Bernie's response: The $82k are a loan, not income, and my follow-up

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: I reposted Bernie's response to keep things a little more organized:

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: Hi Christine,

: The 82,000 was what I walked away with after pruchasing the property. It is over-financed money that I put in my pocket.  I still own the properties and make over 7,500 each and every month after all expenses.

: Just as Russ says in his seminars, you can walk away with cash at the closing of a transaction and it is very legal.  I used some as downpayments and some for some minor repairs.  The rest I just used to pad my bank account.  True, I owe this 82,000 back to the bank, but it is how I was able to grow so rapidly.  22 properties in under a year sounds pretty good to me, dosen't it?  I was able to quit my dead-end job in a short amount of time.

: Talk to you soon!

: Bernie

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: Bernie,

: I very much appreciate your response and honesty.  

: Hopefully it'll be clear to everybody that things aren't always what they seem to be.  This is a great example of people saying the same words and meaning something totally different.

: When someone "walks away with $82,000" that could mean

: a) the net taxable income
: b) the gross income before $100,000 in expenses (neg. $18,000)
: c) or it could be a loan (neg. $82,000)

: Of course a loan is "tax-free" because it's NOT income, you have to pay back the loan amount PLUS interest!

: As far as that cashflow goes, $7,500 monthly from 22 properties averages to $340 per property.  And sooner or later you'll have to pay for 22 roofs, 22 paint jobs, 22 water heaters, etc. etc.  And then there will be evictions, and legal fees, and of course somebody's gonna have to make the mortgage payments while the tenants aren't ... 

: I also wonder about your statement "Just as Russ says in his seminars, you can walk away with cash at the closing of a transaction and it is very legal."

: You don't need to pay Russ $1,800 to find that out.  Just turn on the radio and listen to the ads.

: However, previously you posted that you had a tough time finding a mortgage broker who could get you a loan.  Apparently Whitney doesn't tell you HOW and WHERE to get that financing.

: I'm well aware of cash-back loans for owner occupied properties when the borrowers have excellent credit, income and employment. But I don't know of such programs for income property other than the FHA rehab loans.  

: Could your mortgage broker post some details?  Terms, rates, guidelines? Anyone?

: Thanks much!

: Christine


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