EYL #20 Lord of the Slums

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All right, guys, Welcome back. Welcome Back Episode twenty uy EL twenty twenty weeks in the books. Man, this is monumental. This is a very very special day for us. So first of all, before we start, we got to thank you God for your support. To grow this fast in twenty weeks is crazy.

And the growth continues. It's amazing. We ran into some people randomly and telling the stops we make and the love has been amazing. Support has been amazing, The feedback has been great. He would just want to talk to us about the podcast.

So thank you. This is we're not going out. You like that. We can't say anything better than that. Yeah, that's a fact. That's a fact. So we goes jump right into we got a very special guest today, so I'll give the delayout. So obviously real estate is very important in building wealth. So this is an educational show on finance, and you can't have education finance without talking about real estate, right, So we have Fernando Fernandez with

Can you tell you an introduction to the.

Definitely Got a Down podcast?

Right?

Graduate? Right? So all right, so can you tell the people because I heard your story the other day and you know, as far as like being like a fifth year senior in college with like ninety credits and all that. Oh so yeah, how do you Okay? So how do you go from humble beginning getting kicked out of school pretty much because you didn't have enough financial aid I believe, to having two hundred union Like, how did that happen? It was never my intention to have two hundred units.

I mean it's remember one day speaking on season, he telling me like, Yo, I'm at this guy he's in Pasig, man, he has two hundred and fifty units.

I was like, holy, two hundred and fifty units man. I was like, Yo, that's like quarter of a million dollars a month. It's because like they in run, It's crazy that time is like my mind.

I'm thinking, like we're both like, yo, we could imagine we made five thousand dollars a month. You know, take that plus you to have your little career and making like another seventy five put that together, it's like, you.

Know, you're making decent money.

So two hundred units wasn't the intention.

You know.

My my initial attention was get a four family house, then get the three family house, then get the two family house. With those three right there, that'll pay the mortgage for the one family house. Yeah, so really think about it. Most people spend about fifty percent of their money on their mortgage, so I was like, hey, if I get that covers, that's that's like a big thing.

So that was the initial intention.

But once I got getting really into the villa state and deep into it, getting to know like other people who weren't investors, like your mind starts changing and like start changing up.

So slowly, you know. I ended up going from one.

Property, I got my second property, my third, and started getting multiple properties at the same time.

So I mean, that's really impressive. And it names Lord of the Slums, right, it's the ord Landlord of Patterson, So lord of the Slums. Yeah. Two thousand and four, Right, I looked at your vision board and it was.

I was like, hey, there's nothing name on the vision board, right, he hasn't accumulated anything yet.

Two thousand and five, it's the same two thousand.

And six all the way up to twenty eleven. That's when you get your first property. So what's the process? During that time, right, we all were like, you know what, this really isn't for me downt yourself, Like what's the process?

What's people out?

The process was not giving up, you know, and I keep that that vision.

Boy, it was like I purposely did that because get a lot of family and friends. You know, they want to come down, sit down with me, and you know, so I could kind of like give them some advice and obviously they know where I'm at right now, so there's always what do I have to do to do what you're doing? So and it's like nobody wants to you know, not that they don't want to put it into work, but it's kind of like they forget the work that was involved.

And it's like the patients too, So it's like it's.

Almost like, you know, you can't just jump in and think that right away you're gonna do a complete dumb renovation on the house where you're gonna build a house on the ground up, like right away with having no experience. So that's basically my way of showing them like, look, you know I you know, I put in the work. I was patient, I never gave up. So it's like, you know, follow that system and you be able to make it so all.

Right, So you have a system in place right where you talked to me, you spoke to me about it over the phone that you ain't see to use. Can you just explain that, like as far as like you buy a home, then you take the cash from the home, you buy another home, like what's your what's your blueprint?

So yeah, and that's kind of like we're allowing me to like really blow up as far as like in real estate. So it's basically the system is, you know, you try to cash out on your property as soon.

As you've done renovating.

So just to like run a quick math, you know, let's just say the house is worth three hundred thousand, you pick it up for one hundred. Let's just say it needs fifty on renovations. So it's like originally when I would go to a harm Mooney lender, I will just tell them, look, I'm buying the house for one hundred and fifty for renovations, and they'll give me the ninety thousand on the purchase because it's ten percent, and then they'll give me the fifty thousand for the renovation,

So now if you're renovated for fifty, but now you're not.

Saying fifty for the same this scenariic, I'm taking one ten. Now finish up the house with the fifty. You get that difference. So by the time you're renovating the house, you're pretty much already cashed out this money.

And then you have the two options worth your house.

You get to flip the house and if it's worth three hundred, you know, you're flipping it for three hundred, or you could just do a cash out REFI, which will be at seventy five percent, which is down the loan instead of being two ten, it might be let's say two twenty, but you're ready cashed out, so you're not really cashing out. You're just more like what I call a park in the house. And the most important thing about this property it needs to cash load. I

So hard money lending, can you talk about that because people might not be familiar with because people know about traditional bank loans, mortgages and stuff like that, right, but people don't understand. I don't think a lot of times that you can get financing for a home outside of a bank.

Right when I heard the word hard money, I'm thinking, you gotta get this guy with a suit, handslipped bad and he was like, yeah, I can give you some money.

Like what is a hard money lender?

So harmmoney lender is a private lender and their asset based lender, meaning that they're not really focusing too much on your personal income credit. They're really focusing on what the what property you're buying, what's it worth, how much are you going to need?

And you know, those.

Numbers make sense, and for them to make sense, different letters have different rules. I have lenders who they're willing to go seventy five percent loans of value.

Those lenders that.

Are willing to go seventy some you know, they're really cheap. They only want to go let's say fifty five percent. So you know, depends what lender you get. But the most important thing about them is like they're not focusing on your credit.

On your credit.

You know, you have, you know at one point, but I think like the first hard money loan that I that I took out, my credits goal is like a five to eighty five, which is trash and that property particularly, I had no choice but to go through the hard money lender because I was trying to go through like a regular conventional bank and they already had loan on

But to reverse it was gonna take a few months, and they were like they weren't gonna wait.

A few months, and I couldn't wait a few months. I needed to do the right away. So that's when I was introduced to a harmoney lender. And you know, they made it happen.

So in that process, right, because I'm assuming like hard money letters, not many of them look like us. No, whether it's on like discriminatory setbacks or anything like that, you know what coming from the inner city.

Yeah, you know, I've learned in this business that sometimes we tend to be racist ourselves. It's kind of like, you know, you grow up in the city and it's like everyone around you is like a minority, and like like when you see someone who's not a minority, they're like either a police officer or like you see my TV, like the politicians and it, and then you hear all these things, like you know, situations, especially in the inner

You man, and you know it's not the case. You know.

It's like most of the people that I would say that financially have helped me out through loans have been white people.

So you know, the whole.

Concept of like you know it's gonna be all racist, you know, it doesn't work. I will say this though, especially started off in the cities. You know, they're pretty dope. Now everybody wants invest in them, but you go back, there were the first ones to take the head.

And you know, going to a bank, nobody wanted a loan.

And in the cities, it's like when I first tried to do cashot refis, lenders would say, oh, yeah, we're willing to go seventy percent. And once you submitted the application and then throwing the zip code, they'll come back and said, I know.

What, We're going to give you sixty. It's like wildly sixty. It's like, oh, because you know, where you're located.

Is a literally high crime area, so it's it's a higher risk bru so they chop it down.

So if anybody's not familiar with Jersey, you're from Pattison, Jersey party practice, So Pattison, Newark, East r and South Orange, Jersey City, any other place not forget that's north southern Jersey. I mean, but like northern North Jersey.

Day you got your Jersey City, you have Elizabeth.

If you have Nork, you have Pattison, you have for sake, you know, it's a whole bunch, and you have other

So as then, you know, it hasn't hit like two year extended with Jersey City and North And we would say the reason for that is because of Jersey City and North they have some really good public transportation like trains that go in to the city, so that allows for that to happen a lot quicker for us. We have buses, but we don't have like any trains that are mass transit like that.

We have one that goes into North but very few people use it.

It doesn't have like that appeal where you know, someone could just go and grab the training.

Yeah, so what are the appeals, disadvantages, advantages because we hit it a lot right where it's trinity was like by a block by back to block right, So you actually have done that. You guys are actually doing that in real life. So because I mean you couldn't at this point, you can invest anyway. You can invest in the suburbs, you can like, so for you personally, why is it beneficial to invest in the city and what are some advantages and disadvantages in inner city?

Well, for one, when I got into real estate, I wanted to get into rentals. So you're not going to go into the suburbs to the rentals because it's like the.

Money's not there.

And I've read a lot of books and before I even got into the real estate, and one key thing that I always read it is like all those other like investors with world books, what we're saying, which I agree with it too, is like know, go into like the tough neighborhoods, but the good parts of the tough neighborhoods and then you know you're gonna do it.

Right.

So, but yeah, the suburbs, you're not gonna you know, you're not gonna be really you're not gonna make money. Where you're gonna make the money when you deal with rentals is gonna be where the rentals are at.

Which, for the most part, is gonna be in the city. Yeah.

And that that goes along with like zoning issues, right, I would assume like in the suburbs, people's homes are zone for two family, three family a lot of.

Times, you know the design that where they design one families, you know, and they'll have their few multi family complexes, but you know you're talking about million dollar properties. Then you start off it's just not realistic, right, Okay, okay, all right, So one o the questions that I wanted to ask you, So, Okay, can you just break down your first deal?

Because I think that's the hardest part that people. It's like all things in life, right, the hardest thing to do is to start. Once you start, then you kind of but like, can you just explain your first deal, your first investment deal?

Yeah, so you know, going back to that chart where you know roll down to is like in my mind. In two thousand and four, that's when I said, okay, I got to get into real estate. So went into real estate. But as soon as they were my credit credit was kind of like shot, so I had to start working on fixing that credit. By the time I finished fixing the credit was like two thousand and five

Out too well. She couldn't find me anything.

So I ended up getting my license, got my license, but O seven, I ended up getting fired from my job.

So now you know, couldn't get into like basically real estate investing.

So took that as an opportunity to just have my license, let me just do with real estate and let me learn the business as a roulter.

So let's just fast forward.

When I ended up getting my first property, which was twenty and eleven, that was a short shot. I put the offer like in twenty ten, All right, now this deal. When I put in the offer, I put an offer of one fifty.

I qualified, it was good to go. The bank approved that for two twenty eight.

It's not much of a difference on the mortgage, but it's like when you're like really right on the borderline, that made a word of you.

Know, that made a huge difference. I couldn't couldn't get the loan. I mean I went to like eight different banks to get like a loan.

Everybody said, now, so, which is a thing that I tell people now all the time, Like listening when someone tells you no, that just means it's not a yes right now. But find out what do you have to do to make that a yes. You know that yes could happen in a couple of days, a coold happened a couple of years, but like, definitely find out what you need.

To do so you could you get it corrected.

Did that when you know, went back to like one of.

The guys that you know, it kind of broke down to me why I didn't qualify. It's like I had an auto loan, I had a lot of credit cards mixed up, and I also had a huge IRS. So it's kind of like I had a kind of maneuver all the money make a payment plan with the irs instead of paying them in full, pay down some credit cards, pay off.

A car, and did all that.

And I had like basically like the money and and the means to get the first property. It was the game changer for me, the first one, because it was a four family house and it was all events through section eight. Now it's crazy about that that I went. You know, I tell you friends, family members about it, and everyone was to basically tell me like, ah, don't do that four family house.

And you know that's Crazy're gonna be dealing with tennis. Is gonna be a headache.

You know, get the two family with attic in the basement, which in my mind, I'm like, well, that's a four family. But then all that though, is that it was say in Jersey three family. Once you have a three family, you have to deal with the state and they come and inspect their property every five years. And you know, most people don't like dealing with that. So with the two family, you get no inspections. And now you have the addict, you have the basement. It's fair game in Patterson.

Home child, but you know that willpen up my mind. I just got to rest. I'm like, wait a minute, now I need to get another one. So now what do I have to get, you know, to get the other one?

And and you know, studed like strategizing and figuring out ways.

It was.

The time was also perfect too, because it was like, you know, during that time, nobody wanted to jump into real estate. I mean, I will go to barbecues and I will try to convince people to buy, and then that you get, like to get an investment property. Everybody thought was just after a commission, like now know you just you just want to sell the house, and it's like.

Nah, man, like you know this. You're gonna make good income off though for this house. So so okay. So you brought your first investment property in twenty eleven two thousand and even took the equity out of that, and then for another one and then kind of just parlated from there. None actually and the didn't they didn't take out the equity on that one. It's like that still was in my mind. I still didn't know about like.

Hashot refives or anything like that. It's got the first one. The game plan was you just save up money. Now I'm making three thousand per months, though if I touch those three thousand in a year, that's close to forty thousand dollars I was gonna have.

So it was just kind of like saving up.

And then like a year later, what happened was there was a property that I had put in an offer for a client of mine, and we put in an offer.

On a fourth family for one to fifty.

He was on by straight cash months passed by. Hits me back up, like you know, because it was a short sell. He got desperate, he couldn't wait send to you know, find him something else found him a six family for two hundred. A couple of months passed by, the built her that was suddenly the house. She called me up, tells her height list and we finally got the approvals. Your clients so interested, and I was like, yeah, yeah, definitely.

So I was able to get back my money on that.

So you your company, you said, your father LLC. So your company became your client, you became your client.

Yeah, yeah, basically sense right, yeah, in the sense it's like the bank didn't care who who purchased that house, you know, they just wanted to seventy five So.

What are some of the benefits of putting a house or property in an LLC?

At that time, the benefit was it was a requirement because it was a business deals Like though you know it's all to for one thing, I wanted to make sure, you know, doing research and stuff, and you know, it's like getting multiple multiple properties. I had to stay in my head that I read like, oh, you get a different LLC for every property, that's going to limit your liabilities.

So I kind of went that out but now, you know, just keep a.

Couple of llocs for my probably's home. You know, there was a time when I was actually opening up an LLC for each property. But then after a while, like you know, it kind of is like I had you gotta follow these I was like, just keep getting insurance on your house, all right.

All right, So now you got the backstories, and now we're going to go into the blueprint of how you actually do your day to day operations. I'm gonna get it gone, all right, So we're going to go into

So yeah, it's I'll say twenty sixteen though, that's that's kind of like what the magic happened though, Okay, it's kind of like that's when like I was consistently able to purchase a property, fix it up, rents it out, and then once it's already rents it go to Alenda to catch it out.

All right? So can we all right? Son? We so can we get right to look at the chart? Though?

You notice how it's kind of like I was like, oh, it's like you know, get a three, it's like one one, yeah, but it's like twenty sixteen. That's kind of like when it really like made that So match twenty fifteen, twenty fifteen, So can we do that's when I, you know, the first cashown.

Can we go to twenty fifteen? When when you start to really take off? And kind of just because that's like your blue right as far as yeah, can you just break that down as far as the flips, how you look at it? All right? Can you just tell exactly like what you do?

So what I do is like when I look at a house, it is like try not to look at a house.

I try to look at numbers. So it's in the.

Formula is basically if I keep try like of my portfolio and I ask myself like, all right, is this going to increase my network.

And then the other question is is this going to increase my cash flow?

And if the answer is yes, and it's kind of like all right, is the thumbs up, you know, and I could get this.

But now there's the other question, now is like how fast and can I get my money back on this deal? And then there's like if all three are yes, then that's when I jump on the deal.

Okay, yeah, this is a deal for me.

So it's like every property that I see, I see with that intention is like I think, like the most important thing you need to know is how much can a house a praise for?

And then it's like the key component here is a.

Praise for which took me a while to understand because before I would look at a house and I was just like such an honest guy, and I would look at it, I tell myself, like, you know what that ask I can sell that for two fifty, so it's worth two fifty. But going back down to like the inner city, and it's kind of like why I stuck to Patterson because I felt like I knew Pattison like the palm of my hand, and not sure if it's like if it's you know, if it's the same for every inner city.

But let's say Patterson, you get you get a block.

This corner right here is.

Like where all the hustlers are at, and it's a lot of crime basically, right.

But this corner right here, which is the same block, super quiet. It's cool. You could you know, you could walk by.

Nobody's gonna, you know, try to hustle you for you know, to buy any any drugs or anything like that.

Yeah, but now they're on the same exact block.

So now you picture somebody coming from out of town, like an appraisal or anyone, and now they see this property over here. But now when they look at comparables, they're looking at the whole neighborhood and gonok for the median area. So it's like if this property record, you know right here, basically let's say this one is cells for two hundred, but you know, let's say this one sells for.

For two fifty.

Let's just say, right, but now if you're buying this one and you're buying it through a short so it's going to be a foreclosure, more than likely they're going to use this one here as a comparable. So now this brings down the value of this but this one is worth more, and you know it's worth more because

At two fifty.

So I try to look for the house it's worth two fifty that I know the value is going to come in at two hundred. It's it's kind of like now off the bed. As soon as I buy the property, already know I have fifty thousand inequity the other part of it too, which is why I always try to look for properties that need renovation because most people do not want to deal with renovations. Most people want to just grabt the key, go inside of the house, and they're good to go. So when you get a property

So when you're doing that right, when you're about to rentedy, right, I'm assuming on your first property, you.

Didn't have a team or did you going into it right?

So what was the process of selecting a team of contractors, like honest people.

Out of right so that you don't get ripped off? Or was it like you know what, I'm gonna learn the craft and do it myself, or what was the process in creating.

That well first properties, let's just say the second property that I purchased, right, that one, I did not do a govern renovation. I just went in threw a couple, you know, some liming the floorings, painting the walls, patched up a few os. I think I did like one bathroom. Had I purchased the house today, that probably would have been a complete guy renovation. So you have to do, you know, where you can handle what you know.

So when you start off, you know, advice everybody, just start.

Off, you know, with light renovations and kind of like work your way up.

The way it works is basically, you get yourself, you know, the one handy guy, which once again this is why it works out. And you if you're able to buy in your neighborhood, you can make a few phone calls ady, you know, so they're like, oh, yeah, my cousin has a cousin who is pretty handy.

He can help you out. So you start off with the handy guy.

But after a while, you know, when you start doing more incense for renovations, you know, they might refer you to someone else. Or it's like, you know, just go to home Depot's like and you study, like home meebles worried by most of my materials. And it's like and if you go in there and you study, when you see somebody walking out and all they have is just electrical materials that you know, this guy very likely is an electrician or at least.

Knows how to do electrical work. Same thing with a plumber and so forth. So it's kind of like and you sort of.

Build up your team, but it's really a trial to never unless you get some refrols, you're going to get brod.

You know, a lot of people ask me a lot of times, is like, have ever lost money in real estate?

And the answer is no, just because I've been able to buy properties and have a lot of equity and though, but that doesn't mean that its not lose money on the deal. So it's like if I go in, I get get a property I'm projecting and make let's say fifty thousand, and I get this one contractor and you know, he messes up and I end up losing ten thousand with time.

Still make forty thousand. You know, but I didn't really didn't like lose money.

But you know you still agree, yea, yeah, it's still agreeing no contractors is trigga with contractors is like it's like that's why I call them contractors, because you're not careful they will kind of So what I do now to minimize the chances of somebody ripping me off is basically I pay for all the materials, which is pretty cool too, because it's like you start getting your mouth. So I pay for the materials. I make what I call a draw schedule, which is the same kind of

Out all right. So okay, so whole verse flips because you hear these two kinds of trains of thoughts in reality, right, some people only want to flip. Some people only believe in buying and holding. Some people do both. You're more on buying holding side, right, Yeah, more buying holding.

It's it's it's a little more complicated because it's like when you buy and flip, it's pretty straight straightforward. You buy a house, you renovated, you fix it, and you suddenly make a profit when trying to hold it. You know it goes back to the open of appraisal. Whatever it doesn't you know, it doesn't come through, and the appraisal doesn't come in right, so you know you kind of got to like really, you know, maneuver your way

It's a thing about real estate too, is all numbers.

So you kind of have all the numbers in front of you.

Bas you already know how much money you're gonna collect the runt. You already know how much you're paying for the property over time.

Once you already know this, you already know what you're gonna spend the renovation, so you kind of already know what the mortgage is gonna be, what the rent is going to be.

What the profit is going to be.

And so when you see it's a really good profit, you keep it and you know you want to let it go.

You want to keep it. So how do you learn that, like to say, okay, all right, I understand that you want to buy a home for cheat and fix it up. But the average person they don't have any knowledge of like, okay, how much this is actually going to cost to renovate or how do I know it's a good deal, Like you know what I mean, Like, if you're just going in with no team, just by yourself, how do you It's very likely you're gonna be a first time on buyer.

So I'd recommend either go for a three family or four family and like your renovation, so it's like you know, paining the walls, you know, may throw some lemon the floor, and make sure you know how much rent is coming in on this property and then also see how much.

You're paying for it and know what your mortgage is going to be. So the difference that's going to be your cash flow.

As far as like what is the number, it's kind of like for me personally, like for for any property that I get, fifteen hundred is kind of like my number fifteen hundred and rent. The difference between the mortgage and the run. So let's say if the mortgage is two thousand, I need to be cut like in thirty five. Okay, So the way I do that is basically five hundred goals aside, and that's for your vacancy, is your repairs.

So things like it happened in the house and then the other dollars is kind of like your profit. Okay, that's the minimum that you want. That's yeah, hudle thumb for me for my area. That's kind of like, you know, if those are the numbers, then the it's a keeper then and I go through. I'll go through on the deal.

If those are not the numbers and I just kind of like pass up on the deal.

Do you have a minimum as far as the value of the home, like you want to get it for at least fifty thousand under its market value or something like that.

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Yes, going back to like the formula is basically the value of the property. Then I look for what can I catch this out for? Like, right now, I have the lender who gives me seventy five percent lot of value, so I already know value. Multiply that by the seventy five percent. Let's just say the numbers is two hundred, so kind of I use two hundred as my mark, right, and I'll say, okay, now I have the two hundred thousand my hair. Look at how much you know I'm

Can move on to the next one. Because if you do it correctly, if let's say you have.

Thousand dollars to buy a property, you go out, you buy a property, you renovate it, you rent it, and then you cash it out. If you guys need to get back your thirty thousand, and it's like let's say it's from it will take you six months to do that. So six months later, basically you got your thirty you know, you got your thirty thousand.

Dollars back, and do that again.

So like it's kind of like with that same money every six months you can buy a property or every three months depending how fast you move.

And you're taking your money after some people will clear you're taking your money out. Be it not home equity loans, right, you're taking your money out, no to hard money, like not just the hard money. So keyword is acid based lender. Acid based lender.

Yes, it's income based lenders will be like your Wells Fargo, your Bank of America, you know, your local bank. Third the income based you know, you go to them, they want to see the top credit score, they want to you know, they want to see that you have a really good income taxes.

You know, they're actually making good money. Yourself me, all of my money comes from real estate.

So when I go to a bank, and you know.

I still try it out once in a while because they got a really good interest right now, always getting that for the loans, because it's like all they see is like, oh, they just see all these expenses. Everything's come from real estate. So for them, it's like, oh my god, it's like such a high risk.

You know, we can't we can't rap with them.

But when you go to these asset based lender, they don't see any of that. All they're seeing is like, what is the house? Like, this is the house right now? What how much you think is worth?

It's worth this much? All right? This is how much?

Right now? There's how much some collecting the rent. So it's like all right, cool, yeah, you can give you the loan on that.

So outside of hard money lenders, who else is the asset based slender?

Asset based lender the one I used right now, they're called Visio.

They're like they're like companies, Yeah, the companies nation companies. No, no, this is no. They're nationwide legit bank companies. But they just work with investors. What's the one that you use?

Visual lengthing is the one that I'm currently using right now.

That's another thing too.

I mean, you got to keep these guys in rotation because it's like the other lender that I use before, they will give me seventy percent.

Now this one gets seventy five percent. That five percent that's a huge difference.

You know.

It's if you're talking about three hundred thousand do the house that's fifteen thousand.

Dollars, what's the interest rate usually from that compared to like a regular traditional.

Bin the traditional bank my choice with like five percent.

These guys are choice like a six and a half. Yeah, and then it's a five year arm so after.

Five years you have to either sell a house and have to refive.

And we kind of spoke off camera, but we said, harmoney, anybody could be a hard money lender, right to do it individually or you can team up with a bunch of people exactly. And I think one of the other things is that the timeframe, right, the timeframe when they want their money back is obviously a lot different, right, this is not a thirty year thing, right, they want their money back then, like, what are some of the time frames?

Well, hard money lenders they want their money back ideally like in one year. They might give an extension for another six months or another year. With these cash up has to base lenders. They'll give you loans for a fixed for five years like the thirty year mortgage, but basically is like an interest race for five years, seven years, or ten years.

But after you know, at one point they want you to either you know, refive them out sell the house, or you could go with the thirty year program. But the interest rates.

Gonna be like h you might look at like an eight and a half nine percent, So I'd rather just go with the short terms. I figured, you know, five years for me is like a long time, and I'm constantly evolving in real estate. So I figured, like, you know, get the lower interest rate just to increase the cash flow, and then in five years, I'll figure it out, you know what, the next So.

What do you usually do in five years? What do you do? What's your game plan?

But let's just say right now, I work with my portfolio right now, right now, I just started building brand new construction houses.

Those I'm not going to keep.

Had I done new construction a couple of years ago, I definitely would have kept them. But my mindset right now is to develop buildings. And I already have the land to start developing buildings, but I feel like that's like too far to reach for me right now.

Yeah, So what I'm gonna do.

I'm gonna up selling about from ten to fifteen new construction. Sell those, get that money, and then start building the buildings. So like in five years, I already have a couple of buildings. Once I start developing the buildings, Let's say, if I develop a thirty in the building, I'm gonna start unloading thirty unions of these like smaller properties, like I don't want to deal with like the headque of these smaller ones.

When I have thirty tens in one section.

If this sounds like monopoly, it is like I really watched your vision board and like the last board is like and when I get all these things, I'll have my monopoly. So you're starting with the little the little greenhouses until you can get the red building right and once you start doing that, three three.

Greenhouses in one red hotel, that's that's hotel hotel. If you understand me, now I'll sell all the topics stand monopoly, you can understand how to make money in this world. I'm gonna take this right now.

Like the way I play Monopoly as a kid, and even now, that's the same way I approach realistic. It's like my strategy when I play Monopoly is just you know, obviously you got to go around go to just collect that money. But whenever I land on a piece of property, I try to get that property. Like I focus in just getting like the property, and then you know, focus on getting like kind of like the like the houses. It's kind of like that sort of what I've been doing.

Gonna try to get it. You know, it's like nothing't let it pass out.

Now I own properties that are kind of like next to each other.

If you look at a building anywhere you go and you really size up the building, you realize.

It, like, you know what, it's not that big of a land.

It's just that a small piece of land. They just they just went, I'm pretty high up and they have all these units. So and then the city is where you're gonna find the buildings. You're not gonna find them in the suburbs. So now if you basically it's sort of just like monopoly to get you know, four properties, and on those four properties like the probabuilding.

All right, So that leads perfect segue into our next segment where we're gonna talk about your next level of what you're doing, which we was just briefly talking about. But we're gonna go into details for to the next level. All right, So we're playing we're playing monopoly with real money, like the what was that video? Presidents shouted the shout that Jay we had the reference day. Yeah, we kept as two players that we're gonna play with some real money,

So.

But so that's like you got always think three steps ahead. So you already you're already playing three steps ahead. Right, So you did the you're doing the real estate thing with the mixed unit well multi level homes and things that nature, most of them homes, but the next play is a bigger play, right, Yeah, so we want to about that in this segment. So you told me over the phone when we spoke, and I saw it the seminar, and now you're just buying plots of land, right and yeah,

So a couple of months back, like I was with with Caesar and so we went out of political function and we're just you know, chopping it up. And he showed me email. He's like, oh, look like he's lots to day for sale, like you're interested.

And I looked at him. I saw the addresses. I was like, man, I'm just garbage, like because people for two.

Seconds, because when I say lots, right, a lot of people will think, oh, you're buying a parking lot.

No, so that that goes over like they're like, he's finding their lives.

Basically, that's where your properties, like the house is located exactly.

Okay, thank you.

So he looks at him, so he's like, yeah, I feel the same thing.

But as I'm looking through, I saw there was one address that popped up and it was two lots and then went next to two properties that already own that are right next to each other. So I was like, oh, minute, I was been looking for that one. I was like oh, I was like, so, I was like, yoh, let me get that list. He send it over to me and then reached out to the Relton. But I just wanted those two. I wasn't interested interested in the other ones.

Yeah. So, but the guy was like, now the seller, he's only.

Willing to basically sell the whole everything together, Like he's not gonna just make a pick which once you want, So I still push for I was like, you know what, then I'm about it. You know, I try to squeeze in half of them and like put some them off for like half.

He's like, nah, he wants, he wants. You know, you gotta buy everything.

So I low balled them on everything, and just with the idea, I said, you know what, I'm going to buy everything. And as soon as I buy it, did the numbers that if he gives it to me at this price, I could just throw it back on the market, just make a few a few dollars on it, so get into the process.

I ended up going on the contract. As I'm going on the contract, I'm started doing more research.

I started researching brand new constructions, and I noticed that they were selling for like three fifty three thirty three sixty And I realized that they are new constructions. But these new constructions were built in two thousand and three. Now these will be built in twenty eighteen, So it's like waiting. That means that these have to be worth a lot more than so at least three seventy five. So so so I figured, I, so the key's like

On average? I was like paying like twenty five twenty five thousand. How many left did you buy? Twenty two? Well, twenty five thousand a piece, twenty five thousand a piece here, and there was like another like a two family under that. They just kind of like the win. How do you do? How do you how do you buy lots? You buy any cash? So you can you get like a moan for that. Yeah, that was like a message.

But I'm colling up like the hard money numbers that I use, and they're like, we don't know what I'm vacant lost.

I was like, wait on okay, I just put up. I just put up like twenty thousand dollars non refundable with you. You can't know me on this, Like now you know what you gotta put up like fifty percent. I was like, shit, I can't. I was like, no, that's too much, is it.

Then I started making pocals and I start explaining to them, you know how to come the stage.

Do you know how much business we've done.

You've got some great context if I close myationship, really good relationships.

Man.

So I'm a quiet guy, like you know another like a big speaker, but you know when it comes to like you know, business and stuff, and then get on that phone, it's like, you know, I started, like I start.

Transforming man, like like Michael Jackson gets on stage. You know, quiet do off stage, but on stage has the performance showtimes so.

Long time shot.

I convinced them to loan me and uh and they were willing to do. You know, the lender was waiting to do twenty percent. One thing about these lots that I picked up though, is that because they're located in urban areas, they're located in redevelopment zones, which meant that the city has these kind of sort of like set idea of what you can build on these lots, and if you meet the square footage and what they want, then you don't need to go in front of the zoning board.

You can just basically submit pay Like just.

Submit plans to the building department is just like taking out a permit on a whole new construction.

So that allowed me to let these out.

So as soon as I close, I was able to get with the architect and sim it all the paper we can. I already have permits on five, which means I already have the financing in place to build these five.

What's the permits you talk about that when when we first spoke, you had to have the permits? Like it's a process, right when you buy a land, Like it's different than just buying.

A home, right, so yeah, yeah, when you yeah, but when you buy a land, is it's more complicated because it's like banks don't really want to loan online.

Because what do you have just have dirt. Basically, you know, it's like no, no, no property, there's no cash flow, nothing on it. It's just basically baking lots.

And in most places when you buy a lot, you have to go in front of the zone board, which can take a year before you can start building up these.

You know, fortunately I was able to kind of like build right away.

So now going back to like the numbers basically, like so three seventy five and twenty five for the lot, that puts me like a three fifty. So now the difference between now, let's say a few years back is like the market where is that now where it was a few years back. If we go back like three years you built on a new construction home, you were lucky to get two fifty maybe two seventy five for it.

So can we go back a little bit because you said season had a.

List, right and it was twenty two you're twenty two lots. Where does someone even see that list? Like, is that at an auction of where we're getting that? We have to go a kind of clerk or something.

No, No, that's just relationships.

It's basically when you're known, you know, for making deals, deals will pop up on your email, like you know, I get phone calls all the time like hey, listen, I got this deal, and it's like, you know, it's a good deal of John vardem it's not a good deal.

Now I'll let it go. A lot of times you've been telling me like, hello, you ever let go one those deals? Is this?

It's like you don't want it because it's like if this is the reason if I let it go is because it's not a good deal.

If it's a good deal, I'm going to somehow someway I'm gonna make appen.

So all right, So okay, So now you're building homes, right, So when you you're building homes from scratch? Right? What kind of homes are you building? How do you build a home? Who do you have? Contract? Like? How does danet happen? So? All right? So I mean, first of all, you know, the idea of building something from the ground up. Was was scared. I was like, I've never done it. It's like, how am I going to do this?

But you know, going back to the whole renovation schedule, when you map it out and you like kind of break everything up into pieces. It's like when you do a complete renovation, the first thing that I basically look for, you know, you need to cut the property.

Once you cut the property, then you go to the framing.

You know, it's like a system, and from framing you go to you want to do the plumbing, Then you do the electric, you know, then it comes the installation, it comes to driveaball.

So it's like a process of step you just kind of map it out step by step.

So, now if you put complete renovation on one side, you put new construction on the other side, what's the difference between the two. The only difference is that on a on a car, on a new construction, you need foundation and you need framing. Once you have foundation and framing, pretty much what you have is like the skeleton of a house. When you buy a house and you do a gun renovation, that's all you left with the skeleton of the house. So now if so I kind of

Do a foundation?

And I just you know, I figured, you know what made you know, made some phone calls just you know, contractors giving me prices and like most people.

Say, like forty thousand for cement.

Up forty thousand you're just theed just the foundation out so it's like a forty thousand, And made some other phone because how much is you know for the frame this thing? It came up to price like forty thousand, like eighty so now eighty plus the twenty five that's one of five. I was like, I'm paying that right now to renovate it for like a complete renovation. And

Of course, like how much more costs to build up everything else? Yeah, you know right now. I mean it's gonna be my first rodeo. So it's kind of like it's just a budget that I have in my head. And my budget right now is like one seventy five and you sell that home for much three seventy five to make two hundred thousand.

But then you know, minus the twenty five of the line and minus the closing comes out right there.

So let's say like one fifty, like ten of them is like one point five.

So what's are you selling these homes or are you sun like I said, like only signing them because it's like now, my vision is to develop buildings, so I already have the last for the buildings.

I just don't have the knowledge of building the building and I don't.

Have the liquid funds to get into a project like that because it's like I have this big portfolio and net worth is looking pretty nice.

Yeah, but you know, the cash flow is looking pretty tight because it's kind of like.

You know, the way I see it, once my all my personal bills are taken care of, is like if I have five thousand dollars in cash low in the month, the way I see it is like money has to work for me. I don't work for money, So it's kind of that money is just sitting in the back.

Hold up on the house until I'm ready to start, you know, working on it. You said money works for me. I don't work for money.

I was actually going because you told myself in all camera he was like net worth or what was the soul?

You said, uh no, yeah, because it's kind of like y'all separate things you got here, you know, your asset minus be your liabilities, which you know, listen, we heard that.

You say net worth networth rich, but cash Oh yeah, networth, yeah, I'm networth rich for cash flow poor.

Yeah yeah, I'm cool with that for now because it's like I'm trying to build up. I'm trying to, you know, just climb up to a certain level.

All right, So your net worth could be thirty million, right, but your cash flow could be three thousand, and that's okay, right, exactly like I.

Wish I had. But it's basically like yeah, like you know, it's two different things.

Like it's just us raptists for example, Like you know, people who get these large amounts of money, they're cash rich, right, like.

They have a lot of cash on hand.

But the ifro I have like no net worth, you probably see people with like the nice cars with jewelry and everything, and they riding around within that worth. Yeah, so then you can see someone like me, I'm driving to yoa TSA coma. It's like I'm not studying, but it's like the network is looking.

Nice, network is looking more than nice. What's the time frame on building from the ground up?

That's then you know, it's just like you don't know when you're not familiar with something. In my mind, I wouldy sat out was like a year is gonna say to build up a house. Before I started doing the house, I was like six months I'm gonna build, you know it's going to be the time frame. Now the time frame is looking like three months. So I think like three months I could knock out house. Wow, And I could probably build them like two, probably like two to

One already is gonna have to frame me.

The other one's gonna have the foundation, and I'm gonna be working on the footing much one.

And it's like and they're gonna be lined up.

Like that, and you just using the same team. He's time or you're like, you know what, I'm gonna capitalize by using different teams that I trust to work on these properties.

It's like I have my core guys that I trust and like, I know they can handle things, and then it's their responsibility to build up on them. So it's kind of like like my project manager, his job is to kind of like I tell him this is what I want to do, and then he goes out. He finds the extra help, even if it means, you know, reaching out to a contractor to kind of help him out. You know, it's crazy, like if I reach out to a contract that, let's just say, they might tell me fifteen thousand.

I tell him to reach out, he ends up getting it for time, you know.

Because it's like the relationships and Mason, the concept of like, hey, listen, you gotta give in your prices. I need to make money off of this. But then you know, obviously I know what's going on, and the saving is getting passed down on me.

Yeah. Wow, ladies and gentlemen. Once again, free education, right, that's a good thing about the show. Instead, it's all free and all of our guests are willing to provide information because you didn't have to, you know, tell people what you're doing, like you could just be selfish. Yeah, Like, I mean, I'll say this much is like going on.

When she's did the first seminar and he tells me you'll want to do a seminar, I was like, oh, that's cool, Like I remember we spoke about doing like little seminars, but they in churches.

It's gonna get back to the community. Like and I see every time I see like, you know, a pastor. I've talked to the laylists. You know, I'll do real estate.

You want me to go and speak to your congregation that it's like, let me know, I'll come through and i'll speak.

You know, nobody's everybody, you know what I mean.

But it's kind of like maybe now you know, it'sart getting phone calls and stuff, but you know, but so I thought that's what's gonna be. Were like, Nah, we're gonna do like these seminars, you know, for like I was like, you know, why, why do this? But then when I went to the first seminary, I was supposed mind you, I was supposed to speak at the first seven or right, and it's.

Like when I get there, I was like, oh no, I can't speak. Man.

It's like I'm not a public speakcause I was like, nah, But looking at the crowd when I seen the crowd, seem like everybody's like from the you know, the first one was the past and I've seen a lot of people that I know and and it just kind of hit me and I'm like, you know what, man, that was me ten fifteen years ago, and I knew nothing and I needed it, like somebody to kind of just not help me out, like giving me a hand, but just kind of like guiding me like some of this.

Is you know, this is the direction, and it's kind of like and we came from nothing.

So it's like I feel like when they see us, you know, they're not see these guys in these fantacyes too, they seeing themselves. So they're saying like, you know what if you know, if like if they did it, they put it they way to put into work, and you know, look what they're right now.

I mean I can do it.

So I feel like I felt I felt bad like that I didn't speak. I felt bad like, yeah, you know what, I let my fear, you know, stop me from going up there. Like and these people it's kind of like they need like that motivation, you know what I'm saying.

They need that information.

So that motivated me to kind of like you know, you know, to push through and then I should speak on stage. And I feel like it is like a responsibility for you know, for people like us that we are you know, at a at a certain you know, certain level where we have like this knowledge of this information,

You still want to regardless. Regardless. I mean, I'll tell you this right now.

I mean I actually like start today and just with these lasts that I have, with these uh these plans that have with the buildings, I'm gonna stay busy for the next five years, and all my crew, everybody that works with me, they're gonna stay busy for the next five years.

So we're all gonna eat.

So it's kind of like, you know, why why I try to keep that information. It's kind of like, you know, I don't need to bring you down so I.

Could elevate, you know what I mean.

It's like I could elevate myself and it bring you up, and it's like and I'll still be up to everybody needs. Yeah, everybody needs everybody, especially coming from in the city. Man, it's like, we don't have the resources. So it's like, you know when you feel in the city the resources that we do have is like it's what everybody knows.

Is like, you know, you have the resources, like you got the hustlers.

Maybe you know what I mean, you know somebody else like a local data or something like that, but that's not real money, you know what I mean.

It's like, you know, you might know somebody alws.

Like one property, but you really don't know those guys, you know, those corporations that own these multiple big properties. So it's like if we're in that situation, but that's where we're at, then it's like and then the thing is like, you know, we.

Didn't start with money, so not like we just started you know it was lost to money. Thing like that.

We started from the ground up. So we started from the ground up. You can start from the ground up. And I feel like anybody could like get into real estate owned a couple of properties, and I feel like everyone should try to own a couple of properties.

Yeah that's a fact. So once again, man, thank you for coming. Can you tell the people how to contact you your social media handles and all that. Yeah, yeah, like social media.

You know you find me on social media, go buy Lord of the Slums.

It's Lord underscore of underscore the Slums bitally underscore between each work. But you know, I'm not a slum lawyer. I just I thought this was a funny name. You know, I'm not here trying to sell anything. So it's like, you know, I feel like it where it doesn't matter. I feel like my my you know, when it comes to lenders is like my my portfolio, my credit score, like my my my background that speaks for yourself. So like being like trying to do a little plown with

Yeah, and you still on tour too, right with n being Yeah, definitely have one of the guest speakers with with the DJ and V and Flipping and Jake Seminars.

Definitely suggest you know, anybody whenever we have one. If it's if you can make it, definitely make it out. I mean we speak, I'm talking about five hours. It's really NonStop, like you know, we don't like there's.

No breaks in between.

We went me and try went to the one in Jersey last week, like your story, I was like, wow, like this guy looks like us, Like there's no like said, everybody really everybody up, because everybody has been a guest on our show except the season n MV.

So y'are next, But yeah, mad, you know that's our guys being all. You know, everybody's just good people and like you said, everybody's just relatable.

Yeah, and the earth and everybody could like relay and and you know what, it doesn't have to be necessarily real estate investor. I mean there's like like Sabine, you know, she's she's an attorney and she's a female ye so female minority attorney.

That right there.

You know, that's something that somebody goes over there and who knows who she's basically inspiring to be that because that's not like a common thing.

Sabine, man, she's a bout a business. She's very knowledgeable.

So everyone that, you know, everyone that goes on stage from like you know, the credit guy is like everyone that goes up, they have their own little stories and they have everybody. We all have like similar backgrounds where we kind of like come from the city, come from nothing, and you know, we're trying to like make it up, and then we all want to kind of like help help out and get back for sure.

Man the game man, We thank you, We thank you. Before we wrap it up, Troy, can you can you give them people some information? Yeah, So our Patreon is moving well.

And a lot of people, you know, I'm realizing that they don't have any idea with patreon it. So Patreon is a way creatives to put out extra content and come up with some ideas that can help. So what we've been doing is putting out bonus content, putting out the earlier the episodes.

A little bit earlier.

Our new features are going to be dropping before the summer, My Hometown Hero series. We got a new campaign that's coming on with that, and we had a great conversation the other day with one of our patrons, and it came to our mind that, you know what, why are we giving them bonus content? So starting this week, we're actually gonna start putting out unedited episodes. You're gonna see everything behind the scenes in betweens because we have some

We have five tiers. Feel free to join any tier and it will tell you what you get at that tier. And our season two is out, so be on the lookout for that.

Our merch of our merch, so shout shout out to Mic and the team for uh, you know, working deals to put that out. We got our kid sizes now we have some phone cases and some months, so yeah, feel free to support that because everything helps, right, We're not able to do what we do without ya'all, so we appreciate that.

Uh yeah, definitely. In YouTube, make sure you subscribe to our YouTube also because we're gonna put bonus content on YouTube as well, and we're gonna have a lot of different stuff that is not on the audio side of the podcast. Make sure you still subscribe to iTunes too, because we need to get the number one spot on iTunes. Yeah, but also the YouTube. We're gonna have a lot of different things that we have opportunity eson segment with Matt

So man, this is like what you guys got out here, and it's pretty dope, man, because it's like, you know, it's it's it's not just one one direction, like you know, you guys have a little bit of everything. So it's like anyone that needs to get inspired in different fields kind of providing something financials and different fields exactly.

That's what it's all about, man, trying to give it people as much information as possible and then from there they can kind of pick and choose. Which is that a lot what.

Drives that makes it because it's like literally everyone has earned their legion, right, So like even on your board in two thousand and forty twenty eleven, there was zero right they didn't see that that that part that you had to struggle and you had to figure out a way, but you never give up, right, So everything you have now like.

You've earned you literally earned the freedom.

Yeah, definitely, And then you know that was also a big part of that was also feared.

M M.

It's like you know, you us because it's like you scared to fail, and it's like what's gonna happen if I fail.

So it's like, you know, there's like a lot of hold back too. So I also think that too.

When my daughter was born twenty thirteen, that kind of like pushed me to because.

The following year, that's when I was able to do multiple deals at the same time. I put in my head like yo, I got them, like yeah, somebody doing.

Like you know what I'm saying. I was still in the hood.

I was like, I can't know, I grew up in the hood, and I was like dreams of like kind of like moving out and like, you know, like.

Living in American dream basically. So it's kind of like I.

Wanted to push it, you know, and then make sure that, you know, financially that we were all good, you know, and.

You know, she helped me out. So yeah, you change, you are changing the narrative of what the American dream is. Yeah, definitely. Now you're already America and dream dream and so yeah, before we leave, I have a book tip that I always say. My book tip this week is Nelson and Della's biography. It's called A Long Walks of Freedom, and it's a really good book. It outlies his story, you know, as far as doing I think thirty years in jail, thirty years in jail and coming out and it's dope.

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