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Speaker 2: Oh, we start rehab. It's pretty extensive. So the first
Speaker 2: thing that people have been asking for a long time
Speaker 2: is like the hardest part of and even this is
Speaker 2: what Caesar's saying, The hardest part of real estate is
Speaker 2: finding a good contractor. So you have a contracting company like,
Speaker 2: what are tips? How does somebody know you fresh just
Speaker 2: bought a house. You don't know anything about real estate.
Speaker 2: You're trying to rehab you're trying to fix up a home.
Speaker 2: How do you know like a good contractor? Like, how
Speaker 2: do you vet somebody?
Speaker 3: All right?
Speaker 4: This is the only way you can vet somebody without
Speaker 4: actually knowing what to look for. First and foremost. If
Speaker 4: you know what to look for, then you'll know for
Speaker 4: a contract that's good or not just by the conversation.
Speaker 4: But in our demographic in our community is really word
Speaker 4: of mouth. That's how you can tell. I mean, you know,
Speaker 4: if he used a contract and you ask him, like, yo,
Speaker 4: what's up the contract? He's like, nah, even know not
Speaker 4: to use it? Right, But if you're like nah, he
Speaker 4: officials and we got word of mouth spreads fast in
Speaker 4: our community. But the number one way, man, honestly, is
Speaker 4: to actually get educated. Like everybody that's in the real
Speaker 4: estate business, the contractory, they took a hip off the contractor.
Speaker 4: I did you know what I mean? Plenty of contractors
Speaker 4: got over on us.
Speaker 2: Yeah, exactly. How do you know if somebody the.
Speaker 4: Main contract is gonna get over y'alls like your uncles?
Speaker 4: You know what I mean, Like, nah, my uncle and
Speaker 4: I do everything.
Speaker 2: You know, if you get ripped off.
Speaker 4: I mean in the beginning. No, there's really no way
Speaker 4: to know. There's no way to know. Like man, when
Speaker 4: we I never forget. Me and my best friend we
Speaker 4: had a first house at the same time. He decided,
Speaker 4: by the way to fix this, I decided to sell minds.
Speaker 4: I just blew minds out and I never forget my
Speaker 4: uncles of them had did all the plumbing, so his
Speaker 4: bathroom was done in anything, right, so we couldn't we could.
Speaker 4: So I came downstairs one day, I'm like, wholl where
Speaker 4: are the pipes coming Like, this is your bathroom right again,
Speaker 4: I'm like, well, where are the pipes coming from? No water,
Speaker 4: no pipes, know nothing, the whole bathroom done.
Speaker 3: It was like a model home. You know what I'm saying.
Speaker 4: It's like a mouse like staged you know what I mean.
Speaker 4: How they was able to get over was one, he
Speaker 4: was twenty seven, I was about twenty eight. We was kids,
Speaker 4: not knowing nothing about the business. Two the water was
Speaker 4: turned off from the street at the time, so they
Speaker 4: had a Sunday the impression that they would fix the
Speaker 4: house then call the city last to come cut the
Speaker 4: water on. But it was no plumbing, nothing hooked up,
Speaker 4: and they just they just did it like that.
Speaker 5: When you realize that, I mean, it's it's bad, you
Speaker 5: knowation it's bad.
Speaker 4: It's like but I'm gonna tell you something in that era,
Speaker 4: back then, it's just what people did.
Speaker 3: Man.
Speaker 4: People chase the money. They didn't really think that we
Speaker 4: would make it to this level, you know what I mean. Like,
Speaker 4: you know, they didn't care about reputation. But one thing
Speaker 4: about that construction, you will learn it through trial and era.
Speaker 4: Everybody gonna pick something up and try some stuff on
Speaker 4: their own. They're gonna pick something up and try. Every
Speaker 4: one of us did that. It probably took me a
Speaker 4: month and a half the sheet rock this room all
Speaker 4: by myself. But I can do it, you know what
Speaker 4: I mean. But now once you learn like you don't
Speaker 4: cut the sheet right, if you watch it, once you
Speaker 4: watch a professional do something, you know what I just came.
Speaker 4: I just thought about why I'm sitting here. If you
Speaker 4: got the opportunity to be around some professionals, just go watch,
Speaker 4: because if you see how the sheet rocks supposed to
Speaker 4: be done, and you're going to hire somebody. If they're
Speaker 4: too busy, then you know instantly if they're putting it
Speaker 4: up right, if they're putting it up wrong. You understand
Speaker 4: what I'm saying. Oh, put the walls up, then it's
Speaker 4: now you put the ceiling up. Then you put the
Speaker 4: walls up. The walls holding up the ceiling. It's little
Speaker 4: minute stuff like that that you wouldn't know unless you
Speaker 4: was in there watching.
Speaker 3: So like you talk a lot about the phases of rehab.
Speaker 5: So the first one is find the contract and the
Speaker 5: next one is the demolition.
Speaker 4: The constructor scene does that right? First thing is please permits.
Speaker 4: Somebody got to be licensed. ELLENI is not the cops.
Speaker 4: Everybody think Elena's the cops. Like you'll close the windows,
Speaker 4: lock the door, Yo, ELLENI coming down the street. You
Speaker 4: know what I mean?
Speaker 5: Like, Yo, the permit and I felt those are the
Speaker 5: expenses that people don't really think about, like the materials,
Speaker 5: but the.
Speaker 4: Paperwork, permits, plans, blueprints, that sounds like something extensive right now.
Speaker 4: They damn they want playing for everything in Philadelphia. If
Speaker 4: you if I just renovate your basement, they want plans.
Speaker 5: What's the pricing on those permits and get those I
Speaker 5: mean what the permits don't cost nothing, pulling permits in
Speaker 5: like fifty bucks to eighty one eighty.
Speaker 4: Now when you got to get to an architect and
Speaker 4: you need plans, it costs a little more. It might
Speaker 4: be two thousand and three thousand, depend upon the job.
Speaker 4: Now where the permits get pricey at we just I'm
Speaker 4: just gonna put it out there and talk real. Is
Speaker 4: you you doing the house and you don't really have
Speaker 4: a license, So now you want to use his license
Speaker 4: for him to get you a permit, then a permit
Speaker 4: might shoot up to fifteen hundred. This is what people
Speaker 4: do because everybody don't have the credentials.
Speaker 2: So the contractor handles all of that.
Speaker 4: The contract is supposed to handle all of that.
Speaker 2: And so what questions do you do? You ask us?
Speaker 4: Are your licensing insured? Are your licensing insurance almost first
Speaker 4: and foremost? And I'm gonna tell you why, because trying
Speaker 4: to cut corners always seem to revert back to doing
Speaker 4: it three times. You understand what I'm saying. So cutting
Speaker 4: corners always revert back to doing it three times. And
Speaker 4: you look up and you done spent twice the amount
Speaker 4: of money that you were spending, thinking you was gonna
Speaker 4: cut a corner.
Speaker 2: Another thing that I think I heard you say. I
Speaker 2: know Caesars said as well as that you paid contract
Speaker 2: contractors should be paid in phases exactly.
Speaker 3: Yeah.
Speaker 4: And you know what, in this era, people are more
Speaker 4: protected than we was in the beginning because when you
Speaker 4: get funding, they would normally say, okay. Back in the day,
Speaker 4: it's like, oh, it's seventy thousand dollars to get it done.
Speaker 4: They give you seventy thousand, Well, we know we ain't
Speaker 4: gonna get the job done. Got to get the car
Speaker 4: and to watch, you know what I mean, Maybe we
Speaker 4: get the job done later, you know what I'm saying.
Speaker 4: So now and it's like, okay, one, you gotta put
Speaker 4: your own money up. I don't know if y'all know that.
Speaker 4: So let's say let's say you get one hundred thousand
Speaker 4: dollars to do you ever rehab, right, the first phase
Speaker 4: is twenty five thousand, Well, you gotta get twenty five
Speaker 4: thousand dollars.
Speaker 3: Worth of work done.
Speaker 4: Then they come out and expect it and see it's
Speaker 4: twenty five thousands were for work done. Then they reimburse
Speaker 4: you construction loans or reimbursement loans now, which protects everybody
Speaker 4: because I watch this a contractor right, you give me
Speaker 4: twenty five thousand dollars, I don't do no work. Right,
Speaker 4: You burnt out of the twenty five thousand, but you're
Speaker 4: not burnt out of the whole hundred thousand. You understand.
Speaker 4: You gotta chat. You got an opportunity to recoup. Now
Speaker 4: the banks is not out of nothing because you paid
Speaker 4: for the first phase, gotcha, So you.
Speaker 3: Don't have to mess the loan up.
Speaker 4: So let's say if if a contract to get low
Speaker 4: on you in the first phase, well what the lender
Speaker 4: didn't give you no money on the first phase because
Speaker 4: as they come and inspect, the work is not done.
Speaker 4: That's another way. You know. Pulling permits will save you too,
Speaker 4: because you have to get city inspections and you have
Speaker 4: to get inspections.
Speaker 3: From the bank.
Speaker 5: You said something about having permits after every phase.
Speaker 4: After every phase, so you got to get permits and
Speaker 4: plans to go in right, demo alterations. After you demo,
Speaker 4: they got to come out and inspect it. And you
Speaker 4: want to frame it, frame the alterations, permit boom. After
Speaker 4: you frame it, you get inspections. Then you got mechanicals,
Speaker 4: electric plumbing, h BAG. After each McCay, you gotta get
Speaker 4: electrical inspected to come and inspect electrical. They can put
Speaker 4: a sticker on your window this hours in Philly to
Speaker 4: give you a stick that's saying you pass electrical. Then
Speaker 4: a regular city inspector comes back out and inspects the
Speaker 4: plumbing and the hvact boom. You get clear to do that.
Speaker 4: Now you can close the walls. You don't need a
Speaker 4: permit to close the walls. You just need to inspect.
Speaker 4: You didn't need to permit for the beginning to start
Speaker 4: the demo, the framing and the mechanicals. After that, once
Speaker 4: you close the walls up and everything is done, they
Speaker 4: do it's called the final inspection, signed off on it,
Speaker 4: and that's it and you ready to go.
Speaker 2: So like the two O three K loan, which is
Speaker 2: a renovation loan from a bank, the.
Speaker 4: Card is loan in the world. No contract don wants
Speaker 4: to deal with that. It's too extensive and it's too
Speaker 4: tight the government. It's not like the government. It's a
Speaker 4: lot to get your money for a contractor. Yeah, it's
Speaker 4: a lot for a contractor, a lot of contracts on
Speaker 4: Like you got some contractors that are just specializing that.
Speaker 4: Then you got some contractors down they don't want to
Speaker 4: deal with that. So it's because it's too much easy money.
Speaker 4: That's I'm thinking to myself.
Speaker 5: It's great for the person who's trying to get the home,
Speaker 5: not so great for the guy who's trying to say
Speaker 5: exactly exactly.
Speaker 2: So what kind of financing do most contractors? Obviously cash,
Speaker 2: but the majority of people don't have enough cash to
Speaker 2: pay somebody.
Speaker 4: So right now, people staying away from banks like the
Speaker 4: reason that the market is not really gonna tank. It
Speaker 4: might slow up and shift, but it's not gonna tank
Speaker 4: because people are not over exposed with these banks. People
Speaker 4: are dealing with private lenders. Hard money hard money, not
Speaker 4: really hard money, and private lending is two different things.
Speaker 4: What's the probably a private private lend is just a
Speaker 4: group of people like us, you know what I mean.
Speaker 4: We might got twenty million dollars, we're gonna lend on
Speaker 4: it with eight percent interests on it, and we're gonna
Speaker 4: make some money right together collectively a group of us
Speaker 4: friends heard money lens is different. They're kind of the same,
Speaker 4: but they are a little more extensive on the requirements
Speaker 4: in the criteria, you know what I mean. Hard money
Speaker 4: lenders come a little they come a little harder, you
Speaker 4: know what I mean. Like, you know one false moved,
Speaker 4: we own that, you know what I mean?
Speaker 3: Yeah? What about the job, like the materials for the job.
Speaker 3: Is there a strategy that you.
Speaker 4: Use or you buying in bulk or this is what
Speaker 4: I do? Build a relationship. I don't care. Don't think
Speaker 4: you can't build a relationship with a corporation. I spent.
Speaker 4: I spend over a million dollars a year in home depot,
Speaker 4: so I got a great relationship with them. I'm getting
Speaker 4: everything with like a three percent markup on some things.
Speaker 4: So where let's say sheet, where I costs eleven dollars
Speaker 4: a sheet, I'm paying like seven dollars and thirty cent,
Speaker 4: you know what I mean. So I get discounts because
Speaker 4: the more money I spend there, the more discounts I get.
Speaker 2: How did you establish that?
Speaker 4: I went through what's called a pro rewards account, and
Speaker 4: I get two percent off of everything I spend every
Speaker 4: six months. So if I spend five hundred thousand dollars,
Speaker 4: I get two percent of that and six months and
Speaker 4: I spend another five hundred thousand. I get two percent
Speaker 4: of that, So I get that, I get discount on pain.
Speaker 4: But it's just for everybody, Like, these are just programs
Speaker 4: that they offer. When you're a contractor, you got to
Speaker 4: get into You can't just go in there and spend money
Speaker 4: like every day person. Because you spending a lot of money,
Speaker 4: you want to get the discount. So you want to
Speaker 4: find out what programs available.
Speaker 2: So what is the most important part of rehabbing house? Like,
Speaker 2: is it the walls? Is the floor? Like, what's gonna
Speaker 2: make the house the most valuable?
Speaker 4: Kitchen, the kitchen, the bathrooms, the x steria, curb of
Speaker 4: pill the extra amenities, finished basement, hardwood floors throughout. What
Speaker 4: kind of towel you use, what kind of light fixtures
Speaker 4: you use, Just just the little stuff that catch people
Speaker 4: at Because I'm gonna be honest with you, I could
Speaker 4: strip a house down to the bare bone, right, strip
Speaker 4: it all the way down. That's what we do. We
Speaker 4: strip it all the way down to the brick and
Speaker 4: frame it up and do all new electric, plumbing, hpect, everything,
Speaker 4: sheet rock, everything brand new. And people noticed one little
Speaker 4: nick on that wall, Oh what's a little paints right here?
Speaker 2: You know?
Speaker 1: What I mean.
Speaker 4: I just we built this whole house. Like I had
Speaker 4: a guy. We had built the deck one time and
Speaker 4: the deck, the back of the deck had leaked, and
Speaker 4: he said he caught me, like you know, he was like, Yo,
Speaker 4: you gotta get down there real quick. I'm like, what's
Speaker 4: the matter. I got this man's leaking in here. So
Speaker 4: I come, I look at the back of the deck
Speaker 4: is leaking. I mean, he irate, what are we gonna do?
Speaker 3: What we gonna do?
Speaker 4: So said, he said, man, what are you laughing at?
Speaker 4: I said, you watch me build this whole house from ship,
Speaker 4: excuse me, from nothing, and you complaining about that little
Speaker 4: teeny leak. And that's how I was able to calm
Speaker 4: me down. I'm like, bro, you watched me build this
Speaker 4: whole house like this was a bandominium, you know what
Speaker 4: I mean. Like you know what I mean. You watch
Speaker 4: me put it back together, you know what I mean?
Speaker 4: But people, like I said, people only see the small things.
Speaker 4: They could see, Oh it's a nick in the walld,
Speaker 4: this is crooked, And we just built this whole entire house,
Speaker 4: you know what I mean.
Speaker 2: So so from a contractor standpoint, because you're you're interesting,
Speaker 2: because you're an investor and you're a contractor, right, right,
Speaker 2: So we talk about a lot. I realized we've never
Speaker 2: really looked at it from that standpoint, like from a contractor, like,
Speaker 2: how how do they go about as far as structuring
Speaker 2: their business model like you have a like how do
Speaker 2: they find clients? How do they like a.
Speaker 4: Lot of time clients? Let me let me just real
Speaker 4: quick because I'm gonna tell you something about contractors, just
Speaker 4: how we lose big with contractors. A contract to give assessment.
Speaker 4: I want one hundred thousand dollars to fix your house, and.
Speaker 3: You beat them up.
Speaker 4: No, I can't do one hundred. I could do sixty two,
Speaker 4: sixty two. I can't do it for sixty two. I
Speaker 4: could do it for ninety five. Man, I can't. I
Speaker 4: could do it for sixty two.
Speaker 3: That's it.
Speaker 4: The man commit to sixty two thousand, You get him
Speaker 4: a deposit?
Speaker 3: What do you do?
Speaker 4: Never come back? Right? You know why, because there's no
Speaker 4: way he's gonna get the job number sixty two thousand.
Speaker 4: He told you how much the job costs, but he
Speaker 4: took the money. A lot of times you get contracts
Speaker 4: that take a deposit and just use jobs like that
Speaker 4: as cash for like, you know what, I'll make the
Speaker 4: difference up somewhere else. I just need this money right now,
Speaker 4: so far and so on. But if you get a
Speaker 4: GC that come through and give you the number, instead
Speaker 4: of beating up on him, just get a couple of estimates.
Speaker 4: If it's in the same ballpark, do not try to
Speaker 4: knock that man down. So you go home and say, yo,
Speaker 4: I got hiven do it for sixty two, and then
Speaker 4: next week you ain't hear it from him.
Speaker 3: No, they go, you're sixty two exactly.
Speaker 5: So when you do these full gut rehabs right and
Speaker 5: you walk in, I mean you're seeing how the land
Speaker 5: you're gonna landscape this thing out?
Speaker 3: Is there an architect that works with you?
Speaker 4: Like, are not me? Who's doing me?
Speaker 3: Me?
Speaker 4: Everything you see in my house is me when I
Speaker 4: got a house out, Like if I ripped this house
Speaker 4: out right now, if I ripped the building out, we like,
Speaker 4: I can visualize whatever.
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Speaker 4: We room where I wanted that. I've been doing it
Speaker 4: that once you walk in. Yeah, like I would love
Speaker 4: for y'all come down one day and see me do it.
Speaker 4: I come down and run with me and see me
Speaker 4: do it. But I could rip this whole house out
Speaker 4: and just be As a matter of fact, if you
Speaker 4: look at my Instagram, you'll see me laying out. Yeah,
Speaker 4: that's what I do. I'll visual when you.
Speaker 5: Walk in, you're visually seeing like you know what, I
Speaker 5: can see an open floor space.
Speaker 3: That's gonna be two bedrooms up here. We're gonna put
Speaker 3: the basement. We're gonna add a wall. Yeah.
Speaker 4: Well, when you do so many of them, most of
Speaker 4: them become a cookie cutter. It's four or five different styles.
Speaker 4: When you do so many of them, you know what
Speaker 4: I mean. I'm doing hundreds of houses yearly, you know
Speaker 4: what I mean. So I got stuff going on in
Speaker 4: different cities that in Cleveland, I don't I don't knock
Speaker 4: no walls down. I keep the structure structures sound. I
Speaker 4: keep in Philly they call an open floor plan. When
Speaker 4: they walking in front door, they want to see the
Speaker 4: back door, which is easy because we don't have to
Speaker 4: spend all the money on these partition walls. We knock
Speaker 4: every wall down. On the first floor, you're that front door.
Speaker 4: You can see out the back. You put the kitchen
Speaker 4: in the back, put a half bath on the side,
Speaker 4: and that's it and you come out there.
Speaker 5: When we spoke to a season heavy, they were like,
Speaker 5: they have a standard, right they don't. When they do
Speaker 5: something rehab, they keep the same paint. So everything is
Speaker 5: very easy feeling. It's a strategy you use. You try
Speaker 5: to make it.
Speaker 2: Yeah.
Speaker 4: I got my own paint too, big business gray, in
Speaker 4: the same home depot word. Yeah, big business gray. So
Speaker 4: it's a great I use called big Business gray. It's
Speaker 4: made by PPG Paint and you can get it. And
Speaker 4: it's the ceiling white. It's called Sky's the Limit white.
Speaker 4: And I paint all my doors a signature red. It's
Speaker 4: called Paris Apple reds named after my granddaughter and my daughter.
Speaker 4: And these legit paints, these legit paints that sell the
Speaker 4: home depot.
Speaker 2: So yeah, you're you're like I said you you're like
Speaker 2: on a chessboard, You're the red and black, You're both.
Speaker 2: You're investor in your COTO gives you an advantage because
Speaker 2: you could look at the house and say, Okay, I
Speaker 2: know this is how much it needs to be fixed
Speaker 2: up because you're the want that's fixing it up. But
Speaker 2: for the average person that doesn't have any knowledge or
Speaker 2: that budgeting, like, how do they how do you see
Speaker 2: a property and say okay, this is a good buye
Speaker 2: or this isn't a good buy because you don't really know.
Speaker 4: All right, let me tell you anything that you could
Speaker 4: turn the profit onw is a good BUYE. Remember I
Speaker 4: told you this, and it has nothing to do with
Speaker 4: the structure of it or nothing. Let's say you and
Speaker 4: I buy a house today for twenty thousand, and we
Speaker 4: don't know nothing about it. How much is gonna cost?
Speaker 4: We got one hundred thousand to fix it? We find
Speaker 4: out tomorrow he come through as a construct contract and
Speaker 4: say it's gonna be two hundred thousand to fix it. Well,
Speaker 4: that's one hundred thousand doll our budget, right, But we
Speaker 4: paid what I say, we paid for twenty thousand I mean, listen,
Speaker 4: for fifty, if somebody gives us forty, we make one
Speaker 4: hundred percent interest for my money. There are weighs. It's
Speaker 4: a thousand ways to skin this cat. The biggest part
Speaker 4: about real estate is ownership. The second you own it,
Speaker 4: you got so many angles to ping golf up. Prime example,
Speaker 4: if you and I buy something for twenty we know
Speaker 4: it costs two hundred to fix it, but it's gonna
Speaker 4: be worth four hundred and we stand to make two
Speaker 4: hundred thousand profit. Or guess what I could tell somebody, Hey,
Speaker 4: give me two hundred thousand and fix this house. I'm
Speaker 4: gonna give you back three. I'm still making one hundred
Speaker 4: grand minus a twenty yet paid for it. I made
Speaker 4: eighty grand and I ain't spend none of my money
Speaker 4: but twenty grand. But I gave somebody fifty percent interest
Speaker 4: on their Money's so many ways with this game. You
Speaker 4: can sell it as is, or you and I can
Speaker 4: get a loan to fix it, put the two hundred
Speaker 4: grand into it and it's worth four hundred grand, and
Speaker 4: make the two hundred and one eighty profit. So it's
Speaker 4: so many ways. The main thing is ownership. You gotta
Speaker 4: buy it. You buy it. You good. You buy this
Speaker 4: building right now. Guess what if we go belly up,
Speaker 4: we can refinance it. We don't want to sell it.
Speaker 4: We need to stay here. We're gonna refinance it, pull
Speaker 4: that money out, make a move.
Speaker 3: You know what.
Speaker 4: We don't want to refinance it. We're gonna sell it.
Speaker 4: We're gonna do whatever with it. We can get an
Speaker 4: investor coming. Hey, listen, I want to airbnb this house.
Speaker 4: Give me fifty thousand, and we're gonna be partners on it.
Speaker 4: It's so many ways that you can flip it once
Speaker 4: we have ownership. Once you own it, you in a game.
Speaker 3: That's okay.
Speaker 2: So how do you know of something because you say
Speaker 2: you fully demolish everything. How you know something doesn't really
Speaker 2: need to be fully demolished or it just needs a
Speaker 2: little bit of.
Speaker 3: Work, like when you do a partial reheab man, is.
Speaker 2: There any partial rehab al?
Speaker 4: All right, listen, listen, I'm gonna be honest with you.
Speaker 4: So and slower in markets that's jumping, like in Jersey
Speaker 4: and stuff, I would definitely demo everything out. If they
Speaker 4: think they got a great comp now and they just
Speaker 4: doing light rehab, they could set the market. If they
Speaker 4: rip everything out to the brick. If they rip it
Speaker 4: out to the brick and do everything crazy over, they
Speaker 4: could set the market. They'd be super rich.
Speaker 2: Set the market. That's like set the market. Comps.
Speaker 4: I set the comps. I don't care. Nobody can't tell me, Oh,
Speaker 4: the comps is only listening this neighborhood.
Speaker 3: Just listen.
Speaker 4: I make the comps everywhere I go. I make the comps.
Speaker 2: How does it all right? So you make the comps
Speaker 2: by how many houses does it take in the neighborhood
Speaker 2: to make a comp like one? Really?
Speaker 4: One house? Prime example. If I went to Cleveland and
Speaker 4: I'm buying houses for fifteen, I'm selling them for I'm
Speaker 4: buying shelves for fifteen. Well, housing need work for fifteen.
Speaker 4: I'm selling them for eighty five or twenty down. People
Speaker 4: asking me who am I selling them to. What happens
Speaker 4: is sell them for twenty down. I do the construction
Speaker 4: for him, and I'm the mortgage company, so I might
Speaker 4: put Let's say, if I put twenty into them, I'm
Speaker 4: all in them. Thirty five people get me twenty down,
Speaker 4: I'm fifteen out of pocket. They still owe me sixty
Speaker 4: thousand dollars. They pay me five hundred, seven hundred a
Speaker 4: month mortgage.
Speaker 5: So once you sell the first one, Once I sell
Speaker 5: the first one for eighty five, it sets the trend.
Speaker 4: It seys it so.
Speaker 3: Normally you might even own the next three on the block.
Speaker 4: I own the whole block. But I'm gonna tell you
Speaker 4: how it goes. That's because people are following. And the
Speaker 4: thing is this, I'm not really looking to really flip.
Speaker 4: I don't want my clients to flip. When I sell them.
Speaker 4: My clients, it's a buying hole because I might sell
Speaker 4: you yours. Like in the beginning, I was selling for fifty,
Speaker 4: then it was sixty five, then it's eighty five. So
Speaker 4: now my people that was in for fifty are trying
Speaker 4: to sell to make their thirty five thousand profit next month.
Speaker 4: When I feel like changing the cop to one twenty five,
Speaker 4: my sixty five people want to be to sell, and
Speaker 4: then so forth and so on. I just keep elevating.
Speaker 4: And the thing is ownership is how I did it.
Speaker 4: If I buy enough, if I own I own over
Speaker 4: like five hundred doors in Cleveland, no exaggeration, we own
Speaker 4: almost five hundred doors, right, So if I listen, if
Speaker 4: I put everything on the market, for sale that I
Speaker 4: own right now for one hundred thousand. Anybody else that
Speaker 4: bought something for ten don't think they're entitled to one hundred.
Speaker 4: So we all put them up four hundred. That's what
Speaker 4: the number is. One hundred.
Speaker 3: That's the new number.
Speaker 2: So that's interesting, is that controlling the comps or manipulating
Speaker 2: the comps.
Speaker 4: That's not manipulating the comps. Is if you, my man,
Speaker 4: and I buy a house for twenty and I sell
Speaker 4: to you for eighty five, that's manipulating. There's people from
Speaker 4: all over the world calling me to buy these properties.
Speaker 4: But this is why they calling to buy them. So
Speaker 4: even though I'm charging eighty five, they give me twenty
Speaker 4: thousand down and their mortgage payment is five hundred a month. Right,
Speaker 4: but I want you to understand that their rental income
Speaker 4: is sixteen hundred a month. So if they getting eight
Speaker 4: hundred for each, because these are two families I'm selling,
Speaker 4: they're getting eight hundred for the upstairs, eight hundred for
Speaker 4: the downstairs, they getting sixteen hundred a month. They paid
Speaker 4: me five, let's say me five and property management of
Speaker 4: one fifty. Let's say they walking with a positive of
Speaker 4: eight hundred dollars. This is we're talking like that said Cleveland,
Speaker 4: what's attaches like a couple hundred dollars a year?
Speaker 3: I'm crazy.
Speaker 4: Yeah, So let's say they make an eight hundred dollars
Speaker 4: positive cash flow right off of a twenty thousand dollars investment.
Speaker 4: Like that's ninety six hundred dollars a year. In two years,
Speaker 4: they make all their money back. What happened to the
Speaker 4: thirty year mortgage? We just shrunk that up, owner ship
Speaker 4: three years. You own it, You got all your money back.
Speaker 4: At least you got all your money.
Speaker 3: Back used to get it in, so you said, and
Speaker 3: we ain't even.
Speaker 4: Talking about the refile. I ain't even lay the refied
Speaker 4: game down. That's that's just me saying, you in something
Speaker 4: free and clear, you own it, or you in something
Speaker 4: not no necessarily free and clear, because they still owe
Speaker 4: me a balance, but they got all of their money
Speaker 4: back out of it.
Speaker 2: So I used to that say, that's why you say
Speaker 2: comp should be your starting point, not your bottom.
Speaker 4: Exact exactly sow me say that said, I'm talking about
Speaker 4: the homework, and we do a lot.
Speaker 2: So I one other questions. I wanted to another video.
Speaker 2: I thought that was really dope a while ago that
Speaker 2: you did. You said, the process is you buy it,
Speaker 2: you flip it, you fight, you buy it, you fix
Speaker 2: it up, you refine, then the scrow, then you sell.
Speaker 2: Can you explain that?
Speaker 4: Say it again with that?
Speaker 2: So you buy it, we buy a proper, you fix
Speaker 2: it up, and then you REFI the money you put
Speaker 2: that the refile. Okay, okay, okay, I got saved your time.
Speaker 4: This is how you do it. This is what I
Speaker 4: meant by that. So you buy a house. This is basic.
Speaker 4: Buy it, fix it, refinance it, rent it. So let
Speaker 4: me give it. I got to give you everything in numbers.
Speaker 4: We buy for one hundred, we fix four hundred, we
Speaker 4: in it two hundred. It it praises that four hundred,
Speaker 4: we pull out seventy percent, which is too eighty, right,
Speaker 4: so we pull out too eight We was in it
Speaker 4: two hundred. We got eighty thousand dollars that we up
Speaker 4: on the refile, right, I payment it's twenty eight hundred
Speaker 4: one percent. So I payment it's twenty eight hundred dollars
Speaker 4: a month. We take twenty eight thousand of that eighty
Speaker 4: thousand and put an escrow. So you know you're good
Speaker 4: for ten months. Right, the second money in you rent
Speaker 4: it out, you probably ain't gonna get twenty eight hundred
Speaker 4: dollars a month rent due to this market. But we're
Speaker 4: gonna pull that eighty out anyway, because that's what we do, right,
Speaker 4: that's truth. So but what you want to do is
Speaker 4: if you put that twenty eight thousand, you up ten months.
Speaker 4: So even if you rent it out for fifteen hundred,
Speaker 4: that'll overlap, you understand, and that'll give you some buying
Speaker 4: time while you're taking the other sixty whatever thousand dollars
Speaker 4: left and you turning it. That's what I meant by escort,
Speaker 4: because what happens is people refie take that money out
Speaker 4: and think they're gonna put all the money in one
Speaker 4: bank account and every month they gonna take their money
Speaker 4: from that bank acount and pay that mortgage. What they
Speaker 4: get to spending that money and reinvest in that money.
Speaker 4: Every day life happens and you look up, they don't
Speaker 4: have that money or the mortgage money. So I would
Speaker 4: esco at least ten months, so I know, I'm good
Speaker 4: for ten months for God to give yourself a cushion.
Speaker 4: Every day life happened. So do you believe in buying
Speaker 4: holding or I'm all buying holding now that I'm older.
Speaker 4: My kid probably he probably came wake to flip all
Speaker 4: his house.
Speaker 3: But when you get to when you get to.
Speaker 4: A point like me, Man, I'm forty four years old.
Speaker 4: I've been in the game since I've been twenty eight
Speaker 4: years old, and I sleep four hours a day, Like
Speaker 4: I barely sleep with my wife. I see my wife
Speaker 4: like one week out of the month, you know what
Speaker 4: I mean.
Speaker 3: Like, b.
Speaker 4: That's my boy. Yeah, that's my boy. That's all he
Speaker 4: wanted to do was dance.
Speaker 3: He's like he sat this here a few weeks ago.
Speaker 4: Yeah, that's my boy. So when you get to that point, man,
Speaker 4: you gotta kind of sort of figure out one day,
Speaker 4: you know, I won't be able to go out and
Speaker 4: kill my food to bring it home for the tribe.
Speaker 4: You understand what I'm saying. So I got a cord
Speaker 4: of sort of have a machine set up in place.
Speaker 3: And the thing.
Speaker 4: Is, my kids love me and they they follow me.
Speaker 4: But my son, you know what I mean, I don't
Speaker 4: want to leave this earth and I leave my children
Speaker 4: in debt. You know, if you got an extensive portfolio,
Speaker 4: but you but you refined everything and you bringing in
Speaker 4: thirty grand a month, but your mortgages is twenty two. Man,
Speaker 4: you work for the bank. Man, you know what I mean?
Speaker 4: You work for the bank. My kids walk with eight
Speaker 4: thousand dollars a month. Now when I leave here, whatever
Speaker 4: I leave them, I want them to if they don't
Speaker 4: feel like working, they don't owe nobody nothing, you know
Speaker 4: what I mean. And that's that's what we got to
Speaker 4: get into. Like, if you want to be in this business,
Speaker 4: you cannot get into becoming an entrepreneur to be in debt. Entrepreneurs,
Speaker 4: you know, we don't. We're not supposed to work for
Speaker 4: each other. I mean, work for anybody. That's why we
Speaker 4: become entrepreneurs. But I mean, if, like I said, if
Speaker 4: you bringing in thirty thousand dollars rent roll and you're
Speaker 4: paying twenty two thousand out because you got four million loans,
Speaker 4: you know what I mean, you work for the bank.
Speaker 4: Cause if you don't, if you don't believe me, don't
Speaker 4: go out there and pay it and see what happens.
Speaker 3: See how much?
Speaker 4: See how much of an empire you really own? I
Speaker 4: know people that's man, listen, man, I know I know
Speaker 4: groups that's buying and building crazy fifty million dollar lines.
Speaker 4: What happens if something happened to them, their kids got
Speaker 4: to step up and what and be liable for the
Speaker 4: Their next to kin is liable for that stuff or
Speaker 4: they're gonna lose everything. So everything they built, you know,
Speaker 4: when you weren't teaching your kids, you know, to go
Speaker 4: to college and do this because you thought you had
Speaker 4: them and then you look up one day something happened
Speaker 4: to you. How many of us know our friends that
Speaker 4: parents left them stuff and they messed it up. They
Speaker 4: blew it because you know why, the parents never taught
Speaker 4: them the business.
Speaker 3: They don't.
Speaker 4: They didn't care about the business. The parents thought they
Speaker 4: had it to the point where they could just leave
Speaker 4: them the money. We were never taught maintenance. You gotta
Speaker 4: be ta a maintenance.
Speaker 3: Yeah we don't. I mean I don't even know people
Speaker 3: who parents left them anything. So that's dead. Right.
Speaker 4: We're breaking this cyphle right there. We're gonna be the parents.
Speaker 4: I was in a meeting with somebody not to get along.
Speaker 4: When I was in a meeting with somebody last week,
Speaker 4: and he would say, yeah, I just want to you know,
Speaker 4: I'm not gonna leave man. Listen, if I get one
Speaker 4: hundred million. I'm just gonna leave my kids this percentage,
Speaker 4: and I'm not gonna leave my kids all this money.
Speaker 4: I want to be not just straight up looked at
Speaker 4: him and asking, like, then quit what your works are
Speaker 4: for You got enough for you, right, If you got
Speaker 4: enough for you and you feel that way, take two
Speaker 4: million dollars. Put it in some kind of iry or
Speaker 4: something untilay you do have kids and they do get older,
Speaker 4: and quit, Like, what's the use you making fifty one
Speaker 4: hundred million dollar? You say you're gonna leave your kids
Speaker 4: two million apiece? Or they can struggle puzzle for your
Speaker 4: last name? Man, You know what I mean. It's crazy,
Speaker 4: that's the.
Speaker 2: Fact, all right.
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