The $50K House Secret Investors Don't Want You to Know | Antoine Martel DSH #653

right so with us we do like this turnkey fix and flip model so we'll buy the house for 50k renovate it for 30k

put a tenant in place we're cash flowing we're good then we can find a buyer if we sell it great we make a profit if we can't sell it it doesn't matter to us can you can get some uh better loans lower lower rent lower um interest rate no points

all right guys got father son combo here today antoan martel and eric martel And you guys are killing it in real estate, right?

Yep.

Nice.

How long have you been in houses?

Yeah, of course.

How long you guys been in the real estate game?

10 years now.

Wow.

So right after the OA crash then, right?

We, yeah, so I was in college.

He was working full-time.

When I was in college, I moved all my classes to the nighttime so that throughout the day I can, we went to a conference, a real estate conference.

And then after that, became addicted to real estate, moved my classes to the nighttime so that throughout the day I can work on the fix and flip business.

And then we would chat when he was off of work, when when I was done with school and then right out of college I started flipping we started flipping houses buying houses buying rental properties but all in the Midwest and actually in the beginning we weren't not the intention was not to flip it was to build a passive income portfolio for the family

and then it turned in turned into a turnkey business shortly after that because there was a lot of interest a lot of people that we knew were like, hey, I want to buy the property when you're done with it.

Like, is it, can I do that?

And then Antoine is like, hey, you know what?

I think we have a business here we can actually flip these houses yeah it's not easy to do that though right no no

it's yeah I mean we take all the basically that was Martel turnkey and we basically took all the risk the risk of the acquisitions the risk of the the construction the rehab the the rent all of that and then they our investors the people that were buying the turnkey rentals I mean it was it was cash flowing from day one there was a tenant it was recently renovated so most of the risk was uh taken away and it was and they they could see what the returns were.

That's smart.

Yeah, because a lot of people that get wrecked in real estate, they have too much risk.

Exactly.

Yeah.

And it's because they only have one exit.

So with us, we do like this turnkey fix and flip model.

So we'll buy the house for 50K, renovate it for 30K,

put a tenant in place.

We're cash flowing.

We're good.

Then we can find a buyer.

If we sell it, great.

We make a profit.

If we can't sell it, it doesn't matter to us.

Smart.

It doesn't matter which is cheap.

15K.

We still are getting houses that cheap.

What?

Where is this at?

Detroit, St.

Louis, Cleveland.

Okay.

Akron.

I didn't know houses were that cheap.

They still are that cheap.

Even today, our average deal we do is 60K purchase, 30K.

Damn.

I've never heard of houses below like 100K.

Like, this is crazy to me.

Yeah, when we talk to people in California, they're just like, they can't believe it.

That's their monthly rent right there.

Yeah.

See, that's a shed.

That's a shed in my backyard.

It's 50K.

So how can people live in that?

Yeah.

Damn.

And those rent out for $1,000 to $1,100 a month.

And is that Section 8?

That's just a cash-bang tenant.

If you get Section 8, you can sometimes get in some cities, certain cities, you can get a little bit higher rent renting it out on Section 8.

Yeah, that's a hot topic right now, but I feel like social media is making it too easy.

Like they're just saying, oh, you could invest in Section 8, but I'm sure there's a lot more steps to get involved.

There's a lot more steps.

I mean, Section 8 definitely complicates the process.

It has pros and cons.

Pro being part of the rent is guaranteed by the government.

Cons of Section 8, it does slow down your process a little bit.

Like, for example, I buy a house for 60K, renovate it for 30.

I'm all in for 90 or 100.

I can go post it online for rent, and I might get cash-paying tenants to apply right away that move in next week.

Section eight, I now have the government involved, right?

So I have to go through an inspection process, all these different processes to be approved to rent it out to the...

the Section 8 tenant.

If you know ahead of time that you're going to do a Section 8 strategy, that helps you a little bit because then you can tell your contractor the first time around that, hey, you know what, we're going to do Section 8, so I know that I'm going to have to put, you know, handrails on everything that has a step and all these things.

If you wait until later, then

you have to have an inspection from the Section 8, and then they will tell you, oh, you have to do handrails, you have to do this, you have to do that.

So if you know ahead of time, if you plan your strategy well, it saves you a little bit of steps.

But then the rent, the tenants are Section 8 tenants, so you limit your

pool.

When the interest rate shot up a few years ago, did you guys get pretty hurt from that?

I mean, it was definitely tough because we were trying to sell a lot of stuff and we weren't planning on like refining.

I think we had like 250 houses at that time.

Yeah.

Interest rates started spiking.

And we were like, shit, what do we do?

Because we were banking on, like for the last, for many years before that, we were selling all the inventory.

So we just became accustomed to it.

We were like, if all hell breaks loose, we can always refinance these houses because there's still cash flowing, cash back.

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Paying tenants.

And so when the interest rate started spiking, we went to some of our investors.

partnered up with them and just kept a bunch of houses gave some invest gave some houses back to investors refinanced a bunch so we got like big lines of credits from some banks to pay off our private money to then hold those houses in the long run yeah that was a scary time yeah one thing that we did i think pretty well was uh we always whenever we bought these properties we were always thinking about the buyer so whether what kind of uh loan are they going to be able to get so we'd buy the house like six months early and we always did the calculation for the buyer and say well let's say it's the interest is four percent when we buy it but it's going to be like we assume that it's going to be six or seven percent when the buyer is going to buy it so that really helped us actually not buy properties uh at too high a price and we still have some good profit margin and smart yeah because now it's like i just bought a house a couple weeks ago dude it was 8.5 and i had to buy it down to 7.5

oh wow isn't that high yeah that's high for a house that you're going to live in yeah like the houses in the midwest so like even if a loan's below like a hundred thousand bucks typically the interest rate goes up by like a point and then it's like in a in a rough city it'll go up by another point so we're seeing like houses in the midwest if you're buying it like as an investment property you'll be at like seven all the way to like nine percent but that's super high for dude yeah the house you're gonna and here's my problem with it because as entrepreneurs we try to write off everything so on paper my income was 50k or something stupid stupid low right yeah yeah so i had to do a bank statement loan so the interest is already automatically what a point higher yeah um so it kind of sucks as an entrepreneur to buy a house yeah that was his big

problem as well yeah you you write off everything so your income's low and then when you go to buy a million dollar house they're like you you can't afford it unless you pay this interesting.

We with Martel Turnkey, we're flipping like 20 houses, 30 houses a month.

We tried to refinance one of our houses with like a very similar loan.

We did not get approved.

Damn.

Because we had all this asset.

Because the same thing.

We were like making no money on paper.

We were flipping 20, 30 houses a month with a business.

And it's like, okay, now I'm going to buy one of my houses in inventory and just get like a loan

on a bank rate loan.

And it was mind-blowing.

Yeah.

And it's like, oh, you have no income.

You can't get a loan.

I'm like, I'm literally doing this 20 times a month, and I can't get a loan to like hold it for longer than six months.

It's such a broken system, dude, because with the bank statement loan, I qualified for a $5 million house, but with the traditional route, I couldn't even buy a million-dollar house.

Wow.

Isn't that crazy?

That's crazy.

Yeah.

So I don't know.

I get it from their point of view, but there should be a new system, I think.

Yeah.

I mean, even for like finding a place to live.

Like some cities that we like in LA and in Miami, like a lot of the apartment buildings will take like your stated income or just like your bank statements.

Just be like, yeah, but

my W-2 is showing no money.

Like my business is like breaking even, but I'm making 30 grand a month coming in on my P ⁇ L or my personal bank account.

And so they'll take that to even like find a place to live, for example, is tough.

That's what I'm saying, though.

If you have a million in a bank account, you should be getting a good interest rate on them.

You know what I mean?

Like if you could show that.

Yeah.

Yeah.

But money is easy to move around.

Right.

Yeah.

Maybe they would assume you just had your family send you money and then you had a million.

So I get it from a risk point of view, right?

Yeah.

And then a bank perspective, too.

If you just have money sitting in an account too, they're like, we don't know where this money came from.

We need to verify.

So sometimes if you go buy, like, if you go buy like an apartment building, they want to verify where all that money is coming from.

It can't just be like...

They actually look at the last six months of your bank statements or three months and they'll be like, why did you just get 250K here?

What's that for?

So they want letters of explanation.

I just went through all that.

Yeah, yeah, yeah.

I had a cash out some crypto and they were like, like, hell's this.

What's this?

Yeah, exactly.

I didn't know it was that intense.

Every deposit.

Yeah, anything above 10K.

They were like, holy crap.

Yeah, yeah, yeah.

Exactly.

Like, I had some invoices.

They're like, explain exactly what that is.

What all these transactions, right?

We're sending money 60K out or 50K.

Yeah, that's common 50K.

You know, we have to explain this, explain that.

Like, wow, this is going to be a while if I have to explain everything that goes in and for real.

It was to buy a house.

It was crazy.

I mean, we bought an apartment building and then we used that same bank account.

and they were like, what are all these transactions?

It's like, dude, it's literally a business.

Because all these banks are scared from 08 crash.

Yeah.

Because they were just handing money out.

Yeah.

It was their fault.

Yeah.

Don't blame me.

For real.

You think something like that will ever happen again, that crash?

Well.

I hope not, but I think that right now we're seeing some around the DSCR loan, that could be a little bit of challenges in there for people that are doing like Airbnb kind of thing.

I think there might be a little bit of risk there.

Commercial, I think there's some risk there in terms of

lending, but what's the SCR?

DSCR is kind of like asset-based lending.

So it's basically they want to make sure that whatever

the property that you're buying with that, they're not looking at your income, they're looking at the amount of money that the property is making.

Oh, interesting.

If you have a long-term rental, it's not so much a problem.

I see it as a problem with Airbnb or short-term rental where your income could be very high, like for a couple of months, and then all of a a sudden it dries to zero so that's that that's where I see a little bit of risk on the residential space commercial like office space I think there's some there's some risk there yeah yeah that Airbnb game was hot for a while but I feel like it's died down pretty heavily right it's died down a lot yeah well if you're heading if we're heading into a recession as well I mean I don't want to be like doom and gloom here but if it's or even if it just slows down then yeah so these short-term rentals would be in trouble yeah the recession thing I feel like we've been in one for years personally but what do you guys think you think we're we're in one yet

I think, well, that's tough to say.

There's a lot of things going on right now where you're just like, yeah, everything is fine.

Like, you know, there's some companies that are laying off employees and inflation is more stable and stuff.

But when the Federal Reserve says they're going to cut rate, this is not a good sign.

So they're seeing something that is not good.

Oh, it's not a good sign.

It's not a cut interest rate.

What do you mean?

Because they're trying to stimulate the economy.

And I think the economy is going okay.

So why is the Fed thinking of cutting the rates?

Oh, so you like the rates right now at this price?

I like the rate.

I think the rate is a normal rate.

8.5, a normal rate?

Yeah, really?

Yeah, so the average for

the last 50 years was like seven and three-quarters.

Oh, wow.

So we just got so used to the

rates.

Yeah, yeah, yeah.

Yeah, especially you guys.

You never saw like I never saw this because I was never shopping for houses years ago.

So this was my first experience.

When we bought our first house, my wife and I, his mother,

it was like 13%.

Holy crap.

What?

We were fine.

In 2001?

Damn.

Yeah, no, it was before 2001.

It was like 1995 or something.

Holy shit.

13%.

I'd be crying to sleep.

That's insane.

But we thought it was fine.

We thought, that's okay.

It's going to appreciate.

And, you know, we don't have to pay rent and all that kind of stuff.

Did you end up appreciating?

It ended up appreciating a little bit.

But now, I mean,

I don't own a house.

I actually sold my house to invest in real estate.

I know it sounds kind of weird.

But

yeah, I mean, I kind of like Grant Cardone, I rent my house.

I rent where I live.

Wow.

It doesn't make sense to buy a house.

Yeah, because he has that controversial take that a house is a terrible investment.

It is a terrible investment.

Absolutely.

Yeah.

Wow.

Yeah, I bought mine more for safety.

Like, if I end up making money on it, that's cool.

I didn't see it as like an investment.

You know what I mean?

Yeah, so if you like that, as long as you don't see it as

an investment, that's fine.

Yeah, but a lot of people do.

A lot of people put their net worth in their house.

Yeah.

Exactly.

And that's the situation I was in before I sold the house.

I had absolutely everything running on that house.

Yeah.

Like, you know, I had no 401k almost.

Oh, that was stressful.

Then everything was there.

And there was a lot of money, a lot of equity.

And yeah, every money, every day I would come from work and I was like be stressed out and tired.

And then I would look at the equity on the couch watching TV.

And, you know.

know, yeah, because he bought that house.

We immigrated from Toronto to the Bay Area.

That's a big change.

In 2001, they bought that house for like 700K or something like that.

That's unheard of now.

70k.

Yeah, San Fran.

And then what didn't you sell it 2,000?

2.1.

Holy crap, went up 3x?

Dude.

Yeah, San Fran's popping off right now.

Crazy.

It's adjusting down now.

Oh, is it?

Yeah.

Oh, yeah.

I was just there and I was like zillowing houses that I passed by.

Some of them were 15 million for like 3,000 square feet.

Yeah, yeah, yeah, yeah, yeah.

It's like not even a mansion.

Yeah, it's still expensive, but you know, it's coming down.

Like I have a lot of people that invested in real estate in the Bay Area and yeah, they're having a hard time selling their house.

Which cities get hit first in America, usually?

I think all these ones where

you know, where you see some kind like it's a little bit different because I think the the big one everything one that's where it's expensive That's kind of like bubble territory.

So so San Francisco had been kind of like in bubble territory for the longest time.

Then they moved out and then they created a lot of people from the Bay Area moved out and then they went and created other bubbles

in Austin and

Las Vegas.

Yeah, Vegas got hit.

Right.

And then so the prices went up in those.

Miami, too.

Yeah, Miami.

Miami was still in it.

So yeah, so that's what I'm seeing is that

these big cities that are kind of in bubble territories and you look at the migration where people are going.

I mean, the pandemic really accelerated the migration out of California.

Oh, yeah.

Cali and New York, everyone left those too.

Yeah.

Yeah.

Miami, I heard, is really hard to get a good house out here for a good price.

Yeah, for a good price.

The prices have gone crazy in Miami.

It's been insane.

I mean, the rents have like double triple.

I met a bunch of people since we moved here that like, they were like, yeah, the condo in these buildings used to sell for 100K five years ago.

Now they're like 600 grand.

Holy crap.

Just in the last couple of years.

So a lot of real estate is just timing then.

A lot of it's timing.

And I think there's just, I mean, there's so much that happened in California.

Like COVID just like really put its damper on a lot of New York City or New York in general, California.

And I think it's just like the spreading out of all these people to Texas, to Florida, Tennessee, a little bit, Nashville.

That's just affected the home prices so much in these places.

But we don't play the timing game.

Oh, you don't?

No.

So that's why we're in these boring markets.

You know, Cleveland, St.

Louis, Detroit, when we're in Memphis as well.

Like the appreciation, not the appreciation, but the business,

the cities were growing at about 1%, population growth about 1% or half a percent.

Very slow, sustainable growth.

And that's where we invested.

And so that makes it a lot more stable, more predictable.

And when you look at these bubble markets, like Austin and all that, and Phoenix, like up and down, it was very difficult to get any deals there.

Yeah, I like to say, like, we choose our markets.

Like, if one of the cities we're investing in hits like top 10 places to invest, it's too late, right?

So, like, we like to find the places that are just super stable, reliable.

We can count on every deal.

We're all in for around 100,000 bucks, 150.

We have multiple exit strategies because you're right.

Like, timing would be great if you had a crystal ball, but there's no way to fucking know what's going to pop off next.

Yeah.

So, for us, it's choosing those reliable markets that haven't had that hockey stick growth.

Where can we buy and place our chips so that when it does hockey stick, if ever, we already have a ton of chips in that place?

Got it.

Are you guys selling right now?

Buying and selling a little bit of both.

Yeah, a little bit of both.

We're buying a couple per month and then selling a couple per month.

Damn, a couple per month.

That's crazy.

So you guys are just cash flowing heavy.

That's nothing for us.

We did at one point like 50, 50 houses a month.

Holy crap.

And we were like cruising at 20 houses a month.

50 50 was a little bit of a 50 was our biggest month we ever did was we almost 20 houses in a month.

Jeez.

20 a month is like almost every day.

We had a whole team doing that right now.

Damn.

Yeah.

20 per month was around like our target like normal.

Okay.

But now with interest rates, you've toned back.

We've toned back and we moved over, took a lot of that cash and sold a lot of the houses we had and went more into like the technology software space.

So we made an app now that helps other people find deals in the Midwest, analyzes them.

We have MLS access.

Oh, nice.

And then connects them to local vendors on the ground to help them do the same thing.

What's that app called?

Flip system.

Flip system.

That's cool.

So it's just an app on your phone.

You look up the city and it tells you good deals?

Yeah, it's so we have bought MLS access.

So MLS is like Zillow and Redfin and stuff where they get all their data.

So the software, we bought MLS Access in a bunch of cities that we like.

We have our team go through all those deals, which is like 400 deals a week.

They whittle that down to 200 good deals per week.

Those get posted on the the marketplace.

And then our clients can go in on their phone.

The numbers are already there for them with the ARV, purchase price, repair costs.

So the numbers are done.

And then the next thing they need is just a local realtor, property manager, contractor, and we connect them to all those people.

Wow.

You make it easy because a lot of people are scared to get in real estate that's pretty complex at first, right?

And they don't want to invest out of state.

They want to like, I talk to so many people here in Miami, Florida, and they're like, yeah, I just want to go and see the house, touch the house.

So they have all these fears about about like buying something completely virtually.

But my question to them is, okay, cool, let's buy the house next door.

Then what?

Like, you're still going to have to hire a realtor, property manager, contract.

Like, what value are you going to add?

Are you a certified inspector?

Are you an appraiser?

Are you a contractor?

No, no, no.

Okay.

Does it matter then?

Yeah.

It's just this erasure.

It's just a fear thing.

They also have squatters, probably.

And there's a lot of emotional.

I think they watch things on TV and they think it's fun to be, you know, throwing a hammer through a wall and stuff like that, doing the demo and stuff like that yeah that lasts five minutes you know then after that it's kind of like go back to my spritz yeah it is fun yeah it is fun to be like when you get like into the dirt and you can like go see your house being renovated it is kind of cool the first three times and then after that it's like all right i'm just doing like it's the same bloody thing every single time you know I'm already over it.

I'm dropping like 5K a week right now on contractors.

I'm like, damn.

This is the part they don't talk about with buying a house.

Yeah.

All the repairs and shit.

Yeah.

All the repair.

Well, especially if you're buying it to like renovate it to your standards.

And then, on top of that, the ongoing maintenance.

I didn't even know you had to trim palm trees.

So that's 3K a year that I didn't know about.

Did you guys know that?

No.

No.

I don't know if you got palm tree cities.

Oh, okay.

Yeah, there's a lot of those in Vegas.

You guys ever invest in Vegas or no?

Well, almost did, but no, we ended up not investing there.

Too pricey.

Too pricey.

Pricey and then too competitive as well.

Yeah, Vegas is super competitive.

Dude, when I first moved there three years ago, you had to offer $100K over ask just to even talk to the seller.

Yeah.

And so for us, we prefer to be in a market that has a ton of deals where we don't have to like worry about getting a next deal in the door.

Like a buyer's market.

Yeah.

And you can go to like Detroit, Michigan.

There's 3,500 active houses for sale below 150K.

Damn.

So it's like.

And all the houses are the same.

So I want an assembly line of projects.

You know, like I'm looking at some investors in California and they say, well, oh, this house we're going to do this.

We're going to do an ADU and we're going going to do this.

And this one we have to do something different.

And with the decorator is coming in.

And, you know, I don't want to do that.

I want to have like cookie cutter and every cookie's the same.

The contractors knows exactly what to do.

They know what paint color.

I don't have to talk to them.

And an assembly line.

You get way more efficiency.

Yeah.

Yeah.

Why do you guys decide?

You got to know your numbers, you know?

Yeah, you got to know your numbers.

Why do you guys decide to go the volume route rather than just buy like a million dollar house, get a couple of those?

So we did the, there's a couple of things.

So

well we went to commercials place, so we'd actually bought like a couple of apartment buildings

and so we have one still left, but we sold four of, we had five at one point, so we sold like four.

And I really like that.

I really like the game,

the returns on that and the but it's so it takes so long to find an apartment building.

And then you have to go there.

The due diligence takes forever, the loan takes forever.

And

you know, so this it takes a just a very long time.

And again, it doesn't give me that assembly line kind of thing.

Every apartment building is different and you know, and you have to go city to city.

So it's just very complicated, very difficult.

Returns are great once you get there, but you know,

it takes a couple a year at least to get into one of one of those properties.

Then you do the renovations, you have to disturb every single tenant to do the renovations.

Yeah, I didn't know it took a year to get one of those.

Yeah.

And then the other thing is like, even if it was like just a single-family home house flip, like if I wanted to flip houses in Vegas for a million or LA, it's like those houses don't have exit strategies.

There's like one option, which is buy it, renovate it, and sell it.

I can't buy it, renovate it, rent it out, buy it, rent.

I mean, you could probably Airbnb it.

Vegas banned it, I think.

Oh, really?

I think they banned Airbnb.

Yeah.

So literally, like, your only exit now is to buy it, rehab it, and sell it.

Cool.

What if after renovation, the whatever, the market gets a little soft or like interest rates go up instead of going down.

It's like, cool, now your like $2 million sale price goes down to 1.7, 1.6, 1.

And you have like your tans, your hands are tied.

You're kind of locked into one exit.

So that's why we prefer doing the cookie-cutter $100,000, $200,000 house, splitting up our chips across 100 deals versus just one because we have multiple exits and then we're spread out.

We can afford to lose money on two out of 100 deals, 2%.

Whereas

average person probably couldn't.

Definitely not.

Because one deal is just going to wipe them out because they're putting all their chips in.

Yeah, one bad deal could be a huge loss.

But your houses are 100K, so if you lose two of those, it's manageable, right?

Yeah.

And the profit margins on them are 10 to 30,000 bucks.

So it's like, okay.

10 to 30%.

That's pretty good.

Yeah.

For is that a year or is that over?

No, just project length.

Okay.

How long is the average project length of you feel?

Average project length, four to six months.

Oh, it's quick.

Yeah, exactly.

Yeah.

So 10 to 30% in four to to six months.

Yeah, that's to buy it, rehab it, rent it out, and then sell it.

Holy crap, those are like the best returns I've ever heard in real estate because people think real estate is slow.

Yeah, that's just cash.

If you finance it, it doubles and triples that return.

Damn.

And you guys are financing all these.

Yeah, we are.

So we'll buy the house, get a hard money loan on it.

Hard money funds like 80% of the purchase, 100% of the rehab.

So you can like flip a house today in the city in the Midwest for 15K at a pocket.

Dude, see, that's like awesome because people don't have 100K lying around for exactly.

So you start with 15K in four to six months, you flip the house, you buy it, rehab it, rent it out, and sell it, and you make 15K profit.

So it's 100% return in four to six months.

Incredible.

And you guys learned all this at a conference 10 years ago.

The conference really helped us kind of like get together and think about real estate together and have, and then we did a lot of exploration after that.

We tried to do, I mean, we tried to do wholesaling, we did probate, we did commercial, we tried to do things in the Bay Area, flip retail, rentals, apartment buildings.

Oh my God.

It was like, no, nothing worked.

Nothing worked.

And we like small

big pond.

So it was a company to make money.

Two years just like testing a bunch of people.

Wow.

I love how open you guys are about that because some people think it's easy.

Oh, no.

And then we went back to the drawing board and said, okay, well, this is when we need to build like a passive income.

We are interested in passive income.

We're going to build a portfolio of rental properties.

It can't happen.

We can't do this here.

So where can we do this?

And so just started looking at statistics across the US

and looked at Census Bureau, Bureau of Labor Statistics, combine all these spreadsheets.

We love spreadsheets.

And then, yeah, so we looked at Memphis, Cleveland, St.

Louis.

These were the three cities we looked at initially.

And yeah, Antoine went on the phone.

calling every realtor in town and there was only one of them really made sense.

And that's where we we bought our first house in in Memphis and you didn't even see it you were buying it from here that's right from Florida wow yeah from LA from LA damn so you guys really believed in the model we did yeah well there was nobody else really like I remember going to like conferences or like networking events in and around LA I was right out of college 22 23 or whatever and I was going to these conferences youngest person in the

networking event and I was they're like we're trying to find deals in LA we're trying to find deals in LA and I'm like I just bought my first house in Memphis and it's like they had been trying for five, six years to flip their first house in LA, going to all these meetups.

And I was like, oh, I've been trying.

Well, I've been trying for two years, but I started looking at out of state a couple months before and I bought my first house already, built the team.

And so people's brains started exploding.

And then I think that's when a lot of people in California and New York like started opening up to the fact that they can buy stuff in out of state.

Right.

And they could buy it like all done up with the tenant in place, like with a bow on it for $150K.

Yeah.

And, you know, in their local market, that'd be 2 million bucks or something crazy.

Absolutely.

It'll win cash flow.

Yeah.

What kind of background do you need to raise hard money?

Do you need deals under your belt to get to that level?

Yeah, well, hard money normally, if you have like a good credit score, if you have like, you know, and what, yeah, if you have some, some money in, you know, you're going to put some money skin in the game and stuff like that.

So that'd be great to do that.

So that's basically the

requirements for that.

But, you know, we really like also private money lending.

So if you have like a rich uncle and so really kind of like go and tap to those resources, the people that know you already, then you let them know that this is your co-workers and all that and say, hey, I want to do this.

And then that helps you.

You can get some better loans,

lower interest rate, no points, and then they're happy to help you.

Especially if these people live in California, lending like 50 to 60K is not a big deal.

Yeah, if you live in LA, yeah.

Yeah.

Yeah.

Hard money is great because there's no income.

So just like the thing we were talking about, like for you to go buy your house, you have to show all that stuff for your income.

But for this, these loans, they're used to working with fix and flippers.

So it's like, all right, we don't care about your income anymore.

It's just taxes.

And then we're going to analyze the deal side by side with you.

So we're going to get an appraisal on the property.

They do all this kind of stuff, rehab, repair cost, estimator, all this kind of stuff to verify that they think it's a good deal.

And then do you have the credit score to back it?

And then, like he mentioned, do you have the cash to actually put some skin in the game yeah i know a few hard money lenders they live a good life man yeah just sit there and collect a check

and a lot of them are not even lending their own money they like have like they have like a rich uncle oh that's even crazier yeah or they have like family office they go to family office most and they're happy with 10 a year yeah these hard money guys yeah like 10 12 a year yeah and so what they'll do is they'll charge these points as kind of like their fee for getting the loan together and then the 10 is like cool family office here you go yeah like here's your 10 because then the family office making 10 They'll be pumped with that.

Because they're managing so much that 10% is actually good to them at that level.

Yeah, exactly.

Yeah.

But with this model, it's cool to see it works at scale with these returns.

Yeah.

Yeah.

It's also very nice when you see that the flip system clients are actually, you know, they follow the, if they follow the program, they do the training,

they get together with our coaches.

And so it's so, to me, I find that so exciting that these people are actually getting into their first deals and then the renovations and all of that.

And then they sell their first property at a profit.

I love it.

It's just like unbelievable.

Yeah.

Do you get a percent of their profit?

No, no, no.

No, really.

It's all theirs.

I mean, we're just coaching them along the way.

Okay.

And

yeah, I mean, this is great.

So this is entirely their business,

their thing.

We don't get involved in it.

Nice.

Yeah, we'll definitely link that up below.

Anything else you guys want to promote or close off with?

Nope.

Nope.

No, that's it.

Just the hop.

Nothing really.

We'll link your social media below as well.

Yeah.

We want to message you guys and maybe a contact email.

But that was awesome.

Thanks for coming on.

Awesome.

Thanks for having us.

Yeah, thanks for watching, guys.

See you next time.