BiggerPockets Real Estate Podcast - 642: Private Money: What the Experts Warn Against Before You Lend (Or Borrow!) w/Beth Johnson and Alex Breshears

Episode Date: July 31, 2022

Is private money lending the next best way to invest? To the everyday landlord, home flipper, or once-in-a-while investor, private lending seems completely foreign. Why would you lend money when you can put it into your deals? And even if you wanted to, wouldn’t it take millions, or at least a few hundred thousand dollars to get started? Surprisingly, private money lending is available to more people than you think, and it could be your next way to make truly passive income. Alex Breshears and Beth Johnson were neither millionaires nor active investors when they started lending private money. Over time, they realized that they had grown relationships with active real estate investors, many of which always needed funding for the next deal. While swinging hammers and painting baseboards may sound fun to active BRRRRers or flippers, to Alex and Beth, the passive income that came in from private money lending was even better. They’re now so ingrained in the world of private money lending that they’ve written the newest BiggerPockets book, Lend to Live, where they talk about how to build “hassle-free passive income” by lending private money. In this episode, they go over how a new investor can start lending, what to look out for in a lender when you need money for deals, and how even with a few thousand dollars, you too can start building truly passive income streams. In This Episode We Cover: How any investor can start lending money for a substantial profit Why private lending has become more popular as investment funding becomes limited Hard money vs. private money and why you should never confuse the two What to look for in a private money lender and how to vet them before you invest Protecting your money as a private lender and what you need to do to secure a return Where private money lenders can find investors who are looking to invest  And So Much More! Links from the Show BiggerPockets Youtube Channel BiggerPockets Forums BiggerPockets Pro Membership BiggerPockets Bookstore BiggerPockets Bootcamps BiggerPockets Podcast Get Your Ticket for BPCon 2022 Listen to All Your Favorite BiggerPockets Podcasts in One Place Learn About Real Estate, The Housing Market, and Money Management with The BiggerPockets Podcasts Get More Deals Done with The BiggerPockets Investing Tools Find a BiggerPockets Real Estate Meetup in Your Area David's BiggerPockets Profile David's Instagram Rob's BiggerPockets Profile Rob's Youtube Rob's Instagram Rob's TikTok Rob's Twitter Why Private Money Lending is a Perfect Alternative to Active Investing The Perks & Process of Becoming a Private Lender Books Mentioned in the Show Lend to Live by Beth Johnson and Alex Breshears Extreme Ownership by Leif Babin Cashflow Quadrant by Robert Kiyosaki Psycho-Cybernetics by Maxwell Maltz, M.D Connect with Beth & Alex: Alex and Beth Email on Lend2Live Beth's Email on Flynn Family Lending Alex' BiggerPockets Profile Beth's BiggerPockets Profile Lend2Live Flynn Family Lending Click here to check the full show notes: https://www.biggerpockets.com/blog/real-estate-642 Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Check out our sponsor page! Learn more about your ad choices. Visit megaphone.fm/adchoices

This is the Bigger Pockets Podcast Show 642. I think a lot of people say they have to have a specific structured mindset and they got to be really goal oriented and put out into the universe what they want. And oftentimes for some people, they're so over-engineered in their goal setting that they may not be, you know, they might have blinders on to what kind of opportunity exists out there. I think, you know, both Alex and I shared our stories about how we just kind of happened upon private lending. and every aspect of real estate investing involves some sort of chance encounter with someone, with some sort of opportunities.

What's going on, everyone? This is David Green, your host of the Bigger Pockets Real Estate podcast here today with my good friend and amazing co-host Rob Abasolo, where we are interviewing two of the authors of Bigger Pocket's newest book called Lend to Live. We get into it with Alex and Beth, the authors of the book, about private money lending. lots of things that you probably had no idea that go on behind the scenes. How to vet a private money lender to make sure that they're the right one for you, what to look for, what questions you should ask,

and how this whole thing works so that you can scale or supercharge your business. Rob, what did you think about today's show? This was, the wheels turn very often for me on bigger pockets, but today was a very special one because I know this wasn't, the intention for today's videos to really talk about the world of private money lending and how to vet your private money lenders. That's very honestly the largest part of this episode. But I was super interested in actually becoming a private money lender.

I think this is a really cool avenue to diversify in. And so I really like learning a lot of the mechanics of that. I'll spend your money. Happy to pay you interest on that. You just let me know, my man. Hey, a solid 20% for you, my friend, and you got it. All right, today's podcast is brought to you by Rob I and Rob's mustache. Let's see which one of us becomes the best private money lender.

Before we bring in the guest, we're going to get to today's quick tip, which is, consider buying the book that we're talking about today. You can get at biggerpockets.com slash store. It's called lend to live. The idea is to invest passively so you can live actively. And today's guests do a very good job of spelling out in detail how you can achieve the same for yourself. Biggerpockets.com slash lend to live, two as in the number two, lend number two live.

Well, I actually have a, I have a second quick tip for today. This is really important, too. This is going to change a lot of real estate journeys just by listening to this tip. And it's to set a reminder in your phone to remind you to take out your trash every week. Because I'll tell you what, David, I forgot to take out my trash last week and I am paying dearly for it with a trash can full of maggots. And it's caused some divides in my household. I'll be honest. It's not been a pretty week for us because we don't have anywhere to put our trash. It's funny that you say that because two weeks ago, for whatever reason, my credit card stopped making the automatic payment to the city where I live for both the water bill and the trash. So trash guys apparently have like a chart or something that tells them, don't pick up this person's trash because they didn't pay their bill. So I was taking my trash out. The first time I'm like, oh, they just missed it. Then next week, like, it's getting pretty full. And they skip it again because now I'm not paying. And it wasn't until I saw that there was like a letter they got sent saying, we're going to turn off your water. I'm like, oh, I don't know why my credit card

does that every once in a while, but paid it. Now they're taking the trash. But it is a little stressful as you're trying to figure out. And it does fill up with maggots surprisingly fast. I like walked in so defeated. My wife's like, what's wrong? And I was like, I forgot to take out the trash yesterday. And honey, this is the first time this has happened. But there are, there's maggots in there. And she was like, oh my. And yeah. So I had to show the whole mustache is my redemption story to her. She, she's like mustache or you're sleeping in the doghouse tonight. So here we are. Here we are. Very resourceful of you.

What if I told you you could forget everything you know about investment property loans? Because host financial is rewriting the rulebook, tossing out those pesky DTI restrictions. They focus on your property's income potential. No tax returns or personal income statements needed. Simple, efficient, and tailored for investors like you. Imagine a lender that sees the gold mine in your property, not just the numbers on your paycheck. That's the host financial difference. And they're approved in 47 different states.

So your next big deal could be just. around the corner. Ready to unlock your property's true potential, visit hostfinancial.com. Don't let old school lending hold you back another day. That's hostfinancial.com. Did you know your house gets bored when you leave? I can't actually prove that, but it probably misses out on the action, the footsteps, the late night fridge raids. Yeah, when you're gone, your place is basically on unpaid leave. It's sitting there in the dark thinking, I could be contributing right now. Your side room wants a side hustle. Even your Wi-Fi is like, we could be networking.

You're on vacation, spending money like it's a sport, while your staircase at home is fully capable of sending your income upwards. Here's the twist. You can go on a trip and actually earn money. Airbnb makes that possible with the co-host network. If you're away for a while or have a secondary property, you can hire a vetted local co-host with real hosting experience to handle it all. A co-host can handle guest communications.

It can manage reservations and keep things running smoothly so you don't have to check your phone between beach days. That means less stress and more time enjoying your trip. You can relax, knowing guests are taken care of, and your place is in good hands. You travel, your house works. Everyone wins. If you're ready to host but could use some help,

find a co-host at Airbnb.com slash host. Do you ever notice how every passive investment somehow turns into a very active lifestyle, active spreadsheets, active phone calls, active stress? Here's a better question. What if you could buy brand-new construction homes, 10% below market value, and the best markets across the country without making real estate your second job? That's exactly what rent-to-retirement does.

They're a full-service, turnkey investment company, handling everything for you. In some cases, investors get 50 to 75% of their down payment back at closing, plus interest rates as low as 3.75%. They've partnered with bigger pockets for over a decade, helping thousands invest smarter. If you want to do the same, visit biggerpockets.com slash retirement to learn more. All right. Let's bring in Alex and Beth. Alex and Beth, welcome to the Bigger Pockets podcast.

I understand that you two are the newest authors in the stable of Bigger Pockets Publishing. So congratulations and welcome to the family. Alex, can you tell us a little bit about the book that you two wrote? Yes, absolutely. So the book was really kind of a, it started off a little bit as a passion project because we kept getting asked, you know, what's a good book to read? what's some resources and there just really wasn't anything solid out there. And I think we had just gotten asked one too many times and we're like, you know what, we're just going to do it, we're going to make something. And because we had talked to so many kind of new private lenders or new people

wanting to use private money that were like, okay, we got a good idea of what the common questions are. What are the common pitfalls? What don't they know? What are they asking questions about? And then we put all of that as action items into the book. All right. And then Beth, in your opinion, Who is this book best suited for? I think this book is best suited for anybody that wants to learn more about private money lending, whether you're a borrower who just really wants to become more engaged and build your acumen around private money so that you can raise capital better, trying to understand how to learn about private money from the point of view of the lender. But it's also for people who just don't really want to be an active investor.

Maybe they don't like flipping or wholesaling. and so they choose a more passive route to creating some cash flow by becoming the bank. So I'm curious before we get too deep into this, as the market is shifting, how do you see the need for private lending moving? Do you think we're going to see more people to say, you know what, I don't want to own the real estate. This is a little scarier now that values are actually going down again. Or do you think that people are going to be saying, hey, I need to borrow money, who's going to give me money or some combination of the two? I think it's coming more into light right now more than ever. I think we saw this in 2020 happening as well where a lot of investors who might be a little bit more bearish are pausing on their projects and kind of waiting and seeing what will happen next.

And we see really understanding where your source of capital becoming more important because the volatility in rates, the underwriting requirements shifting, understanding where you can get capital very quickly and easily is making private money lenders become. more and more important right now. I think it's probably going to only increase the demand for private lending right now because those people have nowhere to go. Like I literally ended up in private lending because a friend of mine, his hard money lender called him right when the world was shutting down with COVID. And the hard money lender said, sorry, dude, you know, you're out of luck. We aren't funding any more deals. And fortunately, we just knew each other and I said, okay, let's make a go of it. But that's happening in a more increasing pace now because some of these hard money lenders aren't necessarily closing their doors to pause. They're closing their doors for good. Oh yeah. I just actually

wanted to establish a baseline here because we're going to be talking about private money lenders, you know, private money in general. Can we just start with a simple definition of what private money is and how it differs from, you know, traditional money? I think you just asked a loaded question there, Ro. Right. We've got one hour, so hit lay it on me. So the way we define private money is capital that someone directly has control over. There's not strings attached. It's kind of the easiest way to think about it. So I have a pool of capital potentially sitting in a bank account, retirement account, and I am the decision maker. I am underwriting the deals, and then I'm moving those deals forward with clear to close. What is currently happening in our industry is hard money

lenders are now trying to rebrand themselves as private lenders, direct correspondent lenders. They have all these phrases that include the word private lender. And I don't want to sound like I'm, you know, making something bad out of hard money lenders, they're just different because their source of capital comes with strings attached. Either they're a debt fund and there's legal obligations to their passive investors that says, we won't do this, we will do this, we will do this, or maybe they have a warehouse line of credit with a bank somewhere. So again, they've sold the bank on this business model saying, we're going to check all these boxes, or they're selling the loans on the secondary market saying, okay, what is the

secondary market buying. So they have yet another person dictating what they can actually close on. And all of those things, you know, in a good environment, good market, you know, bull market, not a problem. But now that we're starting to hit kind of that rocky road like Beth mentioned earlier, knowing what your source of capital is when you're talking to a lender is going to become vitally important for a lot, especially active investors, because they need to know that if they get that pre-approval, that it's actually going to close. Because otherwise, the pre-approval is just a piece a paper with letter typed on it. Yeah, that wasn't so bad. I think that was a nice, nice intro to the topic. So hard money lenders, there is a little bit of a, not necessarily

a branding issue, but there are people who would consider that private money, but it's just really important to be clear on where the actual source of that money is because it dictates some of the, I suppose, legalities around how that lending takes place. Is that kind of correct? Well, it's not just legality. It's also how you are able to loan your money out. If you're a truly private money lender, like Alex and I lend out our own money, I can call the shots. It's basically I could choose your own adventure. I can dictate the rates. I can dictate the terms. I can pick the partner or the borrower that I want. But when you're a hard money lender, traditionally a hard money lender, maybe you pool capital together, then you have a private placement memo, a PPM,

that dictates how and what you can lend on. So it'll say maybe you can only do first. Maybe you can only do up to 80% loan to value or an appraisal or a BPO is required, some sort of stipulations for the underwriting so that they can sell it out or to appease their capital investors. But true private money does not have those kind of stipulations, specifically if you're not going to be backed by the institutional capital that Alex was speaking about. If you don't sell out your loans or you're not going to get it funded by Wall Street, then you can do whatever you want. Yeah, that's a great point. It's much more a relationship-based business versus metrics and guidelines like you're going to come into with hard money. So do you feel that that is more of a benefit to the person who's lending money or the person borrowing money or both?

I'm going to say it's definitely both. Beth and I like to play this jockey versus the horse game, where, you know, which one do you bet on? Do you bet on the jockey? You bet on the horse. And I tend to be more along the lines of the jockey, which would be the borrower. And Beth is more along the lines of the horse. It's not to say we're ignoring the other one, but kind of in Pareto's principle, the 80-20. I'm going to look at the person, 80%, maybe the property, 20%, and Beth is probably going to be doing the opposite.

This is really interesting. Can you guys explain that a little bit more, Beth, maybe let us know why you go down that direction. Then Alex, I'll ask you the same question. Well, in very simple terms, I feel like properties don't disappoint me, but people can. And so the most important thing for me in terms of especially scaling private money because Alex and I both started out lending out our own money. And over time, you become really the most popular person in the room because borrowers want to know who you are. People want to invest through you because they hear about. your great rates of return and so on and so forth being the bank. And so I like being able to have the ability to put a large equity buffer on any loan. So if the market shifts, if a GC just goes dark, because that's never happened on any project, right, then I can accommodate some of those variables that might not even be, you know, a borrower problem per se. It just helps protect me and lets me sleep well at night. Relationships are important. But as you start to lend out more and more, you have to scale what you're going to look at

because you can't look at everything under the sign. You have to make the best decision you can with a very limited amount of information. So I choose the property. That's a good point. Alex, what do you think? Why do you choose the person? I am definitely person because I feel like no matter how good the deal is that if you have someone who can't make timely decisions doesn't make, doesn't communicate, doesn't has a really

crappy partner, choose a crappy partner. You know, whatever that happens, it doesn't matter if you hand them a deal on a silver platter. If they don't have those fundamental skills in place, then it's nothing's going to happen. And I also kind of base on the relationship where do I feel like this particular investor is going to do everything in their power to make me whole? And if this deal goes sideways, are they the type of person that's going to make me whole? Because it might feel like everybody you know is involved in real estate, but it tends to be a pretty small circle. So if you burn one private lender, I guarantee you that you're, you know, somewhere in the, you know, Cajun underground is going to be found out that you burn one private lender and then nobody's going to lend to you again. So that's why I really base it on the relationship because it's like, okay, if this is a good deal and I have faith, you're going to make me whole, then we're good to go.

So, Beth, when you're looking at the property, what are the key metrics that you're like, this is what I need to see? And if I get this right, the deal is probably going to be okay. Well, as I mentioned before, equity buffers everything. And from a lender point of view, we talk about it in terms of loan to value, whether that's looking at it at it from a loan to purchase price or loan to as is value. But we're also looking at the loan to ARV, the after repair value. Implementing formulas like the 7030 rule, which you guys have explained it very well on BiggerPockets.com.

We want to be able to make sure that there's enough profit margin that, is going to make sure that our principal is going to be returned and that we can make some interest on it too. But really, principal preservation is the primary objective for private lenders. And so that equity buffer, traditionally for my loans, I like to keep it around 65 to 70% loan to value. That feels pretty conservative compared to a lot of other lenders. But as a small private lender, I have a whole lot more to lose than some of these larger corporations, right? And so I want to keep a real nice equity buffer protection. And then how about you, Alex? What do you look for in the person? I would say, I totally agree with everything Beth said. But in my kind of evaluation of the person,

since we were talking about books earlier, I don't know if anybody's ever read Extreme Ownership by Jocko. That is me. I want to see that in an individual. I want to have a conversation with them. And I want to see, are they blaming past partners for poor performance? See, you've got the book, David. Best book ever. Such a good book. So that is really, that is really me. Like I want to see someone who's going to step up and take ownership of what they could have done better. So yeah, your last deal, you might have lost $10,000 doing your first flip, but I bet you learned a lot. And if they're standing in front of me going, this is my next flip, this is my second flip, and they go, this is what I screwed up on.

I hired the wrong general contractor. I picked out the wrong flooring. I didn't pull the permits. But if they're constantly saying, oh, the contractor was crappy, you know, they didn't do this. they didn't do that. It's just excuse after excuse after excuse. To me, that's a red flag. Because me as a lender, I'm basing on that person, that relationship. And so I want to see some ownership of what you've done. It doesn't have to be, you don't have to paint me, you know, rainbows and unicorns, but I just want an accurate representation of how you thought this deal went and

why. Yeah, it's an accountability, right? In owning that accountability, I think it, I mean, especially in a relationship, I think there's probably a lot of trust that that is built, if you are held accountable and you and you do take the ownership. So clearly both of you have done this for a while. You guys are experts in the world of private money lending and everything like that. I have to imagine, it didn't always start out this way. So can you tell us a little bit about how you got into this world? I'll go first. So I was set up on a date with my now husband. We talked casually about real estate. I grew up around real estate. My parents did it on the side as a hustle flipping and owning rentals and he talked about getting into private money lending again. He hadn't done it since before

2008. And truthfully, even though I knew a lot about real estate, I had never heard the term before. So I'm pretty sure after that date, I went back home and I googled it just so I could understand it better. I'm not going to lie. I think that a lot of private lenders just kind of happen into this because they have casual conversations over a glass of wine, which Matt and I did. And then it peaked my interest because how could you possibly become the bank? How could you actually invest in real estate without having to get your hands dirty and build sweat equity? So it peaked my interest and he asked me to help him. I had a lot of marketing and project from program management background. So I got into it that way, just all by chance. What about you, Alex? I'm laughing so

hard because my story is very similar. I went to a RIA meeting, a local RIA meeting. We were stationed. My spouse is active duty. So we were stationed in Florida. the time. And just southern person, I've never met a stranger. This guy walks up and starts chatting. And he's like, if you ever thought about being a loan officer? And I'm like, no, like, I'm in college to be a chemist. Like that wasn't in the radar. And he goes, oh, so you must be good with numbers. I'm like, yeah, I took Calc 3. You know, we're doing okay. My number, my math has more letters than numbers in it these days, but I could do it. And he explained a little bit about what the process was. And this was like 20 years ago. This is back before phones were smart. Everybody was faxing stuff.

And I was like, okay, cool, like, we'll give this a go. And it actually turned out that he was a private lender and he was also a hard money loan broker. And so this being Florida, everybody golfs. So he was routinely out of the golf course. And I was the one running applications out to borrowers. I was taking phone calls. I was a person in the office accepting the checks, you know, when the mortgage payments were coming in. And I really got to see real estate from what I call the other side because I'm going to these RIA meetings.

I'm going to these landlord meetings. And you keep kind of hearing the same recurring things. People are talking about contractors. People are talking about tenants not paying. But they were in this guy's office every time on the first with their mortgage payment in hand. And my guy's out on the golf course. And I'm like, yeah, I like this side better. Like I don't have to deal with tenants.

Like I'll do that. I'll go, you know, I don't golf, but I'll come up with something to take up my time. So I guess it's safe to say you're a financial chemist. You're working the number on that end, right? So I have a question here on the technicalities. I'm still trying to wrap my head around hard money versus private money because I understand a little bit from the standpoint that you were saying, hard money, they have different sources of income, they're pulling it together, might be a fund, we're not totally sure. So if me, Rob, if I want to go and lend $100,000 to people,

yeah, am I a private money lender simply because it's my own money that I'm lending out? Or is there some other technicality that would make me a hard money lender in that instance? I would say the terms are a little nebulous. There's not a clear cut definition. That's why we say what we are considering private lenders, but in my opinion, in your scenario, you would be a private lender because it's your own capital. You can hit the clear to close button and say, yeah, let's do this deal. I like it. You know, here's where we go. Private money lenders are like a speak easy, you know, you don't know where they exist. You're not sure where the door is, but you know they're out there. Whereas hard money traditionally has a brick and mortar storefront, right?

they actually operate it as an active business where true private lenders are really doing this on the side mostly. And so that's why you don't know them. They're not advertising. They don't actively run a business around it. And so they're a little bit more elusive. Yeah. Okay. That actually helps quite a bit because I think it sounds like the average person that has money stashed the way they could just be a private money lender. If they, if they're like, yeah, I want to make X amount return on my money, I'm going to go find an investor to partner up with lend out money. So when you, were starting out in this world, did you lend out your personal money just right out the gate and fund people's deals 100% of the time? Or like Alex, you said that you met, you were kind of

working with somebody, learning the ropes. Did you partner up with someone on your first private money deal to lend out like the wholesome to an investor? I mean, I did not. We funded our first deal entirely from our own capital, but to give someone, because I think one of the kind of misunderstanding's money is everybody thinks you need to start with like a million dollars. Like you can't do anything in lending unless you have a million dollars. My first loan was actually about 32,000. And the reason it was is because my particular borrower actually ended up taking the property subject to. So the first lien was already in place. He paid the cash to the seller. Seller kind of walked away. And then I actually came in in the second lien position and paid for the renovations. So my first, my very first loan kind of on my own,

not with this a hard money broker that I used to work with, was actually in the second lien position, and it was with another military member, again, falling back on that relationship. If he's an active duty service member, he can't get in financial trouble because then his clearance will be pulled. So I was definitely hitting the relationship, I believe, button on that one. Okay, cool.

Beth, what was your first deal like? It was very similar. It was basically, you know, Matt, my boyfriend at the time, had a little bit of his own money, and he actually had two investors, a golf friend, and another school dad that wanted to invest because he was always talking about private lending. And so then I had a legacy 401K from an old employer and rolled that over into a solo 401K and started lending it out that way. It was also about 60 grand. It was on a legal 50-2 cannabis

grow operation in Seattle. But it was in second position and the loan to value on that building was less than 40%. So it was a really safe opportunity for me to really get my feet wet and understand the whole process end to end with my own capital. Cool. This is really, I'm actually really, I'm super intrigued by this specifically because I actually now I'm starting to understand, this is not really anything I would have considered, to be honest, previous to now. And I think I'm understanding a really big benefit is this, is that is a lot of this money that you're lending out oftentimes short term debt? Is it something that you can get repaid? you know, can you find deals that are usually three months long or six months long?

Or are you typically targeting something that's, you know, a 30-year amortization? Always short-term. Yep, always short-term. Most of the time. There are some individuals that they don't want that churn. They don't want to continue to underwrite deals. So maybe they'll do like a five-year loan because they just want the capital deployed. They just want the cash flow. They don't necessarily want the whole like figuring out the documents and doing the due diligence and underwriting. But I would say the vast majority of private lenders. are going to be a year or under as far as loan terms. Yeah, and that was interesting to me because I am in this situation where I do have capital, but I always have to keep it, I want to stashed away for a certain reason, right? Like at my position, like I have to keep a lot of money available for taxes, right? Taxes are coming. Well, taxes, I filed an extension, but in October, that tax bill is going to be due.

And so I know I cannot spend that money. However, if I were to work out an arrangement where I can lend it for, let's say, six months, months, you know, a couple months ago, I could have planned for this. I could have been making money on my money that I have to pay Uncle Sam or I have other projects that take me anywhere from six to 12 months to permit, like different glamp sites or Tiny House Village, for example. And I know I got to keep that, you know, saved for an instance whenever I'm actually going to break ground out there, but I don't, I can't use that money because I know I have to section it off for that. So I'm starting to understand, I'm starting to understand that aspect of it. But for someone

getting started out in this whole world, there's a, I got, it's, it seems scary. It seems scary to just be like, all right, you need 200K. I got it. Or let's say even $36,000. If you're first starting out, $36,000 is a lot. So what kind of protections do you have as a, as a private money lender, if any? So what we offer our private lenders, because just a little bit about my background, as we sort of grew and friends of friends heard what I was doing, they would ask if we would lend out their money. And so it just kind of grew organically. And now it's that we lend out quite a few different people's capital. And the way that we can safeguard it is by helping them underwrite it for them. Of course, we'll do due diligence on the property itself, but we'll add things in like a title

policy for the lender and we'll order an insurance binder on behalf of the lender as the mortgagee. There are quite a few safeguards that you can do in addition to that equity buffer that makes the lending scenario, really safe, really short term, and really secure. Yeah, I would definitely add to that that for me, private lending is one of the few things where someone else is going to pay to cover my butt and I can go into the deal and know exactly how much I'm going to make because like we've already dictated the terms. We've said, you know, we're going to get 10% annualized. I'm going to get two points, you know, up front.

So it's one of the few ways that I've ever found in investing period where I'm protected. I don't have to pay for the protection. And I already know how much I'm going to be making out of the deal. Right, because I think one of the things that you hear very often is, you know, with the hard money lender, they say, oh, yeah, you know, the house is collateral. But we don't really ever talk about the opposite side. We're like, okay, well, if I mess up, the lender will get my house as collateral. But now when we're talking about, hey, I could actually be the lender. If I'm getting the house, quote unquote, as collateral in that instance, now I'm like, okay, is it a headache?

Is it a headache to really go through that process or do all the different fail-safes that you were talking about really, I don't know, really kind of make this process easier? And I'm kind of curious since Beth, you were saying that. Like that was kind of what was coming through my mind. Yeah, I mean, I deal more in volume now. So I'm kind of like a hybrid. I call myself a private money matchmaker because people know us. I have a brand presence in my market, but I'm still dealing with truly private individual capital, right? So we're a little bit in the middle on that.

So we do more volume now that we're kind of growing in our private money and letting out other people's capital. But we try to safeguard it again through that equity buffer and by being able to put the rates in terms against the overall risk tolerance of our clients, right? So if you want to have a lower risk, then maybe we get you into a lower loan to value. And then maybe your interest rates a little bit lower on that. too, but we have some that will take on a much higher risk. And so if it does get into a situation where it ends up defaulting, it's not really a bad scenario. I mean, we have less than a 4% default

rate year over year, and we've never had a principal loss. Thank goodness, because we're putting in some added protection with that equity buffer, right? So even if you lend $150,000 and the property's worth $200, well, if I have to charge default interests and I have to engage, an attorney to help force a sale or force them to make payment, I'm still going to be covered overall. Yeah, it's a little bit hassle logistically because you have to go through that foreclosure process. And Alex says, I can let her speak to it, but she calls that the nuclear option. There are plenty of ways to mitigate that risk and to prevent that default from becoming really scary for a lender. And I'll let her touch on that a little bit. Yeah. And I also wanted to kind of bring

in another angle from this is that title insurance and hazard insurance are not going to necessarily protect you from a loan default. Title insurance is making sure that the buyer actually has clear title to the property that there's no other liens, for example, if you're in a first lien position. So there's lots of things to protect against other than just the borrower defaulting. Because if you don't have lender's title insurance and it turns out this was a fraudulent sale. You know, wholesaler did something, you know, they forged grandma's signature and now the cousin's coming back and saying, hey, this property was never actually legally sold, your lien gets washed away. So if you don't have lenders title insurance in place. So I don't want listeners to think that the only thing that could go wrong is foreclosure. There's lots of things. The property could burn down the day before it's supposed to go out on MLS. So if they don't have adequate hazard insurance that covered the property at its ARV value, they just went with the cheapest thing they could find. And they, you know, they, you know, they, got coverage just for the amount that it was in as is condition, then you're in a similar situation. So when I say protect yourself and I'm not necessarily negating default because there

are other risks to a loan process other than just the borrower defaulting. Did you know you can go on vacation and actually earn money? Because while you're out exploring new horizons, your home is sitting there dark, silent, and wildly underemployed. And it could be making you extra cash. And Airbnb makes that possible with something called the co-host network. If you're away for a while or you live far from your place, you can hire a vetted local co-host with real hosting experience to help take care of everything. They handle guest messages. They prep your space, manage reservations, and they keep things running smoothly so you don't have to constantly check your phone between activities. That means fewer logistics, less stress, and more time actually enjoying your trip instead of thinking about what's happening back home.

You can relax knowing guests are taking care of and your place is in good hands. So instead of your home just existing in the dark, it can be quietly earning its keep while you're off making memories somewhere else. You travel, your house works, everyone's happy. Your home might be worth more than you think. Find out how much at Airbnb.com slash host. Did you know your house gets bored when you leave? I can't actually prove that, but it probably misses out on the action, the footsteps, the late night fridge raids. Yeah, when you're gone, your place is basically on unpaid leave.

It's sitting there in the dark thinking, I could be contributing right now. Your side room wants a side hustle. Even your Wi-Fi is like, we could be networking. You're on vacation, spending money like it's a sport while your staircase at home is fully capable of sending your income upwards. Here's the twist. You can go on a trip and actually earn money. Airbnb makes that possible with the co-host network.

If you're away for a while or have a secondary property, you can hire a vetted local co-hosts with real hosting experience to handle it all. A co-host can handle guest communications, it can manage reservations and keep things running smoothly so you don't have to check your phone between beach days. That means less stress and more time enjoying your trip. You can relax, knowing guests are taken care of, and your place is in good hands.

You travel, your house works. Everyone wins. If you're ready to host but could use some help, find a co-host at Airbnb.com slash host. People love to call real estate passive income, which is interesting because most of the investors I know are very busy. Busy finding deals, busy managing teams, busy worrying they pick the wrong market. Rent to retirement flips that model.

They help investors buy turnkey new construction homes, often 10% below market value in top rental markets across the country. Their local teams handle the build, the property management, and the details, so you don't have to. In some cases, investors even receive 50 to 75% of their down payment back at closing, and there are interest rates as low as 3.75%. They've been trusted partners with BiggerPockets for over a decade, and if you want to learn more, visit BiggerPockets.com slash retirement.

New Year, Clean Slate, and maybe a vacancy that needs to get filled fast? That's where a veil comes in. With Avail, rental listings can be published to 24 top rental sites with one click, completely free. That includes places renters are already searching, like Realtor.com, apartments.com, Redfin, and more. No copying and pasting. No juggling multiple platforms, just one listing that shows up everywhere. If getting rentals organized and filled fast is on the list this year, start with Avail. Sign up for free at Avail.co slash Bigger Pockets. That's A-V-A-I-L-C-O-Slar Bigger Pockets.

In each of your businesses, we'll start with you, Beth, and then I'll ask you, Alex, how often is a default something that actually happens? Do you have the numbers of like a percentage or maybe even just a rough idea of how often you have to foreclose and sell properties? Well, like I said, you know, our default rate is less than 4%. We're really proud of that. Some lenders are much higher than that. For our volume, we're still considered relatively small. Since 2020, when COVID hit, you would think that there's more.

And I've actually only had three. Two of them actually went to auction. And, you know, we were able to recover all of the principal, all of the interest, late fees, default interest, as well as legal fees that were incurred associated with having a ticket to auction. Prior to that, I only had a handful in eight years originating, you know, hundreds of millions of loans. It just doesn't happen very often so long as you put those precautions in place while you're originating it and not taking care of it afterwards. I would say for me, I haven't had anything necessarily default to the point where the loan, you know, we had to go to foreclosure. I've had a

borrower that was basically the loan needed to go a little longer because of the supply chain problems during COVID. This guy ordered Windows the day he closed. He showed me the invoice. And it took four months for windows to show up. And so they had a contract on the property contract on MLS and said, hey, we're good to go. We're just literally waiting on windows to be installed. So we had to extend the loan. But he was very upfront and very communicative about it. So it really wasn't a problem. It's just nothing we could do. You know, we can only get windows so quickly. especially during the early parts of COVID. So I think, again, going back to that, that what most people would consider the nuclear option of foreclosure, yes, technically his loan was in default. He, you know,

we had reached the end of the six month term, but because he was open with communication, he was always very forefront like, hey, this is what I've done. I knew this is going to be a problem. At that point, we elected to modify the loan and just extend it for a couple more months until the windows could be installed. We could close escrow and get repaid. So that's why I called nuclear option foreclosure. That's what I wanted to point out, because I think a lot of people hear this and they're thinking like, if I go one day past what we agreed on, they're foreclosing right away. But you two are both saying, no, I take pride in the fact I don't have to do that very often. We don't want to have to foreclose. And I'm sure it also is nice when you can get repeat

business. You get the same people coming back. You build a relationship. They know how you work. You know how they work. So on that note, when someone's vetting the private money lender that they're going to borrow money from, what are some things that they should look for? I'll start with you this time, Alex. For me, I'm going to say the first thing, above all, never, ever, ever send them any money. There is no private lender, a legitimate private lender. They are not going to request thousands and thousands of dollars up front. They're not going to request some, you know, $5,000 as an application fee, whatever their BS, they're trying to sell you. So no, if you take away anything from this episode, please do not send a quote unquote private money lender thousands of dollars up front. That's a no.

there's a couple different industry associations. They are not necessarily compulsory to be a member of, but if they are a member, that does show that they legitimately care about the ethics best practices in lending. One of them is the American Association of Private Lenders. You can go on their website. You can search for the person's name or company, and if they are a member, it will pop up. Another is lenders are sometimes required to have what's called an NMLS number. Anybody, again, it's a licensing thing. You don't necessarily need to be licensed, so they might not have that. So not having that doesn't necessarily, again, exclude them. But another thing that you could do, most private lenders tend to be very hyper-local. They're going to either lend where they live or they're going to lend in a very small market if they are a distant investor. You could ask them, have you closed any loans in this area? And they go, sure. Then you can ask, what's the name that you closed under? And you can actually search public records for past deeds of trust or mortgages, depending.

depending on the state you're in and see what they have funded. How long was it? You can see when it was paid off. You could see how much it was. There's a lot of information on public records that a potential active investor would go and say, okay, I just want to see a couple other deals that you funded. What's that information? I would add in that I think that performance is more important than rates and terms, especially when you're dealing with truly private lenders. A lot of them, as I mentioned before, they don't really do this every single day. It's not their active day job. And so you really want to make sure that a private lender understands the nature of your business that understands the project and isn't going to hamper in any way. When you're dealing with novice lenders, there can be a tendency for

them to maybe stall or not meet your immediate needs, especially if you put maybe some money on a draw and you want to see performance. So from an investor standpoint, I would caution about shopping just rates and terms and really making sure that the private lender can truly perform the way that you need them to as you would if you were going to a traditional hard money lender. When you're vetting the performance, what if you're, what if you're, it's like a new relationship, you know, if you've never met this lender before, if you haven't really worked with them, obviously you're going to interview them a bit, talk to them about their process and what, you know, their experience and everything. But, you know, on your very first deal with the private

money lender, is there a little bit of a leap of faith with that? Because, you know, you don't have the historical, you know, knowledge of what their performance is. There really is. I mean, I think that the best way to raise private capital is to really, like I mentioned before, is to understand what private money lending is from the point of view of the lender. And especially as you're trying to draw kind of novice capital into your network, into the fold, the more that you can really educate them on how to safely and secure their private investment in you in your project is a good way to be able to get them to buy into what you're doing and to gain that confidence. So, even though you're going to try and ask questions to understand their level of competence as a private lender,

if you're talking with somebody that's completely net new, then they don't really have a history, right? But you might want to gauge their overall conversation, those nonverbal cues. Like, do they ask a lot of questions? Do they maybe come off as a little needy? Are they getting really into the weeds? Which there's a balance to that, right? You want to be able to give them just enough information, but you don't want them to be maybe overly nitpicky about. things. And so, you know, if I'm an investor trying to seek private capital, I just don't want

someone that I feel is going to not trust me and end up meddling and maybe stifling my project. I want to make sure that they feel confident in me and in my project so that they can leave me alone and let me go do what I do best. That's a good point. So I was just thinking about this. Like, there's oftentimes where I'm working with a professional in any space. It could be a lender. It could be a license broker. It could be a real estate agent where you will have a question and you will ask that email text, whatever. And some of them take two to three days to get back to you. I particularly notice this with attorneys.

I recently was looking for someone to draw me up an operating agreement. I sent four different attorneys in email, and I got random sporadic answers over the next, like, seven days. Like, good God. Like, why is it so hard for something that they probably have a template for that they can just edit? But then there's the people who immediately respond back to you, set expectations, ask questions to see what you're looking for to see if they would be a good fit.

And I've just like over the years of doing this have sort of learned, pay attention to those ones, right? Like the response rate they have and the decisiveness and the confidence that they have gives me a good feeling if I want to work with them as opposed to what I think the amateur mistake is, which is just to say, what's your rate, what's your terms, right? They'll almost every time you do that, you end up finding the best price ever at Walmart, and then you get Walmart quality and then you complain about real estate investing as a whole because you had the really bad experience.

do you two have like a similar way of looking at this where you try to respond very quickly and you're looking for clients to do the same? What's your advice regarding when they don't know anyone at all? They're not coming via a referral or maybe they just heard about one of you through the grapevine. What specifically do you think you can give our listeners as really good tips to look for in that communication? I would say the first thing is ask them what they are willing to lend on. And so just a very simple question. You know, Because, for example, they might only lend on fix and flips. They might only lend on something you're going to burr.

It just really depends. So I'd ask them what they are comfortable lending on. They might not be comfortable doing a renovation down to the studs as their first loan, for example. They just might want something like a paint-and-carpet cosmetic rehab as their first loan. So if you can paint them a picture or have them paint you a picture if you're the active investor on what they're willing to lend on. So is it single-family homes in their local market that? are only needing paint and carpet rehab versus, you know, a major renovation of a multifamily. That's two very different projects. So I think if you lead with that, you're already trying to

narrow down whether or not they're a fit for you and you're a fit for them. I would add on to that, like how much money do you have to lend if, you know, making sure that they understand that if there's going to be project overruns or, you know, God forbid, we have another shelter in place and timelines get elongated, do they have enough extra capital to potentially infuse into your project to help you get across the finish line. Because one of the problems about potentially working with some novice private lenders that may not understand projects and real estate investments all, you know, in general is that they may not have additional capital or they may not want to. And then from an investor standpoint, you're kind of stuck having to go out

and raise capital or refinance your entire loan elsewhere just to get across the finish line. And that's probably what you don't want to do. Again, it's trying to do your due diligence as a borrower and as a lender before that loan closes and not having to have so many issues after when it's in service. Is that a, is it fair game to ask that? Or is that a, you know, are the, that, that, I'm always nervous to ask for like referrals or, you know, what, you know, when it feels like I'm interrogating them a little bit, it, that's totally fair game. Like no private money, no private money is really going to take offense to that question of, how much money do you really have in case I need it because I feel like that is a possibly like a red flag for me to ask simply because it sounds like

maybe I will need it. Well, a softer way in my opinion to ask something like that is, you know, hey, the properties I'm generally looking at, my purchase price is around $200,000. Would that be a loan that you could fund? And then they just say yes or no. So you could come up and tell them about, and that also indicates to them that you've thought about your business model, that you know the numbers of your real estate business. So if you come forward and say, hey, my usual purchase price is some between 2 and 300,000, is that something you can work with, you know, even for one or two loans? And they can either declare yes or no. And then that way know what you would consider sensitive information has been relayed. Okay, what do you think about closing quickly?

How much should a borrower value how quickly that you can get funds for the deal that they're doing? I think that really is going to be very, very important moving forward because there's going to be as things as the market's correcting potentially in some places. potentially all places. Being able to close quickly, get things renovated quickly, get it back on the market quickly is going to be paramount. Because even though real estate tends to be kind of a slower moving asset valuation, it's still moving. So understanding that it's moving and potentially it's moving downwards, going back to Beth's point about having that healthy equity buffer, that right now is of utmost importance because potentially your equity buffer could be going down

quarter by quarter the longer this project goes. Now, being able to perform and get to close is extremely important. So I think borrowers really need to understand and pick, right? It's all about managing tradeoffs. Do you want quality? Do you want speed? Or do you want it to be cheap? To your point, like, people don't come to me expecting Walmart prices. I'm going to be priced a little bit higher than some of your national hard money lenders out there that have access to really stupid, low cost of capital. But I'm also going to provide them a value out that these national lenders can't. I can do hyper-local in-house valuations and do it really quickly. I can provide full service from end to end, have access to a key decision maker, the owner. So it's a lot different.

And I think that borrowers really need to understand based on the project, based on their, you know, individual needs, what's going to be the most important for you? Is it going to be speed? Is it going to be quality? Do you need it to be cheap because your margins are kind of tight? tights, kind of up to the borrower to figure that out first, and then go find and right fit the lender that they need to match that. And I would say on top of that, Beth and I both have people in our networks that an established borrower can literally text information to that private lender and say, hey, look, I got this deal, I just got this contract, I need to close next week, and that's why I got the contract, because I had a quick close and no contingencies, can we do

this? And, you know, we have private lenders in our network and maybe 20, 30 minutes worth of underwriting, like she mentioned, these quick valuation processes, they can go, sure, just let me know where to wire the capital. So that speaks to, again, having that relationship with someone. If you've completed a private loan with somebody, you've done well, you've communicated. A lot of times, you know, the active investor, at least in my case, is going to come back and kind of call dibs on that money because they're like, hey, don't lend that out anywhere. I got deal number two in the work. So as soon as that closes, we're closing on something else. So it ends up being a little bit of kind of just a recycling program, if anything, it's less work on me as a lender to work with the same borrower over

and over and over again, as long as the metrics aren't changing. So it becomes less work for both of us as the active investor and the lender. Awesome. Is there anything that we're missing here? I mean, I don't really deal with a lot of private money lender. So what else can I ask here to properly vet my private money lender? One thing I would ask is, you know, are you, because some people put themselves out there as private money lending, right? Or they say that they're a direct lender, but they really, in fact, aren't. They might actually. be a broker. And so brokers are great for certain scenarios, maybe have a really complex project, maybe it's a large commercial deal or some, you know, issues or, you know, with a sponsor

or something like that. That might require a broker to really get creative and have access to a wide network of financing. But most deals don't necessarily need to be that way. And so when you work with a broker can just add additional costs, not to mention you don't get access to the key decision maker, the actual underwriter. When you're working with truly private money, the person lending out those funds, if you talk to Alex or you talk to me, we're lending out our own capital, we're doing our own underwriting, we're doing our own property valuation. So you know that we're going to what we say, our word is our bond, and we're going to get to close and we're going to fund that deal. We won't change at midstream. So I would ask whether or not they're a direct lender or

broker because it can make a difference not only in terms of cost, but in performance as well. Oh, absolutely. I think if anybody's coming forward in the forums or on a Facebook group or LinkedIn or something and they're like, hey, you know, I'm a lender or somebody, I see it all the time. Somebody will post somewhere that, hey, I need a lender. I need a private lender in Pennsylvania. And then they'll just go and it'll just be comment, comment, comment, like, hey, here's our rates and term sheet. Here's our link. Here's our application. A lot of private lenders that we're talking about, they might not be that formalized. They're not likely. to have like a rates and term sheet, for example, that's usually hallmarks for something that's going to be a hard money lender or even a broker. That's not to say every private lender acts that way, but the vast majority of private lenders that are in our kind of space, they're not going to have a formalized rate and term sheet. They may have an application online. You know, it's, that's pretty simple to do these days. They might have a website. But if you start seeing things where like rates and terms and they have fax numbers and they have phone numbers and they have, it's probably not the

decision maker. You're probably not talking to the person who can hit the clear to close button. All right. That is fantastic. Ladies, this has been incredibly informative. I think that quite a few people are going to be taking notes on this episode. And you two are both very good at what you do. I can see why we tapped you to write the book here at Bigger Pockets on this topic. I'm going to move us on to the last segment of our show. This is the world famous. Famous for this segment of the show, we ask the same four questions to every guest. But this is going to be a remix. So you guys are going to get slightly different versions of those questions. Question number one, what is your favorite real estate book?

Beth will start with you. My favorite is cash flow quadrant. While it's not specifically real estate, it's all about investments, and it just really resonated with me. I would say mine is, it's not, again, directly real estate. It's actually psychosyberetics by Dr. Maxwell Maltz. And the reason I say that is because all the decisions you make in your life, including investing in real estate come from home base, come from foundation. So if you don't have those

personal beliefs in place or you have a crap ton of limiting beliefs that are directing your life that you don't even know are there, that's going to affect your real estate investing. So for me, it's all about the person. So that's my favorite book. Question number two, favorite lending or finance book. Oh, is it too catchy to say it's ours? Because we've read all the private lending books on the market and they're not that wonderful. So, I would say for me, it was actually, I'll tell you what got me started in this whole thing years ago in high school. I read Roberts Allen's note buying book that he had back in a bright blue cover with white lettering. I actually got sent to the detention in high school for reading

this book during class. And I think that really kind of opened my eyes to the other side of real estate investing. I would say our book too. And I wouldn't see that the other books weren't necessarily not wonderful. But as I was building up our private lending business, I was really at a loss for how to locate best practices or how to really understand the entire loan lifecycle from getting a loan, finding and funding it and making it safe and secure. There wasn't a whole lot of tactical information. There was a lot of conceptual information. And so I think our book just takes it one step further and helps make it actionable for a lot of, you know, really the lay person that just wants to learn more about it and how to get into it and do it safely.

Question number three, cool tips when you're getting started. Do you have any tips for the people that are kind of looking to get into this world? My number one tip is when you're talking to other people, don't ask them about the technical details. You can find that on YouTube. Instead, ask them if they would choose this method of investing again and why, or what didn't they like, or what have they tried before from their personal standpoint? Because you can learn how to flip a house. There's books about it, there's YouTube videos about it, but the opportunity to get to talk to an actual flipper and be like, dude, what is this really like? Ask their personal experiences because I think you're going to learn far more doing that than coming to people

and saying, teach me all you know about flipping because that's available out there. That's online. That's in books. The personal experiences are not. And I would say just be open. Network, of course, but I think a lot of people say they have to have a specific structured mindset and they got to be really goal oriented and put out into the universe what they want. And oftentimes for some people, they're so over-engineered in their goal setting that they may not be, you know, they might have blinders on to what kind of opportunity exists out there. I think, you know, both Alex and I shared our stories about how we just kind of happened upon private lending. And every aspect of real estate investing involves some sort of chance encounter with someone with some sort of

opportunity. So just be open-minded and get out there and start mixing and mingling because you never know what you're going to find. I have seen this happen so much. many times that you just said there, Beth, with the over-engineering. I've done it myself starting different businesses. I've seen other people that come into these businesses and they're starting their own little mini business working on one of my teams where the human brain wants to know exactly what is going to happen. Give me the blueprints of the house. I want to know every angle, every piece of wood, exactly where it's going to go. And you don't want to move until you know that. The reality is you take a couple steps and go, yeah, I'm going in that direction, but it's not

actually going to be the path I thought. It's going to be this way. And then you take a couple steps down that road and you go, whoa, I didn't even see this thing from where I started. That's way better. Let me go in that direction. And you're constantly pivoting. You do have the overall idea of what you want to accomplish, but you've got to hold it with the loose hand. The insistence that real estate investing or wealth building is going to work the same way following blueprints or a chemical engineer would do their job is a fallacy. And so many people get fresh. I just love that you brought that up as people getting in their own way by looking for that. So thank you for mentioning it. Last question from me, Alex, in your opinion, what sets apart

successful investors from those who give up, fail, or never get started? It's going to be having an abundance mindset. You have to be able to walk in and go, how can I add value to someone else in this room? Because you're going to automatically attract other people that also have that same mindset, because people want to invest with people they know like and trust. So if you walk into the room going, what can I add? You're going to attract those other people that are what can I add? And then potentially you're going to find business partners, like Beth and I managed to find each other. You're going to find deals that way because someone's going to be like, hey, this person really helped me out with, you know, referring me to a good insurance agent. You know, hey, let me come back to this person because you're top of mind because you left them with a good feeling.

Like they really added some value to my life. They gave me a referral, whatever that is. So I would definitely say, walk into the room with what you can add. Preach it, sister. That is so, so good of what the world look like if everyone had that. Because everyone asked the question of what's in it for me? What can they do for me? In fact, you know Rob has been going through a breakthrough in this area of his life

because he's now growing out his mustache as a way to try to add more values to the world around him. It's true. And it's not working, but I'm going to keep growing it out. And hopefully it's adding value to my marriage. My wife likes my mustache. It's actually her request. She's got a thing for Tom Selleck. And I'm like, well, I guess you can call me Juan Selleck.

It was inspired by Top Gun, right? She's like, what was it? Miles Teller. Happy wife, happy life. Yeah. So I guess I'm, that's right. I'm Mia's teller. Let's say say Miles in Spanish. That's very funny. Ben, if you still remember the question to you, if not I can restate it because we sort of took that on the tangent. I think I remember it. I think that, you know, perseverance is really important. When you become a private money lender or when you go into real estate investing in general, you're a business owner. You're an entrepreneur. So you really have to stick through it because you're going to build up. You're going to get knocked down. and you have to have a survivor mentality so that you can keep plowing forward

even in the biggest times of trial. And if you don't have that in you, you're probably not going to make it. Yeah, so Rob, keep that in mind. Just stick with the mustache. We'll keep coming in. It's going to get stronger. It's going to get better.

You're bringing more value. It's on my vision board. Thank you for that, Beth. He really needed this. Before we started recording today, we had a 25-minute conversation of just Rob wondering if he should stick with it or if he should throw in the towel.

Right. I was tapping myself in the mirror all morning saying, you can do this, man, you got this. As my husband says, Rob, no one likes a quitter, so keep going for it. That's right. Well, thank you very much, ladies. If you don't mind, tell us where can people find the book to buy it, and then how can they each get a hold of you?

The book is available on Bigger Pocket's website as the e-book and the paperback book. There will be an audible version of Think available on Amazon for those that like to listen on the go. And you can reach us. We have a pretty easy email address. It's Alex and Beth. at Lend to Live, the number two in there.com. So Alex and Beth at Lentiliv.com. And then where can people get a hold of you, Beth? Likewise. You can reach me out at my company. It's Flynn Family Lending. We're based in Washington

State. And you can also reach me at Beth at flinfamilylending.com. All right. Rob, where can people get a hold of you? Oh, you can find me on the YouTube's over at the Rob-Bilt channel, R-O-B-U-I-L-T, and on Instagram as well. Rob-B-B-U-I-L-T. you know, not really changing the spelling, except on TikTok where I'm Rob Bill Toe. Yeah, you really shot yourself in the foot with that because now people are building fake accounts saying Rabito on Instagram and it's just confusing. Oh, I know. It's so frustrating.

I just didn't think I, listen, I didn't think this was going to be my life and I realized all these things. The mustache grew and then like the spam accounts came out. I don't know what am I supposed to do. Maybe we need to get your mustache its own page. That's probably what we need. like your mustache, Brandon's beard. That would honestly solve.

And I don't know what my trademark would be. I'm a pretty boring guy. You got mutton chops a little bit when you grow them out. I don't know if you could have a page for mutton chops or if they'd qualify. Why not? All right. Well, thank you very much, ladies. This has been fantastic.

If you guys would like a copy of the book, go to BiggerPock's.com slash store. You can find it there and leave a review. Let us know what you think. Anything you guys want to leave us with before we get you out of here? I would say, just realize that private money lending can be something that anybody can do. Like I said, you don't need to start with millions of dollars. You can start with a very low amount or even none of your own money. Just do brokering. So it's not as high a hurdle as most people make it out to be. To add on to what Alex says, it allows you to invest passively so you can live

actively. And if anyone would like to get into the lending business, hit me up because we are hiring brokers for my company. I think that if you love real estate, this is something I'd tell people all the time. It's not work a full-time job or become a full-time investor. There is a huge of stuff that you can do in between that you two are a great example of where you're working in real estate. You can also own some real estate. You make money from real estate and you don't have to sit in that three hour commute that is draining your soul with the hopes of if I just buy enough property, I can finally get out of it. There's a lot of stuff in between. So thank you for sharing and painting a picture for us of exactly how that worked for each of you. Wonderful

stories. Had a great time. Thank you very much. This is David Green for Rob Juan Selig Abasolo. signing out. Thank you all for listening to the Bigger Pockets Real Estate podcast. Make sure you get all our new episodes by subscribing on YouTube, Apple, Spotify, or any other podcast platform. Our new episodes come out Monday, Wednesday, and Friday. I'm the host and executive producer of the show, Dave Meyer. The show is produced by Ian K, copywriting is by Calicoe content, and editing is by Exodus Media. If you'd like to learn more about real estate investing or to sign up for our free newsletter,

please visit www.biggerpockets.com. The content of this podcast is for informational purposes only. All host and participant opinions are their own. Investment in any asset, real estate included, involves risk. So use your best judgment and consult with qualified advisors before investing. You should only risk capital you can afford to lose. And remember, past performance is not indicative of future results. Bigger Pocket's LLC disclaims all liability for direct, indirect, consequential, or other damages arising from a reliance on information presented in this podcast.