AI Live - Land Shark Mastermind

Exactly.

But Florida doesn't exactly have autumn until November, so I still have a long way to go. I'm not even— I'm normally—

Same with Arizona.

Collar, but today I'm like, I'm in a t-shirt, I don't care what. It's like, no, no jacket required today, it's too hot. The air conditioning here got up to 82 yesterday, and I did a webinar at 6 o'clock at night. I'm like, oh my gosh, it's just too hot.

Yeah, we don't get fall here until like fall, November as well. Yeah.

Yeah.

I used to really love autumn. I've lived in Seattle. I've lived in Salt Lake City, and you get really good autumns there.

Right.

But Texas had no autumn. Florida has no autumn. I need to go back to some autumn sweater weather. And you were from Toronto, right?

No, British Columbia, the other side.

BC? Oh, even better in my opinion. Yeah, yeah, um, I love Victoria and Vancouver, and yeah, those were great places to visit.

Yeah, it's— I've been all over the world and Vancouver is still my favorite city on the planet.

It's beautiful. I, I slightly prefer Victoria a little bit more because it's just a little more British and Right. Yeah. Have you been to that Craigdarroch Castle there in Victoria?

No.

My parents actually just moved to the island a few months ago. So they— my dad's retired. So I'm really excited to actually go and visit them and, you know, go more of the island.

Yeah. It's heaven.

One of the things that's amazing is on the island. I don't know if you saw it when the salmon run in the fall. The salmon run. It literally looks like the, the, the creeks and stuff are on fire.

Yes, I've seen that in Seattle too. Yep. Bright red bellies. Yeah. And it's just, you can almost walk across on fish.

The streams are so full. Yeah. Yeah.

Oh, I'm missing that today.

Wow.

Yeah, it's— well, and it's, it's— so what do we got? August 26th. So August 26th, like, yes, up in Canada school is getting ready to go in. Um, yeah, it— the fall colors, I was thinking about that the other day. I mean, school started here beginning of August, so it's, uh, and it ends earlier too, so it's, you know, it's a different thing.

A couple weeks ago, but yeah, man, I'm Yeah, I think my parents are still up in the Seattle area. I think I need to go visit again soon because I need to cool down.

Yeah, it's hot. So, yes, I think that I'm definitely craving a northern, let's cool off location so that I can go the next couple of months.

Yeah, yeah, I think I need a break.

Yeah, I hear you. So we got—

go ahead.

So no, no, I was gonna say you've been traveling a lot, going and speaking at different events and stuff about lending. Um, with all the, um, I heard the Fed is looking at raising the interest rates. Um, so has that— has any of that impacted what you're seeing with around lending?

No, not really, because when people need capital, they need capital. And if they've got a plan to turn the money, you know, you know, if they have an ROI plan, then, you know, they just have to make more money with the money. But, um, whether rate— I mean, if, if rates are low, it tends to stimulate a lot more home refinance action, which I don't do. But I mean, I always say when business— when the economy is good, people start businesses. When the economy is bad, people start businesses. But, you know, so I, I'm busier than ever right now. I mean, I, I just, I, my hair's on fire.

That's awesome. Um, and so what mostly are you busy with?

We, uh, startups, which we, we have a history and we're kind of famous for helping the startups. Um, but I've got a lot of real estate, commercial real estate.

Okay.

Any, when you say startups, like any particular industry?

No, I, I don't. We're agnostic as to the industry. It's the situation. Somebody who's pre-revenue or in their first 2 years and can't get traditional bank financing.

Okay.

They're all coming to me. It feels like.

That's interesting. So one of the things I was thinking about it is like, what are, like, if you had to give like a, here's the top, you know, 5 things that you can do to get yourself ready to be, uh, to get a better loan, to get better rates, to get better— like, you know, I think about, you know, what is it, you know, having— and just in our conversations, like, uh, I think one of the things that, um, understanding the, um, uh, making sure that you have liquidity available.

Yes.

Not that they want to lose what's— they don't want to use that liquidity. They just want to know that it's actually there. So that, that was really interesting to make sure that you do have some liquidity sitting there, even if it is like, you know, in a compounding account making interest, that it is accessible. Sometimes your credit score, but I also know that companies, when they have revolving credit lines, Sometimes that gives them a better credit rating, like for their EIN.

Yeah, not so much. As long as they are using their credit responsibly, it doesn't damage anything.

Okay.

And so say more about what responsibly looks like.

Yeah. So from the personal standpoint, personal credit is absolutely the foundation of everything. And then it would be collateral or liquidity or both. Just what, what are your assets? Good credit and decent assets, you know, you'll get funded for just about anything from a business standpoint.

So what is considered a decent asset?

Well, it needs to be proportionate to the loan request. If I'm asking for $10 million and I only have a million In assets, I might not get it unless it's a— excuse me, a revenue-generating asset that I'm buying. Then that's different.

Okay.

Which should be the case anyway.

Right.

It's different in every situation. It just has to be proportionate to the request. You need— at least you need to have, like in an SBA setting, SBA 7 setting, you need to have about 20% of the requested loan amount on hand in cash or assets, whatever those assets are. Okay, you'll need 10% for your down payment. You'll have to show roughly another 10% in post-closing liquidity because they don't want to see that you put every penny into the business because, right, they want to see you have a buffer.

Again, you got to have liquidity.

Yeah, yeah, or, or an asset that you could Dispose of if you need to.

Yeah.

Right.

No, this is really good. I think that again, if people— here's, here's how I equate this. It's that, and I always said to my kids, look, like, business is just like playing a board game. You don't have to like the rules, but you learn what the rules are, you play and you win. That's it. So it's like if we could have the rules laid out so that we know what they are, we play and we win, like, then, you know, it's like setting yourself up to win, right?

Yeah.

But again, we're not taught this stuff in school. We're not taught this stuff, you know, in colleges or whatever. So it's like, you know, like, you're the who that knows how. So if we have a playbook, like, look, these are the rules to the game, do these things, then you're setting yourself up actually to win the game. Right? Like, I love to play.

Yep.

So that's the, like, you know, understanding. Okay, so if you're planning forward, knowing someday that you are gonna need money. And the other piece is, is how many times have we heard, like, um, what is it? They'll, they'll lend you money when you don't need money, but when you need the money, they won't let you the money.

That's right.

Exactly right.

Right? So I think about like, well, well, what does that mean? Right? Like, it's like, that's a— it's such a, a nebulous concept.

Right.

So if we can break it down and have people understand, okay, here's what it actually means and how do you set yourself up, right? So for me, it's like having the 7 streams of passive income and creating that and having that liquidity sitting over there. Then that gave me access to being able to get bigger lines of credit over here, even though I didn't technically need them at the time. But then I like I was explaining to my daughter, right? She's 22. Like how do you how do you get good credit, right? You go and go to your bank. You don't you never apply for one of the credit cards that comes in the mail. Don't do that. Don't go to a department store. Like go to your bank because they have actual legitimate credit cards that get reported to your. Your, um, the credit bureaus.

Yep.

And so you get a little $500 one and you use it, you know, 2 to 3 months. You pay it off, use it, pay it off, use it, pay it off. And then you go and you ask them to increase it to $1,000. Use it, pay it off, use it, pay it off, use it, pay it off. Go now, ask them to increase it to $5,000. Use it, pay it off, and just keep doing that. And eventually you get to like a $50,000 line of credit, and then you go do another one, another one, another one. Now you've set yourself up with all these different lines of credit, and as a credit agency, what they see is the percentage of credit that's used versus the percentage of credit that you have available to yourself, right? That's a really important piece to understand to the game. It's just a freaking game, right?

Yep.

And so when we do that, Then, when we get to the point of like, okay, now we're needing these larger loans, doing these bigger things, now it's like, okay, now I can do something with this because I've followed the rules over here, did the good things over here. To me, it's kind of like the other piece is, is it's like, why the heck do we brush our teeth and floss every day? Right? Like, it's something that takes us 2 to 3 minutes every single morning, but that 2 to 3 minutes, Yeah, why? I'm 51 years old and I have zero cavities, zero fillings, like zero, because I spent 3 minutes every morning brushing and flossing my teeth really well.

Right.

Like, it was that, that time there that flipped over into the benefits long-term, you know, 51 years later. So, it's the same to me. It's the same SRA, same rules apply, right? Like, we do something small over here knowing that right now we don't need this, but in the future we're setting ourselves up to have it be understood and known over here. Kimberly, I'm— I love it. I wish my parents would have explained it that way. My parents didn't explain it that way either.

They—

I actually— so here's a really funny story. So my adopted parents, when I was 20, I think I was like 22, 23, and I had started learning about financial literacy and stuff because that was never a part of my world. Um, my adopted parents, they, uh, blue-collar, hard-working. Um, you know, my, um, adopted father had literally worked at the same mill for 30 years. Like, that was the That was what you do in northern Canada. You get a job at the mill and you're there for life. And we were having a conversation and I was asking them, okay, so what are you doing to, you know, set up for your retirement? And they were like, oh, we got Social Security. Well, in Canada it's called the Canadian Pension Plan. We call it the Canadian Poverty Plan. And so inside of just doing the numbers, like at 23 when I did the numbers, I was like, This isn't adding up because what ended up happening was her parents ended up having to come live with them because their Canadian pension plan, Canadian poverty plan, literally did not pay out enough for them to live on their own. So they had to move in to be able to, you know, have everything be covered. So inside of that, my brain went, wait a second. So I started looking at my parents and going, I love you. I'm happy to have you live with me when you're older. And how about if there was some actual, you know, financial literacy here? So long story short, through a whole series of events, I got them set up with their retirement accounts, and my adopted dad was able to actually retire several years earlier because of literally me pushing them back when I was 20 years old to To get them to start planning for the future. And decades later, he was able to retire early. And they actually called and said that had I not pushed them, like, there's no way that he would have been able to retire early. So, again, it's the— again, making sure that what we're doing now is setting ourselves up and planning for the future, right? Anyway. So inside of what you do, I just, I think that there's a huge part of financial literacy that's missing for people to understand what they could actually be doing now to set themselves up into the future to be able to get these leverage, these loans to be able to grow their companies and portfolios bigger.

Yeah.

Guess what?

Yeah.

I haven't told you this. I have 3 different books available on Amazon. that cover these topics.

Okay, what are they?

When Banks Say No: How to Get Funding for Your Business. How to Build and Leverage the Power of Business Credit. I've talked about that before. That's a book as well. And I wrote one for teenagers as well, how they can establish the credit. And one of those tools is what you talked about, that $500 secured credit card, all the way up to, you know, when they start applying for college student loans. Well, if you just search my name on Amazon, Boyd Caron. Oh, somebody says, can you put them here?

Yeah, I was gonna say, can you just put the link?

Um, well, there's a link. Here's— I can get a link to my, I think, to my author page. I'm not sure. Let me see here. Let me throw it up there. Um, I think this will work.

There we go.

Might list some other things that aren't by me, but everything that I have up there I've got a few books up there.

You've never told me that you wrote a book.

I've wrote a few. Yeah, because all these presentations I do all over the country, I took the— I took them and put them into book format with worksheets and templates. And here's a personal financial statement. Here's the wording you want to write when you're writing for a loan.

This is awesome.

Personal scoring and planning and charts and That's all.

Look at you.

I generally don't self-promote, but this was a chance to say, hey, I, I have stuff for all these things you're asking about.

Good.

And that's exactly what I'm asking for is, again, like, you know, we have Luke who's here, who's in his early 20s. Ashley here, she's still, you know, building everything up for her family. Kimberly, who helps people with reverse mortgages, because had they had financial literacy, they wouldn't be in that situation. So again, it's like all these different things of, you know, again, it's like I try to read at least one book a month and learn from it and then implement whatever it is that I learned. And so this is very helpful. So again, yeah, please, please.

Next Tuesday night, we're kicking off a live startup academy specifically designed for single mothers. So it's going to include classic entrepreneurial training with personal, personal credit remediation because I also own a credit repair company.

Yep.

Business credit training and preparation and direct access to funding options for startups.

Love this. So yeah, if you can, um, uh, put the information in like there so that people can get registered.

I don't have a link necessarily. The first cohort is free. And so I'm just— it's just by kind of by invitation only.

So how would they— how would they get the information?

Email me. Email me there. Ask about— the program is called Go Biz Girl.

Okay.

Like it's here. It shows the Go Biz Girl student workbook on Amazon.

Yes.

Yeah.

They have to get that before. Yeah. They have to get that before they start the program. That's that's for the academy members. But you only buy that if you're gonna be in the academy. So if you're gonna start attending classes. But I have many, many friends who are single mothers. I have 2 sisters who are single mothers. And if anybody needs understanding and help to build new prosperity for themselves and their kids, and maybe even if we're lucky, create some generational wealth, I'm all about it.

Yep.

I love that. Okay, cool. Well, thank you. And I wanna talk more about this again, like, and Yeah, there's a part of me that wants to, like, have, you know, at least once a day, or, you know, because we do this every day, have it be a piece of it. Like, what's the rules to the game and how are we playing with those rules? Right? So we can break it down in a way that people understand it and can implement it really easily. So, yeah, super important to understand. Love this. Well, very cool. Ashley, super excited you're here. Kimberly, super excited you're here. Luke, super excited you're here. I love all the generations learning all the things. And, you know, again, all, all ships rise together. Um, so I have, uh, Tommy's not here. He's at a networking event. Um, and so I get to run the ship today, which is why we're going off and having actual lessons about stuff, because that's my style. Um, Ashley, did you have any deals you wanted to run? No, I'm good. And if you don't, I've got one here that Tommy had already prepared.

I don't today. Sorry.

No, don't be sorry. It's all good. Okay, so where are we? Okay, I think this is the one where Oh no, I think this is— so, uh, somebody— I think this is the one where Tommy said that somebody sent him a pic. Oh yeah, they— this is actually really good, so I want to show you guys this. So one of the things that you can do is make sure that you get on to, um, different wholesalers' lists, uh, because you never know what kind of deals that they're going to have. And Sometimes they you know have good deals, sometimes not. But being able to analyze them makes a huge difference. This one came. Let me share my screen. Da da da da.

Here we go.

Okay.

So this is a screenshot from a text message, or maybe it was Facebook that it's here. It doesn't give an address or anything like that. Are you guys seeing my screen?

Yep.

Do you see it?

Okay.

Yeah, it doesn't, like, say anything, right? So he went in and he said, see if you can find a house on the market or that just came off the market based on the description. And it literally did. So it went and it was able to actually find the actual address and then be able to go through and start underwriting the whole deal. So that's pretty powerful for, um, uh, for Deal Hunter to be able to do that and, uh, be able to underwrite the entire thing. So what's the opportunity to do a rental at this location? So it says, yeah, you can do a long-term rental. Um, and then it goes through all the numbers. So the purchase price, the assumption is $2,200 a month. Property taxes. So the NOI is $18,000 a year. Financing, it goes over all that, what that looks like, the rental range in that particular area. Excuse me, the biggest risk is the rehab and rent mismatch. So depending on the rehab that needs to be done. So this deal hunter's read is that this is a conditional go for a rental BRRRR evaluation. So being able to see if, you know, but just from this, now we could reach back out to that wholesaler and say, hey, you know, now give me, give me the information, and then, you know, they could go for that. So, uh, do a BRRRR. Evaluation. So it went through the snapshot. So again, buy for $260,000, rehab $25,000, closing acquisition, stabilization, rent amortized. So the refinance math, refinance it all the way through, cash remaining. This is not a full cash-out BRRRR at 75% LTV. So the real issue is the DSCR. So Redfin estimates that the rent is $2,189. Zillow says it's $2,233. So $2,200 is what they're going to underwrite it with. It's between the two. And based on all of that, going through the BRRRR sensitivity, Is the ARV, it's anywhere between $325,000 to $355,000 refinance cash out. So you would get anywhere from $46,000 to $23,000, depending on how much you're rehabbing and what you can actually do the refinance for. So then it goes into where you would negotiate. So opening offer. Target acquisition, um, maximum I'd pay is $250,000. So do only a light rehab on this, uh, and then funding pathways. So put 3 funding pathways all the way down, and then, uh, the verdict is renegotiate the BRRRR. Uh, and then what are the actual action steps to take? And then What about doing this, the Morby method? So Morby is where they do a wraparound. So purchase it for $260,000, existing loans $200,000, the existing rate 3.5%. So if you did the wraparound method, is that then solves the seller's remaining $60,000 equity?

Um.

So the seller finance 0 to 3% interest only for deferred payments for 5 to 7 year balloon. So example, existing mortgage would be taken over. Cash to seller is $10,000. Seller carry is $50,000. If the seller carries $50,000, 3% interest only, it's $125 a month. Um, so why this beats the traditional BRRRR method. The traditional BRRRR requires that you eventually replace the acquisition loan with new debt. This means that you're fighting current interest rates, DSCR, all of that. Cheap acquisition financing. So 3 structures you can pursue is subject to, which is the best case. So the seller owes approximately the full price and has a low interest rate. So the existing loan's $245,000. Cash to seller would be $15,000, purchase at $160,000 or $260,000. So this could be excellent. So, or subject to plus a seller carry, probably a sweet spot. So the seller owes $190,000 to $220,000 but wants $260,000. The existing loan's $205,000. Seller carry $45,000, cash out $10,000. Um, or seller finance is the whole thing. So, $260,000 seller finance purchase, you're doing an interest rate at 2 to 4%, 30 years amortized, 5 to 10 year balloon payment. Um, and so the seller pitch, and it literally gives you the script to actually go talk to them and explain the whole thing. The number that matters the most is before we know this is a killer creative deal, we need the seller's mortgage statement. So you need to verify all the information on the mortgage statement. And then from there, now you can have the conversation with them. And understand that the critical subject to risks, like what they actually are. So if you're wanting to do this, make sure you're doing it with somebody that has actually done this before. Don't do this on your own. And you want to make sure that you have all the legal documents structured through an actual attorney that's done this before. This is really important. So the go with conditions. So pursue creative terms before conventional BRRRR. I would not lead with a $230,000 lowball yet. I'd first ask, what's the current mortgage balance rate and monthly payment? Because that determines— this is a part of do the numbers, numbers tell you what to do. Whenever I say that, these are really important numbers. If you're doing this particular method or any method, you need to know your numbers for sure. And then the next question is, what's the mortgage balance payoff, interest rate, total monthly? The whole point, why am I showing you this, is I love real estate in the sense of like there's no one way to get a deal done. There's so many different ways to get deals done. You just need to be creative inside of understanding what they are. And again, working with people who have actually done this before, which is really important. So anyways, does anybody have any questions about this? I think it's pretty cool that Deal Hunter comes up with and gives you all these different options, but more importantly, Gives you a script. Like, how freaking cool is that? Or is it just me? My nerdy brain is all excited.

No, it's so helpful.

It's so helpful.

Yeah.

So happy you're here, Amor. It's been forever, honey.

I know, you know, kind of busy.

You're always busy, and you're not on a plane right now. So I'm not on a plane.

So that's good.

You're always on a plane, just not a private jet yet. We need to get you that.

Not yet. I love it.

Um, anyway, so yeah, Deal Hunter, I love that it gives you all these different options and has you think differently about, wait, what are like the ways that we can actually structure this? Um, another deal that he was looking at was Analyzing a fire damage deal. I did several fire damage when I was doing the flipping females. These were actually really popular for us to get was fire damage properties. And I think it was because I think for some people fire damage properties was too scary for people to like jump into, so to speak, with the amount of work that had occurred was probably going to happen. But we like these because we really were able to transform— like, talk about some very dramatic before and afters with these. So this one, let's go to the top of this one. So Glendale, preliminary fix and flip, asking $190,000, ARV is $400,000. So there's quite a bit of Margin there, but how much is the flip going to cost? So, initial verdict, renegotiate for fire damage. 2 by 2, unless the rehab comes in usually low. So, yeah, it comes down to the how much are the rehab costs for this. So, a major leverage point, public listing shows the same property sold for $180,000 in December 2025. After being listed for $200,000. That's interesting. The prior listing description also confirms more extensive damage than just some rafters. It says the interior was gutted and studs concrete asbestos.

Wow!

Huh? Still requires asbestos abatement. Yikes! So ARV realities. So for that zip code, you're looking at the high threes, but four is not yet. Proven for the exact 2-2 configuration. So it's interesting because this is where Deal Hunter coming in and making sure that you understand the numbers of just because a wholesaler says that it's a $400,000 doesn't necessarily mean that. You need to go and verify, trust and verify, and have it go back and actually pull the real numbers. I find a lot of times they're being overly optimistic. To justify getting the price that they're asking for, so you want to like test their numbers and where they're actually getting their numbers from. This is critical. So then the rehab risk. So best case scenario, 100 to 115. Worst case scenario, it's 150 to 180, which of course that digs into your profit in a really big way. So the assumptions, not contractors' bids, is all the things that actually need to be done. You can go to our free estimates GPT and actually pull how much it would be to actually get all that done. So the flip economics is the closing costs, selling costs, finance, holding. You got to think about all these things and The, um, the profit's always made on the buy, not the sell. So making sure we're buying this right is the most critical thing that we can do through this whole process. So scenario 1 is purchase it at $190,000. Here's all the closing costs, all of that projected profit would be $34,000. Um, and here's the other piece I would want to break down is how long it took for you to actually get this rehab completed. Because I don't know about you, but making $34,000 over a 12-month period doesn't really get me excited. So, um, just something to think about. So scenario 2 is the whole project ends up being— project cost $364,000, total profit $20,000.

Thank you.

Or then, of course, scenario 3. If the rehab's $140,000, you're now, you're only down to $8,800. No, thank you. Breaking point. If you want roughly $50,000 profit, then what you need to do is you're like, you gotta look at what the rehab is actually going to be. So $190,000, if you're effectively betting on the combination of the ARV being $400,000 and the rehab Staying near $100,000, no major structural permit insurance surprises. That's not enough margin for me on a fire reconstruction, because that is an enormous amount of work. Negotiation leverage. So the property sold at $180,000 8 months ago, substantially the— so it makes me wonder if they actually did any work on it. Or if they just bought it thinking they were going to do it and then ran out of money or thought it was too much work. It's interesting because if they, if they bought it for $180,000 but didn't do anything to it and are just bumping the price, that doesn't make sense. So, um, 3 funding pathways: best execution, private hard money loan; lower cash path, private lender JV agreement; Or creative path seller carry, and then you can go that. So the biggest risk— excuse me— definitely is structure. When fire comes in and damages those rafters and trusses, roof framing, any of that, that's like a huge, huge concern. Uh, asbestos is a major concern. Uh, and then of course permitting. How long does it take to work with the city? And the county in some cases to actually get the permitting done. Oh, that's usually, I find, the longest thing to deal with. So definitely having a contractor is a who that knows how to get through that process is a really, really big deal. So one of the things is, and I'm going to bring this up for just a second, when you're Interviewing for contractors or for any— for vendors, for anybody, you want to have your conditions of satisfaction in place. So yesterday, it was the day before, all my days are running together. We had a call with somebody who's, you know, wanting to become a vendor and sell us, you know, their services. And again, so these are— you can't see this, but these are my notes here, and my notes are based off of my conditions of satisfaction. So I want you to start having writing down, getting really clear, what are your conditions of satisfaction? So when you have that, whenever you're interviewing somebody, it's really important to be able to go through and ask those questions and get them satisfied before you move forward. So for me, One of my questions is always, I want to speak with at least 3 people that you have done business with in the last 6 to 12 months that you've actually like, you know, added commerce or bank accounts or, you know, whatever the thing is. So that, because I don't want to see like a quote on a website because we know those can be made up, or a testimonial video, those can be made up. I actually want to talk to somebody. And I want to talk to 3 somebodies. That's really important for me. I want to know how many years they've actually been doing this, how many of these particular projects they've actually done themselves versus just a theory of it. And then, so for contractors, I also ask how many of their projects have stayed on time and on budget and how many have not. And then I also write into my contracts that for any of the contractors, excuse me, is that for every day that they go over budget and over the deadline. So we have the contractor actually determine the timeline of what the project is going to be. And based on their timeline, every day that it goes over that, that time, that deadline of when they said they'd be complete, they actually have to pay me $150 a day every day we go over. And then every day that they're under, then they actually get bonused on the profit of the project. So then what happens is they become essentially accountable inside the profitability of the project as well. Does that make sense? So these are just things inside it. Again, I've done 500 flips, so These are the lessons that we learned, um, for being able to vet out different contractors and partners that we wanted to work with. So I want you to start writing out what your conditions of satisfaction are for vending people that are vetting people that you're gonna, gonna work with. So as I digress, um, so moving back, so Tommy had this, we're gonna run this on the podcast. So the breakdown is again back to this burnout, asking $190,000. The claim, the ARV was $400,000. We already saw that it wasn't. Um, the house size, the house lot, there's no HOA, it's vacant. Uh, the major issue is the fire damage was started in the kitchen and affected the rafters, roof, deck, shingles. Um, so is this a deal at $190,000? You got to renegotiate because the fire damage reconstruction. So, $190,000 plus the rehab costs, $400,000 is the resale, maybe, and thinking that there's $200,000 of room, which there isn't. The rehab is any best cases $100,000 to $115,000, worst cases it goes up to $180,000. And then with the fire damage, All the things that you need to know about that, all the questions you need to ask, and these are the hard questions. And then of course the ARV, like where they're actually getting the ARV. So conservatively it looks more like 360. So the math on it is 190 rehab, go with 120 acquisition costs, finance costs, selling costs. Um, that puts the project around $366,000. So that's only a $34,000 profit. There really is not enough profit in there to actually make it worth doing this project, especially for how long it's going to take. When you do a burnout like this, you definitely are looking at a longer timeframe, um, because of permitting and all of that. So. Anyways, so, so negotiating angles is, um, that, you know, just because you need to make more money, nobody cares about that. Uh, negotiate the actual risks. So the buyer is taking responsibility for structural uncertainty, reconstruction permits, carrying costs, specialized insurance, potential environment, and possibility of hidden fire damage. That's a really important one. Hidden fire damage, things you don't see when you actually go in. And then of course funding with the— because the longer that you have to hold that funding, the more expensive it becomes, which eats away at your profits as well. And then of course the exit strategy, which is reconstruct, renovate, retail, flip, which would be awesome, but doesn't always necessarily work out that way. Um, sell a project to another investor if the rehab or timeline stops making sense. The final verdict is make sure you renegotiate because there's too many, um, too many pieces in here that you can't be certain about the numbers or the timeline. So again, I would not move more forward with this, just given the timeline and the narrow margin for making money. Because one of the other things that we did when we were doing our flips is we calculated out— we literally broke it down to the hourly rate that we would be making, um, with the timeline and the hours and everything put into it. And, you know, some of them ended up being below minimum wage. So again, understand and do your numbers no matter how hard they are. Um, does anybody have any questions about that? And I feel like I've been talking this whole time, which I have. Is this making sense inside the conditions of satisfaction?

I'll say yes.

Love it. No, I like, I like, you know, like trying to be clear on what those are and stuff like that, and just the importance of it and stuff. So I think that's super helpful because contractors will take advantage of you. So if you have all that in place to begin with, you'll— you have a better shot at actually making money on your deal.

Right. Do you have— you guys have your conditions of satisfaction wrote down for working with vendors or contractors?

No.

Okay. So we're gonna— I like— I want to take the time right now to actually have you write some down. Again, over the years, this is what I have found to be my, my, the rules to the game, right? We started out this call about the rules to the game. So it's just more rules to the game. So your— let's just talk about what would be the rules to the game for working with somebody, like your conditions of satisfaction. Mine is that I need to talk to at least 3 people that they've done The thing with whatever it is in the last 6 to 12 months. So what are some other ones that, you know, you could think of?

I would say before I hire them or during the process of their work.

Before you hire them. Yeah.

Like proof of, like proof of concept, like show that they've actually done that type of work before.

Yeah. And so what are some questions that you could ask them where you would be able to find that out? 2, 2 questions.

Past work.

Yep. So number of projects. What clear number of projects? And what is your minimum number of projects they have to have done? Like for me, it's a minimum of five. Saying they've done one and a half—that's not good enough for me. Like I want at least five. So ask how many, and then know what your minimum number is. You don't tell them what your minimum is, but you need to know what your minimum is. So. determine that. Maybe it's 3, maybe it's 2. I don't know what it is. So what's another question that will help you answer that, to clarify that? Number of years. Number of years they've been doing this. Because if they've been doing this for 20 years and they've only done 2 projects, that kind of tells you something. Yeah.

Isn't there something like closing sheets or something? Because a lot of people will be like a part of a deal, but maybe they didn't do Part of it, but they'll still use it as like their— like try to say that they had a big role in it, if that makes sense.

Yes. Again, these are the pieces you need to verify for sure. Yeah. So they could have an SREO.

Because in case morbid, you know, they always say, oh, get all the CDs, get all the CDs together. Well, what I found is just like Ashley was saying, that could be hugely deceiving because they can give you 20 CDs. But that was one investment project. And then when you invest— investigate that investment project, everybody's in litigation. So like, Right. you have to go 2 or 3 layers deep, and it can be— that's where I feel like it's kind of stressful, because on the flip side, you might see several good deals. I don't know. And then I think people just get interested in like, oh, I've done 800 doors, or, you know, things like that. But it's like the success rate times the time times financing options, what partners. I think it's almost to put that into our own chat, you know, of like our qualifications of how deep can we go to make sure no one's just kind of rambling things off to us.

Yep. So this is actually good. So Boyd, because I know you work with a bunch of different lenders, I'm curious what your vetting process is for the different lenders before you put them in front of your, your clients.

Uh, yeah, I actually have— I've got an entire document here I could, um, I could share if I've got it in PDF format. I can. There we go, it's right here. I'm so glad you asked. The lender vetting and due diligence check— checklist. There, it's hiding. There we go, you kind of see it.

I love that. So can you share with us like some of your conditions of satisfaction? Because protecting a borrower is critical.

Absolutely critical. Yep. In the years I've done this, we've only had— and it wasn't our fault— we've only had one time in which customer client information jumped containment is the term I use. And that's an ugly thing when it happens. So we're very careful. We verify regulatory licensing. There's an NMLS registry and state registries as well. Make sure there's no— I mean, I'll just keep it high level. Verify they're licensed. Verify that we audit their legal and court histories, if any. We review Better Business Bureau and consumer protection portals. We consult industry and broker peer networks. We ask for verifiable proof of performance. We inspect the contracts they have. I think that's it. Then it's all additional screenshots and more detailed instructions. So really the key, we also need to know what their fees are and how they, how they get paid and how, how we get paid when we refer someone. But those are really the big 6: licensing, audit their legal history, BBB, um, contact peers and brokers in our networks, ask for proof of performance, and then look at— look over their contract documents as well. You can learn a lot about a lender those, those ways.

So it's interesting, and I love that you're doing this, and I'm warning everybody that not all brokers are equal. So for instance, we had a broker—

Yeah.

We had a broker who we were working with for several months on several different deals, and he put a lender in front of us, and the lender wanted $3,500 for doing an inspection report, which again is fine. Long story short, the lender never did the inspection report, and it's been, uh, it's been over 3 months and they still won't give us our $3,500 back. And they keep saying that it's in process, it's in process, it's in process. And then they're like, well, take us to court, we'll deal with it then. Again, the broker had a responsive— had a fiduciary responsibility to make sure we as the borrowers were protected. Yeah. Now, here.

Sorry. Broke. Most brokers do not have a. Oh, everybody's calling me all of a sudden. I'm sorry. Let me turn this. Man, it's all popular. Wow! How do you even turn these off? Oh my gosh! I'll sit on it. Most brokers do not actually have a legal.

Really?

Really. No, we act as if we are fiduciaries, but there is not a legal requirement for a broker. So we— and we often— well, we won't go with the person who necessarily pays us the most on a deal. We have to make sure that it's the right deal for the client. And we've talked clients— Carol calls it going dad mode when I actually talk clients out of deals. And that's, that's funny, but it's true. Yeah. So yeah, you really have to vet the broker carefully too.

Okay, so when vetting a broker, this is actually really helpful. So what are some questions we should ask when vetting a broker?

I would want, I would want to talk— if I were the borrower, I would want to talk to satisfied clients. And not all brokers will share their clients with you because that's proprietary information. So that's a tough one. But I do the same thing. Search them on the BBB, search them online, get an understanding, look for legal— other legal complaints or court records, something like that. Same kind of an approach. And if they will, you know, some, some would be happy to share satisfied clients with you, but a lot of them protect that information very carefully.

Interesting.

It's best, it's best to approach a broker who has been referred to you by someone you already know and trust. Brokers should not be soliciting and calling you and That's usually a bad situation. If they're busy, getting referred to them is much better. And they prefer— I prefer to work with somebody. If someone says, hey, Catherine Bell said to call you, wonderful, you're going to get my best attention. Right. Best to ask around. Ask your CPA, even ask your banker. Hey, if you can't help me, do you know somebody who can?

Right. Yeah, these are interesting. Again, there's unfortunately, there's so many scam artists out there in everything. I think one of the worst ones that I see recently is marketing companies. Oh yeah, like that's been—

yeah, yeah, SEO companies, lead gen companies.

Yep, yep, SEO, lead gen. Those are really interesting again, and understanding like What their what their history is, what their background is. Companies like that, you absolutely should be talking to referrals of you know who they've been working with in the last six to twelve months. And then when I talk to that person, then I ask them like for instance how many how much money did they spend with them? How much money was Generated as a direct or indirect result of working with them and getting you know working with their business. That was so again do the numbers. Numbers tell you what to do, right? Like they can be super friendly and wonderful and blah blah blah great to go and have a drink with whatever. But if they haven't actually produced the results that they were paid to produce, then they're doing everybody a huge disservice. So Catherine, I'm gonna jump off for a client call. No worries. Anyways, yes, I have to go too, but thank you. I appreciate everybody engaging with me because I, again, I want you to think about your conditions of satisfaction. And so Boyd, have an amazing day and hopefully we'll see you tomorrow. OK, for everybody else, like if you don't know what your conditions of satisfaction are, you can actually talk to my clone, CatherineBell.ai, and she'll walk you through the process of creating your conditions of satisfaction for no matter what type of vendor or person you're looking to work with. That's a really important thing to have for you in like whatever industry you're looking to work with people on. And Kimberly, like I'm thinking for you, for your reverse mortgage, you could actually be putting articles out there on questions people need to be asking to find the right type of company that does reverse mortgages? What are the things people need to be asking to make sure if it's not you that they're working with, like, these are their conditions of satisfaction to help them make sure that they are getting the best representation and service possible?

Yeah, I put in the link there just because he did my book and stuff like that on Amazon. I give them free. I give them free because it's like easier for me to talk and then teach from it, you know, too. So if you need that. But what I was going to ask you is I'm going to go to my real estate luncheon. And remember last time how we were talking about the affiliate link with Deal Hunter?

Yeah.

I want to brag on Deal Hunter because like you always say, the who and the how and why recreate the wheel. So I think you guys are such a key. That's just key. That literally can save people's lives. But I couldn't find it on the website how to sign that up. So I thought maybe you could resend it to us. Or how you want me to do that. Like, maybe you have a protocol or process that I could— let me think through that. I'll ask your AI too, because maybe it's all in there. I should ask her because maybe she has the affiliate link. I forgot about that.

No, no, no, she doesn't. Let me— actually, and that's a really good— I need to get that linked in. So I'm glad that you said that. So, yeah, let me work on that, and I'll text that over to you later today.

All right, thank you. Okay, bye-bye.

Okay everyone, it's the top of the hour. I really would love to know what your conditions of satisfaction are, so I will be following up and bugging you to make sure those are wrote out. I promise you, you'll thank me later on for those. Anyways, I hope you have an absolutely extraordinary day, and I hope to see you