"Stunning" Deals Come... and Go

We're letting a deal go in our area. I know Peter is a little disappointed, laugh.

Current CAP is actually 12.03%, PROFORMA CAP is: 13.06, and the CAP less Rite Aid is 9.14%, price tag is 8.9 million. My sense if we could of put an IQ Money Team around this we could of gotten it for 7.9 million. Properties are valued and refinanced in our area at 6 CAP.

We could of acquired, optimized probably in less than 90 days, refinanced and took a nice GOBB of cash out along with returning principle. The GOBB of cash would of been loan proceeds which are not taxable. Usually you have to work at optimizing for the $$'s to work.

I am inspired to make a new spreadsheet because this has surfaced. The IQ Money Team plan does not require "stunning" deals like this in order for it to work and give double digit returns safely.

Everyone could of gotten their principle out probably with a few hundred thousand dollars as an "equity tap" bonus and -- AND - long term equity effects and residual income long term. In this case another equity tap in 5 years, and/or exchange it up from something bigger/better rolling the equity forward.

Today is the last day for us to get an offer in. The downside of a "cash" buyer approach is you have to be able to move fast and stand behind your LOI. I'm not into tying up someones property and then going out to try to "fund" it. I know that is what is taught, but it seems to waste a lot of time for sellers.

It is part of creating the world I want to live in. I also what the IQ Money Team to develop a reputation so that when we make an offer, the seller/brokers know we are serious and can do what we say we intend to do.

I created an LOI system last month for our team. It doesn't make sense for me to tie up earnest money making offers while we are negotiating. When it is clear we have agreement, that is when I'm open to putting $$ up. Most sellers and brokers are wise to the various escape clauses. I have my own techniques for dealing with contracts anyway. Most people don't read them properly any way. At the end of the day, a buyer isn't going to put earnest $$ at risk unless they are ignorant or something. This puts a burden on Sellers to carry properties while Buyers get their funding together.

Working as a team - with a cash buyer status - we can cherry pick the very best deals pretty much on demand. Working as a team gives us a powerful edge.

My Commercial Lending Contact at US Bank sent he a list of tenant and tenant types they the bank view as "High Risk", U.S. Bank you may have noticed is never caught up in scandals and so far has been financially stable compared to other banks. Anyway, I've known him for several years and he always gives me the straight scoop. We now have another level of screening in our optimization process.

What a lot of people do not understand is that most Commercial Properties - the current owners "bail" when they have 5 years or less on their lease contracts.

Why? Because they want to get their principle out and move it somewhere else. This is irrelevant to our dynamic approach.

Example: lets say we bought the Portland, Oregon area deal that surfaced. BAM - we own it, its cash flowing and everyone is making $$, we optimize it and get all the principle out plus a few million extra for everyone leaving 25% equity in the property.

MOST PEOPLE MISS THIS, until I point it out to them.

Where is your principle funds? In the investment or in your bank account?

It's liquid in your bank account. So, lets say that over the next 5 years, the economy tanks further, and this property becomes totally vacant. What is the risk? (nothing)

What happens then? We deed the property back to the bank, and then turn around and buy it from them (CASH) as an REO and re-optimize it. Folks are missing the boat because they do not understand the dynamic vs. static investing. Everyone is afraid to "risk", yet they set themselves up for being in the riskiest positions because they have been taught to think a certain way.

There is so much more we can to as a team that we can do as individuals. If someone out there can back this 8.9 million dollar deal let me know, it is a shame to leave millions of dollars just sitting on a table waiting to be simply picked up.

I told Peter not to send in an LOI because we can't stand behind it with any kind of integrity at this point. All I needed for this was to 5 million IQ Money Team Members to have a 10 million pool available. I'm going to add a "quick turn" page to my analysis spreadsheet.

It is interesting reading all the news about Off Shore tax shelters. I know how to shelter up to 50% of tax liabilities in 1.2 million dollar increments. Folks have to have a $500,000/yr minimum tax liability for our totally blessed by the IRS approach. That is a net approx. $400,000 of tax savings per every 2.4 million dollars of taxable revenue.

Now to re-due our IQ Money Team Website (laugh)

What is interesting to me - is our team I sense is going to do better than the 5 Year averaged 15% Annual ROI projections.

I only need 3 $5,000,000 financial partners to do something amazing for all of us. The fun and profit we could all have together. It is going to be fun.

If you don't have $5,000,000 capacity, that is OK, let me know who you are, what your capacity is and what your objectives are. I personally don't mind working with sophisticated investors, or even unqualified investors because I 'm not selling shares in anything.

What is very clear to me is that if a team than can pull together $15,000,000 of capital quickly and make a killing during the next 5 years with a dynamic vs. static approach.

Namaste'

- David