You're welcome. Yes, I mean the answer to that is really what's the
           market going to bear and the, you know, the amount of risk in the deal too.

(Jim):     Hey, Lance.

Lance:     Yes, hey, (Jim).

(Jim):     Hey, how are you doing?

Lance:     Great. How are you?

(Jim):     Real good, real good. Hey, what I've been doing here recently is using
           your investor profile sheet. And when I talked to the investor, I mean
         obviously the last thing I tell them about is the return on their investment.
         What I talk about of course is the low risk in the control.

         But then I ask them some questions about what kind of deals they've done
         in the past, what kind of returns that they received, what are they receiving
         now on their money and then what would they expect to receive on the
         new deal like what I'm about to propose to them.

         And that puts them in the position for, you know, they get to answer their
         own question. Now I've already set the stage for their expectation based
         upon what they previously have been earning, what they have expected to
         be earning in the past and what they earn now.

         So, that kind of sets the stage for, you know, if it's 8%, 6% or 2% or
         whatever it is. I'm getting a good feel for what type of investments they've
         been doing in the past. And now I've got an idea for what they're going to
         be asking for now.

Lance:   Precisely. That's exactly (inaudible). Thanks, (Jim). I mean and also
         keep in mind everyone. Look at the investor profile sheets. I alluded to it
         last week, showed you one on the screen.

         And that investor, talk about the strategy of preeminence and
         understanding our investor. Become a student of our client. One of the
         questions on the investor profile sheet is, you know, what real estate
         investments have you done in the past, how much did you earn and what
         do you consider your alternatives today?

         Well they may have earned 8% or 10% a year ago, but if asked the
         question, "What do you think your alternatives are today?" they might
         blurt out, "Well I feel great. I feel lucky to get 7%."

         Oh, well lucky day for you. I have one paying 7%. So, today's your lucky
         day. So, it's really, I mean just like (Jim) said. It's understanding what are
         their expectations.

         I mean while we were talking (Thomas) just said in a comment, "I spoke
         to an associate whose father is a banker and learned that the FDIC is about
         to double the fees that banks pay. This will probably lower the interest
         rate CDs are paying even lower. It sounds like good news for us."

         Absolutely, (Tom), spot on. So, you know, the highest CDs I've seen right
         now are like 2.5%. And I think they're going to 1%. So, you know, great
         news, great news. The alternatives are looking even bleaker.
          So, that's, you know, when someone asks you what they expect to, you
          know, return is always going to depend. What's their reference point? I
          can tell you right now sitting in a real estate club meeting, you may have
          heard this back in I think it was January, and the hard money lenders that
          would, you know, demand 18% a year ago were happy to get 8% today.

          So, it's, you know, it's all relative. It's all relative. And especially if
          someone's who's shell-shocked coming out of the stock market, anybody
          that made 1% in the past year actually made 41% on their money. So, if
          they were not in the stock market - so, there's, you know, just, that's why
          we want to ask.

          Okay, thanks for that, (Tom), great point. Glad to hear that. It is good
          news for us. All right, (Rich) had a comment, "Excellent information
          tonight. Lance, thanks so much." Thank you, (Rich) for your
          contributions. Great input - thank you for participating in the process

          (Samuel), "This was a great session with the internet search and own
          nothing, control everything." Thanks, (Samuel). (Samuel)'s actually, he's
          got two deals he's working on right now. Thanks for that.

          Oh, we had one question that came in from (Jerry), "If one of our sources
          decides to fund the deal what's in it for us?" The money contacts you
          make, the money contacts you make. You, no one's going to paying you a
          commission or a finder's fee to fund these deals because number 1 the
          FCC doesn't like that.

          And I don't want to put anyone in a position to do that. The whole benefit
          here is in every money source that you make you've got to realize you
          cannot approach money sources without having a deal.

          So, if you have your own deal go use that. The whole value of this contest
          is to get everyone in the game with real life money sources that are yours
          for life. But they're not going to talk to you unless you have a deal. You
          can't go to one with some theoretical, hypothetical deal. Well that won't
          work. That's why we equipped you guys with the deals for those of you
          who are interested.

(Rich):   Hey, Lance. This is (Rich).

Lance:    Hey, (Rich).

(Rich):   Hey, just following up on that. So, just making sure I understand this
          right. If we approach a deal to one of our referral, to one of our family
          friends, it's not appropriate for us to pay them for that for that referral?
Lance:    Give me the scenario again, (Rich). Say that again.

(Rich):   Okay, say that, you know, I, my brother finds a source for me. And I say
          hey, you know, if you find any people that are willing to invest, you know,
          we'll give you $500 for the referral, something like that.

Lance:    You really cannot do that except in Texas.

(Rich):   Okay.

Lance:    Only, but, only in Texas interestingly enough. You can do it in Texas, but
          not any other states.

(Rich):   That's if I'm in Texas or…

Lance:    Both. It has to be, the deal has to be in Texas and the investor has to be in

(Rich):   Okay. All right, thanks.

Lance:    You're welcome. You're welcome. So, yes, I mean they don't like paying
          commissions to anyone other than a licensed, you know, securities agent.
          That's the way they do to protect, you know, the little old lady from
          having her money taken off from (her). And when you got guys like in the
          news today made off for 25 years, operated without the FCC even
          catching on. That's, you know, a big spotlight put on stuff like this now.

          Okay, thanks, (Zafar), on your comment. Thanks for the excellent
          information. Lights are going on everywhere, great to hear so far. So,
          that's the whole purpose. I want you guys to - money goggles are on now.
          See the world of abundance.

          All right, let's do this. We're going to call it a wrap for tonight. We're
          coming up to the top of our third hour, great session everyone. So, here's
          the deal. We are - it's the end of this session.

          We're going to have our bonus Q&A session this Saturday. It would be
          nothing - there's not going to be any instruction. It's going to be all Q&A.
          This is your time. If you want to bring your deal in, you want to talk
          about how to structure your deal, you want to have some clarification
          questions on any of the content, any of the skill set side, it's going to be
          your time.

          It's going to be this Saturday at noon. And then we'll have a regular
          session next Monday, same time. And next week we'll be talking about
         structuring the deal and how to create the return, how to structure the deal
         for control, for low risk, how to structure the return.

         Some of the questions are starting to allude into that. We'll talk about
         exactly, you know, if I only get so much equity how much equity do I give
         them? I'm going to show you how to do that.

         And also we're going to start talking about marketing for money. So,
         when you exit here there's going to be a brief survey. I appreciate any
         feedback you can give us on this session.

         And I read these, every one of them. I'll be reading them tomorrow when
         I come in. I use it to incorporate back into the program here live. I want
         to congratulate everyone who contributed tonight and the questions.
         That's part of the beauty of this process.

         Do your assignment and come back next week ready to report what you
         discovered. This thing, the power of this mastermind group is when we're
         all sharing resources. (Inaudible) some people have asked - you've seen it
         start happening.

         You're experienced what's working, what's not working. This is a
         dynamic field. And it's a world of abundance. I want you to divorce this
         scarcity mentality. (It) is unlimited money out here.

         I've shown you, you know, more sources than I've ever shown in any one
         setting tonight. And I'm looking on you guys to take that, do your
         assignment and go see how many you can find just on the internet this

         Have a great week. Work on the money madness contest, good luck with
         that. And if you need questions send them to us email, and look forward
         to talking to you guys next week. Have a great week everyone. Good

(Jim):   Good night, Lance.

         Lance: Good night, (Jim).

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