Business Credit for Real Estate Investing Discussion
hello hello hello landlords i'm so excited you guys are here today welcome to the better than success real estate league live q a weekly on this youtube channel so while you are here make sure you hit the subscribe button because we are doing lives every week and we are posting various videos every week we have hundreds of videos about investing in real estate teaching you how to build your real estate portfolio and so the information is here you might as well get it so hit the subscribe button i can't wait to get into this conversation today with one of our seasoned vets members who have been investing in real estate for quite some time and they've grown their business and grown their portfolio and we're gonna be answering all your questions but before we get into this conversation i have some homework for you really small small homework like i don't even know if you will call it homework might be like classwork you know the kind of class work where everybody scoops around you know i don't know why the teacher put his head down for a few seconds so it's like classwork so first things first is i have a free download for you today's free download freebie giveaway is based on one of our most popular videos on this channel and that video is how to become your own general contractor right so if you're investing in real estate how to also become your own general contractor i have a checklist for you so i want you to go and download the checklist let me post this checklist in the chat and it will also be in the um in the description for those of you are watching this replay and for whatever reason this video is private it should not be private what's up what's up what's up everyone and how do i edit this public public public there we go here we go let me make this public someone on my team made this video private on youtube and it shouldn't be private so okay yes um so download that link get access to that checklist to become your own general contractor it might be something you're been thinking about might not be something you do tomorrow but it's something that you can absolutely aspire to do it makes running your projects so much easier so and the other thing the other piece of homework that i have for you class work that i have for you is i'm gonna give you guys a few more seconds to hop up in here but i want you to take this link that you use to get in here and send it out to three or four people y'all know i ask this all the time send it out to the people you love because you know we'd be getting it popping in here and i know you want those people to actually like it's not fun being successful in real estate and you're the only one in your family in your circle so you need some people to do it with you so go ahead and send this out and have them hop up in here i'm really excited hello maxine what's up emwoldmariam i hope i pronounced that right hey df how are you how are you how are you what's that link right there so all right let me read off our guest's bio and we will hop right into this remember this is a q a session real estate q a session if you have any questions post them in the chat right one of the things that you guys had mentioned on my instagram post a little while ago when i said hey what do you guys need in terms of real estate you'll say y'all need mentors this is your opportunity i don't want to hear it they really don't don't say you don't have mentors and we're doing live q and a sessions every single week answering all your questions all right i'm going to read off lorenzo's bio and i'm going to let lorenzo on the stage lorenzo's real estate career started in 2008 when he received his real estate sales license he quickly found his niche in property management and smoothly worked his way up the corporate ladder holding positions as leasing consultant assistant property manager and property manager while working full-time in his corporate positions he built a multi-million dollar real estate portfolio and decided to run his own property management jackson rental homes and construction jackson home remodeling full time he is currently growing his property management company and he received awards as the top leasing consultant for berkshire properties outstanding service for berkshire properties and was recently recognized for his real estate work as 40 under 40 for philly real estate week yes lorenzo mr jackson is an advocate in the philadelphia in the city of philadelphia and surrounding counties to teach entrepreneurship within the schools and programs assisting disadvantaged minorities he regularly attends career days panels and accept mentorship programs lorenzo is a married father of two and resides in a philadelphia area everyone welcome lorenzo to the stage hey guys how are you what's up nicole how you doing i'm doing well doing well good so a couple things i got to let everybody know before we get into this conversation first of all i did a little sass when i said the philly real estate week award because that is an award that my company gave out when we do philly real estate week and we did a 40 under 40. we had a whole voting thing and um we put a bunch of names up there and then people voted and lorenzo was awarded to be one of 40 under 40. and so that was a grand time and a grand day and so yes yes that was a great week though it was we're actually um we're finally finally going to do it again it's going to be virtual again it's not going to be in person but um in the summertime so we do a virtual we try to like over provide value so it'll be 20 events in four days i know we that's what we did in 2020 20 events in four days so we've already yeah so here's the other thing i want everybody to know lorenzo joined bts like when our first or second meetings and we've been trying to get lorenzo to speak for a long time and he was shy he was like no and then the covey happened and he was like you know what i got to get in front of this camera yeah because i i really just enjoyed sitting back in the class and i'm a back of the class type person and kicking it with jabar and everybody else i used to sit in the back so sitting in the front it's a little lonely out there but in the back it was a lot more fun i'm sure it was it's always fun in the back of the class y'all get to hear the jokes the side jokes when she got on yeah what are you talking about he's stupid look at him over there so but i mean i think you should be proud though because a lot of people even in philly today the better the success tree is all around the mentorships and everyone who is doing well i think in real estate came under the better the success tree from their first few meetings i don't want to drop any names but you can go off like almost 20 people who are millionaires just by the information that they gain from better to success so congrats to you and the team that you guys put on together thank you thank you so much you saw it from day one you saw the behind the scenes you saw everything so i really appreciate you saying that so all right let's get that we got that stuff out of the way i just want everybody to know that lorenzo has flourished from not wanting to speak just getting the information now he's ready to give back which i can totally respect because i think a lot of times and say this one last thing will happen to this conversation with you a lot of times people they will get some information maybe duplicate it once and then immediately decide that they're ready to be a mentor or educator and it's like be a student for a little bit just a little bit yeah for a long time like become a master of something i always say become a master or something and then you're allowed to teach it but until then it's okay to learn everybody doesn't have to stand in front of the class and teach this it's okay to sit back and learn everybody that's the truth all right so lorenzo i read um your bio off why don't you tell everyone a little bit about yourself in your own words and remember everyone um this is your q a session as things come to your mind even if it's something from his bio just go ahead and put it in the chat i will get to i always get to every single question usually unless it's just like a ton of questions but i usually get to every single question so go ahead and the sooner the better for you so go ahead lorenzo why don't you share um a little bit about yourself in your own words yeah well they touched on the fact i'm uh i've been doing this for almost let's say 14 15 years and just being able to grow with better the success i'm uh we went to high school together as well so i naturally i'm a learner and a nerd at heart so i was eating up all the information um marcus knuckles really was the one that projected our my career when i learned what business credit was because i had no idea what it was and when i say i may have had eight units maybe 10 when i started and that next year i bought eight units in that next year and a year after that i bought 12. and then a year after that i quit my job so and then colby happened so being a professional learner learning your skills and actually executing on the information that you learned was a trick that i was able to pick up early on um but by trade i am a property manager i love everything about tenant placement tenant management uh people shouldn't know enjoy evictions and just the small things as much as i do when it comes to managing the overall process so whether it's getting a bad tenant out of hard situations or placing a really good tenant um that's seeing a big smile on their face and making everybody happy i love that part of it did you say you like doing evictions i do because you have you ever had one by time the eviction comes i'm so excited i'm excited the night before and i cannot wait to get this person out of this house they've been not they haven't been paying rent for months i look forward to that so um that's my secret pleasure i got two that i need to be actually actually one of them i negotiated they should be proactively moving out at the end of this month but another one that i need actually no two yeah two that i need to do and um i'm a little bit nervous about it and so i i'm glad well i don't want to say nervous that's the wrong thing to say this is my first time doing evictions i just i'm nervous not for the reasons you think i'm nervous for i'm nervous because i am nervous about the headache of the process okay what part uh well have you teamed up with an attorney not yet so that's why this is my you know how i kept saying to you we need to talk and i just hadn't talked to you but i was prolonging it like my tenant was getting caught up but now i'm just i'm just not doing it and one of them i talked them off the ledge and then two of them now y'all gots to go i can't do it right right so we'll talk more we'll talk we'll get to that in a minute i just wanted to stop there because you said i like the eviction process and everything and it's constantly changing with it has changed you know the landlords we kind of took a beating for two years and now you know we got our gun back now it's time for the get back you know let's go that's what i heard yes all right so um so you love the whole process you are a landlord by trade i want to just something you talked about um very briefly i do want to talk i want to go down this route one question a lot of people have is around this business credit conversation leveraging business credit to buy real estate and you said marcus knuckles helped you shout out to marcus he's like a brother to me and he has been a friend of bts for a very very long time why don't you tell us what that looked like when you made that leap from having eight properties and then being able to just like literally scale overnight using business credit talk us through the numbers talk us through the math whatever you feel to share and how it worked out for you okay so with the numbers my first um for me to get in and out of a property i was spending around ten thousand dollars at the closing table um and that's not including the first draw so maybe twenty thousand dollars to get in and out and as a combination with my first round of funding with marcus i picked up i think forty thousand dollars in business credit so with forty thousand dollars in business credit i also had a good conversation with my hard money lender and they decreased my rates and my um closing costs at the table so i was buying houses for five thousand dollars at the closing table so with forty thousand dollars not counting the first draw i was able to buy four houses at one time i think i bought four houses in a matter of two weeks and with the cushion you had with an extra twenty thousand dollars in business credit i was just circling i just circled the money around between my draws and my hard money loan all the way to my first refund and when you refinance four houses that's a that's a that's a pretty good day and then you're talking about almost having six figures um to work with you take those six figures and now instead of buying four houses now you're buying eight but you just have to decide how much can you actually stomach how many projects can you do at one time um and by me having a nice i had three crews at the time so i was able to get them in and out doing lipstick rehabs until i was able to max out i think one of the biggest things you have to be ready so when i met marcus i was ready with the 700 plus credit score llc's in place for two plus two two plus years and i was one of i wanna see the perfect client zero inquiries i was seasoned and ready to go and once you have that and i was also disciplined i don't live a luxurious lifestyle i just hang out with my kids um so that discipline combination combined with the opportunity and just being able to find deals with a cheaper rate it just it really just sort of took me off um and that's why i was eating all the meetings of i was learning something new every every wednesday i'm like okay great i got another contractor i got this play here now i can use the points now i can do this and it was just a big snowball effect so i was in real estate university everybody was having you know a good time like this is everything that i need to change my life and i'm good you know i'm proof that it does um but with business credit you can do a lot of different things um even today i went through a second round funding with i'm running the business is expensive websites all the backing things that you really have to do can cause to run it effectively so i think that when used correctly it's such a powerful tool now there's a lot of misinformation out there but used correctly combined with real estate the right way oh man it's you're almost unstoppable you feel like you could be almost unstoppable at times you do that's the truth that is the truth i i i did a little bit of research um just around this channel and also like um on instagram to find out where people are struggling with and i had to really ask myself like a while ago i used to get really frustrated when people ask questions i'm like yo i made so many videos i've we've talked about this in masterminds and i've realized that it's just so much content and so much stuff like you when we were in person you were coming every week it's different now right you competing we're competing with tick tock right like you can be looking at bts or you can be doing zigzag or you might be doing both and you're missing it so even though we have so much information around it we have so many mass amounts that business credit question is a question that so many people have and i i just like the fact that you you did that and i wanted just to kind of walk through the logistics of it because i think people hear about it and they're still getting intimidated when it's like oh my god business credit and then they're like oh i don't know what to do um managing your personal credit and i also took another i took a detailed course on business credit as well um last january to get further information on how to do it so i love marcus but when you learn how to do your own business credit funding that's another level tool so now you don't have to pay the eight percent and you can do it on at your leisure um and with social media helps we're we're not walking into the bank talking to the teller we're walking and talking to the manager or some of these smaller banks the presidents and ceos so our conversations are different our application process is different and our funding is different we're not asking for ten thousand dollars anymore we're asking for a hundred in up and you better give it to me because i know we if you want my business then that's where we're at and when you combine that like i said when you are still doing the hard work looking for deals still on deal hunting every tuesday um and just staying hungry at the same time it's it's a powerful it's a powerful tool but with business credit make sure your personal things are in line and the education is out there to do the right thing with it so let me ask you a question um before i ask you this question i got a little floss a little bit um my my videographer was here was recording some content and i got a phone call from one of the banks that banquet and uh the woman called me basically she said she told me about a new product and i didn't submit the application yet and she called me like can you submit the application please say like that's where you want to be at when the banker's calling you begging you to submit the application so they can give you a new line so i just i'm just i'm just flossing a little bit but let me just ask you this question you said that a lot of people there's a lot of misinformation out there what do you think is the biggest most egregious misinformation that you've heard about business credit the thing that i found about business credit uh maybe misinformation is people are using it but they don't actually have a legitimate business so they have you can submit the right documents but if you're not running a business actually making a profit doing transactions then it makes it tougher now you have to manufacture spending or do certain things to get points that i i don't look down upon it but it's something that i wouldn't do like we could spend a hundred thousand dollars in a month just by working rehabs drywall you know things but other people may have to go and do alternative spending to run up points or to get things back um if that makes sense i don't want to go too deep into it i don't want to seem like i'm coming down on anybody but i know yeah it's tough because i yeah business with legit transactions then it's the best thing in the world but you can easily manipulate the system to be in your favor but it's not really helping you because you're don't if you don't have a business you're just more so philosophy instagram and stuff like that okay about this all right i just like to demystify because sometimes i do see stuff and i don't like you i don't i don't wanna i'll be wanting to be like now what i got to remember to keep the main thing on instagram i'm here to make money not to get in not to get in dm fights with people because i've done that be like how did i get in damn fights with this person damn section going in like that is wrong you cannot do that i mean we impressed with people when i look on a page and they sleep in the mattress in the grandmama basement why am i fighting with you but and you sleep in the mattress then your grandmama basement because we had time that day it's like i got time today let's go like this is wrong and you're not going to put it out there but yeah the dm dm fights they can be fun sometimes but yes i do the same thing like look that's wrong you're teaching the wrong thing and your followers are going to you're going to lead people down the wrong path stop i had to promise myself not to do it no more man i still get it as long as they'll screenshot the fight then i ain't worried about it that's the thing i know you know they will screenshot the fight that's why this is somebody else's group group chat i don't mind but don't make it public because then we gotta take it to the next level you know you made me feel so much better because i literally struggled with this stuff i didn't know it was other people out there i just thought everybody was just like i don't care like no i'm passionate stop telling these people yeah you're telling these people to commit fraud and stop doing it this is let me tell you the one that i and that i said and i'm only saying this not to talk trash about anybody i'm saying this because someone has heard this and they have it in their arsenal one of y'all at least one of y'all's about to do this so i'm going to tell you the one that i found that the most egregious get business get a get business get a business start a llc get business credit because there are banks that will give you business credit even if you don't have any income yet it's a new business get do that take that money that you get pay for whatever it is that you pay for and then file bankruptcy on this llc close the llc yeah the biggest one is like do it with your student loans because you can't file um bankruptcy on your student loan so that's what that's yeah that's that's the that's my fight right there like stop yeah i don't i that one yeah okay all right let's just go yeah so we're on the same page like don't do that because you're just setting yourself up you might get away with you may not but don't just don't do that you know you're better just here's the thing right again for people who think that is sweet like okay you get bet like people are also marketing hey you get business credit and because let's say you do get business credit and you're not a personal guarantor let's say that happens right and they're promoting it as if you have less liability i mean you have less responsibility to pay it back and that's is it's easy to make it's easier than you think to make money out here and with any business you could start a drop shipping business with with the business yes like if you focus on the right thing it's a little bit it may seem like it's more work to do it not the right way but to actually start a real business but it's a system to it and the more work you put into it you do it the right way it'll take you a lot further than um maybe doing some of the other plays with the bankruptcy and things like that all right so guys make sure you load your questions in the q a section so all right lorenzo let's talk about um some of the some of your buying criteria that year when you bought eight properties in a year well is that has that been your biggest year in terms of how many properties you bought at a given time in a given year you're looking like heck no no i had i had a really decent year last year as well i think last year was like almost 12 or maybe 14 but i mentioned i told myself i was going to count i was going to just keep grinding until i turned 40 and then i was gonna see where i'm at if i want to keep going if i want to stop so talk us through so last year you did 12 12 to 14 or whatever talk us through the buying criteria and then also how you managed all the work like any tools for the trade in terms of that's a lot of work in a lot of crews how did you manage all of that work and also by still making sure you you got good deals now my buying criteria was really based on zip codes i took a small area um i had eight zip codes and in my i don't have it in my office now but i had it broken down on what each zip code the buying criteria was and specifically it was really fifty thousand dollars or less for a three bedroom house that was 1200 square feet and as the arv started to increase my um my price started to increase so maybe it was 50 then it started to be 65 75 and anything that i could do with 50 000 and work so i had a a nice handshake deal with a contractor where his he was going to fix up all the house for thirty thousand dollars so i just had to manage the materials some of the materials were 20 some of them were 30. so we were in and out if we were buying it for i could easily manage that and we were he was in and out in 30 days and i can say this now but i wasn't necessarily pulling permits we were just we were just getting right to it like look we're buying this on the first we're getting out of here at the end of the month um and from here you're going to be able to go to this house so he was making a lot of money everybody was happy um one of the best things that happened to me was when his crew split so his guys left and the first person that they called was me so instead of having one crew then i had two and they already knew how we work so now i had to double up on how many houses i purchased to keep everybody busy and that was how i was able to do it so some of them they were in 60 days but we were in and out and by me managing the properties myself i had a list of people still have a list of people who want to rent i just picked the person at the top of the list put them in in out um it got it can get hectic at times it got to the point where i had to quit my job because i couldn't manage everything but having a system in place we got a 28-point system that we use um all of my houses for a certain amount of years they all look the exact same we took the materials from one house to the next and by being in the same zip codes the west building and southwest area we're not taking the material as far as like look take the drywall over here and finish take the tile over here finish and just use i had um like almost an inbox of item numbers for amazon lose and we would just go plug and play it was all a system it wasn't i took a lot of the emotion out we just had to actually put the work in and my job was really to find the deals find a deal and keep everybody busy okay all right so many questions that you just gave like the 28 points talk to me about the 28 points the 28 it was similar you touch i saw you did a youtube video where i think your video i think yours might have been 20 or 21 steps but i have a few order of a rehab an order of a rehab yeah okay and i don't skip the steps i go straight down the list like where are we at we had the finished frame i'm not jumping the head and doing anything else at the finish frame we're going to insulate you know and i'm sticking straight to this script and everybody knows exactly where we're at and exactly where you're coming in um got the system on what the order when to order materials so nobody's waiting we don't have um a lapse of work and that was the key point where everybody at least knows how we work and the quality of work that we want so the steps i don't forget i think yours might have been 20 or 21 but mine is 28. and this is all right it's so crazy i'm gonna say this and then we can we can probably compare where what you have versus what i don't have um so i made that video and i was like this is gonna go viral because it was a game changer for me so let me give everybody a little bit of context i made a video that listed out the order of a rehab for me and i think for a lot of people that be your biggest struggle and y'all don't even know that's your biggest struggle when it when it was explained to me i was like you could do as long as you know the order you can find everybody on yelp for real for real so you really have no issue you there is no mystery around the rehab process if you know the order in which you're supposed to go you can literally google everybody else that's it you don't have to do you have to know anything other than the order that's it and lorenzo just clarified that for me so i said i'm gonna make this video it's gonna go viral this is it's the hidden gems and some of the stuff is right in front of them they just i don't know i don't know hey they're all just giving out free information that nobody wants to share with you they want to tell you like yo buy my course for 75 thousand dollars and i'm gonna give and i'll give you and they give you that and then you'll be like and i'm like i just take a screenshot and then take a screenshot like it save it to your faves so that six months when you finally get in that first property you could just be like nicki no exactly okay no i'm here step number two you know step and you name it and you you actually number so when we number like nah where are we at we're at number 14. your team your job is coming up in about two weeks you'll know exactly when they're
you can tell them you're gonna be already know we got you february 5th that's when you're coming in i love that okay and so that's important because this is something i'm learning from you right now like i normally don't tell everybody the steps right i usually have a project manager that handles it i just make sure he stays according to the steps but i know like the subs that i do talk to i don't tell them that but i do that with my regular business where i try to tell everybody so that they know where they fit in the wheel right even though and it's important i realize how important it is in that business i don't i never thought about applying it to being a developer because it's important for my other staff to know like hey guys i know this has nothing to do with you but this is what i'm doing over here or this is what susie is working on this is just everybody know where they are where we stand so you understand how important or unimportant your job or task is right and so um i say that great to actually tell where you are in the cog and why you can't get in here or why you need to be here on this day right so that they're not confused and let them know if they can't finish on time it's like look i'm giving you a week if you are not finished by monday at eight o'clock it's going to be an entirely no other crew in here working and you are going to have to work around them so you got this house to yourself whatever you do by 8 o'clock on monday somebody else is starting and if you think i'm playing a game you know you try to do some plumbing with uh 10 10 hvac guys running around because you decided to take an extra couple days it's going to be hard but you're going to you can only blame yourself um rob said the order and reference said no in the orders he said i did a rehab with my cheap crew off the order flow i know that's right rob that's all that's all you need to know i mean as you get better you start butting up some other things but that's once you've got that you good um all right it was another question i had guys please post your questions in here um in the chat rob rosie it's a lot of y'all in here thank y'all for coming today i love it it's popping today all your friends is here albert mike alyssa george y'all got any question chrissy hey chrissy boo um y'all got any questions please ask lorenzo i'm working on that you gave me and that's going to be that's another reason why i'm trying to slow down i'm going to finish the single families and the duplexes and focus on that because i don't know i think my step system will work with it but it's a lot of other stuffs that got thrown at me in the middle of it and i don't want to necessarily mess that up so it's just so it what ended up happening that deal was meant for you to have what ended up happening um the other deal i told you i was going to do i didn't end up doing it so let me give everybody a little bit of a backstory right so um it was two quads that i was um that i wanted right one of the quads i was like okay i'm gonna have jabar going look at jabbar went and looked at it and ran into lorenzo at like home depot or lowe's or something where are you ever there's a load right down the street so he was like yeah they ran into each other at lowe's and he was like lorenzo's like yeah my way to look at that deal so i'm like lorenzo was looking considering buying a deal because i was about to put the offer in and tell jabbar tell everybody shut it down so i was like lorenzo's looking at for real and commander i'm thinking looking at the other deal the other quad and i was like you know what i can't one thing especially my members that's been members from a long time ago it it'd be i have to be very mindful of conflicts of interest i'm not trying to get in a bidding war with one of our members and so i very well could have been like that now i don't know what he would have said he might have had to you know and her beasts come out but i was like you know what i'm not going to get into a bidding war with lorenzo on this let me ask let me tell lorenzo he can have his i got this other deal to be honest it would have been a stretch because the other deal was in germantown and that was in west philly and then i had some other small ones single families going on it just would have been a lot of people running around and i i did i don't know if i would have been able to support that level of crew yet it would have been all experimental so i was like let me just let lorenzo get this one so i called lorenzo i was like listen i just want you to know that i'm not gonna go for it you got it and then i had to it was a couple things that you didn't know too about it yeah it was like negative four is not a truck it's not a triplex make it a quad so i did that before um i just i went to the settlement table i needed to quad before then so i was all right that's what's up yeah cause um it was being sold as a triplex but the numbers like when you ran when i ran the numbers it's not that was what made it such a juicy deal the seller the wholesaler was marketing it as a triplex and i'm like sure i'll buy it almost sight unseen because you don't know that this is really a quad and the numbers are better right now like lorenzo get this don't don't tell nobody but this use this as a quad the numbers are juicier and this is why and then so with the other one the lot size was too small i it had the size to convert to a quad but the lot the lot width was too small and it was then it was just diminishing deal and i was like i'm not fighting with no deals fine and then what made it even worse is the wholesaler i had it under contract i put the um the emd down the wholesaler i mean the title company needed like a death certificate from the seller and the seller was taking a long time to get it to them and we moved way out of contract um they never did it so the whole seller just gave me told the title company to release my money okay so it's okay i'm honestly i'm right now i am uh i don't know i don't know what i'm doing i thought you just got like four houses on the contract and they're all single families but you know i normally do multis but the reason is because a lot of them are like two of them are lipsticks on a pig one of them is a um it's turn key and another one is a full gut but it is a 2 000 square foot property and maniac i'm getting it for 200 and the arvs are 650. with a garage that might be my philly i might do airbnb and then it'll be my philly house when we finally come back to philly because i don't mind staying and it's literally one block from main street yeah you could put what maybe 200 is your rehab budget if you on the high side my i told my guy he said he could stay within a hundred he said maybe he said put like maybe 20 on it because you know you like nice stuff so 120 okay so if i'm all in at 320 and the arv is 600 that's a i saw 650 a strong 650 and it was smaller than my property yeah yeah i lived in roxboro for a long time so yeah those numbers is crazy and it's a really good area that's one of the still one of the good areas of living in philadelphia it is because guess what you got main street right there which is very cute food all that and then if you want to get out the city it's just right there you know 76 i'm going i don't have to go to where the rest of it and go both ways you go out the city or you could be right downtown in 20 minutes so and uh you got your son now you're gonna be looking at different schools they have some of the better schools too in that area if you can get in that zip code you're good we shall see um all right so rosie wants to know how that's a good question how did you make that property into a quiet before you got to the close and say well i tried to do that and it was like the deed needs to be recorded in your name before we actually change the use so how did you do it um i believe she spoke on your platform before i use a paulette philly expediters so she handles all of our permits how she did it i i don't know but i sent her all of my documentations and i had um i had everything back that was on there's a four unit legally in the state of in the city of philadelphia in about 72 hours something like that took me three days she's coming out to paulette she's a bts member as well that's awesome so yeah so that's about the relationship that i have because i've been using her to pull all my permits and do uh single family conversions and things like that so with her i left my deposit down and i would not have actually closed if she didn't turn it into a four unit before i bought the house and my hard money lender actually required me to get that to him so i submitted that with my paperwork yes okay all right so now y'all loading your questions in right now um hold on maxine what happened to your question where's your question y'all got now see i'll be getting the conversation juicy and then you'll just be uh happy now um what are your thoughts about doing larger commercial deals i love the larger commercial deals uh last year we did do a i don't know if it's considered it is considered commercial but a 26 unit for 1.8 million and the numbers on that is is through the roof because it appraised for 2.5 so you came in with almost 700 000 in equity um that's what one of my partners deals but i was able to be the agent and i manage the property and i'm looking at all the money that's coming in it's bringing in almost is netting almost 14 000 a month so with that i think that's another reason why i'm sort of slowing down because i would love to jump into the larger commercial deals when you combine that with a seasoned llc and business credit those sort of deals will be open open up to you um so i think that's the way to go if you want to skip some steps in the rehab cycle straight to large commercial deals buy some eight to 10 12 unit apartment buildings and i think you'll you'll definitely see the profits i love it that's that's them some beautiful numbers right there okay let's get to the next question when buying what criteria in a property do you look for in turnkeys and what do you renovate intern keys to make that rent ready with the turnkeys um i really or maybe lips lipsticks or turnkeys um i'm gonna in between and anywhere from lipstick to turnkey i really like to i'll change small things the faucets knobs one of the big paint one of the bigger things i always have a cheaper floor installer so i really like to put down new floors i've had some poor appraisals come back because i thought that well they love this old original hardwood floor as well i like it but the appraiser didn't necessarily see the same um eye on it so i would give them new floors and if i could change the lighting make it nice and bright um and i like to use gold do i did a little bit of research on my demographics if it's going to be a certain demographic i use certain colors so gold stands out gold forces gold everything in the bathroom and you'll be surprised you can actually get a little bit of a higher rent lorenzo said 40 year old black women like yes black people like gold so when they see gold it works so if i'm if i'm going to have african-american or black empire i do put gold in the house somewhere either in the kitchen and in the bathroom uh all right here's i should here's my um here's my criteria for turner kids i was reading between the lines i started smoking your face the result um all right so here's my here's my my my criteria for turnkeys um what defines if something is a turnkey or lipstick on a pig or not is the mechanicals hvac is a trillion dollars right now that's my biggest question is what's going on with the hvac anything that i buy i want to put forced air and heat in it one it will keep a happier tenant and two um nobody's gonna call you about any issues with it they shouldn't so it needs to if it's i won't even consider turn key or rent ready if it does not have forced air or force heat in it it could be everything else nice and it's got that that might be a lipstick on a pig depending on the number i'm just not going to analyze it the same because it's just so much of a headache and it's so expensive um elec electrical too plumbing as well um but that's really where i start from that's what i look at those are the things that cost the most money then obviously flooring and um kitchens and bathrooms no matter what whether you go you can have hvac i mean you really ever see anything like this but you have brand new hvac electrical plumbing um brand new floorings that kitchen that bathroom don't look cute if it don't look cute the value of everything else drops about fifty percent so i mean and it is it can be expensive the cost of the tiling and um you know countertops and and encounters and cabinets all that stuff is is going up as well so like the mechanicals bathrooms kitchen floors those are the things that really go into the meat and potatoes of whether something is a turnkey or being a lipstick on a pig everything else paint trim is important doors windows that stuff can be massaged and put together keep that in mind you know you might be able to it's important but like it's not a headache like everything else and you can get them done a little bit easier hopefully that answers your question aisha i didn't answer it directly but i gave you some criteria for you to look at i think the biggest thing that she wants to look for is she needs to go and make sure the mechanicals work if the mechanicals work then you got yourself a lipstick if they don't you got yourself a headache yeah but even if they do work and it's radiator heat and it's old plumbing guess what they gonna be doing calling you every darn week every month my i got a leak my stack broke i got you know my electric outlets are going out because you got some knobbing tube hidden somewhere in there so yeah it makes it tough don't call me don't call me at all all right so i'm going to go to my 28 step i mean my 20 step and then lorenzo can tell us somebody asked me this lorenzo can tell us where where what he got in there that i don't have in mind um let me go to it let me pull it up well i could go out on top of it all right all right i'm letting it the video play so i can screenshot it all right so so i can start off the first one is you want to make sure you got your plans because mine is based off a full gut so the very first thing you want to make sure you have your plans uh i'm a big fan of jane jane does a great job she can be responsive and if you more information you give her the better you can help her do her job uh second the next three steps are setting up the utilities whether it's pico i always start with pico pgw then the water department pico you can make a phone call pgw same or you can do them online the water department is actually done uh at the closing table however i like to send them an email to make sure that they have my correct email address and i want the bill sent to a certain place um those are my first floor i don't know if you got yours now i couldn't let you go i do i didn't have the um utilities in there and you know what i never really thought about it to you said that i do be fumbling through my utilities like oh i gotta do that i need to have that in there so i i pre-development is for me like plans permits all of that that's all in one thing but i do always every time be fumbling through like oh shoot i forgot okay tell my my va like hurry up can you do you know or i gotta i got two va's technically one of them handle that type of stuff and so like i just always fumble through it yeah so that's my right after the closing table i'll go one of my big things i sit down for an hour set up all the utilities before we do anything else and then um the first step should be the first actual step in the house should be the demo and i'm trying to pull my thing up so we can um pull it up on the screen um while you're talking i'm pulling trying to i move on to any masonry work so if i have to secure any foundation uh foundational issues that's where i'm going to see make sure the house isn't falling down i'll bring them in and just secure everything so from there after that's completed i move on to my it's actually called a framing rough in a way yep yeah framing rough so you got a frame so you do your your framing before you do the roof i have on my my thing like if there is the roof is not leaking i do the roof after the mechanicals why the reason why is because my windows are going to be put in during the framing now my plumber is going to put holes in the roof when he's venting everything out so i'm going to have to bring the roofer back anyway so if i can if the roof isn't leaking i could bring the roofer after the fight the mechanicals are done he's securing everything and he's capping the windows so i'm doing all that at that phase siding uh window capping roof secure the building on the outside at that point because nobody else is going to you better not put any more holes in this roof at all after the um your rough end is done and you know what this is a personal preference i'm not mad at that because i will tell you i have had issues where the roofer got to come back and all of that and then also the capping of the windows that's always a thing that's got to be jigsawed in there so i'm not mad at that but i'll tell you i always do this because i have i i was scorned one time i uh so kim was doing jumpstart and he had already done it when we had started and then we met and he's like listen i want you to go i want you to audit the program i just want you to go through it so i went through the program and one of their students they had um they on the day they did like a tour so the previous student lets people come and look at the house and this house was being done it was beautiful gorgeous and i mean you know in terms of it was just framing up i think and they had put some mechanicals in and on the third floor they they hadn't done the roof yet and the mechanicals was in and there was a big hole and it was about to rain that night and so every time i think about the roof i think visually to myself oh my god it's going to rain and guess what ended up happening they also it was a they did their whole thing out of order and then somebody had ended up breaking in and stealing all the mechanicals and all this so the whole property just wasn't secure all together so i think in my mind the roof something's going to happen to the roof yeah and then it's going to get damaged on my stuff and i'm going to be like but i'm not mad at you that's possible that's why i have it it's flexible because if the roof is actually um damaged then i'll do it a lot sooner but to make it a one-stop shop that's what yeah that's why i moved it but um i have those same fears like if you put your electrical wires in you know your installation everything can be ruined by you not doing the roof on top your subfloor everything backs okay so then so you said masonry then you see you you start your hvac plumbing what else what's your next step well yeah i do uh rough plumbing rough hack and rough electric in that in that order um and then i do the framing final and after that that's when i do the roof um insulation after the installation that's when um straight up drywall and then after we drywall it's a party after that it is hey look you getting there you prom paint my floor and tile guys they actually work together at the same time it's like look y'all gonna have to get along however y'all work it out um so they're in there simultaneously and then after that i'm bringing in all the mechanical guys can come back hey y'all finish up um but the exact order is i go back in the same order the plumber comes back hvac electrical but uh massage they can actually all work together everybody has a week to get their stuff together you know like look y'all come back february 5th and knock all this out and while we're doing that we're doing a trim um a couple things i add in there is after that that's when i started to pre-market um pre-market to me is real important because you can have your unit so rented before it ever hits the market just by you taking a couple pictures and videos um then you got your your final paint your staging and then your then i'm done after that pretty much similar similar similar orders so here's my order take a screenshot everyone and um lorenzo if you can what we'll do is um if you can send your order to irish or or um alaia and then we'll see how we can get it out to everybody their own way either way they're both good orders um okay you got to you got your appliance i sort of bring my appliances in with um they kind of go in almost with the cabinets i always do it last it just that's just always what happens um it's all kitchens call for the granite it's all around the same time honestly when you get to this 16 through 20 a lot of that stuff is around the same time right and you can be in and out in about three weeks to me so like everybody if as long as you're as the actual project manager have everything inside get it in and get out i aspire man i think i probably i i will need to come back home or be in the same city for that i know people will be doing all type of i i leave a room for nicole live on a different coast we gotta get over on or a little bit i don't be i i don't be tripping about that i just i really don't and that's all right long as y'all stay within the budget y'all answer my phone calls y'all be honest y'all good people y'all stick with me i take i'm i'm three thousand miles away no i'm not gonna come and punch you in the eye like i would if i wasn't there nobody's like taking the flight to just to check or make sure they're showing up for work every day like no send me some pictures and i'll be okay right all right so next question what are the basic property needs to be sectioning i don't do section 8 so lorenzo is the king with section 8 uh you want to be aware of what commonly fails and that's going to be the first off is making sure all of your outlets are grounded um that's the i found that's the biggest thing where they'll fail you it could be 40 outlets in the house and if you have one that's not grounded it's going to take you two weeks to get it you know until they come back out um with section 8 they really want to make sure the property is safe and secure and when it comes to the inspection though outlets plummet similar how everything we just mentioned you want to make sure you do your research and make sure everything works don't get taken off guard by them turning the stove on and you have a turn you never turn the stove on it doesn't work or testing your heat out make sure the heat actually works at every room your windows lock doors lock it seems very simple but you want to make sure that if you do your own research you'll find that okay this master bedroom door does not lock and the window doesn't work so you make those repairs it's not complicated but they will fail you for it may seem like something small but any one infraction you're not going to pass um are you investing outside of philly for me no what about you not no i don't know i can't get over the taxes and i haven't been able to make the numbers work but i would love to i would love to invest outside of uh philly but i haven't been able to really the taxes always throws off the cash flow for me i'm not making any money on this and by that he's talking about the surrounding counties um and there there are people here who are investing in a whole other states um for me honestly i am very very very um i'm strongly considering investing in memphis um i just haven't done i don't i'm it's just a little making me a little nervous and plus i got some other things i want to do and so i'm just not super locked in but i'm i'm heavily considering it uh okay we got the rosie answer that question um mike said what's the discount code for your hundred thousand dollar membership you got a hundred thousand dollar membership lorenzo or mike being funny mike is it's uh it's ten thousand but i'm not even trying i need to come in here to sell anything i'm just here to bust it up we good mike might just trying to uh bust chops okay uh lorenzo i'm trying to restart flips this year i spoke with the gc yesterday and he said he can look at a property then have a proposal put together within 48 hours he said continue okay congratulations oh he said if i identify a property should i put it under contract first or just take the dc with me from the beginning to minimize the time frame between seeing it and putting an offer in put your offer in get your offer accepted and see if you can get 72 hours before you have to leave your deposit and during those 72 hours you got a lot of work to do to find before you put your money on the table typically what i do rob is um i and as you develop this relationship with these um wholesalers it's just a kind of a normal conversation so actually this happened to me wholesaler sent me a deal i looked at it tentatively and i go through my i got a list like okay this costs this this costs this okay i'm looking at the pictures okay this need that this need that and i'll put numbers in right and i always assume that whatever it is is full right not partial whatever that line item is so i came back to the wholesaler and was like hey i'm running my numbers preliminarily and i always use language like that i'm running my numbers preliminarily this is my counteroffer they accept it i say okay listen i'm letting you know right now i want to have my guy go through it there i'm letting you know right now like that's the number i would do it at i just is it okay if i had my guy go through it they know the game right you do have some wholesalers that's gonna be like oh and guess what i don't do business with you because a lot of times they be like really out here scheming and scamming i can tell you stories collecting deposits exactly make a whole business out of collecting deposits and not selling any properties not selling any property just collecting your five thousand collected deposits okay right so most wholesalers will understand like all right y'all verbally accept it but just tell him like listen i want to have my guy go through this to verify it so my guy went through it his number was wired a number stock whole time like listen i'm gonna pass on this deal this is what this is why and we had a whole conversation because he also had his comps way higher oh you you going 3.3 miles out for commerce is a cop on the block
that's like the appraiser is not going to overlook a comp on the block that's 30 000 less than what you're telling me the 1.3 miles away is like you know so we had a whole a very good conversation where i was helping him to understand i said this doesn't mean that your property won't sell where you want it to sell it because guess what there are some investors out there they not bts members they won't know stuff so you'll probably sell it where you want to spell it out but i can't do it there because this is what it is and so i say all that to say to you rob r
2022-01-28 08:05
