Epic Real Estate Investing - Real Estate Mastery: From Financial Analyst to Property Mogul | Brian Valdivia | 1426

Episode Date: February 15, 2025

Join us on the Epic Real Estate Investing Show as we welcome Brian Valdivia from Beltway Lending. In this episode, Brian shares his impressive journey from acquiring his first rental property in 2021 to amassing nearly 200 properties to date. Learn how Brian transitioned from a basement-dwelling financial analyst to a thriving real estate investor and lender. He reveals his strategy for expanding quickly using hard money, the importance of relationships with realtors, and his unique approach to finding deals. Additionally, he offers valuable advice for aspiring investors on securing financing and managing renovations. Don't miss this episode packed with practical insights and inspiring stories from a true real estate pro. Stay in touch with Brian: phone:  [phone] email: [e-mail] Learn more about your ad choices. Visit megaphone.fm/adchoices

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Let's go. All right, please help me welcome to the show from Belt, Way lending, Mr. Brian Valdivia. Brian, welcome to the epic real estate investing show. Hey, how are you? Thank you for having me. You back. Nice to meet you. I like your attire. We got the same taste in fashion. Black hoodie, man. Black hoodies, can't go wrong with it. I think we got the same barber, too. Where are you from, Brian? So I'm in Baltimore, Maryland. I was just in Baltimore six months ago. Oh, where at? I think we just drove through. I spent time in D.C. and I was kind of everybody that lives by, oh,

were by Annapolis. Super nice, man, the waterfront area down there. I mean, one of my favorite restaurants is down there. Lunas is the Steak House. I think we went there. So you like steak, too. Look, we're best buds already. Don't tell me like the Boston Celtics and it'll be just fine.

I'll pass. Cool. Hey, you know what? I was reading about you, Brian, and I noticed that you just started and got your first rental property in 2021, I believe. And then you built that up to like nearly 200. super fast escalation. So I want to know all about that. But tell me what you were doing just before real estate and what inspired you to get involved. Absolutely. So prior to real estate,

I was a financial analyst from Northrop Grumman. I'm like a wizard in Excel, I guess I would say. I'll never forget that work environment. I was in the basement with no windows. It was a pretty rough environment, you can imagine. It was pretty locked down. And I actually had done a house prior to buying my first rental. And it was a real train rack. I had some owner finance stuff to get it. I didn't have a lot of money, and it was a real nightmare of renovation. It took about 18 months. But I do, I got the taste that like this is the way, like, you know, when I was 24, so I'm 34 years old now, but when I was 24, I think I like started reading and I gathered

a lot of knowledge about real estate, but I didn't really have the confidence, we'll call it, to make the jump and to get started. But something switched, you know, shortly after I got married and then I struggled through the first one. And then so financial analysts, and I was like, man, I got to, I need a change. I found a hard money lender and I went and offered to work for them for free. And that's all she wrote. You figured it out.

Yep. So you basically what? Just kind of watched the clientele work? Yeah. So I'm a really, really like process driven type of individual. So for me, like I can see things in an assembly line fashion and I can kind of model and build out. So I started working for this hard money lending company and they brought me on to do like accounting and like analytics and things like that kind of leaning on my background in Northrop. And within a week, they had me helping build out a process for DSCR loans, those rental loans that are really great for scaling.

And so what that showed me, those DSCR loans, they showed me that what the takeout, what the refinance portion looks like. They were a hard money lending company by nature and a really great hard money lending company. They have a great process, a great product. They're widely known in our area. So I was learning that process from them as well. And all day I'm talking to clients and, you know, just listening to what other guys are saying and how they're doing it and piecing it together. The only part that I really had to figure out was that contracting piece in the middle. You know, how do I buy a property? It is distressed. I already just understand financing. Got to figure out the renovation piece, but I already understand the exit financing. So not too many variables in the middle to work through. Right. Sweet. So going from one to 200 in just a few years, I mean, what was the key ingredients of scaling so fast? In the beginning, I'd say we were definitely, you know, I was definitely afraid to use hard money. I was nervous about it, about that whole concept.

So I tried it with one property at first, and it worked exceptionally well. I did something with like very, very amenable rehab. And I think I put 20% down on that deal. And then when I got to the second deal, I wasn't really borrowing money from where I worked on the hard money side. They were like, hey, we'll let you do 15% down. And then when I got to the third deal, I think it was 10% down. And honestly, I think at some point it became very,

very minimal out of pocket. And it was sometime around August, I want to say, where like buying one property a month became two or three. And at the end of that first year, I think I had 27 properties from May to December and really got a chance to pause and figure out like what I did exceptionally well, what didn't go well. Like, how do I fine-tune this craft? What can I sharpen? Right. For a while, I was borrowing hard money, renovating, and refying within 48 days, using rate and term refis instead of kind of relying on that cash out. And that worked exceptionally well.

That allowed me to speed through properties. That definitely was a key ingredient to scaling. But knowing how hard money lenders that were flexible and down payment terms, flexible in terms, I mean, I was basically a points machine for some of these people, right? I'm paying 12 and 2, but I'm using their recycling their money every 60 days. You know, that return on those points is crazy.

Are you clipping or are you refying into DSCR? type loan. Refying into the SCR, it's funny, I used to say I don't really flip very much. And then I look back and I probably flipped like 12 to 15 properties a year accidentally, you know, like, you're in the game. You know when those

renovation costs, they're going to stack up eventually. So I finish a rehab that I plan on keeping as a rental and I come across somebody through work or through the lending business. They're like, hey, we're looking for a turnkey rental. Great. We'll sell this one to you. Or I'll put some money back in the bank and keep the wheels turning on the

Yeah, that's how it goes. I mean, you intend to hold them all, but then all of a sudden, opportunities cross your desk. You're like, no, I could use some cash. That's it. The most painful ones are the ones I look back on, and I'm like, man, I wish I'd ever sold that one. Oh, I know, man. You do this long enough. Like, you know, you've only been, what, three or four years, and you're already feeling that.

But you talk to people like myself or people even been in the business longer. They all wish. I wish I would have bought more and sold less. I wish I'd bought more and sold less. That's part of the game. Yep. So there's so many. I mean, it's still so many.

So like, okay, kind of have the money piece figured out. So you had access. You weren't afraid to use hard money. You knew your exit strategy was to go on to DSCR loans. You built the relationship with the lender. So the down payment became less and less of a burden because of your relationship. Now, so the next piece of the puzzle is how are you finding so many deals that actually where the numbers work?

So this is the million dollar question I get asked us. every single time that I'm talking to people because that is the most challenging thing. So I'm a million and one time? Yeah, a million and one. And I mean, I've been acquiring since the height of COVID, which is some of the hottest markets we've seen. Now, it's obviously a little slower now, which has been good. And I'll touch on that too. But a lot of people focus on buying from wholesalers, right?

Like, wholesalers are a really good source. And I buy a lot from wholesalers. Don't get me wrong. However, I kind of thought about, like, if you think about it, every day, a wholesaler wakes up. and they try to emulate what a real estate agent is. Real estate agents have training infrastructure at a system from like Keller Williams or places of that nature, right,

where every day they go in and they're taught how to do things. They're forced to cold call. They're forced to do these things. So instead of modeling my entire business after chasing wholesalers, I actually forge relationships with these realtors more. And I want to tell you that more than 50 or 60% of my deals come from realtors.

Because it's people who like know that I'm going to close when I say I'm going to close. It's going to be hassle-free. look, I don't always flip and everyone knows that that's not really a thing. But on the off chance that I put it back on the market, like I'm coming right back to you. You get the listing, you know. A really good tip that I tell people that I think is really important is you got to get,

if you see something on the market that you like, you got to get that listing agent on your team, not just on the sellers team. So if you were the agent, I'm calling you Matt and I'm saying, hey, Matt, my name's Brian, I really like this property you got. I'm not going to bring an agent. I want to pay $150 for it. And you can take both sides of the commission. Or you can save your client money, whatever you think is best for the scenario.

What I did right there, Matt, if you're an agent, obviously, you know, because you're in the game. But I just offered to double your paycheck for you to help me buy this property. Now, I'm offering you 150. I guarantee it's listed for more than that. I mean, it's very rare that I'm calling an offer ask. But effectively just tried to increase your paycheck to swing you to my side. Right. And maybe you're now on my team helping me work the seller.

You know, that's been really effective for stuff on the market. And all it takes is for me to close one deal with you. And then you're going to see how smooth it is to work with me. You're going to call me, whatever you haven't as-as property. And on top of that, I reach back out to you. And I'm like, hey, by the way, I use Beltway lending for financing. So if you come across any other investors that you need help with financing, give me a ring.

You know, we have a referral program. We're happy to help out. Yeah, no, having been a real estate agent early on as eons ago, you know, you'd hold an open house. And then all your homeowners, your prospective homeowners will walk through. But you'd get a handful of investors every day walk through. And they all kind of had the same song and dance. You got any good deals?

You got anything that pencils. You know, call me with a good deal type thing. After a while, you just kind of dismiss them and brush them off because none of them follow through. But when you, as an agent, when you find one that does follow through, you're calling that person every single day. So it's a really good strategy. It's just to follow through and don't be a doucheback.

on the first deal and you'll probably get a lot of favoritism from the agent. Another thing that worked out pretty good for me that I think was kind of unique is I had MLS or bright access from a colleague because I've never been a real estate agent. But I had access to it. And I can see the agents that are doing the volume and the zip code that I like, which is 21-222-Dundalk. When I flipped-chat out to the 21-22-2-2. Dundalk, baby.

When I, let's say a wholesale, I brought me a deal on Dundalk that I did end up flipping. Obviously, I'm not calling the wholesaler back. but what I did is I picked up the phone and called the agent that's doing a lot of volume there, not necessarily like retail stuff, but also as is. And I said, hey, Matt, I know you list a lot of houses and don't know. You think you could list this one for me? I don't have an agent. I do a lot of investing and I'm looking forage new relationships.

And a lot of people in this industry focus solely on themselves. And it hurts them, man. The second that I'm coming to you and I'm like, hey, I want to bring you value, here's what I got a listing for you. here's a, man, I'm coming to you. I'm bringing value to you first so that it makes it easier for you to say, oh, I got another one. Here's another one.

Yep, yep. With my clients, I share with them on how to build a relationship with a real estate agent. I say, you have to give first or else they're not going to give you the time of day. So you got to give first. And you might have to give twice before you get that reciprocation, right? 100%. So true. 100%.

So scaling that fast, you had to have made some mistakes, right? You just don't up and do 200 houses and you got through totally unscathed. What were some of the big mistakes that if you had to go back, you would do them differently? Yep. So in the beginning, a big piece of this is actually understanding your ARV after repair value. What's this property get all appraise for? For refinance purposes? Yeah, exactly.

Or for sale purposes too. But yes, for me, it was on the refi side. Like I needed to know, like, ban, let me tell you, when I was working for that hard money lending company. And one thing that I did that I thought was pretty sharp was I created an Excel workbook. And I started tracking neighborhoods as appraisals came in. I was leaning on my Excel background. So kind of see, like, okay, this pocket is appraising for this. This pocket is appraising for this.

But the one thing that I'd ever looked at, I never tracked in the beginning was the GLA, gross living area or whatever the actual acronym is, like above-grade living space. So I have never heard that one before. GLA is like a common use in the appraisal world, but like above grade. So out here we have townhouses with a basement. And generally they're going to fall into two size pockets, 896 square foot, which is going to be two bedrooms upstairs. And then 1,024, which is going to be three bedrooms upstairs.

I mean, that kind of shows you the granular of how I look at some of these deals. But anyway, so I wasn't tracking that. I was just looking at talk at a borrowers. Like, oh, I got a three bedroom in Dundalk. Well, they never really specified the two. of those were upstairs and one was in the basement or three was upstairs, one was in the basement. Well, what an appraisal for value? That basement bedroom is worth a lot less than those upstairs and the square footage is a good bit smaller. So the first one I bought, or the second rental,

one of the first two, I got an appraisal back. That was about $30,000 light. And I remember thinking to myself, man, like, I've stared at this spreadsheet for days. How could I have gotten this wrong? And what is the price point at these types of properties that you're talking about? Back then, an 896 would appraised for probably like 185. So a two-bedroom would appraised for somewhere 180, or whatever. And a three-bedroom would probably appraised for like 210. Now, what's wonderful, you know the power of appreciation. Now those two bedrooms are apprised in for 215.

Those three bedrooms are like 255. End of groups are almost 300. It's wonderful. But being off pretty grand, that's a big chunk to be off at that price point. So it dramatically hurt my refinance. I was kind of planning on pulling some cash out of this, when in reality I ended up bringing a couple of money. to closing. So that was one thing in the very beginning that, like, it taught me a very valuable

lesson is I got to know these property types. I got to know sizes. I got to understand above grade living is different to basements, you know, and to tell you how granular I ended up taking that is when I renovate a 896 square foot house, now I know it's, I know it's 18 cases of flooring on the main floor if it's vinyl. And if I know it's going to cost me, you know, $17,000 to $20,000, depending on if I'm doing a basement bathroom. So, like, some of those things have changed. It forced me to be super analytical in a lot of places that I originally wasn't. So with that many units, how are you handling the property management? I have a third-party property manager that I use.

Really great guy. His name's Chad Rawls, Emerald Property Management, super organized. Used to work for the Port of Baltimore out here. It's a crazy, funny story. It came to me back in January of 23 is like, hey, I want to manage your properties. And I was like, dude, you work for the Port of Baltimore. This is like a real income source for me. You've never done this before.

doesn't work like that. I said, but I'll make you a deal. Like, any property you bring me, I'll let you manage. And we'll see how it goes. By June, he brought me 30 house, 28 or 30 houses. He was an agent. He was in the game a little bit, but no rentals of his own. That November, I was like, hey, man, he and I got together. I was like, you can take over the whole portfolio. You're doing a great job. But that was crazy hustle. You know, everybody comes to you and says, I want to get in the game. I want to learn. What do I do? How do I get there? But very few people, are going to actually take that big step and jump in and leave their W-2 job. And he did, man.

Great guy. They are. They're few and far between. You know, the number of people that have come to me over the years. The greatest story that you just wanted to help them. You just like, you felt the emotion and there was a heart over there. And you just wanted to lend a helping hand and give them a hand up. And, you know, everyone that I've done that before, like, they just disappear.

It's kind of sad. People are so convinced and so committed and then when it gets down to the real work. So when you find someone like that, hold on to them for sure. Absolutely, man. Cool. So what does business look like today? I mean, you've made this transition, right? We'll talk about the lending for sure.

Are you still, though, in the real estate side, you're still buying property, still building your portfolio? About 18 properties so far this year. And that is really a function of... It's February 13th. Well, the goal for the... Well, the goal for the year was really 50. I was truly trying to slow it back. And you know how the craziness is.

I'm standing an agent calls me. It's like, hey, there's this cool commercial building. And that's kind of like a target for mine is to buy some commercial this year. So I'm standing out front of this commercial building, like December 20th. And that agent leaves. And I'm just standing there thinking in my head, like, this would be a big step. I don't even know what I would do with this. And some guy walks up and says, can I help you?

And I'm like, I'm just, and I was just looking at this with an agent. The agent left you goes, oh, well, it's my building. if you have any last questions, I can. So he starts talking to me, and we're in Dundalk, which is like where my holdings are. And he tells me they inherited it. I said, any chance you have anything else, that's the famous question.

My mouth gets me in trouble, man. I'm not afraid to open it. Any chance you have any other properties. Yep. And he said, well, my sister and I both inherited about a dozen. I'm not selling mine, but I believe she's selling hers. And I was like, oh, okay. So I got in the car, called that agent that just showed me the commercial property.

I said, you've got to call the sister. and you got to figure out what she's got, and I want it all. And we were able to buy, I was able to buy them all. And he said, I don't want to sell mine. And I tell you what,

two days after we settled hers, phone rings, hey, I want to sell mine now. I'm like, this sounds great. Now I'll say that there's a good bit of renovation that are going into these. I'm not looking to buy another 20 very quickly.

I'm not even looking to buy another two or three right now. I want to get these kind of stabilized and performing the way we want, but the way that I want. But you hear me say we a lot. I think that's a testament to like the team that I have around me. Like I have a property manager. I have guys that do construction work for me that are not employees that are very loyal.

I have GCs that work with me. To be, it's a crazy network that has helped support me and build. And I say we a lot because I, to me, it's very strange to take all the credit because I certainly can't do that. None of us can, right? We're behind every, what, self-made millionaires is a team of support. Yep. For sure. You know, circle back a little bit because one thing I can hear it grinding in the head of the audiences right now.

Because most new investors, they struggle with finance, right? Money is the big barrier to entry for a lot of people. And, you know, you haven't really said anything different than I've said here a million times. But unless you actually experience it, you know, logically it can make sense, but the experience is where like it really clicked. I'm always like, hey, you'll find a good deal and 10 people will be willing to give you the money if it's a good deal. Most investors still struggle with it. So what are you think the top three things that they should know before going out and looking for the money? So you said something that I'm about to make a statement.

I know in your head you're going to be like, man, I've heard this. I've said this a thousand times. Get it under contract and then find the money. Yeah. If it's a good deal, you won't have a hard time. Yeah, never have a hard time. They won't even talk to you unless you have it under contract. Generally, yeah.

So that is one way that I think my company is different. Like, everybody that works on our, I call them salespeople, but like really their loan consultants. Everybody that works for me is in the game, right? I got guys with rentals, guys that are flipping. They understand it differently than your normal nine to five loan officer. We kind of recognize our area and we understand it. So the first thing I'd tell you, here's three great steps that you could do in the very beginning is call us, call a local lender, call anyone, call one of your lenders. Anyone in your Google them, you'll find them, say, hey, what would you need to pre-approve me to use hard money with you?

And they're probably going to tell you, send me a couple bank statements. If you called us, we would say, hey, we just want to see that you have down payment money and that you're kind of sharp, that you kind of understand the game, that you're not looking your first deal, you're not looking to do a $200,000 rehab. Maybe it's more on the cosmetic side. You know, we'd love to hear that. So we then, once we quote pre-approved. you, we'll write pre-approval or proof of funds letters for you. And I think that's huge. And we're not the only lender. Most of them do it. You know that. So what that does, though, that proof of funds from a lender, when you put that in an offer package, it adds so much weight

to your offer. And with a hard money lender, you can offer quicker closed timelines than any retail buyer could. So you can immediately take a competitive edge on a timing for close, whether that's seven days, 10 days, 14 days, whatever the case is. You can waive appraisals. You can do so many different variables there. And then finally, man, I would say, I like this advice. Someone in the office gave it the other day, and I thought it was really good. Start going to on-site auctions in your area. So I'm not necessarily talking about like foreclosure auctions at the courthouse steps, but like every city and state and county has like local auction houses. We have Alex Cooper, AJ Billig. They're both great guys. Start going. You don't necessarily

have to bid. You don't have to be ready for that. But see what other people are willing. and comfortable to bid. And in the neighborhood where you want to play, you start seeing that, right? So if I see people bidding 150, 160, 155, 158, immediately now, if I go to one in my head, I'm thinking, like, well, if somebody else, if other investors who I've seen at these auctions over and over again

are willing to pay in that 150 to 160 range, and I'm seeing this one sitting at 130, 140, like I know that's my time. If other people are willing to bid more than that on a similar house, this is my time, get it under contract, and send it to your lender. So you're talking, go to an auction, and you're keeping your eye out for buyers, so to speak, right?

Yeah, exactly. And you find another deal away from the auction. You know you have buyers. Is that what you're saying? Well, I'm more saying, like, if I went to an auction, and I'd never done a deal before, and around me, there's 10 guys that are bidding on this house and it sells for 160.

And I went to another auction and another one in the same neighborhood or similar, sold for 155, 160, whatever, all in that same pocket. Now, when a deal gets sent to me, personally, and I see it's for 140 or 150. In my head, I'm kind of already like, I've had the ice broken. I know other people are willing to pay up to 160 for this type of house.

That means that I could probably be comfortable paying 145, 150. So that's just cut to analyzing, hey, this might be a deal. Exactly. I think it's an easy way for people who are very new to get started. You could firsthand see what other people are paying, see what they're comfortable bidding at, and then go from there, man. the second you get something under contract, reach out to your hard money lender

because you're never going to get a better underwrite than when you ask for money on a property. If your hard money lender says, we have a product that's kind of unique. It's no experience required, so it could be your first one, and we do a 10% down hard money. So you're buying it for 100,

you need 10 grand plus closing, a bread and butter product. But if you came to me with a deal, and I come back to you, and you already know that I have that product, and I'm like, hey, we're probably going to need you to bring 15% down on this one.

Red flag should be going off. Okay, this guy's got a 10% down product. It's a great product. But now out of nowhere, they're telling me I need 15 or 20. Why is that? Well, chances are that purchase price is too high or the rehab is too high or the ARV is lower than you thought. So that underrate you get from your hard money lender is going to be the best underrate you can get. So you're saying, like, you think it's a deal, but depending on what they say, kind of confirms whether or not it's a deal.

Exactly. And just like the statement you made, if you have a good deal, you will never have a hard time finding the money. This is a true testament to that. You'll have people jumping through the screen offering to land. Sure. I always say there's no shortage of money in the system for a good deal. Perfectly said. So step one was call a hard money letter in your area.

By the way, are you national? We are. We lend in like 46 or 47 states. All right. We'll give your information out when we're done because I know people are about to write this down. If you come to us, if you come to us from this podcast, you need to mention Matt's name. We definitely track that and we like to take care of the people that take care of us. So make sure you mention where you came from.

Sweet. You got a free toaster program too? A little bit better than that. How about a half point? Very good. That'll give me a couple toasters. So first one is, what would you need for me to approve me for hard money? That's the first thing. Then step two was go to the auction. Is that step two or is that part of number one? I'd say that's probably step two. Like start getting familiar with what people are paying in that neighborhood. Okay. You said you had three. For step three, once you decide to pull the trigger and get something under contract, I would say for your first

one, give yourself room. You don't need to be the most aggressive person in the world. You don't need to make it a seven-day close, a three-day close. Give yourself 14, 21, 30 days. And reach out to your hard money lender and say, hey, what do you think of this deal? I'm under contract for. And I think more times than not, a good lender is going to weigh in in not just terms. They're going to say, you sent me, okay, you're looking at a townhouse in this neighborhood and you got a $80,000 rehab. We do a lot of loans there. Normally we see 35 to 40K. Like, what do you do? in there and, you know, they might be able to weigh in and say, well, you don't, you know, it's a rental or it's a flip.

We're not moving stairwells, right? We're not making it for you to live in. You're making it for someone, you've got to copy and paste what's selling on the market. So I think that's it, you know, we would weigh in and give you a little bit of advice on it if you ask or not. You know, we don't, obviously don't charge for that. But yeah, I would send the deal to your lender to see what they say, you know, get that free underwrite.

And look, in most cases, the right lender is going to find a way to make that deal work unless you're way, way overpaying. Got it. So write the contract. don't be a wuss, get the thing under contract, get in writing, get control of it, take it your hard money lender, and if they'll move forward on it, that means you got a good deal. I always say this, if they reject you and don't give you the money, don't say the hard money lender is not being a jerk.

It's just saying that they don't feel your deal is comfortable enough for them to take the risk with you. I agree with you. I would say it never hurts to get two or three opinions ever. But as a reminder, like I wear the lender hat almost every day and I show up to work. if I don't lend you money, I don't make any money. I'm not in the business to say a no, right? We're in the business to help and structure deals and help get them to the table for everybody.

We want everybody to win, right? That your lender doesn't make any money by telling you no or sending you away. Got it. Yeah, I always say that. You know, we're showing that. We have invite people here to our office and we do these two-day fulfillment. Like, after they become a client,

then we do two days to launch them. And when we get to the money part, I'm always saying that you guys are so concerned about the money, but somewhere in another part of this town is another workshop of a bunch of people with money, and they're trying to learn how to find you. Right? Like, how do we find you so we can give you our money? That could be a big paradigm shift for a lot of people, but you're, you know, you're testifying right now that that's the case. If you can't give your money to somebody, you don't make any money. That's it.

So you're hoping that they got a good deal. It's so funny how people just, you know, whatever you don't have, you feel like that's where you're at, this huge. disadvantage and why you can't do something. And it's just not the case when it comes to real estate. I agree with that, especially in our area, man, the lenders are at no shortage. There are no shortage of really, really great lenders that we go head to head with every day. I have friends with them outside of work, inside of work. They're great, but there is no shortage of money in my neighborhood. You've got to find really great contractors to work with. That's going to be hard in every area. Finding that, forging that good relationship and being on the same pages. That's

going to be it. Totally. Let's see. We have like seven directions I can go with this. Let's go over to, you know, if you're going to fix the stuff up right now, labor shortage is a big issue in the country, right? It's in the headlines, but then it's down in the grassroots, too. People are really experiencing it on the ground level. How did were you able to build a team and how have you created that loyalty? Man, at the very beginning, I had no clue what was going on.

It was just zero idea. When I started to find some of these people, man, I held on and I paid them. I underwrite pretty conservatively when I'm going to buy something. So if I say I got $30,000, $35,000 for renovation here, it's probably either less than that or I have more than that set aside. Like, I'm pretty conservative. So when I started really rocking and rolling, I went to a guy that had only ever done landscaping for me,

but man, he worked so hard. He's still with me to this day. His name's Anthony Dolly. He's incredible. He did some demo for me today, you know. And I said to him, shout out to Anthony. And I said to him, what would you charge me to paint a three-story townhouse?

And he said, I'd charge you. God, I can't even remember. The number today is different than it was back then. But I want to, let's just say it was $1,000 a floor or something like that. Or maybe he wanted $2,600. And I said, well, here, look, if I call a general contractor, they're going to charge me $1,000 a floor. I'm going to pay you that, and I'm good with it.

But when I pick up the phone and call you, I really, like, I want to be a priority, man. And the same way that I always close with a realtor, I always pay. my guys, right? Like, they have lives. They are real individuals. It's, what's really important to remember is that it is a two-way street. I cannot win every single time and keep my relationships and keep my network intact. Everybody has to win, man. There's another contractor that I work with very frequently. His name's Aaron Alberti, and he's a general contractor. So I, you know, I call him, and he does an entire house for me. And he has an incredible, incredible methodology. That makes it really easy to estimate projects.

I'm going to give you one piece of it. He's like, bathrooms, $4,500, no matter what. If it's a bathroom upstairs that I just got a turnover that already exists, $4,500. If it's a powder room, $4,500, and I'm going to win on that, and he's going to win on that. If it's a basement bathroom where I got a jackhammer the concrete up and replumbing and do it all from scratch for $4,500, and you're going to win on that one. He's like, that way we're both winning. I'm not beating you.

You're not beating me. And let's do 100 of these projects a year. and everybody's got to win. That's the value. That's the piece of the puzzle right there. Yep. I mean, if that's your mindset, I can see why you've done what you've done.

You just make sure everybody gets what they're promised. You know, that's just being normal and what people should do. It really differentiates you more amongst the whole crowd because everyone's got a song and dance when it comes down to pay the piper. So, yeah, just do what you say you're going to do. Cool.

So, you know, you've transitioned from investor to lender. We're still investing, but you made this over to lender. And I also can just feel it through the headphones right now, what people are thinking. Yeah, but you had a bunch of money when you got started, right? $14,000. $14,000. This is what I wanted to get down to. Let's get to the real nitty-gritty.

But now you've just made millions of dollars. Now, of course, you're a lender, right? So a lot of what we do lending-wise is we're considered a pretty large broker shop. Now, the hard-body piece, we raise money. So, easy example. Well, we lend hard money at 12%. We go to friends, family, high net worth individuals in our local market who have seen my story and seen my background and know my track record. And I say, hey, Matt, you know, we have a minimum of $100,000, but we pay you a 10% fixed return on that and it's secured to real estate.

We then lend it at 12% and obviously charge generally two points. So I'm here to tell you that I'm doing okay. But that money is not unlimited. It's not, you know, we do a little bit of arbitrage. We have great capital investors, have great people behind us. But then on the refinance side, a little known secret is that everybody out there is generally selling the same product. That DSCR product is very similar, whether you come to Beltway, whether you go to whoever. What you're going to get at Beltway that you're not going to get anywhere else is the customer service and the team that actually is in the game.

So I'd tell you, we know the guidelines better than anybody because I've never wanted to buy a house and get trapped in a hard money loan and not have an exit. So when you got someone like me in your corner that has to be a step ahead of the guidelines that ever you, return, you're in good hands. The funny thing is why we opened Beltway lending. And the reason that we open Beltway is my time at that hard money lending company came to an abrupt end. They're great guys. I look at him as mentors still to the stay. But it came to an abrupt halt in July of 2022. And I had $4 million borrowed in hard money that I was refile. I was in the process of renovating and getting ready to refy. Well, now I had nowhere to refy it. And August 1st, that's at 12% on $4 million. That's a $40,000.

check. And that's okay. I'm prepared for that. But I don't know how far I was prepared for September, October, November. And Beltway was formed, obviously, to handle my own refis in the beginning. And then I wasn't planning on, we weren't going to hire, we weren't going to do any of that. We weren't even going to wait on the public. I did a loan for the guy Aaron that does all my contracting. I closed it in 13 days, which is super possible when it's just me working out of my kitchen. And I don't have like, you know, 13 days is an absurd timeline, like for anything. But I never forget. He said to me, he's like, what do you think? You want me to tell the world or are you ready to do this for other people? And I said, yeah, I guess so, I guess in October 1st, Beltway lending at a $15 million

refinance pipeline. And we've been growing in every way possible since then. Pipeline, employee building, all of it. You name it. We're growing and we're having a lot of fun doing it. That's amazing. Congratulations. Thank you. What does the staff look like? What do the employee count? With 21 employees. And some days, that feels like 300. But I tell you, I think, I think I'm famous for this line. I hire adults. Not necessarily in the literal sense of the word, but man, I want problem solving people, self-starters who are going to wake up and know what they have to do. Now, we pay for that. I pay for that. I would tell you that you could ask anyone, anybody in our local space and probably further out. I pay more to my people. I want them to be

happy. I want them to have what they want. And believe me, that takes care of itself. That's awesome. So, you know, we've got this week. weird thing kind of floating in the ethos right now with regard to the economy. And when we're looking at inflation, we're looking at a new administration, we're looking at tariffs, we're looking at the CPI report just came out yesterday as if we're recording this. Where do you see lending going in the next five years? Let's talk about immediate future and then, you know, over the midterm over the next five years. That's a million dollar question right there, man. I think a lot of people expected a pretty hard, a pretty good rate break,

like that the rates would get sharply better in early 25. And obviously, we're not seeing that. We're seeing some good movement, but not, you know, everybody's like, when we get back to the fours? I'm here to tell you that I don't think we're ever going to be back in the fours. I like the five and a half, six range. And I think that's probably three years away. One thing that I'll tell you is super, super important for everyone to hear is that these properties, there are properties all over this country. You know, Baltimore or Baltimore County is not, it's not exclusive to where I'm at,

but they will cash flow at 7, 8, 8.5% rates. You just have to find them. They exist. There's a lot of places. Cincinnati, you know, Detroit, I don't really have a ton of experience in, but like, obviously Baltimore I know a lot about, you know, Chattanooga, Tennessee is another one that's experiencing

crazy growth. Like, there are cash flowing properties at these rates. So a lot of people ask, like, hey, how do you still buy at these rates? Well, what's interesting is a lot of people are on the sideline right now. A lot of people are like, I'm not doing it because the rates are too high. It doesn't make sense. Well, what that did when those people move to the sidelines, my purchase price, the people I'm

competing with are now watching. And my purchase price came down a little bit. So it makes those rates work even better when I'm competing with less people. I will say, like, my strategy is to refinance the portfolio every five or six years. So I believe in debt. That's how I got here. and that's going to push me on, right? You're in the right place.

Right. I mean, appreciation, mortgage paydown, rents are going to increase. But every five years, the stuff that I bought in 21 for 125, I couldn't pay 160 for that now. It was appraising that one appraised for like 185 back then. I know it's appraising for 215 right now. So that's a nice tax-free cash-out refinance that's looming. And I've got to be honest, I'll probably turn around and take that cash-out I refi and go buy more, go buy more.

When you're buying with less competition, like I just said to myself, I don't care if I refy with an 8% rate. Now, I don't have very many in the 8s, most of them run into 7s. But it doesn't matter to me because my purchase price, my loan amount is so much lower than average because I had less competition. So worst case, when the rates come down, that'll be the first when I refy. Maybe I don't wait five years to refy that specific property. But I acquired more properties when a bunch of people were kind of sitting on the sideline waiting.

So let me ask it this way then. What's next for Beltway and how are you innovating to better serve your clientele? That's good. So we at Beltway, I'm constantly working on fine-tuning our internal process. So I want my team to do as much of your legwork as humanly possible. One example of that is if you called me and said, hey, I want to do a refite, here's the address. My team is going to go into public records, look at the recorded documents, see which title company did it. We're going to reach out to the title company on your behalf, get a copy of your executed closing statement and things like that without even asking you for that. I want you to be able to keep doing what you do and what you really enjoy doing, which is probably buying and continuing to scale. We want to do the legwork on the loan side.

So I'm constantly fine-tuning that craft. We just brought on another loan processor. We are increasing the size of the sales team. One thing that we're really looking forward to doing this year is actually a lot of random places over the country. stopping out hosting events, happy hours, meeting more of our existing clients and kind of new people and just seeing, you know, we've had a really great response to that in Cincinnati,

Indianapolis is on our list, Tennessee is on our list, you know. So a lot of going out, just meeting more people, hosting happy hours. Like, I don't like to do like the educational, public speaking thing. Like, I'd rather just get together, let's network, let's talk shop.

And, you know, how can my team help you? How can I help you? That's kind of what it looks like in about way. Just, you know, organic growth. Got it. So when you're out there and you're networking, you're mingling, wheeling and dealing, and dealing, and how do you know when you're talking to the ideal client? What does that ideal client look like for Beltway?

So for me, the ideal person to talk to is anybody that has some kind of interest in what we're doing. Now, if you ask any of the sales guys of my teams, they're probably vetting the people out very differently, trying to determine if they're wasting their time. For me, you're never wasting your time talking to me. Like, I don't charge for my time. I don't charge for coaching. I don't do any of that. I really respect to the guys that.

but it's just not something that I couldn't dedicate my time to. So I always tell people, if you get me on the phone, I'll pour it out, man. You just got to keep asking questions. So for me, my target person is not the guy doing like 50 plus unit multifamily. I really like talking to people who are just bought their first one or second one. You know, their first maybe handful or like just went under contract for their first one. I really like talking to those people and kind of seeing like, where's your head at? Like, how excited are you?

This is a big thing. Buying a house is a big step. I mean, it gets watered down sometimes in our level, right? Like, we sometimes forget how big of a step that first one is or the fifth one, you know? So I like talking to people that are just getting rolling or if they just hit a milestone to them. I like to hear about that. My team is probably vetting it out a little bit differently, though, if I'm being honest. Got it.

Cool. So what should I be asking you right now? Because if there's so many different ways that we can go, you've got a wealth of information and experience investor-wise. let's kind of go through the attract part. So to find your deal is you created your relationships with the real estate agents, right? It's kind of how that's come mostly. And now, do you have like one superstar agent or do you have like multiple relationships? I have multiple.

But one other tip actually that I think is kind of is like I like giving this tip out too. This is a great one. So I strategically try to always close on Fridays. One, it like makes things a little bit consistent for me for my schedule. But two, for this reason. A lot of what I buy our townhouses. or single families in the same neighborhood. I first step in any project is always going to be trash out slash demo.

So I get a dumpster there pretty quickly. As soon as I get a chance to get to the property on Friday, I go to all the neighbor's house. It's knock on the door. Hey guys, my name's Brian Valdivie. I just bought this house. I'm getting ready to do some trash out. There's going to be a dumpster showing up.

It might already be here. Maybe not. I don't know. Look, if you got anything in your house that you've been thinking about getting rid of, feel free to use my dumpster. It's going to be here on Sunday. This is my phone. number. If you have any problems, call me. Also, I do buy houses. We pay like 2,500 or 5 grand.

If you bring me something. But look, the dumpsters here, feel free to use it. I know that that dumpsters could be gone by the end of Saturday. My guys are going to rip through this house. And that dumpsters could be gone. And most likely, if you tell someone they have until Sunday, they're going to wake up Monday morning and be like, oh, man, I forgot to put that stuff in that dumpster. But I'll tell you, it's only burned me one time with like 10 mattresses from someone's house. I'm not sure where they came from. It was a nightmare. But I've actually probably gotten like five or six houses doing that. And like I mentioned earlier in the show, like I open my mouth, man, and it gets me in trouble.

But you talk to, the more people you talk to that know what you do, you're increasing the percent chance that someone's going to say, oh, that guy that did the house next door, maybe he'll buy mine, you know, or maybe this. Oh, my aunt wants to sell. That's another way to generate them that I think is a good. There's another key ingredient to what you're saying, Brian, is you actually follow through. if I were to gather anything from you of all the people I talked to over the, you know, almost, gosh, 15 years now with the podcast is your reputation. You can't underestimate how powerful your reputation is and your integrity with people. If you say you're going to do something and you do it, that just attracts business over and over and attracts buyers. It attracts sellers. It attracts money. It attracts lenders. It attracts partners. So that is one thing that I've noticed that's really stood out. So I want to throw that in as a tip as well. So when you start talking about it, And then you have this reputation that follows you around when you're talking.

Then, of course, no wonder, no duh. By the way, Dundalk, my little neighbor, not little, but the Dundalk, it surely gotten out of hand, man. Like, I was walking into Dunkin Donuts. People were stopping the middle of, hey, you go, you want this house? I'm like, oh, God, yeah, it's me. It's me. That's good. You're famous.

The king of Dunnock. It's a gyrgy local famous for that. So then the conversion part. So you're making these, these offers you're buying basically retail or through retail channels. Are they just agents come and just say, here's one and here's the price, or are you making multiple offers before one actually goes through? I'm going to split that question into two answers. If it's things that are actively listed on the market, then I'm probably offering on 10 of those per week. If it's not, like, for example, if there's an agent here, his name's Danny.

He calls me a handful of times a month, and he's like, hey, Brian, I'm in this house and it's really not retail ready. would you mind stopping by and taking a look at it? So I'll get there, I'll take a look, and then he's got a huge reputation in the neighborhood. I'll put my best foot forward and say, whatever, hey, I'll pay $150 for this. I can close on the seller's terms. Like, if they want to close seven days, 30 days,

45 days, whatever. If they want to leave everything in the house, great. But I try to, if it's on the market, I'm blessed as many offers a week as I can. If it's not, it's case by case, my phone rings. It's, you know, I pick it up. I try to get there in a very, very short amount of time, because I know, like, this is a competitive industry.

I need to be, like, in it. I'll get there and I'll talk to the seller. I try to understand, like, their needs. I don't try to force them into my mold, right? Like, do I want to close in seven days? Like, do I got guys around the corner finishing up that I need to move? Maybe, but, like, they don't need to close for 30 days. They can't move.

They don't have anywhere to go. So, you know, I try to listen. I think people listen to reply instead of listening to understand a lot. When you flip that script and you actually, and you're actually listening to someone and hearing what their pain points are and what they got going on, it allows you to solve problems at a whole different level. W-I-I-I-F-M, right? That's it.

So, Brian, I know there's a ton of people right now that are just chomping at the bit to get in touch with you. If they wanted to do that, what's the best way for them to do so? Email's great, and my phone number is also great. So I can tell you what my email is. It's Brian B-R-I-A-N at Beltwaylending.com, just like it sounds, beltwaylending.com. My phone number, for better or worse, is 443 845-2273. Feel free to send me a text. Very good.

4-4-3, 845-2273, Brian at Beltwaylending.com. That'll also be in the show notes as well. I guess we're good to go. Let's stay in touch. Let's do this again. I really appreciate you having you on the show. I can't tell you, I listened to a lot of your shows before this. I think you do an incredible job.

I think it'd be incredible to have you come out either to our studio or maybe do this in reverse. Maybe I get to talk to you about the things you do. And here's some of what makes you tick. I'd love to do that. Our studio's crazy. And I can show you the better parts of Baltimore. Maybe we'll do that, turn that around.

I think I would love that. Cool. So, well, Brian is a pleasure. Be good, buddy. And that wraps up the epic show. If you found this episode valuable, who else do you know that might too? There's a really 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'll 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.

Yeah, yeah, we got the cash flow. You didn't know home world. We got to cash low. This podcast is a part of the C-suite Radio Network. For more top business podcasts, visit c-sweetradio.com.