How to Fund Your Deals with Private Money Lenders

Bigger Pockets great part of their community and yeah ultimately justa ton of experience in fixing and flipping having a really just I mean very Advanced company when it comes togoing direct to seller fixing and flipping pulling rentals a little bit of everything from I guess Denver toOmaha to now Indiana is that right oh yeah Indiana and Ohio in Ohio wow whatelse where they missed what I Miss Hanson I think that was it I think you got it allum no I’m also a licensed agent uh I’ve been licensed for almost as long as I’ve been investing and so I talked to a lotof of investors and agents who tow both of those lines so that’s another kind ofthing that I like to learn more about how other people are running their businesses when they’re you know boththings so I’m you know licensed in Denver so that covers me here in Colorado but I’m not licensed in thethose other states and so that that creates uh different paradigms in bothyou know in all those different markets so but yeah um I think you hit hit the basics for sure so yeahthis is a great guy to talk about this and uh I know we’re always kind of talking to different passive investors about their options so I just wanted togive them a different perspective so we’ll kick it off with that like what do you answering why would you say being a1st Category: Private Money Lendersprivate money lender is is so attractive with the type of people you work with yeah I mean um the the type of peoplethat I work with they’re they are really interested in real estate they love it but they don’t wantto do the Hands-On Dirty Work so whether it’s somebody who is kind ofa real estate nerd and they you know they follow a lot of different Fix and Flip shows or they they catch whatyou’re doing online uh you know see some of your Instagram stuff or your your videos and they go I want to dosomething like that but I also have a family and a full-time job and so can Iyou know put in 25 or 50 000 or 100 000 into the projects that you’re doingand kind of live vicariously through that while earning a return and um sothat’s that’s kind of our first category of private money lender and then the second category is2nd Category: Private Money Lendersum older people who have either sold a company or they’re kind of past their active career they want some passiveincome and they know that you know usually private money rates are a littlebit higher than conventional rates unless you have a rich uncle or something that’s going to give you just like two percent loans or something likethat I don’t have any Rich uncles um so we’re usually borrowing you know alittle bit above Prime and so for those investors they they have some cash sitting around or they’re lending out oftheir IRAs and they’re saying like hey this uh eight nine ten percent is uh is whatwe’re really looking for and so they they enjoy those higher returns they’re actually secured by the promissory noteand the deed of trust so their money is secure and as long as they trust you as the investor you know they know thatlending to you over and over is gonna net them that 10 APR uh type scenarioand so um those are the those are the the two you know people who come to usand are basically like hey here’s the money do some projects so double sense good let’s just dive inthere too Anson when you talk about the security of it right because that’s a question we get often and I think a lotof people probably just don’t understand right they don’t understand actually yeah I’m investing in you but really asopposed to like investing in like a small business or maybe a venture capitalist or some other type ofinvestment like it’s much more secure but go into that how you guys secure it yeah absolutely and there’s there’s like100 ways to Skid this cat I know investors who have you know pull lines of credit from their investors and theydon’t secure it with a deed of trust um I like I like offering the security of like ofjust saying hey your money is is actually backed by a recorded mortgageand so there are you know legal ramifications if I get hit by a bus you’re actually still secure in thatSecurity of Your Moneyfirst position loan on the property um if I run off to Mexico uh and youknow stop paying my the mortgage you’re still secure and so uh so kind of nomatter what happens it’s probably the highest level of security uh for an investment type because it is tied tothat property recorded at County recorded of a title so that um you know again if I do get hit by abus you actually have legal ways to you know take over the property and get your money back or have the property soldthrough my estate or something like that and get your money back and so uh having a d to trust and a promissory note justprotects you as the investor and it protects me as the borrower all those documents are very standard we just uselike the state the realtor forms basically and um and you’ll file those at County and it spells out exactly howmuch is owed and who pays what and uh you know the term and the you know thethe interest rate and all of that stuff is all spelled out so there’s never any questions of who’s doing what and whenso it it’s all right there and it’s recorded which is nice so that you know it’s a legal instrument that’s basicallyrecorded against the property I don’t know how much more secure you can get than that what I was going to ask too a follow-upto that is because I’m assuming you don’t you’re not typically going up to 100 of like the value of the house rightdo you have a threshold of like because you mentioned hey handing the property back to somebody but some people mightDealing with Risky Deals and Investorssay well shoot I don’t want to manage this or I don’t want to or I don’t want to manage this half done property how doyou kind of mitigate that with people um yeah so each lender kind of has theirown uh appetite for risk and so some will only lend up to a certainpercentage of the after repair value so what that property is going to be worth and should appraise for after it’s allfixed up you know that varies by investor um some of our guys will go as high as like 80 to 85 percent of that arv theafter repair value so I have to make sure that of course I’m getting a deal that I’m you know well below that sothat when I’m you know borrowing my money I can borrow up to that 85 of theAP or arv and so a lot of times what that does mean is that since we are finding good deals that we are zeromoney out of pocket for these for these properties and so we can borrow 100 ofthe purchase and the fix and come out of closing with our you know with our first draw payment uh forstarting construction and our earnest money back so we’re literally zero dollars into the deal the equity is whatkind of cushions that investor for helping out with risk yeahgiving that if and then the plus side is for you as usas the operator or the general partner whoever it might be now we don’t have to go or we don’t have to potentially putcash into the deal but basically share a piece of the pie right because because if we if we had all the if we did havethe rich Uncle at two percent or we just had this we wouldn’t be working with a private money lender but it’s kind of awin-win where they ultimately get to participate in the deal right and make a return exactly yeah exactly andtypically it sounds like too you mentioned that typically it’s a little bit over Prime right so it’s going to be better than the bankbecause I’ll typically tell people yeah if when it comes to draws and it because we can do a lot of this through a bankright but the benefit of doing it through a private money lender is it’s a much simpler process a little bit moreflexibility there’s trust between both sides to where it just makes it a little easier for for everybody right exactlyyeah on that note do you have any good hacks for like the paperwork side of it or you kind of talked about all theforms that you fill out but uh have you gotten because especially you mentioned you do a lot of kind of like putting oneinvestor or maybe multiple on a specific property but you’re you’re recycling every several months if you found anyefficiencies in the paperwork and making that easier I mean at the end of the day the umyou know the deed of trust and the promissory note they’re pretty standard instruments uh there’s pretty standard forms and so the most we really have tochange is just dates and property address and then obviously the the Lend amount and so we’re we’re at mostchanging you know three or four fields on a PDF and soI don’t know how you know how to streamline that much more than that it takes probably you know five minutes togo and do that look it over send it out for signatures all that kind of stuff and so um so you know being able to dothat makes it easy if it’s your first time filling it out I can totally understand if it’s gonna be you knowkind of a headache to uh to go through the entire thing you have a promissory note or a deed of trust a title companyshould also be able to help you out with that but again we’re like we’re changing the address the date and then the loanamount and if it’s the same borrower or excuse me the same lender then um you know we’re changing like threefields and then sending it back out and so uh paperwork’s not too crazyuh of course you know your lender is going to want to see that they have lender uh TitleInsurance um on the property so there’s going to be like a couple of follow-up things that they’re going to want to make sureAdvantages of Private Money Lendingis all you know good to go and secure they might even want to see your uh your homeowner policy to make sure that thereis lender insured on there as well but other than that it’s you know again we we go to private lending because alot of times it’s super easy I can send out a couple texts I can get on okay I can change a couple fields on our formsend it out get it signed record it with title and um you know we’re pretty muchOff to the Races with funding so yeah for a lot of reasons right as it’seasy for you and it allows you to be nimble and move quick yeah exactly goodum cool well I was curious to what you’ve done to like kind of cultivate relationships because obviously when people first start out they probably uhmaybe not everybody’s comfortable right being a a private money lender whether that’s maybe lack of knowledge in realestate or just maybe they haven’t worked with you before so I’m curious how you kind of cultivate and kind of get people started and because I’m sure once you’vedone two or three Deals people have made a good return then it’s that it’s much easier but what’s that look like to getto that point yeah I mean private money is a relationship it’s a relational lendingand so you have to have you know some kind of relationship and some kind of trust going into it uh and so you knowbuilding that out is um it depends on the investor but you know some are going to want to see kind of a uh you know aportfolio of you know all the numbers and and you know what are the last like five or ten deals that you’ve done withall the before and after pictures um you know we’ve talked to lenders once or twice they’ve seen you knowum one or two properties that we’ve done and then they’re just ready to go they’re just like yeah we don’t need to see the next one you know as long as thenumbers make sense and they’ll they’ll vet the numbers in internally and then you know give us a yes or no but so itreally just depends on the person because it is such a people and relationship business there are some that are just they really need thatHands-On they want to come out and they want to inspect for the draws they want to do all of that and then there’s theguys who are so hands off that they’re just like you know here’s the full rehab amount up front at closing you know seeyou in three or four months like and so so it really depends but as a new person who’s getting into thisum you know a track record definitely helps unless it is like a family member or somebody who just like truly believes inyour vision and what you’re doing um but I I would say like full transparency on what you’re doing toWorking with Lenders and Managing Situationsthat lender uh for for numbers evaluation where you’re getting yourrehab numbers your your after repair value um so that they can feel morecomfortable that you know that you’ve done your research that you know what you’re doing and that they’re morecomfortable with lending with you and um you know it’s the same with you know with you and you and I with a new lenderyou know we’re going to go above and beyond to make sure that they have all the numbers that they need all theinformation that they need so that when it comes time to pull the trigger they are you know all the questions have beenanswered uh they feel good and they feel that they can trust what we’re doing and that their money is safe at the end ofthe day okay another one and this is one of my put you on Spotify is there a common objection or just onethat you see a lot from private money lenders that like just one thing that you notice a lot of people ask they justthey aren’t quite ready to go for whatever reason or they’re not quite ready to jump any common ones you’ve seenum I mean that that’s a good one I’ve been lucky enough to deal with kind of Veteran uh lenders who um I haven’t hadto like hold their hand to get them across the Finish Line um I probably wonuh uh one guy I can remember had you know he was probably our most difficultguy to work with he’s a great guy but he just had you know millions of questions of course butum you know he he just he was really wanting to know how we’re going to keep you know the the project on scheduleum contractors and making sure that you know we had backups to contractors so that you know if the drywall guy didn’tshow up we at least had another guy in the pocket because he just really wanted to stick to like that 120 day timelineand um and so like they’re they’re going through this the first time with you andso they don’t know how you project manage or or if you’re contractors or are you know reliable or if you’realways over budget or always over on time and so some of that’s just you knowgoing through the first deal to kind of work out the Kinks with that with that personum I always offer to you know open the books and tell them like look hey if youwant to come out and inspect every uh you know every draw you know we we cango through the timeline and you know I can show you exactly what’s coming next and loop you in every single week youknow just making sure that you’re are catering to them so that they know that their money’s safe and they feelcomfortable through the whole process but I haven’t had to like get a total you know newbie from zero to the closingtable on the lending side and at least they’ve lent a couple different waysum before they get to me and then uh so I haven’t I haven’t had that like youknow virgin lender thing so yeah I like it it makes a lot of sense got it so you were talking earlier youmentioned a lot of your property money lenders like being uh like doing like the shorter term projects and you justExploring Different Types of Lendersmentioned the ones that like hey after 120 days you wanted to be in and out so is that I’m just curious love to hearmore expanding on um maybe what those why you have more people like that and is thatum is that yeah I’m just curious the driver on that versus I’m sure there’s other people out there that’ll like put lock my money in for four years I don’twant to do the paperwork CV in four years yep yeah and I have um I have someinvestor friends that have you know their lending is more like that where they’ll just get the money for a wholeyear they just owe that APR at the end of the year however you used it ordidn’t use it you still owe that money that hasn’t been my experience with with my lenders they really like to be tiedto an individual project and they uh I’m not the only person lending that they’re lending to and so they like to have someflexibility where two or three times a year they can turn that money over to to different investors as they need itsometimes they’re doing their own projects and so that that’s kind of where that three to four month cyclecomes in up to six months cycle where they go they just like that flexibility if they want to in six months take alltheir money and move to Mexico they’re not tied with me for like four years like you said and so they they reallylove the security of First Position loans and they like the the opportunityto get out within six months or so now of course the loan is structured to where it’s uh you know we have an optionwe have like six month loan but an option to go a year with really nopenalties after that I don’t know it I’d have to look at the the uh the the thepromissory note really close but I think that it is like a one-year Max um but if whether we’re doing Burrs andwe’re refinancing back out or we’re doing flips you know we’re typically getting their money back in uh 90 to 120days somewhere around there so yeah that makes a ton of sense I’m sure every time we do that get more and more confidencewhen you write and you can recycle it there’s obviously benefits to you as the investor or the operator to where youyou’re only paying on money you have out so right yes yeah no that that part’s really good forfor cash flow is to make sure that you’re only like paying money that you haven’t used which is goodjust yeah really interesting how you more people who like um yeah is it is it any certain IDiverse Project Opportunitiesguess the other opponent you made was the fact that they bounced back and forth right so they’re doing other projects because I think a lot ofprivate money investors might be weary of putting in money for like you say for a full year or month or maybe they’regoing into a syndication where they might be holding for five and ten years but they get the flexibility of of doingthis so it sounds like that’s kind of been your go-to and it is that I don’t know is that a better conversation youhave with a lot of private money lenders to where they’re just like hey we want to be flexible we want to I want to get into this but I’m not ready to commitfor four years right yeah it just seems to be um the ammo of of that type of investorand a lot of my um a lot of my private money guys have just referred me to their friends who also lend and so itseems to be that vein of that’s all they know so far maybe after a fewconversations we could talk about doing longer term projects but I haven’t needed to since my you know my primaryinvestment is flips and Burrs and I can uh bur the money out and refinance themout within six months anyways and so having four-year money doesn’t I mean I don’t really need itunless I’m starting to do development or something and so uh or or I guess largersyndication deals but you know these These are guys who have typically 800 000 to 2 million dollarsand so they’re not you know they’re not sitting on like 50 million dollars to lend out and so uh they have you knowone or two projects uh maybe three or four tops in their you know in theirallocation of how much money they can lend and so uh you know that kind of changes the game for those lenders youknow they’re like I want that 400 000 back you know within four months or or six months or whatever so then they canfigure out what to do next and recycle it or not you know they like having that flexibilitythat makes tons of sense okay so what would you tell like a um a private money lender to look for in an operator whatare the kind of some of the things that they should be looking at things that they should be checking you mentioned track record but what are the kind ofthe key drivers and fewer their shoes yeah of course I mean uh track records number one uh figuring out exactly whatKey Considerations for Selecting an Operatorthey’ve you know the projects that they’ve done the timelines the budgets wanting to know transparency on hey didyou go over budget were you over on time what went wrong what went right uh sothen you kind of know what to expect on how that operator is going to deal with those problems in the future and so Imean if somebody comes to you and they’re saying like oh no we were perfectly on budget we were perfectly on time and you know we made a bazilliondollars I would be kind of skeptical knowing how flips work to be like oh uhthe Stars aligned you know um of course you know nothing stays on budget nothing stays on time for onereason or another but kind of like figuring out how they deal with those issues andum I think that that you know kind of one pain in the ass lender taught me was he had a lot of questions like thatwhich is like well what are you gonna do if you know it goes over by four monthslike you know is there enough room in the deal are you comfortable with it asking questions like that were what youknow the first lender who kind of pushed back on some things it really got me to think like oh uh this is what’simportant to him and so um you know figuring out what that means but definitely you know besides track recordmaking sure that they have some sort of reserves so that you’re not just lendingthem all the money that they have so you know if you have a fifty thousand dollar rehab you know making sure that theyhave you know a little bit of a cushion to make those payments or to if if that project goes over by you know 10 or 15percent do they have that money in hand are they going to come to you asking for that money and having to you know modifyyour promissory note or whatever to try to get them to the finish line so you can get your money back and then likeany kind of references that you have like who are you know who’s the agents that they’re working with you know thecontractors that they’re working with like knowing a little bit more about who this person has surrounded themselveswith and if they’re actual professionals or if you’re kind of like lending moneyto a guy who has like a circus around him is going to be a problem at the end of the day so those are the thingsthings that I think that I would want to know from a somebody that I’m about to lend you know four hundred thousanddollars to and uh and of course uh almost all of my lenders double check the numbers just like they’ll they’ll gothrough the line item budget uh make sure that I’m not you know way off byyou know some line item and then they also make sure that you know they reviewthe comps that I send so that the arv looks good um some of them have extensive realestate knowledge and some of them really don’t but they just want to double they’ll always double check those thingsso our lender packet is always you know stocked full of different uh differentscenarios the numbers of what that means um obviously a full line item budget anduh very comprehensive CMA or a comparative market analysis of the arvso that they can feel comfortable that you know we plugged in the right numbers to the formula to get to where we wantto be so that’s a great tip yeah so maybe not have alreadyjust a one-off flip or a one-off burr deal you’re actually putting together an investor package essentially right so tocover that again you said gonna have the comps on there gonna have the rehab budget sounds like the scope andanything else you typically add into that um so yeah like what we’ve used is a issomething called like the house flipper spreadsheet um there’s a guy in Bigger Pockets that made it a long time ago butum I’ve been using that because it has a really good lender report uh so I can plug in all my numbers I can plug in myentire budget it actually gives me you know like maximum allowable offer it gives me you know different places toplug in all my closing costs and so on the lender report it it gives them theyou know the expected return uh it gives them you know all kinds of differentnumbers on the timeline and like any contingencies on going over on time or over on budget are included in there soit shows that we’ve done the budget at 50 000 but we’ve actually factored in you know a certain amount of overage ifit’s a 10 overage or whatever and then also on time like how many months is it gonna take to closeand then padding in a couple extra months and so they get to see kind of all of that in a nice you know one pageyou know detailed format which is really nice um all of my lenders have really likedhaving you know the more numbers and transparency the better and so they they like having a concise report that tellsthem like hey this is what it looks like and I think um I think the Bigger Pockets calculator also has like a lender type formatoutput so if you use the flip calculator I think that there’s a lender output on that as well and so just just somethingthat’s just for the lender that they can see all the numbers and uh not just the investor numbers of like hey I’m goingto make 50 000 on this they’re like yeah but like let me see all the other numbers likeI was thinking too it wrote like kind of a say you’re talking to somebody who’sbeen in the stock market and knows the stock market right they’ve invested there but they’re like for whateverreason maybe they’re tired of the ups and downs now they’re one in Trend they want to diversify in a real estate but they don’t really know anything about itbut they’ve they’ve heard maybe they’ve talked to their friend who’s investing in real estate or a private money lender How would how would you kind of get thatTransitioning from Stocks to Real Estateperson kind of like you said you mentioned a lot of your lenders are typically you haven’t had to take them from zero to one but say you were thatperson getting uncomfortable with kind of investing in a investing in a deal basically yeahum you know I think that that conversation becomes pretty easy when you when youput the word out there of like like hey last year you know our lenders made you know 11 on their money which youknow we paid out let’s just make up a number like as I’ve seen some guys use this as a tactic to kind of just youknow attract lending in I’m like hey we paid out you know with a hundred thousand dollars last year to ourlenders if you want to be you know part of that you know let’s let’s have a conversation kind of thingum I think that you know sometimes it’s quantifying those numbers to umto an investor who might be used to that stock market kind of digital money that’s just out there you know if you’relike hey we you know we paid one of our lenders you know twenty thousand dollarson there you know four hundred thousand dollar investment you know that that becomes real numbers to to people whoare used to just going on their you know on their online stock trading Pro you know platform and it’s just a numberthat goes up and down and may or may not mean much um and so you know having that and thenthat also shows that you have some sort of track record like hey this is this is our past performance this is what we’reyou know this is what we’re doing and that that seems to pique people’s interests too of like oh like oh they’vebeen doing this for a while and their current investors are happy enough to keep investing with them and then ofcourse I think the security part is something that a lot of uh investors don’t know about of like like hey youknow all of our all of our lending is secured by a first mortgage and it’s recorded so there’s no funny businesslike I can’t you know I can’t fly off with the property and you know sell iton the black market or something and I can’t have my crypto wallets you know hacked and the property’s gone orsomething it’s like it’s just you know it’s real estate and it’s secured by a first mortgage which gives you the bestprotection you know of of any mortgage instrument and so um I think once you kind of attract themwith like your track record and your numbers and then also that security piece which I think is huge because alot of stock guys they just see it go up and down and the CEO says something weird one day and it goes down and thenyou know the earnings report comes out and it goes back up and um you know for us we can just say lookit’s you know this is these are the returns that we’ve been giving out um and this is our track record and thenit’s also secure so I mean if you want something different then you know your e-trade uh ticker then uh you know let’stalk now great answer great answer um the other piece I was going to getinto is the types of ways so I’m assuming a lot of your profit money less investors have like you mentioned someof them they’ve got a they’ve just got some Runway or some allocated funds ready to go for it but I’m curious other ways you’ve seen it doneum and people kind of getting creative to to using some income so that could be a self-directed IRA that they’re usingand they’ve converted um other ones are just another big one I’ve seen a lot of people do is if they’ve got a bunch ofmoney in the stock market or in bonds or in cash taking a line of credit on that so they don’t have to move it don’tcreate a taxable event and invest that have you seen people doing that or any other strategy you’ve seen of peopleactually having the liquidity to to be a private money lender yeah the uh the IRA is a big one uh so aself-directed IRA we have two or three of our lenders that land out of their IRA and so as long as you understandmaybe any of the differences of how that works that maybe mainly just paperworkum or or how their name is is put on yeah on title so as long as youunderstand how that works you know it could be uh somebody that you’re talking to that has you know Ira money that’sstocked away from another company that they were at you know it could be just a matter of saying like hey if you enrollthat into a self-directed IRA um you know you could actually lend that out on real estate deals like oh likemost people don’t know that and so you know knowing enough to educate otherscan also open up those opportunities of you know some people do have just youknow old IRAs just sitting around they don’t know exactly what to do with them um they have like a new you know set upwith their new company but they have an old one that’s just sitting there and so you know that hundred thousand dollarsor fifty thousand dollars or whatever could be put to you know actual use bylending it out so not a lot of people know that and that’s that’s the main kind of creative one that my guys use isyou know living in and out of their Ira all day long and uh that that’s you knowtax deferred so it goes into their IRA without being taxed until they pull it out you know later in life or whateverSimplifying the Process and Dealing with IRSso they like playing with that money of like you know 420 out 440 back in youknow like they growing it that way and having that tax deferred to a later dateheard about that think that it’s too complicated but as you said sounds like just a matter of the title and thepaperwork and then as you mentioned the big benefit is you just keep doing it doing it and you don’t pull another big factor is you don’t you’re not pullingon it right away You’re it’s a retirement vehicle that you’re saving but right it sounds like it’s pretty streamlined and very successful yeah andif you have a good uh self-directed Ira company they know exactly what to do forthat paperwork and for any kind of you know weird questions or anything that you have like a really goodself-directed Ira company knows exactly what it looks like to lend that money out on real estate and exactly how theyou know the names and the you know all of the details should be hashed out andso you don’t like I don’t have to know that as the borrower and they don’t necessarily have to know all of that as the lender the the actual company that’suh holding their self-directed Ira you know they know 20 different ways to usethat money and this being a really good one uh they have all the details of how to actually use itif you’ve got any good tips of finding this because they talk about all this self-directed Ira money out there that’sjust sitting educating those people letting them know hey you could be putting that into realestate but you got any good hacks on how to bring those two people together oh man I wish I did I I would imaginethat it’s a lot like uh attracting other private investors where I think if yougo with you know educating yourself on how it works maybe talk to some self-directed Ira companies and then uhyou know basically putting the word out there and educating people on like hey do you have an old Ira that’s sittingaround well here’s some here’s some uses that you can have for it you know ABCum some of our lenders use their IRAs to lend with you know lend money to us on real estate deals that’s secured by youknow a mortgage and if you you know want to know more about it like let’s talk I think that getting the word out there uhjust because I think you know 90 of people with IRAs don’t know that they could do thisum so just getting the word out there is probably going to be number one you know whether it’s your uncle your yourbrother people on social media whoever whoever it is that you talk toum most of them probably don’t even know that it exists and they might be interested if it’s like it’s not moneyout of their bank account but it’s actually money that’s just sitting there anyways that they could use and grow uhwithout you know without doing anything crazy they don’t have to liquidate it they don’t have to do anything like thatso cool we’ll kind of wrap up here I was excited to ask you this one and I knowyou touched on a little bit actually when we were up together in uh Cheyenne we were talking about like kind of the state of the market and where things aregoing and kind of what your thoughts may be and and maybe kind of speak to people that are like oh shoot I’m I’m pullingback now I’m scared interest rates are high there might be a big correction and I know you kind of alluded to it up there about kind of The Upside if youcan make things work now just the upside if we do if interest rates do come back down but yeah just love to hear yourkind of overall kind of Market going forward yeah I thinkum I mean I don’t think and I don’t see any of the market forces that thathappened during the last downturn which is you know basically subprime mortgage crisis that that kind of dominoed theentire rest of the market right now we still have crazy low inventory almost everywhere that people want to live ofcourse and and that drives and can cure almost all problems like even throughthe pandemic it was low in you know low inventory that basically likejust plowed through any problems that people had because people still need a place to live and so if you have youknow record low inventory that demand is going to you know outweigh any of the uhany of the other problems and so you know higher interest rates can’t really help that so we can either sit on theInterest Ratessideline and wait and hope that things get better by getting it now you’re basically kind of hedging your betsyou’re saying well if rates go up well I locked in now okay so I’m I’m safe at seven percent or whateverif rates go down and they go down enough to where it makes sense you can always refinance and and save some that way nowI I’d probably put money on it but we’re probably never going to see like sub three percent ever again and I mighteven say like sub four percent and so you’re talking about a prettyaverage interest rate in the last 40 years being like five six percent even six seven percent so if you’re lockingit at seven percent now you’re you’re pretty much locking in at the average and uh you know it took a pandemic tomake it go down below three percent um hopefully we won’t see anything like that uh anytime soon and and uh andobviously the interest rates of the 80s of 12 15 18 it doesn’t look like it’sgoing that direction either so I think that this is kind of sort of the new norm and you know one way that we’regetting around interest rates is trying to maximize cash flow on all of our properties uh flips I don’t necessarilycare about because we’ve been let you know we’ve been borrowing it like eight ten fourteen percent since I’ve startedyeah and so I don’t I don’t typically care that they’re seven percent because you know that doesn’t really apply to meon flips but if I’m doing buy and holds you know I see a lot of complaints about out how do I actually cash flow uh inthis market with these high interest rates well you can either you know fightthe locked in interest rate that you can’t change like I can’t change it you can’t change it you and me together can’t go down to the fed and change itor you you could try and change the variable that you can which is you know Finding good deals uh so you know thelowest price possible on it on a deal can help mitigate some of that or you can help byraising up your cash flow and maximizing your cash flow on properties and so like a long-term rental might be a so-so dealbut if you can turn it into a midterm or a short-term rental or a room by room rental and actually maximize that cashflow and be getting 50 more than you would on a long-term rental that is something that’s in your control and afactor that you can change I can’t change the interest rate but I can actually evaluate this as a midterm rental and it makes sense and actuallymakes more money okay so I’m gonna go maximize my cash flow and I’m going to keep trucking I’m going to still keep upkeep going on and buying deals because I can’t change the interest rate I’m going to work with I can change uh and moveforward love it love it yeah you can’t fix that but you can still you still stay in the game keep moving forward andas you mentioned you get all that upside if rates do come down you can refinance it five six percent down the road yeahprobably appreciate it been cash flowing love it yep exactly cool awesome Anson well manClosing Thoughtswe’re gonna wrap up there anything else you wanted to share today covered a lot yeah we we did Cover a lot no I I reallyappreciate having me on and uh it’s always good to see you and talk to you of course and uh and yeahum if you have any uh you know private money issues or problems reach out to Casey you know and uh and he candefinitely help you with that so yeah can you share real quick answer where can people find if they got otherquestions on yeah private money finding deals funding deals all sorts of goodstuff of course um if you’re on Bigger Pockets uh you can just search my name and uh connectwith me there send me a message um if you’re on Instagram find me at Young Anson and uhand yeah uh those are the two best ways to find me so perfect awesome wellthanks a lot Anthony you shared a ton of good stuff um excited to share this like in the fullform because I think you gave a lot and then also share them some little golden nuggets you’ve been sharing throughout the episode so really absolutely thankyou Casey you bet as you may have learned by tuning in to this episode of Gregor sense the easiest way to make realestate investing hard is by going at it alone so as you continue learning and seeking knowledge of the industry I wantto encourage you to build relationships with other professionals who are passionate about real estate whetherthat’s an agent a business owner or a managing investor like myself there are Pros that want to see you succeed andare willing to help you by sharing their experience you can always reach me by visiting Casey gregerson.com andscheduling a call I look forward to connecting with you and continuing to share my experience with you here on Gregor since mobile until next time I’mCasey Gregerson thanks for tuning in