One issue we continually strive to overcome is the interest rate-conscious mentality when it comes to financing investment properties.

Here is one of our “secrets” that can help make you real estate rich: Higher interest rates can make you more money than lower rates.

This statement may seem shocking, so let’s look at several examples. As we look at these examples, understand that each of these principles is a critical ingredient in the secret formula for taking people with average credit and average income and leveraging more homes on their credit than any other lending institution could do.

Keep Your Eye on the Profits

Investors keep their eye on the profits. They focus on what they gain by buying a home, as opposed to a consumer, who focuses on the rates and what they lose in acquiring a home.

The Strait Path™ system will help you acquire many homes, but this cannot happen with the person whose only expectation is getting the best rates, because that reality does not exist for the investor who wants to maximize their portfolio.

Do not focus on the 8% interest rate as your loss, but rather the 65% profit as your gain. The impact on your profit margin between a really good and a really bad interest rate is less than a few percent.

Lesson: Keep your eye on the profits!

Each Home Makes you Wealthier

All banks are not the same, and you must pick banks in a manner that will ensure you can leverage as many homes on your credit (with your job situation) as possible, whether it is 3 homes or 25.

The profits from each home you buy increase your net worth by 6 figures. Accordingly, REIC goes to banks that often have steeper rates in order to leverage more homes on your credit.

You may have to exchange a 1.5% higher interest rate for an additional $150,000 profit. The issue is not over rates, but rather how many banks are willing to continue lending for your portfolio.

Lesson: Don’t go with the banks with the lowest rates, but rather the banks that will let you buy the most real estate.

Cracking the Banking Code

The banking industry is a complicated world that requires specific training and cutting-edge information and updates to stay abreast of all your banking options.

One of REIC’s secrets to rapidly acquiring so many homes is dealing with largely unknown facts of how the banking industry works.

Banks make a decision whether or not to accept your next purchase based on what mortgages are already on your credit, how quickly they were acquired, what banks they are with, how your file was submitted, and what you are doing with the properties, to just name a few criteria.

We have learned how to maximize your ability to acquire the most investments possible. Our formula for leveraging several homes on your credit requires us to use banks in specific combinations, so that each additional bank will follow and accept your next investment purchase.

As a result, we can buy twice as much real estate if we are not just focusing on the rates, but on which banks we can get to agree to give you your next loan.

This often means that REIC will choose a bank with a higher interest rate so that we can already be qualifying for your next homes.

Lesson: Paying higher interest rates to particular banks enables us to purchase twice the investment properties, as compared to what we could do if we just went to the banks with the lowest rates.

Selecting the Right Loan

You cannot just go and get any loan if you are looking at maximizing your portfolio.

For example, if your goal was to pay the home off over time, and you wanted a 30-year or a 15-year loan to do it, that strategy would cap out very soon. You would qualify for only a fraction of the loans than you could with Interest-Only loans and ARMs (Adjustable Rate Mortgage).

We educate our members on the loan process and make sure you are completely comfortable with the loans we suggest. These loans capitalize on the best cash flows and overall profits for your portfolio.

*Please note most loans closing right now are 30-year fixed because they currently offer the most advantages.

Lesson: Only certain loan programs will allow you to leverage yourself into your maximum financial potential.

What Are You Doing with Your Homes?

Another critical key to buying so many homes with the REIC system is what you are doing with your investment properties.

By using our proprietary Compassionate Financing™ system, you will collect between $300 and $600 more than you would by simply renting it out.

This corrects your DTI (debt-to-income ratio) and brings your personal finance ratios in line so that you continue qualifying for additional homes.

Lesson: A well-sold Compassionate Financing™ contract is the key to overcoming your financial ratio issues that typically cut your investing short.

Protect Your Future Portfolio

Weaving carefully through the banking industry requires a considerable amount of effort and strategy.

Doing a loan here or there throughout this process with another lending company, including any refinances of your own homes can quickly unravel your ability to buy as much real estate as possible.

Protect your portfolio by keeping your entire lending business to the professionals that have the foresight and the hindsight to see complicated lending issues from afar off.

Lesson: Solving and dodging these issues usually happens long before we are faced with a complication.

Summarizing your Profits

All of these factors ultimately add up to buying more real estate than you could with your old financial paradigm.

Consider, for example, the following scenarios comparing someone who is rate conscious to someone who uses our proprietary financing formula.

In Scenario A, our client may be able to buy 3 investment properties total, with the combined rates on all three properties of 23% (8% + 7% + 8% =23%), and a total profit after 5 years of $360,000 ($120,000 + $110,000 +$130,000), or 195% annualized return (65% + 60% + 70% = 195%).

This 195% annual ROI (Return on Investment) was created with a total interest rate cost of 23%.

In Scenario B, our same client is able to buy 6 investment properties total, with the combined rate of 52% (8.5% + 8.0% + 8.5% + 9% + 9.5% + 8.5% = 52%), and a total profit of $685,000 ($115,000 + 105,000 + 125,000 + 115,000 + 105,000 + 120,000), or a 355% annualized return (60% + 55% + 65% + 60% + 55% + 60% = 355%).

This 355% annual ROI was created with a total interest rate cost of 52%.

In Scenario A, the client may have received some competitive investor interest rates, but they led to an outcome of only being able to buy 3 investment homes.

In Scenario B we had higher rates, but we were able to create $685,000 of profits compared to $360,000.

Why Having More Homes is Better

Buying more homes is not just about creating more profits.

Some of you have goals that extend beyond an extra $500,000 in the next 5 years, and a 5-6 home portfolio. For you, the key to your success lies in creating a powerful portfolio that can attract future partners.

Obviously, 6 profoundly profitable homes will have more credibility for attracting partners than 3 homes. These partners have money and credit you will now use on all your future investment deals.

You can now participate in real estate with no money out of your pocket and no credit. This portfolio unlocks your ability to thus create unlimited returns and now have limitless financial potential.

Higher Rates = Greater Profits

The take-home lesson is that focusing on interest rates can distract you from the more important issues.

REIC’s experience has shown that time and time again, people make investment decisions based on rates when they should be focusing on the profits.

Overlook rates that are 1 or 2 points higher, if it means that you can qualify for even one more home.

This is the investor’s financial paradigm, and it will hopefully lead you to extra six-figure profits this year that you might not otherwise have realized.