Excerpts from my lesson on Velocity Banking and Raising Capital from this video:
Self-Directed Retirement Accounts
There’s money everywhere if you know where to look. There’s $28.7 Trillion in U.S. retirement accounts. “You can’t touch it” is a MYTH. Saving money to invest in real estate is too slow. This is how I do it: #FIRE #realestateinvesting101 #financialindependence #earlyretirement
Learn how Self-Directed IRAs work. Then memorize and ask these questions:
1) Did you know you can use a retirement account to invest in real estate?
2) If you don’t mind me asking, how much do you have in your retirement account? If you don’t have your own, do you know someone who does?
3) What kind of returns are you currently getting?
4) If I could show you how to get double-digit returns on your investment, secured and insured by real estate, would you be open to having a conversation about investing with me?
5) Show how SDRAs work. Do this 4+ weeks before closing on a property. It takes a while to set up an IRA LLC in which the IRA is a partner and the LLC has checkbook access to the funds. If that takes too long, simply borrow up to 50% or $50k (whichever is greater) and pay 5% interest back to your 401(k) over 5 years. You can also straight up withdraw, there’s exemptions with no penalty.
6) Now that you know how to use your own or someone else’s retirement account to invest in real estate, how much of that capital are you open to re-deploying?
How To Use Credit Cards Effectively
While everyone is saying you can’t do this or it’s a bad idea, I love having this answer in my notes, ready to copy and paste:
I once was short on the downpayment on my first property (a triplex for investment requiring 25% down) and wanted to speed up the process a bit (so short that it took me 5 months to close as I simply didn’t have the cash and waited several paychecks for it). Anyway I would’ve had to wait longer if I didn’t pull $15k from my 0% APR credit card and deposited into my bank account and seasoned.
This strategy is not for the faint of heart or risk-averse, and needs to be done 2+ months prior to speaking with mortgage lenders as the underwriters cannot see any large transactions in your bank statements without an explanation.
Anyway here it is. Disclaimer: for entertainment purposes only, this is not legal or financial advice. Consult a qualified professional or someone with some sort of license other than a driver’s license in your state.
Balance transfer to a $0 balance card from another bank then request overpayment refund check.
Chase Slate has 0% APR 15 months with 0% BT Fee. There are other cards as well. Alternatively (and my preferred method if I used any sort of rewards card instead) is to purchase VISA/MC gift cards and convert them to money orders that I deposit in a different bank from the CC I used. This way they look like purchases and earn travel points.
Deposit and season in savings for 2+ months. Lender shouldn’t have to know, nor should they care as long as DTI ratio meets requirements. Worked for me to acquire my first property faster, with less of my own savings. Then you use the rents to pay back the credit card.
Business cards work wonders because the balance doesn’t even show up on your personal credit report so it won’t hurt your FICO 3 or your mortgage interest rate. Then when you’ve got the property, now you can apply velocity banking to pay both the credit card and the mortgage down in a fraction of the time: https://earlyrewirement.com/velocity
PM me if you want to learn more!
Some credit cards allow you to simply mail (a check directly or sometimes even direct deposit your balance transfer, bypassing all the complicated “refund check for overpayment” BS. Capital one lets you do this. Chase Slate does not, but it’s the only one I know with 0% apr 15 months AND 0% BT fee.
Actually what I did:
1) Get Chase Slate with $18k credit limit
2) 0% apr 0% fee on BT so I BT $15k (didn’t wanna max it out, also that is the max BT allowed on this card) to a BankAmericard I had laying around that I didn’t use.
3) Call BoA: “Hey, I overpaid my CC by $15k, can I get a refund check sent to me?” “Sure we’ll mail it out in 10–15 business days.”
4) Receive and deposit check into any savings account (ideally earn 1–2% while it’s sitting there)
