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[Music] next question came in two weeks ago from phillip phillips says i need help with raising pr hey where's dan hey dan you get this one you ready sure hey the reason i'm asking you is because like how much private money uh have you been crystal raised like since we've been hanging out together i think she's or we're sitting somewhere around nearly 6 million something like it's a lot you you ought to be able to handle a private money question i would suppose so philip says i need help raising private money knowing best rate to offer private lenders and if we should be looking at bank loans with low rates to refinance and pay off private lenders for houses that we want to keep for the long term as rentals so his question really specifically then is should they be looking at bank loans with low interest rates to refinance and pay off private lenders for the houses they want to keep long-term okay so wow good question um it depends on how we're purchasing these homes so if we're if we're purchasing homes uh subject to and we've got a a private lender on it to do uh some small rehab like mini rehabs if you will on them uh then what we do is we get the owner to refinance drop the payments down low and we collect the cash on that refi so we get that back to us so that's by the way i think that's like a fourth paycheck on that one but uh which is great but uh um yes if you wanna if you wanna get a lower payment and you think you can successfully do that again you know problem is you're going to be using your own credit and jay talks about don't use your own credit and don't use your own money so i don't we don't put anything we don't put anything in our business in our name everything is is financed through unless it is a foreclosure that we purchased um the the offer of and you're gonna this is convoluted so you're gonna have to clear that up form but the offers that we make to our private lenders we're very consistent with and uh we we asked them initially what they feel would be a good deal on their interest rate but typically we'll sit if it's a hundred thousand and below we sit at ten percent if it's uh if it's above a hundred and thousand then we go with eight percent uh obviously if it goes up to one million which we have a couple of those then we drop the interest rate even farther but we're very consistent i think we sit at about five percent on a one million dollar uh and above so so but make sure because you don't want your private lenders talking jay has all these private lenders sitting on a stage together so if one mentions one percentage and the other one looks at them really funny then jay's gonna have problems with that so he's very consistent with that across the board as well uh any other question there yeah well you said something that i don't want people to miss and it could have cause i mean you said it like that and it could have gone very easily like that okay so everybody tune in okay like stop looking at your facebook i don't want you to miss this so play out one more time a little slower that you have somebody else refinance the house play that out for everybody how did what's that look like short so when we go to purchase these properties and and again if they're not a foreclosure that we bought outright to do a full-blown rehab on if it is a subject-to and again crystal's the queen is subject to so she can't virtually reach out and slap me in the back of the head so i'm okay with this uh if it is a subject to purchase and we look at it and their interest rate on that might be six percent we'll just say that that's what they were sitting at but they've got an offer or an ability a capability to reduce that by refinancing it so they reduce the payment which makes it even sweeter for us because now our monthly our monthly income on that when we turn around and sell it as a rent to own or whatever happens to be will increase so we're going to have passive cash flow coming in because of that now we convince and it's a great deal for them but we convince the the sellers to us to go ahead and refinance we pay any of those costs that are incurred on that that's taken care of on that we pay those and right now most of these folks don't charge anything to refi like rocket mortgage and all that kind of stuff get them refinanced through there lower their monthly payment if there's cash ability to take out on it then we work that into the deal where that cash comes right to us so if if if they're able to if the house is worth 250 000 we're going to pay for an appraisal we're going to get that bank in there we're going to say okay let's refinance that get cash out of it if they only owe 150 or the only owner oh we'll say 70 70 we had one that was 75 000 and it it appraised out at 350 000 there's a lot of cash sitting in there we don't want to wait two three years on this we want to go ahead and get that cash now so we get them to refi we get the cash out still staying down within our percentages you know 60 to 75 percent whatever we said low in the value and we take that cash and hold on to it so we're gonna use that cash reinvest it back into the property to do the rehab on it whatever it happens to be we don't even need a private lender because we just got that cash to do that if there is a private lender that we were going to be using on a property and we were able to refinance it then we pay that private lender off and now they're out of the picture we're not paying that you know eight percent or 10 percent of whatever happens to be well that's a very um advanced brilliant strategy what um incentive so obviously you're uh you're buying this house subject to the existing note i'm going to assume everybody in the academy knows what we're talking about so your body is subject to the existing node they're obviously can't get it refinanced unless they've been current on their payments and you and crystal have been buying a ton of subject-to deals that are current they're not behind they're current they're currently payments so obviously uh crystal's got the talking points down pat on convincing someone to sell subject to and they're not even behind on their payments right that's a whole nother discussion but since they are current they're not behind they got good credit what incentive would they have to go through even though you're paying for the refinancing cost what incentive would they have to go through the whatever uh not pain but to go through the trouble for lack of a better word of doing the refinancing i mean are they are they most times when they're going to refinance the house and sell it to you subject to are they go is that one way of getting them cash that they want over and beyond what they want to sell it for absolutely we get them cashed out quickly that way so normally when we're purchasing subject to we've got to wait until we get a tenant buyer in there the tenant buyers installed they have some seasoning on them you know a year maybe two years max they're in there and then they're able to get their own mortgage because we go ahead and put them in free credit repair that kind of thing we're getting them there got them qualified they get cashed out they they purchase the house the cash comes in and we hand the the previous owner the cash that we agreed upon and this way with a refinance so we already worked out all the deals on it already understand hey you know this is how much you're gonna get we agreed upon it then we talk about the refi so we say okay since we've got this now let's talk about a refi we're going to walk you through it we're going to help you with it you're not going to have to deal with it all by yourself some of these folks and i'll breeze over quickly some of the reasons why is because well probably primarily because of covid right now but they're they've lost their job they haven't missed a payment yet but they know they're going and they don't want to wreck their credit on it so we step in and we can buy very very quickly literally within seven days as long as we get that title search done we can start making payments so boom they don't even miss a payment on it you can't get that with a realtor so realtor said hey you know i believe i can sell it in a month or we've got we've had properties sitting there for six months and jay can attest to that you know it's a fickle market out there it just doesn't i mean they don't sell like hot cakes like the realtor's telling you oh i can sell it in two weeks or six months you know that kind of deal so these folks have no tolerance no threshold they haven't they have no i mean they have a big pain point because they've left already or they're leaving maybe they found a new job someplace else and they've gotta move or they're moving in with mom and dad because you know they just can't make the payments anymore so this strategy just to recap works a when they're current on payments because they can't refinance unless they're current b um they want cash over and beyond they want to save the house over and beyond what they owe on it so they're not selling it to you for what they owe so one question just came in that i think we sort of answered it the question is why would they even do subject to if they can refinance and the reason they want to do subject-to is because they want to they want to sell the house and they they don't want to be responsible for payments because maybe they're getting ready to lose their job right dan right right there's i mean there's a million different ones uh different reasons behind it uh you know whatever but i don't know we're gonna go here we could have one session just on reasons why people sell subject too exactly the primary reason is that crystal knows what to say and how to say it that's right that is the primary reason she she's good at finding the pain points and uh having a having a conversation with people um she's she's just very very good at that so [Music]