The Science of Flipping - Why The Wealthy Never Follow The 4% Rule | Zach Richards

Episode Date: June 26, 2026

Subscribe to The M.O.R.E. Show Most people have been told the same thing their entire life, put your money in a 401k, invest in the stock market, follow the 4% rule, and hope you don't outlive your money. In this episode of The M.O.R.E. Show, Justin Colby sits down with Zach Richards, co-founder of REI Capital and private lender to real estate investors, to break down why savvy investors are moving money out of volatile markets and into real estate-backed private lending, how hard money lenders are failing borrowers at the worst possible moment, and exactly what real estate investors need to qualify for and successfully use private money on their deals. KEY TOPICS COVERED: Why private lending is one of the most overlooked investment strategies most people never hear about. How stock market volatility is driving investors toward consistent real estate-backed returns. Why hard money lenders are changing terms at the last minute and how private lenders are different. What real estate investors need to qualify for private money and how the process actually works. How to underwrite a flip deal and what private lenders are really looking for. The 4% rule debunked and why real estate-backed lending beats traditional retirement strategies. ️ TIMESTAMPS: 00:00 — The 4% rule and why private lending is a better way 00:30 — Introduction: Zach Richards, co-founder of REI Capital 01:14 — How REI Capital started and evolved into a fund 02:26 — Why stock market volatility is pushing investors to private lending 03:41 — Access creates opportunity, Justin's mastermind insight 04:09 — How private lending works on both the borrower and investor side 07:00 — What makes a good private lending deal for borrowers 15:00 — How to qualify for private money, documents, comps, and scope of work 25:00 — Downside protection: what happens when rehab budgets go over 32:00 — Where the real pain is in the market right now 34:00 — Why single family flip slowdowns are a return to normal not a crash 35:00 — How to connect with Zach Richards and REI Capital Connect with Zach Richards: Website: https://reicapitalguys.com/ Linkedin:    / zach-richards   About The M.O.R.E. Show: Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

A lot of people don't even know that private lending is a thing. Everybody's told, yeah, take your 401k invested in the stock market and do that until you retire and then live off 4% of your portfolio, you know, follow the 4% rule and then hope you don't outlive your money. And that's really what it's come down to for a lot of people. And we're just trying to show people that there's a better way to do it. What is up? The Moore Show family.

We are excited to have this guest as in real estate. It's a little uncertain right now, but his business is actually paying. picked up in the recent times. Now, as always, these episodes are brought to you by the Moore Club. The Moore Club is where you can get access to these type of guests, experienced entrepreneurs with great opportunities. Make sure you go to Timeformore.com. Get a part of this club. All right, so our guest today is with REI Capital Guys. He's one of the co-founders. And like I said, his business has been increasing as a private lender. We all want money. So this guy is going to be a good guy to talk to. Zach Richards is here. How are you, bud? Hey, Justin. Good. How are you? Thanks for having me on.

Well, let's jump into this. With all the uncertainty in the markets, with all the uncertainty in politics and in life, but also in the financial markets, how is your business as a private lender to real estate started an increase? So it's picked up on both sides, right? Because we have two sides of our business. We have the side where people come to us to borrow money, real estate investors. And then we have our investors on the other side that are looking for a place to put their money. So it's picked up on the borrower side because with rates increasing and Wall Street kind of tightening some of their guidelines, we found that a lot of people going to hard money lenders are getting yanked around a little bit for lack of a better word where they get close to closing and terms are changing on them

at the last minute and so on. And so because we control the capital, we lend, we've been able to keep all that steady because we don't have to answer to Wall Street, anything like that. We dictate our terms and so we don't have to change them on people. And then on the investor side, with the volatility in the stock market, we've had a lot of people that want a consistent return and a place to put their money back by real estate. So it's been attractive for them to place money with us as well. Now, what makes you guys private, like you guys invest your own capital as a lender. Yeah, yeah.

We lend our own money. That's how it all started. started with our own money. And then from there, we had friends and families say, hey, I've got some money sitting in an old 401k in a savings account and a CD, whatever. Can you lend it out for me? Then it went there. And then it became, okay, let's actually create an investor community, start a fund and take on more capital to give this opportunity to other people. What are you seeing right now as the desire for people to come to you as you guys kind of be a resource for them to invest money, right? So they'll give you their money, you invest it.

their desires what, just the pure uncertainty in the stock market, uncertainty in the financial market in general, or just a lack of knowledge of opportunities out there? I think it's all three, really. Like, yeah, a lot of people don't even know that private lending is a thing. Everybody's told, yeah, take your 401K invested in the stock market and do that until you retire and then live off 4% of your portfolio, you know, follow the 4% rule and then hope you don't outlive your money. And that's really what it's come down to for a lot of people. And we're just trying to show people that there's a better way to do it. Yeah. Well, listen, I think access,

I've been talking a lot about access, right? The more club gives you access to Zach. The more club gives you access to incredible operators. But access creates opportunity. I was literally just with Grant Cardone and Brandon Dawson for private mashmind for two days. And the whole time I'm kind of thinking to myself, like, it's access to these kind of guys that create opportunities for me and always has. Sure. That, I think, transitions into what we're talking about. Your investors are looking to you like, hey, I need access to opportunities that are good

deals, not just S&P 500, right? I need a better return on my money. Exactly. Better return on your money. And then we have a lot of people that have tried to lend on their own, which you totally can do. I mean, that's how I started. But people have gotten burned.

They don't have the right attorney. they don't have the right processes in place to vet a deal and vet the borrower and all that. And so, yeah, it's the opportunity and it's also knowing how to do it the right way. Now, let's talk about your borrowers. What kind of opportunities are you seeing come to you right now? Sure. So a lot of it's fix and flip. I mean, we've done, that's like the bread and butter of loans we've done.

Single family fix and flips. They're easy to do, right? Easy to value, easy to paper up. But we've also been doing more recently a lot more commercial deals. We just closed out the sale of a self-storage facility. So our borrowers built a self-storage facility ground up in Maine. We funded that, and they sold that in mid-April. And so we've been doing more commercial deals like that, bridge loans on industrial buildings.

So still fix inflates, but we've had the opportunity to do a lot more commercial transactions recently, and those are always a lot of fun. Are you open to seeing more of those style opportunities versus just the fix and flip? Being a part of this, you know, founding this club, I just, yesterday I get messages, right? Like, hey, do you know anyone who would lend on this, you know, deal in Delaware? Hey, do you know, and there's, I see all these opportunities. I'm not saying they're good opportunities. Sure, right. I'm just saying I see it as the founder of this club.

I see a lot of those opportunities. Are you guys open to more of a diverse commercial story? industrial, I mean, of course, fix and flips, apartments. Are you guys going open? Are you trying to really hold that circle of genius tight? No, we're totally open to more commercial projects. And for a few reasons, there are larger loans typically. So a larger loan, a loan is the same amount of work,

depending on if it's $100,000 loan or a $2 million loan. I mean, within reason, sometimes there's more complexities on the bigger deals. But it's much easier for us to just do a larger loan. loan. It tends to be with more experienced real estate investors because they're not the ones doing fix and flips that you can buy for $100,000. So yeah, we love doing the commercial deals. As I'm literally doing this interview with you, I'm thinking of the guy that sent me this deal. I'm like, I'll put you two together and just see if that deal actually makes sense. Yeah, happy to talk about it. So talk to, you and I and your partner, Mike, who, if no one

knows Mike, get to know Mike, really funny guy. You know, we've leaned into understanding some brand recognition, getting a little bit more out there onto some social media, some features on some podcast. You got yourselves started your own podcast. And before I go, all the things, how has that helped you grow awareness of you? What would you maybe point at to say, hey, we're getting more opportunities now because of X? it could just, by the way, I'll lead you into wherever you want to go, but it could just be a function of like people want easier terms and you guys are easier to work with than everyone else.

Maybe it's just a word of mouth. Maybe it's this actual leaning into putting a brand together, creating a podcast, creating some social media content. Maybe it's, you know, you're just sitting in the right rooms. You're now working the right people. Could you pinpoint a little bit of the direction of why you guys have seen this increase in business? I think it's solely because of the way we've, or not solely, it's majorly because of the way

we've positioned our brand. Like we called ourselves REI Capital Guys for a reason. You know, we're not wearing suits when we, you know, do loans, right? We're just a couple of guys that fund real estate projects. So we structured the name of the business around it, the attitude about it, all the types of posts that we do on social media. We try to make them really educational and conversational. and conversational, and that spilled over into the podcast and how we do everything.

Yeah, so talk about the podcast a little bit. You guys started a podcast. Yeah, we did. What's the name of the podcast? What's the subject? How is it going? Sure. So the podcast is called Safe to Zero.

We just released our 14th episode, I believe, this morning. Hell yeah. So we're chugging along. We've got, I don't know, eight or ten more that have recorded and more scheduled. so we're really trying to do a good job of keeping ahead of, you know, staying consistent with it. Save to zero. What's the premise? Yes.

So the premise is if you're solely focused on saving money in life, and I mean you're going to drive around and save five cents a gallon on gas or you're going to take the flight that's got five layovers so that you can save $100, you can only save down to nothing, right? least amount of money you can spend on something is getting it for free, right? But if you instead focus on growing your, you start a business, you invest in yourself, you join various communities like yours, for example, that gets you in the room with people to get opportunities, the amount that you can earn is infinite. And that's what we want people to focus on. You can't save yourself to getting rich. I mean, that's, you know, no, you can't.

I think the old, and by the way, you and I aren't old, but, you know, old enough to have some life experience. I just think that the days of our grandfather's generation, right,

and the Scrooge's, right, that whole classic, you know, Christmas story, and he's the great, you know, he's rich because he's just

as a penny pincher, right? And it's just like, that doesn't exist. I mean, it just can't. No, it doesn't work anymore. No.

Not just conceptually, like literally financially. It doesn't work. You will not, you will go out of money if you just sit around trying to save yourself. You can't even put money into savings account today and break even with inflation. It's not possible. I was just going to say the easiest answer is inflation. Like, where are we at right now?

7% or I don't even know. That's what it was over the last few years. I think it's come down a bit now, but they play with the numbers too. Yeah. Like they say, oh, beef's gotten more expensive. So let's take that out and put in chicken. So it makes the numbers look better. It's like, that's not what people wanted to buy.

So if you really dig into the numbers, it's a lot worse than they say. And I think most people feel that. Yeah. Listen, look at gas. I mean, I understand everything is going on with the war and all this stuff. Okay, fine. But at the end of the day, like, I'm in Miami to get premium gas for my car, which most cars now minimum need the middle of the line.

Yeah. Right. I don't know what it's called like low, medium high, whatever pricing. Most cars now need at least the minimum. Here it's $4.30. $4.30 for the premium is just under $5. And that affects everything. Everything. Yeah.

Like, what are you just not going to drive now? So you're going to be a recluse and you're going to sit in your home because you want to save. So you're going to stop driving. So then you can stop your car insurance. So you can stop having a car. Like, where is the line end? Like now what do you do? You just literally don't talk to people.

You do nothing. You sit at home. I'm with you guys. I love the subject matter because I'm an earner. Just go make money, right? Like life is expensive. Make more money. Yep.

Yep. And I think once you figure out how to do it, especially if you have your own business, I mean this may sound a little flippant, but I don't mean it to, but it's easy. Sure. You know, in the grand scheme of things,

you build the system, you build a business and things start working. Just focus on that. You know, people don't do that. is because it also takes patience. Yes, it does. I mean, you just got to have enough runway to see that flip go over into like, oh, money's actually, okay, here we go.

Yeah. Right. And that's for all of us, you, me, everybody. I just think people like, okay, I want to make more money. And it's May 19th as we're doing this. And so about the end of the year, I want to go make, you know, $200,000 more. Right. Well, you could probably get there, but you're going to go put some random date on it.

I'm like, why don't you just give yourself some runway? to go to that. People give up way too easily with everything. Like if you're going to start, you know, posting more on social media or I know like when you started your original podcast, how long it took you to really blow up. It takes a while. You got to be willing to stick with it. Yeah, right?

10 years to become an overnight success, right? Yeah. Like you got to be willing to stick with it for more, for longer than other people. Yeah. And a lot of people aren't. That's right. And then, but those are the same people that end up complaining, right? Exactly.

You know, we live in a space of. of transactional real estate, right? So I literally started the original version of this podcast was called The Science of Flipping because like you, I really just lived in the transactional wholesaling flipping world. I wanted the point of my podcast is I wanted the truth to come out about what flipping really is versus all these TV shows that make it look so glamorous and easy. You just make hundreds of thousands of dollars on everything you do. And so I started it that way. Now we have transitioned in the Moore Show because I actually believe there is so much great opportunity, as you and I are even talking about, in real estate in general, land flipping, development, you know, storage, entitlements. Like, there's just the opportunity everywhere.

There is everywhere. I say that because even when people are like, okay, I'm going to go flip to make money, which in my opinion is the right route. You should be always making money. Yep. Then you need to give yourself a runway of like, you're probably not going to. to go out and make a million bucks in the first year or maybe in the second. So you got to start to understand what is your trajectory. How long do you need to give yourself? Because otherwise, you start to give up too. Or you make silly decisions and start buying assets that you call Mike and say,

hey, I want to go buy this flip. And Mike and Zach are like, that's not a good deal. Why are you doing that? People get desperate. Why haven't bought something in nine months? Exactly. That's what it is. Yep, people get desperate. They like, oh, the numbers kind of work if I massage the spreadsheet this way. and don't do that. You're going to regret it. I'll give you a great example. I'm out of the flipping game. I'm not building a bit.

But there's a home in my neighborhood. My neighbor is a realtor. The guy who has the listing, which is not a yellow listing, calls my neighbor first because I guess they owe each other favors. My neighbor calls me. He's like, I know you flip homes. This could be a great one.

It's in our neighborhood. Like, let's go. So I'm like, all right, it's in my neighborhood. Let me go walk it. Right. Look it. Why not? Yeah.

It's a classic Miami original build. Like it's going to need a full, you know, $300,000 rehab, which is normal in my neighborhood. That's like the normal. Yesterday I had to just say, I'm out. Like I just, it was going to take, I don't know, nine months probably and to make, maybe we're going to make $100 grand.

Yeah, I just don't. And I know to some people you're like, Justin, that's $100,000. It's a lot of fucking money. Yeah. But for nine months of dealing with it and contractors and then the city and then the things that go wrong because they always go wrong. They always do. You go, I bring this to Zach and Zach goes like, are you just forcing this, Justin?

Like are you just forcing this by? Because if you just looked at the energy effort and whatever, it's going to cost me nine to 11 grand a month just in holding costs. Right. We've looked at a lot of deals and it's like, guys, we as the lender are going to make more money on this than. you. Is that is that really what you want to do? Right. Like, you know, it just doesn't make sense. But people are desperate. Yeah, they are. Yeah. And it makes me like feel bad, right? Like, you're the one doing the flip and doing the work. Like, let's find a better deal that just works for everybody. It makes everybody money. What really set me over the top, and respectfully, because it's not

their problem, but like if I paid a 6% commission when I went to go sell it, they, the agents themselves, the agent commissions between the two of them will be more money than I make. And I'm just like, this doesn't, I'm just going to go be a realtor. Like, I don't know. But it's also why I'm out of the flip game.

Like, I'm not desperate to go do that flip. I'm not running the model. It's because it was convenient. But to your point, like the lender would likely make about as much money. The agents were going to make more money. And I'm,

I'm the guy like with all the risk, with all the stress, with all the money. Exactly. Yeah. You're the one taking the burden of all that. Yeah. Yeah.

So where do we see, you know, your business going here? Now, you know, obviously we've talked about over the last little while your business is increasing on both sides of the ticket. Where do you want to go? Where do you want to take REI capital guys? So we want to grow, we want to just continue to grow what we're doing. And the cool thing is like what we're doing is working, right? We just need to do more of it. We need to take on more capital, more investors, and then we need to continue to lend it out to great people and do great loans.

So, you know, we can say we have a goal of getting to $100 million in our fund, which, yeah, that sounds great. But it's not really about the dollar amount. It's really about, like, if you're going to do, say, $10 million worth of loans to get to $100 or to really increase, you have to start systematizing things. You can't really get away with just doing one-off loans. And you have to build systems around raising capital, systems around finding good opportunities. and that to me is an exciting challenge, right? Because all along, your goal is to manage risk. If someone gave me $100 million, I could lend it all out tomorrow.

It doesn't mean I'm going to get any of it back. And that's the key. And that's what's hard. You could immediately lend it out, but doesn't mean you're going to get it back. That's a really good point. So let's talk about that because, again, the more show, this podcast is maximizing opportunities in real estate. And there's a lot of them, to your point.

I could lend it all out tomorrow. By the end of the week, I'll be 100 million short. I brought it in today, tomorrow. It's gone. It's gone. And it's gone for good. You're right. And so not everything is an opportunity.

This is also why I created the club. The club is there because it gives you access and it gives you people like Zach and all of our members to really refine. What is a real actual genuine opportunity? We do Friday calls where people get to present the opportunity they're looking at. And whether it's a Zach that comes in and says, hey, I might be a lender on this. I like these numbers. Maybe as someone who's a private lender who's looking to just privately lend money or maybe it's a contractor.

My point is with this growth that you're looking at, how are you going to start defining where are the opportunities for you? How are you going to be the brand, the REI capital guys, that everyone brings opportunity? What is your business model to go become those guys? Yeah, our business model is to just be. as easy to work with as we can. And we're not, we're not the cheapest. I'll be the first to tell you that. We're not. But we've done, I have had, we've done so many deals where somebody has come to us and we've, they've had a hard money lender that changed the terms on them at the last minute. I mean,

one that we did a few years ago, I'd spoken to the, long story short, I spoke to this borrower beginning in November about a flip. She was going to go, uh, get, uh, pricing from a hard money lender because it would probably be cheaper. And I said, you know what, go, that's totally fine. Go ahead and do it. No problem at all. She comes back to me the Wednesday before Thanksgiving at 5 o'clock saying that that hard money lender wants an appraisal and she's supposed to close the following Monday. That's just not happening, right? Through Thanksgiving all that, I'd already looked at the deal. I knew the numbers. I was comfortable with her. And so I said, yeah, we can do it. Here's the terms I quoted you originally. And we closed it. So the way we position ourselves is

Yeah, being easy to work with and being able to fund quickly because we're the ones that are controlling the capital that we're lending. So we're not subject to a lot of those rules and stipulations that Wall Street has. So that's what we want to do. And for repeat people, we have people that they text us and say, hey, here's the here's a flip I'm looking at. Do these numbers work? When we can look at it in 30 seconds and say, yeah, this works. Let's go ahead. Obviously, we do due diligence and stuff where necessary.

But point is, building a relationship makes it just easier for everybody. Where do you say no? Where are the opportunities that you two are basically saying this isn't going to be our right opportunity? Whether it's a deal, whether it's a mastermind, whether it's a club, whether it's something that you're like, I just don't believe this is in alignment with what we're trying to do. Less is more. Yeah, less is more. And I think that's such a big challenge in businesses. Is this an opportunity or is this a shiny object?

and that is something that's hard to answer. I struggle with it. I don't know if you feel the same way. Oh, my God. Yeah. It's so hard, right? So really, to answer your question, I mean, there's more technical things. Like if a flips in California, okay, no, we're not, probably not, we're not going to do a loan in California, right?

Licensing requirements. Yeah. Like, if it requires a license to do the loan, which I think it's only 11 states that do, we're just going to not do that. It's just too much work on our side. So there's things like that. And also as far as on the borrower side, like somebody reaches out to us for a deal and we ask them for five documents and they send us one and then they send us something else. And it's not what we asked for. And then they say, hey, are we ready to move forward?

Like, no, you haven't sent me what I asked for. So it's, you know, also what type of level of organization does somebody have that we're working with? And so it's all those things that we look at. And the numbers, of course, but it's not just the numbers. Yeah, and so what would help you guys refine this? Meaning, is there a way that you can go to market and just say, here's the 10 things everyone needs? Because I think for us as a borrower, when I'm a borrower, if I'm already clear on what I need to deliver you, that's the easiest thing in the world. Yeah, right?

Is just having that almost checklist. Hey, give me this, you know, whatever bank statement, whatever the five things are. if that is known, you guys start to create a big ecosystem for yourself. Yeah, I agree. And that's why one of the things we've built out, like, for example, on our website, we've got a loan application that people can enter, somebody can enter the basic numbers of their deal. We can do some really quick math and saying, hey, based on what you told us, this works.

If you want to proceed, you know, click here, and then here's the documents we're going to need. And that's it. the website is just what, RIAicapitalguys.com? Yeah. Yeah. Well, if you are looking for money,

make sure to get to RIAicapitalgys.com. I mean, can they just start to fill out the application right then and right there? Yeah. Yep. What's the easiest way? Like, is that the easiest way

or how can they get a hold of you? If they're listening to this right now and they're like, God, I would love just an easy lender. You guys are at, where do they go? Yeah, so obviously, like we just talked about, you can fill out a loan app

on our website. That's fine, but we are more than happy to speak with somebody if they want to just build that relationship. Maybe don't have a deal right now, but you want to build that relationship. We love when people do that. We have on our website, people can send us an email, book a call to chat with us. And then, you know, same on social media, Facebook, Instagram.

We're all over. Yeah. I think you guys have done a great job starting to get out there in social media. What are the type of assets? If someone's listening or watching this right now, what are the type of assets? what are the type of assets you want to do more of? I understand flipping is your bread and butter, but let's say people are out there seeing different opportunities.

What do you want them to present you with? What do you look for? We really like doing the new construction. Like that self-storage facility I told you, it's not like I want to focus only on that, but seeing a project start from just a piece of dirt and then getting pictures and updates as things go. go on and then we see all this construction equipment come in and they dig all the,

they clean up the site, pour all the cement, and then these storage buildings go up and the whole thing got done in, I don't know, seven months they did all the construction. Like, that's exciting. Wow. It's fun for us on the lender side because we get like emotionally involved in deals like that. It's exciting. It's exciting to watch this stuff come together. So like that kind of stuff is really cool.

or when somebody gets a multifamily that is just in a horrible condition. It's the worst house in the neighborhood. And then we watch them bring it back. And that makes everybody's property values in the whole neighborhood go up. Like that stuff is really, really fun to be a part of. I was just at Grant's Wealthcon. He actually had Bill Pulte. The head of Fannie and Freddie speak at it, which was really cool.

I bet. I bet. I bet that's interesting. Like I don't get access to just. sit there and talk to Bill Pulte. But his whole point was they are going to do everything they can in government. And he's in charge of Fannie and Freddie to keep valuations high. Okay.

That makes sense. Yeah. They want them high. Which means there's only one other lever lever to poll. Interest rates. Yeah. And so they're very, very bullish on Trump and this current government really. really leaning into keeping the value of homes incredibly high,

but creating an affordability through lending. Yeah, okay. You likely, because of your space, do a lot of research on kind of all this and the treasury bonds and all this kind of stuff. What is your take from everything at least you're seeing? Now, I got to talk directly to Bill Poltley about this. That's what, I mean, he obviously is in politics now,

so he has to be very tight-lipped. And he has to frame it in a way that looks in a certain way. which respect, but what are you seeing, like in the game, but also as you're studying the treasury bonds and in everything that's going on in the financial world? Yeah, obviously, I don't have a crystal ball. So, I mean, my opinion, it seems like the Federal Reserve, they're looking for an excuse to start cutting rates. And it seems like they've been tipping on that, on the edge of that for some months now.

and I haven't checked the forecast and stuff recently, but last I saw, it seems like they're getting close to wanting to do that. Now, I don't know if this stuff, all the stuff in Iran and everything going on has changed that with gas prices and all that, but, you know, gas prices tend to push, make things less affordable too.

So, right, does that make them want to, want to cut rates more aggressively? Maybe. I don't know. We'll have to see what happens. Yeah. Well, the nice part about you guys, I mean, you know, kind of being true private lenders, you're not as pigeon-held by needing to go find and borrow money.

You are private lenders that make decisions independently. And like you said, easily, you can, today's Tuesday, if I needed money by Friday and I gave you all the documents and all the things, you probably can fund by Friday, right? Exactly. Those are the uniqueness of you and what REI Capital guys has done. Yeah. Is you're not reliant on that. And I think that's a great place to be. Yeah. if you remember like back in COVID, what happened right at the beginning was all the Wall Street money. They were spooked about real estate or about the whole economy. So they shut off the tap for a lot of lending. And a lot of these larger hard money lenders just stopped. They stopped doing loans because they couldn't get the capital on the other end. And so it left their borrowers in a jam. I've heard stories of people getting left at the closing table because they're like, yeah, sorry, money's gone. We can't do it. And so it just,

Yeah, if you're dependent on other people like that, it really can cause you, you know, trouble on the deal side and then also if that's your business, too. What are the, you know, handful of things that you want to borrow to bring to you? Like if they're listening to this right now and they're like, okay, what do I need to do? I'm going to submit a deal today. Is it two things, five things, ten things? What do you need to go see? Sure.

So, yep. So we want to see information about the property. We want to see photos, the purchase contract. You got the scope of work. That gives us a great understanding of what the property looks like and what you're trying to do. We've done enough flips now, seen enough deals where we typically don't need to get inspectors out to the property and order an appraisal and all that. So if people can give us that information up front, then we can, that saves us a lot of time and it saves our borrowers on those fees because we don't need to do all that. And then as far as the borrower goes, too, we also want to get comps.

And that, we pull our own, of course, but that also tells us what our borrower thinks about the deal, right? If the property is a 2-1-900-square-foot house and all the comps they send us for what they think it's worth are four to three thousand square foot houses, it's like, okay, do you really understand the market and flipping and all that? So it gives us like a good check on our borrower. And then that, I mean, that's a lot of it for the document-wise. We try to keep things pretty simple. And then we like to have a Zoom call or a face-to-face meeting if it works with everybody that we lend to because we really depend heavily on that relationship. And that's super important to us. Yeah.

And, you know, listen, borrowers, if you're out there, these are simple things that, you know, now the downside, Zach, I mean, obviously we're beholden. holding to contractors, you know, getting the bid back in time. Yep. But not terribly difficult. And if it's a real deal, then just get that done. Submitted to Zach and the team. Yeah. Yeah.

So. And a lot of times we're not looking for like signed contracts with your, you know, I don't, I don't need a signed contract that you're going to spend 10 grain on countertops. You know, for example, I don't care. Just tell me this is what I want to do. And we can look at and say, yeah, that sounds like it's probably about what it's going to cost.

We totally understand that there has never been a flip ever done that the budget has, you know, the ending budget is exactly what you thought it was going to be when you started. Right. That's never happened. Yeah. Yeah. So you guys are, do you guys have a downside protection though? Like if they give you an $80,000 rehab bid, you approve $80,000. And if it goes to $90, then they're just out of pocket for the remaining 10.

Yep. For the most part. We have done a couple times where there's been so much equity in the property that we've been able to do. a modification on the loan and advance some of the extra money or maybe they've got another property that we can use as collateral. But by and large, that's why we want to look at a scope of work and make sure that, hey, going into this, this is what we're agreeing to fund. And if you go over budget, it's going to be on you to fund the difference. Now, you and I are part of some high-level masterminds, some serious investors.

You know, let's call it what it is. There's a lot of people still in pain, right? They're making whether it's bad decisions. The market changed on them. They thought it was going to be a... How do you guys protect yourself the best you can? Or I'll ask you a better question. Are you seeing in any specific region or price point more pain than others? So from...

So we haven't seen as much directly because we're more on the finance side, but I've heard from a lot of multifamily people and even like some of our borrowers buying properties from other multifamily investors that some of these people that have overpaid for these big multis are feeling some pain like people that have done syndications or you know and now the they underwrote it at a certain level of vacancy and now the vacancies higher for example so they're having more trouble covering their debt service so some some investors and some syndications have stopped paying their investors for example so that seems to me where the bulk of the actual pain is. I mean, yeah, we've seen a single family flip sit on the market for a little bit

longer, but I would think that's more of like returning to normal and not necessarily pain. It's the some of the days of putting a property on the market and by the end of the weekend, you've got 10 offers and they're all over asking. Like a lot of people got used to that, but that's kind of gone away in a lot of markets. Yeah, I mean, it was the same thing with the code effect, right? Like everyone thought three percent interest rates were like, the normal now. You're like, going to last forever.

Yeah. Just have some reasonability. Zach, I love this. I appreciate your time. Zach is in the Moore Club, by the way. Yes.

As access to Zach, uh, REI Capital Guys. dot com. You can find Zach Richards all over social media. Get in the Moore Club. Be a part of his world.

And he is a very easy lender to deal with. And so, dude, I appreciate you spend some time here. Yeah. Thanks, Justin. Thanks for having me on.

Right on. All right. If this was good, or you think someone needs to talk to Zach, make sure you share this with at least two of your friends. We'll see you on the next episode of The More Show. Talk to you later.