Guard Dogs, PML Secrets, and a 2-Week Flip with Crazy Profits—Spillin’ the Tea Tonight!

Hey everyone, this is Shauna from She's Got Assets. I have Jenny Saw here. Just give me a few seconds. I'm doing a few things. We have a really fun topic tonight. So everyone knows the drill. Let us know where you're calling in from, if you can see us and hear us. I think this is working. Yeah, a really fun conversation. Okay, so let us know. We're gonna get started in a minute. Just say hey. I just know where you're calling in from. I'll be checking questions probably on Facebook. So let me just let everyone know. Jenny, welcome. Thanks for joining us tonight.

Thank you. Appreciate it. Always love to talk to you.

Yeah, we always have good conversations. Awesome. Okay, let me just make sure I'm gonna pin it here. Everyone know we're live.

Okay. Okay. So I'm checking Facebook. We're live.

Okay, perfect. Okay.

Awesome.

Well, I'm going to do another intro here now that we got live everywhere, hopefully. So again, Shona from She's Got Assets. I'm the founder. I'm also a coach. I have a couple of courses and I do flips on occasion. I don't talk about it a lot, but I'm very particular about flips. And when I do flips, I work with private money lenders like Jenny Tsao, who's amazing. And we have a really fun story. We're going to break down some numbers and talk about dogs and just all the fun stuff. So Jenny, why don't you do a little intro about yourself and then we'll kind of dive into the story.

Okay, hi, I'm Jenny Tsah and I'm a private money lender. And actually I started doing private money lending probably about less than 2 years ago. And when I was laid off on my corporate job of, you know, more than in that field for like 25 years. And I'm a CPA, former CPA, and a tax professional. And so now I'm a private money lender.

Amazing. That's such a really pretty short journey too. 2 years, right? That's awesome.

Yeah. I mean, it's been fun so far. It's been a fun ride and I love doing private money lending.

Yeah, that's really— well, you're very thorough, which I was really impressed. So let's dive in. We're going to do like a case study. We talked a lot more generally about PMO in a previous episode. This is the second time Jenny's been here, so we're going to kind of dive into a really fun case study. So I'm gonna kick it off and then as you guys have questions, put them in the chat. 'Cause I feel like, just a little backstory, when I first got into real estate, like I heard the term PML, private money lender, and I just was like, how do you find one of those, right? It seemed like a unicorn and really the money is out there. People are willing to lend you, but you need to present the business case and have, you know, just be lendable, right? So we're gonna really talk, we're gonna unpack that a lot. So little backstory, so, I, in one of my courses, it's called the, um, the REI Playbook. I teach people to do this, but I got an inbound lead. It was for a property in my neighborhood. Um, funny story, our kids happened to go to the same school. I think it was over Labor Day. We had a coffee meeting, we chatted, their house had been on the market for quite a while. They were very motivated. So after a little bit of back and forth, we got it under contract. Um, it was kind of about what I thought was a light fixer. There was actually more involved. So I got them under contract. And at the time I had a coach and he was like, all right, Shauna, well, it's, you know, Jenny, how much What was the purchase price again? You have all the numbers.

I think it was when you presented to me, it was $341-something, $831, some random number, some not even number. And I don't know why. So maybe you can talk about why you have such random or not even purchase number.

So I think there was, it was part of my spreadsheet, but I think we always have a round number and it looks like you put more thought into it if you come up with like a number that's not just a round number, right? Because there was like all the budgeting stuff. So that's probably why I did that. But it was a really good deal. Like, for reference, it's Portland, Oregon. I know there's people calling in from all over. It's a pretty expensive market. I'd say the average house is like $500,000 or $600,000, right? So there was definitely a lot of meat on the bone, which was why it was a good deal. And so I got it under contract, right? And then when you start doing your due diligence and we get stuff under contract, we don't know where we get the funding from. But so everyone knows, if it's a good deal, you can typically find the money. And I prefer private money lenders because I can negotiate terms directly, right? I can present the case and it's still underwritten, but it's just, I mean, it's more of a human experience than working with HML or other forms of lending. I think, Jenny, what do you think? I don't know.

Well, I mean, of course I'm a private money lender. Of course I say private money lending definitely has its advantage over hard money lending, right? Because you have more flexibility because I set my own terms. Or you and I can negotiate the terms, and I have flexibility to say, oh, you approve or not approve, right? I'm the only person, or, you know, plus my husband, but, you know, so it's only the two of us. There's no guideline. Like, I know private, like, you know, hard money lenders, usually they don't lend you like full 100%. You have to have, you know, a down payment. Like, I don't know, some of them ask for like 10% or 20%, you know, depending on your experience, right? So, so you basically have still have to come up with your own money But private money lending, I mean, of course it's, you know, you've got to look at the ARV and LTV, but, you know, we can lend up to, you know, 100% plus your carrying costs. So that can be over, you know, 100% of the purchase price, right? So I think the benefit with private money lending is we're not bound by certain rules by the institution or by the company that's, you know, set up. We are flexible on a case-by-case basis. Like for Shona's deal, I can, you know, I can change my, you know, interest rates or points. You know, for another deal, I can also adjust, you know, the interest rate or the points that I want to charge because it depends on the risk level, the LTV, you know, what's the skin in the game. So that's why I think having, you know, doing with private money lending, it's definitely, you know, a benefit to the borrower/flipper/investors, right? Because you got more flexibility, flexibility in terms of, you know, the terms and the, um, you know, your, your kind of case, I think.

100%. So I'd love to know if anyone in the audience has done PML, like let us know. PML, private money lending, right? Typically there's hard money, right? That's institutional. PML is an individual, right? So just if anyone hasn't familiar with that. So, okay, so thank you, Jenny. That was really helpful. Again, I think, yeah, all the things you said, the flexibility, it's a relationship. I love that, right? And I also think I'd rather give my money to a person than to a bank, right? Banks have enough money. I'd way rather work with somebody. So, um, okay. So yeah, I got this lead. It was— and the other thing I just want to say, like, I got this lead, it was from the marketing that I did, which I teach in my REI Playbook course. It was an inbound lead. I wasn't pulling a list, a motivated distressed list and harassing people because I should sell, right? It was actually an inbound lead. So it was a very nice conversation. I went and saw the house right away. Was a family and essentially they were moving. And our kids had gone to the same school. And funny story, my daughter had been bullied there a little bit and so were their kids. And we both almost got kicked out of that school. So it was just a crazy coincidence. We like really connected though, is my point, with the family, right? So I got under contract and I just, you know, I put like a 30-day inspection period, which you can do again with off-market with no agents involved. That's the other beautiful thing is like you can write the contract. So it's, you know, it's sort of, it's just you have more flexibility, right? All around, there were no agents involved in this deal, right? So I got it under contract. And when I went to visit, they were living in the house, right? And then since then they had moved. But this is where the dogs come in, if you guys saw the preview. So basically we're under contract. I'm like, hey, I'm going to have to do some inspections. I put a lockbox on it, right? No problem. And, you know, I didn't quite know what my budget was, so I had to get that in order to kind of put my budget together to make my presentation. So Jenny and I, I think while this is happening, we connected about midterms. Jenny, it was something unrelated, right?

It has nothing to do with you asking for money. I don't know, somehow you were saying, you know, let's posting or something, some on Facebook post and says, oh, let's talk about midterm rental. And I was at that point, I was interested in exploring the different strategies, right? So midterm rental really kind of, you know, I find it very interesting and I want to learn more because I Personally don't like to do short-term rental. And then of course, long-term rental, you know, I've been doing long-term rental before, but the cash flow is not, is not as high. So kind of MTR or midterm rental is the happy medium, right? And so I saw Shona's posting something on Facebook and said, oh yeah, I would, I'd be interested. And she pinged me, oh yeah, you know, we could get on the call. And so I think that was the whole point of the call that we were talking about midterm rental. It has nothing to do with this flip or asking for private money lending.

Yeah, it was, I guess, also to underscore the fact, like, I was talking about something I was interested in putting myself out there, and that's how we made this connection. It wasn't even about private money. So you guys, you have to talk about what you're doing, whatever, even if you're not doing a deal, just talk about real estate, put yourself out there. Don't be shy because people get to know you that way, and that builds trust and credibility, right? Jenny, you probably— I wasn't unknown to you, right? Like, in the same network.

And, um, no, I don't think you know that I was a private money lender either at that point.

I didn't know.

Well, the thing is, I think at that point I just started doing it for like a couple months, so it wasn't too long, you know, since I started doing private money lending. And it's just a coincidence, um, I got a HELOC You know, that's another thing I want to talk about. It's like, it happens that I just got a HELOC on my investment property, and I actually got a very low introductory rate. I recall was like 3% or something. I— it's some ridiculously low introductory, you know.

Yeah, that's great.

For like 6 months or 9 months, something like that. And I say, hey, you know, that's probably a good thing to do, you know, lend it out, you know, as a private money lending, right? You're at, you know, 10 to 12%, and then you get to make the spread on it. Now, of course, you know, this is a very, you know, high-risk strategy, so I don't suggest anybody just start taking out HELOC and start lending, you know. But there's definitely— there's a lot of risk in using that strategy. But I think, you know, that's why, you know, Shona, back to your comment, was, you know, you really have to, like, start networking, right? And you don't know what you ended up partnering for, right? So we were thought, we originally, I thought I was going to, you know, to ask you, you know, kind of about midterm rental, kind of learn about midterm rental, how to do that. And that whole conversation, I still recall vividly, you know, that phone call. Almost towards the end, we're ready to like hang out. We finished talking about midterm rental and then all of a sudden you say something, oh yeah, you just got like a deal under contract and you're looking for private money lending or something. And I was like, well, well, guess what? I just got my HELOC. I need to deploy the money. I need to make my money work. So I guess, you know, yeah, let's talk about that one now.

That's right. And then Jenny was like, well, they— you were in Seattle at the time, in Portland, right? It's like, what, 3 and a half, 4 hours?

It's not super close, but it's, you know, 3, 2 and a half, 2 and a half to 3, 2 and a half.

Okay. Yeah. But you, you were like, well, you decided to come down and see it. And I think I was even considering assigning it. I was kind of figuring out my exit, right? I was weighing my options. Yeah. But you guys just came down one day and— oh no, actually we got a backup, right, Jenny? So I think we had that conversation and then I got a lockbox on the property and then I went in the property and I don't know if they told me or not, but they, moved in with family members who had dogs that did not get along with their dogs. So they moved out of the property, left their dogs. Mind you, these were not regular dogs, they were ferocious guard dogs. So you walk into the property, there was a dog on the left, a dog on the right, and Jenny— and I was like, Jenny, you want to FaceTime with me while I go see the property?

Yeah, you told me, so you want to FaceTime? I can share the FaceTime while I'm walking the property. I'm like, sure, you know, let's, let's FaceTime.

Oh my gosh. So yeah, I remember putting the phone down and hopping over a countertop because there was like a pit bull in a carrier, you know, right blocking the doorway. And it was so awkward. Like, I'd never met you in person. So there are two dogs in the main level, and then you'd go down, you'd go down to the basement. There was another dog on that level. So there were three dogs that were there the whole time doing all my inspections. It was— I think I had PTSD from it because they were very ferocious and they were guarding their home. So anyway, that's the point. This is a good deal, but there were— it was a bit hairy as far the dogs go, right? Because they were always there and they would always growl at me. And then you go to the basement and they'd be growling. The dog down there would growl at you as you came down the stairs.

Well, they're not only growling at you, they were like literally barking very loud.

Yeah, like I think they would probably— if they'd gotten out, they might have like eaten me. And I'm like, I'm like, this is a little bit crazy that I'm doing this, right? And so yeah, that's the— it was— they were there the whole time. But anyway, so Jenny, we watched the house and then I think you came down to see it in person, right? That was the next.

Yeah, so, so After you FaceTimed me, right, I said, well, maybe we can just drive down and take a look at the property. So my husband and I, I think it was almost like the same day, like once we hang up on the phone, like in the morning, and I told my husband, hey, there's this deal, and he said, well, okay, well, let's drive down to Portland. I'm like, are you serious? He goes, yeah, why not? Let's go, let's go. So we just left and, you know, took our car and drove all the way down to Portland. And met Sharna there at the property.

Yeah, which I was impressed because it was a lot of effort on your part and you saw it and you acted really quickly. And I think it built trust with us too, of like we didn't know each other that well and just meeting and you took the effort. So that was great, which is I don't think most PMOs— and I'd love for you to unpack that. Do you always visit properties when you're underwriting them or how does that work?

Actually, you're the only one that I drove all the way. No, the other one's like, because all the deals that have lent so far, it's not local, it's always like in another state. So it's hard for me to like literally travel there to look at the property before I lend. Now of course, you, you know, you still need to do your due diligence as a private money lenders, right? You know, we look at Google Maps or Google World, whatever that is. My husband loves to see that, you know, kind of check out the neighborhood. Right, and of course, like you did FaceTime, you know, I would ask my other borrowers, you know, send me your videos or kind of checking out the areas, the surrounding and, and the neighborhood, right? So that you can get a sense of what neighborhood that property is in, right? And I literally, you know, because it was just so close when I was in Seattle and this showing this property is in Portland, and we're like, well, you know, might as well just, you know, drive there and look at it. Because if it's, if it's within driving distance, I would highly recommend people drive and really go there and check out the property. Because sometimes, you know, videos and photos doesn't do its justice. You know, you can say it from the, the positive or the negative side, right? You know, you really don't know what you don't know if you don't see it with your eyes, right? And also, you know, looking at the neighborhoods, because sometimes your Google Maps may not be, you know, 100% current. And so if you actually drive there and drive around the blocks, around the blocks, and look around the neighborhood, and maybe if you can possibly, if, if the person is local, you want to drive by like a different time, right, to see What, you know, do you see people walking their kids or walking their dogs? Like, for example, like, if in early evening, do you see a lot of those? If it's a lot of those, you mean the name— that means the neighborhood is quite safe because people will walk their dogs, you know, walk with their kids, or there's kids playing around in the yard, right? But if you see, you know, other things like, you know, homeless or around the blocks, or there's a big commercial building or warehouse like right in back, or a motel in the back, and it's a 2-star motel, then you might want to consider, you know, what kind of neighborhood that property is in. So I think it's fairly important if you, as a private money lender, if you are able to, right, go visit the property, you know, before, as part of your due diligence, if that's possible.

I think that's really smart, even just the stuff about the neighborhood and the different times of day, right? And I think because here the thing what Jenny is saying is like, from the P— if there's like any PMLs listening, right? Worst case, your exit could be having to take the property back. So Jenny wanted to know that if she had to take it back, would it be a property that she'd even want, or could she turn it around, right? So we're always weighing all our exits. I think on the— like, as an investor, I'm weighing my options, right? Is it buy and hold? Is it a fix and assignment? And as a PML, you're weighing like the borrower and what happens if I have to get the property back, because that happens. I talk to people all the time and that it happens. It's like not common, but that's a risk, right? Everything is calculated risk.

Yeah, exactly. Because I always like in all my due diligence, every single deal, I just have to assume all my borrowers will default. Sorry, Shona, I assume you're going to default. Okay.

Are you upset that I didn't default?

A little bit. You didn't default because I actually want that property and I want to flip it myself. You know, so I mean, it's because as a lender, you have to assume everybody's going to default. So you're, you know, lend-to-own, they call it lend-to-own, or I just assume I'm going to take over that property. So what are my exit strategy? Am I okay in owning that property, right? So if I, you know, if Shona walks away, right, I'm going to take over that property. Can I finish a project myself? Possibly, because I'm local, you know, it's only 2.5 hours, not that far. Or if I'm remote, can I, you know, hire a team to finish the project? You know, do I want to flip it myself? Or if it's not, do I want to hold it as one of my investment property? Is that a neighborhood that I want to hold a property in? That's why I say it's important to understand, you know, that property, what neighborhood is in, or is that something aligns with your investment strategies, right? You know, like if you want to invest in only, you know, B+ neighborhood and above, right, then you got to make sure the property that you lend in, it's in that area. Or, you know, I know some, some investors like to invest in, you know, C neighborhoods, right? C or D neighborhoods, those cash flow really well, but it may not appreciate. But so that's why you got to make sure it aligns with your, your investment strategies, so that, you know, once in case, you know, the borrower does default, you know, you have to take over that property, and what are you going to do with it?

So Yeah. And, you know, from an investor's perspective, right, that, that's not why we're doing this. That's not why we're taking all this risk. It happened. That's why you need to be so careful on running your numbers and having the right location. No double yellow lines. Is it a location? I always filter it through what I want to live in the property, right? Because that's what you're going to attract if it's a buy and hold, those kind of, you know, tenants or guests, right, with midterm. Or, you know, you just— it has to be a good property. Like, don't get dealitis. Like, it might look good on paper, right, Jenny? So let me ask you this, right? If I sent you a deal, it looked really good on paper, but you didn't like the property, I'm assuming you'd have some concerns, right? If you didn't like the location or the neighborhood it was in, even if it was a screaming deal.

Exactly. I mean, of course, I have reviewed a lot of deals, right? Like one of them recently, I have to walk away. The numbers all worked out, but actually it's in New York and it has an existing tenant in there. And I didn't want that because New York is not a landlord-friendly state, it's a tenant-friendly state. So I actually walked away from that private money lending deal even though the numbers all worked out. But I'm like, well, I don't want to take over it in case anything happens with an existing tenant, and I don't want to deal with it. So I basically walk away.

Yeah. And that's, I, that's, I mean, that makes sense. You're looking at all the angles. What I noticed when I was talking to, she was very thorough, like, so let's get back to the story. Right. So I think Jenny came to visit and then I think, I think it was in passing. Like I called you from the car and I remember thinking, okay, I'm just going to ask because basically I had a coach tell me like, you can get a first position loan and you guys, it's like the numbers made sense. I didn't like at the time it seemed like, you know, asking for almost like $400,000 from a private money lender seemed a little bit Because at one point you were deciding if you're gonna wholesale it or you're gonna do it yourself.

I think that was your struggle because you didn't think that you can get private money lending. So that's why you're thinking, well, maybe you should wholesale this deal, right?

I was, and I kind of was like, you know, the queen. Well, I was kind of weighing the quick cash in and out versus the lending. And I have to tell you the power of coaching, right? Because I had a coach at the time and he was like, Shona, this is You need to do this yourself. And he gave me that guidance and it just was such a lifesaver because there was a lot of other things with negotiation, right? So I think just want to highlight having a coach like Jenny as a program, right? If you're getting into PML, there's so many things that could have gone sideways that me having a coach just even telling me, go find PML in first position. I was like, okay. And sometimes you just need someone to give you that guidance. And that was really pivotal, pivotal, right? You know, and I knew what I was doing, right? I'm experienced. But I think with Jenny, she's launching it course. We've learned a lot, right, Jenny? We want to help people not make the mistakes we've made, right?

Exactly. No, no, that's for sure. Definitely you want to have someone who's there to support you, motivate you, and also guide you. I think that's very important. Shona, if it's without your coach telling you, go out and get a first lien position, private money lending, do you think you would have wholesale this deal? Without him telling you to go find it?

You know, I probably would have, and I would have lost like, let's say like 50— I mean, a lot. I mean, it was a good deal, right? This was very profitable, but it was having someone just be like, they could see the big strategic picture. And that was very helpful, right? So I think, and I'm not saying you have to have a coach or mentorship, but I just know that for me in my personal experience, especially in this deal, it was twisty and turny with the dogs and the inspections and Yeah, not only a coach, but maybe you just have some, someone accountability group, right?

Some kind of support group, right? And, but of course, you know, coach can give you the expertise and guide you. But, you know, if you have a group that you hold yourself accountable with other real estate investors, that, you know, that can work too, right?

It can. There's something about being like someone looking at your deal like with you one-to-one, and that is a different experience than just like throwing something out there because deals can have a lot of nuance, right? And he knew the numbers. I was sharing all the numbers. That's the thing about it. And it was just like, so everything works. But I think just if you are newer, it saved the deal and we wouldn't be on this today if we had. So just wanted to highlight that. I'm just very grateful to you, right? Because I was like, I really was. There were ups and downs in this. I mean, and also in the face of this, it looks like a screaming deal. Like I made a 6-figure profit. Jenny, it was like her case study, but there was a lot of negotiation that went on. The rehab, it was very quick, but there was things we didn't know about, right? We had to navigate. So I think we've often see these deals and think it was just like this peachy creamy deal, but it was pretty hairy, like literally dog hair and lots and lots of dog pee and ozone machines.

Yeah, I remember walking in with you when I arrived in Portland and actually going in and looking at this property, yeah, the dogs were there. It stinks. It was like, oh, you just walked in and you just want to get out as quickly as you can. So I mean, sometimes that's why, you know, best deals are the one that is the hairier and the ugliest and, you know, smelliest.

Right. Yeah. Like on the face of it, it looked kind of lipstick-y. I'm like, oh, paint and like a couple of fixes. But we got in there and And I didn't know this, there were a lot of bleach cans all over. So they had been bleaching the floor because what they were doing— and they were, look, they were the nicest people, like nothing against them. I hope they don't ever listen to this, but they're super nice. They just, with their families, they couldn't bring the dogs. So the dogs would be loose in the house and they, they, you know, they peed a lot on the floor and it soaked through the floor. So we had to rip off all of the floor. And I didn't realize that going into this, right? It was just one of those things. So it was a pretty intense thing. And, um, yeah. And then we got the— there was a dog in the basement. So I'd have, you know, there was foundation issues. Issues, right? How these people coming over and these big grown men would be going down the stairs to the basement, they'd be like growling from the dark basement. And it was just like, it was insane. And I got kind of used to it. I'm like trying to make friends with the dogs, but this was like not an easy deal. I had to go over there and just like be okay, I'm going with the dogs, they could eat me, but hopefully I'll be okay. Their cages don't open or something, right? It's like really—

no, I mean, I mean, even though we— you thought initially, I think you said, you know, probably it's not a lot of rehab, but it turns out there a lot of things that you need to fix. Because it's just, I remember seeing there's holes here in the wall, or there's another, the doorknob is missing on this door. Just a lot of little things. It's not big thing, but it's lots of little things, right?

Well, and they're actually, they were actually structural things, right? Like, I, here's the thing, I hear, and I will also call this out, I did an inspection, but it was what we call a walk and talk inspection. I would not recommend that. It was just basically walking with Ron with an inspector, it wasn't as thorough as it should have been. So, and there was so much stuff in the house we couldn't see. So there were foundation issues that were okay, that we kind of navigated and gave some credits. And there was some fire damage that I didn't know about. So like, I just want to underscore like inspections, right? So there was some structural things that we had to navigate, and I, I disclosed it in the sale, right? I really got ahead of it and maneuvered around it. But, um, I don't know what my point was there, but I guess it was just, it was not like a lipstick. It was quite a bit of stuff to clean up.

Yeah, no, I know. It's, I mean, when you first look at it, you might, well, it looks like a lipstick, but it's not a lipstick once you start rehabbing, right? Because I know you got lots of things that needs to be fixed and you still did an incredible job. You finished in 2 and a half weeks. I don't know how you guys do it, but I remember the moment you close, you already have your rehab, your contractors in there doing demolition.

Yeah, we have. And I don't think, I don't know if I told you this at the time, Jenny, because I like to be very communicative. I had hired one of my, I had a GC that gave me a quote that I didn't like, so I had him just doing the floors. And then I had my other guy there and the one guy was kind of, it was a little bit of a territorial thing. I basically fired him. It did not go well. It was a little bit of drama anyway. But yeah, I mean, I had my subs lined up. I knew exactly who to bring in there. And if you have a mission, you can move quickly. And I think that's so important with flipping because like you're borrowing money from someone, you're promising to pay it back, and the market can shift really quickly. So I think you need to be really quick and efficient and just get after it and not just wait 2 weeks to start rehabbing. So yeah, and I like to share a lot of pictures with PMLs and so they know what's going on. Don't go silent or something, right?

No, no, you don't want to keep the PML— not keeping updates with the PML because the PML needs to know what's going on, right? Kind of knowing what's the status of your rehab because they lend you this huge sum of money. I think they have the right to know what's going on.

100%, right? Well, let's go back to kind of like— and I also think we have to make a business case. So I, Jenny, I'm going to share the, um, the slide deck that I, I always have a proposal and it's in the REI Playbook, right? It's a template you can use, but I think it's really important to show your credibility and show the numbers and show what you're doing for due diligence and all of that stuff. And that all goes into like a proposal, essentially. Just think of it as a business proposal. This is what I sent Jenny. So Jenny, can we go over the numbers really fast? Is that— is that cool? Okay. Um, so yeah, so like I'll put a picture of the house, right? An ARV, after repair value, right? I also— I don't know, Jenny, I'd love to hear your thoughts. I think you have to be super conservative on that, right? This went for a little more, but you always want to be in the lower end. Don't be on the optimistic side of ARV, right? Jenny, I'm sure you can speak to that.

Yeah, so like as a PML, I look at these numbers but I will not trust these numbers, especially the ARV, you know, the list to sell. Yeah, maybe that's because, you know, Shona wants to be conservative, right? But especially the ARVs, you know, I always do my own comps. I always look at the ARV myself or recalculate the ARV myself, right? And of course, the rehab, you know, budgets, you know, we— I always ask for, hey, can you give me me the detail quotes from the contractors, or at least, you know, a listing of all the works that, you know, the work that you want to do, and then the price for each line item, then I can kind of go through it and see if it really makes sense or not. Even though I'm not a, you know, flipper, but at least I kind of know how much it costs to do something. You know, if you're telling me you're going to change, for example, if you're going to change 10 windows and it's going to only cost like $1,000 budget, okay, that's not gonna— you're not gonna— you know, if you do have that contractor, let me know because I want to use that contractor. You know, 10 windows for like $1,000, right? So, you know, that's kind of— I would kind of look at, see if the rehab budget is that— it doesn't make sense. You know, does she have, you know, cushion in there? Giving herself some extra just in case. And then kind of look at, okay, what is the total ask, right? The loan that she's asking, right? She's asking $379,000, which in this case, basically she's asking everything: purchase price, rehab, closing costs, everything. She probably has, you know, Shona, you probably didn't, you didn't come up with any money at all.

No, I didn't. I mean, I guess, and it would, here's the thing, it was, there was enough meat on the bone, right? And that's how that was even this. I mean, this, you know, You could say this is a unicorn, but it's also like the right kind of marketing, the right networking, everything, all the work, right, to get to there, right? So yeah, no, I didn't. Yeah, which was pretty amazing, right? Yeah.

So that's the thing, because as a private money lender, right, you want to make sure that what you lend out, you can recoup that money back, right? So even though Shona's like asking me everything, but she has technically You can say no skin in the game, but, but, you know, I know that even at $379,000, if she walks away tomorrow, I have— okay, first gotta make sure you have first lien position and deed of trust. So that's very important. You know, I am recorded as a lien holder on this property, right? So if she walks away the next day after I fund everything, and I know that my I take over this property, right, as is, I can still sell it. I can still recoup that $379,000 back. So I think as a PML, yeah, you got to really look at the numbers really well and do your own due diligence. Like my own due diligence, I, I won't trust what Shona says, you know, $535,000. You know, ended up, of course, she's being uber conservative, you know, she sold it above that price. But, you know, I'm just saying, you know, even though, you know, people's like, wow, you're lending everything to her. She has no skin in the game. Yeah, but the reason why I did this deal was that because I know that if she walks away the next day, this property, I can sell it probably at above $400,000. So I know that I will get my $379,000 back. So that's why I, I'm willing to, you know, to, to lend her everything. So But if you're using hard money lender, they may not lend you everything even though it's a very, you know, it's a very good deal, right? They still want you to have some sort of skin in the game. But of course, you know what I'm, I'm, I'm saying here, it's definitely there's risks, right? But it's what Sean's saying, it's calculated risk. You have to know what it— what, what are you— what are the chances of you recouping the money that you out. So in this case, I know that I can take over this property and finish the flip myself, which actually I wanted to do that. But, or, you know, I can just sell it as it to another wholesaler. I can still probably recoup that $379,000 back.

So, so yeah, so I think the lesson here is you have to have a good deal. You have to. And also, Jenny was very thorough. Like, Jenny, do you want to talk to how you like underwrite the person? Or how, when you were looking at me, like, I know you asked for some stuff, but You have to make that PMO feel comfortable that you're— I don't know if you're looking for a certain amount of experience or generally what you're like. If someone's on here like, "I have a deal, I want to pitch it to a PMO," how do you recommend? What are the best practices, I guess I would say?

Well, I think, first of all, you did a very nice deck. So, this is definitely— that helps a lot because you lay out all the critical information, right? And it's in a very organized fashion, right? Even though that's— I mean, I know that you put in your experience, you know, a little bit about yourself, the background, um, you know, the deals, all the numbers here. And then of course, you know, there's comps, you know, if there's comps, you put in that in the comps. But I still do my own comps analysis even though you include it. But it's still good to include it so that the private money lender knows, okay, What comps are you using? Do you use the right comps? So is your ARV, is it really, you know, good ARV or not so good ARV, right? And kind of, I think that's number one first impression is you have it all laid out and organized. And of course, you know, what is your exit strategies, right? You know, you're going to flip it or you're going to refinance and, you know, as an LTR or MTR, you know, if you have multiple exit strategies that also gives the private money lenders comfort. Because if, you know, Shona can't sell this property, then she said, okay, I'm going to turn it into a midterm rental. I can refinance it, get a DSCR loan, and will still be able to pay you back, right? And I think the other thing, you know, I think I want to kind of go back a little bit. I think, Shona, I think you did it at the right timing in such a fast, you know, doing the rehab within 2 and weeks. I'm not sure if people know, in Pacific Northwest, the weather really kind of start raining, the rainy season, like October, late, mid to late October or November, right? So, and then real estate market tends to slows down, you know, after when it starts the rainy season. So when she did the flip, I think you did it like right before, you know, the rainy season, because Shona knows. She knows. She said, I gotta get it done before the rainy season, you know, so that I can sell this house. Because once you get into that season, you're gonna have trouble selling, right? It's gonna drag on for another couple months, or you just have to lower the price. So I think as a PML and also as an investor, you need to kind of time your projects and make sure that, you know, you got to put that into consideration, factor that in into your numbers because Shona is being ultra conservative on the ARV or list to sell because she knows that in case it hits into that period, she might need to sell it at a much lower price. So if you do that and being conservative and the still— the number still pencils out, then it's a very— then it's a good deal.

Yeah, 100%.

I think—

and I've done flips where the market has shifted. That's the other reason. But the weather too. Yeah, I mean, this was probably not like looking at the calendar the best time, but it was a good deal and I knew I could get it done quickly. And that's why I was very intentional. And there were lots of late nights and lots of junk hauling, lots of like— and I, someone in the comments, I did, I do live near this. It was a beautiful thing. It was like a 10-minute drive. So, but I mean, I don't know, you know, I tend to be my own GC on projects because that's how I get this. There's no way a GC would have done this in 2 weeks. It would have been probably 2 months, 3 months, right? There was a lot of little things, but I just have a very scrappy crew and they work really hard and they'll stay late and I buy them dinner and they kind of know how I work. So I drive them slightly crazy, but, um, that's kind of how— and I wouldn't take something on that I, you know, I'm not doing really heavy, um, rehabs because I don't— the market can change and the ARV is generally higher. So I want to be in the sweet spot where it's an affordable ARV. And so, but to Jenny's point, yeah, I mean, you have to take all that into consideration. Um, so Jenny, like, what else? So there's like the presentation, the numbers.

Okay.

Yeah, you know, what else are you kind of vetting?

Um, Yeah, of course. I think I sent you an application, right?

Yes, I'm very impressed. I've never gotten that before. It's really—

so yeah, so I did send Shawna an application, which in this application I asked her, you know, a lot of different kind of asking her about the her experience, you know, kind of a lot of, um, of course I asked for credit scores and, um, also, you know, how How many properties do you own or have you done before? What's your flipping experience? What is the ARVs? Kind of a lot of this information, which in addition to the deck, because I know sometimes the deck, if they did a good job, it should have most of the information, but they may not have all the information. So I told Sean, hey, I know some are you already provided through the deck, but I still like to keep it in that application because I have other things that I ask that's not presented in the deck. So, so I think that's very important because you should ask, always get a lot of information from your borrower. Like, also references. I ask for references, so I do, do reference check as well. And of course, you know, Shona was really good, and she's like, well, you know, let's get on FaceTime, let's look at the property. And, you know, she said, oh, you want to come look at it? So I think these are the things that, you know, you know that the borrower is very takes you seriously as an investor or as a lender because they're not afraid to literally get you as part of the process as well, right? So that's when transparency is very important, and that builds the trust because Shauna said, well, I was serious, I drove all the way down right away, so she trusts me as a lender, right? And I trust her the borrower, right? She will invite me over and really show me the actual house, the property, and show me around the neighborhood. So to make sure that— and also seeing a person face to face, I think that makes a huge difference. You know, even though for most of my borrowers I can't physically, you know, meet them in person, but I always do video calls. I would never just do a phone call or just through text. It's always— I always will have a video call because you can just tell a lot, you know, from just talking to that person through, you know, seeing it even virtually, right? There's body language. You can see how they respond when you ask questions, right? So sometimes even you text, right? They can ask ChatGPT and respond to you, right? Right, right. If you run into— I'm not saying, you know, you are or not, But if you run into someone who's potentially a scammer, right, they can already have model answer ready to go and copy and paste. But of course, seeing it in person doesn't mean that they will not have model answer memorized. But you would kind of see, feel that gut feelings when you talk to them, how they respond or how they react to your questions. I think that tells a lot. And so I think that's also one of the, one of the things that I look for when I, you know, what a good borrower is.

Yeah, that's so true. I mean, I, I would probably do like a Zoom call, right, just to kind of go over the presentation. Like, you have maybe a phone call and then a Zoom call, Jenny, or what's your typical process if you're kind of vetting a deal?

I guess, um, I always do a Zoom call or video call. Yeah, that's always Yeah, that's always kind of my, you know, one of the steps that I always do, you know, and go through, you know, talk through the deals and kind of understand, you know, how did you get the deal, you know, have you done the analysis, have you run the numbers, can you show me your numbers, because sometimes I think as a PML you also need to understand and run, like, analyze the deal like you are the borrower, you're the flipper, her, because the whole thing is, if Shona cannot sell this property at a profit, right, that's been the chances of me getting paid back, it's lower, right? So I need to make sure that she has enough profit in it, but also has to be like good enough, because she can say, well, I'm gonna lose money, I'm just gonna walk away, right?

If you're—

if your profit margin is really slim and you know that, oh, you know, she borrowed 100% of everything, she can't easily walk away, right? Because there's not enough equity of meat in the bones, right? But if there's enough, she's not going to walk away and let Jenny mix that profit. She's like, I'm gonna stay here and make sure I get finished so I get to eat the meat on the bone. Jenny can eat a little piece, but not the big piece.

Yeah, that's, I mean, that, and that's a good point. That kind of, it was such a good, you want, I mean, I, and I've heard other people say, I don't know if you, I would think that you want it to be profitable for the, the rehab or otherwise, like it's not a good enough deal. Like they might, they may walk away, right? It has to make sense for everyone, not just like the PML, right? Otherwise, like, why are we doing this? And you're more likely to walk away, like you said.

Yeah. Yeah. So that's why, you know, as a PML, I would, ask, you know, or I will ask, hey, have you done your profit analysis? Send me your P&L or estimated P&L. What's the profit in there? Because I've seen some deals that are like, the profit is so small and so slim. I said, if you need to lower the price, just that one price drop, your profit's gone, right? Yeah. So that's—

yeah, so true.

Yeah. So that's why you need to really make sure that you also review the profit analysis as well.

Yeah. And I think that's what I see a lot of, what I want to help students avoid is the first flip that was a learning experience. All mine have been successful, but I've heard that so many times. And it's just like, I think you either need to partner with someone or have a coach or just don't get dealitis. Because I think especially when we're first getting into this, we just want to do a flip. I think it gives us credibility or something, but a bad flip, it's not worth doing at all.

Jenny, I don't know if you agree, but why would anybody, you know, do all these, you know, getting scared by dogs and getting eaten by dogs and not make money? I don't think anybody would do that, right?

Yeah. Um, this is not for the faint of heart, right? Flipping, it's not HGTV, right? There, this— I was in the weeds on this one. I've done enough flips where I'm like, okay, I got this. It wasn't that big of a deal. But you This would've been tricky for your first flip, I think. And finding, so yeah. So Jenny, what else, if someone's like, what's best practices that we didn't cover maybe as far as presenting a case to a PML? I mean, for me, it has to be a good deal and I want to make sure that I feel very confident I can pay someone back and I feel very responsible. I don't take that lightly, right? And so I'm curious what else you would say to someone that's like maybe hasn't done a deal or is newer or just best practices.

I think, you know, for, you know, if what can show me you're a good borrower is, you know, you always keep me in the loop, you know, always. Like, even when I don't ask for it, you say, hey Jenny, that's where we are, you know, we did this. I will get a text like, oh Jenny, we're doing this right now, you know. So I'm like, oh my, you know, you kind of, you know, the one that's, you know, really send me status update without me asking for it. And I think that's a very, very good borrower traits, right? Because you want to make sure that your lender is up to date on the progress, right? And I think that's very important because you gotta think about it, it's not just this deal. If Shona has another deal like tomorrow, I would be happy to lend to her right now. It doesn't say that once she's, you know, she's good at one deal. I always say it doesn't matter if it's not Shona, somebody else. I always say say, you know, past deal doesn't really mean, you know, the future deals, nothing's going to happen. You still need to analyze or underwrite each deal separately on a standalone basis, right? But at least you have that foundation or that trust already. And I know that, okay, next time, you know, Shona's probably— I know she's gonna, you know, be up, you know, keep me updated all the time. She's very transparent. She won't give me surprises. She'll let me know. We can talk about that surprises when you're ready to put that one You're on sale. You know, she keep me in the loop on everything, right, to make sure that there's no surprises. You know, at least I have an expectation of, okay, well, she's gonna, you know, she's done with the rehab, she's ready to list, and okay, she got an offer, okay, this is the closing date. So I can at least plan ahead, right, and have some kind of expectation, when am I going to get my money back. So I think that's, you know, the communication Communication skills, being transparent, open communication. Don't give your lender surprises, you know, talk to them. Your lender is not going to eat you. I don't eat anybody. I'm not the dog, okay? I'd rather you give me, you know, keep me updated and don't give me surprises, and let's sort it out together, right? If you run into any problems, let's figure it out. If you need my help to figure out, I'm more than happy to figure share that with you, right? I, I think that is the key. At least now it builds the trust. So whenever Shona say, hey Jenny, I might need money for another deal, you know, I'll be happy to look at her deal, you know, right away. Because, you know, real estate, it's all about relationship, right? Long-term relationship. So it's not just a one-time deal. If it's a one-time deal, I can tell you, to be honest, if this deal with Shona didn't go Guess what? You think I'm going to start telling people about Shona?

Right?

Your name, your reputations will start— people talk. It might be like a small world, but people do talk. And so your name, your reputation will be known. And so I think you should treat every single lender or every single deal you know, as professional as you can. Because even though you say, well, I'm not going to borrow from Jenny next time, well, doesn't mean Jenny doesn't talk to, you know, Mary Smith, who Jonah may be asking Mary, you know, to borrow next time, right? So I think, yeah, I think that's kind of— I think that's very important.

Yeah. And I think— and there's all— and there was some hiccups, right? We got under contract once and it fell through, and then I was like, okay, my plan B is another— I got another inspection, right? A presale inspection, address some things, and was like, that won't happen again, Jenny, because I'm going to disclose all of the issues. And I was proactive, but I didn't— I was kind of like, oh my gosh, because I was like, hey Jenny, we're under contract. Then, well, we fell out, here's plan B, right? No one wants to say that, but if I didn't say anything, you'd probably see it on Zillow anyway. So me keeping that, you know, not saying it, I think that's so— communication with our phones, like, there's really no excuse. And even like bad news, right? I'm assuming you'd want to know that versus me like just not communicating, right?

Exactly. Yeah, I'd rather hear the bad news than no news because no news means I don't know what's going on. At least bad news, I know what's going on, right? But, you know, I don't think there's any bad news. There's always— I think there's always a way to solve it, right? If you're just being— you just need to be transparent, be open about it, and then we can, we can talk about it. And that's the beauty beauty of private money lending again, right? Let's say if you run into trouble and you call your hard money lender, do you think they care?

Yeah, I don't send them updates. I'm like, thank you, I'm paying my interest, and then it's sold. Yeah, I mean, like, yeah, it's a very different experience, and I think there's so much flexibility. And again, like, I couldn't have done what I did on this deal without, you know, Jenny. There's no way. They know I would have done that. And so, yeah, but it was a lot of due diligence and a lot of careful number crunching, right? So, and I think anyone out there, just like, there's, I mean, there's professional PMLs, which Jenny, I think you are. There's also kind of more like people that just have money in an IRA, they're not directing, right? But I think anyone that's going to be in a dabble in this, take it seriously. You don't, don't just loan to anyone because you know them. You need to be very, you do, do your due diligence, right?

Yeah, yeah, that's very, very important. Important. I think people find like PML very fascinating and profitable because they're like, oh my God, you can make, you know, 15%, you know, annually, or, you know, more, or double digit at least. You know, nowadays you put in the bank, you don't even, you know, now it's probably what, less than 5? You know, you're lucky if you can get 4, right? So when your rate of return is double digits, people kind of, oh my God, you know, they, they all jump jump into it. And I just found that so many people just lend out money without protecting themselves or without the right knowledge, or they just trust it, you know, to a point that they didn't verify what they say, right? So I think the key is you really need to learn the, the key concepts, the foundational concept, and understands, you know, how protect yourself, right, and do the due diligence correctly and be able to, you know, take that, have that expectation that, you know, what if the worst-case scenario? You have to have that built into your own analysis. What if, and what if the worst-case scenario? What am I going to do with this property? You know, you're not gonna— once you lend out that money, you can kiss it goodbye and hope you get it back.

Yeah, it's not without risk. Yeah, we hear these numbers, all these great percentage, but I mean, and it is more passive than doing the work, but I still, I talked to a lot of people and they've lost money on deals. It's not a guarantee, right? So from both sides, right? Like it's a relationship, you both have to do your due diligence. Like, and, and, you know, like the PMO, like they've fallen out, right?

And that way, if you don't have a relationship, you just, it's, it's very much, um, well, there's actually the other side I heard it's not just, you know, people— PMLs worry about a borrower defaulting. Actually, borrower is also worried about, you know, PML that back out last minute, or there's scammer lenders, right? There's those scammer lenders. You thought it was the other way around, always like, you know, with borrower running away. But actually, I heard a lot the other way, which I've heard it too.

Yeah, so we need to vet as investors and vet the PML, like maybe even check references, because I've heard that. I agree that you've You got like 5 days and you have to get an extension. Your lender just went poop, right? Or something spooked them or I don't know. And if they're not a professional, it's a, you know, like I think we should be vetting mutually. That's a great point, Jenny. There's no guarantee, right? I mean, escrow's open, wire the money. What if they don't? Should they just go? You know, I do see that a lot. Yeah.

Oh yeah. I see that a lot that people looking scrambling like last minute. Oh, my deal's closing tomorrow. Oh, and you know, I need a PML. I'm like, okay, your PML ran away. Or just, or sometimes people get cold feet, right? Because they didn't do the due diligence well. And they say, oh yeah, they get excited and they say they want to land on this deal. And then the moment before they're ready to fund, they're like, oh gosh, you know, this is not such a great deal. Or they get cold feet and they pull out. And I don't think that's a responsible lender, right? Because you screwing the borrower. Because if Shona is looking to close tomorrow and I pull out today, hey, so Shona, sorry, I can't fund you on this deal. She's going to lose this deal, or she needs to scramble and trying to ask for extensions, and then she's got to go scramble and find another PMO. Which put a lot of pressure on her and also whoever is the next private money lender, because it doesn't give that person a lot of time to underwrite and get all the paperwork, right, ready. So, and I— so I don't think that's fair. So I think as a lender, we need to be responsible to the borrower, just like the borrower needs to be responsible to lender. So like you said, it's a mutual.

100%. That brings up a good question. And I feel like any borrower lender worth their salt is going to want at least, I would assume, a week or two to underwrite. No one's going to— I mean, because you have to— how long? What's the ideal timeline for you as a PML to be like, here's my business case, I'm closing on next day? How much time do you need?

For me, I don't fund anything. It's less than 2 weeks because I need time to underwrite and I need— my attorney needs time to prepare a doc. So by the time I underwrite, I okay on the property, then I feed my attorneys all the information, and then they need time to turn it around. And then once they turn it around, then we need to review, you know, if there's any changes that needs to happen. and then send it back for them to make changes and then send it back again and then send it to title for them to read that 107-page document. Because yeah, my loan doc now, my attorney that I use now, their loan docs is literally over 100 pages. Oh, wow.

It's like a bank.

Okay. Yeah, it's like a bank. But I can tell you, their documents set is so thorough, it basically covers me as a lender, protect my interest in every single scenario you can possibly think of. I think that's why it's such a detailed document. And so that's why I say, you know, it takes time to review, go back, questions. And if a borrower like you who has never seen that 107-page pages, you probably want to read through at least, you know, the, the, the, the document and make sure you don't have any questions, make sure you understand what you're signing. And then needs to, you know, review it, and they have to make sure they get all the pages signed correctly, right? So that takes, you know, at least I would say the fastest is another week. That's the fastest you can get all that done in a week. So for me, it's like minimum 2 weeks. I would not fund anything less than 2 weeks.

Well, and I'd frankly be concerned if somebody was willing to fund that quickly without that due diligence, because I'd be worried they'd back out or they'd get cold feet, right? So if someone's not taking that time, that would be a little concerned too, right? So, um, there's clearly— you're very thorough, but like, can we talk like high-level paperwork and security and like what you're, you're expecting in me and what I should be expecting, like the term sheet and how it's secured? Like, even I know it's a big topic, but I think that's— I hear a lot of loans that are not secured, and it just makes me want to scream because, like, you need— your loan should be secured to the asset. Don't let it just be hanging out there on a personal guarantee. Like, Jenny, I know you have a lot to say about that.

Yes, yes, I've been talking to a lot of ladies, um, recently. And, um, yeah, I think the key couple of documents that at a bare minimum you should have is the promissory notes, the deed of trust or mortgage, mortgage. Depends on your states, right? So deed of trust, which is— that's the lien that gets put on the title of the property. That, that's the collateral, right? If you don't have that deed of trust or mortgage, you're basically lending as an unsecured loan, right? So I heard a lot of ladies lately saying, oh, I only have a JV agreement, a promissory note. I said, do you have a deed of trust?

No.

I said, so what did they tell you? What lien position? Oh, I thought I have second lien or first lien. I'm like, well, where's that trust. If you don't, that's mean you have no lien positions, right? So I think those are the key documents: promissory note, deed of trust, you know, of course insurance policy, making sure you are on as the mortgagee on insurance because, you know, in case something happens. Like lately, all these natural disaster, right? California, you know, hurricanes, anything happens. If you're not put on that policy, right? And when the insurance pay out, they're not going to pay you as the mortgagee, right? They're going to pay the homeowners, and they can walk away with that money, right? So making sure you have that. And then of course, I think the other very important thing is lender's title insurance. Um, that's also another very important document you should make sure you get. You have your borrower get that lender's title insurance because you know what's going to happen, um, you know, if something clouds the title afterwards or anything that happens. You know, we— I actually, one of my recent deals that fell through last minute, it's not me, is actually the— there is actually another name on the title that they didn't find out until like, I think, couple days before close. And yeah, so, and then that person actually you know, is the relatives of the owners, and she refused to sell. So, so there's actually two names on the— yeah, two names on the, on the property. They thought they were dealing with one, and then they didn't find out the second name. And then once they found the second name, that second person refused to sell. So the deal kind of just, you know, you know, didn't, didn't happen, didn't through. So that's why I say, you know, lender's title insurance is also another very key important document. You've got to make sure that you request that. So I think these are the basic ones. Now, of course, like I said, my document has, you know, my attorney prepares that loan doc that has 107 pages. They have a lot of other agreements or, you know, kind of, you know, like arbitration agreements, you know, making sure you're certified. This is a business loan, not a consumer loan. There's other things that are there to protect me as a lender. But of course, that's going to go through— that's a whole discussion about just the legal document. And I'm not an attorney, so I'm not giving legal advice here, but I'm just sharing some of the documents.

Yeah. So I just want to circle back and say, when you post this deal, it was like a screaming deal. I made money, you made money. It looks all rosy, but we both did so much work and due diligence. And it wasn't just like— that's the thing about these good deals you see, you don't know what goes on behind the scenes and you really have to do your homework and just be smart and follow procedure, right? Because you could miss one of these things. You don't do your inspections, not— it's just, it's, there's a lot of nuance to it and it's amazing, but just, you know, just follow procedure. That's like what Jenny's saying, right? Because there's a lot.

Yeah, there's a lot. Even people say, think private money lending is passive. It is passive if you consider, compare it to a flipper, right? Definitely I do less work than Shona did, but it doesn't mean I'm doing nothing or really as passive as people think. Um, because if you really need to do this as a business or you want to really do the due diligence and do it correctly correctly and make sure that you're, you're protecting your investment, you really need to do a lot of work. It's not just, oh, this is a good deal, oh, here, let me wire you the money, Shona, and I'm done. And then collecting mailbox money, okay, next month I'm going to get my interest in my mailbox. Well, used to be mailbox, but now of course in your bank account. But it's not as simple as that. I, you know, literally needs to making sure that from the beginning to the end, right? From the moment that Shona and I start talking, you know, you got to work until you fund. Even after you fund, there's still a lot of things that happens after funding, right? Shona and I kind of still keep in touch about the progress, you know, making sure that she's making that monthly payments to me, making sure it lands into the right account, making sure I gave her the, the, the, the bank account information so she can send me the money. And then also when it— when she's under contract, when she's ready to list and it's under contract, then we need to walk, you know, work together to make sure that how can we exit this, you know, loan, right, um, appropriately, correctly, right? I got to make sure I need to send, you know, the title company the payoff statement you know, she needs to work with me. Okay, when is the payoff date so I can calculate the interest, right, up to that closing date, and working with the title company to make sure that we're in communications. And I remember I was out of the country.

Yes, I remember. Safari or something, right?

Yeah, yeah, I think it was safari. Was it safari that was in that trip? Yes, yes. And when you're in under contract, contract. And so in that situation, I need to make sure that I talk to the, um, you know, the title company, making sure that, hey, you know, I'll be out of the country. If your closing date is going to happen while I'm out, well, let's do this before, you know, I leave. If you need any wet signatures or any notaries of any documents that you need me to sign off, you know, even though I still have email you know, but I can't do wet signatures. I can't go to the bank. I can't go get notarized signatures. So if you need any of those, you better let me know before I leave, or else you have to, you know, fly to Safari or FedEx it to Safari for me. I'm not sure if there's any FedEx delivery at Safari.

There was a lot of planning. I remember we were very much good communication and working with title because there was stuff going back and forth, and you have to just— there's a lot of details, and you miss one of those again, and it just— yeah, you have to be very detail-oriented, which we both are.

Yeah, and that's why that open communications, right? So I will make sure, you know, you tell me, oh yeah, we're closing at— we're expecting to close at certain dates, and I'm like, oh well, I guess I'll be traveling during that time, you know, I won't be in the US. And so I think that's why it goes back to that open communications, right? 100%. Keep them updated.

So, and I think it starts with the right deal, the right property, the right presentation, which I have in the course, right? Making that business case and just having that foundation of— and that, because that sets the tone for your communications and how you present yourself, right? Even if you don't have— I'm assuming, Jenny, if someone doesn't have experience, if you present your professional, anything relevant to what you're doing just to make that case, because if you know, it's a risk. You have to present your case. It's like that you're worth taking a risk on, essentially, right?

Yeah. So I think, you know, you have to present a very good case, right? And I think a lot of people don't realize, as a borrower, as a flipper, you know, the better prepared you are, the better, you know, kind of organized. Like I said, I love people who's organized, who's on top of things, when I ask them, hey, send me this, they can send it to me right away. That means they're prepared, right? They have looked at this deal from, you know, different angles. When I ask them that question, they say, oh yep, you know, yes, I have this support, I'll send it to you. Yep, you know, I can get that too. Oh, or even you don't have something that I asked for, is like, hey, I'm on top of it, I'm gonna go get it, I'm gonna go find out, I can provide it to you, you know, tomorrow or something, right? If, if when you're, you know, I think the better prepared you are, the better it is, and it gives me comfort as a lender, right? Because I know that's when she's on top of things. I know that I can trust her. Well, of course there's other things that you gotta, you know, underwrite, but at least that add a point, you know. Yeah, another point, you know, that's, uh, you know, she's a trustworthy person, or at least she's, you know, responsive and accountable, right? And I can, I can rely on her to make sure that she gets this project done. And I think the other thing I forgot to mention is, you know, contractors can make or break your deal. If you have no contractors contact or network, you know, that's going to put a lot more risks on the projects than those who have great contractors network. You know, it does— like Shona, you know, you say you fired a contractor, which I didn't know because you got people in They're like, right there. I didn't even know you have someone who left the job, right? Because you can find someone else pretty quickly and take over.

Yeah. And it was— he was for a certain thing, but it was— there was drama. I didn't share it because it wasn't relevant. I had it handled and it didn't affect the timeline. So there was like, I don't want to stress you out with the drama. It was just, you know, I got through it and it wasn't necessary. But yeah, you have to move quickly and I contact Contractors, they're really important. And they can— I mean, because if they go too long, there's holding costs, you could miss the market, all of this stuff, right? So there's so many pieces to this, right? It's not just get a great deal, get the money, then you have to execute on it, right? You have to execute the work.

This is not HGTV or those Unsellable Houses or whatever, you know, they make it sound so, you know, so fun and so quick. Of course they cut out all the, you know, all the drama.

Yeah, not to say it's not fun, right? Like, it's fun to do this, it's really fun, but it's also a business and there's a lot of risk and reward. And the bigger the risk, the bigger the reward. But like, I hope people are taking away like, hey, build relationships, communicate well, talk about what you're doing. I mean, PML is out there. I think if for someone it just— it's out there, but you have to like have a good deal and you have to talk about— you have to, you have to be a known person to have the credibility for someone to take a risk on you? Because if you don't talk about what you're doing and you have no experience, then I would imagine, Jenny, that would give you pause if no one has experience or they're not active somewhat on social.

Well, it depends. I mean, I do lend on a couple that's first-time flippers, right? But those deals have to be very good. Right now I have one that's a first-time flipper, flipper, but her deal is like, I don't mind taking over that property. Goes back to, right, if she can't finish this, you know, flip, you know, I'm okay in taking over the property and, you know, flip it myself. And so, you know, and also if it's a first-time flipper, I would say try not to do a project that's like a full gut project. Like, you know, like, you know, if it's a first-time flipper, if they can just do like a simple, you know, flip cosmetic flip, or just simple, nothing like knocking down, you know, 5 walls or anything like that, or changing floor plans. I think, you know, that's, that's— I think that is still a doable project, right? As long as it goes back to the underwriting again, the number has to pencil out, right? And I have to assume that I'm going to take over this property, and what's my own, you know, exit strategies? Am I okay with these exit strategies. If that's, you know, if it all lines up, everything checks, then, you know, first-time flipper, you know, still can still be, you know, a great, great success story.

No, that's so true. Yeah, I mean, it's, it's a numbers game, right? Like, you're looking at a lot. Yeah, so for sure. Um, is there anything that we didn't cover, Jenny? I mean, I think we unpacked kind of the story, and I just want to emphasize It was a great deal on paper and there was nuance to it and it was a little bit twisty and hairy, but it worked out and this can be fun. But again, there was enough meat on the bone to make this work for everyone, right? And that goes down to marketing and all of this stuff, getting the right deal and all of that work, right? And we often don't see the behind the scenes when we see a great deal. We don't know all the nuance of the guard dogs and the growling in the basement and the pee-soaked floors. I mean, it was like all these things on the face of it, you had 2 weeks, but I mean, I basically lived at that job. Site for 2 weeks, and there were many nights where I was in the basement cleaning out pee-stained mattresses and, you know, just junk hauling endless loads of junk out.

I think you were— you guys were working 7 days a week, right? Did even the contractor—

pretty much, yeah. It was— I mean, because I knew we could get it done, but that's not everyone's style. I'm not saying you need to do that, but if you— I think having a clear timeline and having a clear, like, knowing again the timing of the market, right? Because it listed in December, which is, you know, not ideal. But like, we, you know, we also staged it. I did it myself, which I love, but I was pretty scrappy with that, right? And got it done quickly. And so yeah, all the things.

I remember you say you raided your own homes and put them up, which we bought.

Yeah, our kitchen table was missing, a lot of artwork, um, and then I sourced some stuff. But, and for me that was fun, but I also could move much quicker, right? Because like staging would have been weeks out, and I'm like, I don't want to wait for stagers. I also— and the other thing, I don't know if there were of— they left a lot of furniture, which I repurposed kind of selectively in the staging. That was the other thing. I'm like, oh, I could save some money.

Oh, and I think I forgot one thing. I think one of the key to success is you have a very good realtor, right? In this deal, right? And I think she gave you kind of the market analysis, the CMAs, you know, telling you, you know, what's the price. I recall you mentioned that she's very She's, she's, uh, Melissa Dorman.

She's, she's amazing and she's very experienced. And I interviewed a few agents and I knew, like, you actually— that's the other thing, because there were some agents I didn't think they would market in the right way or hustle. And I was like, you have to, because it's kind of in their hands once you sign that contract. So I'm really glad you mentioned that. And that was, I think, really key because there was quite a bit of negotiation. We fell out once. It wasn't any— it was just what happened. And so it was, yeah, that's another partner in this whole thing is like your listing agent, right?

Yeah. And I know that also kind of gives me credibility and it gives me kind of comfort is that I know Shona is using a very experienced realtor. She knows what she's doing, right? And she knows the market. I remember this house was listed right before and it couldn't sell. Well, why didn't it sell? It was, it was an on-market deal. It wasn't an off-market deal. Why, why, when that home is under another agent, it didn't sell, right? And when you have— so I think it makes a huge difference if you have an experienced agent versus a non-experienced agent, or not experienced in that area or neighborhood. You need to really find someone who understands the market, you know, in that area, and then the time. And, you know, so I think that, that also makes a huge difference.

It really does. Yeah, I came to find out when they had it listed on market, they would— they had a Ring doorbell and people would ring the bell and they'd hear the dogs growling inside. So needless to say, it did not sell, right? Because the dogs were inside. So yeah, all, all the things, right? Well, I hope people got value from this journey. Anything else as we wrap up? I don't know if we'll have time for Q&A, but like anything else that we didn't cover or I know you have a program that you're launching. You're welcome to mention that because this is, this is so important. Like, you guys don't lend without being properly secured. Like, I— we both hear so many stories. I think that's why we're both so passionate about talking about this stuff. We kind of got into the weeds, right, on it because it's really important.

Yeah, so I think it's, you know, it's, it's very important that you really know what to do in private money lending. Don't just lend because, oh, you like this person or you trust this person, you really know how to protect yourself and get the basic— you know, not even basic, you need to know the right knowledge and guidance and someone to, you know, walk you through or handhold you. Or actually, when you have questions, you don't know what to do, or someone to look over your deals for you, underwrite it, you know, take a look at the deals or help you, guide you what question to ask a reference, right? When you're trying to do— and you underwrite the person person. And I think that's fairly important. So right now I am— have a program out. It's open for enrollment. It's for a short period of time. And so if you guys are interested, you can always go on my website, Jennysaw.com, and you'll find more information on it.

Yeah. And Jenny knows her stuff. And I think in general, coaching is a bit— everyone has an opinion on it, but they can actually save you money. Again, I had I'm a coach during this thing and I coach students. I know I make the money. And so it's like, it's an investment that will pay dividends. And yes, you can figure it out. But I think you and I both, Jenny, we talk to people that have lost like hundreds of thousands of dollars by not being secured. And it just, it breaks my heart because that's not why you're a lender, right? And that's like when I'm working with a student, I want them to be successful. And yes, it's an investment clearly, but you, it's just, they can save, it's just, It could be a very costly mistake.

That small investment can help protect or save you from losing hundreds and hundreds of thousands. I mean, I've heard, you know, the largest amount was, you know, over 6 figures and multiple 6 figures. So yeah, I mean, the smaller— that's the 5 figures, yes, that's very often, but 6 figures and multiple 6 quicker. I've heard people lost money on that amount too.

So yeah, yeah, I mean, it's just, um, and there's, yeah, varying degrees of education, but it's, I mean, it's, it's simple, but it's not, right? I think it's so important to understand what you're doing because again, you can lose money and you, and you don't want to make sure you're like, yeah, and you might even tell a lender, hey, that's not a good deal. They might walk away from that, right? Because you might even like, that's the other side of it too, right? If you can't even get PML, it's probably not a good deal. That's why you can't get it, right?

That's one factor, I would say. Yeah, but I think like, like we talked about how this deal, how I, I'm involved like from the beginning to the end. So it's not just, you know, you just the underwriting. I mean, yeah, everybody stressed on underwriting. Yes, that's very important, but that's only one piece of it, of the, of the puzzle, of the whole, you know, we call— I call it life cycle, right? From the beginning to the end. So I would teach you everything from, you know, from underwriting all the way to, you know, funding. What do you need to happen? What do you communicate with title? Make sure after funding, how do you communicate with the borrowers? And then when the borrower is ready to, you know, pay you back, you know, how do you exit the loan? We call it exiting the loan or payoff, right? What kind of document you need to sign? And then after that, you know, you still have— right now I'm busy right which is doing the year-end reporting, because I think a lot of private money lenders didn't know that, you know, you have tax obligations to file, you know, 1098. And so I am doing that analysis right now. And so I think, you know, these are the things that, you know, I would teach students, you know, from the beginning to the end. Everything kind of covers the whole loan life cycle.

That's also important because if you don't do— you miss some of that, you might have, you know, you might if it's not— especially the securing the loan. God, if you take anything away from this, if you're listening, make sure that loan is secured to some kind of asset. Could be a different asset, right? Typically it's the house that's being rehabbed, but yeah, don't let it float in the wind, please. Um, so Jenny, you wanted to spell out like the domain, um, if anyone's listening.

Okay, so it's basically my name, JennyTsah, J-E-N-N-Y-T-S-A dot .com. So you will find it under service. If you go to the website, under service, you'll see there's a, there's a box that says Elite Mentorship Program. So you just click on there and you'll find it. Or, you know, you can also send me an email. I am happy to, you know, send you more details. It's hello@jennysaw.com.

Perfect. And Jenny knows her stuff. She's amazing, very knowledgeable. And if anyone's interested in off-market properties, like how I found this deal, the kind of marketing idea to get these kind of deals because that, you know, there's either buy on market, you buy off market or through a wholesaler. I personally like direct off market. You can negotiate the rate. You can, there's not less parties involved. That's my favorite kind of marketing. It all works. But if you're interested, just reach out. It's called the REI Playbook. So I love getting inbound leads where I'm having a conversation. I'm not harassing or door knocking or SMS messaging or doing all those things that feel kind of icky. At least to me. And there's ways to do that that feel really authentic and you get leads. And, um, yeah, it can turn in, you know, to really profitable— those, or buy and hold. That's like what I really love coaching students on, right? Um, but flipping is great, right? It's— but it is a job. So, but yeah, but it can be great. We just do your education. So reach out to Jenny if you're interested in being a PML, because a lot of courses teach it in a very— Jenny, I don't know what you'd say, like high-level way. I don't think they're diving the weeds like you are and the full life cycle, as you said, and that's so important because there's a lot that goes into it.

Yeah, yeah, exactly. So, you know, I would, you know, go to Shauna's REI playbook. She will tell you exactly how to do a great pitch deck, right? That's in your REI playbook.

So that you can get the deal, do the pitch deck. Exactly.

Right. So you can get the right, the fundings that you need to get your projects going.

Yeah, yeah, perfect. Well, Jenny, I thank you so much. It's always fun. If anyone has comments, I wouldn't get to Q&A. There's just so much to cover and it's, we're kind of at time here. But if you, if you got value, please let us know. It's really helpful. And reach out to Jenny if you're interested in that, if you want to talk about the REI Playbook course. Yeah, lots of options. Or just hopefully you guys let us know what your takeaways were. It's really helpful for us to know. So yeah, thanks for tuning in, everyone. Jenny, thank you so much.

Well, thank you for having me.

Yeah, this was fun. Thanks.

Okay, bye.

Good night, everyone. Bye.