Study Hall: Real Estate Hard Money Loans & Asset Based Lending Explained

You're taking your money out. Be it not home equity loans, right, you're taking money out.

No, it's the hard money, like not just the hard money.

So key words ASCID based slender, acid based lender.

Yes, it's income based.

Lenders will be like Wells Fargo, your Bank of America, you know, your local bank. They're the income based. You know, you go to them, they want to see the pill 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

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

But when you go to these ASCID 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 run?

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 acid based slender the one I used right now out they're called Visio.

So they're like they're like companies. Yeah, the companies the nation wide nation wide 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 used 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 dollar the house, that's fifteen thousand dollars.

What's the interest rate usually from that compared to like a regular traditional thing, the traditional bank. My choice was like five percent. These guys are choices like sixtion and a half.

Yeah, and then it is a five year arm sor after five years you have to either sell our house and have to refive.

And we kind of spoke off camera, but we said harm money. Anybody could be a hard money lender, right. They 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. This is not a thirty year thing, right, They want their money back in like what are some of the timeframes.

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.

Asset base lenders, they'll give you loans for a fixed for five years. It's like the thirty year mortgage, but basically is like an interest rate for five years, seven years to 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 rate's.

Gonna get higher. 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's 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 it 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 you construction a couple of years, 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 sunning 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 units of these like small properties, like I don't want to deal with like the headqu of these smaller ones when I can 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 greenhouses until you can get the red building, right and once you start doing.

That, three three greenhouses in one red hotel, that's hotel hotel. If you understand me, now I'll see 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 real estate. It's like my strategy when I play Monopoly is just you know, obviously you got to go around go to just collect money. But whenever I land on a piece of property, I try to get that property. Like I focus is 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.

You know, it's like nothn'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, 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, you know, pretty high up and they have all these hunits. So 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, if you get you know, four properties, and on those four properties like you proba building.

All right, So that least perfect segue into our next segment where we're going to talk about your next level of what you're doing, which you would just briefly talk about, but we're going to go into details for to the next level.

All right. So you're playing, you're playing Monopoly with real money, like the what's that video shot shot at James? We kept easy to play earners.

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An illegal alien from Guatemala charged with raping a child in Massachusetts. An MS thirteen gang member from Al Salvador accused of murdering a Texas man of Venezuelan charged with filming and selling child pornography in Michigan. These are just some of the heinous migrant criminals caught because of President Donald J. Trump's leadership. I'm Christy Noman, the United States

Sponsored by the United States Department of Homeland Security.

Two players that was gonna play with some real money, easy Dame Big. We was kind of raised off for music. That's what we related to the music a lot.

But if anybody from that era, you remember they were playing Monopoli with real money.

But Finando's actually really.

Playing like it's not a rat, it's bigger than rat.

So all right, So now you talked about the blueprint as.

Far as to buy the homes and then to get the money out of the homes and then buy another home and kind of keep that's like bone what you're saying that. See, all successful people have a plan, right, nobody just start. We had another guest on episode eleven,

Even though he doesn't even have kids yet, I don't think so.

But so that's like you gotta 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 femly homes. But the next play is a bigger play, right, so we want to talk about that in this segment. So you told me over the phone when we spoke, and I saw at the seminar that now you're just buying plots of land right here.

Now you're a real estate developer. Can you talk about that?

Yeah, So a couple of months back, like I was with with with Caesar, and so we went at a political function and we're just you know, chopping, and he shows me, you know, he's like, look like if he's last day for sale, like you're interested? And I looked at him, I saw the addresses. I was like, man, I'm just garbage. He's like you posted two seconds.

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

No, so I think that that goes over like they know he's buying your lives.

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

Okay, So he looks at them soil He's like, yeah, fore the same thing. But as I'm looking.

Through, I saw there was one address that popped up and it was two lots and it went next to two properties that already owned that are right next to each other. So I was like, oh, wait a minute. I was been looking for that one. I was like this, 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 roltor. But I just one of those two. I wasn't interested interested in the other ones.

Yeah.

So but the guy was like, nah, the seller he's only willing to basically sell the whole everything together, Like he's not gonna just make a picklech 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. I like put some them.

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

So I lowbolled them on everything, and just with the idea, I said, you know what, I'm gonna buy everything. And as soon as I buy the numbers that it gives it to me at this price, I could just throw it back up the market, just make 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 I was like waiting, that means that these have to be worth a lot more than so at least three seventy five.

So I figured I so the key like no Number one, you got to know where you can you sell something for. So like I had three seventy five, So now how much am I paying for these lasts? On average?

I was like paying like twenty five twenty five thousand, how many left to jubay twenty two, twenty five thousand a piece?

Twenty five thousand piece here? And there was like another like a two family endre that they just kind of like the will. So how do you? How do you?

How do you?

How do you? How do you buy lives? You buy in cash? Can you get like a moan for that? Yeah? That was like a message.

But I'm calling up like the hard money numbers that I use, and they're like, we don't know what I'm making. Last I was like, wait, okay, I just put up. I just put up like twenty thousand dollars now refundable. Sure you can't on me on this, Like now you know what you gotta put up like fifty percent.

It's like I can't. I was like, no, that's too much.

And I started making phone becaus and I started explaining to them, you know, I have the conversation.

I know how much business we've done. You know we got you got some great content. If I close my mind, what's all about relationship? You know some really good relationships. Man.

I'm a quiet guy, Like you know, I'm not like a bit 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.

I'm like like Michael Jackson gets on stage. You know, quiet do off stage, but on stage has the performance showtimes so so long time shot. I convinced them to loan me and uh and they were willing to do. You know, the London was waiting to do twenty percent.

An illegal alien from Guatemala charged with raping a child in Massachusetts. An MS thirteen gang member from Al Salvador accused of murdering a Texas. Man of Venezuelan charged with filming and selling child pornography in Michigan. These are just some of the heinous migrant criminals caught because of President Donald J. Trump's leadership. I'm Christy Noman, the United States

Sponsored by the United States Department of Homeland Security,