mortgage educationHere’s a great little mortgage education tip. The best silent partner of all in the deal is the one who doesn’t even know he is participating. This describes the role of banks when you invest in income properties according to the profitable strategy employed by Jason Hartman and Platinum Properties Investor Network. To be honest, yes, the bank is aware that they have agreed to loan you money to purchase an income property. They are aware of that.

What they may not be fully cognizant of is the extent to which they are leveraging your (or client’s) business against the effect of inflation. But don’t feel sorry for the bank. They’re happy making their money charging interest for the use of your money and this mortgage education is not for them. Were they in possession of the knowledge about how drastically inflation reduces profit margins on loans they issue, they might be fabricating all kinds of other fees and penalties to make up the difference.

The truth is this. The party holding the bag, or loan note as the case may be, is in a subordinate economic position as long as inflation is a factor in the national economy. How long will inflation act in this role? As long as short-sighted politicians continue printing money with nothing of value to back it up, which functionally works out to be the day after forever.

Mortgage professionals everywhere should write this down in their little black book of mortgage education secrets: the bank is your silent partner when it comes to income property investing. They put up the money and then watch the value of that money go down as the years pass. By the time you finally pay it back, it’s worth less than it was when they made the loan. And the investor owns the asset!

Would you rather be the banker or the investor? We choose the investor.

The AIPIS Team

Accredited Income Property Investment Specialist

Flickr / Brad & Ying