GMT20260504-155751_Recording_gallery_2016x1134.mp4

Good morning and welcome to The Deal Room Live, the daily real estate deal tank powered by Titan Impact Group, a global leader in AI-driven real estate investing and funding, where the real estate world meets speed, precision, and profit. And bring us your deal so we can put it into our AI model that analyzes and structures real estate deals in minutes, generates all the docs you need to get the deal done, and gives you a verified, unbiased breakdown of due diligence reports. The investors get the advantage of getting fully vetted AI-analyzed deals that cut their due diligence time down by 60%. So you're in the right place. Let's the deal room now and get into today's opportunity.

Don't want people's note takers. Note takers. I don't know who did that last time.

I don't normally do it, so somebody else must. It was Blocke. Blocke did it. We're going to blame it on Blocke. No, he wouldn't have done that. He knows better.

Okay, Blake, what kind of fun background screen?

Well, this one I didn't know automatically came up. I'll have to change it, but this is the hot seat.

That's awesome.

Oh my goodness.

I'm trying to figure out a way for like a co-host, because you can change people's backgrounds, right? Like other people's. So there is a way to do it. I think it just has to be a pre-selected one because like for the Diving for Dollars, you can add different ones to it. So we could technically have a hot seat, but that was just that one.

That would be really cool.

I want to know how you make them.

So that's it at all.

Hello.

Good morning.

Good morning.

Good morning.

It's all ChatGPT.

Oh, it's ChatGPT.

You have ChatGPT make them.

That's awesome.

Freaking awesome. That's so great. Okay, making y'all co-hosts. So anytime you guys are co-hosts, I— people are allowed to be let in, but note-takers, they just leave them over in the other. Don't bring them on screen. Somebody let them all in last time. I was like, they don't have a face, I don't want them here.

Here we go.

So I might potentially have a friend from Denmark joining in one of the podcasts this week. So he took the investor survey.

Okay.

Um, last week, and he's very interested in real estate and just wants to—

Did he email it in?

I can double check with him, but I think so.

Okay. That's really cool. Yeah.

So he's actually— we met here in California, and he's a Danish— well, in order to get Danish citizenship, his dad's Danish, he went to go to school up there. So he's studying finance and investing. Up there right now, but he's very interested in learning new things. So he might be joining us.

That's awesome.

They have some very interesting— I have really good friends who are Danish. They have some very interesting investment and mortgages and things like negative mortgages.

And it's very—

I can't even wrap my head around it all, but it's very— it's some interesting stuff.

Love it. Okay, so Tommy is out on the job site today.

Putting in a septic tank, which is really interesting.

So that's really cool. He'll be joining us here in just a moment, hopefully.

Gonna text him.

In the meantime, if any of you have deals that you're, that you're ready to run this morning or whatever, let's go ahead and get you teed up so that we can do this. Yeah.

This is very exciting.

I have final exams and presentations all week this week, so this weekend was spent towards presentations and studying, so I don't have any new ones to bring at the moment.

I love it. Okay, that's awesome.

Okay, bring up ChatGPT and it's being stupid.

There's Tommy.

Okay, trying to figure out how to get my video to work so that I can show you what's going on where I'm at. For some reason I can't shut off my background yet. Can't find the, the, the I want to stop sharing my background. I can't, I can't get off this virtual background for some reason.

Let's see if we can decide to change name tag and virtual background.

Hold on, I think I can change it. None.

Why not letting me do none?

Yeah, it's not letting me. It's letting me change the name tag.

There we go. There we go. There we go.

To do it from the phone.

I had it and it disappeared.

Okay, we can see.

Can you guys see this now? All right, so We just dug a test hole right here. They filled it in, but there was a 60-foot hole that we just dug right there. The digging machine just went out of here to go to another job, but basically we're going to be putting a septic tank here for this house and this house, and we're going to put one big tank with one big hole right there. So we had to have an engineer come out and look at the dirt and tell us if the dirt would be able to sustain the— So basically what happens is when toilets flush and showers are ran, the water runs down the drain and it goes into a concrete box, and that concrete box fills up and lets the water out really slowly into a pipe. That pipe then runs into the ground about 60 foot, and the water goes all the way down that 60-foot hole, but that hole is full of really big rocks basically to help it, uh, help the water kind of fill up that 60-foot hole full of sewage. And so when it does that, it's called a seepage pit because once that hole is filled with water, the water then spreads out through the ground around it and it becomes a natural way of putting water back into the ground because most of the water that goes from the tank into the ground is just water. There's no solid sewage in it. And that solid sewage is broke down inside the tank. So, the solids turn to liquids and then the liquids just dump into the ground. After it goes through the ground, it goes through a lot of lime and calcium and it leaves behind all the pollutants or the parts of the water that we shouldn't drink and then it adds back to the water table just pure water. It's an amazing way of recycling our, you know, our waste. And I think that we could spend a lot more energy and scientific studies on how to make it more more efficient for our houses because you can actually run— when those solids turn into liquids, you can actually capture that as gas. It's called methane. And you can use that methane to then power your water heaters and your stoves and basically use it like propane. So methane is a little bit more unstable than propane. Propane can be made into a liquid. I think making methane into a liquid's a little trickier. So again, if we had the science, we could understand it. But anyway, that's part of what I do for Imperium Construction. We just got done getting our license last week. And so super excited to get back to work on stuff, 'cause I've had about a year off of construction. So with that year off of construction, we grew a really cool podcast. But today was one of those days I had to go out and play, uh, play construction worker. So, but I think we got some deals to run. Um, Catherine had a great, uh, opportunity to talk to some business owners and stuff yesterday, uh, and last— or I mean Saturday and last week. So we've got some really cool, exciting things coming up for the Titan 23 Fund. One of them's a, um, a luxury build in Scottsdale. So we're going to be doing a luxury build in Scottsdale. Uh, we, we went and had, uh, had a virtual visit with Katya to a building over the weekend, and we learned what red flags look like, um, and how significant, uh, you know, when you ask somebody a question, when they become defensive, it's just easier to probably walk out of the building, right? So when you ask somebody for an appraisal and they're like, well, I don't know, there's a bunch of hoops and scoops you got to jump through to get something that should be simple. That's a red flag. So we can talk a little bit about that. And then, Sarray.

Yes.

Let's see. There we go.

I did have a question about if that's okay. When we were doing the walkthrough, just to educate. So the broker said that usually it's not customary and polite to ask for all documents. The first day. So he said you have to approach a real estate deal like, like a dating process.

Is she breaking up with me?

So the first day needs to be smiles and butterflies. No, that's not true.

That's not the case.

No, you can go in there straight off the bat.

You can go straight off the bat.

Okay, I didn't know if I had to build rapport.

No, that's not how it works.

This is not personal.

Okay, this is not personal. We are not into business with them. We are there, we do the numbers, and the numbers tell us what to do. Yes, we can be polite about it. Yes, we can be professional about it, but this isn't about building a relationship with them unless they're going to be partners with us doing the deal.

Okay, so it's totally okay and totally normal to be extremely upfront with numbers and documents?

Yeah, that's the whole point as well.

Okay, just for the sake of understanding, We are not courting this individual for any kind of romantic or sexual encounter. So therefore, all the, all the typical rules that we would use for engagement are out the window. We are 100% there for business. I'm not asking this person to dance with me. I'm asking them to do business with me and they're on the other side of the counter. So we've gotten as a society out of the art of negotiation because we go in, we pay the retail price and we leave. Have you ever walked up to the Walmart counter and said, hey, uh, this bag is broken, can I get a discount? No, no, but you can. Like when you find something damaged on the shelf, hell yeah, you can walk up and say, can I get this for 10% off? Yep, here you go, because it's damaged goods, right? So a lot of people don't know you can do that, but that's an— that's an engagement that you can have with somebody.

Like a floor model too.

You can—

if there's a like a table and chairs, that's the floor model. But if you went to buy it, it'd be in a box. You can get the floor model similar to what Tommy's talking about.

You can say, hey, can I have the floor model at 40% off?

Whatever. Yeah. And so that's a, that's a way to negotiate when you're talking to a realtor who's trying to sell a property and you ask for documentation and they give you a hard time about the documentation, it's because they're hiding something. That's the red flag.

What I learned was that the appraisal is basically the value of the home. So professional or a building. So somebody professional comes and analyzes everything, and the appraisal is the final value. So, and it's public. So if the only reason somebody would hide that is if they are selling it at a higher value than what the appraisal is, correct?

Correct.

Yeah. Okay.

And as far as it being like, when, when I said it's public, it's only public based on if they got a mortgage. Like when you get the mortgage, it'll show the appraised value. And so if they actually had a contract with somebody, an appraisal was done, that's a piece of documentation that's very valuable. And so it should stay attached to the property and go with the property. But if it's a bad appraisal, you're going to scratch that one, throw it away and say, give me a new one. I want a new one. You know what I mean?

Okay, I understand.

So yes, you're not needing to make friends with the seller's agent.

Okay.

Okay.

Good to know. Because he was explaining and it's always good to like at least flags come up when you're talking to them.

Yeah, if you don't have a bulldog like Tommy with you, the best thing to do is when you hear the red flags is to say, well, let me get back to you, I, I had something come up, let me get back to you, and leave. And then don't get back to them, let them chase you. That way when you do point out your objections, they, they try to reel you back in somehow, and you can use it as, as leverage. But I'm not, I'm not too keen on leveraging that, you know, bad bad stuff. Like, I didn't— I just, I go through deal after deal after deal. I don't, I don't try to negotiate with people that are trying to, trying to be underhanded, and that's underhanded in my book. So once I offend them by asking a simple question, I kind of burn that bridge because I know how to swim.

And it seems like they would be willing to give you— they should be excited to give you all this stuff so you're, you're happy to move forward with the deal. Because in reality, I don't know if it sounds arrogant to say this, but in reality they need us more than we need them. There's a million deals out there that we could be going after, but we took the time to contact them. They should be giving you anything and everything to make you excited about doing the deal.

That's right. That's the advice you need to take right there, Katya. Take Sarai with you next time instead of Tommy, because Sarai will be like, hold on, wait a minute. Well, you need us more than we need you. We do 1,000 of these. You're doing, you know, we're here for you, you know, and that's the attitude to take because again, it puts them in their place and it makes them go, oh, wait a minute, you know, you're right, I should be trying to sell this to you. And what I'm doing is, is basically turning you off, right?

So I'm also—

yeah, that's the property was appraised for $9 million and that's what they wanted to charge. And then somebody gave an offer for $8.9. Is it really worth to not take an offer because of that small of a difference? So like, that was something else that stood out to me.

Um, right. So when they said they wanted $9 million and they turned down an $8.9 million offer, I mean, you're $100,000 away from your target, right?

Yeah.

And if you— that seems crazy.

And that's something you can point out. Like, if you can catch that in the moment like I did, then you can go, wait a minute, you turned down a $100,000 difference? Why would you? And then I would ask them, why did you turn down a $100,000 difference? Like, how Like, look, I don't understand. And when you, when you pose these questions and they get upset, that's the red flag. And that's when you go, okay, I'll see you later. I got to go. Can you tell—

can you say why would anybody turn down a deal over 100 G's? What I mean, like, what would be the point of that when you're that close?

Right. When you're that close, like, it should make sense. But again, when, when you're lying, Nothing makes sense. There's no logic to a lie, right? And so when you're lying, when you do— when you say like, oh, we got an offer for $100,000 less and didn't take it, you're literally trying to make yourself sound better and bigger than you really are. You— in, in his brain, it's like, see how— see how little we're interested if it's so low, if it's too low. That's what he's trying to prove. But what he's proving is they're greedy and they have no interest in working with anybody because they're willing to piss off $100,000 instead of taking $8.9 million. Like, they could make that— if they were smart, they could make that $100,000 back in about 3 months with a— they could take their $9 million, put it in a bank account, get high interest on it, and make that $100 grand back really easy. And that's how you could say it. You could be like, why would you do that? You could literally make $800,000 off of that $8.9 million in about 6 months with a Meow account, high interest-bearing account. You'd be able to make your money back off of that. You'd make that $100K back quick. Are you stupid? Like, that's how I talk to them. But you, you just take it as a red flag.

Am I allowed to ask one more question? I'm so sorry.

You are allowed.

I like your questions.

You're allowed to ask any question you want, copy? You got— you have— you have the floor for about 6 more minutes before Blake starts getting upset.

Okay, so, so, um, our most— sorry, I'm dog sitting a puppy and she's—

okay, the, the, the camera had to Turn off. This must be important.

Sorry. She's like throwing around her toys everywhere. So when it comes to brokers, are most of them trying to manipulate the situation and trying to manipulate the sale? Or is that something that only I have experienced so far?

No, no, no. Remember how many, how many, how many deals should we look at before we actually think we can get one?

I forgot the numbers, but isn't it like you have to analyze like 500 deals to look into 100, to pursue 10, to get 1, or something like that.

A bunch at least. And you're— and you're on number 2, right?

Yes, actually 3 if you count Blythe.

I mean, if you count Blythe, but I wouldn't even count Blythe because like that one was— that again is another— when we asked him, I said, he's like, oh, it's worth $2.7 million. Do you know? You're not even a realtor, bro, right?

And so Oh, sorry, go for it.

No, I was just saying the rents were crazy. Like, again, when you, when you go shopping, when you're doing real estate, imagine you're going shopping on the clearance rack at Macy's, right? And you know, at the clearance rack they've got like one or two of everything nobody else wanted, right? These are all things that nobody else wanted, so they're on the clearance rack for a reason, because they didn't want to get hung back up or they can't go back to the store, whatever. So does it mean that it's on the clearance rack that you should buy it? No. You're going to find the one that fits you, is comfortable, has all the buttons on it. Like, maybe it went to the clearance rack because the sleeve is ripped. Are you gonna buy it? No. Only if you know how to sew, you know. So if you know how to sew it back up, yeah, great. But if it's only 90— if it's only 10% off with a sewn— with a rip, you know, ripped sleeve on it, nah. I'm going to need it the other way around. I'm going to need to buy it at 90% off, not 10% off. Right. So, because if I got to do some work to it and create a Tommy shirt out of it, like, that's the way that I look at real estate is that these are all on the clearance rack. They're trying to get rid of them. Right. And so if they're trying to get rid of them, they have to be negotiable either on price.

We lost you.

Time. And when I say, 'Tommy, are you going to hold it for me?' Because here's— buy something, I have to put it in holding, have holding costs on it until I get done with it, with whatever I'm going to do, right? So if I can get the current owner to do the holding costs for me, and that's all I got to worry about is just getting the work done on it until I can make money off of it, and they hold the thing with holding costs, that's doable in some situations because then when I buy it, it'll have a bigger value to it than what they sold it to me for because they, they did it and like they held it for 6 months or a year. And so there's been a couple of those where like we can, we can do those. And, and it's, and it's, you know, beneficial. But again, we're negotiating time over money and I'd rather have time than money. I'll pay full price if I can, if I can get the time to make it worth more money. Because I'm good at that, right? I'm good at sewing the sleeves on, right? So that's the way I look at these deals. And, and if you can look at them that way too and be like, look, we need time more than money, it gives us a chance. But in, in these— all these situations we've had right now, they're, they're interested in having time and money both on their side, and it, and it leaves us with like— we're like, sorry, we can't do both, you know. So you just have to walk away because again, like this guy wants full price, $9 million, but he's, he's also wanting us to let him stay there at a discounted rental rate. Like that again, red flag. Like if he wants to stay there, he should pay triple. Since he's not going to do owner financing, he should pay triple the lease rent or get out day one. Like, go, like, what's the value of letting me let you stay there? You know what I mean?

Yeah, definitely.

I'm going to say a lease back. Oh, there's no value to me to lease it back when he's not going to pay a premium elevated rate. I need the ups.

So yeah, because we were looking to let—

it was at a 0.30, and this is why we teach you DSCR, right? He was at a 0.30 DSCR, which means that you are literally taking on 90% of the debt and only going to be able to cover it with 30% of the income. What— I didn't see what you typed there, Blake. You want to come off the mic and spit it out? Sorry.

Yeah, I know. I got you. Pretty much. I was just saying to— I posted all the links for our social media, so if we could join them and stay inside just to boost our numbers, even share them with other groups, that'll be fantastic.

No, there you go. Blake's on this. Blake's on it this morning, y'all.

So the other thing I just want to like, again, a teachable lesson for everybody inside of this, which is really great. Again, first of all, the realtor is there to provide customer service. So Cicely is a realtor. Cicely, would you agree that your job as a realtor is to provide customer service?

Yes, especially now in this market, we are having to step back to like old school, like follow-ups, calling, checking, making sure that we do our best because now— and there's been a lot of changes like with the laws. So people have more options right now.

So as a customer, is it my job to be friends with you?

No.

Right. Again, so, Katya, so that, that lesson right there. We're not— we're here to do business. We're not here to make friends. Like, yes, we're going to make friends. But in this particular— it's— and so here's the other piece. We do the numbers and the numbers tell us what to do, which is what Tommy was alluding to. So for all of you to understand, they were— they— how they manipulated the numbers on this building, they took the value of the building based on the Irvine market, which was 3 miles away. Which was higher values, but then they took the rental amount that they wanted to lease back for that particular area, which was a way lower amount. So they're justifying paying us way less for the lease or the rent, but then turning around and pulling numbers from somewhere else to justify the high price of the building. The other piece that was really interesting, again, this is where free estimates comes in, is that it was a 30-year-old building and the nothing had been replaced. They had just been, you know, patching everything, the roof, the AC, like all the things. And he gave a $50,000 concession for the roof, except for here's the deal, it's a commercial roof. And if you don't know any better, Tommy does because that's, that was his previous life. I mean, that it needs to be over $5 $100,000, not $50,000. It's not a house, this is a commercial building. Way different ball game. So again, he was the— they— the realtor was manipulating where he was pulling the numbers from. He wasn't being consistent.

But that is not common, or should you always be prepared for that manipulation?

Just because—

okay, I mean, it's 100% common because again, Dallin did this. Dallin did this with the, uh, the property down there in Tempe. He's like, oh, we We knew the soil was dirty, but we don't know how much it's going to cost to fix it. Like, you better know. So hold on. Hey, Catherine, go ahead and take over for a minute. Let's run what Saray has going on. I got to take a call from Mark.

Okay. Yeah, go that. Okay. So I hope that this is valuable for all of you to learn inside of being a savvy investor. Right. And I want you to get like, if you, if you always like tune in to what I call WIIFM, What's in it for me? Like, when you can look at where the other person is coming from, you can see, like, are they really actually in it for my highest and best interest? Most likely not. So it's up to you to do that. And again, this is where I use AI and our Deal Hunter and all of that. Like, I'll literally say, point out all the red flags, point out all— like, help give me a list of questions that I need to ask so that I dig in and find out all the things I need to know where this can go sideways. Can. And, and I can guarantee it makes people really uncomfortable when I'm asking the tough questions. Right. But here's the deal. If I don't ask the tough questions, then we're left dealing with a complete frickin nightmare, which unfortunately we're dealing with two of those right now because, you know, again, we didn't dig hard enough into the tough questions with, you know, what was going on with these people and, you know, the deals and stuff. So again, it's our job to ask the tough questions and turn over every single stone so that we know like we know like we know. Like, if there's bad stuff going on, just tell me so that we can help mitigate the risk, right? I'm not afraid of the— if things are like, you know, we have to deal with headaches, just let me know what the headaches are up front so at least we can, you know, allot the, the budget and the time to be able to deal with those issues. Don't hide it and then, you know, claim that, you know, well, I, you know, well, you should have known. It's like, no, you know, because even like I think about Dallin and the whole, um, the, the dirty, the dirt again, you know, he, when we found it out, he should have been up front and told us because he knew right? Even especially when we went out there and were walking the dirt and had multiple conversations and were clear with him that moving forward we wanted to take that property and continue using him for the next transaction on the back end of it. We were very clear we were looking for a professional relationship with him so he could have got commission up front, and then we turned around and got it ready to sell it again, he could have got commission again. But because he literally was not a, like, upfront, it was lying by omission is what he was doing. He literally, like, lost the entire deal on both sides.

You know, he, he could have right off the bat said, hey guys, full disclaimer, this is dirty dirt. There's like a 10% chance that you'll ever be able to build multifamily on this. Please scrap that idea. But please check out this huge avenue of all the industrial ways you could also make a profit. Like, wouldn't that be more beneficial for us but also for him as well?

Yes.

But was he looking at that price point for that commission?

Oh, 100%.

That's it.

Yes, because here's the deal, they were promoting it as multi-family. That was illegal for them to actually do. And when you look at that, it's going to cost $10 million to clean up that lot. The reality is, is what they were charging, $12 million, the lot's only worth $2 million, not $12 million.

And sorry to add, so he's probably trying to convince the seller to sell to him, and the seller probably said, well, I want $15 million, right? I want $15 million. So now the seller's thinking it's worth $15 million. So he's probably coming in like, I can get you $12 million. The conversation he has to have with the seller from $12 million to $2 million is one of the hardest conversations because the seller is not going to see that. Even with the facts, they're going to fight it. They fight us all the time. So he's— he was probably just trying to secure a win here so he can later on secure another win here. And so yeah, it's difficult having the conversations with our sellers. So he's again going against property.

Yeah, you got to be responsible about this, right? But people are afraid of having the tough conversations.

So he did a disservice to a seller because— yeah, because now a seller— he told us how it was worth more. Now he has to go back and tell his seller, hey, It's actually not worth that. I was wrong. I'm incompetent. It was— I'm wrong. It was worth this, which is even worse.

So it's all good lessons. Again, this is why we do the numbers. Numbers tell us what to do. It's not personal, you know.

Number next.

Here we go.

You know, get the no with a happy heart. God's got a bigger yes. So you're muted, honey.

Can you guys hear me now?

Now we can hear you.

I was like, going, going, going. It's sometimes it's— I'm just a people pleaser, so I'm getting uncomfortable, like, with these conversations, but it's so good. To know all these red flags and actually go to the buildings and see it in person, because in the future it's just developing those skills where you can identify it super quickly. Because now I know, like, appraisals, construction, dirt, remodel, like all these little things, now they stick out. So if you guys want to go and tour the property with Catherine and Tommy on FaceTime, that'd be really beneficial.

Well, you know, and here's the thing, Katya, as you like your personal development, the question to ask, would you rather be liked or would you rather be respected?

I've been toying with that my whole life, and at first I always wanted to be liked, and I lost a lot of respect. And now I'm transition between like family, friends, classmates, like everybody around me. So now I'm transitioning to being respected. It's a lot more of a lonely road, but it's more empowering for sure, and self-serving and serving others as well.

Well, and again, this is just something that we learn as we grow. Like, I have to say, as being a parent, you know, Laura, Saray, Cicely, as a parent, I feel like this is one of the biggest personal development lessons inside of, like, with our kids. Would, you know, being liked versus being respected— how many times have we had to like, you know, put a boundary in place for the benefit of our children. And we're— then they're like, I hate you, you're not my dad. And you know, of course my answer is that position's already been filled. But you know, again, but at the end they actually respect us. And Katya, Blake, think about your parents when they've had to like, you know, do a hard line. Do you respect them or do you like them, right? Like Again, it's just— this is just another piece of, you know, adulting and growing up, right?

We should call those brownie points, parental brownie points, right?

So yeah, okay, I think that's so far the, the lessons. Katya, you know, be super cool, you know those cool graphics that you're creating of what we learned on today's show? Yeah, it'd be a cool graphic for what I learned from not doing this deal.

Oh, that's a good idea.

Okay.

I'll write that down.

That would be awesome. And same with the other, the Tempe Dirt one. I'd love that one too. So let's create those because I want people to get the golden nuggets. And I feel like the, the failure, so to speak, and not that this is a failure, but had we moved through with it, it would have been a massive failure, both of them. Like though, I feel like the cartoon where you're like, you know, the cartoon character like splat right on their face. Those are both of those. Anyway, so yeah, if we could start gathering those, I think the golden nugget lessons would be awesome. I think those are cool. Okay.

You got it.

Love it. Okay. So who has deals they wanna run, move forward with? Serey, I know that you were working on those commercial lots.

Yeah. And I have a meeting at 2, I think, 2 my time with Tommy. He's gonna help me like walk through my first LOI. Yeah.

So that's kind of cool. Look at you!

Okay, last thing.

Yeah, so that's kind of cool. And then I think he's also going to talk with me about a virtual board. I don't know how many, how many other people have already done theirs. I like fooled around on Claude just this weekend, just goofing around and kind of came up with some ideas, but, but I didn't have any direction, so I was just kind of winging it. But so we'll see what he says and then I'll let you guys know what I do.

I need a virtual board as well. So if you want to do one, like if you want to me to join you guys or if you have the—

Yeah, that's fine. But you said, I'm sorry, I need to make sure it's in his calendar and it's not. What time is the meeting? I, I, I think I have it at 2 on my time too.

Let me see.

So that would be 11. Okay.

No, wait, let me see. I definitely made it.

I have 3 different deals we could pull up. I have 2 car washes, one in Corona, California that's called Tommy's, another one in Arizona. And I just found a zipline park in Branson, Missouri.

Cool.

Okay, so I love— I love car washes.

Let's do the car.

You want the one in Arizona or Tommy's?

Uh, I want Arizona and then we'll do Tommy's.

Okay, I, I do have an email that says you're locked in from Tommy, um, for my, for my calendar, but it actually does not have the time on there. I picked 2 o'clock my time, but if that doesn't work, we can do something else. I'm good, I'm, I'm open.

I got you, I got you, honey, and I'm adding Katya in here as well. Again, as long as I have it, I just need it in his calendar.

That's all.

Because yeah, I don't know why it didn't go through because it did send me the confirmation email. So that's kind of wild.

Can you forward me the confirmation email? Because I want to find out where the break is in our session.

Sure, sure, sure. Okay, go ahead.

Thank you, Catherine.

I'm glad we talked about this. Otherwise—

Oh, totally.

This is awesome.

Okay, Blake. Here we go.

So it's in Phoenix, Arizona, and they say it's a car wash and a pet wash. I don't know how it is a pet wash. I don't see where that is, but so—

like it.

I then I have it all ran through, but these are just the photos of it.

So, okay, Shine, love it, love this.

And then I threw in the OM and this is what I came up with.

Okay, so Absolute Triple Net Car Wash. Love this. Yes. So I love triple net lease. Who knows why I love triple net lease?

Less work for you.

Because they're responsible for taking care of what's inside and all of that, and you don't have to do that part.

Yes, yes, yes. It's the best part. Okay, so this is clean passive income. We love this. I love this. Not a high yield cash flow monster. Yeah, it's awesome. Motivated. Okay.

So acceptable 1031 investor who values—

I'm just gonna listen. So I'm almost back to the club right now, but I'm gonna sit on mute. Mark's on his way up there to look at the sound setup. I'll let you finish running this deal.

Okay. So the offer, 3— okay. Scroll up a bit. Okay. So the metrics, the NOI. So the going cap rate is 6.75. Year 10 rent, year 20 rent, lot size. Keep going. So it's 20-year lease. That's fabulous.

The biggest thing right here is the 2% increase annually.

Okay. Yield to cost 8.7 by year 10. 9. Hold on, hold on. Go down just a little bit. 9.83 by year 20. Assuming tenant performance holds. Okay, great. Financial stress test. Okay, so LTV. So if it's 60, 65, 70, 75 annual debt service, there's the numbers, the DSCR. So it's 1.3 down to 1.06. Okay.

Cash on cash return is 4.15%.

Interesting.

Okay.

Financial read. The deal does not support the aggressive leverage. Most commercial lenders want 1.25 DSCR. 60% LTV works. 65% or above did not work.

Okay, so, okay, DSCR.

Keep going. Okay, keep going. So unlevered IRR estimate.

These aren't good numbers.

Keep going down.

This sensitive to exit cap rate.

Okay, so the strengths: long lease, absolute triple net lease, which is awesome. Annual rent growth, which is awesome. Strong micro location.

So where is it?

Chandler Boulevard and 32nd by the Loop 202. Okay, awesome. Affluent trade area. Okay, great. Tax angle. 100% bonus depreciation, assuming roughly 20% of purchase price is allocated to the land. Okay, good. Red flags, here we go. Tenant is young, so they founded in 2021. Not the same credit profile as a national triple-net lease tenant, but if they've been there the whole time, I'd push back on that. Rent may be above replacement.

Current rent is above But this is specific use property. If tenant fails, replacement rent could be materially lowered unless other car wash operator takes it.

Okay.

Car wash used equipment.

Okay. Environmental risk triggers elevated diligence.

Detergents.

Okay. So environment's really important. It's saying personal guarantee needs to—

needs verification. Interesting.

Okay, so offer strategy. So recommendation. So opening the offer 3.4 to 3.5. So that changes the cap rates. Blake, what were they asking for on this?

3.737.

Okay, so we're going to lower the ask. Okay, so my target contract. Okay. DSCR coverage negotiation script. So there it gives it right there. So great location and lease structure. but this is not a national triple net lease. We need pricing that reflects operator risk, specifically use environment diligence, DSCR. At the current NOI, the deal price is more like a credit tenant than a young local regional. Okay.

So we can move quickly, but we need—

oh, hold on, hold on.

We need a low to make the deal and risk.

Okay. The funding strategy. So if we were to do 60 to 65%, 25-year amortized, 5 years, buyer roughly equity 1.3 to 1.5. Why it fits: it's clean triple net lease income, long lease, stable rent schedule. At risk: 65% LTV, a DSR is tight at ask. Best use: buyer with strong liquidity and long-term hold strategy. Uh, path 2, seller carry to improve DSCR. So if the senior bank takes 60%, 10% seller carry, 30% buyer equity, seller note interest, uh, only for 3 to 5 years.

Why this fit?

Bridge valuation gap and protects the cash flow. Okay, so ask for a seller to carry 5 to 6% interest only, 3 to 5 year balloon. Subordinate position benefit can make the deal work closer to ask without crushing DSCR. Path 3—1031, which is not us. Due diligence checklist. Okay, so lease legal tenant, um, keep going down. I'm curious if—

Keep going down, down, down, down, down, down, down, down, down, objection, tenant. So this is product DSCR, tight environmental exposure, go/no-go. So jump in here real quick.

Yeah, please.

So on the 1031, you jump, you jump past it. But that's, that's actually something that what, what we can do is we have a network of people that, that are in the 1031 market. Right. And so we can reach out to the qualified intermediaries that we have relationships with. You have anyone that has a profile like this because it has to be equal or greater value. It has to be like, you know, a like kind of an in-kind property or like-kind property. So meaning like in this case, based on what I'm hearing, it's, it's, it's, it's a leased property. So you can't necessarily go from a, from a leased property over to a ground-up development, but you can do a ground-up development into a leased property when you're doing 1031. Right, right. So yeah, just finding some You know, I mean, I like that it makes that suggestion for 1031 because it gives me the opportunity to reach out to my network and say, hey, do you guys want to be partners on this?

Yeah. Okay. I can see that. That would be interesting. So would— here's my concern is that would Deal Hunter be able to go and potentially look at potential comps for car washes in the Phoenix area to see if this is on track?

Yeah. Well, the way to do it is there's 3. So you can. I want everybody to do this as homework. Go to Deal Hunter and ask it to give you the 3 ways that we can come up with valuations for businesses. And it'll, it should give you the 3 ways. One is called asset. It's called the asset method. Then there's the market method. And then there's the income method. Asset method takes all your assets, subtracts your debt, and gives you the value of the business. If you do a, if you do an inc— if you do a market analysis or a market method, of valuing a business. You go based on what the business is. Say, for example, it's a car wash. You would go and find what the national average of car washes are being sold for. Then you would go to that MSA or, you know, like the Phoenix market and say, what are car washes in Phoenix selling for? And that's how you would come up with a roundabout market analysis. The market analysis is basically like the lowest used form because it's very vague and it's really only helpful for like very unique niche-style businesses that, you know, like being a poodle haircut designer, like that's a very niche business. And so your income might be very high and it could give it a false valuation on the income side. So you might go with just a, a market value and say that a, a niche dog groomer, and that way you could get a better value going that way. And then finally, the income value, and that this is where you get into the multipliers of the EBITDA and all that. And it gets very detailed. This is the one that most every bank uses is the income method. So if you go to Deal Hunter and ask it to explain those 3 methods to you, give you case studies and examples, you'll get a very good understanding of how to value these businesses that have real estate with them because you're going to value the real estate and then you're going to value the business.

So you got that, Blake?

Yes, I got all that. Yeah. Okay, cool.

Yeah, I would love to dive deeper into this once you have all that. I think that's awesome.

Okay. Yeah, I could definitely do that.

Yeah. So that's the first one. Sorry.

I want to throw out there that we have a needs. So I found a guy that wants to get into an RV storage or self-storage facility somewhere in the Phoenix Metro. Probably going to need to be around a 7 cap, 6 cap, but he wants it operating.

Operating, meaning like you are like a triple net lease or like he wants to take over the operations? He wants to buy the—

buy it operating. He wants to buy it operating. So if it's— even if it's like dead, like nobody in it running it, he wants to turn it on.

Okay. So if everybody wants to go have some fun, look for that criteria. Can you say the beginning part again, Tommy?

He's looking for RV storage, boat storage, or self-storage. Let them know that like those are not like just— though I already gave him that information and he's fully aware, but I found this guy off of what I do know, what I—

you cut out. Are you there? I put up ads on Facebook. Are you there? Yeah, you cut out for a sec.

All right, what— I'm just trying to let you guys know where I, where I source this, source this guy from. So the Facebook Marketplace lets me sell property there, and so I'll— if I want to, if I have a lot of If I'm wanting to check the market, I'll, I'll make up an ad for an RV storage facility or an RV park. I'll put the ad up and then see how many people respond and say, sorry, already— it's called a bait and switch— sorry, I already sold it, but I— do you have interest in this? And so it's my way of understanding what's available. I don't always do the bait and switch. Sometimes I'm just doing it to understand what the market is. And when they send me a message, I'll say, no, it's no longer available. So, and then I just move on. But you can use it to build a buy box and there's people out there that do it. And, and if you build a buyer's list that way, sometimes it's, it starts off on the wrong foot because you, you lied your way into it. But this is a method used by some people to generate leads. I guess if you do it in a in a way where you actually have something to sell and build your list that way, that's it. You know, that's even better. So that's why I encourage people to go out and find something they can market and then get busy marketing it so you can build your buy list.

Did you say there was a— is there a geographic area he's looking for these things? Arizona. Arizona. Anywhere in Arizona.

Yeah, but also it has to kind of make sense. Will they, will they be able to fill up and rent out?

Right. So we, Tommy and I took a day trip yesterday. and I'm trying to think where we were. It felt like it was like in the middle of freaking nowhere, and there was a— there were several giant RV and boat storage lots with like— that were covered, literally in the middle of nowhere. And so I suspect that people would like drive there, like instead of driving the RV all the way back to the city, they would drive their car to the RV storage, leave their car there, get in the RV, and head out to the lake or, you know, wherever they're going. So So Tommy, I don't know if that, like, that was where my thought was every time we saw those yesterday. Might've lost 'em. Okay. Well, we gave you all another thing to go look for because again, being able to, you know, flip this automatically to a buyer. Again, it's opportunity for all of you, which is awesome. Bless you. Okay. So do we wanna run another deal, Tommy? What do we wanna do?

Yeah, go ahead. Throw another one up there.

Because I know Blake has another one. Did anybody else have one before I jump back to Blake?

I don't have one today.

Blake, let's go. I just have a question.

Yeah. So I found this thing in Chicago where they are like, you can buy land, these lots from the land bank. And then they have this like thing that they were doing with the city where they give you so much money to build on that lot because they have a lot of lots they're getting rid of. Have you like ever heard or something like that? And then do you think it's like worth pursuing? I've been looking at some of the lots that are in the land bank. Now you have to like— it's not like the dollar land bank like they used to have, those real cheap ones or whatever. So the lots cost a little more, but they're definitely discounted. And then you can apply to get money from the city that they'll give you, I think, up to a certain amount to like build on a lot.

Right. And so here's the— here's what I heard. I heard two things. One, that you, you joined or paid for something to give you. Oh no, I didn't pay anything.

I didn't pay anything. It's like free. The, the, the website is free. It's just like they— it's like a land bank where you look for different— yes, on a website. It's on a Chicago website. Like the city has has it, right?

Well, and that's the thing is like, I, I would never pay a third party to do anything directly with the city or county because, right? So that's the first thing that everyone needs to learn is like, if somebody's like, oh, I got a list of properties, that's all you're buying. You're not getting, you're not getting anything but a list. No one's going to show you how to or get through getting through it. So Deal Hunter will do that though. And there are places like, there's spots in Oklahoma, Kansas Montana, where they're giving away land so that you'll do something with it so they can put it on the tax roll. So these— the way that municipalities make money is off of taxes and bonds and, and people being in town. So if you're not there, they can't make money. So if they give it away to you, then they can charge you for it later on down the road, of course.

So back to Amor's question, is this something she should pursue?

Absolutely. I mean, there's ways to do it, but again, There's a lot of work that goes into it. Deal Hunter will help get through a lot of it. Uh, but yeah, you can pursue it 100%. You get the lot, they give you the money to do the work. I think Tina has a little bit of experience with this as well because she did it with the property she has out there in Boone. And so, okay. Right. And so it's 100% possible. It's just, it's 1,000% work. So, yeah.

Yeah. Okay. But you're not afraid of work-a-more.

I'm not afraid of work. Not at all.

And then using Deal Hunter to get through it, a lot of that, a lot of that'll be helpful. We'll show you how to do it with when you, when we do a, uh, in doing it, we would set you up with a project folder that you would put like all the documents into. And then Catherine and I have designed this way of saying, okay, we'll get the document in your knowledge base and then get us, you know, get us through filling it out step by step. And we use, and we use like what it gives us, copy and paste over into the blank template.

Okay, great. Okay. Thanks. Okay, cool. So Blake, you're ready to pull up your next deal? I can pull it up.

Does Cicely have anything cooking? Sorry, who? Does Cicely have anything cooking? Has Cicely been running some deals? I have not.

She's shaking her head no. I have not.

I'm in a hotel with my kids doing homeschool and just got my kid through asthma and getting on a plane to New York tomorrow. So I have not done any deals. But I'm listening, I'm capturing, and I'm a sponge right now. I'll be, I'll be in the mix soon.

I want to just make sure we give you the space to get out there.

Thank you. How's your kiddo doing with the asthma?

He's good. He was out of school for 5 days, so I just made it into— I had to stay away from the pollen. So we're by the beach and, uh, yeah, we're, we're, we're good. He's good. He recovered.

Thank goodness. Okay, good. Thank you. Thank you.

Okay. Ready to go, Blake? Yeah, um, Blake has a place called Tommy's.

I have that. It's another car wash. It's similar, uh, the numbers were similar to the other one. I did find a thing, an outdoor— not outdoor storage, a storage unit in Chandler, Arizona. They call it the Toy Barn. If we want to—

nice. Yes, totally. I love the Toy Barn.

All right, so yeah, this is it, asking for a little bit over a million. Chandler. And then this is what it came out as.

Okay. So 3,000 square foot floor plan shows 3,573 internal area. First floor. Then there's 475 feet mezzanine living room. Published pricing found online, $350 a square foot, implying $1 million asking.

Units. This is a fall. I said that. Had zoning, 25-foot clear.

Okay. So what the deal has going for it.

So strong physical profile. Okay, great. Keep going up. So it's Loop 202 Chandler German. Okay, great.

Keep going back to the napkin valuation. Okay. So it's 3,000 square feet, online price, $350,000 square foot, implied price.

This helps the broker. Okay. Keep going up.

Income scenario, purchase price, loan to value, 70%. Uh, okay. Only $315,000 down.

Like it. Amortize 25 years. Okay, keep going.

Rent sensitivity. Okay. Shark read.

24, uh, square foot leverage. It's a little— becomes legit. Specifically income play. Okay, keep going. Offer guidance.

Okay.

My offer poster. So LOI. Okay. Financing paths.

So SBA. Conventional seller carry. Keep going.

And this is also property that Tommy was just mentioning. I don't know if we wanted to look at it that route for their buy box or if this is just another property that looks interesting.

No, this totally looks interesting. I like it.

Keep going. Key due diligence. Okay, keep going. Negotiate leverage as is. Trade language. Keep going.

Go, no go.

Okay. Owner user. The property solves the business lifestyle need. You can lease out. Seller is financing condo. No go. Rent comps are below. So it's okay. Strict service. Next, call the broker and request asking price confirmation.

Okay. So it, they don't have a clear asking. So the document doesn't show. I thought it did show a clear asking price or no. Was that my imagination?

Uh, it does have a clear asking price. They're asking for $1,050,000. Okay.

Tommy, you still here? Dang it. This looks like a really cool property, Blake. Given what we're doing, I'm actually really interested in running through this one deeper. Yeah.

There was another one that I found as well. This one didn't have as strong of numbers, but, uh, then another one called Falcon that looks more modern as well, where it's kind of actual like toy storage as well. Yeah. Like toys and boats. So those are just two that I found, but this one just seemed a little more interesting.

Yeah, no, this is super cool.

I love this.

So yeah, I can call and ask about these questions they have for 'em and I can also see if $36 a square foot is feasible at least.

Well, we'd need the, uh, the, we, we would need the comps to be able to justify it, not just You know, the realtor selling it, here's opinion. You know what I mean? So have, I would say, have Deal Hunter, um, do, do what Tommy said, because again, this is another fabulous business, and have it do the valuation on the property, but then also the business model for that, uh, property in that actual area. Does that make sense? So you're, you're doing two valuations again, one on the actual property, the building, but then one on the business so that we can see like that's what's actually being bought and the value of it. Does that make sense? So you're going to be doing that on both of those for the car wash and this one.

Okay, I can do that.

Yeah, dig in. And then tomorrow I'd love you to come back because I'd really like to look at this. So I want you all to understand, and a lot of people don't understand this, like even for instance like an RV park, right? When you're evaluating, and or the mobile home park, anything like that, you want to understand it's 2 separate things you're doing the value on. You're doing the value on the land and then you're doing— or the land, buildings, all that. But then you're doing a value on the business because they're 2 completely separate things put together, right? Because on those, when you understand the value of the land, the value of the business, there may be things that you can do to increase the value on one or both. Right? So, because somebody can be a really crappy business owner in a really awesome area, or somebody could be an awesome operator in a real, you know what I mean? Like, it's, so you need to understand both pieces and be running it from both directions. So that's what we want you to do with Deal Hunter. Um, it is after 10 o'clock. Um, does anybody have anything else before we go? We're good for today. We're good. Today was a lot of lessons. So just like Katya said, uh, you guys have deals and stuff. How we did it was, uh, Katya set up the meeting and got us on FaceTime and she did the whole walkthrough with the realtor and we allowed Tommy to ask all the tough questions. So you have to understand, you know, the who that knows how. Um, Tommy is the one who's going, who has zero fear in asking all the tough questions. And you want that on your team. Because again, there's 3 types of entrepreneurs. The first type is the skilled producer, somebody who's really good at doing the thing, whatever the thing is, say being a plumber, right? But they generally identify as their business and their business is them. The second one is the manager, leader, somebody who loves to lead and manage people. We need that person because teams need to be built and managed. And the third is the like the, uh, true blue entrepreneur. And what they do is they can see the, the deal all the way from beginning all the way through and love to get it all the way through and exit out and do it again. Problem with that one is that they see opportunity everywhere and they're like unicorns, uh, and see unicorns and butterflies. And we need to make sure that we're looking at all the pieces. And usually the first one can see all the things that can go wrong with it, and we need that we need all three voices to be able to be heard so that we're seeing all the problems so that we can mitigate that on top of it. So I want you to like look at the deal. And so Tommy is the one who on our team, he's the who that knows how to poke all the holes in the deal so that we can see what we can, we can mitigate the risk. Hey, are you there?

Yeah, I'm here. I'm on my— I kept losing signal on the Zoom, so But I'm around the corner and I'll be there in just a minute. I want to let you know, don't leave because we're going to be meeting Mark.

Mark. Yeah, he texted me. Okay. I'm just wrapping up the, the Zoom. Everybody can hear you. Awesome.

Everyone coming in today, we got a podcast tomorrow instead of the Land Chart. Tomorrow is going to be our, I believe it's 5th webinar and our 5th webinar tomorrow is about Chosen Forever. This is the, this is the, the soul. To the Titan Impact Group and what Titan Impact Group is all about and why it exists is because of this particular mission that was given to us by God. This is why we got the band back together, was so that we could accomplish this mission of getting 120,000 children adopted before their 18th birthday from the foster care system. So it's not about finding them a job when they're 18. It's not about Finding them a house when they're 18. It's about finding them a family before they're 18. And that's the purpose of everything that Catherine does inside of Titan. So tomorrow, 9 a.m., come in. Catherine and I will be talking about what it is that we have to do to get 120,000 children adopted and what everyone that we work with is able to do with us.

Yep. Absolutely. So with that, thank you everybody. You're amazing. Sari, if you could— Sari, if you could stay on for just a second afterwards because I want to figure out this calendar link. For the rest of you, thank you for being extraordinary. Go and find some— maybe we can find this RV storage because that would be awesome to have you all be a part of that. And if you haven't, the other ones, again, Blake, great job finding those deals. Super excited to see how you evaluate them and then come back tomorrow so that everybody can learn from what you're doing. So good job, super proud of all of you, and, uh, excited for what we're doing moving forward. With that, have an extraordinary day, everyone. We'll see you tomorrow. Peace. Okay, okay, Serey, let me— okay, the link that you used to schedule Did Tommy send you that link? Yes, ma'am. Okay, so I'm thinking it's through GoHighLevel, so there might be something. I just got to figure out where it's not connecting so that I can fix this.

I got it. I got an email that I have a meeting with her at noon today.

I believe you did. It just didn't add it to your calendar, so I'm trying to figure out why it's not syncing to your calendar. So I'm in GoHighLevel right now figuring that out. Because I am pretty sure that's where it's broken. So it makes it easy to fix. So email is there.

I do calendar, calendars. Here we go.

Preferences. That's that email notification is very, I'm just OCD. So I checked it every time I see it, but it doesn't show up elsewhere.

Yeah. That's for sure. Yeah.

So the, I just checked the link he sent me as api.leadconnect, Lead Connector HQ.com, is that?

Yep, that's the one through HighLevel. Yeah.

Okay. I was double checking. I was like, maybe—

no, no, no, it's not you, honey. That's just why I'm— okay. So it's connecting to his Outlook, but it's not connecting to Google.

So let me get it connected everywhere.

I figured out where it wasn't connected. Okay. It's now connected and we'll add to his calendar. Okay. This is exciting. Okay. So I think so. That's perfect.

So thank you. Okay, cool. So in an hour I'll be there.

Cool. Okay, that sounds good. Thank you. Thank you. Appreciate it. Appreciate you. Bye, guys.