Guest: This episode is actually Dan interviewing his father, Dan Breslin. The elder Dan Breslin is a Private Money Lender for other fix & flip investors throughout the Northeastern US.
Big Idea: Private Money Lending can be an effective and reliable source of above-average returns for those with some cash. One often overlooked source of this cash is dormant IRA and other retirement accounts. Dan and his dad cover private money lending on retirement accounts. They also talk through the founding of Diamond Equity Investments – which is the volume fix & flip real estate firm founded by Dan (the podcast host).
This episode of The REI Diamonds Show is sponsored by the Deal Machine. This software enables real estate investors to develop a reliable & low-cost source of off-market deals. For a limited time, you get free access here.
This episode is also sponsored by Lending Home. Lending Home offers reliable & low-cost fix & flip loans with interest rates as low as 9.25%. Buy & hold loans offered even lower. Get a FREE iPad when you close your first deal by registering here now.
My Dad & I Discuss Private Money Lending:
- How to Become a Private Lender
- Earning 10% Returns by Investing Passively
- Vetting Potential Borrowers
- The Founding Story of Diamond Equity
Relevant Episodes: (200+ Content-Packed Interviews in Total)
- 10 Years Ago Today-The Birth of D.E.I.
- Dan Breslin on Raising Private Money for Single Family Flips
- Fast & Easy Multifamily Lending with StackSource Founder Tim Milazzo
- Navigating Real Estate Investment: From Young Enthusiast to Mobile Home Parks with Mitchell England
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Watch the episode here
Listen to the podcast here
Private Money Lending With Dan Breslin
Dad, welcome to the show. How are you doing?
I’m awesome. How are you, Danny?
I’m doing well. For a lot of our friends, our family, and the people who knows personally, they’ll probably think this is a real interesting story. To readers who catch us occasionally, I hope they find it interesting and intriguing but I wanted to have you on the show to talk about your experience as a private lender from the private lender’s perspective. For the readers who maybe don’t have as much affinity to hear our second topic of the founding story of Diamond Equity Investments in my career as a real estate investor.
Hanging out and listening in to the perspective of somebody who is doing private money loans on fix and flip investors houses is worth the time to do the research so that you reading can have that conversation with people who will potentially be a private lender, for you and fund your deals. The main talk topic will be private lending. We are going to start off with the founding story of Diamond Equity Investments.
To give some people contexts, our company in 2023 closed $57 million in real estate, meaning after the renovation was done, we sold it. We add up all those sale prices that was $57 million. That was not our profit. That number will be not disclosed in public. That was 330 transactions. We’ve done that with a large team. We have the virtual offer at. We’re closing deals and rehabbing deals in nineteen states in 2023. We didn’t step foot in the state at all to buy it, fund it, close it, do the work, and then resell it, and get a retail buyer to go to the settlement table.
From HVAC Sales To Private Lending Success
We’ve been blessed to attract a team of high caliber, talented individuals to come together and put together the volume of deal flow that we’ve done. That’s Diamond Equity. We did $54 million in 22 and $54 million in 21. We’re no strangers to do in volume deals throughout the United States, but I started from humble beginnings, which I’ll share in a few minutes. Dan, you got your Oliver shirt on there. My dad’s name is Dan as well, but through this episode I’m probably going to call you Dad or Pop. Maybe you can talk about your set up, your brief summary of your career, where you live, and how you fit into being a private lender.
I’ve been with the Oliver company for many years, and scratched two years in their in ’07 or ’08, selling heating and air conditioning. I remember when you told me that I’m not selling heating and air conditioning. It went this real estate route full-time.
I want to give an introduction that you’re the HVAC sales and you’re doing some private lending on the side.
That is correct. I’ve been blessed to have made some decent investments. Investments I knew at one point and that have come back to me nicely then enabled me to do the private lending for you guys. It started with going along to some of the seminars when you’re learning about the self-directed IRAs, five-star equity, trust, couple different ones, then you can set it up. It’s just on the IRS code. You can set it up yourself. I’m not sure the exact numbers but it’s not real complicated to run your own IRA and be able to wire the money out to your team. I have another gentleman I work with locally, too.
I’ve been blessed to be able to do that. It’s pretty solid. It’s investing. I did some speculating and did, okay. That gave me some money to do some investing. I’m at my age now where I probably should stick with investing. No more speculating. Only good solid investments. It’s tied to a specific property, so that it’s not unencumbered. You’re the first position on that loan and you got to be ready to act when the call comes from the Chicago team and get down to the bank, get your paperwork in order, which they will help you with. Your guys have helped me with that nice nicely.
Starting Fresh In 2006: Finding A New Path
Let’s go back to 2006. We’re going to pull on all the threads of private lending and talk about that a little later in the episode. In 2006, I have no license. I had come home from a sabbatical in jail. I got myself about drugs and alcohol. I got clean at the time. I used to sell cars but without a driver’s license. That door was closed to me when I came home.
I remember thinking, “What are we going to do?” I was calling you to collect, and you told me, “I don’t know what we’re going to do. We’re going to do something. We’ll find something to do.” I don’t know if that was October or November, but I remember feeling hope while I was still finishing out my sentence there. I was like, “I don’t know what it’s going to be, but it’s going to be good.” I had no idea eventually how good it was going to get, but maybe we start there. Maybe we start with Russ Whitney.
I’ve been getting up going to work 6:00 AM for decades. I would never turn on the TV in the morning. “Don’t turn on the TV. Get ready to go to work.” One day, I woken up early. I happen to have a working phone and cable. I started turning on the TV and there was this real estate guy Russ Whitney. He was going on about his own father-in-law. He said, “If only my own father-in-law had bought another house. Where would he be if he had just bought one more house?”
I remember picking up that ten thousand pound telephone receiver. Phones were connected to walls back then, believe or not. I was picking up the receiver and down to 1-800 number and registering for this. That was December. I picked you up right around Christmas from your sabbatical then we went to that seminar on a weekend right up in King of Prussia. It’s now the casino or whatever giants hotel up there. You’re weird walking in like, “What is this all about?” We did. I remember plucking down. I used credit card for that first program to get which titled us to come. It was just an evening and it was a full weekend of training.
They blew our minds with the training. She was using the old overhead projector screen. “You can do this. If you want to over here and do this. You could get these for at least purchase agreement for 10% in this neighborhood,” then she piled them all up on top of one another. It’s so deep and the directions you can go in this. That was the verse. Whitney loved it. I remember from that program. The next program was a pretty good bump. It was more than I could do on a credit card, but that’s when we book up with the gentleman.
Your brain gets scrambled with all the possibilities in real estate. The directions you can go are endless.
Before we even got to that point, that first teaser evening seminar. I’m pretty sure the guy got up and he had his overhead projector. For those who don’t know what they are, they had this arm objected this thing onto the screen. It was a light bulb under that. It was back in 2006. I remember he was telling us about a land deal. He was like, “I got this piece of land for $10,000 and I turned around and sold it for $20,000. His check for $10,000.” He put the $10,000 check up there. I was like, “I get it.”
As complex as real estate is in the end, there’s title, contract laws, renovation, and negotiations with the seller, with contractor, with a buyer, and on the repair inspection report. There’s so much complexity but it all boils down to buy it for one number and make sure I went for more. I remember thinking like, “That’s exactly it. It makes sense. I want to do what he did.” That was my moment of excitement. My moment of my excitement and my hopes being dashed was when he got around to telling us how much it cost to come to the wheels. That was $995. That was beyond what was in the realm of possibility for me at the time.
That was a lot of years ago. I remember I sat right in front of you and I wrote down the $995, then I circled to the left two decimal points. I said, “I’m just going to spend on $10,” and we did. The goal was for you to move that decimal point the other way to the rest of your life and you’ve been doing that nice leads, if I do say so myself.
I almost fell off the chair when you said you were doing it. To look back and think this all started with a delusion where we turn that $995 into $9.95.
It was about not looking at the number. It’s just doing the work, which you’ve done thousands of hours a year. I try to join you at one point. It’s hard work. I remember trying to get the office set up on Drexel Hill, the Garrett road around the corner. It’s like a business center around the corner from where the house is. You’re set up in the third bedroom at the house there and that wasn’t going to work out. It was about knocking down these obstacles.
It’s not about looking at the number. It’s just about doing the work.
I remember that gentleman. It was through a phone call and he wanted $600 hours a month. We’re talking about numbers from many years ago. All these numbers will be doubled now, but I remember walking in, “Maybe he needs a boiler.” He said it before I said it. He walked out and said, “I need a boiler.” It was surreal. I had this luxury of trash picking commercial buildings. Remember I got the door for the building? I put that beautiful door up because stuff just lays around the corners of these mechanical rooms that don’t seem to throw away.
One man’s trash is another man’s treasure. We just made a real good use of that space. That covered rent for a year, but it was just about knocking down bare minimum. I’m sure you’re doing that with people every day to week with your team just taken away those objections as it is. Take away those objections and keep it going, but it was surreal. From that second seminar meeting up with the fellow from up in Bangor, PA, there and then sharing it with him.
They don’t tell you that you can share the seminar, but we had a conversation outside during the break and you guys were able to share, which I could manage. That was awesome and that was like a next step. Interestingly enough, now it’s CRM and Podium and all this complicated last stop. It was index cards with like two bedrooms and three baths. It was crazy how far this has come and how far it could possibly go. It’s mind boggling I must say.
One thing about the office. I was this 25 or 26-year-old kid at that time but having an office. They didn’t tell us to do that in the seminar. That wasn’t like a thing. I certainly lived in my mom’s bedroom. I wasn’t going to cut it to like conduct business but we took that leap of faith. You pushed us to take that leap of faith and put the boiler in. We got the year worth of free rent out of the boiler installation that you found in the trash.
That was lovely donated by my company.
For context, that boiler and why that was important to the guy, they were oil heat. Around the country, a lot of places don’t have the oil heat, but outside of Philadelphia, where we grew up. A lot of these houses had the oil truck to come deliver the oil and now that was how you had the heat your house. The price of that oil would fluctuate dirty.
It could spill and the basement. It smells down there. It runs out on your 10-degree day. It’s hard to get more and they have to reprime the system. It’s not desirable to have oil heat. Scott, the landlord, knew that and wanted to convert it to gas. It wasn’t even just a swap out of a boiler. I can’t remember if we ended up removing that oil tank for him or not.
The oil tanks probably still down there but you had to convert. The funny part, pennies, nickels, and dimes matter. I remember we bought some houses later that had a oil heat and it was cold. While we are doing renovation, you’re bringing bucks of oil over from the office tank so that we could stay warm and get the paint to dry.
I forgot about that. We’re quite joined at the hip early in there, but you’ve taken off.
Having the office created a new image in my own minds. I will look at myself in the mirror. Self-image is important when you’re building a business, building a successful career, and becoming a successful parent. What do you tell yourself in the mirror about how you’re going to do things and how you’re doing things? I was able to look at myself a little more as a business person. I’d had this little leather briefcase thing I’d walk around the corner with and throw some.
Breaking Down The First Real Estate Deal
It allowed me to show up a little more professionally. I could sit at that desk in the office and make the phone calls. I made the phone call from the newspaper ad for-a-rent-sign to Creig whose name pops up periodically our newsletter. He’s running the Philadelphia Market Force. I’m like, “I’m going to buy your house.” He’s like, “No, but meet me at this networking event and I’ll show you around.” That was the door opener. I don’t know if I would have made to call if I wasn’t sitting. Having that place to go to certainly was a big step. Let’s shift gears. Let’s touch on the first deal that I ever did from your perspective.
Flash forward to July of 2006, I pushed and you pushed me a lot also, which is awesome. We get to do that with each other. I remember like, “Come on. Are we doing this?” You got disappointment and I remember, I was in the City of Chester. You had Keely with it. I’m taking Keely a little playground at the end of the street as you worked your magic with this deal. What I remember about that is you doubled your money probably a little better but the woman, her children, her son’s son-in-law or whatever is was.
They had no idea how bad it shaped that house was in. They had no idea the conditioned her mother was living in. It’s about helping people. No Joke. No cliché. I’ve watched you to do that with probably thousands of people by this point. It’s providing a service then it enumerates. That come in Oliver, you just serve. The rewards come from elsewhere. I feel like I’ve taught that and been taught that myself. I remember that because it was a blessing for the folks to be able to do that and you were able to flip that property.
For context in Chester, the funny thing I was running around telling people I was going to make $6,000. “You can make $6,000. I’m going to deal it this way.” It turned out, eventually the deal is talking about, I did end up making the $6,000 like I talked about. That was my profit on the deal, but Chester and this particular section at Chester at the time, it’s the place where that seller, that owner would be to call other people who are in the real estate business and be like, “I got this house.” “What’s the address?” “It’s Terrell Street.” They’re like, “Sorry, we don’t buy there.” There’s certainly was in 2006 and for the following ten years, a little bit of an open near drug market in and around that section of the city.
It wasn’t safe. There’s bullet casings on the ground on some of the streets. That specific neighborhood was highly challenged by that situation. My contract price was $5,500. $2,006 or with the dollar now, a $5,000 house that you’re selling for $11,000 is probably located in a lower dollar, higher crime, and higher risk area. Frankly, people will hanging up on this cellar when he called them. Even to go out and do the deal, that’s one of the things we at Diamond Equity strive for.
There’s a lot of neighborhoods where we do business still around the country, where no one else taking the call. No one else is willing to even work on the deal. Real estate agent doesn’t want to go. Are they going to list a $5,000 and shortage a thousand dollars commission? It’s too small. It doesn’t make any sense for them. It leaves this vacuum in the market where we’re market maker.
Diamond Equity is obligated in a sense to make a market and give a price quotation on whatever the piece of real estate is and 98% of the pieces of real estate across our desk, we can put an offer on. There are 1% or 2% that are flood zones. We can’t even do anything with them, but it’s very rare that’s the case. I remember being pushed too because it was in this time when you’re starting in a real estate business. I was probably a hundred deals in before I became confident enough to put a price quotation on a piece of real estate and say, “We’re ready to move forward at this price.”
Before my 100th deal, it’s hesitation. I’ve got the notepad out. I’m trying to put the renovation budgets together. I’m trying to come up with an all for the high enough to be accepted by the seller, but low enough that I can still make a profit. There would be this agony of procrastination that would occur. In trying to determine what the offer price is going to be and then make the offer. I remember during those days we just discovered Starbuck’s. They put one in on Baltimore Pike. We took a lot of rides to Starbucks you and I. I remember that voice. “Let’s just go to Starbucks first.” “No, we have to go sign the contract.” I’m like, “We don’t have a contract.” Do you remember where we got the contract?
I was in the office max or the Staples. Either one of them.
We go in by a contract then I get to the house and I didn’t realize, “I’ve never done this before.” I’m carefully looking for each fill in the blank there for the first time. “I’ve done this before.” Meanwhile, I’ve got Keely at the drug infested playground down the street. Luckily, it was like 9:00 or 10:00 AM.
You’re going to do that on a Saturday morning. Not at a Friday evening. That was good. That fun reliving it.
Key Events That Shaped 2007 Success
We did two flips that year in 2006, if I’m not mistaken, going into the winter. We had the other house in Chester. We had a two-bedroom house in Darby. We stitched them together. Got out of them and there was probably sometime in the spring off to the races. In 2007, this would be a good spot. I have two notable events that happened in 2007. One, was we met Dave Van Horne down at the self-directed IRA conference.
That was in Baltimore.
Number two, was you quitting your job on your 50th. Where do you want to start, Dad?
The cold snowy morning in February, we were renovating the house on Chester right on the corner of 22nd street there. They put GPSs in the van so he saw where we were or not on our jobs. It was the night before. He was like, “I want you in here at 6:00 AM.” I wake up at 4:00 AM. it’s my birthday and I’m like, “I can get one more load of trash out of the house before I go in the office at 6:00.” This isn’t fair. It’s not fair to my employer but I’m more than made it up. I’m back there now just killing it for them and vice versa but the truck wouldn’t start. It’s like 5:30 in the morning and I’m in the middle of Chester.
I called a tow truck company and much like the real estate people, they’re not coming to Chester at 5:30 in the morning. I just left the phone in the truck and just started walking down MacDade Boulevard, then I gave you a call. “You got to rescued me. Meet me at the Dunkin’ Donuts. The trains not coming soon enough to run me over.” I got off the train tracks and met you at the Dunkin’ Donuts. My employer got your phone. Someone had called you by about 11:00 AM and you shoved the phone in my ear.
At that point, they had brought the van back to the shop. They were very concerned for my safety. They didn’t know if I was in that house and what had gone wrong. I remember getting into the boss’s office turning it into like an exit interview. If I waited another week or two, I could have caught two weeks of vacation, but I wasn’t thinking well. Ironically, that was my 50th birthday. I walked out of their at February 7th. I went back about two years later and did well. I left in ‘23.
I was joining you full-time in ‘23 proved a little bit too arduous for me. I literally got hired back full-time on my 65th birthday to this sales team, which I’m just about three years in and it’s going fabulous. I’ve never worked so hard and had so much fun at the same time. The compensation is there, too. I’m now becoming quite the traveler. It’s been an interesting couple of years to say the least.
We had a little couple rough edges.
We try to plan things now instead of just voting with our feet everyday.
The self-directed IRA, I first learned about it from the Russ Whitney advanced education that you invested in. We went to Millionaire University that was probably March or April 2006, and this is a big problem for people. There are three components to any real estate deal. You have to have the deal, then you have to have the capital and the operations of the deal. If it’s a fix and flip, the operations is finishing a rehab completely, getting at staged, getting it sold, and through the inspection. That’s operations.
If you’re going to buy a shopping center in Las Vegas, someone’s got a managed to construction of the parking lot, the façade, do the lees up, manage it, and build out all the tenant improvements. That’s operations, managing that shopping center correctly. Most people don’t put a lot of emphasis on operations and maybe it is some of the lower hanging fruit. You can figure out how to get the contractors. You can go in there like I did on my first flip, paint, do the electric work, fix the door handles, and dual out of the operation’s yourself in a fix and flip the deal.
A lot of us are like, “That’s not the barrier to entry. That one’s the low barrier to entry.” Most people have the capital. It’s the highest barrier to entry. They don’t realize that the deal is as high if not higher of a barrier to entry as the capital. Most people are like, “I am going to start flipping houses but I need the money first. I would love to flip houses but I need to find the investor first.”
I figured out that my career is built on finding the deals first. The people at Millionaire University told me, “If you have a deal and it’s a real deal, good enough deal. You’ll find the capital.” They’re right. Someone will JV, will partner, or do a 50/50 split. You run the renovation. There are people out there all day. I would do a 50/50 split with someone and put the cash up on the right deal in a heartbeat. They would have to be good at the operations. I’m not talking about the brand-new investor necessarily. I do some other joint venturing and give them a smaller than 50/50 percentage. We’ll run the operations.
I’ll bring the capital. They bring the deal, but none of its start without the deal. The deals the most important. When we went to Millionaire University, the capital stack, my eyes were opened. I can’t remember her name. She said, “Here’s where you’re going to get the money. You’re going to create a private bank.” I said, “That sounds like fun, a private bank.”
She drew a little house and all this stuff. She’s like, “Here’s where the money is located. You probably know people who have money with.” They don’t have money necessarily sitting in their bank account with half million dollars or $300,000 but they probably have it in an IRA account from some job they left five years ago and this thing’s just sitting there. There’s $250,000 or $300,000 in the IRA. They can self-direct that IRA and you touched on that earlier in the episode where the IRA is lending money to the investor not necessarily a person directly. The interest in the money goes back to the IRA. That was huge light bulb.
I grew up around a lot of people who had enough. We don’t go to bed hungry. There were people driving Bentleys and Rolls Royce that were stroking $400,000 check. That wasn’t the neighborhood I was in. It’s impossible to me that people would have money in the IRA account and that might be a big source of capital. In fact, it is a big source of capital for investors out there. Dave Van Horn was a mentor back in that era. I remember we ran into him in the Equity Trust Company.
That turned out to be a master’s class in how the IRAs work and how creative you could be with the self-directed IRA. That gave you and I the knowledge to understand how it was done way back in ’07 even if that wasn’t the capital that you were allocating at the time. Did you remember anything else not worthy there when we are at that event?
Dave made a good point. The 4 to 5 unit’s apartment buildings. You want to stay at four units. I do remember him describing that because you said, “I have that fifth unit,” but then that just throws you up to this another tier that they want sprinklers, this and that. Ironically, having left the Oliver job in ’07, I went with another firm. About a year’s March, I was by back to Oliver by ‘09. I had that IRA that sat with the other firm and it was about $30,000 That was big money for me to then put into equity trust. That’s how I got started with it.
You can’t go with the firm you’re with. It has to be a dormant thing. Your current employer is not going to let you pull money out of the IRA and self-directed. It has to be a former job. I’ll do it. I’ll have more for you, Danny when I retire. I can assure you this. I got a nice chunk in with all of our folks. That let me set the money with equity trust. I literally lend it to Craig. I lend Craig that $30,000 for whatever length of time and came back as $33,000.
I lend it to a gentleman John that had working for you for quite a few years here. Investors, you need to relax about it. The money just goes out there. Trust that they’re working on it. A year will turn into a year and a half but it’s 10%. It’s out running inflation, so it’s a good solid investment and I remember when John had called me, “What’s the payoff amount?” “No, you look for my son. I’ve gotten all about it.” That $30,000 turned into about $38,000 then I’ll flip up to where you were able to pay me back, Dan.
I was able to visit in Chicago. You’re like, “How much do I owe you?” We came up with a number because I lend you to money for my IRA when I left ‘07. I thought I was giving it away, but it came back. Thank you. I got lucky with some cryptocurrency and I was able to take that $38,000 and put it in the first Bitcoin IRA that opened up. That’s a little bit of a story because I remember the equity trust. They used snail mail and things like that.
Other tools are wonderful, but they don’t get the overnight transactions in the way things work. I remember I got an envelope FedEx from the people in California then 8-9 days is going by. It’s like, “Where the hell is my $38,000?” He’s like, “We mailed it.” “You mailed it? Bitcoin’s flying. What do you mail it?” It cost me entire coin before it got there, but I got lucky. I was in there early. I was able to pull that out before it tanked in that first crash.
That’s when I became a serious investor for you. I had some decent money in my own. It’s IRS code 1075. It’s not real complicated. You can figure this out yourself. Maybe if you’re using your own accountant. The self-directed folks try to make it complicated then it’s just big for. It’s not. You can have your own IRA and it’s a checkbook IRA. I could write the check for that amount if I hadn’t already lent it to the guy on this end of town. I worked with Aaron in your team in Chicago several times, money in and out, 3, 4, or 5 times. It’s just been a decent investment.
The cryptocurrency was speculating. You could win and lose. This is more of an investment. There’s still risk with investing. If you do invest it, you got to just relax. Know that Aaron’s taking good care of you in Chicago. Craig is taking good care of you in Philly. It’s here mark to one specific property so you’re well protected with this loan. You are the bank at that point. It’s a good solid 10% return. That’s where it’s at. It’s somebody who’s semi-retired and you got some cash. You can walk down to the bank and you’re going to wire some money out. There’s people around a table waiting for you. It’s a nice feeling. It’s is to be part of this.
If you’re going to invest, you have to just relax and trust that the right people are taking care of things.
The Nerve-Wracking First Private Loan
I don’t even know if you even remember back then. Pick any one of them. What’s the feeling when you’re sending off the wire for the first time as ever any anxiety? When you’re about to send the money off to your buddy Steve for the first time and it was your first loan. What was going through your mind at that time?
I did that first one with him. We had closed our writing deal, you, myself and Craig. Put that away. That’s where I met Steve because he bought that deal. That first loan I did to him. I t was like $9 a change per day. That was in my head every day. I had to count exactly what it was everything like what was it going to go. That’s the furthest thing from it’s here to there. I got $165,000 there with them. It’ll come back as like $180,000. I texted him a year into it. That was anxiety there because the wiring is taking time again. I sent that out and they were sitting around the table waiting for that to happen.
That would be a challenge for you to try to get that money ahead. Let me get it to your escrow account a day or two ahead of time. Folks, you can’t worry about that day’s interest or two days interest. You won’t making nothing with analysis in your account. That clock will start running at everybody signs off and leaves the room. The new homeowner’s walking in. The teams getting paid and they’re diving up their commission and stuff.
You might lose an overnight or two of interest but banks are playing games now trying to drag that out. They can make it fair amount of change on a couple hundred grand sitting in their account overnight. That was a nine issue for a few years at the low rates but now it’s a little bit of a trick again. You got to be patient around it. You got to trust it. It’s to make sure all the numbers are in the right blog ABA and whatnot. It’s a high pressure but I dig it. It’s like going to casino and hoping black comes up.
If you’re going to be in the real estate investment game, you need to be patient. Trust the process, make sure the numbers are right, and know that the banks are always playing their own game.
There is risk along the way. I’m going to be doing a private lending webinar for quite a few people who probably by the time they’re reading to this, they will have already attended that. There are risks involved. When someone is sending a wire to my team, we’re known entity. We did $57 million in transactions. We have a brand. People see our TV commercials.
There’s a level of trust that we’re going to be there the following day. You want to have a good feeling about the person that you’re lending the money to. I would caution anyone reading who’s like, “I’d love to make 10% to 12% and two points on the loan. Let me just find any rehabber then lend them the money and it’s going to be great.”
You have to do your underwriting on that rehabber that you’re learning the money to. If you could do a background check, great. If this person can provide you a credit report showing that they make all their credit card payments on time and their balances aren’t up at the limit. All their car payments have been made on time. You’re going to feel a little better about lending to that person. You may even ask to see their tax returns, “Could you show me a tax returns?”
Do I want to lend to the guy who made $18,000 to 25,000 in the last one and two years? I don’t know. I’d feel a lot better for lending to a professional whose tax returns at $140,000 and $135,000 so I can feel a little more comfortable. The other place of risk that could also occur is the actual funding day and the paperwork. You want the mortgage a note signed. If it’s your first loan, you’d want the title company to have instructions not to release and disperse your wire.
You would write up instructions, that title company if you send your wire ahead of time before you see those documents signed. The title company is a bit of your last safeguard or check on the investment. You wouldn’t want to wire that money directly to the rehabber. You’d want it to the title company with instructions they can’t release, the note, the deed or signed and they’re going to be recorded. Now the title company has the instructions to record the mortgage and the note.
That gives you the security and everything. All the Is and Ts are dotted and crossed there before they send the money out. That’s probably not as big of a risk for someone lending to Diamond Equity because we’re doing like 5 or 10 of them a month. There’s plenty of money to backstop anything. If at any given time, a lender came back and say, “I need the money.” I’m going to come and check and buy them out of the deal. Not every investor’s going to have that luxury that we offer at Diamond Equity.
The final piece is wire fraud. You have to be careful that you’re wiring instructions are correct and you call the person. Typically, if I’m going to call a title company, it’s a new title company I’ve never wired money to. They’re going to send you your wiring instructions. You’ll see their account number and your email address, or address, etc. That’s usually where the wire fraud would occur. You’re getting those wire instructions from an email. It’s very similar to the one you’ve been dealing with some agent or some investors.
One letter is misspelled. It’s Micael instead of Michael in the Gmail account. You’re like, “It’s Mike. It’s the investor. Here we go.” You wire off the money to the wrong person. Double check in that the wire instructions are correct. There’s potentially a call to the title company, but if I’m ever calling the number on the sheet. I’m going to google that phone number and make sure that shows up for old republic title. I’m not just going to take the wiring instructions phone number. It could be the scam artists showing them on there. I want to Google that and do a skip trace on that number. I’ll make sure that number matches who they said is sending me the wire instructions before I fire that off.
I’ve noticed, too. The banks are sending it through a secure email that only you can open up. It proved complicated for me. Someone younger be able to figure that out quickly. I’m now calling a girl and say, “What is this?” I thought 7 or 8 of. It’s a blast, to be honest. I remember the one I did for that gentleman, Matt. It was a thing in Tennessee. I had a lawyer do that before we prepare docs just to be sure. That lawyer happens to be your cousin, Eddie Kelly.
I had him prepare the docs for me. He called right off to make sure my LLC was still good. They don’t have a real robust system in Colorado where the LLC is located. You have to have the spaces all proper and everything. We called the account manager right up. He did get right on the phone with straight out. It’s LLC and EV space. Whatever it was. That was nice to prove the legitimacy of the LLC, which would then give me the ability to sue if in fact something goes wrong.
You couldn’t do that from a ghost account or a dormant account. That gave me a level of comfort there, but that cost money too. It cost you money to ask questions and stuff. I like what you’re saying about the wire transfer and the process and making sure the fraud is not a bot. There’s always that tension. That money that does leave your cash by all means. You can see that quickly right on your phone. That $100,000 plus is now $14,000. I’ve got a charge out of it myself.
Maximizing Returns In Private Lending Investments
I have a trick for that. If you’re doing private lending and you’re the private lender. You’re working your retirement account at $300,000, $400,000, or $500,000 retirement account. A couple of things. Number one, if you do move the money to a self-directed IRA, you now have to make sure the money stays working. Otherwise, it’s not making any money return. Keep that in mind, if you’re going to do that.
Number two is $500,000, a lot of the loans aren’t necessarily $500,000. The guy got a house you could buy and fix up. It needs $200,000. Now you can allocate $200,000. Now you only got $300,000. The next guy needs $350,000. You don’t have enough to do that loan. Maybe the rehabber can fund the other $50,000 out of pocket that you can put the $300,000 on or he needs to $275,000 and you’re, “Is there any chance you could do this for $300,000 so I could put all my money to work?”
Maybe he does let you over fund it. You have a good relationship with him or her and you don’t mind putting the other $25,000 on the table to keep all of your money working. The trick to helping with the account going down a small number is to get a google spreadsheet or an Excel spreadsheet, then track the loans and make an interest column that has a formula in it that’s calculating the interest that you’re expected payoff.
Anytime you need to check your balances, you just go check your portfolio spreadsheet that you made. It’s like, “Here’s where I’m holding this. I’m holding it in these private loans.” These are assets the same way Bitcoin might be an asset or the same way shares in the S&P 500 might be an asset. What is the difference between your PNC bank account number and your TD Ameritrade trading account number? What’s the difference between that number and you are Bitcoin number and you are number that has to do with the private loans?
Only because you put them in the spreadsheet, you can trick your mind into being a little more confident by tracking that in one place like a portfolio like you would do with the shares of stock. It’s no different than getting your brokerage account statement from the IRA company before you move it over to the self-directed. I found out to be a good little hack to track the progress of the loans by keeping them all in one place.
I’m paying attention to them. Do I have to check in with the rehabber? What’s going on with the rehab on this one? This one’s been out since such and such a date. Let me fire off a text and get the update because you don’t want to find yourself in a position you’ve not had to take any properties back. If you get to that point, it will be a lot easier to have some conversation with the field investor later to the effect of, “The loans due. Are you guys looking like you’re going to be done in 2 or 3 months? Should we be having a conversation about you deeding the property over to me? I got to just basically deal with this. Where we at?”
If you’re going to have that difficult conversation, you’re better having some periodic touch points. It doesn’t have to be every month. It’s certainly every week that the rehab has your loan. That guy will never want to borrow money from you again if you’re paying it once a week. If it’s a local person, you’re walking out there and inspecting the project to feel good about it. Especially, if you don’t have a long-term relationship with that lender.
You want to be in some cadence of communication. One of the persons answering the phone, so that trouble is hitting the fan. You do have to step into worst-case scenario. At least the conversations already have been going in that way, so the person’s not out of the blue the first time you’re calling the guy since the loan was made a year after it’s due. If it’s going to be bad news and they had a squadron move into the property and they’re ready to throw their hands up.
You don’t want to wait 2, 3, 4, or 5 years before you do that. You might lose the property tax sale if they’re in that much trouble. You’d rather sort a nip that in the bud and have that hard conversation earlier in the process. That’s not going to be the case with me. We have deals go bad that we’ve lost $150,000 on and probably $95,000 of the loss was interest payments that we made to our lenders.
The nice thing about being a lender’s is 2 points in 10%. That’s fixed. That rehabber makes $100,000 and you’re getting your 10% interest. You feel maybe you got the short end of the stick. You didn’t because they took the risk and they found the deal. If the 2 points in 10% interest goes for two years and had to rehab the property twice because the squadron moved in. He is not making money but you’re getting made whole with all your interest and you should feel no qualms and no guilt. That’s the benefit of being a debt partner in a deal versus a joint venture or a partner card. You’re sharing the upside or the loss accordingly.
That make sense. The other in line at the Diamond Equity, I’ve lend to the gentleman of you in Chicago, then Steve over here. Part of the beauty with Steve, he’s not trying to suck his living out of the rehab. Does that makes sense? It’s not his full-time job. That’s where the rehabbers get in trouble. They’re trying to take $1,500 a week out of this deal and they’re using the borrowed money to do that.
You don’t want to be their first guy. You want somebody who’s done some things and Danny said, he can show you the track record of a portfolio of what they’ve sold and stop. The market certainly been going up, but it’ll be flat at times. It may even lose a point or two at times. The renovation costs are going up from just everything from pizza to HVAC. This is nuts. Everything’s doubled. That was not the issue for many years but it is currently by all means.
Finding The Ideal Borrower For Lending
I have a friend with 49 or maybe 59 single-family houses all over Philadelphia. He rehabbed every one of them. He did the buy, rehab, refinance, and rent strategy to pull most of his cash out. He still has some cash in those deals and he’s flipping houses in Philly. I don’t know what he does, 15, 20, or 25 yr. He’s probably making $500,000, $600,000 or $700,000 a year from house flipping. Him and his partners making the same amount. That’s a great borrower if you can align yourself with someone who has that team in place, that momentum in place, that a backstop, and a net worth.
They’ve got huge track record. That’s your perfect unicorn borrower because they’re going to keep coming back since they have the volume going. For me, it was, “That guy got it all figured out. He’s got tons of rentals. He doesn’t need my money. Maybe I never have that conversation with that guy that I would be willing to put my money in because he’s got it all figured out. That’s the ideal scenario. On the other end of that spectrum, there’s the new rehabber who’s got the dream and is going to be a very high risk because you don’t know if they can execute on the project.
Even if the project doesn’t go as they expected, they may not have the power to weather the storm as it were or the desire to be able to make you whole the way that someone who’s doing a few hundred houses a year is going to be able to do. That person’s going to be the one you would meet at the networking group who’s willing to have the conversation or ask him for private lenders. You’re like, “Can we meet and have coffee?” They could look the low-hanging fruit the one with lower experience compared to the guy who’s got the 50/60 rentals.
He’s got some money partners. That guy doesn’t need to even go to the networking events. He’s certainly not going and try to have coffee with the new private lender guy who just came to the meeting. There’s probably a sweet spot in there from zero deals to hundreds of deals where if you can align yourself with someone. You want your rehabber thinking of you like this.
They’ve done deals and you want them thinking, “How can I keep so and so’s IRA money working? I’m looking for the next deal. He told me he’s got $275,000 left. Let me try to find the deal that needs to $275,000. If I could find one, I can sell for $400,000, buy it for like $225,000. Borrow $275,000 from him and put $25,000 of my own cash to finish to rehab in there for $300,000. I sell it for $375,000 on a bad day and $425,000 on a good day.” That’s great.
The perfect rehabber and lender relationship is the rehabber is literally thinking of you in a sense like a partner even though you’re just a lender and a debt partner. They’re like, “How can I keep their money working and find the right deal to match up with that person?” That way, it’s not just you trying to find the next loan but your volume house flippers out there trying to find you the next loan, too. That’s an idea relationship for a private lender. How does it feel when the money comes back to the account?
When they told you it all settled and stuff, then you look at the apps on the phone, which I wasn’t doing that all the time. Now it’s the apps on the phone. That’s a nice feeling. Steve again said, “You’re going to get like $18,000 more so I can borrow.” He’s counting my money. He is what you just described, that relationship back and forth. For people who are new in the game, there’s guys out there that have a team of workers. They’re just going to do what they had to do to keep those 8 or 10 guys running. They’ll be flipping and buying them houses. How did it originally get paid into standard? There’s always more money than deals. The money’s there. You’ll find these people. You’ll find the guys doing the deals.
I had one go bad. I wasn’t the first position. You want to be first position. You want to tie to one piece of property so you have their attention. The other fellow, Steve was borrowing from, they would get monthly checks back. That was just a way to keep in touch. I want my interest payment back monthly. I want to see $994,000 back in my account monthly. That was a way to keep the guy’s attention. To me, that doesn’t help the guy if he’s got to give me the two points and the loan right away. There’s good or bad. It depends on how much management you want to do with it as the bank.
That’s another way to go to have a little more accountability. That guy’s got to sit down and create an e-Check once a month for you, then you’ll know the minute it’s not showing up that he might be in trouble. Get your antenna up and get after it and realize that your final recourse may be to pick up that piece of property yourself. Now you’re looking for someone to finish it up and they do get renovated twice sometimes. That had happened to Steve. I forget what it was. It’s like a cross space and the inspector command. His buddy was the GC that didn’t quite go well, but the moisture reader picked up stuff. They had to redo the floors again a second time, but that didn’t impact my income, which was fine. He was good to me.
For the person that’s going to lend the money, I’m not the best borrower anymore because we have more capital even still now then we would have deals. We’re doing hundreds of deals, but we’re at a point where the team wants to participate in the funding to part. We do our best to put some out to the lender network and I have handful lenders who will text me, “I got such and such amount. I’m doing my best to try to keep them working, but we’ve got in a sense too many people raising her hand.”
That’s part of why I’m doing the lending webinar and it’s part of why I wanted to have you on the show because there are lenders who are going to read this who have lent me money. I want to expand the horizon so that if they do find another person. I don’t want them feeling obligated to me like, “We can only do it with Dan being present.” I also don’t want them doing it with the wrong person where to get themselves in a jam either. I’m trying to give some context. You’re my dad and you’re lending them to Steve.
I’m sorry.
Don’t worry if you’re lending me money and you find another person. That’s my goal. I want everywhere to 2 points and 10% and you get twelve. That’s great. We’re going to be fine. We’ll find lenders. We’re going to keep your money as good as we can, but I also want to make the pie bigger for everyone, even the rehabbers who are reading the episode. Maybe you’re running into the lender that funded on our deals.
Setting Loan Terms And Monthly Payments
You guys are doing a deal together. I’ll probably say the last point here and then we’ll shift gears and do a little wrap up. It would be the monthly checks and the down payment. If you’re on your first loan, it’s hard to say. If I know my buddy with the sixty properties and he’s doing dozens of deals every year. I’m probably okay giving him 100% of the purchase and the construction and even given them all that money up front. I know that’s how you’re doing that for Steve. That’s how the lenders do that for me, but there is a place for mitigating the risk. Especially if there’s not a big relationship there were maybe you want them to have the skin in the game.
The guys got $40,000 or $50,000 in the bank and you’re telling them you need to see $25,000 that go into the deal, so he’s paying attention and you want him to put some down payment in. As the lender, you have the option to set those terms and set up whether its monthly payments, or not monthly payments. That’s an option that you have. I’ve never made monthly payments. I have a big line of credit to a hard money lender and we will make payments to them if we ever use them for a loan, but I don’t use them for a loan because my lenders will allow me to not have to set up the accounting headache of the monthly checks.
If we have 32 properties under construction, that means I got someone with almost a full-time job clearing the 2 checks and doing the accounting for that. It’s more of a hassle than we’re going to deal with. My money’s safe and my borrowers are safe. It is what it is. The terms are more set by me, the rehabber, because I have the momentum but that may not be the case for the newer rehabber who’s done 2 or 3 properties, and a lender who’s doing a loan for them for the first time, don’t feel like just because you heard Dan talking about, “It’s a balloon payment.”
It’s no monthly payments and no down payment. Don’t think as a lender that’s the standard of business. You could have someone put 10% or 20% or 30% down. You could give them 100% of the purchase. They could pay for the construction themselves. In fact, I do a lot of deals where that’s the case. We borrow the money we decide to rehab. We pay for the rehab out-of-pocket. We don’t go back to the lender.
If we change course on the deal, it’s on us and we have the cash to cover it. We do that. We have that option, but I just wanted to make that clear, as the lender, you have the option to set the terms that you’re comfortable with in the loan. There’s not a standard expected interest rate or points. I paid five points and 15% at the beginning of my career. Balloon, 100% of the construction. I pay two points and 10$ my private lenders. I pay one point and 9% to my hard money lender. I pay more to my private lenders than if I were to use my line of credit.
I don’t have to do the monthly payments. It’s a text message and an email. It’s a streamlined simple process when I do it to my private lenders. I like the feeling of putting 10% interest in people who I can call on the phone and talk to them. I know they got 10% interest on their money. That feels good even if I lost $150,000 on the property. I can sleep at night knowing that 90 of that went to John. He made his money on the deal. He’s one of us. One of us partners made out on that deal. Even if it wasn’t us, I’d feel good.
Rule of thumb was 75% of the after-repair value. Does that make sense?
One of rules of thumb for me is, if you’re not making 25% profit as a rehabber. On the way in, you probably need to take a second look at the deal. Maybe you’re bending the rules. If you’re selling a property for $400,000, you should probably think that if everything goes well, you’re going to make a hundred and that’s the right number. That’s probably 70% of the IRV for lender because they’re going to have to pay the interest and now you’re at 75%.
Seventy-percent IRV minus repairs is the offer price. For a lender, you should probably be at 70%. Would you bend the rules on a quick painting and carpet? It was a $400,000 house. They’re going to make 15% or 18% profit but all they have to do is paint, carpet, and sell it, and there’s no inventory in the market. There’s probably a place for bending the rule a little but, as a lender 75% loan to value would be probably the maximum that I would consider regardless of the price.
When you get in the lower price houses, the profit margin amount could be a lot less. You want to see a little more. It might only want to be $0.60 on the dollar if it’s $150,000 house. Maybe that’s 75% by the time you move forward with the deals. You don’t want to put a rehabber in a position where they’re not going to make money from the beginning.
By borrowing too much.
If you want to own it back, you want to own it for the right price, too. It’s 25% profit on the purchase price because 25% on $500,000 house is $125,000. That should be the target profit if you’re going to do this flip and all that work at risk for that price point. If we’re 25% of a million dollars, you better make a quarter million dollars on this high-end million-dollar home fix and flip. You should be able to see on the way in $250,000.
It sounds like, “That’s huge profit.” The reason it’s not is you find mold. The water damage onto the floor. The roof’s bad. We didn’t realize we’re going to redo new joist on the roof. A quarter million on a million-dollar property turns into $150,000 real fast. The $125,000 on $500,000 turns into $85,000 real fast. It’s still a great deal, but that’s why you don’t want to pencil it thinking you’re going to make the 85% on the front end and being too thin. Do the deal that way. You got to give yourself that.
At first blush, it sounds greedy but with the risk that’s built-in, that’s only reasonable.
With the reality, it’s never what you thought it was going to be.
Current Real Estate Inventory Trends
I do the same thing with the HVAC jobs. You had a one-day job. The third day on the one day-job out, not good. Danny, off topic a little bit., where is inventory? Is it still think so tight?
Inventory is up 12% across the country. We’re at the end of the seller’s market. We’re going to have a stabilization of the inventory coming into the market. In Philadelphia region Tri-State, and Chicago Midwest region the inventory is tight. It’s probably going to remain very tight there. A little less tight in the Atlanta market.
Atlanta is going to have a little more normalized inventory, but the influx of inventory is coming from shadow vacancy property. When I say that, what I mean is Airbnb’s that everyone bought from 2021. They didn’t set up Airbnb’s all over Pennsylvania and Chicago. There’s a few, but it wasn’t what happened in Florida where the whole neighborhoods were going on a short-term rental market like Arizona and California. Where those Airbnb’s were the most vibrant and new, that’s where you’re going to see a lot of the inventory.
The inventory is just insane in Cape Coral, Florida. We’re relatively stable and we’re all going to think, “It’s so much inventory.” We’ve just been through the most historic low inventory market that ever existed. We need a little normalization. That said, be careful where you’re at. Look for the number of active properties that are for sale. If you’re going to flip a house, you want lower active’s and the right number for that. There’s no Black and White number.
In South Side, Chicago, there’s areas where in your radius you’re going to find 15-20 actives for sale. It doesn’t matter. You put a nice product out. You’re going to sell towards the top of the range because that’s what people want to buy there. It’s a great neighborhood in South Side, Chicago for house flippers. Their profit margins and the amount of inventory that’s there to be renovated is unmatched by any market in the country.
You can buy a house. You got to do $150,000 renovation and ton of two flats or three flats. People will buy them. Those prices keep going up because you got two units that are going to offset that mortgage payment. People setting themselves up for the long term. They got to buy it and live in. It’s like Russ Whitney said, “What if your father-in-law had bought a three flat in Chicago and paid it off?” It was in marginally the right area where progress over 30 years catches up. He can retire off that. He’s got two units. Paying them rent on his paid off building in Chicago then his got his social security. Even if he had no other pension and nothing else.
He probably gets in there in the Chicago market. They’re getting in with 5% to 10% down. It’s a low downpayments. There are programs for single family houses where they can get in for $1,000 down. It’s like, “Do I want to be selling product into a market where people can buy for $1,000 down, my $325,000 renovated rig home and nicely appointed?” It’s a great market if you have the contractor resources and the risk mitigation set up. Property alarm systems and the board up. You got to know who the contractors are and who would be willing to go there and are not going to rip you off and take your deposit.
You got to cross that bridge to survive in the South Side, Chicago. There’s fix and flips that pop up sporadically all over the country. We do those and we love those, but it’s been good thing to slow inventory market when it’s done for economically challenged areas like some of the South Side or South Suburbs Chicago’s area, and West Philadelphia, and Riverdale Georgia. There’s been a large increase in the quality of construction for the fixing flip rehabs that happened in those neighborhoods. Buyers can now buy in those neighborhoods or paying higher price.
Must-Read Books For Real Estate Investors
Those higher prices allowed for more investment to go in there. It’s been this helpful self-fulfilling cycle progress to turn these neighborhoods over and get a lot of that vacant distressed inventory. Back going to tax roll with the people in there celebrating holidays and living their best life. We’re happy with it. A couple wrap up questions here at the end, Pop. Two book recommendations that jumped to mind.
I’ll go with this weird one, On Death and Dying by Elisabeth Kübler-Ross. I took it as a high school course in 1975. It became the hospice industry evolved from this book. It was her explaining and divulging the grief curve, which occurs in death, injury, illness, divorce, and the bad flip. There’s a grief curves. It would help to study that. That’s one recommendation. My second one, somebody needs to rewrite it. You reread it occasionally, How to Win Friends & Influence People by Dale Carnegie.
I think it needs to rewritten to a more current time. I can relate a bit but we’re finding out now. Clearly, if I said to you the big bands, that means nothing to you. It would hardly meant anything to me, then the music from the ‘70s and you guys kept me young with the rap and stuff. Thank you. Someone could rewrite that Dale Carnegie book, but it’s something to read. You do want to read that every other year just to try to put yourself in other people’s shoes. That’s like sales.
Anything you’re going to get, you’re going to get through people. I’ll go back to my other guy. For me, it all started with the tapes way back when in the ‘80s when you were just a baby. I love the way this gets introduced here. You’re not that guy making the tapes. It’s awesome. You’d put them in a little cassette player and you’d have to listen. It wasn’t just this instant fire hose of information that we have these days. You had to literally searched it out, wait for it to come in the mail and give it a good list. That changed me. The old Nightingale stuff, the secret. I wore that thing out.
Sales is about putting yourself in other people’s shoes. You’re going to get where you’re going through people.
Need to Feel and I think we broke the tapes in 2006 and 2007. There were a couple of them that broke in the truck as we were listening to them. They literally popped. You touched on briefly the speed of the information. As humanity, we see the middle class is being squeezed. There’s a larger upper class that’s growing. Luxury hotels are one of the hottest segments of real estate as of July 2024. Luxury rentals like Avalon Stone, Harbor rentals all along the Atlantic coast are up 8% year over year.
What we see, this will go down as the era of upper-class wealth. We’re on this wealth creation opportunity moment in many years. Probably mid ‘90s is when the middle class started to go away. The event of the middle-class started after World War II when the industrial machine that won World War II suddenly was put in to making toasters and TVs throughout the country.
We see that whole cycle happened there. Now, we’re at the other end where the availability of information, the things we’ve seen happen in Bitcoin alone to fortunes people made. I’m sure some lost in Bitcoin is one small example, but at Diamond Equity, we never would been able to buy and renovate and sell houses around the country without this instant access to information. The availability of opportunity in 2024 is unlike anything that’s ever been available in history and it’s only getting better.
The only challenge to your point is it’s a fire hose and being able to filter off just the right pieces and not be distracted or drowned, if you will in the sea of information. It might be the key, but the opportunity is just never been greater in the world for people to move up their lifestyle and graduate at a higher level of income if they so desire. Dad, what would be the crown jewel of wisdom if you were to go back?
Lessons Learned From Decades In Business
We didn’t touch on this at all. We don’t have to get into the story, but you worked at the Navy Yard, the day before you left the Navy Yard back in ’89 or ’90 or whatever it was. If you knew everything you know now, what would you go back and share with yourself that day as you were walking out of the Navy Yard for the last time?
I left to go full-time in the electrical contracting business. I probably could have gone more in the communication side, then didn’t realize what the internet was to become. You could make a real good reckon in that world at that point in time. I’m not sure what I would have done. I went out there. It didn’t quite go as well as I planned. I’m probably off topic a little bit, but there was a gentleman around the corner on Jeffersonville down the road from the office there. I was getting the one truck. I had to get it towed away. I couldn’t afford to keep it in the locker or the Trump flow was winding down. He says, “You need lock.” I’m like, “No one ever told me that part.”
It’s because it was like two years, the three years, then seven years. When was this ever going to turn positive, but it had. No regrets. That would be my story. No regrets having stepped away from their 1989. The security of government job. I’d be retired for ten years already but no regrets. I got to have a large world and reach for the brass ring. It fell on my face and got up and still enthusiasm and trying to spread that to my kids. I have four quite successful children. What more could you want out of life?
If it wasn’t for Trump flow and a couple of rental houses like 7, 8, 9, o r 10. You don’t know if I’d have the entrepreneurial drive and bug I have. I remember one evening, you, mom, and probably Kristen. I don’t even know if you were with us there, but we were stuffing envelopes and doing a mail campaign to try to get some light on in the basement. I still do quite a few mail campaigns. I know a lot of people have gotten my mail campaigns.
Big box truck going down to Florida about 3 or 4 times a year. We were licking envelopes.
I did it that way. I’ve wore out a couple printers. It’s not sustainable.
Ironically, at that last year at the Navy Yard, I was wearing out some copiers printing up my flyers and stuff. Thank you, Uncle Sam for that helped.
There you. Any contact information or anything you’d like to share with the audience?
My phone number is (610) 400-7127. Send a text, please. I’ll send you a contact and it will have my email to put you at ease about any of this investing stuff. I would be a borrower and do some flipping here when I get some more time on my hands, too. That’s about my next goal.
The Kindest Act Ever Received
I’m with it. I got access to a couple deals we’ll send your way. My final question, Dad. What is the kindest thing anyone has ever done for you?
Your mom and I split in ’98, then I left the house and she had left the house. That’s known as the rotating nest in the industry. Kids stay put to go to school. There’s terms for everything. I went up down at my mom’s house in Southwest Philly. She sold that and I shared an apartment with a young fellow for a year or so. I was eight months in my brother’s basement over there and boarded then I rented the room down to South Philly.
She was a renovator. She did well. That was the hottest zip code in town at the time. My mom helped me get the house in Glenolden, where she’s at. We originally put the bid in for $31,000 and that wasn’t enough, so I made the $1,000 a $7,000 and put it into $37,000. Not too much attention to detail, but when I got the place, I was about on my knees like, “How could God fill dreams I don’t even know I have?”
My mom said, “Maybe I had a dream for you.” That was clearly the kindest thing that ever happened to me then. I was able to pay her back completely the way you paid me back completely. Maureen, my sister, was able to get in that place and stuff, who had to get out of a house with many steps and get in that little place there while the last couple years are life and stuff. It’s just family. What a treat. I was able to stop back over by that house in Glenolden. We’re watching mom now. We’re down there a lot and I happened up the steps. The woman who bought it is a very successful gal. They had lived in Alaska, but what a treat.
I was able to give her the backstory of that house and how that place was from me and everything and then Maureen. That was back at a rust wouldn’t anything. The real estate school was there. That candy store where you were a kid. It’s still there. It’s now four apart, but it’s still there. The same bridge is still there. That’s the beauty of investing in a real estate. Thank you. This is just so wonderful to be able to share.
My kindest thing that anyone has ever done for me, I can’t say it’s more of like an event but you and my mom raising us and giving us the opportunities, even some of them that we maybe didn’t capitalize all the way on, in my case, Villanova for two years. Growing up in a house full of love. We had to split up in ‘98, but before and after that, having two parents has been such a blessing. I appreciate you and appreciate mom for bringing us up this way.
She and I get along terrifically. She was down there with us having picture with Grandma. Your mom coordinate that with me. She had her all decorated for the ‘94. It’s a little celebration. She’s just does all that. Her father was the real estate guy. Your grandfather Ed Kelly.
That’s right.
That’s where that real estate blood comes from. I was doing well. My grandparents were doing great while he was still alive. He passed away suddenly, then the rentals tanked. It is a whole different world of knowledge, the Randall’s collecting the rent and making them pay the water rents. There are many little nuances that he had. I missed that fella. He was a nice guy.
If anyone has watched our episodes on YouTube going back a while. Before I had the backdrop with the diamond, I had Ed Kelly, so Pop Pop’s real estate sign was there. If you guys want to go back in the archive there and check that out, there’s a piece of history and you’ll realize why that name was on my wall.
Yes, it was.
I love you, Pop. I appreciate you coming on the show. I had a blast and I was glad you did it. Thank you.
This was fun. Thank you, Danny. Thanks for this opportunity. I love you. Keep moving that decimal point.
That’s right. We’ll take that as our crown jewel. Everyone reading the show, we keep moving decimal point and make those numbers look smaller.
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