Real Estate Today, 9/9

Real Estate Today
Saturday, September 9th

Real Estate Today with Jason Randall, for September 9.

00:24:44

Transcript - Not for consumer use. Robot overlords only. Will not be accurate.

Oh Lyndon. Mean them. Welcome to real estate today with Jason Randall and Jason is a top fifty realtor in the Austin area he is the broker owner of a rematch delete and has been inducted into the re Max hall of fame now with solid Entrust ready really stated ice here's your host Jason Randall. Good afternoon Austin, Texas my name is Maggie and I'm actually filling in for Jason Randall dale on the realistic today show. But as always have a special guest with us this week his name is Chad fox he's been eligible forested Chad good morning yes and welcome or after the drug and an at an afternoon. Welcome back to issue will always love having Chad here he's. One of he's been on I think the past. Definitely a four week month and a half we're gonna have to agree to start making them microphone more current project and I mean look at me with the past you. Jeff boxy but it is you write about us. Know once it's there at so today we're gonna kind of talk about. Different. Invested I guess you can call investor one no one. Not the money investors not the stock market acting like a house investing. One on one and then he also want to talk will also want to talk a little bit about hard money lending. Now I know nothing about I know very little harmony landing Villa. So Chad's gonna give us a little education and and we'll go through their first account wanted to start off with with just how investing works like in my house like we've talked. EU and Jason and in the past weeks gotten really into the weeds and you know really tied down in there. But as someone who doesn't do it very often. How would you get involved with that I'm listening to the show right now in my car on line Revver how to like involved with. Investing in home. Well that the biggest part is finding someone. Who can find homes were you so obviously you know image is definitely. As a way to get started you need to pick yourself on to list and start looking you can afford chicken to. And how deep you wanna get involved and to do in investments are you looking at an investment that you want to quit. Couple teachers in and out that in and out kind of deal are you looking for something that you know you want to tear down and rebuild. Or do you just want something that you can hold onto and turned into a rental income you know so. You've got to define how do you want to go about doing business yet the stuff and how much money you have so there is. There is. A number a dollar determines. You know how you go about assay buying it rental property. If you don't have 250000. Dollars in your bank account and obviously. Moving towards a rentals the right thing to do tend to immediately establish yourself and those yourself into that. That marker first before you start building on some kind of two income and a now that's not to say that's. Guaranteed way to do it and safe ways do. Making sure you have them money up for yet to DC you're not having to come out of the pocket. I rent a house there's that that the people of heard about. It doesn't cash flow positive from that at 21 of those things. But we my wife and I've talked about it and you know we really think that that's something that is a good idea. To get into is and that's on a couple of properties gives you always talk about the residual ammonia you know. Is this going to be making me money and fifteen years down the road dam in some form or fashion whether you sell a house or keep it. But what's your magic number when you're sitting there I guess magic numbers. A little skeptical at. Your eyes. What's kind of the number that you're looking that. That that make you comfortable like if if you're gonna talk to Solis as HM and buy this house for renal. You know what's. What's kind of that that number that your looking that you say OK I can't referring cash up front there but I wanted to say at 1530 year mortgage whoever that is. You know is there a number that you say if you make X amount dollars on X percent over what your pain your monthly mortgage and monthly note on it. Is there's like is that okay when you get a exit to 300 dollars in the positive yet. A 500 dollars to marker like to look for are so when I am when I'm looking at a property and decide whether or not want him to rental. I'm looking at how much can rent it more and then how much money in my going to profit informant after taxes. Insurance. And Macon married no payments is that gonna look like in if it's in the 500 dollar range and and that's our payment basically telling him I can buy a house. Rent it and then by IR. Yeah you know but at least the car's gonna go down. But the house is gonna go up and guys I was funny that you mention that the car goes down there at that as an dealership couple days ago via and that chart. Should buyer at least color yeah. Let's make sense that looked at it and they charge immediately within twelve months the price Cilic now play all. Yeah that's a good lesson and the that's right that's why you buy used to buy you because I taken depreciation minister and appreciate. Absolutely I mean this isn't a car shows of the we could argue who won its. But I think that a I know for me when I looked at him and we wanna get into my wife and I mean right now obviously. Yet the 200000 dollar below ones are flying off the shelf they are I mean that's not the inventories non. It's it's there's not enough inventory for the demand right now that's right so I think the 200000. Kind of market. Has not stopped almost at 250 now or start to see those start to kind of move quicker Alina so I think that's kind of the next area that the that there rat but. You know when you're looking at a flip I guess it's day. Are you looking you mean you take everything into consideration. When you know that that. The line that goes into you said previous shows the you know. A couple of years two months of no accident and with the city of Austin. Who Walcott and of that. A restoration. But when you're looking at that. What are some of the key things that you look for when you look in an investment prop. So I look at basically do what do I need to bring money to the table and and I've got to borrow money am I gonna bring cash to the table desert those are some the ways and let him rot away. How much his can tossed me. It was the best use of my money was the highest. Returns that I can make on the property in the short amount of time so it's time value money is what that really comes to hunt. So you got to try to identify this property look at it and do the numbers make sure that the numbers work. And that you can actually make good money in a short amount of time that's really comes out as they were gay or you wanna keep the house is limited his time as possible that's right and sell on the quickest time possible strike and make in the highest return SL yes so the buying good is always a preference certain have to bite your depth charges I just had some under contract and we finally got them their due diligence. And man. If we got a contract to tie it looks like it did deal smells like a good deal when you go and seat house. It's not a good deal. And after bodies come in and said hey we're gonna we're gonna charge of this month to do this or pairing. Now let's look at that takes us out of our ram that takes us too far. In two. A market that we can absorb and down costs go. It doesn't work so we have to move that that the now and so you exercise your option to use what you do anything. Privacy try to do as much you can't within your option period when when that he's under contract who trying to. Trying to buy them yet and yet a lot to do in in the first you know seven to fifteen days you got a lot of stuff. Yeah that's usually removed the flurry of activity happens is in the theater stuff. Seven you know sometimes even shorter option earlier and it's. So there's no there's a lot of there's him there's a said the flurry. Elective the end of the first time actually witnessed like an option period and those costly. All of this happens really quickly into Atlanta there's a little odd that again so I understand where people get stressed out about my house. It's usually the first couple of days yeah after that want to get inspection reports back in and that's where having a great real estate agent or you know rules that broken it can come in and that's right and coach you through that process and yeah that's where you know immediate agreement to leave hopefully shyne yeah it's a self plug. Yeah but. You know we hopefully should and we do we we definitely try to make that is less stressful offs that's right right because. They're sometimes that you get in these houses than they do an inspection report like you said. Everything looks great this is it you get that inspection report back and it's. Here's all here's the real problems and that doesn't even the inspection report to local foundations it's they don't go behind the walls. So it just starts to uncover. More and more then back out targeted at this more and on the phone if your in the conversation but. It's another deal that ticket that took another turn you know all all of almost every deal that I've got in that you whether remodel or reconstruction there is always happenstance there's always something that's going to happen. That's not Murphy's law that's kind of fun it's. I'm gonna go out on ya know when I was in the military earth thing was that the plan mean. Yeah you spend weeks and weeks of planning yet for an operation. And we always and as soon as he left the gate. The map images everything that timing and everything you plan for it it's been changed yeah so. It's one of those things that if we can go wrong will go wrong type app that has. I I'm with working with Jason I. Can see how that happens now it is I think expect that he's at. Something that was on my radar. Yeah you could have things you know go over real fast and so president as an investor get an vaulted of these things you have to be. Oh waiter. And that just because you have a budget. That doesn't mean that set in stone. You better plan and plan well plan to spend ten to 20000 dollars but maybe thirty dollars. So plant whale they used to say 10% the marker. And it's it's Henderson like the flooring way if that's. Poorest I think you we got our freeways. The episode at identifying these do mountain you really got to know which do and and aren't knows somebody that can help you. The dignified as at least for your first couple runs in the and get used to it you cancers team what's happening and where he's basics so people us you know if you wanna become an investor you only get involved thick of this. Framer. Doesn't show up with to the carpenter doesn't show with that tool. Inside their tool belt they have specific tools that they need in order to do their job and so when you look at that. An investor as a tool what's inside that tool helps him used. He's gonna turn is an. Insurance agent you know legal analyst thanks here just checked off all the things that are necessary. In order to get yourself ready to be mr. And that's hard yet so. We're gonna take a quick we'll break Chad's gonna come back after the break and we're actually gonna talk a little bit about hard money lending arm inch because I'm thinking like it's for example there's been an episode we'll be right back. All right welcome back to a room is that they show time the guest host this silent disease and a man young. And I have a guest that are on the third I I used to be called the permanent guest. Permanent guest last executive producer. I think we're gonna transfer the title over to Chad is the permanent yes now on the realistic today show I have Chad fox and good afternoon. So before the break we kind of talked we're gonna we talked a little bit about investing in how to get into it now we're gonna talk about. Hard money lending new now IE you know I've heard hard money lending before I kinda have a basic concept of it. But it's what is hard money lending. Hard money's just expensive. Money. That's the eye witness and it is just expensive so's a higher interest rates yet okay yeah it's it it's higher interest rate is easy to again it's at a higher register. It also has a lot of cap stood it's not about the person that's borrow the money to the U. So when when you're trying to yet hard money you've got to make sure that deal lines while on two where. The lenders willing to lend them money and he's got a safe bet that lenders looking at the duke okay. I'm 70% of them about. You mean you know whatever the after repair that you're into the embassy and its. 200000 dollars annual Navarro. 70% of that 200000 dollars that's after its prepared when you can borrow 7%. When you are that money it changes the you know the parameters how much maneuvering and the table. You know whether or not it's safe bet for that and involved. So so now when you talk. Harmony lending can I go to like. Big bank. Think partly island in no and I think so but these questions I guess about my mom and ask these questions and I'll be the ones it's the dunce cap for the past. At. No problem that's so. You can't go to like. The big box bank at home we do all the big box retail stores on the big box banks I can't go down the street says a nice. Big box makes a way to like go to yet. How are going fine apartment because they see that there's signs on the side of the road sometime yes that are like. You know hard money invest their hard money lending yeah that Google works if you want to let you know. Did does it don't force are not a plug matters that professional now I. That's the professional. It is what you would aegis type today you can type in hard money thing. And then you'll find all kinds of stuff customized of some funds. Yeah people that have set out specific funds that are setup. Two. Lend money at a higher interest rate. For yield for investors war there are people that wanted to fractional start lending their hard money platform. And they shopped at two different investors. That want to make specific yield on the moon on their money so they will. Take those and then. Diversified fuel which ever. Platform works fund platform or even fraction lies lending for in a fresh guys living platform you get maybe. Five investors and here in your pool and you're saying hey mister investor. I guess I need Andy to borrow 100000 dollars if you wanna be a part of this deal here's here's that minimum buy in as 50000 dollars you buy in and you know that will do all the rest of the staff and basically. Said. Security for use. Through the transactions when you have a first lien position. On the property down. And so at that point you've got probably three guys come and may forecast commend the 2.5 thousand dollars each if the middle was 25. Then we come in and then dammit albeit on title there and all happily in the amount of their 25000 dollars. They were all have a Leno in the amount of the money and the that they planned again you know this and BellSouth again paid 8% 10% whatever is. Then that. That money is going to be distributed to the investor that is when the parliament. That investor now has to take that and make payments on on a monthly basis. So interest rates on hard money. Say vary anywhere from twelve non non. Two of 14%. And that's set by the people in the in the group correct it's it injures to east Inge trees standard OK so. You know if there's the other game could certainly get to the point to where. Things are given out more money. More freely. Then you what you'll see is a transition on these hard money lenders that and a bringing their rates down because they still have to place this month yeah. And so they'll start dropping down to so points. You started investing. And doing this type of work were were in and really get into it. Right before or or after the the housing collapse so that yes the class obviously started and Stan yeah and I got in too late so don't win you came in did you see more people using hard money. To do the investment or it was hard money harder to hit at that point or was it easier to get and the reason I'm I'm I'm kind of going off this is. You know with the housing collapse or when knows that the banks basically locked you have lesson that I ever just like were not given anyone any more money yeah I go away. Go find somebody else so did that hard money lending start to become even more prevalent than at this point we're saying like hey. We can give you this money we can do this but. It's gonna cost you more yeah and the interest part so that's. So is that still kind of prevalent today were there the rates gone download wither or how is that still kind of because I know banks are starting to open up a little bit more now some wondering how that's kind of affecting. So that the the rates drop but this market is flooded I mean we've got a flawed. People that are our company and be in lenders we've got to flow of people that are coming and one borrow and yeah. You've got. All kinds of things happening right now today's market you've got everybody want to be built there everybody wanted to be an investor. So when that happens to steal my mind to go around so you know these these people that want land continue to start lending war. Really extend their their business you get further into lending the banks they still take the safe route and mundane they still look at the people so you've got banks look at people. Investors looking at the deal them yeah with the at a Taylor on the board with more but. It's it's just down it's regulated so obviously there's reasons why. So getting into. Did the bunch of things. I did know about heart money lending when I gotten started down I was like I got to find a way I got to find money I don't do this or high. Doug you're collier electorate directs it to them like collecting cans that I have. And a good 750000. And it's a this is going to be three dollars and yet we know it was three dollars and five cents suffered the same number again tomorrow at six dollars yeah so that. Yes that's you know I pass or look and I. Or use a meat I started get involved and so billion investor. Isn't just a cakewalk. You have to grind it you have to get involved you have to meet people you have to talk to people you have to know people that known people. Yeah it's so it's is definitely a relational game. Nationally I think that you said you you make an appointment investing not just. Yes everyone can do it that's right there's a lot of risk involved with that and I think that gets under played a little bit sometimes yeah I think people people don't play the risk they don't think of the risk as much as maybe they should well they C. d.s TV shows and it's like a student you know so there and a broken down just for the good stuff. And so Malia Obama things are out of date that things aren't as I can average it used to pay that money. At at at at at at at at not the house exactly you know it's funny as someone used to work a whole you know. Though of home improvement store via. Of the blue variety. So. We used to see if you come and all the time that would do you know renovations or flip did and that was the one thing that we though we say is not a TV show that's right you know these things take time they did it doesn't take thirty minutes because what you don't see on camera is. You know the 45 master carpenters and they got stand on stand by it right there come and fix your mess that you discrete media at a that's awful. But I think it's it's it's good to talk about it and good though people up to a written you know hard money lending I didn't even know about that early until you came and talked to us about yeah. And so. I'm still kind of like you know it makes sense because it sounds like it's a little bit easier to get that in investment money to come in so you can and. The projects but there's a minimum there's like it when I'm looking at deals I look at them animal on mound and I'm gonna make. Has before I'd get involved at least you know weren't used to look at things it was round about 25000 dollars if I can if I can buy property. And borrow the money and at a very little money. And turnaround in six months and 25000 dollars for doing that that to me. Works. And so I started doing that just look at to see how many deals I can do how quickly condemned them and how much money can make as long as it at my minimum. If it didn't maximum pain that's a win that's always that's a great deal death and and so that it is it is game. Cherry pick him you know Austin looking for the one that would produce that now now what are so. The other than other than he's maybe of getting our money what are some of the other advantages of of of hard money. Are there any thing is there anything else other than just that ease of access to it well hard money you don't have that your credit. It is not credit based you don't have to have any filings down from the started to do you know that stood there looking at the deal again you know looking at the deal. The only thing that they are looking for his experience some type of experience are you familiar with the processes do you have somebody in your pocket Dennis remain with the processes and you know so you probably know a friend a friend of friend it's billed as that's gonna build for you. And he's done several several bills now that somebody that you need to promote when you're going to Hartman. And that's and that's the difference that right there like you have to conventional. You know going to a bank and down. Make it easier getting if your of yours your whole life yeah my story you know maybe even a sampler Indian. At at at and her child first child definitely that's in that and now now but I think that that's the differences that. Lot of times people wanna get involved in investing idea but they don't know how and I think that's it's been so great having you on the show of the past couple weeks is because. You'll win from. Early knowing it sound like his I have do it to you know do and do it and do and it is a very very successful rate so if you wanna get a hold of us here at the show you give us a call 5129300000. That's you re Max will be lined suit he definitely wanna get them all there have any other questions give us a call. We close it down with you. I have a good rest your weekend and enjoy the rest your week you'll see guys here next week absolutely.
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