The Science of Flipping - Wholesaling Your Way To Wealth PT. 2

Episode Date: August 10, 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  

So let me start out simply by saying this one thing. You do not need money and you do not need a bank, a national bank or commercial bank, to get these deals done. Yo, yo, what is up everybody? Welcome back to the Science Flipping Podcast. I am Justin Colby, and this is part two of the two-part episode sequence, which is all about my business, wholesaling to wealth, and how you can wholesale your way into building wealth through rental properties, and how I'm actually doing it. Now, first of all, if you could do me a massive favor,

right out of the gates, if you're liking my podcast on iTunes, make sure you are giving me a five-star review. I would greatly, greatly appreciate that. You could even write a review if you so want, but make sure you give me a five-star review. Secondly, make sure if you're not yet watching these podcasts on YouTube

that you go subscribe to my YouTube channel, youtube.com forward slash Justin Colby there is a channel called science flipping podcast so you can watch these episodes and you can actually see me versus just hearing me and also I dropped three other YouTube videos each and every week all about business real estate and entrepreneurship so check it out subscribe like the videos I would really appreciate all about business, real estate, and entrepreneurship. So check it out, subscribe, like the videos. I would really appreciate all that. Now let's just jump into this episode, which will be a continuation. Today we're going to be talking about money. How am I financing these buy and holds? And this is in large part where I think most people who do

not have experience have the challenge is they think, well, I don't have enough money to buy all these, Justin, or I won't be able to go get those bank loans. So let me start out simply by saying this one thing. You do not need money and you do not need a bank, a national bank or commercial bank to get these deals done. I will give you first scenario, which would be private money. Private money is probably the best way to do this. Whether it's friends, family members, colleagues that come in with cash to help you buy and remodel, and then you can refi them out. If you remember the last episode, I talked to you about refi-ing out your money. So you want to buy it, you want to buy it you want to rehab it to 75 of arv then a bank or even a hard

money lending bank like lending home or lima capital will come in and refi you out up to 75 of the value of the home so they will go do an appraisal and if your all-in number is 75 then they'll give you all your money back so your private money lender will actually not leave in any money now like I said on the last episode I have yet to refi and actually take every single dollar out so far doesn't mean it won't happen just so far and the money I leave in I actually just negotiate with the private lender a 4% interest rate that they get for keeping the money in. As I just mentioned on my last episode, the most recent property that we refied out, my lender had to keep in roughly $6,000. And so if

you put 4% interest on that, you can just simply do the math it doesn't take long because i'm earning 450 net after all costs to get that six thousand dollars repaid now my business model isn't to go make a bunch of rental money yet i want to get to a place where i have hundreds of rentals and then i can start taking the income. What it is is to build wealth. You see what banks, real banks, you know national banks like the Bank of Americas, they love to see that you have a lot of homes and equity and they will lend you more money. So the faster I can get to 200 rental properties, the faster a bank will loan me more money to buy more rental properties. That's the model, everybody, right? That's where you can actually go and get money from the banks so you don't need

your private money lenders. But until then, I would encourage you to think through where could you find some private money lenders. As I told you on the last episode, I'm buying these homes for 20 or 30,000. I'm putting in anywhere from 20 to 40 000 uh into the remodel and essentially i'm making 450 dollars a month after all taxes insurance uh debt all costs are out i'm still putting 450 in my my pocket now again these private individuals they only need to come in let's just say you bought it at 20 000 and you have to put in 30 000 they only need to come in, let's just say you bought it at $20,000 and you have to put in $30,000. They only need to come in $30,000. So before you get like, oh, Justin, I don't know any rich people. I don't have a rich uncle or rich parents.

I don't either. If you guys remember my story, during the foreclosure crash, I lost my home to foreclosure. I was sleeping on a couch. And to make the matters that much worse, I was actually, the repo man took my car. My family doesn't have money. I didn't come from money. I didn't have any rich uncles. But I understood this one thing and listening to podcasts like this and getting coaching from several of my coaches, they taught me how to do this. Now, let me pause there for you guys guys if you're interested in me actually coaching you holding your hand giving the actual blueprint to this business model go to thescienceofliving.com and go fill out a simple form one of my top success advisors will reach out to you and see if we would be a good fit me the coach you the student i'd love to be able to help you gain

traction wholesaling to the point where you can actually build in this wealth component and you can start buying rentals yourself so now back to the lending part what I'd tell you then is if you don't have the private money there are hard money companies that will pay for the purchase price. And in fact, they will actually reimburse you for the remodel if you so need it. Now, the next part is to leverage these hard money companies with private money. That's where your friend, family member, or otherwise,

maybe they don't have 50 grand, but maybe they have 20 grand. Maybe they have 30 grand. And that's where you can leverage their capital with the capital that is brought in by the hard money lender now these hard money lenders uh typically will be you know on that type of loan they're going to be closer to 9 or 10 percent interest but then again you are going to refi them out when you're all done because if you stick to the model your purchase price and your rehab is 75 of ultimate value and then the the other lender will come in and take out the

hard money and take out your private so now instead of just using a private you're actually using both and again if you just look at the math and I have spreadsheets on my website if you go to the science of flipping.com there are calculators right spreadsheets for the buy and hold model for the flip model that you can just simply download so go to the science of flipping and go get those calculators for yourself so you can just understand the spreadsheet and the math. But now you can actually go further faster. So when I say I have, you know, $5 million that I can go spend on rental properties is because I'm leveraging private money and I'm leveraging hard money. And if I can leverage them together, and then I can take another lender and they will actually give me a loan to take the first two, the hard money and the private money,

away, well, now I just win, right? And I don't want this to be convoluted for you guys. And maybe, again, this is a good reason for you to go to youtube.com forward slash Justin Colby's because you can see me on YouTube. And maybe when you're listening to this, it's not lining up yet. Maybe you're just having a little trouble. But if you really write this out, you don't ever need to bring in your own money I want that to be really really clear here on these podcast episodes is you don't ever ever ever need to bring in your own money on these properties and as long as you structure it the right way and as long as you have the right paperwork in place you can either partner with your private money lender they could just be like a bank and you

give them a 4% interest like I do. But either way, you would never need to bring in your own money. Now for me, people ask, well, what do I do? Well, I have a combination of both. Some of it is just debt, right? Like I said, the 4% interest. And then there's other money lenders

that I bring in as partners. And so it just really depends on who I'm dealing with and how I want to make this all work out. So with that all being said, you know, I want you to be clear, you don't need to go to a bank, you don't need to have your own money, you can build wealth, but you got to start with what I told you on the last episode, start creating the opportunities, start finding the areas that you can go create those opportunities and just execute. The only way for you to start building wealth is one house at a time.

And I encourage you guys to start doing that. Now, if you're liking this, smash the like button on YouTube. Make sure you're giving me a five-star review. Hopefully these episodes are rocking the house for you guys and you're starting to systemize your business, get a little further. As I mentioned, if you are looking for coaching, go to thescienceoflubbing.com. I'm happy to help you out and see if we are, get a little further. As I mentioned, if you are looking for coaching,

go to thescienceflipping.com. I'm happy to help you out and see if we are gonna be a good fit. But besides that, I will see you on the next podcast episode. Peace.