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R AISING M ONEY

to get whatever money I needed from investors. The investors I re-
stricted told their friends and relatives about the wonderful invest-
ment opportunity they got into even though others were refused.
Because I only made short-term loans on property I was familiar
with, and repayment was guaranteed by my wealthy employers, I had
no bad loans. Because my loans were at an annual interest rate of 16
percent or more and I only paid my investors a healthy 10 percent, I
was creating a lot of income from the spread. It became clear to me
that if I could borrow the money from a bank I wouldn’t have to pay
10 percent a year on borrowed funds but only the lesser rate the bank
would charge. So, what I did was to pay off the original $30,000 that
I had borrowed from the bank, long before it was due. Although I
didn’t need any money until I was ready to place another mortgage, I
then asked the bank to loan me $50,000. They asked, “What are you
going to do with the money?” “I’m going to invest it.” was my reply.
They asked, “What are you going to invest in?” I told them that I
didn’t know right now but I wanted to be able to move quickly when
something came up. In the interim, I would leave the money I bor-
rowed in my bank account with them until I needed it. They loved the
idea and since I had already repaid the $30,000 and my financial
statement now reflected increased income, they approved the
$50,000 loan. I eventually paid off the $50,000 ahead of schedule.
Shortly thereafter, I asked for a loan of $100,000 but they would only
approve it for $80,000. I accepted the reduction and again paid it off
ahead of time. Over the years, I have developed a $500,000 unse-
cured line of credit with a series of banks just by their review of my
credit history and financial statement that showed my ownership of
many high-interest paying mortgages. If one loan officer said his au-
thority was limited, I said, “Tell me whose approval is needed.” I then
went up the ladder of authority and established a relationship with
the higher ups. I also used existing loan officers as a credit reference
for new banks with which I was creating a new relationship.

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