Ding Dong Your Debt is Calling!

Ding Dong is the universal written symbol for a doorbell. It's also the universally understood name for someone that isn't quite right in the head ....if you know what I mean.

Will, I'm not afraid to admit it, I've been a Ding Dong more times in my life than I care to remember! :) But I don't have to be that person any more, at least where debt is concerned, and I'm helping others shake that moniker as well.

Listen to this story: A client, we'll call him Bob Smith, comes into my office. Old Bob has a ton of credit card debt and the minimum payments have been climbing lately. The credit card companies are lowering the available credit, raising the interest rate and increasing the minimum monthly payment!

So Bob comes to me for a solution, what can he do? Well first he can use some of the equity in his home to pay off the credit card debts. We turn his 6.5% 30 year fixed rate mortgage into a 5.375% 30 year fixed rate mortgage. The debt consolidation saves him almost $700 per month!
Good right? Yes, but it gets better. Next we tell Bob he still has a problem. You see, the equity in the home was a safety net and we need to get that back as quickly as possible. We show Bob how to use a portion of the payment savings to build his equity back up rapidly.

With our software we run a scenario using his regular income and the $500 in payment savings as discretionary income. The program tells Bob how to pay his bills and if he follows the instructions Bob will pay off his new 30 year mortgage in just 8.5 years!

It gets better. You know that equity we used up paying off those credit cards? He gets that back in 2.75 years! Bob's life is changed and he's DEBT FREE in just 8.5 years.

Ding Dong your debt is calling! and it doesn't have very nice things to say. Do you want to know how to tell your debt to take a hike? Give me a call, interest rates are low, low, low and with our special debt repayment software we can have you debt free in no time!

Michael Gross is President of Dividend America Mortgage. He has been a builder, a Realtor and a real estate appraiser. He uses all of his expertise to show others how they can use a mortgage to create wealth through home ownership and now he's helping people get out of debt in 1/3 to 1/2 the time. Contact Michael at 770-350-7373 or mgross@dividendamerica.com.

Real Estate And Your IRA

More and more people are becoming frustrated with the lack of growth of their IRA and 401K investments. The stock market isn't doing well and niether is the economy but there is one growth opportunity out there that many are turning to .... real estate.

With the proliferation of foreclosures, homes can be purchased relatively cheap and in many cases can be rented for positive cash flow. The opportunity to purchase an investment at a discount and then have someone (a renter) pay for that investment for you is a huge draw in the current economic environment.

A large portion of the American investing public does not know that the IRA can be used to purchase real estate as an investment. Others think that this is a tricky scheme. The truth is that the IRS code allows for this type of investment through what is referred to as a Self-Directed IRA.

A Self-Directed IRA is managed by a custodian and the funds from the IRA can be used as a down payment to purchase an investment property. The funds can be used for other real estate related ventures like lending to an LLC or consortium where the loan is secured by real estate or a business. The funds can even be used to purchase mortgage notes.

The majority of investors use their IRA as a down payment to purchase a home. This helps them to leverage a $50,000 IRA to purchase $100,000+ property. Usually the benefits include positive cash flow of $150 to $200 per months as well as the ability to increase the value of the money invested in a relatively short period of time.

One scenario goes like this. The investor invest $50,000 as a down payment to purchase a $125,000 property. The property pays a return of $200 per month or $2,400 per year. That's a 4.8% return on the investment. The property increases in value on average 5% per year. The payments made by the renter provide the positive cash flow and reduces the balance owed on the mortgage. At some point the property is sold. If the property was held for 5 year then the estimated sales price would be $160,000 and the existing balance on the mortgage would be around $71,200.

Let's do the math. The investor's input was $50,000. He sold the property for 160,000. He owes 71,200 plus he has to recoup his original $50K. The gross profit is 38,800, plus the $2,400 per year for five years ($12,000) is $50,800. Subtract approximately 7% of the sale price for transaction expenses and the gross profit on the transaction is $39,600. The bottom line is the investor, using his IRA, has turned $50,000 into approximately $89,600. That's a 55.8% return over the 5 year period. Not bad!

To read more about IRA investing visit my favorite financial information site, marketwatch.com. Click this link: http://www.marketwatch.com/news/story/housing-market-beckons-more-invest/story.aspx?guid=%7B4740F69A%2D1CDE%2D4825%2D9122%2D7D7528968B61%7D

IMPORTANT NOTE: A special type of financing is needed when you use your IRA to invest in real estate. But, you're in luck because I know exactly what you need and I can connect you with the people that can get it done for you! Just email me or give me a call.

Michael Gross is the President of Dividend America Mortgage and has been in real estate for over 20 years. He has been a builder, a Realtor, an appraiser, and currently he is a lender and an active real estate investor. He uses all of his experience and knowledge to show individuals how to properly use a mortgage as a tool to help create greater wealth through real estate investing. For more information on residential and small commercial loans please call 770-350-7373 or email mgross@dividendamerica.com