0:00 Hey, welcome to the habit, those podcasts. I'm your host, Daniel Martinez. Today we have returning special guests, Mr. Malcolm Turner. If you have not checked out the episode, please go check it out. We talked about commercial lending with the right capital. If you want to go check out that episode, a few episodes before this one, please go check it out. But today is deal breakdown. We cover cool, interesting stories. What's interesting about Malcolm was a Malcolm X, he wrote a book where he has a bunch of these in written form. So we're gonna talk a little bit about his book, but he has a he has a couple of interesting stories for us today. And he's ready to tell. So what's your co interesting story you want to tell us today? Well, 0:31 mostly, we have a client who had a deal. They lost because they were out bid. And they stayed in contact with the realtor. They were the client was supposed to close with the other buyer. They call the agent and was like, Hey, did you guys end up closing? I know, you're gonna do that closing the day. And the agent was like, oh, man, I'm so glad you call me because the guy walked away yesterday. And the guy's like, what, like day before? He was like, yeah, the day before. He's like, I'm not doing it. And the clients are ticked off. They're upset, you know. And so, you know, they still want to sell because they were looking to move, they're relocating to Colorado to be with their grandkids in there, Michigan. And so he's like, their tech. And he said, Well, my offer is still good. You know, though, I know, that was, you know, 20% less than what they were asking. But we can close in three weeks. Malcolm and close to three weeks, right? Yeah. Yeah, we can close in three weeks. So you know, if they want to take it, well, we'll do it. And they did. And they took that offer. And as a follow up, yeah. Yeah. But because we were doing a bridge loan, we were able to close that fast. Oh, nice. Okay. Right. So we got the deal closed. It was a small deals, maybe like, I want to say half a million dollars, and he got a 400,000 Okay, you know, but 100 grand 100 grand? Yep. Right. So, and within three months later, we refi it out to a long term rate, fixed loan, you know, that had either a 2530 year handle on it, you know, so very affordable payments, that deal was cash flowing like crazy. And this is a property that had no it was it was fully occupied, had no issues, there was no deferred maintenance, you know, on it at all it for him. It made sense to pay the fees and the expense of doing the bridge loan because he was getting a 20% discount. He may not like a bad idea. But that's where you know, speed is your friend 100% Right speeding friend. And on the flip side of that time kills deals. Yep. But it was a it was a result of a US going fast with a bridge loan. And we could have did conventional, you know, but we wouldn't have got the discount. Yeah, the number one, and it would have just, you know, he couldn't offer the discount for Ty like people will will cause for some situations obviously doesn't apply no to most, but in a lot of situations, time is more valuable than money. And you know, for people who have enough 3:15 this show is sponsored by hive mind CRM, it is more than just a CRM. It is a real estate and business mastermind that comes with an all in one CRM, you can have unlimited websites and users, you can call text, RVM and email all in one user interface and you can set up custom automations for any type and multiple businesses. 65% of companies start using a CRM system within the first five years of business. Once implemented, the hive mind will save you on marketing give you more time and make more money. One of our users had his first $100,000 month using our system in June. We want to see you automate and accelerate your business text us at 2109728 t 42. For future meetings. And of course to get our $1 course on how to make more than six figures on one land deal. You can schedule your free demo today at hive mind Cr m.io 4:13 you know that 100,000 Difference ain't gonna make a hill of beans to their lifestyle. It's about getting them home to Colorado before Christmas. That's 4:22 a good one. So we didn't talk about this in the other podcast but what is the turnaround for a loan from origination? He said three weeks is fast. What's the original to do to do? Like three months is make me a bridge loan. What's the traditional timeframe for a long term loan for full am and underwriting and all that process? 4:41 Yeah, I mean, a typical bridge loan is going to be less than 30 days. Okay. It could be as fast as 10 and typically it's not gonna take longer than 30. You know, it just depends on how much due diligence you have to do. You know, because some properties like if you're doing Industrial, you have to get environmental. You know, you don't need that if you're doing multifamily, you know what I'm saying? It just, you know, there's some specifics of the deal. But most loans, most bridge loans are going to close in that two to four week timeframe. Right now traditional loan is going to take anywhere from 60 to 120 days, it just depends on the lender. And we've all been, you know, requested to death of new documents, you know, you turn into something, and I need another thing. And I need another thing. And another thing, you know, and you're like, Oh, my God, I could have gave you this document like three weeks ago, now you just asking for it now. You know, and you know, people get short and they get upset. But the in in my book, financing the bankable deal, I address, the due diligence process, right, because what a lot of people don't know, is when you get deep into due diligence. A new boogey man shows up called a lawyer. Oh, man. And when you're doing the initial due diligence, the initial screening, it's a loan officer, it's a processor, it's a paper pusher, right? Then you'll get to where, okay, there's an underwriter who's looking at that thing over and, you know, seeing it sending it to the loan committee for final approval. Right. At that point, or shortly thereafter, that's when the attorneys get involved. Okay, because when they draft the actual loan documents, the attorneys are doing that. Okay, and then commercial, it's all individual. It's not a cookie cutter. Yeah, every contracts can be different. Every contracts a little different. So when the attorneys get involved, now, you have situations Unfortunately, I've lived through it where some item is missed, right? I missed it process or missed it underwriter missed it. Right. You know, got too long Committee, and the attorney that looked it over right before they put it on the committee. The committee table says oh, wait, this is Daniel Ortega. You know, our E LLC, and it's supposed to be Daniel take care, LLC, or it's our is Daniel Ortega, our E, comma, LLC. This other one doesn't have a comma, you know, so Oh, crap. You know, now, everything has to match. Literally every eye every every crossing of the T, you know, every comma has to match everywhere. And sometimes an attorney will say, well, this doesn't appear to be right because of the law. And first of all, why did they bring this guy in if there was a legal as long as there is a legal issue? Yeah. Right. And they'll say, Well, this LLC has blah, blah, blah, and it should be an S chapter blah, yadda. And why are they interested before? The lender is not going to pay? A, you know, $300 an hour attorney? To do a $10 an hour processing job? Yep. So they don't their eyes don't get to it until you get to the final stage. The end of the process? Yep. Right. And then they can follow it up. Because, you know, attorneys always work to protect their client. Yep. Not to make stuff easy. You know, and some of them, you know, and I'm not knocking the profession, I'm just, in my mind, by experience. Nature, the beast, they chose to be some of them are like, I gotta find something. Otherwise, why are you going to pay me 9:13 300 bucks an hour. 9:17 So, you know, I look at something I'd be like, really? Do you really make an a big issue of this? Yeah, but he's got it because you gotta you know, like, does he do that on every deal? No, but you know, every so many deals, he's gonna justify his fee. And say, look, client look, how are protecting you? You know, the client being the lender? Not the borrower. Certainly not the loan officer. Not the client is the lender and it's like, Come on, man. 9:49 Thank you, sir. Thank you, sir. For your participation in this transaction. Here's your check. 9:54 Yeah, yeah, that's why you never you only bring it to Are these in when you are supposed to when you have to write, you don't involve them if they're not required, because they're going to gum up the works just because it's what they do. 10:17 I hate to be so Silikal ABA, I mean, they protect their client when they're supposed to. But too many are like, I gotta make a mountain out of a molehill, just so I can show my client I'm working for, you know, because truthfully, it's human nature, you send a document to your client, and it's perfect. And the guy sends it back and says, it's perfect, what a bill for $1,000? How many times he's gonna look at perfect documents for you. So you know, I need to send it to him no more. It's just human. So he's got to find some problems sooner or later. Otherwise, you know, I really don't need my attorney to do these transactions. You really don't, you know, because because here's the other side. I've had people where they're like, we literally get down to the end, they look at the loan docs, I was gonna send this to my attorney for review. I'm like, great, you can do that. And I'm not gonna encourage you discourage you not to however, he who has the gold makes the rules. So don't expect this guy is going to send these documents back with, you know, five or 15 markups. And we're just going to change that stuff. Are we gonna throw that out? We need that clause, we're gonna take that out of there minimum, because the lenders attorney is gonna be Hell, no. 11:41 Let's do that. Or you don't get it? Or you don't 11:43 get it, you know, have a nice day, Mrs. Client, you know, because the lender is not going to let that 5 million get wired, you know, to a borrower without proper protections. 11:57 Yep. And they've heard they've already been down that road. So they know what protections they need the experience. And then 12:04 I tell people all the time, we all have read stupid, ridiculous, nonsensical disclaimers. Why? Because some nonsensical idiot did something dumb. Yep. And then said, well, Daniel, why don't you tell me not to stick the fork in the toaster, you should have had a warning label on the silverware drawer. You know, I would have known that to reach in and grab a fork and stick it in the live toaster. Therefore you have to pay me $50,000. So it's like, okay, we want to put a disclaimer now on the silverware. Right? Operate toaster at your own risk. Do not put utensils in the toaster under any circumstances. Period. You think one would have to say that? 13:03 It'd be like, if it's plugged in or not like you have to if it's plugged in or not, please not stick? 13:10 Because I suppose in regard to whether it's plugged in or not, don't do it. Because we're because you're gonna say, Well, I thought it was plugged in. And you should have told me not you know what I'm saying? Right? So, 13:22 let's talk a little how many how many stories are in your book, the actual amount? They're actually in your book? 13:28 Um, let's see, there are? Well, here's the easiest thing I can tell you. And there are probably between those 12 chapters, there's probably about oh, and then here's the book for those who want to see it. financing the bankable deal. This probably 15 case studies. You know, I'll share a fun one. I had a client who had bought a drive in our drive up this you can call it motel. Okay, right. And you know, how, like, whenever, you know, somebody is on the lam, right? They put them on these little side hotels, you know, the kind of car goes right up to the window. lights are flashing. They look at Oh, the cops are coming off the back, right you know that healthy, but there's no right back exit? Because the thing is that big one of those places. Yep. Well, you know, the way those the design right, there's the bedroom that you just walk into, right. And then in the back is where the bathroom is. Yep. Right. And maybe a small area that like across from the bathroom, you can hang up some clothes or purchase suitcases or something like that. Right? But it's just those two areas. Right? Well, I had a client, she bought one of those. And what she did was the wall in between, like the across from where the bathroom is, right? She that back part of that wall she knocked out. So she took two units and made them one. Okay. And then you were the bedroom was she sealed up that door? She took that door out. So you come in to one side, took the bed out, put a couch, cocktail table needing to watch TV there. Right? Right. And then she took the bathroom out and put a little kitchenette. When I say kitchenette, I mean like a really fast refrigerator. And a microwave. Yep. Okay. Then in the other room, she left that alone. So that was where your like bedroom and private bathroom are. Yeah, right. And she sold it or not sold it. She rented it to seniors. Okay, because for most seniors, you know, having a seating area with a little kitchenette. And then they go, you know, on to the next room and there's their bedroom with a bed. That's enough for them. Yeah, total, it was like four 440 square feet. Okay, that that much space? Well, rather than rent that, as you know, just as, as a as for a long term tenant, she decided I'm going to provide them extra services. So she provided maid service that would come in vacuum, do the laundry. Right and do house homeowners. Yeah, you know, and then she had a guy come in, and he will cook the meals for the whole complex. Okay. Okay. So she had like, 30 Something tenets, okay. And this guy was he had she had a commercial kitchen on site, you know, kind of like what the big main building is? Yep. Right. There was a commercial kitchen in there. And he come in, and he will cook the three square meals for the day. And so they got three meals a day, housekeeping and laundry for like $2,300 a month. Now, if she threw in cable, can she provide the whole complex with basic cable internet? And, you know, scenes on the Y six channels anyway. So, you know, there'll be like a ton of guns. So, you know, they just go. So the only bill those seniors had was their cell phone. Yeah. That was it. Wow. You know, oh, my God, was that thing profitable? Because, and she included the heat because they had like baseboard heat in a place and she had an air conditioner. Right. But because the units are 440 square feet. Yep. Right. It was like that much to provide that. But what they liked was it was one payment. Yep. And so she made all the meals. She you know, the guy charged at less than $5 a meal. You know, so and it was one housekeeper. And the great thing about it. The housekeeper was like a secret weapon. Because the housekeeper is in everyone's unit every day. Every you know, so maybe like, yeah, maybe like two days a week? Because he was like, right, because some people will be Wednesday, Thursday, some folks are are rather Tuesday, Thursday as soon as Monday Wednesday, but they will rotate. Right? And if someone was having a bad moment, the housekeeper would let her go first. Yep. You know, right. Yeah. All the gossip housekeeper knows everything about everybody. Right? And she kept the property clean. So it wasn't like you're gonna have you know, the seniors kind of slowing down. They're losing it. And I'm saying I'm starting to get you know, like you go to a nursing home where there's certain smells, even seeing housing complex, certain units and they're letting it go. None of that. They'd have to worry about cooking. You don't have to worry about cleaning. So our units were in immaculate condition. 19:28 So she probably threw her noi through the roof on that one, depending on what she bought it for. 19:33 Oh, yeah. She she bought that thing for was less than half a million dollars. And she's slowly upgraded the units. Yep. You know, because what she, her original plan was she had something, some long term tenants and she had some Airbnb units. Okay, she like five units over Airbnb, and they were making a ton of money, right? And one of the seniors was like, Well, man, you know, you cleaning out the Airbnb unit every time you have to change it over, you know, can I just pay someone a little extra that come to mind? Absolutely. And it's like, wow, okay, you know, and that led to everybody doing getting cleaning, you know, housekeeping, everyone. And then she's like, man, 25 bucks a month, I ain't got time for this Airbnb thing. You know. And so the appointments, though, you know, she, she did, like, she really upgraded the place. So even though it's an old place built in, like the 50s, or 40s, or whatever, she really upgraded the quality of the furnishings and the fixtures, and you know, the flooring, and, you know, all that stuff, she made it nice. And that thing was worth on based on the fly, I want to say at the time 1.6 1.7 mil, you know, and she was she took another building that that wasn't being used, I can't remember what it was originally used. I think it was like a, like a chapel or something. It was something at, but she's like, Oh, no, I'm renovating that. And I'm putting six more units in there, because I can get six more seniors in that space. You know, and so she had a construction guy, and she was showing me how to, you know, turned down the walls. And here's what this was going to be he's going to put a door in for this unit and that out of, you know, anyway, do you think about that, you know, 2500 bucks times six? 21:44 You know, 15,000 21:47 for just a little bit of space, I mean, oh my god, you know, so yeah, yeah. And then she did wrought iron fencing all around the whole property, did a automated gate to come into the place, she didn't need all that parking, you know, that, you know, normally, you know, right dries up to the day, she doesn't need all that, because most of these things aren't driving every time. Right? So she took out half of that parking and made it like a park. So folks would just come out their unit sit in their bench chair, you know, and, you know, there's like a little fountain and you know, the grandkids could come over and play blah, blah, blah. And all her tenants were either state of Michigan employees that were retirees, or city of Detroit employees, that retirees and they all had nice pensions. And for them, the most important thing was I'm on a fixed income. So I need to fix the expense. 22:46 Amazing. I think I think once you find that that perfect product for the right people, you're in the money because there's 1000s of cities, city employees, and there's always cycling up all those people. So hey, there's new, you know, opening up, boom 33 failed on the waiting list. 23:02 Yes. And she had, she had at that moment, like a nine, nine month waiting list. So, you know, she still had I want to say, three or four tenets. That were the original, like long term renters that were only paying like 900 bucks a month. Right? And she's like, Listen, you know, I love you, but you got to go. Right, either step up to 2500 a month, because I'm not renewing. I'm not renewing that lease. Yeah, you know, so she's like, as to as to profitable. I'm going all in. You know, everyone's on this thing. No, Airbnb. No long term is, you know, they're gonna be long term tenants, but they're not just gonna be pure renters. Yep. They're gonna be paying for all of it. You know? So yeah, yeah, what I just shows you when people think out of the box, right? Yep. What can what can be done? 100% 24:01 Can you plug your book and where we can find you online? 24:05 Sure, you can find us online. My book financing the bank will do how to buy commercial real estate with the commercial loan investor success strategy. You can find it on Amazon. Also our website www dot financing the bankable deal.com My firm Castle commercial capital. You can find us online. You can also find us on 24:29 YouTube. You go links will be below the video. So please like share, subscribe. We'll check it out. Let's get the book and she got more interesting stories like those. I think those that's pretty interesting. I think just doing finding opportunities like that and being laser targeted. You can make some money. Just listen to a case study. 24:45 Yes, yes, because we don't share enough and the more we can learn from other people's successes, the more it expands our mind as to what's possible. 24:55 100% Thanks, Michael, for coming on. I really appreciate your time and thanks for coming on. Again. Please get to get the alerts So we'll see you next time go lecture subscribe you know what to do. We'll see you next time have a good day guys watch this video we hope you found value please like subscribe and hit the bell to watch more videos just like this