Wholesaling, Flipping and Creative Finance with Alex and Joe

I can hear you both.

What's up, you guys? Welcome back to the New and Experienced Investor Podcast. Today we have a very exciting show. It's definitely one you don't want to miss. Um, I'm one of your hosts. I'm Alex Barnett. I'm the new guy.

I'm the experienced guy. My name is Joe Homs and Yeah, we're missing. Yeah, we're missing an entire guest.

We're missing a guy. Yeah, it's not the first time that this has happened, but our guest thought we were doing a Zoom. Um, oops.

Yeah, Zoom call.

Oopsies.

Oops.

So, uh, that's okay. You know, we're professionals, we pivot. And, um, we're gonna just, uh, we're gonna just kind of do some free flow. So, uh, jump in the chat if you guys have any questions that you want to get answered. Let me know. But before we do that, let's talk about our meetup that we have coming up July 28th, Hangar 24.

Yeah, 6 o'clock. And our guest speaker is you. That's right, you are our guest speaker. So please come out. Hopefully, please not long-winded. We're going to keep it to, you know, 5 to 7 minutes. Get up there. Tell us why you're the greatest thing since sliced bread. You're the greatest agent. You're the greatest investor. You do multifamily. You do subject-to. You do wholesaling. Whatever it is, get up there. I'm just like, the best guy in the world.

Yeah.

Whatever you want.

Yeah. Whatever you want.

Whatever you want.

And it's also good to ask at that point. You can say, hey, these are the things I need in my business. Is that you out there in the audience? Oftentimes someone will raise their hand, you guys get connected.

Yeah, absolutely. Yes.

Heck yeah. So it was a big hit last time. We're gonna do it again because we had so many requests. So we like to give the people what they want.

Mm-hmm.

And, uh, we'll see you there. Um, I always like to remind you guys that you get the most out of this podcast in particular because it's live when you jump in the chat. So share this far and wide with any new or experienced investor. And, um, you know, we will bring up your questions and answer them, especially today. So, uh, since we don't have any guests, we had to reschedule and we had to pivot. We're talking about multiple things today because if you guys didn't know, Joe is an author.

I am.

Yep. He's an author of multiple books. So we're, let's just, we're gonna go down the list and And we're gonna talk about a couple of subjects that Joe's been just—

Wow.

You know what?

I've looked at that.

I've taken this stuff out of my head and actually written it down. So it'll be around forever.

That's right.

3, and I'm working on 4.

Mm-hmm.

Prolific.

Yeah, it's crazy. We come in here—

Flipping.

Yeah.

Assuming. Assuming loans and wholesaling. And my next book is going to be on subject-to, which is the first property I ever purchased was subject-to.

That's right.

It was 40 years ago.

40 years ago. Yeah.

You remember 40 years ago?

No, I don't remember. Just barely, I guess.

But yeah.

Yeah.

Okay.

But yeah, let's, let's get into it because yeah, you'll show up at the office. We had to come here one time in the middle of the night to drop off some gear and Joe's in here on a typewriter. Smoke flying up, no lights on. He's got a cigar. It's very strange to see.

A drink.

Yeah, some scotch.

Scotch.

Yeah, he's all like frazzled. And then, you know, you wake up and there's a fully published book the next morning. So I don't know how you're doing it, but it's pretty unbelievable.

Thank you.

Yeah.

So let's talk about it.

It's a lot of fun.

It looks like it.

It is. It's a lot of fun.

Let's talk about our, um, our first subject here, which is wholesaling real estate. It's all the rage. It's what all the kids are doing. And basically, this was what our last meetup was about as well. But essentially what you're doing is you're flipping a contract, you're getting property under contract for a certain price, then you're going out and you're finding a buyer and selling that contract for the difference. And it's great because it teaches you how to Get deals, how to get leads, how to talk to sellers, all skills that you can use throughout the rest of your career. If you decide you want to flip, if you decide you want to hold, you want to know how to do that. I mean, you're still talking to sellers and negotiating to this day, right?

Yeah, we've got one in escrow. We'll be closing next week. It took me 4 months to get to this point.

You had to nurture it.

Yeah, you had to nurture it. Absolutely.

You thought you lost it.

Yeah. And I, and I didn't like the price. And I kept on them. It is literally a hoarder house. Terrible condition. You've been there. Terrible condition. And it's just like, you know, texting. This was actually mostly through text.

Wow.

Yeah. I never actually have met this person. And in fact, I think this, it was kind of a probate deal.

Okay.

And I think this person maybe is a beneficiary, because now I'm dealing with the attorney.

Oh.

Oh, okay.

And he's getting all his paperwork on his end done so that we can buy it on our end. Right. But I was dealing with this person who did not want to speak or deal with a real estate agent.

Yeah.

Okay.

A lot of those out there.

Did not want to list the property and did not want to deal with a wholesaler.

Oh, they've been burned before.

I have many hats. I took off my wholesaling hat.

Yeah, I don't do that anymore.

Yep.

Haven't done that in years.

And I just became the investor in this deal.

Right.

And I said, we are going to close this at the end of the day.

Yeah.

At our price that we want.

That's all they cared about.

And that's where we're headed. One more week, we should be closed.

That's all they cared about.

Yeah.

Yeah, that's great. I mean, technically, I believe you guys got it at a price to where if you wanted to, you could wholesale it. Yes.

Sure.

Because there's still enough meat on the bone to where somebody could come in here.

Yeah.

Fix it up.

We're getting it at $650,000. She started out at $710,000. So I got her down to $650,000. And the after-repair value is anywhere between $925,000 and $950,000. So yes. So that's a great question. Let's, let's pose that to the audience and pose that to you as well. It's like, what would you do, Mr. Alex? You have this deal, you're going to close at $650,000. You can easily make probably $100 grand in less than a couple of weeks. You put it back on the market, you find another person that's gonna actually flip the property at the end of the day. They pay you $750,000. They put $100,000 into it, make $100,000 themselves. What would you do? Would you hold on to it and flip it yourself to make $200,000? Or would you not be greedy and say, yeah, let's do $100,000 and We can take producer to Hawaii.

Yeah, I think do the $100,000.

I could go to Hawaii with $200,000 as well.

But you get the money sooner.

Yeah.

I think I, at this point, if you can just relist it, you know, you make a decent return and then somebody else can, I think it's a good move. You don't have to deal with the contractors. You don't have to deal with something coming up in the market. You know, you can kind of just time it. Boom, boom.

Yeah.

Get in and out. That's what it's all about right now.

Well, we'll see. I think that's the plan. We'll probably list it and, you know, we'll see what happens in a couple of weeks.

And well, that's—

yeah, if we don't get what we want, then yeah, we'll go in and flip it.

Exactly.

Not a problem.

Multiple exit strategies, which is nice. So, but yeah, like I was saying, I mean, you're essentially wholesaling it. We call it wholetailing.

Yeah.

You put it back on the market to a retail buyer, which is most likely going to be an investor. Because of the condition that it's in. So it's basically the same thing. You just get more eyes on it because you get to put it on the MLS, right? Where everybody—

We do clean it up.

Yeah, you're gonna clean it up.

Yeah, because you really can't show it like it is.

Yeah.

Oh, look, do we have a special guest that just walked in?

Oh, oh, thank you.

Do you want to be— you want to be on the podcast here? Oh, come on, have a seat. No, we got stood up.

Yeah, this is fine. Yeah, it's all right. Okay, we got a thing going on next week.

Oh, do you?

Okay, okay. Um, but, uh, yeah, so Joe's still taking these skills that he's learned, you know, from many years ago— negotiation, follow-up, um, everything, etc.—

is in the book.

Everything is in this book.

It's like Very inexpensive. You can go on Amazon, you find it on Amazon for $9.99. I'm gonna be rich by all these people that are buying my book.

You might be. Yeah, you might be.

A whole $9.99 for my book.

Yeah. And, um, and maybe if, you know, I see one thing right here, the double close option.

Yes, that's, that's probably what we're doing.

Yeah, it's basically what you're doing.

Yeah, I explain all that in the book, right? Yeah.

It's great.

So get on your computer, go on Amazon, look up the title.

Yeah.

Or look up my name. It'll show up either way.

And start right away. And I want to just kind of, um, give a tip of the cap to a new wholesaler that met with us last week. His name's Brian. I'm trying to get him on next week.

Okay.

When I got a special guest host while you're on your cruise. But he is Just starting out. He's just cold calling 4 hours a day diligently. And at, after our last meetup, I had people text me or reach out to me. I gave him a list of AI driving for dollars, and he's been calling that list and he's already got like 2 leads. Um, after like maybe 3 days.

He sent me, I think it was this morning, he sent me a text that he has a property, I think in San Jacinto, but there's like very, very little spread there. And I told him that, you know, like, that's not really even a deal, but that's so fantastic that he's actually calling, right, and talking to these people and trying to put something together. Yeah, I told him that was mostly like a listing.

Oh, right, right, right.

So convert that to a listing and, you know, we'll pay him for that as well. Exactly, you know. But, uh, yeah, we met You and I met him for lunch.

Yeah.

Uh, was very impressed with what he was doing. We invited him to the office.

Yeah.

Uh, because I wanted to hear what he was doing on the phone and, you know, give him some pointers. And he came in, we gave him some pointers.

Yeah.

Thank God. Thanks. I mean, that's awesome that he's headed in the right direction.

It's, it's all it is. It's like he's just putting in the time and he's getting leads from it, you know. It's, that's, that's all There's not really anything past that.

Yeah.

Just people, they don't put in that time. I think he's dedicating 4 hours a day, which is a good chunk.

Yeah.

Which you can still do part-time cuz he still has a full-time job.

Mm-hmm.

So there's no excuses, people, but it's a great way to get started, I would say. Yeah. Cuz you can start with knowing nothing. You can come here in this office specifically, we'll coach you. How to talk to people. We have the lists, you know, we have the systems. So I would definitely recommend it. And this, it seems like a pretty light read.

It is.

I would pick it up, just get an overview, and then immediately start putting action in because $15,000 could be waiting for you. $10,000.

And all it costs is $9.99.

And all it costs is $9.99. Think about that ROI right there.

Yeah.

So definitely pick that up. Where do they get it? Amazon?

On Amazon.

Cool.

Yeah.

Cool, cool, cool. That's great. All right, next up.

And we talked about this last week.

We did.

Yeah, with Stephanie.

Yep.

And, uh, yes, you can assume a loan, FHA or VA, right? And there's specific rules, and all those rules are in there. And we've closed a couple of transactions. We're looking to close another one here pretty soon. It's an awesome way to buy property. The last purchaser assumed a loan, 2.75% interest.

That's insane.

Like, wow.

They said that wasn't gonna be possible again.

No. But it is. But it is. Absolutely. It is.

You just gotta know the right way to do it.

Yeah.

What's the equity trap?

I don't know. What is the equity trap?

It's pitfall number 2.

It is?

Yeah.

It's if the balance is far below the market value.

Oh, that's upside down. Yeah. Yeah.

Okay.

Yeah. That's what that is.

Okay. Gotcha.

Yep.

Before making an offer, you got to calculate the purchase price minus the assumed loan balance, and that's going to be your cash needed.

Yeah. That's—

So you got to come up with the gap funding.

Correct. Right. Well, you have to come up with at least 20% down to buy a house anyways. Even though we have properties that really have very little down. I mean, if you want to live out in the desert, yeah, okay, you can literally pick up a property for $10,000 or $15,000. Yes. And assume that loan.

Right.

Yeah. I mean, you know, this is California, but out in the desert, it's not like they're going up You know, uh, inflation-wise, gangbusters, right?

It's kind of a slow play, a little hot out there.

It's a little hot out there. Not the market, but no. Yeah.

And this is, uh, this is different from subject-to, and I'm sure we'll go over all of that, where subject-to, you can, you can probably pick up a property for like no money down.

Yes, we've done that. Which is possible. Yep. We've done that a couple times.

Done that.

Yeah.

It's when people, you know, are in distress and they want out.

I like those conversations you have with these people. It's like, uh, yeah, my sister's living in there. She was supposed to make the payments or she's not making the payments. I'm tired of this. Alex, do you want the place?

What?

Do you want the place?

Uh, yeah.

Okay. Then you can have it. You can, Uh, take the, the loan subject to, but you also have to take my sister.

Yeah.

Okay. That unfortunately turned out to be the hard part. But, uh, we, we did make money on that.

Still made money.

Still made money. I actually passed on another deal where the guy said the same thing. He was like, I'll basically give you my house, but you have to deal with my brother. And, um—

But you had met the brother.

Yes.

You went down there.

We went there and the house wasn't— it was It wasn't like what he said.

That was a different situation because you— I think you told me that the mother lived next door.

Yep. Yeah, it was a whole thing. And the house was a 2/1 that they converted into a 5-bedroom, 2-bath.

Unpermitted.

Unpermitted. All janky.

Yeah, in beautiful LA.

Yeah. So we were like, no, no. But apparently he had a developer that wanted to buy it, so he wasn't too mad.

Okay.

Doubt that's true, but it's fun to tell people that.

If anyone has a beach house they want to give away, we'll take it.

Are you in for that?

Yeah, I'm in for that.

Yeah, the beach house.

I'll get a sister out of there real quick.

Yeah. In fact, um, Ryan, the wholesaler guy you're talking about.

Oh yeah.

Yeah. Wasn't he here that day? Brian or Ryan?

Brian.

Brian. Wasn't he here that day that he had a conversation with a lady who owned—

Yeah.

Who owned that property right on the beach? It was listed, they couldn't sell it, and he's trying to put a deal together with her. And it was like, was it $3.5?

I thought it was— I think she had it listed for $9.

Oh yeah, okay.

And then she was like, I'll take $8 for it, but I believe the ARV was closer to $4.

Oh, okay.

And then there was something— there was like, of course, a mortgage on there that was—

Yeah, but it was literally—

yeah, corner lot on the beach.

What my wife called toes wet. Yeah. You walk out the back and your toes are wet.

Yeah.

Yeah. Right on the beach.

Yep.

In Newport.

In Newport.

Yeah.

I think she bought it for like $200 grand.

Oh, nice. Wow.

That's always fun to look at in the '80s.

And she's older as well.

Yeah.

Well, for $200 grand, you'd have to be old.

I mean, I thought she bought it in the '80s for that much, but maybe not.

Maybe it was the lot. That's, I think, what we kind of started—

Oh, really?

Figuring out the lot was $200,000 and then she—

That's her dream. Custom home on it.

Nice.

Got it.

That's crazy.

That's why she's the producer. She thinks of all these things.

I know.

Yeah.

It's crazy to think how much land there was in the '80s in Orange County.

Oh, I remember. Yeah, lots of land, lots of orange groves, stuff like that.

Now there's nothing. There's like 1 or 2 plots on PC.

The Headlands is gone.

Yeah.

Dana Point, it's gone. They built all over it. They said they would never build on the Headlands and look, They built on it.

Yeah.

They're building more somehow.

I know. Yeah. How was, how was the 4th of July down there? Good?

It was wild. It was actually wild there. Um, so the parking lot in front of our condo complex was all teenagers.

Oh yeah, that's normal.

And I guess the beach was standing room only because they threw a huge party. Like every high school in the area got together and threw a huge party and Yeah.

And you guys weren't down here?

Heck no.

Oh, come on.

No, you're watching from the balcony. I meant to show you because, um, I was trying to send you pictures because there would be like bike cops. Yeah, the sheriffs. But they're all on e-bikes now.

Oh, I know, that's cheating. That's cheating.

Yeah.

So there was one guy who's like going up this like bike path and a guy was passing him and he's like, hey, I just called, um, there's like a fire up there. And the guy's like, he's like, he stops for a second. He's like, what? He's like, yeah, there's like a fire up there. I just called. He's like, yeah, yeah, call the fire department. And then takes off on the e-bike.

Okay. Yeah.

Sounds good.

Yeah.

Yeah.

It looked pretty, looked pretty fun. But yeah, we're just watching from our balcony, people getting in fights, getting in accidents. It's pretty fun.

Just belligerent teenagers.

Yep. Yeah.

Do we have any comments?

Anybody? Yeah, we got Liz in the chat. She's asking, in your experience, which US markets are especially ripe right now for cash-flowing co-living investments?

Oh, I'm glad she asked. Thank you, Liz. That's great. So as many of you know, if you've been following my social media, I'm really getting into co-living. We are private money partners on quite a few now. And as far as the markets, I would say great ones are Phoenix. You got Atlanta is a good one, and Florida and the Tampa, Orlando area. So they got big houses and the taxes aren't that crazy. You can shove a ton of people in there.

Well, I was going to say, why don't you describe what co-living is? Okay.

Yeah. And it's sort of becoming more popular right now, but it's essentially you take a 4-bedroom, 3-bath house and you convert the dining room and the living room into extra bedrooms. So you'd end up with an 8-bedroom, 3-bath. That's a very popular configuration. They're all shared bathrooms usually, but some people you can get like an ensuite and you just rent out by the room. And so you have 8 people in a house. You kind of want to have like 2,000 square feet or more, and you just have a nice clean area for people to come in and kind of just sleep. And then they all share the kitchen and the laundry room.

Do you have theme houses? Like, this is all for girls?

I have seen that. Yeah, they're starting to do senior houses.

Do they do boy-girl stuff as well?

I guess they could. I haven't really seen that because one of the bigger platforms that find the tenants is PadSplit. And they will just give you kind of whoever wants to live there. And then you decide if you want to, but you could pick all girls, all boys.

So that brings up a great question. So if you're a young lady that's living there, do you have any say on the other 7 people that are going to live with you?

No.

No.

Yeah.

So obviously there's a special contract that says that, that you have no say in any of that.

Yeah.

You have no say. It's month to month. So you can, you can decide if you want to leave.

Oh, okay. Yeah.

So that you pay weekly actually. And then it's a month to month lease. So you can have a little bit of flexibility. And what's cool with the PadSplit model, when you become a member of PadSplit, you can just pick another house that you want to live. So you can look around, oh, there's this other house over here. Actually, I'm going to move there. And then you can just kind of move your residency over to this next place.

Didn't they used to call these things brothels?

Yeah. Yeah. It's been around for a long time. Oldest profession, they say.

Yeah.

But, um, yeah, rent by the room, rent by the hour.

Yeah.

Yeah, exactly.

Yeah.

So it's kind of a take on the platform.

What, what, what is your take on the average stay?

The average stay is usually around 9 months or less. So there is some turnover, but I have been seeing people, they're starting to hone in on creating more of a community aspect. And so they're getting really granular with deciding people that are gonna mesh well together. Because I think because it's so new, people were just accepting people in. You get the guy that's like just too loud at night. He's, you know—

Is it— is it— I mean, do they have an app?

Yeah, they got it.

Okay, so is it possible like to swipe left or right or whatever?

I don't think so. No, I think you just get a picture of the woman.

You just can't— you can't approve people that are coming in.

Oh yeah, no, no, you can approve people that are coming. Sorry, for the, for the operator?

Yeah.

Yeah, yeah, yeah, yeah.

No, no, no, not for the operator, for the person that's living there.

Yeah, no, you don't get to decide any of that.

Yeah, I don't like, I don't like Alex. He's out.

No.

He can't live here with me.

No.

No?

You don't get any of that.

I mean, if you left it up to the tenants to choose, why wouldn't they just leave the other rooms empty or something?

Well, yeah, but it's basically, it's up to the operator to kind of get a cohesive sort of community going. And these are all supposed to be like, the main demographic is somebody who's working at an Amazon warehouse or Home Depot, maybe lower income. They want a nice place to just crash out and then they want to save some money so they can eventually maybe get their own place. So it is sort of a transitional lifestyle.

Mm-hmm.

But you can have people that stay longer if it works out for them. Maybe you're older, You're on fixed income, this works out for you. You have access to everything you need. So there's a lot of different ways people are going with it. It's kind of interesting because a lot of Airbnb operators, because Airbnb has kind of been declining with the changes on their platform, they're converting now to co-living. And they have a themed house like the beach house or whatever.

So what do you supply in the house?

So you supply a bed, a desk, and then I've seen people put in a closet TVs, they put in mini fridges. So, but what's required is a bed and a desk.

So it's really like a transient type place. I mean, bring your suitcase, drop it, and then if you don't like it in a month, you're out of there.

Pretty much. Yeah.

Wow.

So it's up to the operators to make it a place that is, you want to stay there. And so what people are doing is they'll do like, we're doing pizza Fridays and kind of deliver that. They'll have cleaners go in there, clean all the common areas. So it's kind of in its beginning stages, I would say, but there are people that have been doing it for a long time. And it's just a matter of, it's going to come down to the operator, just like Airbnb. What kind of experience are you creating?

So what kind of profit are you looking to get?

I like to get at least $2,000 cash flow after all expenses, and at least 15% to 20% cash-on-cash return. And so they're buying a lot of them that are subject to, Or creative finance. So there's an entry fee that you usually give to the wholesaler and the seller. And then on top of that, you have your costs of converting it. So then you pay your contractor and it lands somewhere between $80,000 to $100,000 to get into it.

That much?

Yeah.

Wow. I know.

But then, you know, you're paid back in like 5 years or less, hopefully.

Wow.

And then after that you have a, you know—

That seems like a lot.

No, not really.

No?

No.

You're big time now.

Yeah.

When you first started, it's like, Joe, we're gonna make like $20 grand on this deal. I go, that's not enough. Oh, it is for me. Yeah, it is for me.

That's right. I do remember saying that.

So yeah.

I'm like, $80 to $100 grand's peanuts.

Yeah.

No, it is kind of a lot, but all the numbers work out. I mean, if you're making 20% cash on cash, where else are you going to get that? I mean, it's going to be sitting in your savings account, your 401.

You mean the banks aren't going to pay you that?

The banks aren't going to pay that. You have to trust me.

We trust you.

Thank you.

We trust you.

And so yeah, but back to Liz's Question. I'm looking at Phoenix. I'm looking at Atlanta. I'm looking at Florida.

Nothing in Hawaii.

Oh yeah, yeah, yeah. No, in Hawaii too.

We did look at one in Hawaii, but we couldn't get it funded.

But you didn't go there.

No.

That's the one we were trying to go there for.

And it's still on market.

That was one that you and I were gonna go and leave her.

No, that wasn't happening. Nice try.

15-bed.

It's already set up. 15-bed, 5-bath. 3-level, 3 kitchens.

And it fell through.

Fell through because they're not willing to do seller finance.

Yeah.

We can't get a loan on it. And yeah, the couple is a 90-year-old couple getting a divorce and they refuse to do seller finance.

Who gets a divorce at 90? I mean, you know, if you've been married that long, you may as well just forget it.

Yeah, take yourself out. If you're so—

Geez.

Well, no, I'm just saying if you're so miserable.

Just like, You know, separate then. Oh yeah, forget it.

Yeah, you don't have to like legally get divorced.

No.

Okay, no, that's better.

No, I don't know, that's like crazy.

That's weird. But Hawaii could— yeah, could be a good, um, market. It's just very particular. Like whenever I was asking anybody, they're like, have you ever done any construction on Hawaii? I was like, no. They're like, it's hard, nobody wants to work. Getting—

I see why.

I mean, I would be the same way. And then getting supplies over there is like super hard. Home Depot has nothing in it.

The only people who are working are the musicians with the ukuleles, you know. That's it.

Yeah, we'd have to change back to our old profession.

Yeah, I know.

Yeah, true.

Lauren went to a hotel there. There's a ukulele guy in the elevator.

In the elevator.

Like for when you arrive? Playing?

Yeah.

When people came in?

Yeah.

Was it a big elevator?

Yeah, kind of.

Wow.

Yeah.

Wow. Well, that, I mean, you know, you go to New York, and they're in the subways.

Yeah.

Same thing.

It was part of like, he would, well, he was standing by the elevators, just like serenading people. And then he'd randomly get into elevators with people and like, keep singing to them while you're going to your floor.

That's pretty nice.

It was pretty cool.

I think most guys would get in an elevator with you.

Yeah.

I think it was like you and your mom.

So he's like, oh. It was.

Going up, ladies.

He's just a random guy. We thought he worked there.

Yeah.

Um, Chad has a question.

Oh, cool.

And I'm gonna ask Joe to answer this one.

Okay.

Because I feel like we've answered it before.

All right. Let's see.

So I want Joe's take.

Yeah.

How do you feel about buying a deal from a wholesale company And they want a $40,000 non-refundable EMD sent to a separate bank account outside of escrow.

Fraud. Uh, if it's not fraud, then no, I would never do that. No, absolutely never do that. That's, that's nuts. That's crazy. I mean, Chad, if you've got $40,000 and you want to give it to me, I'll send you wiring instructions and you can send it to me. That's fine. You can do that. You trust me, right?

So you'll apply it towards the property, right?

Oh yeah, I definitely will apply towards the property. The property's in Vegas, by the way. Yeah, like, no, no, that's, that's crazy.

I know.

Yeah, we had that.

That was a real request.

Are you still getting, uh, prop or, uh, deals from those guys? Or it seemed like they were kind of just starting out or something.

You think?

Scammers.

And then they, they go, well, man, we've been burned before, like by buyers.

That's what scammers do.

I know, they make you feel like you're like, oh no, I get it. No, it makes sense.

Yeah. Chad says send the instructions, Joe.

Okay, there you go. I'll be texting them shortly.

Yeah, you'll receive it in international waters. So then therefore, yes, where'd the money go? Yes, there wasn't any money.

No violence. International waters, you know. I'll send you our, uh, FBI would have to come after me and they're too busy with Epstein. That's right.

Yeah, they already solved it. They already solved Epstein. Um, so let's talk about your other book here.

My original book?

Your original book. Yeah, Flipping the OC.

Yes, that's, uh, beginning to end what you need to do to create a flipping company.

This one is thick.

Tried and true and tested. Yep.

Yep. For 50 years.

For 50 years.

$9.99. $9.99.

$9.99.

Oh.

Not $100. $9.99.

Corner Escrow.

One of my favorite escrow companies. Corner Escrow.

Yes. You think escrow company, you're like, oh no, they're all the same. That's what I used to think. They all do the same thing. They just get the money. They disperse it to everybody. But after doing, you know, multiple deals, I now realize the power of a good escrow company.

And it's not, not the escrow company.

It's the people.

It's the escrow officer.

Yes.

Okay. Because the one I have now with Corner Escrow, she's been with 3 other companies. I just followed her.

She might be a lieutenant at this point. She's beyond an officer.

She might be a general.

She might be a general.

Yeah.

She's got a lot of people underneath her.

Yeah.

That are working underneath her. Yes. Yes. So yeah, she's, she's probably a general. Yeah. So it's, it's not the company, it is the officer that makes a big difference. A huge difference.

A huge difference. I mean, let's talk about the differences here because I'm— we're dealing— Lauren and I are dealing with this escrow company. It's sort of a ragtag team. So it gets the Bad News Bears of escrow companies. They don't communicate. Um, when they need something signed, they just send the paper. And with Christie, like, everything is highlighted. It's, or it's all filled out in DocuSign. So I just go through and click. I was never learning what I was actually filling out and signing because then I would get the blank paper from these guys. I'm like, uh, I don't know what to, where do I fill in? And so it's just that alone is like— A time saver, keeps everyone on track. She checks in with all parties at all times to make sure everyone's on the same page and it's moving. Because if no one's doing that, it just gets to the last day and then people are scrambling and it's, um, yeah, it just doesn't come together.

Yeah, it's, it's like flipping a property. I always suggest you go out and visit the property at least once a week, uh, because if you're not visiting the property when, when you finally do go out, it's like a ghost town. Nobody's around. Nobody's done anything because you're not there telling them to do these things. They're just gonna sit back and drink a tequila or margarita or whatever.

I feel like we've been on this escrow. They're definitely annoyed with us because just Corner has just— or Christie, just completely blown our expectations out of the water. So they just— yeah, it feels like no sense of urgency and we're just pulling our hair out.

I'm sorry for giving you the easy button. Okay.

Yeah, I didn't realize. Oh my God.

Yeah, but now, now you're learning the ins and outs of different people and companies.

Yeah, yeah. Christy almost acts like a TC in a way because she makes sure everything is like in and follows up, because we don't use a TC when we buy.

Yeah.

So having her is almost like that. She'll, she'll kind of take some of that load off. That's insane.

It's experience.

Yeah, it's crazy. I don't know how— I mean, it seems like they make so little for what they— Don't say that. Oh, okay. For what they're actually doing.

We are going to bleep out that last, uh, comment. They get paid Very well. They get paid very well.

No, they do, honestly.

Don't forget they get paid for 2 sides.

Yeah.

Okay. So if they're like making $2,500 on one side, they're making $25,000. That's $5,000.

That's $5,000. Yeah. On each. Yeah. Okay. That adds up.

That's very close to what an agent makes on the deal, their commission. Not really, but yeah. Yeah. They get paid very well.

Okay.

Yeah. And then, you know, they all throw the junk fees in there as well.

Oh yeah.

That's great.

Love those junk fees. Makes sense.

Yeah, you get paid very well.

Yeah, no, no, no, she gets— yeah, no, she's making big bucks, but because it's worth it.

Okay, so do we have videos?

Uh, yeah, we do.

We did. I mean, they're kind of related to the guest, but that's okay, we can review them.

Okay, we're talking about co-living. We're breaking our, uh, you know, we're breaking the Talking about co-living today.

Okay, back to co-living. Top real estate expert reveals co-living investment secrets.

We've been finding the base of what we can get in co-living. Some of our co-living homes are performing so well that we're able to refinance them, pull all of our money out, and collect infinite returns on them, which it's just such a hard thing to do in today's interest rate environment where rates are 7% plus. And on a long-term rental strategy, they just will not cash flow. But when you're doing it with a co-living exit strategy as a rental play, there's a really, really good opportunity to make money and do well for the community. We've been finding the bait.

Yep.

It's true, Jamil. Thank you. True. Glad you brought that up.

Yeah.

So where, where, where is it appreciating enough where you can actually Uh, pull your money out. It's BRRRR, basically.

Yeah. BRRRR, basically.

BRRRR.

Well, I mean, you find a fixer and you get it deep enough and you just do, you know, it's almost do like you're gonna do a regular BRRRR, but you have an extra couple rooms. So he's in Phoenix, so it has some of that West Coast appreciation.

So I would say most of these properties are gonna be single family. Condos are not gonna work.

No, condo's not gonna work. It's gotta be single family, no HOA. Uh-huh. Plenty of parking.

What about the neighbors?

You know, we don't worry about the neighbors. No, just kidding.

No, what about the neighbors? Do you get a lot of complaints from neighbors?

Yeah, some people do. Some people do. It's mostly parking. So parking is a huge issue you got to tackle and make sure that you're doing. Cul-de-sacs, bad, because there's only so much parking. You want that street parking. If you can get a corner lot, it's even better because then you can have people park on either side.

Do you offer e-bikes with each room?

No.

That's a good, that's a good thing.

Maybe.

Yeah.

You want to live here? This is your e-bike. Or if they're in Austin, um, they can take a CyberCab.

Oh, CyberCab.

Yeah.

Yeah.

Well, a lot of how PadSplit started was they wanted you near a bus stop.

Okay.

Because a lot of people are taking public transportation out here. It's It's not really possible. Takes you probably 4 days to go from Aliso to San Clemente on the bus. But in other areas, the metro system's pretty good. And so people will take their— will walk to the bus station and then come back and do all that.

How different is this that you're doing than what Julian is doing? Is it similar?

It's similar, but it's more— he's working with international people.

Okay.

And international workers that come here on a visa, a certain type of visa, and then he's putting multiple in a room.

Oh.

Because they're here for a certain amount of time for a contract. They usually get a contract with a resort or something.

Yeah.

And then they'll be here for a certain amount of time, and then he has that turnover. So, okay, here you're getting an individual room, keyless entry. It's your own space. Within this space. And then Jamil's actually taking it one step further. He's taking a single-family house and doing 6 beds, 6 baths.

How do you put in the extra baths?

He's taking it down to the studs.

Oh my God.

Yeah. And then fully building it out from scratch and then has like a, you know, like a kitchen and laundry room that are shared. So it's almost like a mini multifamily.

Is he permitting any of that stuff?

Yeah, he's permitting.

I don't know that they would let him do that.

Permit as much as you can.

Oh, I don't know if they're going to let you convert, you know, an extra 3 bathrooms in a house.

Sure. Aren't there—

Everything is yes with this guy.

Sure you can.

Okay, you're just noticing that?

Yeah, no, I'm not. I'm just making a point that if everything's yes and then I have to go to the actual—

It's—

he's doing it. He's made a video about it.

He's doing it, you know.

Well, and the great part is, is if you have— I mean, as you can imagine You can get for a bedroom with its own bathroom, maybe like $280, $300 a week. And it was like $1,200 a week times 6 or 7 rooms. That's bringing in like, you know, $8,000. So then you're probably cash flowing like $4,000 after everything's paid. So my point is, who cares about permits?

Could be a liability thing. I'm just saying.

Okay, so I know, I know a person who has a place out in Riverside, actually 2 of them, okay, that are not working out.

Oh, okay, where's this going?

Pad split might be a good idea, a good suggestion. Yeah, these houses are like 3,000 square feet, 4 bedrooms.

They're in Riverside.

You know, but they can't, they, they can't rent it out and cash flow.

Right.

For a long-term renter.

Okay. Does, do they want to sell them?

They don't want to sell them, but they're headed in the direction of they're going to have to sell them, if you know what I mean.

Seller finance.

Seller finance.

Subject to.

Subject to.

Subject to is more like it.

Send them my information. I'll get them onboarded immediately.

Okay. Okay. Yeah. That kind of popped in my head like, well, this might be an exit strategy.

Yeah. No, it's totally, I mean, and the part is there is, there has been some pushback in certain cities because of neighbors and issues like that, but they're also, passing laws that are basically saying we need housing. We've been whining about housing for the last 10 years. This is a solution. Yeah. So let's work together.

Yeah.

Apparently there's something in the Big Beautiful Bill that is sort of like pro-co-living. I don't know what it is, but maybe you could find that video.

In the— do you have it on here? No.

Do we have another video?

Do we have another video?

We do.

Okay.

It's not that one though. Okay. I don't think residential investing, co-living versus family homes, risks and yields.

Oh, all the keywords.

It's going. It's just loading slow. There we go.

Yeah.

They don't have to house a family. So that next 30%. they're going to be sharper and they're going to be less emotional in their negotiations for that product.

Yes.

You know, in residential now we do see a lot of people out there coming up with new products. And I'm not going to say that as a whole all of these products are unsuccessful, but we have seen some very interesting products come into the market more recently, co-living and things like that. I can see how that product can get sold. And I can see why people would move towards that product. You know, 'cause we know that residential yields are tight, interest rates are high. In our personal experience, most of those products that we've assessed, they just come with way too much risk.

Yes.

And the yield difference from a standard house that's suitable to a family to a co-living property, for example, you really need to break it down because if you're gonna put 3 or 4 people into a house. Those are individual people. Individual people seem to move around a lot quicker.

Yes.

So therefore, if these people are moving around and moving in and out of the property, then the property manager is probably the one that's making the most money out of this.

Yes. Relating to that.

Because if you really break down that yield, hey, if this is fully occupied and it's fully occupied for, you know, the majority of the year and the rest of it, this is the yield that you're gonna get.

Yeah.

They don't have to house a family Interesting points.

I think this guy knows Kamala Harris because I, I just heard him speak for a minute or two, but I don't know what he said.

Products.

No, it's like, oh yeah, yeah, what are you talking about? What are you talking about?

I think he's talking about mortgages. And as far as the products, you heard the word mortgage? No, no, products. He's talking about products. So I think that's what he's talking about.

And I don't think he knows what he's talking about.

Yeah. I'm with Joe.

He's wearing a suit.

He's just—

anyone that wears a suit, he's kind of just going in circles, knows what they're talking about. Yeah.

It's like very strange.

No, he was basically saying that if you look at a traditional family, like everyone's touting co-living right now.

Yeah.

And they're like, oh, these are the returns you can get, but there is some turnover. So you have to really take that into the vacancy into account. Whereas if you just had a family renting, a house for 12 months, maybe the yield is the same depending on the operator. But I think he's talking about how the products like DSCR and all these other ones, they're not ready for this co-living sort of thing.

Did you hear any of that?

Products.

I didn't hear any of that.

I will translate it for you guys.

Obviously, that's what he's saying.

You should make a video saying the same thing. The way you said it. Yeah.

Well, I think that's what he was saying. Oh, let's chat GPT later.

You're not sure.

As long as you wear a suit, you know what you're talking about.

Got it.

That's been proven.

Okay.

All right. Any other videos?

We got one more. Disadvantages to co-living houses.

Gotcha. Let's see if this person makes sense. Gotcha.

Come on.

We didn't pay for the Wi-Fi.

Co-living houses for real estate. And what that means is basically I rent by the room to different tenants. The advantages of this are obvious, but one of the primary disadvantages is management. There aren't many management companies that will manage co-living houses, or rooming houses as I like to call them. So I either can use the limited options available such as PadSplit or other softwares that are similar, but there's a lot of disadvantages to that. Or I can create a property management company essentially that manages my own stuff. Now, a lot of real estate investors do this. They'll actually kind of make their own in-house management team to manage their own portfolio. This isn't crazy or uncommon, but this is one of the major reasons that for rooming houses, I like to specialize for young professionals. Okay, so I could rent to students, I could rent to low income, but I do use— do it to young professionals so that way there's a lot of deconfliction that they can do themselves. It's a lot less Management intensive, and therefore I can do it on my own for a long period of time before I set up my team.

Yeah.

Management's gotta be a nightmare.

Depends on who you have in there.

Not you.

It's got to be.

Give me one more chance.

No. It's got to be a nightmare.

Yeah. Yeah, it's a nightmare.

You can't manage 9 people at a time in one house.

No. You can manage one house with a family in there, but 9 people? I mean, you've got to be getting calls in the middle of the night that producer was being too loud in the room next door. What do you want me to do about that? Yeah.

You know, that's where you just have a voicemail.

This guy snuck in— here's another question. What about pets?

No pets allowed.

This guy snuck in a dog in the middle of the night.

That, that would be me, actually. I'd have the cat in my room for sure.

Not allowed.

Done. This girl snuck in a cat and I'm allergic to cats.

Membership canceled. You set expectations beforehand.

Joe, see, this is—

Very simple. Very simple. It's all about psychology.

You can be like the head honcho operator, but you are not gonna property manage this stuff.

You do know that all of this is not a new idea?

No, no, no, no, no, it's not.

Okay.

Yeah.

Just want to make sure.

This is like, when this, it just got a fancy term. I was like, every place we lived from like 18 to like mid-20s, we had roommates and that's co-living.

Yes.

Renting a room and, you know.

Yes, we did rent some rooms.

We co-lived in a van with our other band members.

Yeah.

Van co-living.

We've done it all.

I don't know how you did that. I do not know how you did that. And I saw the van.

Yeah.

That was one of the vans.

I was trying to get one of the inside because it's pretty plush on the inside.

That was our personal local van. And then when we had the actual tours, we were in a 15-passenger. So everyone had their own bench.

You sleep on a bench. What's wrong with that?

Yeah.

Come on, you can get a good night's sleep on a bench.

On a van bench?

If there's one thing—

It's been a long time since I slept on a bench.

There's one thing the homeless in Winos taught us is you can get a good night's sleep on a bench.

Oh, I bet. Did you serenade them too?

Yeah.

Yeah, you parked, you know, parked at Central Park and, you know, there's homeless just milling around and you started With the ukulele and they all came around and said, we got entertainment here free.

We were not in a van because we were homeless. We were in a van because we were on such a busy travel schedule. And so we'd be driving to one—

Go ahead.

I had a home while we had the van.

Okay.

Because we'd be traveling from one gig and have to get to the next one like in a day. And then when we'd have days off, that's when we get the hotels.

Were you in the van more than in your own home?

For certain stints.

At points.

For certain stints.

Okay.

Yeah, a lot of DoubleTrees.

But the van was always in motion. It wasn't like parked down by the river with other homeless.

There's a few Walmart parking lots.

I was gonna say, you know that Walmart lets you stay in their parking lots for free.

We did have to do that.

Yeah, it was good.

Oh, you can get a good community going on at Walmart. Let me tell you, they got the bathroom. I bet you, you go out to Hemet and there's, there's a full, full parking lot at night.

Oh, the Walmart out there is freaky. Remember we went there one time?

Did we?

Yeah, we've only been to the Walmart there one time, but the Walmart in Hemet is—

The Walmart around here, I, every once in a while, I don't go there, Um, I drive my wife there every once in a while.

Yeah, she's gotta look around.

But, uh, I do see motorhomes.

Yeah.

Out there.

Yeah.

But not a lot.

No.

You know, it's such a big lot. They're like way out there.

Yeah, not bothering anyone.

No.

They got the lights on, so you kind of feel safe at night.

They have security.

They got security.

Yeah.

So it's better than a truck stop. We've been to some truck stops.

Freaky. You know, where do you go to the restroom?

In Walmart.

So they used to be open 24 hours?

Are they 24?

No, they used to be.

Not so much anymore, but they used to be when we were traveling. Yeah.

Oh yeah, that was, that was good. It depends on the area too.

Yeah.

Okay.

Otherwise you just hold it for 8 hours.

Yeah.

What?

You can't hold it. When you're young, I guess you can do all these things, but yeah, and then you're like, as you get older, yeah, the toiletry kit, you go in there and You plan your life, you plan your next trip around, can I make it or do I need to go to the restroom? It's like, you know, when you're traveling with your kids. I know you guys don't have kids yet, but when you're traveling with the kids, the first thing you ask them, do you need to go to the restroom before we go? Okay, let's go now. I don't need to go. Let's go.

Yeah.

Okay, let's go. So I'm not stopping.

Yep.

My dad used to say that. I'm not stopping. I don't care if you have to go or not. I'm not stopping.

Yeah, you make— because you want to make good time as a man.

Yeah.

You want to get there to there as quick as possible.

Yeah, I need— hand me a Coke can. Here, you need to go here, man. Oh, come on.

Jeez.

Yes.

Yeah, you get pretty good at that.

Good old days.

A little spillage on the bottom of the station wagon never hurt anyone. But anyway, co-living is the future. Get on or get left behind, people. It's AI of real estate. If you're not doing it, you're getting left behind.

And definitely if you are interested in doing it, this is the person to talk to. And I don't do co-living.

Working on my—

it's not something that I'm ever going to be interested in.

Joe, you just brought up a potential deal for it. Exactly.

Oh, I did? Yeah, you're gonna like it. But it's a deal that I'm gonna present to you guys. Oh, it's not something that I'm gonna— I'm not gonna wholesale. I'm just gonna give it to you. I'll just give you the lead.

All right. You know, you don't want to get your beak wet on that little co-living until I'm just calling him like—

no, I don't even want to say it. No, no, no, depending on, you know, The type of house, maybe.

Okay, Hawaii.

Yeah, location would work too. Yeah, I have to go—

And one room would always need to be vacant for you to pop in and take a little vacay.

Yeah.

Yeah, that's fair.

Sounds good to me.

Yeah, yeah, I know. And I'm trying to figure out a way to blend that and mobile homes into—

In Hemet.

Mo Living.

Mo Living.

Yeah, in Hemet.

You should see some of these mobile home units we looked at. Yeah, they're making duplexes, triplexes, and quadplexes, and 8-plexes, double-stacked mobile homes.

Yeah, let's get into that. Exactly.

You just have to find some land, right?

Yeah, I got some land. Yeah, I got some land. I got 6 acres up in Sunland if you want to Oh, yeah.

I just told you about that today. Yes. But it's kind of hilly.

That's fine. People can—

You have to terrace them.

Yeah, exactly. Just build along the hill.

It'll look like Strand's. It'll be the old Strand's. Exactly.

Or you could get together with LA City Council and build something.

All the Palisades people.

They paid the contractor $600,000 per apartment.

That's right.

Yeah. Isn't that wild?

To build low-cost housing.

Yeah.

That's wild.

Well, I would've done that.

I know.

You know, hello.

Yeah.

You wanna gimme $600,000 per apartment? Yeah.

I can do that all day.

Wow.

You didn't say I had to build it here. I'm gonna build it in the factory and get it driven here.

So there's that. $600,000?

Yeah.

That's fine.

Yeah, exactly. Wow. The time really flew by. It did, didn't it?

What a fun episode. Oh my gosh.

A whole hour, you guys, of—

this is almost kind of like a Seinfeld episode. We talked about nothing.

Nothing.

Yeah, yeah, yeah, yeah. We're good. We're good at that.

Yeah, we're getting better every week.

There were some tidbits in there.

There were tidbits in there. So if you guys followed along, we really appreciate your help or your attention, and we will be back here next week. I'm gonna have a special guest host. Because Joe's gonna be on a cruise. That's when the boat leaves.

Yeah.

There you go.

Just like that.

So tune in for that, and we will see you on the next one. See you guys.

Bye. See you later.

If you want some more advice on real estate investing, reach out to us one-on-one.