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Alan Cowgill’s Real Estate Made Easy Newsletter - Issue #5

January 2nd, 2008 by Alan Cowgill

In this issue:

Private Lending And SEC Rules: “Using Private Lenders is “THE” way to go when you need funding for your Real Estate Deals.”

Cleaning Help For Vacant Houses: “We are going to talk a little bit about the cleaning lady.”

Meeting With Your Contractor: “As the administrative assistant I handle setting up contractors meeting after a new property has been purchased by the acquisitions manager.”

Question Of The Month: “Did you need to make any SEC filings?”

Read this newsletter by clicking here!

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Alan Cowgill’s Real Estate Made Easy Newsletter - Issue #4

December 26th, 2007 by Alan Cowgill

In this issue:

Know The Downside Of Your Real Estate Funding: “If you go to a bank to fund your real estate deals, chances are they will want tons of paperwork, pay stubs, tax returns, etc.”

Incorporating The Business: “When I started out I was a DBA, or “Doing Business As.” I realized along the way I needed to incorporate my operation.”

Dazzling Your Curb Appeal With Landscaping: “When you’re looking at the front of the house, you’re always looking to impress people.”

Taking Care Of Utilities: “As soon as I have closed on a property, I call the utility companies because the contractors are going to need the utilities turned on.”

Alan Cowgill’s Question Of The Month: “Besides having the private lending luncheons how can I find private lenders because I’m not much of a public speaker?”

Read this newsletter by clicking here!

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Alan Cowgill’s Real Estate Made Easy Newsletter - Issue #3

December 19th, 2007 by Alan Cowgill

In this issue:

The Secret Method To Skyrocket Your Real Estate Investing: “When I started my Real Estate career, I heard about the necessity of finding private lenders.”

Gearing Up To Acquire Property: “I want to tell you about what happens when we are geared up to buy a property, and what takes place after that.”

Getting More For Your Money: “As the business started to grow and I accumulated all the rental properties, one of the things I could do with the passive income I had obtained was that I could change the dependents.”

Policies, Procedures And Systems: “Every good company needs to have a predetermined set of procedures and systems that are updated as required over time.”

Making It Official: Setting Up Your Office: “When you start a business, you will typically start with a home office, then slowly move to an office that is offsite and then upgrade to a home office.”

Alan Cowgill’s Question Of The Month: “What are the three best methods for someone with no private lenders lined up to acquire them and how would you go about each?”

Read the newsletter by clicking here!

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Alan Cowgill’s Real Estate Made Easy Newsletter - Issue #2

December 12th, 2007 by Alan Cowgill

In this issue:

Private Lenders: “I want to tell you about private lenders and how a company can manage private lenders with a special process.”

Accounting In The Office: “After you’ve been working your business for a while, you’ll need to start thinking about accounting software.”

Computers In The Office: “Even though computers can be expensive, they are an essential tool for running a real estate business.”

Handing Over The Keys: “After handing over the keys to the new owner, the next thing to do is to cancel the insurance.”

Read it all by clicking here!

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NARHRI 2008 Real Estate Investing Industry Preview

August 16th, 2007 by Alan Cowgill

“NARHRI 2008 Real Estate Investing

Industry Preview”

 
August 2008
 
Prepared by NARHRI Executive Director John Grant
 
          The National Association of Responsible Home Rebuilders and Investors (NARHRI) serves as the voice of the real estate investing community before state and federal legislative bodies and governmental agencies. NARHRI, conceived just four years ago, began operations at the state level three years ago in response to two major challenges: first, a significant upswing in state legislative proposals governing the industry, and second, a complete lack of a national legislative strategy capable of delivering a cohesive message to officials throughout the country.
 
          At the heart of NARHRI’s representation of the real estate investing community is an ongoing commitment to raising the standards of acceptable behavior for those in the industry. The hundreds of media articles, as well as consumer group reports, detailing so-called “foreclosure rescue scams” present both a challenge and an opportunity for this industry. Without a strong, national response to the actions of a few unscrupulous investors that involves coordinated talks with state attorneys general and lawmakers, the future of the industry will remain at best uncertain, and perhaps even in peril.
 
          NARHRI’s experiences during the last three years have taught us that our strategy for representing the industry works, and will continue to provide beneficial results for our members and the community as a whole. Whether it is direct negotiations with lawmakers and attorneys general on a piece of legislation currently under consideration, or proactive outreach programs instituted to educate key political decision-makers about our industry, NARHRI has had and will continue to have the most direct and influential voice for investors.
 
          As Congress is on recess until the fall and most state legislatures are either adjourned or on recess, now is an opportunity to look ahead to challenges facing the industry in 2008 and to provide the industry more details about how NARHRI operates, our work in the states, and why the industry needs to unite behind NARHRI for its governmental affairs needs. NARHRI’s position on this final issue is simple: honest, professional real estate investors deserve a national association that can coordinate an effective, nationwide campaign to protect their interests. NARHRI has delivered for our members and will continue to do so as we expand into additional states. Further information about our ongoing educational outreach and legislative campaigns can be found at www.narhri.org
 
How Does NARHRI Coordinate Our State Campaigns?
 
          In any business venture, one always seeks the best possible people to work with at the best possible price. This is the philosophy of NARHRI as well, and we are able to provide this industry with the best possible advocates at great rates. NARHRI achieves this goal through the implementation of a regional lobbying strategy, whereby we retain law firms and lobbying firms to cover multiple states for us. This strategy is also employed by the largest U.S. corporations for a simple reason: it substantially reduces costs without impacting effectiveness one iota. Later this year, NARHRI will announce our 2008 state legislative campaigns, and we expect to be able to serve a significant number of states next year through our regional lobbying strategy.
 
          Another strategy employed by all NARHRI lobbyists and advocates is what we term “top-down lobbying.” Essentially, this means that when NARHRI enters a state we immediately coordinate meetings with the governor’s office, the office of the state attorney general, and state legislative leadership as well as any applicable state agencies. The instincts of non-governmental affairs professionals when faced with a legislative crisis is to employ a grassroots campaign that involves blast faxes and phone calls to lawmakers.
 
          As a government affairs professional who has worked with hundreds of state and federal lawmakers, I can share their feedback on these types of campaigns, which is almost always negative. These types of grassroots campaigns tie up phone and fax lines, preventing lawmakers and their staff from doing their work. Boilerplate letters and faxes are not read, and a significant number of the phone calls received are hostile and serve no one. While it may make people feel good to unload on a politician, it is not the way to get results. The most effective way to get results is through direct, thoughtful meetings with lawmakers, government officials and their staff, and that is what NARHRI does on behalf of the real estate investing industry.
 
          This is not to say that NARHRI completely discounts direct interaction between investors and their representatives. NARHRI established the Community Appreciation and Rehabilitation Educational Services program (NARHRI CARES Program) to give investors an effective, direct voice to lawmakers. The CARES Program is an educational outreach program designed for lawmakers, government officials and the media. Our CARES Program involves direct meetings with key political figures in a state accompanied by a site visit of a home or community invigorated by the work of an investor. Similar programs are in place at large corporations as well because this system of grassroots outreach is a proven winner.
 
What type of Legislative Challenges Does the Industry Face in 2008?
 
          NARHRI has two primary legislative challenges in 2008. The first is the containment of legislation designed to protect consumers but has unintentional (or sometime quite intentional) negative consequences for honest professionals in the real estate investing industry. NARHRI has made great strides on this front, most recently with the defeat of a measure in North Carolina that would have banned all “subject to” transactions. However, our work continues in other states, for example Texas, where a ban on lease option transactions occurred before the formation of NARHRI still stands.
 
          Our ability to track and analyze legislation from around the country allows NARHRI to have some important insight into the containment strategy. As we have seen for the past several years, many states are targeting what are known as “leaseback to owner” transactions. Massachusetts has proposed an outright ban on these transactions, while most other states are substantially regulating them through a variety of provisions, most notably the “82% Rule.” Media accounts of foreclosure rescue scams often refer specifically to leaseback to owner transactions, and the Federal Trade Commission has issued guidelines warning consumers of this transaction.
 
          Clearly, it is only a matter of time before this transaction is regulated nationally. NARHRI’s strategic objective is to contain regulation of the industry to this transaction and judge the impact this regulation has on the number of foreclosure rescue scams. NARHRI will continue to protect home rehabbers and creative real estate investing techniques not linked to foreclosure rescue scams. This makes sense not only from a strategic point of view, but also from a consumer protection viewpoint. One observation that must be made is that the pervasiveness of these foreclosure rescue scams are somewhat exaggerated. Often, it is a few individuals in a state scamming a number of people. NARHRI makes this observation based upon discussions with enforcement officials in states who provide real data regarding the number of complaints and investigations. NARHRI takes all of these complaints seriously, but some perspective is warranted out of fairness to the industry as a whole.
 
          NARHRI has had to “play defense” the last few years in order to stop some onerous legislation but also to establish where enforcement officials stand in terms of regulating the industry. Our next major challenge will be the creation of a standard NARHRI-sponsored measure that can serve as an alternative to a variety of proposals in any state. This will be difficult on two fronts, first creating a bill that will satisfy the majority of lawmakers, and secondly creating a bill that reflects the consensus of the industry. NARHRI does have some language already under consideration. As an organization that is committed to consumer protection, NARHRI has promoted regulation and will continue to work toward a consensus measure that targets unscrupulous investors.
 

Supporting NARHRI

 
          As NARHRI expands its work in the states, it is essential that we represent the full spectrum of the industry. National and regional speakers, state investor clubs, investor franchises, corporations, and individual investors have come on board to support us. NARHRI is hopeful that other groups, such as industry data providers, title companies and lenders will also see the benefits of sponsorship.
 
          NARHRI will continue to work to expand its existing support bases as well. Speakers and corporations have the most to lose if NARHRI does not succeed, and NARHRI hopes that those with also the most to gain by our success will join with our current sponsors. State investor clubs present an excellent opportunity for expansion of our membership base in 2008. These clubs collectively are comprised of thousands of investors per state, and NARHRI has provided clubs a voice in the states and can continue to do so with continued support and expanded participation.
 
          NARHRI encourages all club presidents to join our effort so that the governmental affairs aspects of the industry are in the hands of governmental affairs professionals. As discussed, NARHRI is effective both in terms of cost and representation, and we will have a seat at the table when discussions of regulating the industry occur. We hope that state investor club presidents will want to join in the type of access we provide and have the voices of all of their members heard. There is absolutely no downside for a state club in supporting us and coordinating their concerns with us. The upside for state clubs, besides our political access, is not having to retain and manage its own state lobbyists which will cost the club time and roughly $40,000-$60,000 annually. NARHRI is here to serve the industry, and our advocates are ready to help.
 
One final note on this topic, NARHRI plans to expand outreach to industry data providers and other industries with the stake in the success and protection of the real estate investing industry. Industry data providers depend on support from investors, and should give something back to the industry that allows them to be successful.
 
Conclusion
 
Ultimately, NARHRI’s effort to unify the entire industry will not be determined by a single speaker or state investor group getting behind us. Our actions, growth, effectiveness and commitment to distinguish our members from the rest of the industry will enable us to lead the industry. From the governmental affairs perspective, this coming year is incredibly important to everyone in the real estate investing industry, and NARHRI is pleased to be working on behalf of the industry in the states and federally as well. For investors who want a high-level of representation and a truly effect voice to represent their interests, NARHRI is the answer. The challenges facing our industry are as apparent as the solution to those challenges: NARHRI.

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Alan Cowgill Meets With NBC’s “The Apprentice” Winner Kendra Todd

November 20th, 2006 by Alan Cowgill

Alan Cowgill and Kendra Todd LgAlan Cowgill and Kendra Todd at the REAPS conference in Seattle Washington. Kendra was the key note speaker that spoke directly after Alan on the main stage. Kendra is a highly successful real estate investor and marketing entrepreneur. She is also one of the top producing investment-related real estate agents in the United States. She is a co-developer of My House Real Estate, LLC, and was also the first woman to be hired by Donald Trump as the winner of The Apprentice on NBC.

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PRIVATE LENDING MADE EASY NEWSLETTER - Issue #30

August 17th, 2006 by Alan Cowgill

Alan Cowgill’s
PRIVATE LENDING MADE EASY NEWSLETTER
Issue #30

http://www.PrivateLendingMadeEasy.com

In This Issue:

1. What’s happening!
2. Three Groups of Real Estate Investors
3. Important Tip
4. Links

===============================

1. What’s happening!

===============================
Huge volume of new products are being created for my you.
Here is a list of just a few…

1) The upgrade on ‘The Wealth Management System’. Actually it
was more like a total rewrite. I removed the 1st four
chapters and replaced the whole 3-ring manual with virtually
all new stuff. Removed 3 audios, 1 forms CD-Rom and a added
a ton of new forms and 5 new audios. It is dynamite. If you
own the old version, you can upgrade for the next 72 hours for
$99 by calling the office at 937-390-0816. If you don’t own the
original version and want to order it so you can manage your
private lender money with ease go to…
Wealth Management System

2) New frequently asked questions and the answers in a spiral
text book with 3 audios. I call it my ‘Learning Library’.
Just jam packed with answers on dealing with private lenders.

3) New ‘How I run my office’ home study system. 12 audios and
a couple of forms CD and 3 manuals. Includes how I buy, how I
sell, hiring and dealing with employees, collections and
paying bills, evictions and the all powerful Liaison position
I created to help get houses sold FAST. It’s not cheap but
it is a must for those of you that don’t want to reinvent
the wheel and run a great office and remove the normal
chaos inherent in most small businesses.

4) A new coaching program. Currently sold out. Call to
get on the waiting list.

5) How to successfully pool money home study system. Ya, I
know a lot of you would like this one:)

6) An SEC home study system. Gives you a hands on template
to walk you through filling out your disclosure statement.
And the SEC requirements IN DETAIL for your state is given
along with the forms you need to fill out to comply.
Powerful and there is nothing like this on the planet.

7) A monthly newsletter that is mailed to you house. It is
like getting a seminar every month for next to nothing.
Includes not only information on private lending but also on
buying and selling property, SEC highlights, pooling money
information and last but not least how I run and office.

8) Last and surely not least, I have four 1-day workshops
on critical SEC and pooling topics:
a) Instate lenders & property,
b) Across state lines
c) Private Placement Memorandum
d) Accredited investors and the 42 states that use them
The coolest part is you don’t need to come to all, you
just pick the day you want. So you don’t pay a big price
to go to a 4-day boot camp. You pay just for the day the
applies to your needs.

My goal is to have most of your paperwork completed at
the workshop!

1st and probably last workshops will be in November.

Well that is 8 of the nearly 20 products I’m working on.
More on the others in a future newsletter.

Getting geared up for our upcoming boot camp in October in
Baltimore. Check it out at…
Where To Get The Money Boot Camp

You fall into one of the three groups below so enjoy…

===============================

2. Three Groups of Real Estate Investors

===============================

When it comes to complying with the SEC regulations, I see
three groups of real estate investors…

Group #1: You don’t have any private lenders but are ready to
jump in the water and start bringing them on board.

STOP!!

Listen, this is the time you need to do the following:
1) Create your disclosure document to be handed out to lenders
2) You need to understand your states SEC compliance threshold
3) Find an SEC attorney and let him in on what you are doing.
4) Make a decision:
a) I am going to work with family, friends and associates and
stay under the state threshold so I don’t need to file.
b) I am going to advertise, pool and/or work with strangers
so I need to file with my states SEC office before I
approach my first private lender. So I have a registered
security.
c) I’m going to cross state lines and I’ll need to go for the
federal filing too.
d) I am in one of the 10 states that require me to notify the
state SEC office before I get my 1st private lender. So file
now.
5) Get your disclaimer statement completed too.

Group #2: You have a few private lenders but are under the
states threshold. You need to do all of the above plus
there is a form to look back and let the SEC office know what
you have been doing.

Group #3: You are over the threshold and have made a mess.
Hire an SEC Attorney and let them guide you through the
jungle. You won’t like it but I believe it is better to
put all your cards on the table face up and take your
spanking rather than wait and hope you don’t get in trouble.

The bottom-line…
Look, your dancing with a gorilla. Why take a chance. There
are rules on how to play the game. The SEC controls the rule
book and they are there to protect the consumer, not you.

The flat easiest way to be in compliance is to do it before
you secure your first private lender. So do yourself a favor
and start your business off on the right foot.

I find so many real estate investors are scared of the SEC.
If they would only follow the rules from day 1, it would
make life a lot easier and safer for all.

===============================

3. Important Tip

===============================

I have a bank of attorneys on my dream team. One for
evictions. Another for real estate closings. I have PrePaid
Legal for documents. AND I HAVE AN SEC ATTORNEY.

You should too.

===============================

5. Links

===============================

Just getting started with private investors? Check this…
The Basic System

Make money while you sleep, join our affiliate program…
Affiliate Program

Free Downloads…
Free Real Estate Downloads

===============================

Please forward this newsletter in its entirety to your real
estate friends today. We appreciate your help in making
Private Lending Made Easy grow!

Sincerely,
Alan Cowgill

E. Alan Cowgill is the President of Integrity Home Buyers, Inc.
He is a full-time real estate investor, investing in single
family and small multi-family properties in Springfield, Ohio.
Since 1995 Alan has bought and sold over 200 properties and
uses private lenders to fund his real estate deals.
Our Toll free number 866-831-3540.
http://www.privatelendingmadeeasy.com/products

Colby Properties LLC

PO Box 740
Urbana, OH
43078
US

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#18: Pooling Money

July 31st, 2006 by Alan Cowgill

Alan Cowgill

Pooling Money

When you pool money from private lenders, you’re putting funds together from two or more different private lenders.

You obviously need to look at doing something different where your state’s paperwork is concerned. This means you will need to file paperwork with your state and provide a disclosure document to your potential private lenders.

In Ohio, for example, we have what is known as 6(A)1 filing. This filing allow for pooling private lenders’ money in running your real-estate investment business.

This filing also allows advertising and unlimited private lenders.

Remember, securities laws and regulations vary from state to state and the Federal SEC has its own set of laws and regulations.

Pooling money occurs when you combine funds from two or more different private lenders.

You should use or form a new business entity. You should choose a corporation (which could be an S-corporation) or an LLC. Some states have different filings available depending upon whether you have a corporation or an LLC, and LLC’s are sometimes treated as partnerships. Most states won’t allow you to pool money when you’re operating as a sole proprietorship or DBA.

You cannot use your state’s exemption for real-estate transactions, similar to Ohio’s 3(H) exemption, when you pool lenders together. You can not use this particular exemption because there is no paperwork involved. In Ohio, you must “upgrade” to the 6(A)1 form, which allows pooling. All states have similar paperwork levels.

You should use one of your state’s filings that allow for pooling money. As an example, Ohio has a number of these filings available, such as a 6(A)1.

These filings require you to fill out paperwork, informing the state regulator about your business and what you’re doing. It usually requires you to disclose information to your potential private lenders, which is for your benefit as well as your private lenders’ benefit.

You’ll pay a fee to your state regulator when you file your paperwork.

One of the things I’ve taught my students and continue to stress is that you shouldn’t be pooling money from private lenders unless you make sure you’re in compliance.
In order to be in compliance with your home state’s securities laws, you’ll need to find the proper exemption, filing or registration option and comply with its requirements.

The following is some general information on staying in compliance with your state’s requirements.

When you use an exemption to bring in private lenders, you are making an offer and sale of a security. It’s important to understand that an offer to sell is usually treated the same as a sale when it comes to securities compliance.

Two key concepts to understand when you sell securities are that there are exempt securities and there are exempt transactions. Whether you’re selling stock, equities, borrowing money, or debt, these are treated as securities. An exempt security usually means a security issued by a governmental agency or authority.

An exempt transaction refers to the sale of a security not issued by a government agency that has been given an exemption under state law (or federal law) because of the nature of the security and how it’s sold.

Many of my students are basing their compliance on the exemptions in their states that are similar to the one in Ohio found under 3(H):

Ohio Revised Code, Chapter XVII, Title 1707.03(H) The sale of notes, bonds, or other evidences of indebtedness that are secured by a mortgage lien upon real estate, leasehold estate other than oil, gas, or mining leasehold, or tangible personal property, or which evidence of indebtedness is due under or based upon a conditional-sale contract, if all such notes, bonds, or other evidences of indebtedness are sold to a single purchaser at a single sale, is exempt.

Remember, these are still securities, and the sale of these securities can be exempt under securities laws in Ohio. Compliance with the offer and sale of these securities is still required.

Some states may offer you more than one choice, so you’ll want to evaluate those choices.

Alan Cowgill is a speaker, author, and real estate entrepreneur. Alan has bought or sold over 200 investment properties. His step-by-step system Private Lending Made Easy teaches others to find private lenders. Contact Alan at 937-390-0816 or 866-831-3540. For a FREE audio go to www.PrivateLendingMadeEasy.com

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#17: SEC Questions Answered- Part 4

July 24th, 2006 by Alan Cowgill

Alan Cowgill

SEC Questions Answered- Part 4

What sort of disclosure should I give my private lenders?

When you are reaching out to private lenders, whether it’s just a handful or a large group, it’s very important that you disclose the risks and benefits of the private lending opportunity you’re offering them. There are several reasons you should do this. Some are for the benefit of your private lenders, who will want to know what your business is and how they can make money lending to you.

Securities laws also work to protect private lenders, so you must disclose to them what the potential downsides are. These might include how long it will take to sell a property; mortgage rate changes, housing market pricing fluctuations, or the cost of rehabbing a property. There are others you’ll want to mention.

Disclosure documents will also help you protect yourself and business against possible claims that you didn’t describe the business properly. A strong disclosure document will help you protect your reputation and protect you against frivolous litigation. It will also help you comply with securities laws and regulations and, should you get a question from a regulator, help you demonstrate to them you are working to be in compliance.

Commissions- Can I pay them?

The bottom line on paying commissions is: don’t. Unless you are using a proper registration or exemption and using a licensed or registered broker/dealer, almost every state prohibits paying commissions for the sale of securities.

Now, in Ohio, it is possible to pay someone to help you get potential private lenders to a luncheon, but only if you pay him or her whether or not these folks end up lending you money. That means that you can’t pay them based on their success rate or anything that connects their compensation to getting private lenders. Other states won’t even let you do that unless the people you’re compensating are registered or licensed broker/dealers.

Public Offerings- What does that mean?

It’s easiest to explain what it means by explaining what a public offering isn’t.

Generally, any offering that is not exempt under the private offering exemption of the securities act of 1933 (Regulation D) is a public offering. This means that if you aren’t using an exempt offering, as we talk about in the course materials, then you are getting involved in a public offering. Each and every state has its own definition of exempt offerings and these aren’t considered to be public offerings. We talk about some of these exempt offerings in Ohio and other states in the interview and in the course materials you’ve received.

Exempt offerings are what open the door for you to run your real estate investing business successfully and in compliance.

In Summary, remember securities laws and regulations offer you many opportunities to do your real estate investing business and stay in compliance. Yes, there’s going to be some paperwork that goes with these laws and regulations. It’s just part of doing business, and that’s what Alan’s course is all about, helping you get into business and do it the right way and successfully.

Alan Cowgill is a speaker, author, and real estate entrepreneur. Alan has bought or sold over 200 investment properties. His step-by-step system Private Lending Made Easy teaches others to find private lenders. Contact Alan at 937-390-0816 or 866-831-3540. For a FREE audio go to www.PrivateLendingMadeEasy.com

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PRIVATE LENDING MADE EASY NEWSLETTER - Issue #29

July 19th, 2006 by Alan Cowgill

Alan Cowgill’s
PRIVATE LENDING MADE EASY NEWSLETTER
Issue #29

http://www.PrivateLendingMadeEasy.com

In This Issue:

1. What’s happening!
2. The All Important Disclosure Statement
3. Important Tip
4. Links

===============================

1. What’s happening!

===============================

When I was getting my real estate education and started to
learn about using private lenders, ALL of my instructors left
out a HUGE piece of the equation. It was the part about being
in compliance with the SEC and their regulations.

I now see it as my charter to make sure folks are aware that
when they borrow money from private individuals, it is not the
wild west. There are rules that come into play. The rules
are there to protect the lender and the rules are good rules.

Look it’s just business.
Step 1 understand the boundaries.
Step 2 Fill out the required paperwork and get on with
business.

Rules such as…
1) A promissory note is a security.
2) If you want to advertise, or pool money you had better
have ‘registered’ with your states SEC.
3) Don’t pay commissions to find private lenders unless it
is to a licensed broker.
4) Don’t use the word ‘guarantee’ in your advertising.
5) Every lender should get your disclosure document.

Huh? What is a disclosure document?

I realized recently that there is a basic item that you need
when borrowing money from private lenders that some of my
you might overlook. It is a DISCLOSURE DOCUMENT and every
one of your lenders should get it.

This is such an important item I thought I would dedicate
this newsletter to covering as much as I can in a couple of
pages, so here we go…

===============================

2. The All Important Disclosure Statement

===============================

Whether you have no private lenders yet or a bunch of them,
you must have a disclosure document.

This is a no option item.

When you are looking to get a new private lender, the first
thing you hand them is a disclosure document.

You see all investments are risky. Therefore you have to tell
your private lenders that in your disclosure document.

If you are ever ask by the SEC to show them yours, you had
better be able to produce it and prove that every lender got
a copy of it.

If you don’t have one, then you need to start immediately on
creating one. Then I’d run it by a SEC attorney to see if
it is good enough. They are roughly 10 pages long for a basic
one.

When you are offering private lenders the opportunity to work
with you, you must be sure to disclose to them the risks and
rewards of the business. You should prepare a disclosure
document.

A disclosure document has legal consequences. If a private
lender is not given sufficient, material information and
suffers a loss, he may have a claim against you and your
business. The information you give private lenders must be
accurate and not misleading. The key test is if you have
given private lenders all “material” (significant)
information about your business at the time the investment
was made. It is therefore important to follow the SEC’s
disclosure regulations in your document.

What are these guidelines? In general, they are:

* The Business of the Company -This information generally
includes a description of your private lending business,
location of the company’s facilities, trends in the
industry, and the company’s marketing strategies.

An example would be..
“Integrity Home Buyers, Inc. is a real estate investment
company. We work with private lenders and put their funds to
use in residential property investments that are secured by
mortgages. These transactions are done in compliance with
relevant laws and regulations and in compliance with
appropriate securities registrations or exemptions in
every state in which we do business…”

* Risk Factors -These factors vary depending upon the
company and the nature of its business. They may include
cash flow difficulties, market competition, inexperience
of management, dependence upon an unproven product,
absence of operating history or profitable operations.

The real estate industry is particularly sensitive to
economic downturns. The value of securities of issuers in the
real estate industry can be affected by changes in real estate
values and rental income, property taxes, interest rates, and
tax and regulatory requirements.

* Use of Proceeds - The use of the funds to be received
from the offering should be set forth with a high degree
of specificity. Categories of expenditures may include
such items as leases, rent, utilities, payroll, and
purchase of equipment, payment of notes, advertising costs,
insurance, supplies, and payments to be made immediately
to officers.

* Key Personnel and Shareholders - Individuals who direct
the company’s operations or who make significant
contributions to the business of the company as employees,
independent contractors, consultants, or otherwise are
identified and important background information such as
education, age, and business experience of these persons
is disclosed. Principal shareholders of the company are
identified with a description of the number and percentage
of shares beneficially owned.

* Financial Statements - Financial information, such as
balance sheets and statements of income and cash flows
that accurately describes the financial condition of the
company, is typically provided. In some circumstances,
these financial statements must either be audited or
reviewed by a Certified Public Accountant.

Other key points…
This is where you should give people access to information
about your business. If you’re new to this business, give
people some projections of what you hope to do with the
business that is reasonable and conservative. It’s good
business to under-promise and over-deliver.

You should distinguish between facts and beliefs in your
disclosure. Restrained language should be used throughout the
text. At the practical level, many investors are accustomed
to reading carefully worded disclosures and they are suspicious
of broad, unqualified claims. An understated, factual
disclosure can deliver a powerful message to private lenders.

Avoid arcane jargon and technical terms. Provide definitions
for terms that might not be easily understood. Don’t make
private lenders learn a new language if they want to
understand your disclosure document.

What is required?

* A sound business plan
* A disclosure document disclosing the full facts of the
investment and business
* A SEC lawyer experienced in disclosures.

The bottom line… by giving your lender a disclosure document,
it shows the lender exactly what is going on with their loan.
You will have a meeting of the minds and everything is on
the table.

You will be a huge step forward by being professional and in
avoiding potential problems in the future.

Besides, it’s required in every state.

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3. Important Tip

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Always give a potential private lender your disclosure
document.

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5. Links

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SEC information…
http://www.privatelendingmadeeasy.com/sec.shtml

Make money while you sleep, join our affiliate program…
http://www.mcssl.com/SYS/netcart/affiliates/AffiliateSignUpForm.aspx?MerchantID=39311

Free Downloads…
http://www.privatelendingmadeeasy.com/free-downloads.shtml

Avoid the SEC filings by staying under your states threshold..
http://www.privatelendingmadeeasy.com/products/private-lending-made-easy-the-basic-system.shtml

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Please forward this newsletter in its entirety to your real
estate friends today. We appreciate your help in making
Private Lending Made Easy grow!

Sincerely,
Alan Cowgill

E. Alan Cowgill is the President of Integrity Home Buyers, Inc.
He is a full-time real estate investor, investing in single
family and small multi-family properties in Springfield, Ohio.
Since 1995 Alan has bought and sold over 200 properties and
uses private lenders to fund his real estate deals.
Our Toll free number 866-831-3540.
http://www.privatelendingmadeeasy.com/products

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