Welcome to Cleveland real estate investor. On this podcast, you'll hear about every aspect of the real estate investment business. You will talk to your rockstar investors about their businesses, how they built them, where they came from, and where they're going. Who am I? I'm Joe Lieber and I've made millions of dollars from the real estate investment business over the last 20 years. If you're ready to hear the good and bad from a guy who's learned this business from the school of hard knocks and get educated by some bad ass entrepreneurs, then put your helmet on, strap on your chin strap. Let's ride.
(00:36): Hey, what's up. What's up. Thanks for tuning in. It's good to see you guys here. You guys. I love the emails I'm getting. Thank you. I always try to respond to everybody much appreciated. Hey, listen, look, I got a good one today to talk about. This is a real life situation. This is what I'm trying to do. I'm trying to just hit you guys with things that happened to me in my business every day, and just talk about them and how did I get there and why am I doing this? And let's go ready. So wash out quickly. I raise a hundred GS. This is fast, easy, and this is going to be like a wall for a long term play. And I want a couple of good ones in the old portfolio. If you know what I mean? So let me explain. Okay, I got three houses, right?
(01:17): I bought them all cash. Talk about houses. Number one, pay 17 grand for it. Lower West side. Did I don't know, $15,000 rehab. I'm all in for 35. All right, put it on section eight. It's bringing 1200 a month. It's a five too good number. Right? Second house Garfield. It's a four to a mall in it. 40 right. About 40 1200 bucks a month. And by the way, both those are fully subsidized killer, right? 1200 bucks a month. They pay for water and sewer sweet deals. Right? Third house, West side, Bel air area, all in at 30, I'll say about 30 K rent, seven and a quarter. So I'm bringing in on those three houses, 31, 25 a month. They're paying all utilities. I'm paying taxes and insurance. Those three houses. It's running me about 500 bucks a month for those three houses. So I got a net of about 2,600 a month.
(02:26): And bear with me. I'm doing these numbers in my head is ongoing here. Right? So if I'm off a nickel, don't curse at me. Okay. So I'm about 2,600 net. And those three houses. They're good. They're really good. Right? You got them paid for no debt, but I've had them for a few months. Now, what I want to do now is I want to pull that money back. Cause I'm getting a lot of calls from people to buy houses. A lot of wholesalers, by the way, there's a lot of you guys up in here, man, right now, really hammering it and good for you. The phones are working great. I know Facebook ads are really hot now, so good for you. Keep selling me stuff and thank you. But these three houses back to these. So I want to get my money back out of these so I can, you know, buy some more stuff.
(03:10): Right. And it always on my only a hundred grand. Okay. It's just, I want to pull some money back. I'm going to really call that do mortgage guys. De-risk the leverage, whatever. I know you got some kind of word for that. So I'm going to pull a little bit of money back. All right. And I just watched you how easy it is to raise a hundred grand. So you've got these three houses they're rocking and rolling right now. You might think you don't wanna go get traditional financing against them. Get 30 year mortgages at four and a quarter and just cash low baby. I get it. That's a great strategy. It works for a lot. It just doesn't work for me. Right? I like my stuff free and clear. I'm not a big debt guy. So here's how I do this. I'm going to get all my money back, which is a hundred, about 105.
(03:52): Let's just call it a hundred thousand for the simplicity of this, I'm going to raise a hundred grand through. I'm cheating a little bit because it's through relationships. I already have, okay. People that know me over the years and they like to lend me money cause they know it's secure. Right? But I've cultivated these relationships over the years. You know? And these people are just, they're high net worth people that are a little bit older. They just want to get that mailbox money and it's secure. But the first lien position mortgage. So it's very easy. Right? So one phone call. I'm going to say, I'm going to give you three first lien position mortgages against these houses that are worth way more than 105 grand. They're honestly probably worth double. That's probably worth 200. Right? And I'm looking to borrow a hundred it's on 50% loan to value.
(04:44): Am I going to get an appraisal? No, because they're a credit check. No. Are their title searches? No. I mean, it's just cause all about relationships with private money. Okay. That's where they're bad. They're banking on you, right? With private money. So, cause I know these folks I'll have one person write this check and here's gonna be the terms. Okay. Five-year am fully amortized. 10% interest. Yup. Five-year am I don't want a 30 year am. I don't want to 20 year. And with a 10 year balloon, I want a five year fully amortized or rapid paydown 10%. They're going to get their money mortgage. What a deal? The payment is $2,124 a month. This is guys. This is how I built my portfolio. The first time I started doing this in Oh nine in my very first episode, I talk about this briefly, but that's what a house I built it.
(05:38): I would get blocks of money on five-year AMS. I had a hundred millions I had out. Right. And that's how I paid off my entire portfolio in such a short period of time. So we're getting back to the basics probably cause I was reading a Kia Saki book the other night. Mind you, if you haven't picked up your rich dad, poor dad or your cashflow quadrant code too, that sometimes you just gotta get back to the basics man. And just really dial down on just the basics. It'll make you rethink your business. Okay. I am becoming very transactional myself a little bit here, right? With just turnkey and a little bit of hoteling and retailing. And I'm like, Whoa, let's, let's just pull the little, the strings back, slow these horses down for a minute and let's just make sure we're not getting too far off the track because I hate transactional business.
(06:27): I want to build it once and get paid forever. Right. That's how I did the first time. That's how I was. They'd have all this cool stuff and I don't want to lose sight of that. So all right. I keep getting off track and I apologize for that. So the payment $2,124, the net rent 26, 25, that gives me $501 a month cash flow. So I'm still cash flowing on this. And I got a fight. That's pretty sweet. That's easy to raise. Yeah. I'm not feeding it. It makes sense. It works. Okay. Will I be able to shut the 500 a month in my pocket and laughed all the way to the bank? No, because you know, I'm going to have issues, right? I'll be putting a furnace in this winter, hot water tanks going to go, you know, there won't I just like to get it to break even to be honest, just break even.
(07:18): It's cool because I know I'm getting principal reduction like a mofo. Okay. Like principal reduction. I looked at the amortization schedule on this it's a thousand bucks a month or something I'd love a hundred bucks a month and principal reduction. So that's a big number, right? So your money's made there and it's so short term five years. I mean, goodness, isn't that a car note. I think people take car notes now for five years, if you buy I'm a lease guy. But I remember back when I was you, when I was little bit younger, I would take five-year car notes. So for the time it would take me to pay a car off. I can pay three houses off. Right? So that's how I'm doing this pretty simple. And everybody wants to do this who wouldn't want to lend on that. Right? If you have money and it's secured by a first lien position mortgage at damn near 50% LTV everybody, everybody, if you have money, we'll lend on this.
(08:12): If they want to earn interest, just 10% is really good. Yes. They will lend to you me around just start talking to people. You'll be amazed by what a little bit of conversation happens. What will happen for you? If you have a little bit of conversation, it's really unbelievable. So that's what I'm gonna do on these bed, boys. And then I'm going to slap them over there to the long term side. And I'm going to have in five years. I mean, honestly, it'll probably be the last time, you know, I was, you know, I'll probably pay him off early, but I'm just doing this for the purposes of a demonstration, right? I mean, I really am doing this. Don't get me wrong, but I don't know if I have been off five years, but whatever, even if I do or don't, doesn't matter. It's a short term note.
(08:50): It's a five year note. I mean, you get shoved three more in there. Now look, can you get houses for 40 grand? Probably not. I have to kick over a lot of cans or I don't know all the analogies to get these deals. I have to press a lot of flesh. There it is. I gotta press a lot of flesh to find deals like this and make them happen and know where to buy and when to buy and how to value add, you know, these houses that I'm getting $1,200 a month for. They were three bedroom colonials. I went in there and finished the addicts, cut two more bedrooms in to make them five bedrooms. You know, I added the extra bathroom in the basement, full bath down there. I added value. And that's what was able to increase those rents and section eight pays very well right now.
(09:36): We'll talk about that in another episode, but that's how I was able to value add and make these properties bring in so much rent to make this work. So I have to feed it. Otherwise his house was gonna refer, you know, 800 bucks a month and the little one for seven a quarter, probably what? 600 bucks. I don't know. That's I want to share with you, right? It's quick. You know, it's going to pay these houses off it's to help my long term wealth plan. You got to have that right. Do not get caught up in being so transactional. If you do that, you'll get to the end. You know, I run the race, run, run, run, run, run, turning, and burning, selling, buying, and selling buying. And you get to the end of the game and you say, well, wait a second. Whoa, where's all my money.
(10:16): Well, dude, you had a lot of active income. You live like a rock star in your thirties and forties and fifties. Now you get to 60. So shit, I want to slow down and you can't. So make sure you're keeping some of these things as you go. I see a lot of wholesalers get great deals on these houses and then what do they do? They sell them off to make a $10,000 wholesale fee and go blow the money. Well, this is a great way to just make sure you're you keeping it good. Right? Keep it good. Have those assets. So that's all. I just want to share that with you tonight. That's how quick and easy it is to raise a hundred grand. And if you're not in the right social circles to raise that money, you need to get in them. Right. Do things that people with money do and hang out it join a country club.
(10:58): I like to golf. So that's easy, right? Join a country club like the boat, join a killer yacht club, you know, started meeting people that, you know, have the 40, 50 foot sea rays. If you're a boater, you like tennis, go join the best tennis club, get yourself around people who have money and it's magical what happens, right? It's absolutely magical the conversations by asking different questions. They lead down different rows, you know, different conversations. So don't be afraid to ask questions. You know, I start conversations all the time with people over the stupidest stuff. Hey, nice watch. Oh my galaxy, that and it's conversation, right. People do it to me all the time too. Believe me, but it's good. I made all constant people like that. You know? So that's it. Thank you very, very much for tuning in again and have a wonderful week.
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