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Land Investing Online

In the realm of real estate investing, one crucial element often determines the trajectory of your success: access to cheaper money.

Whether you’re a seasoned investor or just dipping your toes into the world of land flipping, understanding the nuances of securing cheaper money can significantly impact your bottom line and ultimate make you more money.

In this episode of The Real Estate Investing Podcast, the Apke Brothers are joined by fellow land flipper Anthony Weiler. They delve into the various avenues for accessing affordable capital and the strategies to leverage them effectively.

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Deal Funding: Building
Relationships for Success

One of the most accessible and risk-averse methods used to purchase real estate property is through deal funding.
This strategy involves partnering with investors who provide the necessary capital in exchange for a share of the profits.

What makes deal funding attractive is its low barrier to entry and minimal risk.

The use of deal funding also allows investors to target larger deals that may be far beyond their typical financial reach.
With this option being so scaleable, investors will be able to maximize their profits.

If you chose this route, building strong relationships with deal funders is crucial.
By presenting well-analyzed deals and demonstrating competence, investors can secure funding for their projects without risking their own capital.

The use of deal funding allows investors to target larger deals that may be far beyond their financial reach. With this option being so scaleable, investors will be able to maximize their profits.

Hard Money Loans

Hard money loans involve borrowing capital from private individuals or institutions, typically at higher interest rates and shorter terms than traditional loans.

Unlike deal funding, which spreads the risk between investors and the deal funder, hard money loans place the burden squarely on the borrower. Defaulting on a hard money loan can have severe consequences, including potential loss of assets and damage to credit.

The path to success in real estate investing begins with securing affordable capital.

Whether you go the deal funding route, or hard money loans, investors must approach financing strategically.
Build strong relationships, and mitigate risks effectively. With the right approach, land flipping can put you on a great financial path!

Interested in land flipping, but don't know where to start?

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together to find financial freedom through land!
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Listen or watch the full episode below ⬇️ to learn more about how Justyn hit $269k in just 6 months, and how he plans to grow his land flipping business!

Listen to the Podcast Here

View Transcript here

Dan: Bigger deals is where you guys make money. You want to make 20, 000 a deal or you want to go make 300,000, 400,000.

Anthony: Like last thing you want to do is burn relationships with deal funders and just have them analyze deals for you, you know, really get your reps in. And then at that point, you know, presented to the deal funder.

If you show up unprepared, it’s just going to be a bad look.

Dan: Like you start pulling out a 300, 400, 000 loan, a lot of risk, hard money. And it is a lot of risk. I’m giving it to the bank. They’re going to come after everything.

Ron: It’s more scalable. If what you’re doing works for not grandma, you know what I mean?

Grandma, here’s, can I have 20, 000? I’ll pay you back when this sells. It’s not scalable at all because it only works for grandma or grandpa or mom and dad.

Dan: Hey everyone. Welcome back to the real estate investing podcast. Today’s topic. We’re talking about getting cheaper money for your land investing business.

I’m here with Anthony and my brother Ron here to talk about getting cheaper money. Welcome guys.

Ron: Welcome happy to be here happy to do our first episode with us three together. It’s gonna be fun It’s a good topic too because anthony does so much of our deal funding stuff. So cheaper money. It’s a big topic for sure You hear that a lot of anthony cheaper money

Anthony: Yes, uh people always want cheaper money the cheaper money you get the more money you’re gonna make so yeah It’s a very big topic right now

Dan: and we’re gonna focus on talking about cheaper money in this episode And then we’re gonna talk about pros and cons of cheaper money traditional deal funding and alternatives as well This is gonna be a deal funding, you know Money how to pay for your land.

Yeah, how do you pay for your land? And there’s plenty let’s just start by anyone who’s new here. There’s plenty of money in the communities like the number one question we get in the And it’s not hard to solve. The question is how do I pay for my deals? You want to talk about that, Anthony?

Anthony: Yeah. And this, this is probably the biggest question for people that aren’t involved in real estate.

This is their first like business venture is, you know, how, how do I, how am I able to even afford, like, let’s say a five acre parcel buy for 50, 000, right? It’s like, I don’t have 50, 000. What do I do? Uh, the really nice thing with us and our community is we have vetted investors to where you can, you can partner with them, do joint venture agreements.

Uh, but the really nice thing is. It really is such a low barrier to entry because all you need to do is focus on marketing. And if it’s a good deal, then you’re, you’ll definitely be able to get deal funding. There’s plenty of deal funders within our community. There’s plenty of deal funders within the land space and there’s, there’s plenty of opportunities.

So we teach you how to do that, how you’re able to acquire it. Um, but yeah, it’s, it’s a very simple, straightforward process. If the deal looks good, presented to a deal funder, they’ll present the rates, the terms, joint venture agreement, and there really is no risk on you. And I’m sure we’ll, we’ll jump into that in a second, but,

Dan: And that’s the beautiful thing of it.

Like Anthony said, there’s no risk on you. We can talk about the risks since we’re, we’re here now. And you brought it up. There’s no credit checks, you know, no loans or banks involved, you know, they don’t need to underwrite anything. It traditional deal funding, what Anthony’s talking about. Right. Is where you partner with an investor and you split the profits on the back end and some sort of profit split percentage, whatever you guys come up with, but that’s how it works.

There’s just no risk involved. It’s easy and it’s quick. And that’s some of the benefits of it. It’s completely risk free.

Ron: Yeah, for sure. And, um, you just need, like Anthony said really well, you, if you don’t have a ton of money to your name to buy a hundred thousand dollar deal, whatever it is, which is a ton of money, like it’s a lot of money, but if you can find good deals, if you can find motivated sellers and get them to agree to selling, then you’re going to be fine in this business.

You will find money on the back end, whether it’s hard money. Deal funding money, whatever the money situation is. You need to be able to find good deals That’s the name of the business. We’ve talked about a lot recently dan sales You need to be able to know how to acquire land get get sellers to agree to it

Dan: Yeah But more importantly you need to know what’s a good deal and what’s not a good deal because if you’re bringing a bunch of bad Deals to invest like you’re not going to get deal funding on a bad deal, right anthony

Anthony: Yeah.

And there’s, there’s people too, they’ll try to take advantage and they’ll just send you a bunch of deals just to look at it and see if you’re able to fund it. Just be cognizant of that. The last thing you want to do is burn relationships with deal funders and just have them analyze deals for you, you know, really get your reps in, feel, uh, comfortable and confident.

And then at that point, you know, presented to the deal funder. Cause if you, if you show up unprepared, it’s just going to be a bad look.

Dan: Yeah. And what are some of the Anthony, the benefits of deal funding in your mind?

Anthony: Well, the, the biggest thing that we had just mentioned was there’s essentially no risk.

Um, people always ask me after I explained traditional deal funding, like what’s the catch? Well, the catch is you just need to sell it. Sell it within six months. Um, that’s normally a standard contract. Uh, but in terms of the benefits of deal funding is that again, there’s no risk. All you have to do is find a good deal, uh, presented to a deal funder.

Um, and then at that point, I mean, especially with us and what we provide, we provide a very hands on service. I mean, we have a private discord thread. We communicate about the deal. We’re all involved in there, including our operations manager, Amy, that does a lot of the title work and communication. Um, so really is no risk.

And the. I would say the biggest benefit of this is it really helps you scale and you could even focus on bigger deals as well To to where you’re not going to have to worry about that capital You already have relationships in place You understand deal funders and what their buy boxes are and it it just alleviates So much stress that you could have and it really takes that burden off your plate So there’s tons of benefits to it

Dan: and the no risk thing I think is a lot higher value than perceived value like people that hear the risk you know, especially if you’re an aggressive entrepreneur and want to grow, that’s not a huge deal to them.

It was never a big deal to me. Like I hear risk, I see cheaper money. I don’t care about the risks. Let’s go make money. I know what it’s going to sell for. And, but the reality is you, there are unpredictable things that will happen, especially at first when you don’t know what you’re doing. Risk is a really, really, really big deal.

You know, it can hurt you in the longterm along with that. Like you said, the scalability of deal funding run.

Ron: Yeah. And that’s what our brother Mike has done. Like he’s built his entire business off of deal funding essentially, or using deal funding. He hasn’t used, I think he just started buying some deals and he’s a couple of years in just started buying deals for himself.

And he’s made hundreds of thousands of dollars last year. He did. And that just as a prime example of him never using a dime. So he’s able to put money in his pocket. He’s making 60, 70, 000 on some of these deals after deal funding splits. So it’s a hundred percent. So scalable. Cause you can either, you can fuel the business with money.

Essentially, if you’re buying deals yourself, you’re probably using some of that marketing money. So it’s definitely more scalable without doubt. And if you have a hard money loan, which we’ll get into, you have The risk of defaulting on that or something and then you need to have that backup money where you can pay off the bank or something like that um where you’re not Fully where you can pay them off and something worse doesn’t happen

Dan: Exactly, and that’s where the risk comes in when you start we’ll talk about hard money loans soon Is there anything else you guys want to add to deal funding or you feel like we covered it before we get into hard money?

Anthony: I feel like we covered most, I think just one big emphasis to do is when you work with deal funding partners, especially when you’re starting off

Dan: relationships.

Anthony: Yes. Relationships and you get a second set of eyes on the parcel as well, too. So as you’re, You know, a little bit newer and you’re not sure you can send it to a deal funder.

You, I mean, that takes off even more risk because if someone’s funding it, that’s an experienced land investor, then, you know, it’s like, okay, cool. There’s no risk associated with this. It’s most likely a good deal. And then also too, how we talked about scalability is then you can, again, really target those bigger deals.

Cause you’re not going to have to put your money forward. So you can get even more profit rather than the simple, you know, You know, buy for 10 sell for 20, which are still phenomenal, but it just scalability is huge.

Ron: Deal funding in itself gets cheaper over time to like, it’s not like your rates. The first deal you do with a deal funder with us is are not going to be the same rates that you’re going to do on your 10th deal or something like that.

As you get experience, as we become more hands off and truly just money partners. Our money gets cheaper deal funders. Money’s money gets cheaper and you still have the low, the no risk, honestly.

Dan: Yeah. And it’s like I said, or like we said before, just that you can buy 200, 300, deals with deal funding. It’s harder to raise money from a private investor, uh, on a hard money loan for those size of deals.

And it’s also greater risk. Like you start pulling out a 300, 400, 000 Loan, uh, it’s a lot of risk, hard money. And it, yeah, it is a lot of risk. I mean, they are going to come after your bank. Like if it’s a bank, they’re going to come after everything and that’s where it really comes in. And that’s one of our focuses, like bigger deals is where you guys make money.

Yes. Buying for 10, selling for 25, buying for 20, selling for 40, whatever it works. Do you want to make 20, 000 a deal? We’re going to go make 300, 000, 400, 000. Like it’s so the potential is there. The subdivides, the improvement values, like go after bigger deals and use deal funding when you get them.

Ron: We fund those deals for relationships, essentially like we’re not making money when we’re funding a deal, buy for 10, 000, sell for 25, 000, like it’s just, it’s a ton of work and effort.

Paperwork, due diligence. Yeah. But. We want you guys that next deal being buy for 100 sell for two everything like that and having those relationships Building those relationships up and then going after those three four or five hundred thousand dollar deals those project deals That have half a million dollars of profit in them are where you can scale and it helped and the deal fund you’re gonna be Making money for the investor as well.

Dan: Absolutely and go into that we talked touched a little bit. Let’s go to hard money Um, and by hard money, let’s just talk about these are loans essentially. So we’re calling them hard money, but essentially it’s loans and you can attach them to the land. There’s tons of different ways to structure them.

People have been get off. Justin yesterday said he got a heel lock out for some of his deals. Oh, he got it for his mail. That’s a little different than what we’re talking about, but I know people have gotten he locks for. And he locks are good loans because they’re so cheap because they’re attached to your house, but it is still risk.

Ron: I feel like Frank was one, maybe Frank was one who used the he lock and you can pull money out of your house. Essentially. There’s different ways that that is in hard money in itself. Yeah.

Dan: That is, it is. And it’s a good source of hard money. Cause you’re leveraging your house, which, so it hurts the equity, but you’re using it in a very low interest way because it’s based on your house.

Ron: And it doesn’t attach it to when you sell the land or anything like that.

You can pay it off whenever, obviously.

Dan: A lot of them are, you can get a revolve it.

Ron: Yeah.

Dan: So you just pull it out and put it back in like, Oh, really? You can get a line of credit based on your, uh, he lock for sure. Um, I, we’ve never done that personally, so I’m not that versed in it, but I know people who have, but I want to talk about raising money.

So going to family, friends, investors, building up a compiling a list of people who have money, who want to put it in the 15 to 20 percent annualized loans.

Ron: Yep. I think that is That that is like a next step I think after you get deal and doing that on some smaller deals You can really help your margins for sure, uh outside of deal funding, but then you do have the risk like you said, but Yeah, if you can you don’t want friends and family and then combining and each putting in a thousand dollars two thousand dollars four Thousand dollars like you want someone who can fund a twenty thousand dollar deal for you Like that’s what your starting point should be like can someone fund a 15?

I hope it would be more than that But i’m saying like if

Dan: They should have the ability to go more

Ron: Yeah ability for sure, but you need to uh, you need to find those partners and typically it’s not banks Like banks don’t like this stuff. It can be private people.

Dan: Yeah,

Ron: and relationships like that

Dan: start with the smaller less risky deals 15 000, but you got to make sure they got a quarter million dollars .

Anthony: Yeah, I, I completely agree. And just one thing to touch on that is just make sure you know what you’re doing, especially if you’re going to be bringing on friends and family. The last thing you want to do is pass on, let’s say a deal that we pass on another deal funders like, Oh, I know my grandma’s going to, you know.

Dan: You want to be experienced with this, with this method in general.

Anthony: Right. Um, so again, like you were saying, though, you really want to find people that have the capital to do so build relationships with them, because if not, you’re just going to be wasting your time. Um, but yeah, really have a good network of like anywhere from like five to Five. I would say five as a minimum of, you know, people to have in your network and then just grow it from there.

But no, I completely agree with what you’re saying.

Dan: Give them good deals too. Don’t start like anything. The relationships with deal funding, and this is the same exact concept, you want a good relationship so they scale up with you. And that’s why I’m saying start with a $15,000 deal, work your way up to 75,000.

The problem with hard money and friends and family and investors in general, it’s harder to scale to get a 500,000. It’s, it just is like a lot of ’em have max, like max numbers, like 75 or a hundred grand, things like that. And a lot of them just don’t have the money to buy a 400, 500, 000 loan. Plus that is super risky.

I like these on, you know, the smaller deals for sure, but you want to be able to give them four or five deals as well. So like if maybe you have a 30, 000 deal, 10, 000 deal, having these people, you can just give those deals to that are a lower risk deals. And then you’re doing some traditional deal funding and you’re just kind of mixing and then you’re paying for some yourself as well.

And those three methods create a nice business I think.

Ron: Yeah, for sure. I think it’s, uh, it’s definitely needs to be accommodated. So you, you jump out of the gates and you’re doing hard money with friends and family. You’re going to either lose money, hurt relationships. Like it just, there’s more risk that that goes into it than just money when you’re doing that out of the gates.

So just be careful, but you need to, and we’ve talked about it with so many coaching students, Dan, over the last month, two months, it’s like you need, there’s a point in your business where you need to look for cheaper money. You need hard money options for some of your deals because the issue and Mike is an example of the issue happens when you build up some money.

You’re like, okay, I can fund these deals. Then you’re funding all the deals. Then you have no money. So the next step is like, instead of using deal funding, if that’s too expensive or whatever, or the margins aren’t there, a hundred percent is using, yeah, you can do it with tighter deals for sure. And you have experience.

So you, you try, you know, your gut and you know, the instinct and what it’s going to sell for everything like that, but that’s kind of the next step in growing your business and you still have money in your pocket because you’re not putting money into the deal.

Dan: Yeah. And I want to talk about the structure on these.

Because there’s a lot of different ways to structure hard money loans. And we talked about how it’s a loan to you essentially. So what you can do, you can get a mortgage or a promissory note on your land when you’re buying it. And the lender pretty much wires in the total amount for closing. You’re still on the title.

So you have a mortgage against you. It’s not as complicated as it sounds, but what I would start at to compile a list, like Anthony was saying, a five people, like just write down 20 people, call them. Ask them who they know would be interested. So pitch them on what you do and instead of trying to get them necessarily ask them who they know, who they think might be interested in this type of loan, who wants to make cash on cash annualized return.

And then you need, you need to, when you’re making these calls have some sort of plan on what you want to offer them to. So like if I wanted to give them 18 percent annualized loan or let’s just say 20 percent to make it simple. Because that’s 5 percent a quarter you’re going to want to do. So you’re, you’ll tell them you’re doing a 20 percent annualized loan.

So that pretty much means every single month they make one point something percent, but you want to give them a minimum usually of, you know, maybe three, three months is pretty standard. Four months, always spice it up at first to give them a little more and you can pull back over time, but give them three month minimum.

So they’re making a 5 percent on their loan. If it sells within two days, it sells within two days. So you’re giving them something that might sell within a month. You’re giving them, it might sound within a month and then they get some extra percentage and they get that money. They’re happy and they give it right back to you.

And then what you can do to spice it up more, if you need to, you can give them a point of interest at, at closing on the South side. So, Hey, like an origination fee. So you’re paying 1 percent of them, no matter what happens just to close the deal and do everything.

Ron: Yeah. And you, you lock this up, like, like Anthony talked about, like you need to know what you’re doing.

You lock this up with a mortgage and a note like, or a deed of trust and a note, like you need this official, this needs to be recorded stuff. So they have protection. Uh, and it just, it helped. It’s more scalable. If you, if what you’re doing, Works for not grandma, you know what I mean? Like if you can go to a family friend or a friend of a friend of a friend and it works for them That’s awesome.

But if you just do it for grandma grandma, here’s can I have twenty thousand dollars? I’ll pay you back when this sells x dollars, whatever It’s not scalable at all because it only works for grandma or grandpa or mom and dad and it’s not scalable

Dan: Yeah And to cut you off real quick and you put that mortgage and promissory note when you’re pitching them to this is backed by a mortgage It’s backed by an asset that’s worth a hundred thousand that i’m buying for forty thousand. This is a very secure loan.

Ron: And you also got to decide if there’s a maturity on it. So if there’s a maturity, like a deadline on this, like if it doesn’t sell within a year, is that the maturity date? And you keep on going like there needs to be, or you pay them interest only. So that’s what you need to decide when you’re kind of pitching this, what works best for them.

You want to give them your track record. Like I sell properties in the last six months. I’ve sold proper, sold properties on average in 120.

Dan: You’re selling them. You’re giving them a presentation. Yeah. All together.

Ron: This is what your money would turn into. Yes. Exactly. And I think laying that out for them, if you do 20 percent annualized, they can’t get better money.

Are they paying monthly? I mean, that’s another thing that you shouldn’t be.

Dan: No, you shouldn’t. You should have this. So you give them the complete interest when the property sells. So when the property sells or when the contract expires, you give them 100 percent of the interest plus the principal. So you give them, you pay them, you pray him out and you get the promissory note and everything closed out.

Ron: Yeah.

Dan: If you’re paying monthly, it’s just a whole nother operation. You can, if you get a really good rate. And you get a monthly and you’re, you’re a tenured business. You’ve been in business three, four or five years doing a lot of deals. You want a 200, 000 monthly loan just to throw it in land. You can do that.

I do not recommend that for what we’re talking about here though.

Ron: Yeah. Then you lose cashflow. Everything with the monthly payments, there are monthly payments and we’ve been pitched monthly payments. Where it’s interest only. Yes. So that’s not as bad because it’s very, very small payments where you just paying the interest.

Then when it matures, you’ll pay off the rest, the principal. So there’s so many different ways of structures. We could talk about it for hours.

Dan: They key is like we talked with Justin, just be creative with how you do things. Think outside the box. What do you think?

Anthony: Yeah, I completely agree. And just out of this, the two biggest things is structure, making sure you have it set up to where it’s actually going to fit your business, to where you’ll get good profit from it.

Um, and being able to pitch it correctly, you know, have a good track record. Cause like you guys said, I mean, you could have. I mean, if you’re not being able to present it well, and if you don’t have the right systems and processes in place to where you’re actually going to get a good deal from it based off how you structure it, no, it wouldn’t make any sense.

So no, I completely agree with what you guys said, and I don’t really have too much of that to add on top of it. I think you guys nailed it.

Dan: Don’t dive full force into this. Try it one or two times. You don’t want to dive full force and have the wrong structure. Like Anthony’s saying, or some are not filed properly.

You just want to test it out. Like anything, don’t dive in full force. If you’re new. Don’t do this either. It really can. I don’t want anyone like it. Get a HELOC or something where it’s safe and it’s based on the asset, not, not the land that you you’ve looked at, you know, you’ve been doing for one month or so.

It’s just a little risky. You can, but I wouldn’t recommend it at first do a couple of deals. So you have something to pitch to investors. If you have a shit ton of money and you can use yourself, we’re talking about, you know, deal funding in this deal. Funding can be you paying for yourself. If you have a shit ton of money, hundreds of thousand dollars sitting there, 50, 000, you have a deal, buy for 30, sell for 70, 80 grand, buy it yourself and then get deal funding on the next one.

Like just be creative, use funds. Uh, the good thing about deal funding with us is you partner with Anthony, you partner with our team, we do the due diligence. It’s just like Anthony said at the beginning, it’s another set of eyes to confirm. Like if we’re willing to buy that and put our money into it, With what we know, this is our business and it just reassures you that everything’s good and we give you a nice contract and everything’s safe.

We’ll walk you through the closing process. It’s really good for that as well. And then along with that, you guys get bigger deals, bring them as well, because that’s the way like deal funding is the way you scale with big deals.

Ron: 100%.

Dan: Anything else to add?

Ron: I don’t think so.

Dan: As always guys, thank you for joining.

Please like, and subscribe our YouTube channel. It really helps drive our mission forward. Thank you for joining. We’ll see you next episode.

Ron: Thanks guys.

Dan: As always, thank you for joining. Please do us a huge favor and like, and subscribe our YouTube channel and share this with a friend. It really means the world to Ron and I, but more importantly, it could help change the life of someone else.

Thanks for joining and we’ll see you next episode.

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