High-Yield Cash Flow with Private Lending | Real Estate Investing | EP 8

Hey, everybody. Flip and Danny here, co founders of the Freedom Real Estate Group, family of companies.

Yes. And this is podcast number eight of Real Talk, which is real talk for real estate investors. I almost fumbled over that one. We were just talking about it. Anyway, we're super excited today because we're going to be talking about high yield cash flow by being a private lender.

And today we're going to do things a little differently. I am going to be the interviewer and I need my reading spectacles on. Hello, Mr. Flip, and welcome to my show. Today we were going to be talking about private money lending. So what is it?

Oh, stop it. I'm not going to be able to do that.

So what is private money lending?

Sure. Private money lending means that you're the bank. So. So I always tell people when I'm on the phone with them, you are bank of America. You're Wells. Wells Fargo. I was gonna say Wells Mortgage.

Fargo Mortgage.

Somehow this day started off so weird. I'm fumbling over everything. Yeah, you're the bank. So when we bought our house, right, we went to bank of America to get a mortgage, and they have the note and mortgage on the house so that if we default on them, then they're gonna foreclose on us, right? So we're obligated to pay via the terms laid out in that note mortgage. Private money lending is the exact. So in this case, these guys. I'm going to do it this way because you are the acquisitions person, so I need to use you in a different scenario. So you are going to lend us money. So Flip is going to find a deal and then we're going to evaluate it and say, yeah, that's a great deal. And it's a purchase price of $50,000. We have of $30,000. We need a total of $80,000 of funding. We're going to go to one of our private money lenders, send them a financial packet about the deal, gives them all the history. They're gonna ultimately say yes or no about whether they're gonna fund it. I don't think we ever get no's. If we do, it's like one in a hundred. Because we're very conservative and very good about how we evaluate things. And people trust us and have been working with us for a very long time. And so they become the lender on that deal. So when we buy the deal, the deeds are gonna be in our name, but they are the bank. So it's their name on the note and mortgage instead of bank of America. It's Joe Schmo or it's an equity trust. Like if you have a self, self directed ira, then it's fbo and then the equity trust name or if you have an llc, then it's your LLC name. So essentially you're the bank. And that's how, that's what private money lending is, is you just lending us money to buy the house, do the rehab. We're going to pay you back when we sell it and we're going to talk more about how that works.

Right. And that's first lien position.

First lien position, always. Thank you for clarifying that. We do not have any second visit. Actually we have one. We have one lender. We're gonna talk about minimums of loan investing and she had less than our minimum for doing a loan with us. And I said, hey, do you mind being in second lien position on the deal? She's like, I've known you for forever. Yes, I don't care. That's totally fine. It was putting her money to work. So it was a win win. So we put those, her funds in a second lien position on some deals, but that's the only time we do it. But everybody else is just a, it's one lien per property.

Got it. So what are the type of returns?

So they're anywhere from 6 to 12%. I typically say 6 to 10%. But every now and then we've started to do larger projects. When we do larger projects we are. Because it's a larger amount of money. So we've done that. We bought the 56 unit apartments. Right. We put one lender on each building for the purchase and rehab. Those are larger amounts of money. So they are in at 12%. We're doing a deal in Cincinnati that we're offering 12% on because it's a larger deal, larger rehab. So on really larger projects where somebody's coming in with a big chunk of cash, then we are doing 12%. Otherwise it's anywhere from 6 to 10% depending on the amount of money that you're investing. We are incentivizing you to provide us with more money. So depending on how much capital you have, and I don't mean take all of your savings out of your bank and give it to us to loan. Please don't do that. Please be responsible with your cash. But if you have. So this is what happens and I always joke about it, I'm going to come in and our minimum is $50,000. We're going to get to that, but I just said it for this example. So they come in with $50,000. Maybe we deal at $70,000. Right. So we use their $50,000, let them get in the door, do a private loan with us, learn how the process works, experience that, you know, deal. And we had funded the other 20 to make it happen. After that deal is done and they get paid back, they're like, wow, that really was super simple. And I made a good return. Guess what? I got another hundred thousand dollars over here, $200,000 over here. It's crazy, it's so funny. But I understand the process. Process on an intimate level because it's trust. You know, you have to trust the people that you're working with if you're going to be a private lender for them, because things can go wrong. So when they go wrong, what does that person do? Is there a history of them experiencing things go wrong? What did they do in those instances? You need to know and get the answers to all those questions before diving into a relationship like this.

Right.

And we're going to dive into those questions in this interview.

Yep. You're getting ahead of your time.

I know, I know, I know. I'm sorry.

So what is the length of time on the investment?

Okay, so our standard is 12 months. I would say on bigger projects we're going to start doing 24 months. And when I say standard, that means every single loan that's going to spit out is going to be 12 months. And like I said, larger projects, we're going to start doing 24. The reason we do that is because we don't want to extend them. Sometimes we have to get permits. Sometimes we walk into a property and realize the gas lines are retired. That is a process. Sometimes we buy occupied property and it takes four months to get them out. Maybe it was because of a lease, maybe it was just a time where eviction courts weren't open or it wasn't moving quickly or the tenant was giving us problems.

Right.

Something. So all of those variables, we would do a six month loan and then go, hey, do you need your money back? Flip. Or is it okay that we extend this? And then you'd say again, I don't think we've ever, nobody has said, give me my money back. They're like, you can extend, that's fine. So we would then extend it. Now we've eliminated that, that step of having to ask the question by making a standard 12 months every single time. And we're going to start implementing the 24 month rule. Did I answer your question? Because I could keep going and probably dive into 10 more things.

But hold, hold, hold yours. So what are the tax implications?

Okay, so you're going to get a 1099 at the end of the year for the interest that we paid you. So if we paid you $10,000 over the course of a year, you receive a 1099 for that $10,000 and it's going to be treated as ordinary income for your taxes. I'm not an accountant or cpa.

Yeah, neither am I nor an attorney.

Everybody know.

Okay, and you, you, you led into this earlier. But what is the minimum?

The minimum is $50,000. So I don't know that we'll ever change that because I think it's a nice, it's significant to us because we're in Ohio. And so, you know, we do have a lot of 70 or $80,000 deals. It's now, it's very, very, very rare we're ever in a $50,000 deal. But we don't mind topping off new lenders loans.

Right.

As we invite them in and get them involved in the process.

Awesome. How is the loan secured?

Is secured by a note and mortgage. So we talked about you being the bank. So just like bank of America has a note and mortgage for us in our, in our property, you have a note mortgage whenever you're a lender on a deal.

Got it. And so then what are the risks and how do you mitigate those risks?

Great question. So the risks are that we default, right? So if we default and we stop paying you well. Okay, let's talk about this. I didn't even have that written on here. So when you loan the money, there's an actual balloon date. It's that 12 months, right. In the 12 months. And I should have hit this, but I'm going to hit it now because it's in my head. If we buy a single family vacant house, if that's the property you find and you send through single family vacant house, on average, we are buying, rehabbing and selling in four months. So even though it's 12 month term, if we're only using your funds for four months, we're going to cash you out at the end of four months on your payoff statement. You're going to see your principal balance, you're going to see the interest that we owed you for the days we borrowed your money. And then you're going to see a $25 wire reimbursement fee. Why? Because every bank is going to charge you $25 to wire funds to the title company. We reimburse that to you so you don't have any fees incurred or associated with lending with us. And then you're going to see the total. You're just going to double check it and make sure all the numbers are correct. And if they are, you're going to sign it. That goes to the title company. So that went back the term of the loan. But let's just say at the end of 12 months, that's when you're getting paid for everything. You're not getting monthly payments. The reason that we do that is that we are doing so much volume. The last thing that we want to have happen is us be human and disappoint you. So we don't want to miss a payment because we have a hundred loans that we're making payments on and crap, we missed. One of them fell through the cracks. Now that breaks our trust. So everything is tracked via note and mortgage. So you've got the security. There's no way we can't pay you off. We have to pay you off to sell the deal. It's part of the deal.

Right.

But we don't have. We're not putting us at risk of making mistakes by having too many things, juggling and you know, whoops, the podio task got deleted or whatever happened. So the risks are essentially at the end of 12 months, we can't pay you. Something happened. How we mitigate those risks is volume. So we do. We're going to talk about how many deals we do, but we do so much volume that I tell everybody, if somebody tells you that they don't make mistakes in rehab, that they always make money on rehab, that they never lose money in rehab, they're freaking lying. Because you have to go into real estate knowing that you're going to screw up, you're going to lose money. Yes. So working with an investor who's only doing 1, 2, 3, 4 deals a year, what if one of those deals falls through the crack? Do they have the profit in from the other deals to make up for it, to be able to pay the lender back or to fix the situation or pull money out of their own pocket? So the volume, this is what we did to mitigate our risk. Right. Because we knew things were going to happen. So how do we, how do we make sure that we don't fail our private lenders and we don't fail ourselves? And we said volume. If we do 10 deals a month and even two of them are bad, which is not the case. One is even pushing it. But what if two of them are bad? Out of the 10, we still have eight that we're doing in that month that we're bringing profit back in. That's going to save us on these two or this one. So working with investors who do volume, who've got the experience and knowledge that we do, number one, you're mitigating the risk by that 1 of 10 not likely even being true. But we could totally screw up on one and still be okay because we've got the other nine. Profits come back in the door. We can cover the losses on our end. And so this is something that I say a lot whenever I'm talking about private money lending, because we raise a lot of money and that is we have never defaulted on a loan, we have never not paid back everything owed, and we have lost our butt on properties.

I think we did a. We did a short vlog that. Yeah, it's so painful.

Yes, yes. That vlog shared, I think almost $50,000 we lost. That lender got paid every single cent that they lent us, every bit of interest. We did not say we lost money. Is it okay if we just pay you principal or less than the amount? We didn't say that. We're not going to say that. Because private lenders are our most valued relationships. They are why we're growing as fast as we are, because we can do more deals because of the team we've built. We have a really, really great team. But we can also do more deals because the private lender relationships allow the money to come in to help fund those deals so that we can ch. Churn, churn, churn. Which again, allows us even bigger mitigate risk for everybody involved because we're doing so much.

In fact, the lender on that deal that we lost all that money on never even knew.

No, no. They have no idea we lost money on that deal. Yep. They're just like, oh, that was great. Can I do it again? And I was like, yes, you can. Next deal. I'm not gonna lose money.

Now, this is a question that we get a lot because somebody hears this word and number one, they don't know what it is which we're gonna get into. But they're like, do you have to be an accredited investor?

Great question. The answer is no. So there are going to be very many instances where you're investing and you're going to hear that word accredited or non accredited. Sometimes you'll hear the word sophisticated. In this instance of private money Lending where your note or your funds are secured by a note and mortgage. This is a. We are not pooling money together. We did not stick your $50,000 with another lender's $50,000 and create one note that's a security. And that means there's. There needs to be more disclosures. There needs to be a whole. Are you accredited? Are you not accredited? What type of fund are you using? Because you're just not supposed to pool money ever again. That's why it was so important that Flip you had brought up. Is it one lien per deal? Because it is. It's one lender, one set of funds, one lien per property. So you do not have to be accredited to do this.

So that leads to what is an accredited investor?

And that's another great question, because a lot of people don't know the answer to this. And there are things that we do within our family of companies that do require SEC guidelines to be followed in which we will have conversations asking, are you accredited or are you not accredited? So to be an accredited investor, you have to pass one of two, not both, litmus tests. And the first one is income. So you flip. If we weren't married, you have to make $200,000 a year for the last two years and you have to expect to make it make the same next year. Or because we're married together, we need to make $300,000 a year for the last two years and expect to make the same next year. So that's the income rule. We can pass that test and we're accredited. Right. But let's just say we don't pass that test. So the second test is a net worth test. And so you have to have $1 million in net worth, excluding your primary residence. So the house that we own and live in, we cannot count that as part of the net worth. We have to have a million dollars net worth. Otherwise we can pass one or the other. We do not have to pass both. But if you pass one, then you are accredited.

Got it. So you sort of talked about this earlier, but what is, and I say your. What is our history? Have we defaulted or not pay back what was promised?

That is the best question ever. And thank you.

You wrote it down.

And thank you for hitting it again. Because I have been on other podcasts and I've heard multiple times on the phone, I said the reason I called you is because of this, that you have lost money on deals and your private lender never, not even necessarily knew about it because you brought that up but I think I forget to bring it up that I didn't even tell them. But we always pay them back no matter what. We don't try and negotiate something. This is what we owed you. Here is your money. We're fine. We made profit on these. It doesn't matter. So no, we've never defaulted, we've never not paid them back what they are owed and we have an expert panel video on our website. So freedom real estateguru group.com Instead of doing something like this all the time, I actually brought in a private lender that's let with us for years and she's referred us probably another 20 private lenders herself. I brought in a self directed IRA specialist. I brought in my CPA and CFO. Now he's our CFO, Randy Brown. I brought in the title company attorney that creates the notes and mortgages and I said I'm not going to answer these questions. You guys are going to answer them because number one, you've got experience. We've worked together for at that time even title company I think was a couple years. Randy was a couple years at that point in time, I think. And so we created this video that said you guys have worked with us. Randy, you see our books. Sunny, you're a lender with us the last couple years. So you guys answer these questions. I'm not going to answer them. I'm going to ask you the questions and you guys can answer them for you. So you can hear what our words through other people that know us, like us, trust us and have worked with us for years so they know the answers.

Proof is in the pudding.

Yes. And we gave you their names, their emails, their phone numbers. We put it all out there so that you guys could vet us. Because this is a trust based relationship. You should be vetting the people that you're working with. It's on our website if you want to go check it out.

In fact, one lender even said I'm here because of that video because you gave, you gave me everybody's phone number and email. I can call them. You laid it all out.

Yes.

So here you go.

Yes.

Okay, so this is a good question because I'd like to know the answer of it because all I do is buy properties. How many deals do you do you.

Know the answer to this question? So in 2019 this is what the numbers that I know off top of my head every single time because of our annual reviews in 2019 we did 72 deals. In 2020 we were aiming to be over 100. Darn that Covid. We did not plan for it. Screwed up our business plan completely. We did 67, I believe it was, in 2020. 2021. I guarantee you we will pass 100. We are busting through 2021, like, freaking. And I think it's being. All of us are pissed off about 2020.

I think everybody's pissed off about 2020, regardless of the deals.

Yeah, we'll do over 100 this year for sure. And we'll likely do over 150 rehabs this year simply because we've had so much inventory and the apartments particularly, that there, they had to add to their plate with the inventory that we're just doing on a normal basis.

Do you need more lenders right now?

Yes. Guess what this guy's doing to me? I always joke on podcasts that it's a push pull relationship between I have all this money, flip, go buy properties. And then he's like, I got properties. Go find money. So we are actually right now in a position of he's starting to find some larger deals that we can do that are fantastic. We're very excited about doing larger deals, but a lot of our lenders are in that 50, $100,000 range, and we still do need more of those. And I'm actually gonna talk about what. What's coming in the future. Danny, write that one down. There's going to be an opportunity coming up where especially the people with fifty and a hundred thousand dollars, where sometimes when we have a $300,000 deal, we don't pull funds. We've already said that loud and proud. We don't do it. So we have to have the bigger lenders that can actually fund those deals. And that's why sometimes they get higher interest rates, because they are, you know, bringing a big bucket of money to the. To allow us to do more things.

Right.

So what was the question again?

That was, do you know what we need more?

Yes. Yes. So Tiffany, our transaction coordinator, she's the one that's in charge of all of our lenders because you sent her a deal. She finds the lender who's ready for a deal, who's next in line? How much do they have? Is this one gonna fit? And then she sends it out to them. She said, I have this, like, $300,000 deal, and I need somebody with $300,000. And she's got more deals in the pipeline. So, yes, the answer is, yes, we can use more lenders right now, especially for what I have planned for the Future.

Right. And that leads into this question, which is, how soon can you put my money to work?

Okay. Typically, $50,000 is the hardest amount of money to put to work because deals aren't always at that level. So we have to make sure that we've got the extra funds because we still have our overhead of our company. We still pay, you know, utilities and lawn expenses. There's a lot of costs that we have internally for all of our deals and to run what we're running. So we need to make sure we have the ability to top off a whole bunch of your guys's loans if you're at $50,000. So that's part of the factor on why it's harder. But I would still say four weeks. Ish. If you're at the $50,000 point. If you're at 100, I'm going to say three. If you're larger, you're going to be putting a deal so freaking fast, you won't even. You'll be like, whoa, thank you for that funding packet. It really depends on how much you have and what we have in our pipeline. Our pipeline is filling up so fast. I would guess, if I was going to guess, on average right now, two to four weeks is what you're looking at from the time you tell Tiffany, I'm giving you the green light, you know, send me a funding packet as soon as you have something in your pipeline. Likely two to four weeks is when you're going to see that first funding packet again, unless you've got a larger chunk of money, in which case she might be going, sort of need somebody for this deal.

So you started to elaborate on that. But what is the process?

Okay, so what is the process? So typically, you're going to get on the phone, it's either with me or with CJ I'm getting so busy right now. We're about to go on vacation. Vacation, vacation. That C.J. is now. He's our investor coordinator. Really, really, really smart guy. And so he's taking a lot of the calls for syndications, for private money, for turnkey investing. He's like the first point of contact when you want to learn about, what do we do? How can I invest with you? He's going to talk to you about your goals. What are you trying to achieve? Let me explain to you these programs so that you can say, okay, this is the one that I want to try, based on your conversation. So it's likely you're going to talk to him first. If you say, I would like to be money lender. That's the one that I like the most. Then he's going to introduce you via email to Tiffany. Tiffany's a transaction coordinator. As I said, she is the master blaster of everything that comes in and identifying the private money lender and then managing the deal from contract close, getting your money back, payoff statements, everything. So she's fantastic. She'll be your main point of contact from now on. And people rave like, like raving fans of Ms. Tiffany. So you're gonna love her. So once you're with her, you're going to get a sample funding packet. Packet and you're going to review it real quick just to see what a real deal looks like. And it is a real deal. It's not one that's live that she's asking you to fund. It's a past deal that was already funded by another person and she's showing it to you as an example so that you can look at it and you can ask her any questions. Ask CJ any questions. And sometimes I'm copied in for that. I can answer questions as I answer questions. CJ and Tiffany, Tiffany knows pretty much every answer. CJ is pretty dang close. I don't think he's asked me a question a long time. So you're gonna get the answers to those. Once you don't have any other questions and you're comfortable and you're ready to go, you're gonna go, tiffany, green light. And that's essentially telling her, I'm ready for a live deal. Send me a funding packet. When you have something that's in my range for whatever you said, and you're at that time going to tell her, I've got $100,000, I've got $50,000, it's coming from a self directed IRA account. So that way she can start going, who's your custodian? How long does it take for their process in order to get those funds? Because she can't give you a deal that's closing in seven days. Because your custodian likely can't fund in seven days. So she has to give you a deal that is two weeks long. So whatever your funding source is, that's the information you're going to want to give her so that she can understand what deals are going to fit you and she can send you a funding packet.

And you sort of touched on it too. But how do I get started?

This is exactly it. You're going to have that first phone call with C.J. ask any questions. That you have get introduced to Tiffany, ask any questions that you have, give her the green light, and you're going to get started. And from the time, just so you know the process of what happens from the time that you actually fund a deal, let's just say Tiffany sent you a pack, Flip, you said, yes, I'm good to go. Let's do this. Then she is going to introduce you to title and just say, hey, sue, this is Flip Robinson. He's going to be funding 1, 2, 3 Main Street. And here's the details of that particular deal. It closes next week. And so then sue is going to have the title attorney create that note mortgage, and she's going to send you wiring instructions so that one day prior to closing, you can send those funds. You do it one day prior to closing. Closing. So make sure the funds are there at the time of closing. As we've had some bank issues, I told them to wire funds, they didn't wire funds. So we want to have all that figured out the day prior. Then we're going to sign all the closing documents. We're going to close on the deal. Lender, you don't have to sign a thing. It's all on us. We're the one signing that note and mortgage closing documents, all that stuff. All you had to do was wire the funds prior to closing. Then that's when, like, the clock starts, right? So once the deal closes, the title company is going to send the mortgage to the county to get recorded. And then once they get that recorded mortgage back from the county, they're going to send you a copy of the recorded mortgage and a copy of the original signed note. I believe that's exactly how it goes. So that you have all of that for your records. You can even go online and you can see your mortgage and note and everything's on there. Somebody asked me that and I was like, you can do that. I found it. And I was like, here you go, here's your link. So then the rehab starts. Tiffany's going to message you once a month. If you want more frequent updates, you can have more frequent updates. You just have to tell her, can you email me more often? And so she will. She'll just email you, but at a standard. She. It's. I think it's around the 20th of the month. I know our Frequently Asked questions packet says it, but once a month, at some point in time, she has a task to update all lenders. Hey, we just replaced the roof. Here's where we're at in the Rehab, hey, we just were at the final stages. It should be done in like two weeks or, hey, we just got a buyer for it. We're going to close in whatever, once a month. You're getting this. The progress updates. I will tell you that some of our lenders, one at the very beginning, want more frequent. And so they just tell her, hey, can you give me more frequent updates? And she says, how often would you like them? And she tries to give you more freaking updates. Some of our lenders go, I don't want to hear, I have worked with you enough or I've done this enough. I already know how this works. I trust you guys. Please don't bother me until it's time to get paid off. And they just want the payoff statement when it's time so that they don't have all the interactions. It doesn't matter who you are and what you like. All Jack to do is let Tiffany know. Her standard, though is once a month. Now, when the deal is all finished and ready to go, we've got a buyer, we're getting ready to close. Tiffany's creating the payoff statement. She's sending it over to you and saying, hey, Flip, we're getting ready to close on this deal. Here's your payoff statement. You're going to see the principal, the interest, your wire fee, reimbursement check all the time, the totals. If it's correct, please sign at the bottom because we're going to send that to the title company. You sign it, she sends it to the title company. Title company puts that on the hud. I forgot one step in the beginning. When the note mortgage is created, you're getting a copy to review real quick before we sign it, just so you know. So at the end, you sign the payoff statement. Went to sue. They're putting it on the HUDs that you get paid when the deal closes. It's going to say on there how much is owed to you based on that payoff statement. You're going to get a wire probably in the next couple days. And if there's a holiday, obviously in weekends, you know, figure that, you know, you'll figure it out. Title company will typically add a couple days of interest to that because of the time from closing all the way to getting it back into your bank account at the time that Tiffany gave you a payoff statement. She's going, hey, Flip, you want to do another deal? Because if you had $100,000, $200,000, we probably, you flip in this instance, have probably Given Tiffany a big pile of deals that she's looking to get funded. So she knows you just funded something, you're about to get cashed out. Because I promise you, she's written your name. Hey, I bet you this guy can fly in this one because he's getting money back. And typically our lenders are like, keep my money working as much as possible. So they like that little downtime. There was one time a deal closed and a deal funded within two days. The lender literally got the money just to wire it back. And we have to do that. Many people say, can the title company keep my money? They can't. Legally, we have to send you back the money because the title company is going to send you a release of mortgage, which means you have to sign that. I got my, I got paid back what I was owed, my principal and interest at the promised. I got it, I'm going to sign this. So that way the title company can release the liens off that property. So if you don't get your money and it just stayed there, you might not want to sign that document because you don't know for sure you actually didn't get it. So we have to give back to you. But she tries to move those funds as much as she can back and forth. So she will ask you that question. I think I answered question and more. Where are we at now? Sorry, I keep on going.

No, I think you pretty much covered everything. So what's the future look like?

Thank you for adding that. So I just sent an email, I think last week and I asked our current private lenders, I said, because a lot of them will say, hey, Danny, can you just use my funds all year? Can you just keep it? And we do have a program for that. It's called the masternote program. And I'm happy to talk about it. CJ is happy to talk about it if you guys have questions about that. But it's not really scalable and it's not something that I want to do with every single lender. So we actually close the program. Sometimes it's not even available for you. You have to ask and say, are you even open? Tell me about the program. If I like it, are you open? So what though I sent out was, hey, we're thinking of creating a fund. This is a fund where money will be pooled so SEC gets involved. It would likely be a 506B because so many of our lenders are non accredited. So a 506B means we just have to have a relationship. So as long as I've known you for 30 days and we've had a relationship in a substantial conversation about financials and your goals and all that stuff, then you are somebody that I can work with now at this point. So it's important for you guys to get on the phone with CJ because those conversations have very much to do with being able to participate in funds that allow you to be a bigger part of a project you could never do on your own. Right. Because we might be have a $10 million fund that we fund via these relationships. And not a lot of people have $10 million, but they can be a part of a fund that is buying and flipping properties.

Right.

And the money is being used all year long, Right. Whether we're using it or not. And this is, I'm talking to the attorney about what are the structures. But I believe whether we're using it or not, we have to pay the interest on it. So that puts a little bit of, you know, liability on us that I'm worried about. Because like, if. Let's just say we had 10 million. And that's not where I'm gonna start because I'm gonna test this out like at a million or 2 million, right? But let's say we had 10, we're only using 5. I don't want to be paying interest on 5 million that's sitting in our bank account. Like that makes no business sense whatsoever. I'd rather just do individual loans so that we're an exploration phase of this. So just keep in touch with us, keep in touch with CJ so that you understand where it's at. If we choose to roll this out, we're going to figure out what that structure of the fund is going to look like based on the attorney. He rolled out four ideas with me on the phone and I was like, whoa, I didn't even know you could do all that. So he's going to send me an email with some ideas that he thinks will best fit us and our lenders. But it's something where you can now put $50,000 into a fund and then just let it, you know, earn interest. At least that's how I think it's gonna work. So we're super excited about that because we've been asked by so many people, can I just give you my money for a certain amount of time? And it might end up being like a two year fund because it doesn't make sense for us to do a one year fund because that's how long some deals last. Anyway, and we don't want to, like, raise $2 million only to be liable to pay all back when I was like, what was the point? I just had to pay for the fund and pay for the attorney and pay for all that when I could have just done regular loans. So we're figuring all of this out, but that's what's coming in the future.

That's awesome. Well, I know a lot of people have asked us about private money lender. How do I become a private money lender? So this was a podcast that was requested by a lot of people. Plus, we needed to get this one out here.

Yes, we sure did. So thank you so much. We hope that it was valuable information. We hope you learned a lot. Now when you talk to cj, you'd be like, I know it all. Just hook me up with Tiffany. Just kidding. So thank you so much again. This is is podcast number eight of Real Talk, which is real talk for real estate investors. And we sure enjoy and are grateful for those of you who are listening and having fun with us. See you later.

And we always end our podcast with invest Smart, Live happy. Bye.

Bye.