The Science of Flipping - THE RENTAL GAME HAS CHANGED...

Episode Date: October 14, 2021

The #1 training and coaching system to launch, grow, and scale your investing business!𝐋𝐞𝐚𝐫𝐧 𝐌𝐨𝐫𝐞: http://www.thescienceofflipping.com Become a 𝐓𝐒𝐎𝐅 𝐈𝐍��𝐈𝐃𝐄𝐑 and get access to exclusive training and resources:https://insider.thescienceofflipping.com 𝐈𝐍𝐒𝐈𝐃𝐄𝐑𝐒 𝐆𝐄𝐓 𝐅𝐑𝐄𝐄 𝐀𝐂𝐂𝐄𝐒𝐒 𝐓𝐎: ✔️ Science of Flipping Academy  ✔️ All the systems and software I use in my business✔️ All the tools you need to run your business ✔️ All my Scripts, Contracts, Spreadsheets✔️ Special Discounts✔️ And Much More... 𝐇𝐚𝐯𝐞 𝐚 𝐪𝐮𝐞𝐬𝐭𝐢𝐨𝐧?Get immediately connected with a team member on messenger:http://split.to/tsof-messenger 𝐁𝐞𝐬𝐭 𝐑𝐞𝐬𝐨𝐮𝐫𝐜𝐞𝐬 𝐅𝐨𝐫 𝐖𝐡𝐨𝐥𝐞𝐬𝐚𝐥𝐞𝐫𝐬✅ 𝐁𝐞𝐬𝐭 𝐑𝐞𝐚𝐥 𝐄𝐬𝐭𝐚𝐭𝐞 𝐒𝐨𝐟𝐭𝐰𝐚𝐫𝐞: http://bit.ly/tsofsoftware✅ 𝐁𝐞𝐬𝐭 𝐃𝐫𝐢𝐯𝐢𝐧𝐠 𝐟𝐨𝐫 𝐃𝐨𝐥𝐥𝐚𝐫𝐬 𝐀𝐩𝐩: http://bit.ly/tsofd4d✅ 𝐁𝐞𝐬𝐭 𝐒𝐤𝐢𝐩 𝐓𝐫𝐚𝐜𝐢𝐧𝐠 𝐒𝐞𝐫𝐯𝐢𝐜𝐞: http://bit.ly/tsofskiptrace✅ 𝐁𝐞𝐬𝐭 𝐓𝐞𝐱𝐭 𝐁𝐥𝐚𝐬𝐭𝐢𝐧𝐠: http://bit.ly/tsoftext✅ 𝐁𝐞𝐬𝐭 𝐃𝐢𝐫𝐞𝐜𝐭 𝐌𝐚𝐢𝐥 𝐒𝐞𝐫𝐯𝐢𝐜𝐞:: http://bit.ly/tsofmail✅ 𝐁𝐞𝐬𝐭 𝐃𝐚𝐭𝐚 𝐏𝐫𝐨𝐯𝐢𝐝𝐞𝐫: http://bit.ly/tsofdata 𝑾𝒉𝒂𝒕 𝒕𝒉𝒆 𝑷𝒓𝒐𝒔 𝑯𝒂𝒗𝒆 𝑻𝒐 𝑺𝒂𝒚 𝑨𝒃𝒐𝒖𝒕 𝑱𝒖𝒔𝒕𝒊𝒏: “Justin is one of the best trainers in this space. He really gives everything to his tribe.”– Brent Daniels (TTP) “Justin’s ability to connect with people and help them understand what he is teaching, is unparallelled”– Kent Clothier (REWW) “We have been in the trenches flipping homes in Phoenix for over a decade, he is one of the best to do it.”– Sean Terry (Flip2Freedom) 𝐀𝐛𝐨𝐮𝐭 𝐉𝐮𝐬𝐭𝐢𝐧:Justin Colby is the founder of The Science of Flipping Podcast and The Science of Flipping Coaching Program and is an active Real Estate investor having flipped over 1500 homes in multiple markets across the U.S. Justin runs an 8-figure real estate wholesaling business that closes 20+ deals each month in multiple markets across the U.S and has helped 1000s of clients learn how to become successful real estate investors. Justin subscribes to the philosophy of "Wholesaling To Wealth" and is the foundation of his coaching program which teaches you how to get started wholesaling or streamline and scale an existing wholesaling business as well as build long term wealth through wholesaling, flipping, and building a rental portfolio. Subscribe To Justin Colby:http://youtube.com/justincolby View All My Videos:https://www.youtube.com/c/JustinColby/videos 

What's up everybody? Welcome back to the Science Flippin' podcast. I am your host Justin Colby and if you are on iTunes and Spotify or anywhere else that you're listening to this podcast get your butt over to youtube.com and sign up subscribe just start following me over there the episodes are way more funny my videographer laughs at me might even be able to hear sometimes just get over to youtube.com forward slash Justin Colby subscribe because I drop six videos a week right there on YouTube. This podcast is all about real estate investing though. So let's jump into what this is about. We are going to be talking about buying rentals has changed. The rental game has changed y'all and the big reason for this

as someone that's actively buying rentals virtually is you now have lenders that are getting south of 5% for long-term loans. And when I say lenders, I mean hard money lenders. So let's talk about this really quick because traditionally speaking, if you've ever been in the space and you've been flipping homes, there are hard money lenders. They usually will charge 10 12 sometimes 18 percent to borrow money they typically want 10 most likely 20 down and they will give you the acquisition money now over the last several years it has been changing where they've also started giving you or reimbursing you for the rehab money so that has all been transpiring over the last four or five years which has been cool. So most recently and I'd say in the last two years or so I've been hearing about these same companies that are opening up these buy and hold

funds to lend on long-term properties. So when I started buying rentals this year mind you now I'm 14 years plus, almost 15 years in this business, and it's taken me this long to buy rentals. That is my number one mistake I've ever made as a real estate investor. I should have been buying rentals all the way along because if you buy one rental a year for 15 years with 15 year loans, by the year 16, one of those homes is owned free and clear and every year after that you're going to have a free and clear home so my biggest mistake is I didn't buy rental sooner learn from that mistake with that said I'm trying to help you guys so there are

hard money lenders that have become more of lending institutions just like your normal bank and so I actually am actively buying rentals in Oklahoma Oklahoma City and Tulsa and I'm actually looking at a couple in North Carolina even today and what I'll tell you about that is I just got off the phone with Lima one capital and I know lending home is the same they're actually going for 5%. So we are talking about getting a 4% long-term 30-year loan from Lima One Capital. And at that point, banks are gonna become irrelevant. They don't need my credit score. They've given me a $5 million line of credit.

I don't need to have all the different things that banks are gonna make me have. I can fund in a week or two. They're going to give me 80% loan to cost and then they'll reimburse me the rehab funds. I mean, it quite literally has changed the game. Another way to work with them or some of these other companies is buy the home cash, remodel, and then do a refi into a 30-year loan at 4%. I mean, it literally has made banks borderline irrelevant at this point, especially for single-family homes. Now, the real kicker is I'm underwriting a five-unit property, right? So that would be considered commercial property. And it's not great,

but it's a great asset to have for the long term. And that's what I would be looking at it for. They've also said they will lend on multi-units in the commercial space, meaning five plus units. So we're in talks with them specifically about what kind of interest rate, as it may be a little different. We're trying to verify what that would look like but if I can buy five six seven eight ten unit properties even if I'm quote-unquote breaking even after the mortgage payment after interest after taxes but they're the tenants are paying down a building that has 10 units, I'm gonna have a much more valuable property at the end of this game

than if I'm just doing single family homes. Now, that being said, my exit strategy for my rental business is to be able to sell off to the hedge funds, right? Call Blackstone, have them buy all my stuff. Call Invitational Homes, have them buy all my stuff. That's my end game. But they don't currently buy units like that.

The most they will buy is a duplex. And so as a moment in time, that would really, really, really be a long-term. Like if I bought a five unit, six unit, seven unit, that'd be a really long-term. But the point here is the money is so cheap now from hard money lenders. Banks at this point, I don't want to say they should be scared, but they should be scared

because that type of lending is going to go away if information like I'm giving you right here on this podcast gets leaked, right? By the way, if you're liking this, smash the like button for me and make sure you subscribe to the podcast. Or make sure you subscribe to YouTube is what I should be saying there. And if you are on iTunes or Spotify, give me a five-star review already. Hurry up. That being said, I want you guys to learn the biggest lesson. The money's there now. Most people say, oh, I can't get in the rental game because money for capital.

I can't get a bank loan. Whatever excuse. You need to call companies like Lima One Capital or Lending Home. If you are listening to this, I will give you a favor. I want you to go subscribe to my YouTube channel, watch the video and comment in YouTube that you would like my contact for these loans. And if you go to YouTube and you subscribe to my channel, I will give you my personal contact at these companies directly so you can have a conversation so you yourself could potentially qualify for a $5 million line just like I have

specific for buying rentals. So do not let money be the reason you're not actively buying rentals you don't need to get you know multiple rentals a month which is my goal right now but even if you get one a year to a year you need to learn from the mistake I made I went 13 years in this business I owned no rentals now I'm actively buying rentals I want to be buying one to two a month they're a little harder to come by just because sometimes the cash flow is not right but I'm trying to buy one to two every single month we just bought one two weeks ago three weeks ago in Tulsa there's another one I'm looking at in

Alabama and North Carolina I say all this to say this I will give you my contacts do not let money be an issue do not let money be the reason you do not start buying rentals and on top of it I can show you how contacts. Do not let money be an issue. Do not let money be the reason you do not start buying rentals. And on top of it, I can show you how to do it through all of my training. So you need to go to YouTube, subscribe and let me know you want my contacts. I will reach back out to you directly

and make sure you have my contacts. Hopefully that was helpful. Go subscribe and I'll see you guys on the next podcast. Peace. helpful go subscribe and I'll see you guys on the next podcast peace