Breezopoly, LLC

Hello there my friend. My name is Ron LeGrand.

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On this CD I’m bringing you a very special message about how you can greatly increase the value of any investment capital you or your IRA currently has in a CD or Money Market, Mutual Funds, or Commodities or stock market or most anything else.

This message is about creating wealth with passive investments secured by real estate for a safe and very attractive return. Most people try to generate a retirement income by following conventional wisdom and letting other people control their money, and make decisions for them. By the time they need the money they discover they’ve barely kept up with inflation. The cost of living has risen faster than their investment.

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This CD is not about conventional wisdom. Show me one super wealthy person who earned his or her wealth that lived by conventional wisdom. If you do things like everyone else you’ll have to be satisfied with low returns following the heard mentality produces. Secondly, just to clear the air. I have nothing to gain by bringing you this message. It’s a service I provided to the person who gave you this CD in an effort to help him or her better explain to you why you may want to consider joining forces to create a mutually beneficial relationship.

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I’ll explain more in a minute, but before I do, I suspect you’ll want to know who I am and what qualifies me to be the messenger.

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About 30 years ago I was a mechanic looking for a way to make more money and get out of the job trap. After a long search and attending a seminar one weekend I decided that becoming a real estate investor was what I wanted to do. I made this decision for a lot of reasons that have no bearing on the purpose of this CD.

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I started with nothing and over the next few years became a multimillionaire buying and selling single family houses, and keeping a few along the way.

Eventually I got so good at what I was doing I chose to begin teaching others the tricks of the trade. I learned these lessons by systematising the business and making it easier. As of this recording I’ve bought almost 2,000 houses and I’ve become the nations leading authority at what I do.

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We’ve taught thousands how to create huge incomes. I’m proud to say we’re making millionaires all over North America and some parts of the world I can’t even pronounce.

Now, I’m not an attorney or an accountant and you should know that the information on this CD comes from almost 30 years of field experience, not from a class room.

In the beginning of my career I discovered a little known method of acquiring capital to buy and rehab houses so I could use them to make a profit. I learned this was not only good for me because it made my job easier, but it was also good for the folks I built business relationships with. Those people were absolutely ecstatic with the results. They saw their money grow at an outstanding rate and when they went to bed at night they could care less what happened to the market that day.

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The program was very simple and in fact completely hands off for them. They didn’t have to watch the stock charts or call their brokers or wait for the next crash. My job was to go find a good deal on a piece of property that needed rehabbing and agree to buy it on all cash wholesale price. It didn’t take me long to learn there are a lot more of these properties available than I cold possibly handle. I was buying them at a deeply discounted price because they needed a lot of work. I call them “Ugly Houses”. I also learned I could do a nice rehab job for a fraction of what some people think it would cost.

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The problem was banks and other lending institutions didn’t want to lend money on houses that were in poor condition. To make matters worse, I was self employed making hard to borrow. If that wasn’t bad enough, even if I could find a lender to make a loan they all wanted a substantial down payment which would severely limit the number of houses I could do at a time.

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So I found a better way... I started talking to folks with a little money to invest, and created a program where they could lend me the money to buy and rehab the houses secured with a first mortgage on the property. This became a very lucrative investment vehicle for many of these reasons.

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First was the safety issue. You see, I’d only borrow 60-65% of the after repaired value of the house. This left a lot of equity as a safety cushion incase of default. Didn’t take my lenders long to figure out the worst that could happen was if I didn’t make the payments they’d wind up owning the house at a deep discount. If that happened they could hire a Realtor to sell it and make more than their interest. So it wasn’t a bad thing.

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Next, the higher return is very attractive. You see, I paid my lenders a lot more than any CD. That was the least they could expect to make regardless of what was happening in the stock market. A high return day in and day out, they could rely on it. This was very attractive back then and it’s still very attractive today.

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You may be wondering why anyone would be willing to pay a higher rate like I did, but I mentioned earlier the cost of money wasn’t my main concern. The availability was more important because if I didn’t raise the money to buy and fix the house I couldn’t sell it and make the profit. I looked at my lender kinda like a silent partner. I gave them a good dependable safe return secured well by real estate. They supplied the short term capital to grow my business. It was a win, win situation for everyone.

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Later I became a mortgage broker and have since made hundreds of loans to Real Estate Investors using my own money and that of others

Incidentally, making high interest loans is nothing new. There are companies in your city doing it right now and have been for over 40 years or more. It’s a multi- billion dollar industry. They survive on lower loan-to- value ratio loans made to owner occupants. Their niche is people who want to refinance or purchase a home to live in, but can’t qualify for a nice low interest loan. Our niche is people who want to buy and sell for a profit. We don’t make loans to owner occupants and neither will you.

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Before I get off of the subject, pull out one of your credit card statements and look at the rate. Congratulations, you’re a person who’s willing to pay a high interest rate for short term money that’s easy to get.

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You’re placing availability of funds above the cost every time you use one of those cards. Like I said, it’s a multi- billion dollar industry.

Here’s a thought, actually it’s more than just a thought it’s reality for many of my lenders. What if we turn the tables on the banks and grow rich the same way they have by using other people’s money?

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When banks make a loan they do it with your money. The money you’re allowing to lie around in savings accounts and CDs that net less than the cost of inflation. You receive a few paltry percentage points while they loan your money out at a higher rate. They receive the difference they refer to as the spread. The spread amounts to billions of dollars monthly. That’s why the banks have the big buildings.

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Why don’t you become the bank? If you can borrow at a low rate and safely lend it out at a higher rate you can make a fortune off the spread. That’s the beauty of it. Making money off the bank’s money, don’t you just love it? Incidentally if you aren’t using your money you have the best rate of return after all, it’s called infinity. You see, when you have none of your own money invested, you can’t measure the return.

I had one client that I lent out a little over a million dollars in one year, and I didn’t know it at the time, but he was making a 5 point spread on all the money I lent for him. He made over $50,000 net that year without putting up a penny of his own money. In fact, he used a credit line so he wouldn’t have to pay interest while the money wasn’t in use. He made 50 grand using the bank’s money.

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I’m sure you have other questions concerning private lending. I’ll address the most common ones right now. If I miss any, the person who lent you this CD can fill in the blanks.

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First- “Can you use your IRA or 401k to make these loans?”

You bet you can, absolutely you can. In fact, it’s a great use for them and what better way to grow then tax free.

If it’s your IRA it must be self directed. This is easy to accomplish. It’s only a matter of moving it to an administrator of your choice. We use Equity Trust located in Elyria, OH. It took me several years to find them and after dealing with a few administrators that made life miserable I found them easy to work with. I have my IRA with them as well as hundreds of clients. The website to get a hold of Equity Trust is www.trustetc.com that’s trustetc.com. Go there and explore for yourself. They’ve been around a long time. They have thousands and thousands of IRAs and I think you will find them a pleasure to deal with.

Now don’t worry, this is not a roll over with penalties from the IRS, it’s merely a transfer form one administrator to another. If you’re going to use your IRA to make loans you’ll find this a necessary step because most people have their IRAs housed with a company that will not allow them to make loans or in fact make any kind of investments other than what’s on their list. We call those multiple choice IRAs not truly self-directed IRAs. With Equity Trust, you will be allowed to do what you want with your IRA and not what someone else insists you do that’s on their list.

If you’re using a 401K you must be in control of writing the check. You’ll find it difficult to get your employer to direct your company’s pension plan to private loans. They’re usually managed by stock brokers with guidelines. They’ll do what they want and you won’t change their mind.

Now of course if you recently left a job that 401K belongs to you. They have to allow you to transfer to a traditional IRA if you so choose. So you might want to check that out and transfer to Equity Trust, and start making private loans. I had several of my lenders take it out of their company plan and shift it to their own self directed IRAs. You might want to consider the same if it’s applicable to your circumstances and if your company plan doesn’t have a history of high yield, which is unlikely.

Second question, “Is this a security or a mortgage deal?

Well, the answer is yes and no. Technically it is a security. Any debt is security. But it’s not a security

 

that you’re going to need a license for or register with the SEC or anything of that nature. You will own the whole loan with no other participants. You’re in control all the way, which makes this a better investment than all other vehicles I know.

Only when loans are pooled does it become a security needing registration.

When the person who gave you this CD finds a house, at that point he or she will know what it takes to get the job done and relay that to you. At that point you decide if you’re in or out based on the loan amount needed and any other factors you feel are important.

If the borrower needs to borrow more than you have available they have to find another lender, put up some money of their own, or in some cases I have funded with more than one investor by simply giving one investor a first mortgage or trust deed and the other a second. Two separate loans, but secured by the same property. Of course the second mortgage holder must know it’s a second and be willing to accept the inferior position. Frankly it shouldn’t matter as long as the total loan-to-value doesn’t exceed 65% of the ARV.

For Example: if the house appraises at 100K and the borrower needs 65K he or she may split the loan into a 50K first and a 15K second. Both loans are still well secured because the total loan to value ratio does not exceed 65%.

Splitting notes is more common in areas where property values are high, and an investor would need large amounts of capital to make the deal work for the borrower. In most areas the average loan will run between 40k-100k. If your available capital is less than 40k you may still get involved by working with the person lending you this CD and agreeing to taking a second position if sometimes there will be a need for smaller first mortgages depending on where they live.

Third- “Who handles the paper work?”

Well, it won’t be you. You should never write a check directly to the borrower. All real estate closings should be done by a real estate attorney, a title company or escrow company depending on your state. Your check will be

made out directly to the closing agent for the gross amount of the loan. All expenses will be paid by the borrower and will be deducted from the proceeds at the closing. Just like any loan done anywhere regardless who the lender is. It then becomes the closing agent’s responsibility to receive your funds and make sure all documents are in place to secure your investments. You don’t do any paper work. You simply commit to make the loan and get the money to the closing agent when it’s time.

Next question: “Well, how do I know what documents I’ll need?”

Well when making any investment you should seek the advice of professionals and let them handle the details for you. It’s no different here. I’ve made hundreds of loans like the ones we’ve discussed.

Here’s a list of items I always insist on getting and if they aren’t at the closing table the funds don’t get dispersed; it’s as simple as that. No exceptions for me.

First, I want an appraisal verifying my loan doesn’t exceed 65% of the value. Second, I want title insurance and it must be issued at closing naming you the lender as the insured. This protects you against title defects which could affect your collateral. Third, I want fire insurance, naming the lender on the policy so if the house burns down you get a check for the full amount on the loan. And fourth, when you receive your package after the closing it should contain the original note and a copy of the original trust deed which will be recorded and mailed to you by the closing agent. Again, a good closing agent hired to represent you makes all this easy for you and ensures proper execution. It’s common for you to hire the attorney and the fee to be paid by the borrower. In fact I would insist on it if I were you. The banks do it every day. Again you do nothing but make a decision, and wire the money to the closing agent. They do all the rest and they will get you a package back with all the proper documentation and make sure it gets recorded to protect your interest.

Next question, “Is this a long term investment?”

Well, that’s up to you and the borrower. 90% of the loans I fund are interest only with no monthly payment.

Accruing interest, maybe two year balloon with all the principle and interest due at that time or when the home is sold, whichever comes first. However this can be arranged any way you want it to, whatever it takes to meet you and the borrowers needs and your investment plan. The longer the money stays out, the longer it gets a high rate of return. The faster it’s going to grow.

Many lenders like to keep the money out and collect interest only or in fact have it accrue interest. One of my favorite ways to make loans is accruing interest with monthly payments. I don’t want to mess with it. I put a principle loan on it. Let’s say I’m loaning 50k and if I’m loaning the money out at 7% I’ll put it on a 2 year term. I’ll just let them pay back the principle and interest at the end of the 2 year term. It saves me from collecting interest payments and it’s very nice for the borrower as well. It helps their monthly cash flow while they don’t have a monthly payment to make. Yes, their principle keeps getting bigger, but at a 65% loan to value ratio I’m not worried about that. Especially with the short term we usually put in the mortgage or the trust deed.

Sometimes your borrower will only want to use the money for a few months because he or she intends to rehab and resell the property or refinance it. And sometimes the borrower will want to sell it with owner financing. That gives their borrower time to go refinance at a later date and cash you out sometime in the future. Frankly, the longer the loan is out the longer the term you’re going to be making the higher rate of interest.

I’ve taught your new friend who gave you this CD the power of selling with owner financing. How it greatly increases the profit by being a little patient and certainly makes the house a lot easier to sell.

If it’s a short term you win. If it’s a longer term you win, and this should be disclosed and discussed with the borrower on a case by case basis.

Next question is; “Do you have to collect payments?” Answer is, “absolutely not.”

You can if you want, but I wouldn’t suggest it. Many banks will collect them and deposit it in your account and send you the annual 1098 form, to the borrower and you, or

there are companies that will do it for you on a national basis. I’ve done it both ways. But frankly, as I said, I do mostly accruing loans today so there aren’t really any payments to collect so it’s not a big issue for me. That’s entirely up to you. If you want to collect them you can, but frankly I think you’ve probably got better things to do than messing around with collecting monthly payments and I can assure you that your borrower would just as soon not have to send you one. Something you guys can work out together.

Is making a private loan really a safe investment?

If you apply common sense and don’t break the rules it’s as safe as any other high yield investment and a whole lot safer than most. In fact, in my opinion, it’s a lot safer than the stock market. Think about it...with stocks you’re betting on companies you know little about and the volatility of the market is out of your control. You can do well one year and get wiped out the next. Every day you’re wondering if you’re gaining or loosing and the only choice you get to make is when to buy or sell...now that’s risky.

I don’t care how good you are or think you are you don’t get to make the rules in the stock market. Your investment is at the mercy of the ever changing circumstances.

Compare that to mortgage loans. With mortgage loans your return is fixed. It won’t change regardless if the market is up down or sideways. While the market investors are jumping out of the windows you’ll be smiling because today’s fickle circumstances didn’t affect your money. Your loans are secured by real estate that you can see, and they aren’t going anywhere regardless of what the stock market does. The face amount of that note is what it is and that’s the minimum amount of return you’re gonna get. So you have a large hedge factor to protect yourself if things don’t go as planned. You get to make the rules, not be a slave to someone else’s rules. The term rate and conditions are what you say they are.

If you make a loan at 7% that’s your return, no guess work.

You’ll be building personal relationships with your borrowers that could lead to other lucrative opportunities or joint ventures.

When people build wealth together and prosper from each other’s efforts it sometimes creates long lasting friendships. I know this has been the case for me. It’s one of those side benefits having nothing to do with the money.

Over the past few years I’ve played the market, dealt in options and mutual funds and money markets and CDs and a few other off the wall investments. Some of these ventures made money, some of them didn’t. I’ve found nothing that’s given me the safety, stability and high return I get from private lending. I have never lost money making private lending loans. In fact, I’ve always made at least the minimum amount shown on the note which is the least you can make if you do it correctly.

Next question, “should you put all of your money in loans?”

Well, probably not, a little diversity wouldn’t hurt, but you owe it to yourself to check it out. Why not give it a try?

I’m sure you have other questions you need answered. If so, have a chat with your new friend who gave you this CD and he or she will either know the answer or they will inquire about them and get back to you. It was my job to open the door and bring you the message. Now it’s up to you to take action.

By the way, if you’re interested in learning more about becoming a real estate entrepreneur and how to make a fortune in the real estate field, go to RonsPropertyInvesting.com and there you’ll see my smiling face and you’ll learn all about me and how I’m making millionaires all over America.

I’ve enjoyed having this little chat with you and I hope it’s gotten you thinking.

Until next time, this is Ron LeGrand wishing you wealth, happiness and I hope all of your children have rich parents.