How does the bank use your money?
When you deposit money in a bank they may offer a nominal interest rate. These interest rates are usually less than one percent.
What does the bank do with your hard-earned money?
The bank takes your money and lends it to someone else at a much higher interest rate.
For instance did you know that a 6% mortgage is an actualized 100% loan! The fact is, a $100K mortgage at 6% earns the bank $115K in interest alone! (check the facts here)
On top of all that, the bank can loan 10X your money due to federal regulations.
Let’s break that down. . .
- You deposit $100K in the bank and they give you 1% interest (if you are lucky).
- The bank can then make TEN $100K mortgages.
- The bank makes on average 100% back on those mortgages.
What this means to you . . .
- The bank gave you $1,000 in interest while they made much more than a million dollars off your money.
What can you do about this?
You can ‘become the bank’ by investing in real estate. You don’t have to go out and find the homes or even plunge toilets. You just hold the loan, long or short term, on the piece of real estate and let us handle all the details.
When you become a private investor, you take the bank out of the equation. You become the bank on a house and you get the return rates that you deserve.
Click here to learn how you can get started as a private investor with as little as $25K.
You can secure your retirement with real estate investing.
The ‘safeness’ of your retirement is contingent on what is securing your investment. We buy houses, but not just any house. We look at each market and find what is selling. We traditionally buy three bedroom, two bath houses. These are typically the fastest to move when selling and they get top dollar.
When investing in real estate your funds are secured by the actual value of the house. Not the value of tomorrow or even the tax value, but the value of the house today. We diligently look at comparison sales and really tie down what is selling in each market.
Based on our research, we only buy a house when there is equity included. Equity is how much money is valued on the house’s fair market value compared to the outstanding balance of the loans against it.
To give a real world example:
A house has a fair market value of $100K. We know that it will cost 20K to fix it up. That means, the house is valued at $80K. We would buy that house for less than $60K in order to secure our private investors ‘safety.’
That may seem like a real steal of a deal, but keep in mind these houses are ‘distressed’ and we will have to put time, effort and money in order to get them up to the fair market value specific to the demographics of each specific area.
There is always risk in any investments. Our goal is to minimize risk so our home investors and private money lenders are protected going into the investment.
On top of buying low and thorough market research, the private lender is listed on the insurance. In other words, if anything happened to a house while you were funding the deal, you would be protected. Ask your mutual fund broker if they have you insured in case something happens to your investment!
Here at Black Brick Investing we would love to show you specific ways that your investment money is kept safer with our system. Give us a call today at 469-626-8224.
Leveraging the Power of Taxes
No one likes to talk about taxes. . . unless you are talking about saving on taxes!
There are many strategies to save on your taxes, so you want to make sure to consult your CPA, but let’s talk about a familiar way many people leverage their retirement to save on taxes.
Let’s keep it simple. You have probably heard about an IRA. Almost anyone can put money in an IRA. Plus, you can ‘self-direct’ your IRA.
That means you can direct what your IRA invests in. There are a lot of details to know, but this article will not get into the nitty gritty.
IRA’s are taxed in two ways. A traditional IRA puts money in ‘pretax’ and you are taxed when you take the money out. A Roth IRA can grow tax free because the money put in this type of an account is put in after taxes.
You should be getting excited. Let me explain . . .
When you invest in a Roth IRA, or transfer another type of retirement account into a Roth IRA, that money can grow without tax penalty if it is structured properly.
A Roth IRA can be used to leverage your retirement and grow for years without causing additional taxes. This can also be done with money set aside for health expenses, an education funds, and even some life insurance policies.
You want to consult your CPA, but understanding the power of how you can leverage your investments to grow without tax penalties can be an amazing way to grow your money.
If you think about it, since your money is growing without having to pay taxes, it could be like an automatic 20% increase in your funds depending on your tax bracket.
Here at Black Brick, we want to help you make the most of your retirement, education or other investment funds.
We may even be able to help you find funds you did not even know you could use for investing. Contact one of our helpful representatives today and leave a detailed message. We will schedule a meeting and get you started right away.