Epic Real Estate Investing - Investor Financing with Jeff Ball | Episode 163

Episode Date: July 13, 2015

Today we provide another resource for financing your next deal.  Matt is interviewing Jeff Ball, CEO of Visio Financial Services, a company focused on helping residential investors succeed by offering unique mortgage loans. ------- The free course is new and improved!  To access to the two fastest and easiest strategies to a paycheck in real estate, go to FreeRealEstateInvestingCourse.com or text “FreeCourse” to 55678. What interests you most? E ducation P roperties I ncome C oaching Learn more about your ad choices. Visit megaphone.fm/adchoices

Hey, Matt here, and I'd like to meet you. I'd like to meet you in person because I want to know your goals. I want to know where you are in your business right now. And I want to know what challenges you're experiencing and potentially offer a variety of solutions. So go to grub and grow rich.com to see when my team and I will be in a city near you. You see, we're traveling the country over the next 12 months just to meet you, just to break bread with you, toss a few cold ones back and talk shop. And at the very least, I'd just like to thank you in person and thank you for supporting the epic real estate investing podcast because if it wasn't for you, this show would not exist. And for that, I am grateful.

So go to grub and grow rich.com to see when we'll be in your city and reserve your seat, grub and grow rich.com. This is Terrio Media. Broadcasting from Terrio Studios in Glendale, California, it's time for Epic Real Estate Investing with Matt Terrio. Hello, and welcome. Welcome to Epic Real Estate Investing, the place where I show people how to escape the rat race using real estate. Just shift your focus from making piles of money to making streams of money,

change that one thing, just one time, and you are on your way to financial freedom. Now, I warn you, it's not the most exciting path, but it is the fastest. and once you get there, life then becomes exciting. And for a step-by-step blueprint, a step-by-step manual of how to get started, the exact way that I got started, go to free real estate investing course.com. There you'll download a simple little program of step-by-step of the two easiest and fastest

strategies to a paycheck in real estate. It's how I got started with nothing but lint in my pocket. And here I am over, now we're about a little over 100 rental properties. cents. We got up to 200. We liquidated a bunch of stuff. Now we're down to about 100. 100 high performing high voltage rental income properties. All righty. So been busy. I know I've missed an episode here and there recently. And I got a great explanation. Here's why. You see, I stumbled upon a quote earlier this year. Actually, I've stumbled upon this same quote several times since I saw it the first time. and it reads, top performers set their goals to behaviors and processes rather than outcomes.

Did you get that? Top performers set their goals to behaviors and processes, not the outcomes. Their goals are set to the behaviors and processes, not the outcomes. And that quote comes from author of the book, Influencer, by, it's Joseph Grenny. And that quote, it sent me into deep thought, actually, back in I think around February or so. And that happens every once in a while. I mean, you hear one certain thing. It's happened to you as well.

You hear one certain thing in a certain way at precisely the right time, and it changes everything. Specifically, I've spent the first half of this year working on my behaviors and my processes. Or simply put, I've been working on my systems. I've prioritized my tasks, and I start at the time. top now, and I just don't move to the next task until that first one is complete. And so, I've missed some podcast episodes due to the fact that I just hadn't finished the task that came before creating a new podcast. And I'll be back on a regular schedule shortly.

Through this little process that I've been working, I've neglected some of my money-making activities even, because I'm not focused on the outcome. That's not where my goals are set at the moment. They're set on the behaviors and the processes. They're set on the systems. So I've kind of neglected some of those money-making activities in the interest of being able to make more money more easily in the future using some well-oiled high-level systems. And those systems being a lead generation system, a real system. One of them, you just turn the key and the system go, it starts, it runs.

And a lead contact system, making sure each one of those leads actually get contacted. And then submitting offers system, something that makes it really painless. It's really easy to submit offers to every single lead that comes through my marketing efforts. And then following the direction of Michael Gerber, author of the E-Mith, as he states, organize around business functions, not people, build systems within each business function. Let systems run the business and people run the systems, because people come and go, but the systems remain constant. So that's what I've been up to.

I've put the systems in place, automated systems, in fact, and I've hired the people to run those systems. And I essentially, you know, I had to take a step back so that I could take two steps forward. And in a very short period of time, I'm so grateful I did this that I just kind of slowed everything down and took that step backwards. In a very short period of time, I've actually moved forward four steps this year, staying, you know, staying consistent with that metaphor. and this is very much what the epic intensive last month was all about. And if you missed it, boy, you missed it. I don't think there was one exception. I mean, every person in attendance said it was the greatest live event that they had ever been to.

Now, of course, they were speaking to my face and they would, I guess they wouldn't say anything otherwise. Not too many people would, but nobody did. and everyone to my staff said it was the greatest event they'd ever been to, and I actually received multiple follow-up emails from people, from my coaching students and attendees alike, that they were so pleasantly surprised. And I have to tell you, I mean, I had high expectations for the event, but it really did exceed even my expectations.

There are so much ancillary benefit that came out of that that I hadn't even planned on. And it was just, it was awesome. And I've sort of adopted to see this, this phrase that anti-seminar. I've adopted that for the event because there are no upsells. There's no running to the back of the room to buy the next thing.

You don't have to have your credit card in hand and trample over everybody and try to be the first 10 in the back of the room. None of that. No standing up and waking yourself up doing the hokey-pokey or dancing around doing the locomotion. None of that crazy, silly stuff.

I hate all that stuff. And no required crowd participation. I'd have to ask you to raise your hand. or nod your head or repeat after me. None of that stuff. None of the stuff we're all used to. All that stuff that we've probably really all have grown to hate. It was just plain old nuts and bolts real estate training.

And if you'd like to look into joining us at our next event, you can by visiting epicintensive.com. Epicintensive.com. I believe all the new information is up now, as we'll be in Nashville, Nashville, Tennessee, October 1st, 2nd, and 3rd. All righty? In Nashville, Tennessee, October 1st, second, and third.

I hope to see you there. It will be worth it. Anyway, that's what I've been up to, setting up my systems. And now we're really rocking in the wholesaling side of our business because of it. And I may miss another episode or two this summer.

That might happen. We'll see. But if I should miss one here or there, just know that I'm working on my business to make my business better so I can be here more frequently with you. So there. I hope you enjoyed last episode with Josh Swanson, Epic Pro Academy member.

He has taken a very creative approach to using Epicfastfunding.com to close more deals. And just after we had recorded that exact episode, I mean, right after we recorded that episode, he posted in the Epic Pro Academy's private Facebook group, this. Just got another one. Exclamation point, exclamation point, exclamation point. And he writes, remember everyone, just because your FICO score may make Epic Fast Funding not an option for you at the moment. moment, it doesn't mean you can't still use it to make money. My buyers love financing this way

over hard money. Thanks Epic Fast funding and of course thanks Matt for bringing it to us. You're very welcome, Josh. This guy in the email below is a new client who used to only be able to buy properties where conventional loans work an option. Now he can buy at cash only discount prices, refilator with a traditional mortgage and hold for long term. I just improved his life and he will be able to escape the rat race faster because of Epic Fast funding. Plus, I'll be making good cash wholesaling to him through my cash-only deals. Wink emoticon, he put in it. Thanks, Matt.

Well, you're very welcome, Josh. Oh, and then his email says, this is from his buyer. Hello, Josh. Thanks for telling me about your company. We met in Deltona, and I also buy single-family properties, but I hold them long-term. Please direct me to the lender you mentioned. I would like to be able to purchase from your company using cash rather than traditional financing. Thanks again.

So there you go. Epicfastfunding.com. ways to use it. Josh is a kind of a pioneer in the group as far as it's showing us how to do that. So, congrats, Josh, you're absolutely crushing it. And you see, Josh is, he's using his own intellectual currency to access other people's actual currency to close more deals. And the source he's tapped into in this respect is epicfastfunding.com. So if this sounds like something for you, if you haven't gone over yet, just take your FICO score, state your income and complete their 60-second application and up to $150,000 of business credit can be yours in as little as seven days,

Epicfastfunding.com. And speaking of funding, I've got another source of funding for you today via our guest who's patiently waiting on the phone. Our guest is responsible for setting the overall strategy and direction of his innovative lending company. And prior to his current position, he was the global head of semiconductor investment banking at J.P. Morgan. at J.P. Morgan, his clients include some of the largest technology companies in the world, including Intel and Texas Instruments.

But before J.P. Morgan, he was a corporate securities attorney at Gary, Carrie, Ware, and Friedenrich. Hopefully I said that right. He received his JD and MBA from Santa Clara University and his undergraduate degree in economics and theology from Georgetown University. Regarding his business, it's very simple. He leads a group of investors who lend to investors. And we're going to talk to him and how he can help you in your business in 30 seconds. Right after this. There are two steps to wealth. First, stop doing what poor people do. Second, start doing what wealthy people do. The wealthiest people work their strengths and hire their weaknesses. If only you have the time and resources to do it, now you do. We're VAs for Real Estate.com, and we have some free information for you. Get the five-step shortcut to hiring a rock star virtual assistant that will

make you millions. Go to VAs for Real Estate. estate.com. Stop doing what poor people do and do what wealthy people do. VAs for real estate.com. On the phone, I'm joined by CEO of Vizio Financial, Mr. Jeff Ball. Jeff, welcome to Epic Real Estate Investing. Oh, thank you. Good afternoon. Yes, it is a good one. Tell me a little bit about Vizio Financial Services. It's a unique organization or a unique type of company that, you know, services, real estate investors exclusively as far as I understand it. Is that accurate? That's correct. Back in 2011, and we actually fostered the business inside of another company called Akano Homes that we had built during the financial crisis to buy bank foreclosures from the financial institutions wholesale

and sell them to small investors located around the country. And that business is bought and sold about 11,000 single-family residences. And out of that, we saw an opportunity, a real need in the market to provide financing to investors for these properties. So is this a private fund or you guys an actual bank? No, we are a private fund. Okay. Today, we started our business financing it primarily with high net worth folks. Over time, we've migrated it to hedge funds, you know, credit funds and also banks.

Today, that's, today we're essentially a financier to investors. Perfect. And that's for fix and flippers and buying holders alike? That's correct. We have products that are designed for folks who are going to rehabilitate properties to resell them to typically own our occupiers. We also provide some longer-term financing to folks looking to build a rental portfolio. Very good. And do you use the same or similar guidelines as the banks, or is it more of a hard-de-money type situation where they use the actual assets to determine qualification?

Yeah, much more of the latter. We actually do provide some very low documentation loans. So our process is much faster and simpler than a bank. And we're typically, we're even often faster and simpler than local hard money lenders. And certainly in many cases, much more reliable because our capital sources are much larger and much more scalable than most small local lenders. Got it. So this was, this kind of was, Akana Holmes was, I guess, risen from the aftermath of the collapse, right? Is that what I understood you say? That's correct. So you've been in business for what, that's seven, eight years or so? Yeah, if we were to think of the two companies together, Ocona Homes, we actually found it back in 2006. So it's nine years.

But the lending business has really been running in earnest since 2011. So far. And then how many real estate investors are you servicing today? So we've made approximately 3,000 loans. Okay. We lend in 34 states. More than half of our loans have already paid off. So the loans perform very well. And, you know, typically we are lending to folks on a lower documentation loan on lower balance assets.

So our typical home that we're lending on is in the $100 to $120,000 range. Got it. Got it. Right in that cash flow sweet spot. That's correct. Super. Cool. So I understand that recently you did a survey of your investors and you compiled a report that, you know, basically was sharing or can be interpreted as good news for the future as investor optimism is returning.

Can you tell me a little bit about that report and what you found? One of the things that through the process of buying and selling, you know, those 11,000 homes at a Cona Homes, we built a multi-100,000 database of investors, again, located across the country. So for the last couple of years, we've done an annual investor report where we go out and survey them on a series of questions about how did they do last year and what are they expecting in the future. This year we had about 700 respondents. And so I would say some of the key takeaways, investors remain very optimistic about their opportunity to continue to acquire properties. nearly 50% of them expect that they're going to be able to buy four or more homes this year. One of the trends we saw this year is we see an increasing amount of interest in more expensive properties. I think some of that has to do with the reduction in availability of less expensive properties.

But folks are rotating towards more expensive properties, and we're also seeing that investors are now investing probably more into those properties. they're making more substantial improvements to the properties than they were maybe two or three years ago where they were able to just, you know, provide paint and carpet and maybe some new fixtures and resell the property today. It appears that the improvements are more significant, often changing mechanicals and or adding or changing square footage. Is that just buyer behavior? That's just the tendency of when, you know, the memory is not serving them anymore. they forgot about the collapse.

They're feeling better. More money is available today. So they're just spending more? Or are there economic indicators that, you know, kind of tell them that, you know, keep trudging forward? I think so, you know, obviously with the real estate market, it's hard to have to be careful making generalizations because the dynamics in one market can be very different than others.

Absolutely. I live in Austin, Texas. Our business is headquartered here. What I would tell you in Austin, which is a very, very, strong market, most of the low-hanging fruit has been picked over. And so today, investors have to invest more time and effort and capital into properties in order to extract a reasonable return on that investment. So that usually involves, you know, taking a two-bedroom, one bath and turning it into a three-bedroom two-bath. And so, you know, I think for investors in

some markets, that means that the market now is really much more favorable. or favors the more experienced rather than the casual investor. You know, I think in some markets it's also just availability of inventory. A lot of the less expensive properties have been already picked over. Obviously, many markets. The foreclosure backlog is reduced pretty materially from where it was a couple of years ago. Right. Can I imagine also that more money is becoming available to investors?

it's becoming a little bit easier to qualify as a resident owner as well. So there's an exit strategy for the investors right now that probably hasn't been there for the last few years. I think that's right. Although I would tell you we see probably increasing demand from investors for financing to help them grow their rental portfolios. So I think we've seen some loosening in credit requirements for consumer buyers. but I think the conditions there remain pretty tight. So I think that's a trend that really is favoring conversion of increasing numbers of single-family residences to rental units.

In the report, Jeff, what was the most surprising thing that you found? So I think one of the most interesting takeaways for us, I'm not sure I would call it surprising, but interesting. What the data suggests is today about 55. percent of the investors are part-time, 45 percent of them consider themselves full-time investors. Of the part-time investors, so, you know, of the 55 percent, nearly 85 percent of them would like to go full-time. The number one impediment that they cited was availability of capital. Secondarily, there are some other impediments that were noted.

One that I thought was quite interesting was about 20 percent of the investors cited the there was a lack of quality tradespeople to actually do work on the properties. Another cited impediment was availability of good deals. So I think that's a real one as well. Yeah, we've got to actually go out and work now. As you were saying, that low-hanging fruit has certainly waned. Yeah. For sure.

Yeah. Cool. So, Jeff, is there anything that I should have asked that I didn't? I'm trying to think about interesting for you all to, to think about and consider. Sure. My audience is kind of split right down in the middle where we've got a good portion of them are very much hands-on investors and want to be involved.

They want to get their hands dirty. And then we have this other half that think that's what they want to do until they get involved. But the good news is your firm offers financing for both types for the fix and flippers and the people that want to take more of a passive route and maybe do the buy-and-holds. strategy. Yeah, and I think that latter part is probably, I would say, Matt, one of the most interesting aspects of the market right now, which is most numbers that are cited out there is that there's between 13 and 15 million single family rental properties in the United

States. So when you, in overall, when you look at U.S. housing stock, round numbers, approximately 50% of the homes in this country are owned without any mortgage finance on. So when you start to triangulate... You said 50%? 50, 5-0. Wow, okay. Yeah, it's a surprisingly high number. When you start to triangulate on, you know, these investment properties, let's just say

it's 15 million units, and if we kept the math very simple and understated, the average value of those is $100,000, you're talking about a $1.5 trillion asset class. The vast majority of which is probably not. not financed and is there really isn't right now any sort of significant institutional financing of that space. Meaning most mortgage lenders, this is not, lending to investors is not what they focus on. Even though Fannie offers some financing and those sorts of things, investor lending is a,

it's an extremely large market and I think many investors who own rental properties as we talk to our customers, what we find out is that many of them aspire to grow their rental portfolios, but finding capital that is easily accessible by them is actually very difficult. And since the vast majority of these rental properties are owned by investors who own probably five or less properties, they're not really institutional in terms of of their ability to access capital, the way they manage them, the way they keep their records, those sorts of things.

When they try to go get financing from a bank, that's an incredibly difficult process for them. So they're really left. That's what I think is one of the most interesting opportunities in the marketplace is how do you provide financing to those folks who own four or five but would like to own 10? Well, there lies an opportunity, Jeff. That is exactly what we are focused on.

Yeah, you should start a company that services that crap. Oh, well, wait. Fantastic. All righty, Jeff. So if my audience was interested, wanted to learn more about you, or they actually want to contact you and go through the process to see if they did qualify, where would be the best place to send them? The best place to start would be our website, which is www.vizio-v-lending.com. So visiolending.com.

Fantastic. Well, it's been an absolute pleasure. Thanks for your time. And thanks for all the hard work you're doing. as far as the reports and sharing that information. The gentleman's name is Mr. Jeff Ball. He's CEO of Visio Lending. The website is VizioLending.com.

We'll be right back. Alert! Real estate investors, listen carefully. A closely guarded secret reveals that closely guarded secrets aren't really that closely guarded. Seriously, go to find motivated sellers ASAP.com to get the inside scoop on how the nation's most successful real estate investors really find their deeply discounted properties. Go to find motivated sellers ASAP.com.

Deeper discounts, less secrets. Find motivated sellers ASAP.com. That's it for today. See you next week or catch me tomorrow on turnkey real estate investing. I'm Matt Terrio, living the dream. You've been listening to Epic Real Estate Investing, the world's foremost authority on separating the facts from the BS in real estate investing education. If you enjoyed this show, please take a minute to visit iTunes and share your thoughts.

Thanks for listening. We'll see you next time here at Epic Real Estate Investing with Matt Terrio. This podcast is a part of the C-suite Radio Network. For more top business podcasts, visit c-sweetradio.com.