Epic Real Estate Investing - Private Money Secrets for Maximum Wealth and Financial Freedom | 1167

Episode Date: October 8, 2021

If you are struggling to find private money for your real estate deals, you are not alone! It's a mystery for the most, but Matt solved it and will let you know in today's episode! Also, you will learn about the new legislation that recently passed and spells great news for real estate investors. Tune in and find out more! BUT THAT’S NOT ALL, you will hear the latest in the news and crypto updates that bring us together and set modern ideas on creating wealth!  Let’s GO! Learn more about your ad choices. Visit megaphone.fm/adchoices

This is Terio Media. In today's show, if you are struggling to find private money for your real estate deals, you're not alone. It's a mystery for most, but I've solved it for you and I'll let you in on it. But first, I'm going to share with you new legislation that was recently passed that spells really great news for real estate investors, perhaps not great news for everybody else. And I'll explain in just the minute. Let's go.

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Here's Matt. Not great news for everybody, but upzoning is good news for investors, real estate investors, specifically as California leads the way. This is a trend likely to be followed by other states in the very near future as well, but California is their first. California bill SB9 effectively bans single family zoning across. the state, allowing severances and up to four units on most residential lots. So here's the deal. California bill SB 9 was recently signed by Governor Newsom, and the law effectively it bans single-family zoning, a regulation which allows only one house per lot. And SB9 will permit lot splitting and allow up to four units on most residential properties across the state. So SB9 was

met with applause by those seeking more supply and housing affordability and opposition by homeowners and some municipalities. But with the goal of boosting housing supply, the Treasury Department is seeking to reduce restrictions on Fannie Mae and Freddie Mac that limit loans for second homes and investment properties. So the intention is for these to create more supply for housing and more affordable housing. But not everybody is down for. this because it's probably going to lead to congestion in a very different type of landscape of where we live. But anyway, why does SB9 matter? Well, single-family zoning has been the crux of housing affordability and supply debates for decades. This has been going on for a really long

time. Single-family zoning places a ban on denser housing options such as small multifamily units. And so cities and states are now taking a more serious look at draconian single-final. family zoning laws. For instance, last year, Oregon made a move to ban single family zones across the entire state. I don't believe that was successful, but it's on top of their mind. And now California has done it. And similarly, the Biden administration is pushing nationally for an end to most single family zoning. But California, it's their turn. They've taken the lead. They're the first ones to put this into place with SB 9. And that was signed into legislation on September 16th. And this bill, it allows for duplexes in most residential neighborhoods across the state.

So investors and developers will no longer need to apply for a zoning change to increase the density of their properties. Single family homeowners, they strongly oppose the bill as they believe it will reduce property values in their neighborhood. Similarly, many municipalities weren't happy with a bill as it limits their authority to manage communities and oversee development. So a quick take on this, SB 9 essentially end single-family zoning, but with a modest shift, and under the bill, property owners can build up to three additional units on their land, allowing single-family homes to be transformed into as many as four units. So why is this important?

Well, up-zoning, the act of allowing for denser housing options, is great for investors and affordable housing advocates. It gives investors more flexibility and options in terms of adding units, severing lots, and improving the net operating income of assets. So that's part one. The second part is the Treasury's move to contribute to this. So the Department of Treasury and Federal Housing Finance Agency, FHFA, announced recently that it was suspending certain provisions added to the preferred stock purchase agreements with Fannie Mae and Freddie Mac.

So these were Trump-era limits. And they placed restrictions on the number of loans Fannie Mae and Freddie Mac could provide for second homes and investment properties. Ironically, Trump with this plan was kind of moving for the same goal, the same result as far as increasing housing supply for people's primary residences and making them more affordable by keeping out investors or large investment purchases and the second home purchases, trying to make it easier for everybody to get loans for their primary residence.

So although the intent was noble, it hasn't given us the result that we wanted. So we're going to take a different approach to it. And so specifically, only 7% of mortgage volume from Fannie Mae and Freddie could be secured for second homes or investment properties. And the reason that was significant is that if there wasn't anybody on the second market to purchase these loans, it reduced the incentive for banks to even write up these loans. So in an effort to boost housing supply, these limits are being reviewed and suspended. So the quick take here is the restrictions,

which were added to the preferred stock purchase agreements in January, prevented Fannie Mae from acquiring loans secured by second homes and investment properties and lenders. They're more hesitant to make loans that cannot be sold to Fannie and Freddie. And loans that are off limits to the government-sponsored entities are typically more expensive for borrowers. So why is that important? Well, the FH, FAA, and Treasury suspension of limits is great news for investors who will now have more financing options and support when it comes to acquiring rental properties. So as the Biden administration and states push for more housing supply, keep an eye out for more investor favorable announcements such as this in SB 9.

So this is an entirely different approach to get the same result. More housing and more affordable housing at that. but also watch the landscape of neighborhoods as they begin to change. You know, I'm all for making money, as you know, and I love using real estate to do it, which you also know. But this could have some sort of backlash. It could have a serious impact on our way of life, particularly in cities and surrounding suburbs. Now, I don't know exactly where the slope ends, but it does have a slippery slope feeling to it. I suppose if you're first in and early to start capitalizing on legislation like this, you'll make enough money to where it would have minimal impact on where you live and your neighborhood.

But like I said, two entirely different approaches that are striving for the same result, but could end up looking very, very differently. And just all that to say, I'm not sure where this ends and what it looks like when it does. But in the meantime, use your resources and your effort to land on the wrong. right side of this. Please stand by. We've got overhead to pay. We'll be right back.

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Back to the show. Invest in real estate so they can escape the daily grind and retire early. And by far, the fastest way to make this happen is by using other people's money. more commonly referred to as OPM. And that can be a bank's money. It could be credit cards. It could be hard money. All of which can be easily found with a Google search or two.

But when it comes to the elusive private money, that's not so easy to find for most people. These are common questions here that flow my way on a regular basis. Like, how do I get private money? How do I find private money lenders? Where should I look for private money? There's a very simple reason as to why so many struggle finding private money for their real estate investing. And there are really two parts to this reason. Number one, they don't know what private money even is.

I mean, it wouldn't be such a mystery if private money was more commonly referred to by what it actually is. It's relationship money. It's money that comes by way of your direct or indirect private relationships. The second part of this simple reason that so many struggle finding private money is that they put the cart before the horse, meaning they try to quickly build relationships after they need the money. Private money relationships don't get built that way. I mean, these are real people we're talking about. And people can smell your need for their money a mile away.

If you want to access an unlimited supply of private money for your real estate investing, you must build these relationships before you need the money. And that is the secondary solution to the mystery to making private money a reality in your real estate investing ventures. and I'll get to the primary one in just a second. But where to start? Well, I have a simple step-by-step process in how to do this. And I've put that inside of the private members area of Epic Invest Ed, where I help people become top gun real estate investors,

but you can have it for free right now. You'll see a link for it in the description below. Now, the primary solution is understanding that you don't need a bunch of new relationships to fund your deals with private money. Once you've got just one relationship in place, there are five commandments to follow that can turn that one into more than enough. Number one, ask what type of return people would be open to. And this is really important because you don't want to commit to a return that you can't produce. And it's not uncommon for people to be open to an amount that is less, sometimes much less, than what you would be willing to pay.

For example, if your private money lender has their money sitting in a savings account earning less than 1%, it's not unreasonable that they'd be open to a 4% return, as that would be more than four times what their money is earning. On the other side of that, if you were to offer 4% up front, it wouldn't be uncommon either for a private money letter to turn you down, as maybe their money is in a mutual fund somewhere that's currently earning 8%. So, don't offer. Start by asking. And I show you how to ask in the step-by-step process that you'll find in the description. Number two, honor your word. And what I mean by that is say what you're going to do and do what you say and do it for no other reason than that you said you would do it that's honoring your word and this seems simple enough right but very

few people do it and for that reason alone you're going to stand out as a trustworthy competent steward of people's money further when considering all of the moving parts in real estate investing and the multiple variables involved it won't be difficult to understand why this is a challenge for so many So, a good rule of thumb to follow for making sure that you do honor your word is to under promise and over deliver. Number three, do not share your challenges. No, you're the pro. Don't raise concern, unnecessary or otherwise. It's not your private money lender's problem. You see, it's natural that we want to share with others the bad day that we might have just had or how we were cheated in some way or how we just got crushed with some terribly bad luck. Save those stories

for your spouse or your close friends or maybe even better just keep them to yourself altogether whatever you do do not share these challenges with your private money lenders they've entrusted you with their money and it's your job in getting it to perform so remain as optimistic as you were when they gave it to you and work like hell until that original goal is accomplished i mean even when your investment turns out great for everybody involved the spooky challenge stories that you might have shared might be just enough for them to sit the next one or the rest of them out. Number four, initiate communication. And this is a biggie. So you don't want to make your money people chase you for updates or even worse payments. If you're going to be late with a payment or short on a payment, initiate communication as soon as you know it.

Additionally, keep your private money partners abreast of how things are going. I mean, it's something that you're likely doing with your other relationships already. Your private lender is no different. It's a relationship. And as far as your business goes, it's one. one of your more important ones. So treat it as such. Number five, asking for an extension or a modification, that's a last resort. Sometimes investments, they just don't go as planned. It happens to newbies and experts alike. And should you find yourself in this situation, you need to exhaust all options before you bring this up. Meaning, if you got to sell some stocks, you got to sell some toys, some properties, or make some extreme sacrifices, you exhaust all of those options

before you ask for an extension or a modification to your private lending agreement. In short, to keep the private money flowing, just perform and make it easy for your private money lenders. These commandments and philosophy, they came to me through more than a decade of experience. And it all started years ago when I had attended a real estate investor meeting. And during the halves and want section of that meeting, I had shared a deal that I had under contract to where I needed just $10,000 for the down payment. Well, at the end of the meeting, a lady walked up to me and said that she'd give me the money for the deal if she could just tag along and watch and see how everything worked. So, I obliged. Seemed like a good deal to me. And because I followed these five commandments, she's not only a

private lender for me to this day. She's introduced me to her friends and family who have all loaned me upwards of seven figures for my deals over the years. So the key takeaways here. One, private money is relationship money. Two, build the relationships before you need the money. Three, you only really need begin with one relationship. And four, perform and make it easy for your private money people. And you'll quickly develop a reputation for someone who's trustworthy and competent. And that reputation attracts more money than you'll be able to use. We'll be back with more right after this.

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Visit unsmoked.ca. Mainstream media is ripping us apart. This is news to bring us together. And make some money in the process. Tough news week, looking for some good news. But there is some. Gene Simmons is kissing his longtime Los Angeles home goodbye for $16 million. dollars, the Kiss bassist and co-lead singers, 13,405 square foot Beverly Hills residents sold

last week for $9 million less than it was listed for in March when it was priced at $25 million according to the multiple listing service. It was most recently asking just under $20 million, according to Matthew and Joshua Altman of the Altman Brothers team at Douglas Ellman. Mortgage applications volume dropped 6.9% for the week ending October 1st as higher rates reduced borrowers waning appetites for refies even further, according to the Mortgage Bankers Association. Shortages of key construction materials are forcing some builders and contractors to turn to substitutes and hunt for alternative suppliers as they rush to meet high demand for new housing. Construction companies are looking for replacements and new sources for everything from wood

paneling to ceiling joists to pipes, saying that potentially higher costs and added complications to design and construction can be preferable to putting a project on hold for months while waiting for planned supplies. And supply shortages stem from a serious of supply chain disruptions hitting industries around the world this year, from port congestion in Asia and the U.S. to labor shortages at factories. And heavy storms in Texas and Louisiana have also slow production of some building materials, while semiconductor shortfalls have made appliances harder to secure.

Back in August, it was reported that a simple pill taken at the onset of symptoms for COVID-19, the risk of hospitalization and death by 50%. Now, 1.7 million doses of that drug, an antiviral agent called, bear with me, Malnewpiraver, produced by Merck, have been secured for use in the United States and represents the first orally adjusted treatment for the virus. The pill acts like a saboteur incorporating RNA-like building blocks into the fabric of the virus. If they are reproduced, these defunct RNA imposter's ruin vital processes in the

SARS Cove 2 ability to replicate and therefore the virus dies. It's not clear who yet will, would be available or clear to take the drug as the U.S. government paid $700 per dose for it, but having an option for those who are elderly or with underlying conditions to take at home could in some cases solve both the problem of the risk of death and the risk of hospital overflows should further variance arise. It's basic exercise knowledge that to gain muscles, you strength train, and to lose fat, you do cardio, right? Not necessarily a new UNSW study suggests. In fact, the study, a systematic review and meta-analysis that reviewed and analyzed existing evidence shows that we can lose around 1.4% of our entire body fat through strength training alone,

which is similar to how much we might lose through cardio or aerobics. So if you hate the stair mill like I do, then this would be good news. It's not a passing fat. It's the future of money. What happened this week in cryptocurrency? A Bitcoin exchange traded fund has a 75% chance of being approved this month in some form. In comments this weekend, Eric Balchunas, senior ETF analyst for Bloomberg, said that United States

Bitcoin futures ETFs were likely on schedule for the regulatory green light. And that would have a huge impact on the price. So if you had any thoughts of getting into Bitcoin, you definitely want to do it before that gets passed

because you're likely to be able to ride the wave of Wall Street's appreciation. And then Real Vision CEO and macro guru Raul Pawl is predicting that Bitcoin and the crypto markets will see parabolic growth in the coming months as almost every crypto chart looks coiled and ready for a big move after months of consolidation. And there are really no shortage of predictions out there. I share quite a few of them with every episode. And some of the more optimistic predictions, however, some of those are coming true as the price of Bitcoin reached as high as $55,500 in the market today after it broke through an important resistance level in the chart at around $52,700 for the first time since May.

The rise also brought the market capitalization of the number one cryptocurrency above the psychologically significant $1 trillion mark. And if you feel that you're too late to the party, I want you to understand that everyone that has ever gotten into crypto, even if that was four years ago or six years ago or 12 years ago, thought the same thing. They thought they were late to the party. And with all indicators pointing to this is not going anywhere,

as well as the director of the SEC this week, his name escapes me, Grinsberg, Ginsburg, something like that, said that the U.S. has no intention of banning cryptocurrency. So if that was of a concern to you, those were the comments just this week. as well. Food for thought. And that wraps up the epic show. If you found this episode valuable, who else do you know that might too? There's a good chance. You know someone else who would. And when their name comes to mind, please share it with them and ask them to click the subscribe

button when they get here. And I'm going to take great care of them. God loves you. And so do I. Health, peace, blessings, and success to you. I'm Matt Terrio. Living the Dream the dream. Yeah, yeah, we got the cash flow. You didn't know home for us. We got the cash flow. This podcast is a part of the C-suite Radio Network. For more top business podcasts, visit c-sweetradio.com.