Flipping America 197, Commercial Lending

podcast 197 commercial lending

Expected Air Date: 10/15/18


Today we are talking about commercial lending. Office and industrial buildings, warehouses. Leslie Smith from Commercial Direct.

Leslie Smith led the launch of Silver Hill Funding in 2016, and is building on that experience to spearhead the launch of the consumer-facing direct lender, Commercial Direct. An experienced financial services professional and thought leader with more than 20 years in the industry, she has been instrumental in leading multiple initiatives that expanded companies into international markets, as well as developing systems and programs to drive operational productivity and efficiency.

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Guest:  Leslie Smith, Commercial Direct Lending


Comment Line calls and Questions

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questions@flippingamericnanetwork.com  Tell us where you’re from!

  • Sonia, Madison, WI “I was channel surfing while driving through Milwaukee the other day and caught a bit of your show. Good information. I’ve love those house flipping TV shows! How would a person go about getting into this business?”
  • Sandra, Long Beach, CA “I’m thinking about buying a couple of rental houses up in the Valley but at over 2 hours of driving each way, I don’t want to have to be running up there every time someone needs a light bulb changed. What options do I have?”
  • Kwame, Cincinatti, OH, “Do I take a great deal on an old house with a big rehab or an ok deal on a 6 year old house with a light rehab. I listen to you show – I can’t do both.”
  • Samuel, Pittsburgh, PA, “Do you think the Steelers have a realistic shot at the Super Bowl this year? Just kidding. My real question is after Saturday do you think Notre Dame should still be a top ten team? Still kidding. Seriously, what are the best 2 or 3 ways to look for my next rental? I have a good job, just trying to buy 1 rental every year. I have 2 already. I bought the first one before I heard of you and bought the second one after listening to your show for awhile. The second one is doing much better. I like managing myself and plan to do that until I get to 8 or 10.”
  • Risa, Atlanta, GA and San Juan, PR. “Are the principles for investing on the mainland the same as in Puerto Rico? I’m thinking about buying a vacation rental back home.”

Motivational Thoughts for the day

  • Earn a lot so you can have a lot so you can give a lot. 
  • -Tom Olson


[0:00] Music.

[0:16] The show that teaches you how to make money in real estate wherever you are whatever your situation there is an opportunity for you flipping America is sponsored in part by American IRA

founded by investors for investors on the web at American Ira. Com.

And by Braswell Capital Solutions commercial lending made easy on the web at Braswell Capital solutions.com,

and now you’re sad flipping America guy Rodger Blankenship thank you Kathy Curtis good morning everyone hope your weekend was good.

It’s great to be with you today talking about real estate we continue to be mindful of those who are impacted by Hurricane Michael and our thoughts and prayers are with you.

In your recovery and focus keep the relief efforts coming by donating to a charity that you know is doing the thing that be you know of course be careful about the scams that are out there but let’s continue to support to help and to pray and do what we can.

To help in that recovery

I am Roger Blankenship and I teach people how to make money in real estate now on this show even though it’s called flipping America we don’t recommend everyone drop what you’re doing and start flipping houses like you see on TV.

[1:30] All right but we do recommend that everyone consider real estate is a part of a balanced Investment Portfolio and to that end we want to bring you the best information news trends,

studies research tools techniques methods tipz whatever we can to help you get connected with real estate.

One of my heroes in life is my own father and he said I like buying dirt because there’s not make it there not making any more of it and yeah.

My dad has a lot of little things that he says I don’t know how many of the original with him but I love to quote him whenever I get a chance alright coming up in a little while got a good show for you today Leslie Smith is the.

[2:13] Managing director for.

Consumer direct lending now Leslie led the launch of Silver Hill funding in 2016 in this building on that experience to spearhead the launch of they consumer-facing

direct lender called commercial Direct

an experienced Financial Services professional and thought leader with more than 20 years in the industry she has been instrumental in leading multiple initiatives that expanded companies into International markets as well as developing systems and programs to drive operational productivity and efficiency less is going to join us and just a little while and she’s going to talk about the opportunities available to you if you’re looking to be involved in commercial real estate investing this is a source for you to get connected to the funding

got to get connected to us here at flipping America we’ve got several ways first of all.

Find us on the web at flipping America network.com

www. Flipping America network.com all kinds of news and resources and information we’ve got a couple of RSS feeds to hit the front page of the website you got to kind of scroll down to the bottom okay.

You can find out there more information about how you can get involved in real estate investing and get connected and get going right now.

You can also follow us on Facebook look up flipping America media that’s what we had to do on Facebook and then I’m Twitter Instagram lookup just follow us at flipping America.

[3:36] We have a YouTube channel as well just look up flipping America on YouTube you’ll find us and subscribe please and Linkedin.

And house and what else we on Google Plus Pinterest we’re everywhere in social media I am

not at all those places on social media but we pay enough attention to it to get some posting out there and and I will say that I do spend several hours over the weekends every week

just selecting and curating

a series of articles on some of which will cover in the on the show most of which we won’t but they’ll go out on social media it can be anything from some star or athlete is listing their house we don’t talk about that on the show not because

well the only reason is I don’t know how much appeal it really would have to the investing audience but just to the Curious we put that on social media so you can see

you know Lifestyles of the Rich and Famous I guess but we also put things like investment news and business news and things that I think impact us in the real estate market and occasionally some things that I just thought was interesting cuz I do like technology and I like toys and,

in and some things like that so we should go ahead and follow us on Twitter and Instagram so you can get the full.

[4:59] Measure of all of the things that we are looking at talking about

of course some of the shows will be talking about some of the Articles were we talking about here on the show and when we do that it goes into the show notes and the show notes are a part of the app the free app

called flipping America

I know if you’re listening to us on the radio right now you’re probably wondering man out I’d like to listen to this all the time how can I listen on my own schedule well I encourage you to keep listening on your radio station whenever you can but.

You can download the free flipping America app

it is completely free there is no in-app purchase there is no upgrade there’s no limited use then you have to pay nothing like that it’s free it’s always free it’s completely free and when you download the app

you also get access to the notes that I used to make this show including

you don’t like for example I’m going to go I introduce Leslie Smith to you well that’s straight from her bio that’s in the show notes so you can go back and find out about everyone that we have on the show

and websites and notes from the interviews I put those down and links to all of the new stories that a cover plus the questions that we answer on.

The show and if you slip in there that we ran out of time and didn’t get to answer on the show that does happen from time to time so it’s a little bit of a behind-the-scenes peek.

[6:21] When you are accessing the show notes all right,

let’s see. What else if you have questions about real estates in your questions to questions at flipping America network.com and if you don’t want to send an email you can always call or national comment line that’s 404-4369.

1018 bres extension one to leave your message or question.

[6:45] Big announcements coming up November 2nd and 3rd 2nd and 3rd here in Atlanta Georgia we have flipped starter

this is flipping America we do teach people how to flip houses she at we don’t encourage everyone to do it but some people want to it’s a surprising number of people who want to I have a meet up.

Well it’s actually a series of meetup groups in Atlanta that I leave right they have a combined membership

of 5400 people just here in Atlanta Georgia who have some level of interest in flipping houses it it’s amazing to me

but the flip starter event is coming up November 2nd and 3rd and course you’ll be hearing about it during the show but I want you to plan to be here

yes even if you have to travel because there is no where else you can go and spend $200 to learn everything you’re going to need to go back and start your own fixing and flipping business.

[7:38] What you normally get when you spend $200 to go to one of these things is you get an 8 hour or 10 hour or 3 days sales pitch into a $30,000 course.

That’s not the way we handle it yep we’ve got other mentoring going on and we will be telling you about it while you’re here but.

My pledge my commitment is to give you all of the information that you need it’s kind of an outline form.

And it’s pretty high-level but if your inquisitive if you’re motivated if you got some things on the ball if you’ve got experience as a business owner

or experience in the home construction business this seminar could very well be all that you ever need to get you going and.

All that for $200 199 actually but we’re in the second mouse discount phase and so right now you can go on on the website and register for $149 that’s Friday evening

from 5 on and Saturday from,

9 to 5 and there’s an opportunity to do a a VIP dinner with me on Friday evening and I’m looking forward to that so that’s on the website

flipping America network.com flip starter okay.

[8:56] If you’re in Atlanta on a Wednesday and you want to come out and have lunch with us we welcome the opportunity

I do lunch every Wednesday at Huey luey’s Mexican restaurant in Sandy Springs Georgia just north of downtown Atlanta and we just go to lunch and talk real estate the agenda is whatever you come to the meeting with if it’s a deal we talked a deal if it’s a question we talk questions whatever it is we’re just going to sit around and and and gather together and talk now I know that if you’re out there you know somewhere in in in the midwestern United States listening this you might think the hundreds of people come to this but they don’t really

we’ve had hundreds of people come through but you know a lot of people are just passing through or just you know can come only once in a while people are busy with their lives so we typically have 15 to 20 and occasionally as many as 40 there but it’s it’s a fairly constant crowd and it’s just right I usually get around and have a chance to.

[9:51] Talk with some greet everyone there and

try to help out wherever I can that’s really the point is just to help people get connected with real estate I would stop short of calling my passion but I do enjoy the subject of real estate and I enjoy helping people get going it hey we’ve got some other things coming up

but I’m out of time for announcements because we’ve got Leslie Smith coming up so just download the flipping a penny

flipping America app in the app store and Give a listen to her show and take while you’re there take a look at the property grade at 2 and I think I’ll be mentioning that again later on and some of the questions.

[10:27] Music.

[10:46] Have you ever seen one of those Fix and Flip TV shows and thought to yourself I could do that or even better I’d like to do that.

But there has to be a way to get started that’s what we will do for you at flip starter flip starter is our 8-hour course designed to give you all the information you need in order to get started in the business of fixing and flipping houses I’m Rodger Blankenship.

The flipping America guy who is fixed and flipped more than 800 properties over the years.

I will share with you the tools I developed for use in my own business the strategies the management techniques and the systems are used to build a business that was flipping a hundred properties for year.

[11:23] What would it feel like if you could quit your job and not only work for yourself but own a business that will ultimately provide you with more income and more free time.

[11:33] My goal is to train the next generation of real estate Millionaires and I want you to be one of them find out more at flip starter event.com.

[11:44] Music.

[11:59] Leslie Smith welcome to the show.

[12:03] We are so glad you’re here you’re with a company called commercial direct and you are a non-bank lender and of course the first question that comes to the mind of a lot of people hearing this right now is what the heck is a non-bank lender.

Explain up to us while we’re privately held company,

and we’re not a bank whose insured by FDIC so unprofessional banking.

Okay but no we were talking a little bit before we got started with this interview and you told me that you do make owner-occupied loans just like a regular Home Mortgage somebody buying the house they come you for a loan right.

Well not a mortgage but more of a typical owner-occupied is like a dentist that it has been in that office for 20 years and finally decides to purchase the property that they are they been doing business in

definition of owner-occupied house that people live in.

Know where were talking and do it there rules around that but more about a business owner wanting to fully own and stop paying rent and fully on the property of the been doing business out of

right and that’s where I was going with that because you know you can’t make loans I even

I’m not a mortgage company and I’m not a broker but if I I bet I have done a little bit of owner financing in the past.

[13:24] If I continue doing that now I have to comply with the lot of regulations so guess what you’re in the commercial space.

[13:36] So that means you’re learning learning on Commercial assets what are the assets you guys like.

We like our multifamily be like on small strip malls retail office we do a lot of light industrial on Warehouse we do Automotive.

So you know a little bit you know when you’re talking about are bars in your talk about small businesses you you have to be interested in those type of property types but when you say you’re not talking somebody can

go to your website and apply for a car loan.

No we talking about someone that’s going to fix the car that you purchase on somebody else’s site basically they’ve got a garage and they’re there in the repair business I was wondering if.

I wondered if you might compete with the dealerships in doing the lines of credit to allow them to purchase the cars.

[14:32] You don’t want cars as collateral

okay so really your ear loaning on the real estate I and you like multi-family multifamily because I have a lot of multifamily listeners and friends and interest and.

Give us an example of kind of your terms and how you approach life I come to you and I want to borrow money to say bye a 50-unit.

Apartment building here in a suburb of Atlanta Georgia what are going to be your requirements and terms.

So I’m initially you know we start with credit score so are minimum credit score 650 from there we kind of talked about you know how long do you want to be in the loan you know what type of documentation are you willing.

To present for us to do I due diligence and Anna.

What determines what program we put you in as far as you know typically are bars are in our loan for 5 years.

6 3 4 5 years 30-year M and then after the fifth year of floats.

25 year and floats.

After your 5 is it tied to an index like live or something.

[15:45] Okay alright it’s all that disclosed in the loan documents I’m sure,

yeah I mean it’s just closed up front when we give you a conditional pre-approval and then it’s disclose again you know ad at when we do our sign and clothing.

[16:03] CarMax loan to value is 80% now when it comes to value and valuation of multifamily.

You know it’s I know that appraiser is going to take the income approach but what if somebody comes to you and they’re buying a multi-family that’s.

Mostly vacant or maybe completely vacant and what they’re looking at is a bundle of potential but they’ve got to put some work into it and some money into it and they want to borrow on that accept possible with you.

It is possible with being that for us would be more of a shorter-term bridge loan where we’re really banking and taking a chance on that

on a business plan

you know how are you know how are you going to get that fully occupied what is you know what are you investing in so we’re really looking at only add you know the assets but really the person is telling me that this is what they want.

That’s a short-term loan that’s an 18 months to 24 months loan or 18 to 36 really as well.

[17:04] Okay so you can do a bridge and then bridge to along it longer-term.

[17:14] On your Bridge Loan the same you might go 80% loan to value.

OKC multifamily in Atlanta a multi-family that’s not producing any income how do you come up with the value to use consequence.

Well that’s a different approach so we’re looking at YouTube.

[17:41] We’re looking at either what about you know what other comprable multifamily in that area would have a value that would that would have they sold for recently and then we come up with a value.

[17:52] Okay alright you guys are in South Florida we are okay and where are you not loaning.

[18:01] We are not loaning in basically The Dakotas outside of that we’re letting everywhere else.

[18:08] Okay now that I just said to ask if you don’t mind of all the places not too long why the Dakotas I would I would not Loan in California sorry we’re on the air in California

we have very little experience

California would love to do more it’s just kind of tough It’s a well-funded state by the competition

yeah well you know you have a lot of competition in your space anyway alright so.

[18:41] Now it if if somebody wanted to do this and where and we’re kind of jumping to a call to action here but if somebody wanted to go ahead and get more information good getting their website can they apply for this online.

Yes they can it’s one of the things that interesting about us like we have there isn’t another lender out there that can you can do a full application online if you want to talk speak to anyone and you want to do this on your own time on your own terms

you better commercial direct.com and You Begin that application process

there’s two ways of doing that other we hold your hand we help you along or you can eat a steer and and and and follow the direction then stops on our online application,

so you’re the commercial lender for the millennials and I really like to try to do the things on their own time I mean I think.

Changed is I don’t even know I’m just teasing you know I have a couple Millennial daughters and they’ve told me for years dad,

we don’t want to talk anymore we just want to go to your website we just wanted to let you know be able to read it and.

We going to 50 50 people still legal commercial you know real estate can be very intimidating so we get you don’t get a lot of questions and maybe do our chat but you know most of the time we do get a phone call or an e-mail for someone can you walk me through this and we are happy to do that,

I would think the commercials just complicated enough and and every deal is different enough.

[20:05] Some way or another you’re going to have to have a conversation right.

Any other property sometimes have a story to write and they want to do some of that can you do anything there.

No cuz that’s the kind of more of a portfolio lending and where is your ear doing individual properties to an individual bar okay.

[20:38] Yeah that’s that that’s an interesting securitization thing was you if you have a package of single families All Right strip malls and light Industrial.

And I so I just told him I’d industrial space a while back in 2018 I think and.

[21:03] What kind of if I chosen to refinance it is I come to you are you still looking at 80% loan to value and and tell me about your rates right now what do you have going on.

We was with you would be eligible and that’s mostly driven by your to initially by your credit score so really for us you know credit score although this is commercial for us credit score is very important when you’re talking about someone’s ability to repay

yes for that particular property tub you could still go to 80% and I reach for that type of property with depending on your credit score you know could range from you know six and a half to seven and a half

but that’s really driven by your your credit score initially Frost okay alright.

So she can at 7 and then do you add in a whole bunch of points to argue no origination fees.

No I’m at we do not charge any origination points you know there is a prepayment

I don’t see if you want to pay earlier than did your term but we have a couple of options there depending on what your strategy is with your investment but there are from A lender perspective there are no point.

[22:10] All right do you have offices around the country or does everyone need to kind of call you in Florida.

We do not have offices around the country where centralized in Florida but we would have to call us here yes.

Yes we have a vast network of of appraisers and you know my parent company and has been in this business for many many years until we have a we leverage a couple of different ways to get you know really good appraisers to National.


Alright that’s good to know when we get back I want to introduce people to you know you’re one of the loan officers actually if somebody calls are they going to end up talking to you.

[23:01] Not me I’m currently the managing director for for the company.

I get to talk to you so when we come back I want to I want to ask you a few more personal questions if it’s okay with you.

[23:18] Music.

[23:59] Hey you want to learn how to flip houses I want to show you how to flip houses and there’s probably no one in the country better qualified than me to show you I’ve looked hundreds and hundreds of them.

And I also have some training and degree and experience and education so I can show you how to do exactly what I’ve done hundreds of times don’t believe me.

Head on over to put starter event.com but in the meantime Give a listen to Pat caywood and I’m from Cleveland Tennessee and I’ve been.

Doing some flipping since about March of this year and had started with a Nationals program that was very expensive.

I spent today with Roger Blankenship learning about his program and boy do I wish I’d met Rodger purse.

He has a clear concise program and many tools that are going to be very hot.

[24:53] And starting and managing a program and the mentorship and Leadership and coaching that he’s offering our invaluable.

Thank you so much Rodger for your time and sharing with you never know what’s around the corner

but you can be confident that you’ll be ready for whatever comes your way Legal Shield and ID shield look out for you so you can get back to living life,

LegalShield is a prepaid legal service for individuals

businesses for a low monthly rates you get comprehensive legal coverage law firm of professionals and provide advice whenever you need it.

Protect it for a number of legal issues and assistance with common legal need just go to Rodger b helps. Com right now to sign up that’s Rodger V.

[25:48] Dot-com Legal Shield protection for every part of life.

[25:52] Music.

[26:20] Okay as we were going to break we were talking with Leslie Smith and Leslie is the managing director for commercial Direct.

A commercial lender in South Florida that they loan everywhere except in The Dakotas so if you’ve got a multi-family or.

Some of the commercial asset that you looking for money on you know we didn’t talk about skyscrapers.

[26:45] Oh no $50,000 so I don’t think so.

[26:59] When are Lone Star range is 250.

To 5 million but our average once I just 350 so we are lending to that small business owner okay.

I don’t know I don’t know how many strip shopping centers you can buy for 3:50.

You’ll be surprised yeah I would be I’m not in that game so yeah I would be all right so.

I’m kind of little bit going on with my production assistant over here of course it’s just a friendly wager because I always win.

When you were a kid you never one time before the age of 15 said when I grow up I want to work for a commercial lender.

[27:38] You have one question was Lee is when you were a kid what did you want to do when you grow up.

I wanted to be a Supreme Court Justice maybe it’s not too late maybe.

I don’t know that you know based on what we just seen I don’t know if you’d really want to throw your hat in that ring and big I know I wouldn’t want to be exposed to all that scrutiny because there’s a chance that I did something stupid when I was in college.

There’s a chance and at that point doing what taking video but probably a chance.

Sorry I think I’ll I’ll I’ll stay away from that dream and choose another yeah I saw that you’re living the dream as managing director for a commercial lender.

Alright so 1 mortal personal question how in the world did you go from wanting to be a lawyer and then a springboard Justice and do what you’re doing now.

[28:34] Asia a job while I was in college I started working for a bank at a call center and it kind of evolved from there.

It went from call center agent to call center manager and then into Lending.

And then from lending you know in a private banking setting to the company that I’m with now so it’s just

editor at we’ve just I get a Winding Road opportunity and I took it and you know whether I thought about where I was going at the time or not it just kind of ended up here,

and I’m really happy that it did and so you’re in this position of leadership and you’ve got this career that.

[29:16] No kid at under the age of 15 is sitting there thinking about you know I’ll one day I want to be a commercial lender and very few kids are thinking

one day I want to grow up and flip houses or be an investor on rental house is just not one of those things that you talked about

on parent day you know when when the parents come in and talk to the kids about what they do for a living

but I always like to ask my guess this because I like to continually remind everyone it’s not necessarily the life that you’re pointing for it so like that you have and if you’ll just live the life that you have,

the life that you’re pointing for may come but something different may come in your you may just be okay with that and thrilled with that.

Agreed agreed.

[30:02] For you now you’re working for this big company with a lot of money and have you ever thought about owning your own rental houses or flipping houses like you see on TV.

No you know it’s like I took question I get asked a lot and no it’s not just because you know I don’t see myself.

That’s a promise like I love to talk problems and that’s not really kind of a problem I want to solve you know I do see what I do so I can say is that a lot of clothes that comes with investors.

Is there you know they never saw them.

Flipping homes are investing in multifamily use or even buying their own property and they’re always surprised at the end of the process when I like why I can’t believe I did this but you’re happy you’re happy but it is very different and equally a surprising.

Right very good word okay now moving back into little bit and toward the business side of things look into your crystal ball for a minute.

[30:55] And the first will tell me what what are the market conditions for you down there in South Florida right now how are things looking in commercial residential what do you see when you look out there.

It’s a buyer’s market here you know I think it’s it’s at 4 for my perspective it’s a very strong from a residential perspective you know I’m not too much into that world but you know

in particularly there is a home goes on sale and it.

Kinda pretty quickly there’s a lot of building a lot of skyscrapers going up in Miami again so I’m interested to see how that evolved over the next couple of years.

[31:31] But still very busy and a lot of foreign investment in Miami particular

with a e Reds a flipping America we track real estate news nationally all the time in all markets and we know that the feds have been taking a really close look at the foreign investment coming into Miami

Miami Chicago and New York is a lot of money laundering is happening there and they’re trying to provenance the source of the funds that

they’re being used by these properties and it stopped quite a bit of foreign investment but not all of it.

And it also has a really slow down the economy or the sales climate there so yeah.

I’m glad that you said that because that.

Makes me know that my research seems doing their job and we got the right information what do you see happening what do you see happening in your world is going to be more the same you think the market is changing what do you think.

[32:31] Well you don’t have to pay close attention to interest rates a huge impact.

You know interest rates and you know people you know out there that are good bars that are you know are they going to kind of hold back and not refi because they’re going to afraid of the interest rates you know that to me is something I’m watching very very closely

I’m also watching just you know the evolution of technology and how that impacts my business and customer experience

you know I’m making sure that I said I pay attention to the ones and how people and just information how they want information is important for an online,

so I don’t have someone to come in and.

So I need a very you know cognizant of of how people are using the other Google’s of the world the last thing I would say is you know.

You know data science and just a data in general you know I think I can understand and really look at my my customers by understanding all the data that I have and using not to really impact my business in the decision that I mean.

Okay then I’m going to come back around and land the plane.

[33:37] Somebody out there is I didn’t plan to be in the in this business but they’re looking at picking up a small apartment complex and they’re standing in front of it wondering is this the deal.

[33:50] What should they do well first they need to know really come up with an objective what is the objective actually purchasing that is that part of a nest egg,

is it part of is it a short-term type of investment I think that really is Dart the starting point of like where do you find

lending short-term versus long-term big difference and you know the cost in the process of getting a loan but I think first having that internal conversation like why am I doing this,

I think it’ll make then the decision that come next much easier.

[34:23] Okay what do they need to be thinking about the numbers and you know what is this somebody who’s never done anything like this you know.

[34:32] If they’re purchasing there any to think about okay do I want to do I have the ability to document my income and I can I show that if they can’t come someone like me.

If they can then you know you go to the bank but for UniFi my type of bar is a type of bar that’s not always necessarily able to show the success of their business.

Do a tax return so this is you know where I you know the stories matter,

and where I have to be creative about how I do my due diligence on One Lending to they also have to pay attention to the neighborhood where are they are there boarded up.

He says it’s it’s driving you know those those type of things are important when you’re making a kind of investment and say I’m completely new.

But I want to buy this apartment building I have no idea what to do can you help me.

[35:29] And we got a lot of those a lot of times people come to us and if they haven’t even found a property they just really want to understand what you know

the loan would look like I’m going to help him through that and we understand what they’re trying to do we try to say okay this is what it would look like.

Go find yourself a property and come back to us happens all the time people just kind of thinking about it and they’re Googling and they’re trying to figure out whether they can even get financing before they even find the property.

Have you ever been tempted to say what we’ve got a few Oreos over here you can take one of these.

Can’t my parent company won’t allow that or you’re not going to make another loan on the same property.

[36:09] We have and that’s really on you know probably properties that you have 12 years ago we made those loans but Hannah leaves you with the property and more with the bar.


Alright well that’s good maybe you guys I don’t know if you’re doing any formal education about this but it sounds like you’re willing to help anybody that calls upright.

We have videos online helping you through the steps so someone want to just kind of felt educate and click on a video and learn about the process learn about just lending and General commercial the differences between commercial and residential.

[36:43] We have videos on our website and we also do a lot of blocks.

Strictly education on Monday and what’s happening in the different markets in with different property types I think that’s also important for someone to self educate as well.

Okay folks are you have a commercial direct is the name of the company and the website is commercial Direct

dot-com you can find out what you need online just get over there and you can see what they loan on and and start the application process you can get the phone number you can you can get started

with that dream of owning those income-producing properties Leslie Smith thank you for joining us today we appreciate it so much thank you for having me.

[37:20] Let’s jump right out now and handle some of your questions in ask the flipping America guy.

[37:28] Sonia from Madison Wisconsin says I was channel surfing while driving to Milwaukee the other day and caught a bit of your show good information

thank you Sonya I love those house flipping TV shows how would a person go about getting into this business

you know we get to ask that question quite a bit most of the time we just answer it you know.

Directly through email because we getting in sasken so much but every once in awhile we need to answer that question on the show because a lot of people are wondering about this how does a person go about getting into this business

well if I can just summarize I would say first of all get information secondly.

Can a mentor and thirdly get going

I get information how do you get information well there are some places for you to get information on fixing and flipping houses if that’s what you want to do some onion and that all of you who are wondering and asking this the first place you walked to go is flipping America Network.

Come and we’ve got information here.

The next thing you should do is you should download the flipping America app and just start listening to the shows you can go back and you can look through the show titles and we’ve got several shows on getting started the next thing you should do is you should

probably join BiggerPockets biggerpockets.com and connected investor at connectedinvestors.com those are a couple of free things you don’t need to do the paid membership now.

[38:58] Join and start looking around and reading and and asking questions and then the next thing,

you need to get connected with someone locally who is

investing in real estate and doing what you want and believe it or not there are clubs for this around in almost all of the Cities across the United States they’re usually called real estate investment clubs are real estate investment Association Zari i a r we just called

Ria’s you have a local Ria in Madison I’m almost certain and I’m certain there’s one in Milwaukee as well if you just look up.

[39:35] Madison Rhea or Milwaukee Rep you can find the Real Estate Investors Club in your area and so get connected with them attend a meeting or two and see what it’s like don’t be aware of this,

there’s a unique culture that I have found in every Ria all across this country and it it’s a combination of a few people who are doing a lot

a few people are most people who are doing nothing but just curious and a few other people who do a little bit but they’re know-it-alls.

And maybe they don’t do anything at all but there no one else you have that

Dynamic working in every Ria I’ve ever been to is kind of amusing because it’s so predictable and the other thing that tends to happen at some of the riyaz is you’ll go to an event and have a main speaker there and their purpose is to

give you a little bit of information and sell you into their workshop and there’s that an interesting practice that.

It amuses me some what bothers me a little bit too.

[40:36] There are a lot of people that will go to these Saturday workshops in for these workshops you’re talking about 99 to $400.

Quickly for these workshops in while you’re at this Workshop you get a good delivery information and notebook e come home and lot of those people that are regular members of these read as they put that information on their shelf and.

They don’t do anything with it it may be really good information usually is pretty good information

then they they go on about their lives and do their thing and then the next time I work shop comes along right there right there and they’re doing the 200 think now this is different than the national Guru model

the national Guru model is somebody who has achieved some level of fame or maybe has just a bill to an entire teaching business and spends a lot of money advertising.

Comes through your town does an infomercial on your TV and the swings through and they’ve got a free to our event.

Or maybe a free 3-hour vent or maybe you go to the free event you going to get lunch and a smartwatch in a thumb drive full of useful information.

[41:41] Do you know that if you’re getting a Smartwatch for free it ain’t that smart

right you do understand that okay just be aware that a lot of times you get what you pay for those free seminars from the gurus who can afford to advertise on the radio and on TV those free.

Seminars are always nothing more than

a sales pitch designed to get you salivating about the possibilities and thinking about what you’ll do with all the extra money that you’re about to earn and they sell you into another course.

[42:15] That wouldn’t be so bad except after you paid your money to get into the other course and it ranges from 300 to $1,500 for the next course that course itself,

is a glorified sales pitch to get you to spend $30,000 50000 dollars and really,

really take a chunk of change Sonya and everyone listening I ordered you not to do this.

Go to the free stuff getting all the information you can maybe even go to the $200 thing you know because you’ll get some useful information

usually I’ve been to a few of them where I didn’t in fact the reason I got into the teaching businesses I was going to these and listening and and it just really bothered me that people would do this to other people

and I thought well you know I can do it in a little bit different in a better way in a lot of value to people’s lives so I guess maybe something you should plan to come to Atlanta and November to flip start.

Do you know what the plan is we’re going to be doing flip starter all over the United States next year so.

[43:17] You know who knows what is it that’s really going to happen things don’t always come off as planned and we do it as we’re able to

but we’re still actively involved in real estate and flipping houses and that sort of thing and so we know we can’t be everywhere at once doing everything at once so we do what we can.

Anyway that’s basically the the guideline there get information and get a mentor and then get going.

And rather than spending 30 to $50,000 in training put 32 $50,000 into a deal.

Preferably with someone else in a partnership someone else who has some experience

I know that most experienced investors out there would love to have someone joining them with 30 to 50 thousand and in exchange of that would kind of show him the ropes

okay Sandra for Long Beach California I’m thinking about buying a couple of rental houses up in the valley bend it over 2 hours of driving each way I don’t want to have to be running up.

There every time someone needs a light bulb changed what options do I have went really sander you have

do you have a bunch of options but to really stand out your best option is to hire local management if you want to keep these as rental properties long time

find spend some time and you may need to take the 2-hour drive up there for this.

[44:33] Spend some time interviewing and speaking with property managers if the town of any size there is likely a real estate agency and a licensed realtor who does Property Management

you’re going to need someone who is a license realtor to manage your properties and that’s what

they have at these property management companies and there’s some things you need to look for a we’ve got a show and we’ve got information on the website about what you need to look for in a property manager and we’ve already sent you a link to that will refer you to that,

for a longer discussion but basically you want to get the management done for no more than 10% of your gross rent and.

Do you want them to basically do a turn key on everything maintenance repairs and that sort of thing but preferably you don’t want them to do the repairs in house.

Unless it’s a Dino.

You know what things cost and they can demonstrate to you that they’re doing things at Market rates a lot of the in-house operations are owned by the spouse kind of repair operations.

[45:43] 10 to overcharge the out-of-town landlords

four things that go wrong and I even if they have a captive repair company someone that they always work with I always put in there I want the right of first refusal since I’m in this business to send my guys out there to make these repairs

and because I don’t always like your prices and so if they want the business they’ll work with you and I’ll talk about that but we got some other guidelines as well.

Tell that’s the property management side but another thing you can do and we didn’t.

Really get this information from you but if you want to just hold those properties for a few years another thing you can do is a lease purchase strategy or a.

A contract for deed also known as an installment land contract

when you do the lease purchase you need to have that really two separate documents you have a lease agreement and you have a purchase-and-sale agreement

and both of those become a part of the agreement in the purchase and sale agreement,

basically says that within certain amount of time date certain like a year from now or two years now they are going to buy the house and here’s the price and they’re going to putting some money down to secure that price.

[47:01] And if they back out that money is retained as liquidated damages but you need to have a real estate attorney make sure that your paperwork on this matches and conforms to state laws and regulations now

that’s a one or two-year kind of a thing and again it.

You also need to make sure that you can put language in the lease that requires them to maintain and repair the property you can put that in the least but end it’s not always enforceable in every state.

Okay another thing you could do is the installment land contract in this is one of my favorite.

[47:37] Do you have an agreement with them they’re going to give you some money down and they’re going to make payments for a number of years and you know there’s an implied interest rate in that payment and that sort of thing at any time.

They can refinance out and pay you off hopefully for a profit that you expect to get on the back end but.

As this thing is going along they have an equitable interest in the property and therefore they have.

[48:05] The requirement to maintain to repair to ensure and to pay taxes on the property and do you have an obligation to make sure that all that gets done in a timely way and just when you mean fence post I always


Find rolling insurance on the property anyway even though I require them to show that they have the property insured I just keep that as backup.

Because you never can tell so that’s the installment land contract now after they have paid you no end in for Builder.

Terms of the contract you were going to give them the deed it’s a contract for deed so then they will have the deed to the property and I’ll be there so we do this a lot with lower price property but the other side of this thing is if they ever default,

you notify them in writing that they are in default and you declare them a tenant at sufferance they don’t hear the default

there now a tenant and you can evict them you don’t have to foreclose this is especially good and states that we’re both closer to difficult will be right back.

Not too long ago we did a one-day flip starter in Chattanooga Tennessee and low and behold one of my old College friends came out to the event,

his name is Peter Falkner and here’s what he had to say about the event.

[49:22] Peter Faulkner here I send it a one day flip starter training session led by Rod.

[49:29] The maze to see what has happened in Rogers Live from the last $15 plus years.

[49:35] Music.

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but you can be confident that you’ll be ready for whatever comes your way Legal Shield and ID shield look out for you so you can get back to living life,

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businesses for a low monthly rates you get comprehensive legal coverage law firm of professionals they can help you with a variety of issues and provide advice whenever you need it.

Protect it for a number of legal issues and assistance with common legal need just go to Rodger b helps. Com right now to sign up that’s Rodger V.

Dot-com Legal Shield protection for every part of life.

[50:54] Music.

[51:07] Welcome back I am Rodger I teach people how to make money in real estate and part of what I do is answer questions from listeners if you have questions about real estate or real estate investing sending the questions at flipping America net worth,

I come always glad to help in any way that I can.

Call me from Cincinnati Ohio says do I take a great deal on an old house with a big rehab or an okay deal on a 6 year old house with a light rehab I listen to your show I can’t do both

and that’s not amuse me right there that statement because

I’ve heard similar questions like this over the years and I intend to come back to when I do them both okay so he says he can’t do both and that case I would probably take the light rehab I don’t know maybe it’s because I’m getting older, and I just

you know I don’t want to work that hard but I prefer the light rehabs.

On the big rehabs you may have this big number that you’re looking at at the end but you also have a lot of things that can go wrong and things are going to go wrong because there are things that happened,

during the process of one of these big rehabs on old houses that you just didn’t see didn’t know about the budgets going to get busted and that’s this is really how I develop the little Rodger ISM or should I say everything takes longer than it takes.

And everything cost more than it costs.

[52:26] That’s mainly from doing big rehabs on old houses so I prefer a light Rehab on a younger house make a little bit of money and move on.


A little bit of money for us is 10 $15,000 maybe even $20,000 that doesn’t categorize as a homerun anyway you looking but you know if you do two or three of those a month.

[52:50] You can probably keep the groceries on the table you know.

I will see if I can live on that alright Samuel from Pittsburgh Pennsylvania do you think the Steelers have a realistic shot at the Superbowl this year just kidding by real question is after Saturday do you think Notre Dame should still be a top-10 team still kidding.

[53:08] Seriously.

What are the best two or three ways to look for my next rental I have a good job just trying to buy one rental every year I have to already I bought the first one before I heard of you and bought the second one after listening to your show for a while the second one is doing much better

so I like your advice and I want I like managing myself and I want to do that until I get to 8 or 10 okay.

Samuel answer to your first question probably not.

I think there’s just a couple of holes on defense that are keeping you from that Elite level but I don’t know she looked pretty good last couple weeks all right as far as a Notre Dame I’m always in favor of Notre Dame not being considered.

I don’t really hate Notre Dame but.

This year especially their their schedule is pretty soft they’re not really playing by they’re going to go undefeated the rest of the season I think but you know pin,

Ken is coming pit is not that bad but they’re also not that good and they’re not paid is not a top 10 team and they gave.

Penn State Notre Dame series run for their money but this isn’t a sport show and we’re not going to we don’t talk about sports politics here much instead we’re going to talk about real estate so here’s your question.

The best way to find your next rental.

[54:30] There are a couple of things that I would do if this is all I wanted to do which is what you said number one.

I would like to see you since you want to self-manage I would like to see you can find your search to a particular area keep all the rentals close by they need to be close either to your job or to where you live,

and if you know you live close to where you work that’s even better but they also need to be in a working-class neighborhood that has decent schools where you have a chance of putting someone in there and they stay in there for three to five years before they think about moving out

okay now I love duplexes you’ve heard me say that before but the duplexes do have a lot of turnover however the Rehab on those is fairly like when people move in when they move out

in the house the rehabs always going to be a little bit more but if you can get somebody to stay there for 3 years it’s going to offset you’re going to be all right so

first thing is to confine your search to within an area second thing is put all your resources to work there this would be driving for dollars.

[55:36] Maybe a mailing campaign but more than more than that.

Connect with local wholesalers that specialize in that part of town and just tell them to send you

potential rental properties and the third thing is to connect with realtors in that area

between the wholesalers in the Realtors and just driving around paying attention to what’s going on in those neighborhoods and every time you see a house that’s getting into disrepair maybe some deferred maintenance maybe the grass has is not getting cut regularly,

this just obvious that there are signs that the house is being taken care of maybe stop and knock on the door it may be.

You’re knocking on a door where there’s already a tenant and the absentee landlord is cash-strapped in is ready to sell that could happen.

So know how to get ahold of the tax records that information is public it’s very difficult for me to tell you what your website and in

Latin phrase you’re going to look like in any given me ASP Aldi in the u.s. yes I could research Pittsburgh and tell you exactly what to do but you know you can research Pittsburgh to and.

You’ll figure it out but you want to know whether we’re the tax bill is being sent if it’s being sent to a different address than the owner lives somewhere else in the people living there if people do live there are tenants so these could be good prospects for you.

[56:59] Okay hope that helps Rise Up from Atlanta Georgia and San Juan Puerto Rico are the principles.

[57:07] For investing on the mainland the same as in Puerto Rico I’m thinking about buying a vacation rental back home alright I think that.

Buying a vacation rental back in Puerto Rico is probably a pretty good idea we’re working on getting the resources together to do an entire show on owning vacation rentals but I’ve been looking into it the doing my research and homework and.

I wouldn’t have said this 5 years ago but now I think that this is a viable investment possibility owning a vacation home using Airbnb or VRBO.

And we’re home away but you know what kind of list of them in the order of their popularity at least the way I see it

and yes so for the most part the principles of investing are the same because money is money return is return and that’s what you need to focus on Riser you need to focus on

the return on your investment and it needs to be not potential return but it needs to be realistic.

And the way you can find out the realistic return is based on what other people are doing and achieving in that same area.

Remember never be first but always be second if something is working.

[58:20] Okay folks that’s all the time we had today the music means we’re out of here we’ll talk to you again soon.

[58:26] Music.

[58:51] We had Tom Olson on the show last week Tom said earn a lot so you can have a lot so you can give a lot I like.

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[59:06] Working together with communities across this great country of ours to bring lasting life change and impact find them on the web at renewal fund. Net and as always your gift in any amount is much appreciated and tax deduct.

[59:19] Music.

[59:31] You’ve been listening to flipping America real estate investing for everyone if you have any questions about real estate send them two questions at flipping America network.com,

listen three times a week on stations across the country or on the flipping America app free in the App Store.

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