Foreclosure Deals Coach Podcast

Getting your Entity Ready to do a deal with Mike Bancroft of Traction Capital

April 27, 2023 Donny Coram
Foreclosure Deals Coach Podcast
Getting your Entity Ready to do a deal with Mike Bancroft of Traction Capital
Show Notes Transcript

In this episode, I interview Mike Bancroft of Traction Capital about the lending programs that are helping my students to get deals funded in the current market shift. The Real Estate Investing game is about relationships and as a Dealhunter this relationship will help get you from zero to your first foreclosure deal in record time.

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Welcome to the Foreclosure Deals Coach Podcast. The real estate market is shifting. The time is now. The Foreclosure Deals Coach Podcast is your home for the mindset, tactics and tools needed to break through your limiting beliefs and find freedom by investing in foreclosure deals. Don't buy a house, buy a deal. You need to get into this right now. And now your host, the Foreclosure Deals coach Donny Coram. Hello, hello, hello and welcome back to the Foreclosure Deals Coach Podcast. I am your host and foreclosure deals coach, Donny Coram, where our goal every week is to educate you about making money by investing in the foreclosure. Investment space. Before we get too started here, don't forget to join the Facebook group and make sure you subscribe to this channel or wherever you happen to digest your content. Would love to keep you informed about shows and events as we keep moving on. I, I am so excited. I know I say this about like every guest, how excited I am to have somebody on here. But you know, I got a really great guest today, Mike Bancroft from Traction Capital is with us today. I'm gonna tell you a little bit more about that, but as always, I wanna hit this mindset thing pretty hard because Traction Capital is a hard and private money lender. I'm a partner in the firm, okay? So this is my lending partner where I help people just like you to go from not being able to do a. Into getting their first deal done. And Mike is a critical element of that. But this, this, uh, quote is really important cause I think it, it spells out the importance of money and why it's gonna help you out. So money is only a tool. It will take you wherever you wish, but it will not replace you as the driver. We're gonna get Mike Bancroft in to discuss that quote just a little bit more. Cause this is a big mindset thing I really wanna talk about in great detail. Let's get Mike on the show here, ladies and gentlemen. Introducing Mr. Mike Bancroft. What's going on, Mike? Hey, good morning, Donny. How are you today? I'm doing so well. It's amazing to have you on the show. I wanna, I wanna jump into this quote here in a little bit, but let's, let's, uh, well, first of all, let's do the quote. What do you feel about that? Money is only a tool. We'll take you wherever you wish, but it will not replace you as a driver. Obviously, you and I are in the money world. This is what we do pretty much for a living. H how do you feel about money being a tool, a as as far as that quote goes? What do. Money is absolutely a tool and anything and everything you do is dependent upon how you manage the money that you're gonna need to do whatever it is that your project is, or whatever you're doing in life, period. Yeah, I, I mean, I totally agree. Obviously, we're in the hard and private money lending space, but you know, people don't understand that money is just, it's part of the product. Right. A lot of people come to me as coaching clients, and they don't think they could come up with the money. That's pretty much what Traction Capital does, right. They help people to find the money they need to do deals. Right. Can you tell me a little bit more about. Yes, sir. We have several lenders we work with, depending on the situation for that borrower, where we find the lender that matches their situation. Yeah. That, uh, gives them the best opportunity to get the money they need for the deal that they've found. Yeah, and I think that, I think that's so important because, you know, in the five F's that we, we work on in the coaching program and just kind of recap for anybody who happens to be new to the show, the five F's are fine. Figure fund, which is the F we're talking about today, fix and flip. Okay. So on the funding stage, now finding deals is an art form in and of itself. Doing the analysis is critical, but when the real, I think the rubber really meets the road. Mike, when you start talking about funding deals, let's, let's do some backstory about you and me. So we met in my, was it the Miami Pit Bull conference or what, what was the conference that you and I met at? We met at the Miami Pit Bull Conference. Um, you and your wife, we had a great time there. Actually went there to meet investors and you went there to find funding. So we kind of matched. As, uh, both of us looking for what each other was looking for. Absolutely. Man, that's an incredible conference. For those who don't know, the Pit Bull conference is a, is a private money lending conference. They do about two conferences a year, and when I was really ramping up my flipping business, I realized that my shortage was coming from finding capital to do deals. Okay, so I made a huge investment that that conference is very expensive to attend. Totally worth it cuz you meet great people like Mike. But the, the reality is, is you have to, I knew that was my problem. And business is all about solving whatever the problem is. Okay? If you are having a problem right now, you wanna start, you wanna do a deal, but you don't know where to get started or find a deal. The problem that you, that you need to solve is in the finding stage. Well, my stage was the funding. Okay, so went up there. Mike and I met up and we started chatting about, you know, how hard money had its flaws. It was very hard to find guys you could trust and count on to get deals funded on time. And then, well, I mean, I'll let you tell the story, Mike, but things kind of blew up for us in like 2021. Like we, how we, we pulled off what, 47 deals that we managed to get funded that year. That was kind of a roller coaster. Lots of activity, lots of excitement, lots of, uh, nights shopping for money at that time when we were doing so many deals that we were doing, but we got it all done. Yeah, man, it is an incredible thing. So now, as, as the managing partner of Traction Capital, uh, what I wanna tell people about is our education based lending system. Can you, the, the idea behind it being guys that because you have a. You've got some ability to get lower, lower down payments, which increases your leverage so you can put less money down and just get a better deal. Mike, could you tell me a little bit more about how our education-based funding system works? Attraction capital? Well, what you just said is absolutely correct. All the lenders, they wanna see borrowers with experience and. to give you a better terms and, and, and more leverage on your loans. Right? Thing that Donny does is with partnering with Donny, that gives you the experience factor. So you have, uh, better leverage, better terms, better rates because of you have a coach that you're partnering with on your deals and. Going out there as the first timer, you, you have to take a lot more money outta your pocket for your first time deal. Yeah. You're not working with Donny for any, it doesn't matter. Let's dive on that little bit. So if you met a brand new client, okay, somebody is like, okay, I wanna do flipping, I've been watching, you know, YouTube too much, or I got a thing for Chip and Joanna Gaines. I watched that show and I wanna do my first deal. Generally speaking, a complete neophyte case. Somebody off the street who wants to do their first deal, how much money, percentage wise? Now, how much percentage down do you think a complete NBE is gonna have to bring to their first deal? In most cases? In most cases, it's gonna be a minimum, at least 15% sure down payment. And that's, they're really qualified investor. 20. Yeah. Ok. And that, that's that, I guess that's what I was looking for. Cuz I've seen 20% kind of across the board, but I know if there's some extra circumstances, great credit, et cetera, 15%, but somewhere between 15 and 20% down is what we're expecting. If you're a complete newbie, is that right? Correct. And yes, the, uh, average new person, it's gonna be at least 15, if not 20% down on. fix and flip up hard money alone, especially if they're completely, uh, unqualified. U unexperienced, let's not say unqualified, like you may, you may have all the knowledge in the world, but lenders have to know that their money's not at risk. Okay? And to make sure they're not at risk. They're really trading on that experience. So let's compare that Mike to somebody who signs up as a coaching student. And if you have any like real world examples of deals that we've done that you wouldn't mind sharing with. On people who have come in as coaching students and gone from that 20% down to, to what, what, what, what have you seen people getting as a result of, of combining their ex, their experience? With my experience on the coaching side? Well, when we, when we combine your experience that pretty much automatically we're at 10%. Okay. And then if the, the other factor is the deal itself. Mm-hmm. if the, uh, loan to value is that 70%. We can, with Donny's experience, we can do a hundred percent financing. You just need the money for closing costs and some reserves for the interest payments. I'm the loan. So I, I really want you to hear that. Okay guys. Cause a lot of people, the, the gap that that stops them from getting into deals is they don't have 15 to 20% to put down, if we're putting real numbers on that. Okay. If you're going in the Colorado Springs market, just an example where I'm based out of, you're typically buying. Two 50 to$300,000. Okay? That's, that's generally my entry point for an entry level retail deal that I want to sell for three 50 to$400,000 because the market's a little soft. Right now, we're definitely focusing on the less expensive properties, okay? So if you're buying a house for 300 k with the hopes of selling it for 400 K, you're gonna be putting 15 to 20% down, which is 45,000 to$60,000 in down payment money. Now, maybe you. Okay. Maybe you're in a spot financially where that makes sense, but Mike, what's your take on that, even if you've got the money, what's your advice? You, you've been in the finance world for a long time. What's your general consensus on whether they should use their own money to do deals or get better leverage? What's your opinion on that? Oh, absolutely. Get the better leverage. You definitely wanna keep some money in reserves. Uh, even if you do a great job figuring out your budget, things could come up. When you take out a wall or something, you might find something that you weren't expect. And it's better to have that money in your own pocket and reserves to take care of it than to try and find the money after the problem. Right? Right. And that, that's a lot of people that we warn people about. That's a, it's a big fear, right? If you're doing your first flip, you know a lot. There's a lot of unknowns, especially when you're doing your first deal, right? So the key to the unknowns is it's capitalization. If you've got more money in the bank because you put less money down, you're gonna be less concerned about those. Hey, gotcha. Right, because you've got more capital available. Talk to me about where the rehab funds are coming from, Mike. So, you know, you're putting 10% down with the coaching program and now you know the lender's gonna escrow for repairs or where, where do we find the money to do the, the actual work on the property? Yes. Part of, part of the rehab loan is an escrow account for the rehab. So whatever the, if it's$20,000 rehab, that money gets escrow. That money is generally a hundred percent financ. And so you're only putting money down on the purchase, not putting money into the actual rehab portion of the loan. For most hard money loans, that's pretty much standard. Not all, but most the rehab is a hundred percent financed. So you just need the, uh, money for the monthly interest on the rehab portion of the loan. Right, and I think that's important to note. A lot of people come into this thinking they need hundreds of thousands of dollars to their first deal, but what it sounds like you're saying, Mike, is that if we're buying a$300,000 flip, we're putting 10%. Which is$30,000, and then the lender's gonna escrow for the rehab. So you're getting into this deal for just the 30 K out of pocket, that, that seems like a very small amount of money compared to the fact that I might have to put 20% down and then spend 30,000, 40,000 on the rehab. Right. That's a, that's a big jump at how much money is out of pocket. Right, right. Of course, you're gonna have a little bit of money for the closing costs, but yes, maybe 35,000 compared to 65 or 70,000 for the same. So, and as a result of that, you should be able to get into deals easier and you should be able to do more deals cuz you need less liquidity. You see what I'm saying? So when, when you're teaming up with the coaching program guys, um, the, the idea behind this is when we get to the funding stage, we've already got a plan to get this thing funded. How do the lenders define my relationship with the students? Like I know, like some of them want me on the LLC and some will just take the coaching agreement. Well, what's the variable there? How do they define that? I'm, I'm their, It's, it's, uh, everything you said. Some of the lenders, you just provide the documentation that you're a coaching student with Donny, and that's good enough. Cause especially the lenders that are familiar with Donny, some of the lenders wanna see that. Um, they have a joint venture agreement with Donny, and then some of the lenders want Donny to actually be maybe 20% of their L L C. But it, it just varies by the. You know, so that's interesting. And I gotta be frank with you, when we first talked about me joining their L L C, I got nervous a little bit about that. Obviously I'm adding a little bit of personal liability, uh, to the deal. Um, but I really wanna see my students succeed. But, you know, obviously we're not gonna put them, we're not gonna fund a deal. That we don't believe is gonna be profitable. Right. So for me it was, it was a deal I was gonna do anyway. I'm willing to add my name, my experience, to that bottom line because I'm so confident in the deal. But beyond your side of it, how's the lender viewing it? If things go wrong, what's the expectation, I guess, on the coach? Maybe I should have asked this before I started signing for deals, but like, what's the expectation on the coach for me to step in and, and help out? What, what, what's gonna happen if things go bad? Well, yeah, if you're, if you're on the documentation, you're gonna be responsible to assist with getting everything done and taken care. A absolutely. You know, and I, I, I wanted, I wanted that out there, guys, because the reality is I'm, I'm adding as your coach, I'm adding some liability to the deal. I am so focused on my client success and ability to do deals that on the deals that I have to sign for. And again, that's not always the case. A lot of times just the coaching agreement is sufficient for the lenders. But there have been a couple recently where we've had to add me to the operating agreement of the llc. Now, I wanna point out that as your coach, I'm not taking any. Profit on the deal. I'm not interested in the profit. I mean, don't get me wrong. I like money. So, but I really wanna be a pure coach in the sense that I want to help you to do deals. How many deals might, does a student have to do before they'll no longer need? Uh, the coaching, I guess my, my tie-in, how many, how many deals before they're considered, quote unquote, experienced enough to get the, the lower down payments on their. Ideally, once they've done three deals, they're gonna be similar, uh, not as good of a maybe term, maybe rates as far as, uh, somebody with 10 plus is like, you know, the magic number is 10 plus. But once the beginner gets to their third deal and they've completed. Three deals, sometimes even two deals, depending on the lender. Uh, then they're still gonna, that, that point, they're gonna get better leverage and better rates than they would as a absolute beginner. Uh, yeah, I love that. And, and I have to, I have to point out that, you know, the coaching basically guarantees the first deal, right? But you're gonna need the co My goal is to earn your business as a coach for years to come. So, you know, if you still need me as a leverage point, and it's gonna take way less than a year to get your first deal done. I've got clients who are definitely gonna do two to three this year, just on the current momentum that they're on. But you know, I am certain that the coaching's gonna benefit over that time period cuz ideally we get to that magic three deals, right by the end of our first year together as as coaching client. And then, you know, you are now getting the leverage point through Track and capital, which is still an interest to me cause I'm a partner in that firm, right? So understand that, you know, Mike and I are working together to make sure that you are successful and have access to all the capital that you need to do as many deals as make sense in your local. Right. So we're kind of, kind of pushing that agenda as much as possible. The market's changed a lot. Mike, I mean, obviously we've seen some big shifts, um, in how the market is operating. What changes have you seen in the hard money space? I guess I would've thought that lenders wanted to lend less money in this market. But are, are you seeing that or are we still have a pretty good momentum of capital trading in the, in the fix and flip market right now? Or is it, is it trim? As far as the overall funding available for fix and flip, there's plenty of funds available. The way they've cut back to an extent is just like what we were talking about, some of the lenders are requiring more down payment. Mm-hmm. and, uh, more experience. Right. They wanna see that you've done this more. Right. More, more experience, more down payment. They're more comfortable with. Yeah. I mean, and, and I, I have to say guys, if, if my services are, were not, I mean, they, they've always been needed. Like, I always use the example, Mike, if you were gonna go get your pilot's license, I, I like using this one. Cause if you're gonna get your pilot's license, you wouldn't just hop on a plane and say, I'm gonna figure it out. Right. But for some reason in the flipping world, people kind of want to just jump out there or buy their first deal. And just figure, figure it out on their own today. That may not even be a possibility unless you're highly capitalized. Okay. I I, I guess what, what I'm taking away from this is that the lenders are so picky about who starts slipping now, right? Based on the fact that, you know, they, they just really want that experience that it just makes way more sense. Would you agree to get an experience partner on the team, um, as opposed to trying to sort it down on your own? Yeah, so experience partner is the way to go. The thing with being a brand new investor, um, not only are they gonna look at more down payment, they're gonna look at the deal itself. It has to be a, uh, you know, 70% of the a r v or less. In some cases. For new, uh, beginners, they're, they're requiring to be at 65% of the. A r v. So, uh, yeah, they are tightening up in those ways for the beginners. Yeah. And that makes it tough to get into a deal. Right? There's the, I mean, listen, even in, even in a great market, there are just not that many 65% deals out there. You know, and this is a, I think the market's gonna get better. I think we're gonna see a lot of great opportunities. But if you're looking out there and you can only do a home run deal, it's gonna take very long for you to find that home run deal. Whereas if you can do a good. And, and I wanna focus on that. My clients are not looking for home runs. I don't get me wrong. Any opportunity that we can to knock one outta the park is great. But when I say I'm using all these baseball analogies, a, a basic deal is a$25,000 profit or better. Okay? And so if you can find one that's gonna make you 50, a hundred thousand dollars, great. But the danger in that is to both you as the client, cuz that's a much. Skill level deal. Right. And the lender, they don't wanna put you in a really high margin deal that needs 80,$90,000 worth of work because the risk is higher for them too. Okay. So I, I think what we're, we're creating here, Mike, is a partnership with our clients where we can keep them outta harm's way by putting'em in deals that are safer. Right. And do you consult with the clients as you're putting the financing together as to the a r v numbers and kind of where you think the house is gonna sell or what, what's your role here as a hard money broker in helping the clients get into deals? Well, I run the numbers, obviously. Yeah. And, uh, before I send, before I even send'em to the lenders, I run the numbers. Depending on what the numbers are, then that kind of determines which lender I send it to. But, uh, you definitely do not wanna take on a large$80,000 renovation on your first deal. Even if you can get it funded, because you're just not gonna know what you're doing if you've never done one. It could crush you. It could. It could, absolutely. And we've seen it. I, I've seen it crush me. I've seen people get started and get wiped out by doing too high of a remodel or taking on a meth lab or, or fire damaged house or something like, that's just so outside the box. The margin might be there. Okay, but the pain level to get the deal done is, is probably too high. You know? And that, that, that's the reality of, of just getting started. Say you get a deal today, Mike. I know we've closed some stuff pretty fast and I've, I've been very demanding and asking you a lot. Um, but how quickly is normal? Like what, what's a. What's a good timeframe from going under contract to ideally getting a deal closed? What would you like to have time? I know I usually say, Hey, can you fund this tomorrow, Um, but, and you do it like that's your, it's your, it's your fault. If you would stop, you know, getting results every time I'd stop asking you, but like, what, what would you like in timeframe? I, I keep telling you over and over 21 to 30 days to close and then you close in a week. So, cause I get'em done. You keep doing that to me, but it's not, It's not ideal and uh, it's more expensive. You know, I think it's important to note that we can get money fast. We can broker this money pretty quick, but it does cost more when you do that. So it is ideal to give us plenty of time, 21 to 30 days is what you're saying, Mike, to get things done. And if we look at it in most cases, That's plenty of time. Like the, the seller's gonna be cool up, that there are some sellers who do wanna close in seven to 10 days and, you know, we do accommodate that when we can. Right? But the reality guys, this is gonna cost you more money to do that. So if you can get more time, that's okay. That being said, if you're on a tight timeframe, we'll take a crack at it. Am I right, Mike? I mean we'll go after it. If we, if we can get it done in a short period of time, we'll work for it. Yes, we can. We can get it done quickly. It's just like you said, the lenders that close fast charge more money because they know they can because they're few and far between that close that quickly. Yeah. Most lenders want the 21 days. Thank you. And, and you mentioned something that you said there are most lenders, you have to understand that Traction Capital is a broker. Okay. And I think that's important cuz there's some direct lenders out there. And Direct lenders seems like it's where you wanna be cuz you're talking to the guy who actually has the money. But why is going through a brokerage a little bit more, why do you think a brokerage is better than direct? Mike? Well, in most cases, for especially beginners, I can find a better deal for them than they can find their on their own, whether they're gonna be looking on the internet or talking to friends. Uh, because we do so many deals all the time, we have lender relationships, we have, uh, Better programs. Mm-hmm. than, than they offer just to the general public, just because we do volume with them also. I love that, that, I guess that's what I was looking for. The reality guys is after doing 300 plus flips, we've established relationships with some lenders that want to work with coaching students. Okay. And as a result of that, you're getting better rates, you're getting better terms, you're getting, it's just gonna be easier to get this deal funded. Okay. And having Mike on the team has completely changed the dynamic of the Foreclosure Deals coach operation because I have the confidence now that not only can we get the deal funded, but we can get the best funding available. To my coaching students. Okay. We're not just throwing you out to the wolves and hoping we can get it funded, but rather we wanna advise on, on what the best, best loan to use in this scenario is based on your scenario. Okay? There's a lot of guys just kind of, she shelling money out there and that's not a bad thing. It does get, it does get results, things get funded, but I've seen people get, they fund the deal wrong. Have you seen that, Mike? Where they just, the property, the deal was okay, but the funding was screwed up. Well, to an extent, sometimes what I've actually seen happen is, um, I've had deals come to me that I, I forward to the lender mm-hmm. and the lender just won't fund them. And it's actually a benefit to that borrower that they weren't able to get it done. Sure. Cause what they were trying to do wasn't making any sense. Right. So, so that's important too to, to. Make sure that your deal does fit in, in a, in a reasonable box to where there's gonna be a reasonable amount of profit. And I love that. And I, I, I would say that obviously I'm a deal whore. I mean, there's just no other way to put it. I, I, I enjoy doing deals so much that sometimes I can miss it, but I like that we have you kind of, with our fact checking thing where it's like, okay, Donny, you know, we, we need to make sure this is the right deal for the client. That that is my only interest. Right? But things are happening really fast in this world right now. So it takes a team of people to evaluate what the best move is. For the client. So I think, you know, having your eyes on it, Mike has made a big difference in helping us out. One thing that people always ask is how do you do deals with nothing down? And obviously our methodology for that has involved combining private money and hard money to get that done. Can you tell me a little bit more about how the private money add-on works and how we can combine private money to help people to do deals with even less, less money out of. Well, there's a few different ways that you can work with the private money, but one of the ideal ways is to, uh, use the private money for the rehab portion, so then you're not having to qualify for as much on your initial loan just to purchase the property. Sure. So you can maybe go to one of our regular hard money lenders. They will just finance the purchase, and you're gonna have a. Chance to put less money down on the purchase and then maybe get a hundred percent from the private money person. Whereas if you're doing the everything through the hard money lender, you're, you're gonna have to have, uh, More fun, a little more money in the game period. Yeah. So on the 47 flips that we pulled off, an important thing to note is none of that involved my money personally. Right. And the reason that was is because I had some established private lenders and we brought in some other private lenders. Once Mike joined the team, uh, and we got all the paperwork done, that was a critical element to be bringing in more private el. Lenders was making sure the paperwork got done, but that's sort of where you help out, right? Combining the funds that are coming from your private capital with the hard money to get the deals done. Private money is one of those things where it's relationship based though, right? So a lot of my clients come in, they've got friends or family members or people who want to invest with them. How do you help them, Mike, to make sure that the interest of those people who are providing their private funds for the deal are protected? What, what? What do we do with Traction Capital help with that? That's what we would do for that would be open with the p. and, uh, so that they have the proper paperwork so that their, um, private money person is gonna have a deed of trust related to the property. And, you know, we have all that documentation in our database that we can help. With that. Mm-hmm. obviously everybody's recommended to check with your attorney, Yes. Cause we're not attorneys. We're not lawyers. We're not, we didn't have the paperwork. We can do the paperwork, but if you wanna get someone to look at it, that's okay. You know, and in certain areas we work, I work with a law firm here. We just kind of brought on. That's gonna be helping with reviews. Cause we had, we had so much paperwork at a certain point where it makes made sense to outsource that. But you know, when you're doing one or two deals, you're trying to have an established relationship with your private lender, usually a family member or a friend, et cetera. You wanna be able to reassure them that you're not just gonna take their money and hope for the best. Right? It's gonna be secured, as Mike mentioned, by a deed of trust and a promissory note secured against the property. So when it sells, the private lender's gonna get their interest plus, Their cap principle back on the deal. And what would you recommend offering private lenders, Mike, as a, as an interest rate return? What do you think's fair right now for private lenders to get as far as rate? I mean, I think from eight to 10%, I think 8% is plenty. With the way the, the stock market's talking, everything's going right now. Yep. Uh, 10% would be amazing for that private lender. Mm-hmm. Um, so yeah, eight to 10% would be what I would recommend and I. Uh, if you explain it properly and show'em that they're gonna have. Protection and interest in the property. Uh, I mean, most people would jump at that, I would think if you explain it to'em, right? Yeah. And again, we're not talking about a ton of money, right? I mean, I guess out on the scale of things, right? We're not asking them to fund the whole deal, though. If you've got a private lender who can't fund your whole deal, it'll probably be cheaper and easier, right? Than using a hard money combination. But most of the time when you're trying to establish a relationship with a private money lender, we were getting the down payment funds. So 10% once again. On a$300,000 purchase, about$30,000. Right. And then we were budgeting for the rehab. So we had it, the lender cadero for the rehab. But that takes a little bit more time. And at the pace we were moving, we were doing 47 deals in a year. We didn't have that time, so I would generally get the private money lenders to do the down payment plus the rehab funds generally between 50 and 60,$65,000, right? That, that, that's what we wanted out of that. And then we'd get a lien filed against that. As, as you said, Mike, most people are ecstatic to get eight. In a certain case, I was even paying 12% on deals cause I really wanted to take care of my lenders. But compared to what the stock market is offering right now and the risk that comes with that, it's kind of a no-brainer, right? To move some of this money into real estate, particularly with somebody who's trained and got it coached to make sure that they don't screw the deal up. Would you agree that this is kind of a good move for private lenders? Yeah. The, the, the private money at eight or 10% is. A lot more, a lot safer than the stock market right now, and has been for the stock market's, been up and down for, uh, gosh, at least five years now. Just crazy up and down, so, mm-hmm. so this is consistency, right? And certain private lender want payments. So you might have to make monthly interest payments. My private lenders generally just let the interest accumulate till the deal is done. But you know, we're talking about 90 to 120 days, right? We generally get the property fixed in about 30 days. We got the time on market, which is longer than it's been in a while, but figure that for 30 to 45 days, right? And then you got your time in underwriting while the property is selling. So you should own that money. You should be tying up that money for 90 to 120 days. Eight to 10% interest. Right. And for most people, that's a no-brainer investment, especially because it's secured by real estate. But traction capital, you're gonna help to make sure the paperwork is legal and, and protecting the, the, uh, investor so they get their money back at closing. Right. Yeah. The thing is with the private lenders, once they do one deal, they're back for the next and the next and the next. Because hook, they, they see that, you know, big return compared to what they're getting. Any anywhere else? No, that's, I think the savings account is less than 1% right now. Right. And if you got money sitting in savings and you're making less than 1%, when you go against inflation, you're actually losing money with that money sitting there. Which most people, they understand. Most people are intelligent enough to understand that at a decent enough level, the question is not whether they want to move the money. Okay? Most people would prefer to make more than what their savings account is paying. I think what stops people, and maybe you'll have, you can chime in on this, Mike, is the fear. It's the fear that if you just throw it out there to a random real estate investor at a random deal with no paperwork or protection, it's very difficult to say, okay, I'm. Taking the money outta savings, which I'm making no money, but if I'm taking such an ungodly amount of risk by just putting it out to the market, it's safer in savings. Don't we kind of bridge that gap with traction capital, Mike, we analyze the deal, we're making sure it's stable and we're doing the paperwork. Doesn't that eliminate a lot of the risk that these private investors are afraid of? Absolutely. And like you said, analyzing the deal itself. You wanna make sure that the deal is so good that even if some things go wrong, you're still gonna get your money back at, at minimum. And normally you'll just make less at, at, you know, worst case it's usually gonna be made less, but you're definitely gonna get your money back, money back for your private lender and, uh, your hard money lender. You want to get everybody paid. No matter what, that's why you leave a margin in there for error. Like a big margin for error. Absolutely. You know, and again, with a minimum profit of 25,000, but you could, I mean, easily, we're doing deals right now where the clients can make 40, 50 grand on the deal. So if they're, they're still out there, and I wanna be clear, it's just that I wanna be able to provide, unlike a lot of the gurus out there who are just trying to mentor and teach you how to flip. This program's about taking your hand here and making sure that you're actually gonna do a deal with a minimum profit of 25,000. You're gonna be able to satisfy your private lender who helped to invest in it. If it's your own money, all the better, right? We, I talk to people all the time. If you got the liquidity, that's wonderful. But I do recommend as you get some momentum that you get some private lenders on your team here, so you're not putting your own money into it, because that leaves some margin of error too, where you've got some access to bail yourself out with your own capital. That. So that's kinda it. Mike, do you have anything to add as far as what's happening in the hard money, hard money lending world? Anything you wanna tell potential coaching students or current coaching students about the traction capital and the program? I just highly recommend the coaching program, whether it's Donny's or whoever. You gotta have. A coach for your first deal, or you're gonna have all kinds of mistakes, you're not gonna have any idea what you're doing. Really, overall, no matter how many YouTube videos you watch, you gotta have somebody that's actually done the deals, knows what they're doing. Some of the best deals you'll ever have are the ones you don't do because that's what Don help you with. And I will not let you do'em either. If he does send'em to me, but, uh, I don't send dad to you. That's, that's, that's, I mean, that's the biggest protection of all I think of dealing with Donny is you're gonna have your deal analyzed by a professional, and you're gonna only, he's only gonna let you do deals that are gonna be profitable for you. And, um, some of the beginners, they get excited. They find a deal that they think's a deal, they, you know, they get all excited. Get in the middle of the deal and then they realize it wasn't such a great deal after all. They just thought it was Yep. And they get in big trouble. So you don't wanna get in that situation. I agree. Hey Mike, I wanna thank you for coming on the show today, man, I really appreciate you chiming in. Um, you know, a lot of great stuff is happening in the lending world, but like you said, the time to get into coaching, get this education, get your financing set up, et cetera, is right now one of the first things we do after we do a coaching call is we get, get them set up with you on a call. So that's kind of the route to Mike here. Okay. If you guys are looking to get started, you wanna get your funding set up, you need a couple of things that'll just, we, we talk about a lot of shows, but your LLCs gotta be set up. You need an e i n number. So you have an official L L L C with that tax, i r s tax, e i n, and then you have a bank account, right? When you got those three things kind of going, and we can help you with that. If you don't already have those, don't worry about it. That's part of the coaching. But let's hop on a call after that first call with me. We're gonna get you on the phone with Mike. Mike's gonna get all your data. Input into the system so we can start brokering out deals for you. And then just like that, the magic happens. We find deals in your local market. We get you into that deal, then we consult you from beginning to end and doing a profitable flip. The funding is a crucial part of that, and I'm so happy to have you on the team, Mike, helping us to get those deals done. I'm glad I was able to take a few minutes. You keep me pretty busy, Yes, I do, and I appreciate that. All right. Hey guys. Thank you so much, Mike. I will talk to you soon. Guys, listen, the, the reality is the market is shifting right now. The time to do things is right now, so I wonder to take action. Okay. You just got Mike Bancroft there on the line telling you that if you can hop on board and start doing deals in this local market, you're gonna be in a great spot. So that's kind of our show for today. Couple of action. As always, go ahead and hop onto the Facebook group. Subscribe to this channel. Click on this link here. I would love to work with you to get started in your first deal. And if you're ready to rock, if you wanna get incorporated with Mike Bancroft at Traction Capital and start doing deals today, click on the and get started. Get a coaching assessment called going. Let's determine if your first fix and flip deal is where you should be working right now. With that being said, this is Donny Coram, your foreclosure deals coach. Thanking you once again for tuning into the Foreclosure Deals Coach Podcast and reminding you now and always don't buy a house. Buy a deal. Thank you for tuning in to the Foreclosure Deals Coach Podcast. If you like what you heard here today, remember, new episodes are uploaded weekly. Subscribe wherever you listen to your podcast. Do you want more of the foreclosure deals? Coach, are you ready to learn the mindset, tactics, and tools required to be a. Successful real estate investor. If so, click the link below to schedule a one-on-one coaching. Call today with Donny Coram, the Foreclosure Deals Coach to determine if coaching is right for you. And remember, don't buy a house, buy a deal.