00:00:00:00 - 00:00:20:07
Unknown
I gotta ask you something real quick. How much equity do you have in your business right now? That is one of the most important questions that you can answer for a house flipper, because that lets you know whether or not your business is actually healthy. Meaning, if I had to liquidate everything today, how much cash would I have back?
00:00:20:07 - 00:00:43:10
Unknown
So a lot of investors, they might feel broke, but be equity rich. It's pretty common for house flippers to be cash poor and equity rich, and they could change that pretty easily. But it starts with understanding where your money is and the numbers. You got to know that number can't be a rough guess, and it shouldn't be a number that you're digging through a bunch of spreadsheets to find.
00:00:43:12 - 00:01:08:08
Unknown
You should know it right now off the top of your head, because you have access to that information. And if you couldn't answer that, you don't have a deal problem. You probably don't even have a marketing problem. You ideally and likely have lenders lending on this stuff. You probably have a system and data problem, and our company has raised millions of dollars from private capital and on as I was tracking it all on Google Sheets.
00:01:08:09 - 00:01:36:07
Unknown
Now, look, I use very, very little hard money because I've been able to implement the skills that Bill Allen has taught me on raising capital. But I still got to take care of my investors. So I was in I got a whiteboard, I got Google Sheets or text, and it was just kind of a mess. Right? Well, I had to change that because I didn't feel comfortable with that, because I've always said you should be taking care of other people's money like you take care of your own.
00:01:36:09 - 00:01:49:18
Unknown
When you have ten, 11, 12, 25 lenders and millions of dollars at risk, you need to be dialed in.
00:01:49:19 - 00:02:09:05
Unknown
So here's something I've said for years, but I don't think I've said it clearly enough. Most investors who struggle with private money don't actually struggle with raising it. They struggle with managing it, communicating with their investors, knowing what and when and how to communicate with their investors. So think about it a lot. You raise money from a lender.
00:02:09:05 - 00:02:33:07
Unknown
Great. Awesome. You put it on a deal also. Great. Then six months later you moved on. You're scrambling. Remember, once that note mature, who's the lender on that? And I write them at 1090. Like all these things you're digging through your emails, your spreadsheets, your spreadsheets aren't calculating correctly, and you're hoping you don't forget the that you know, to update the spreadsheet.
00:02:33:07 - 00:03:04:12
Unknown
Or maybe someone on your team updated or didn't update it. And that's a management problem. That's not a money raising problem. It's a money management and data problem, a system problem. And here's the thing that managing problem isn't just an annoyance. It destroys your lender relationships. It's why lenders quietly stop picking up your calls. They may have invested in a couple deals, but now they're not investing in any of your future deals, and you're literally lost hundreds of thousands of dollars of capital for your deals in your business.
00:03:04:12 - 00:03:22:08
Unknown
I've been on both sides of this, by the way. I've lent money. I borrowed tons of money. I mean, I'll be honest, I've I could tell you that I need to be a better communicator with my lenders, even my lenders. So, like, look, I don't need a ton of communication, I need some I want to. The more you give me, the better off feel about your operation.
00:03:22:11 - 00:03:41:14
Unknown
But honestly, we should be over communicating. If I'm not getting communication from people and it's radio silence, I probably won't do loans with them, you know? And your lenders are probably the same way. So like I said, I'm on both sides. I borrow and I land. So let me walk you through exactly how this plays out. Right.
00:03:41:16 - 00:04:00:17
Unknown
There's five ways a missing system will kill your business. All right. It doesn't happen all at once, by the way. It happens slowly. And I'll take you through each one of these. So number one is you're going to lose your lender to somebody else who communicates better than you. It's not because your deals are worse or worse. Operator.
00:04:00:17 - 00:04:21:01
Unknown
It's because or your rates are off or they're paying more money. It's because the other person said something as simple as quarterly statements and you didn't. And radio silence is a relationship killer, period. By the way, I'm talking to myself too here, because these are things that I personally had to go and proven in my business. Number two, maturity dates are not optional.
00:04:21:03 - 00:04:51:06
Unknown
It's time to pay the lender back. You better be communicating or paying them back. You miss one, literally just one. And you got a lender who now questions everything about you. The relationship may never fully recover. The fix is simple. Don't know the date? Have reminders? Reach out first every time. Number three, sophisticated lenders are going to test you when a bigger, more experienced lender ask you something like, can you walk me through how you manage your operation?
00:04:51:06 - 00:05:15:14
Unknown
Your answer to that question is going to determine whether they fund your deal, or they rake you over the coals with interest rates. The system doesn't just retain lenders, it can negotiate the rate for you. The more professional squared away you are with those lenders, they're going to believe you're a safer borrower because you should be, and you're going to be able to negotiate better rates.
00:05:15:17 - 00:05:39:23
Unknown
Number four, you raise the money and then you run out of it. Another problem we have this can be problematic when you're going back to the well. And you didn't do it right the first time. You put every dollar back to work. The deal takes longer. Now you're 95% done on a flip that you can't sell, and you're calling people for emergency bridge money at ridiculous rates.
00:05:40:04 - 00:06:03:04
Unknown
I've seen it. I've been near it. It is totally avoidable. By the way, you need to understand what your true cost of the deal is. You need a system for that. Number five, you are the system. You're the spreadsheet. That's a problem. You're the reminder. You're the CRM. You can't take a vacation, especially when you're holding a couple million bucks.
00:06:03:04 - 00:06:22:08
Unknown
Other people's money. You can't delegate something like that. If you are, you're probably in trouble. Can't scale it because you're a mess. Look, that's not that. That's not what a good business owner does. It's not what a good borrower does. And honestly, that reputation is going to proceed. You. And there's nothing more important than that. So you've got to be dialed in on that.
00:06:22:13 - 00:06:40:01
Unknown
Okay. So I've been trying to solve this problem for like years. Even my partner, Bill Allen, try to solve this problem with tech for three different times over the last ten years. And every time we try to build something on like an existing platform, it would break or the platform didn't quite fit what we're doing. And there's nothing.
00:06:40:03 - 00:06:58:04
Unknown
There's like no system, no software, no thing that's built for this specific reason. And honestly, like knowing how much equity, what your monthly numbers and like the money part is the probably the most critical important part. It never really did exactly what we want to do when we try to build it. And a lot of these things were built for the lender.
00:06:58:04 - 00:07:21:16
Unknown
Not so much the borrower or the operator. So that's the piece that nobody's really talking about. Every tool that we have on the marketplace, every loan origination, system, servicing team spell for the lender side. Nobody build anything for me. So for the investors who need to know how much, I need to know which lender is on, what deal, where the money's at and when the note matures.
00:07:21:18 - 00:07:41:16
Unknown
We're all the documents are accurate. God knows I get asked like, hey, I need to see that promissory note. I'm like, oh, where do we save that thing? What your equity position is right now in real time? Well, I was frustrated with these things. Another example is occasionally you get unsecured debt, somebody gives you 50 grand and you start putting it into different deals and properties.
00:07:41:16 - 00:08:04:23
Unknown
And how do you track it? You can't have 72 bank accounts. It's ridiculous. So I built this system. We built a system, a software not on go high level, not on something else, like a true software. For this specific reason. So you know where every single dollar is. And we've obviously closed thousands of deals. Hunter. Literally over $100 million of capital raised.
00:08:05:01 - 00:08:30:13
Unknown
And that is our desire to be operationally efficient, to be effective, to be able to continue to grow because we're doing things well is what was enough pain for us to go out and spend our time resources on building a system. And we built it for our company. We called it Pmml was pride, money lender operating system. It does private hard money and then track your own loans that you do out to.
00:08:30:15 - 00:08:46:02
Unknown
And, we needed it and it didn't exist. So we built it. And then we shared it with our friends and side of our seven figure flipping mastermind to see if, you know, hey, does anybody else need this? And it was insane. Like people were like, oh my gosh, I need that. So, we shared it with them.
00:08:46:02 - 00:09:07:19
Unknown
They got lifetime access to the software. Now let me walk you through kind of what's like inside this, like what it looks like. And why why it matters. I'm going to share my screen. So if you are on, you know, Spotify, Apple podcast, you're not on YouTube, you're not going to see this. But I do my best to kind of talk you through it.
00:09:07:23 - 00:09:25:00
Unknown
Okay. So check this out. Guys. This is my company. You can see blackjack, real estate. You can make this your company. If you're in here, you can see our total. This is just like what we have currently in our company today. This is. I know how much principal I know. I know how much secured debt, how much unsecured debt.
00:09:25:00 - 00:09:51:06
Unknown
I know what my private money is compared to my hard money. If I had DSR in here, which I'm putting in here, if I got any bank sub two money. Portfolio equity. Equity percentage. How many properties are currently in my pipeline? Equity per property total. Total monthly payments. Accrued interest that I owe. So I owe my lenders right now, almost 600 grand.
00:09:51:07 - 00:10:07:06
Unknown
It's kind of crazy funding capital and a number of lenders. And I'll show you guys. I actually have my real lenders in here so you can see it. I've shortened their last name, so you don't go, you know, take on. So you see, my lenders, you know, if I click on one lender, I can see what a hit that lender has with me.
00:10:07:06 - 00:10:27:14
Unknown
This guy's got 1.3 million with me, where I'm almost a million and a half lifetime deployed. Weighted average interest rate. Total returns. He's made from me. How many loans he has in first and second position. So you can kind of see all that. You can see the deals and my pipeline, in these different stages. Or you can see them in a list format.
00:10:27:16 - 00:10:44:13
Unknown
You can see the different loans, the specific loans we have out and the terms on those loans. You have all these payoffs. What's happening in the next 36 to 90 days when you need to pay a loan off? If you're doing private lending, you can add your own private loans out in here so you can track the loans.
00:10:44:13 - 00:11:08:00
Unknown
You're doing all the documentation. If you have anything that's missing, the system will tell you you have task. And then I like the ability to, compare loans if I'm going out to get loan so I can compare lender A to lender B, and it will give me an analysis on which one's more advantageous for me. I also like the ability to evaluate my flip if I turn it into a rental or basically a bur.
00:11:08:02 - 00:11:37:10
Unknown
This is our DSR refinance analyzer and it gives you really powerful information. And same with the flip analyzer. Similarly, if I go to my save deals, I'll just quickly walk you guys through this. I know if you're listening, just know that I'm looking at this software. So instead of like just talking about it, I'm also showing you, for those who are watching, as I evaluate a deal, I save it in here so you can see this deal that I evaluated in, Tennessee.
00:11:37:12 - 00:12:03:18
Unknown
And I had the ability to see the key metrics, the sales price, the potential net profit per project, ROI, annualized ROI. I can see the profit waterfall with the sales price and how we get to net profit. There's this other component that we call the capital raising framework, where even if you get a 100% purchase price, 100% rehab financing, like we do with our lenders, and seven of that, there's still cost to bring to close the deal.
00:12:03:20 - 00:12:24:18
Unknown
And sometimes that's way more. Plus, there's cost of interest payments during the whole. So what this does is it tells you what it cost you. Additionally, even with 100% financing, in this case it's 42,000 extra and it gives you the option to make it a second position loan. You just click a button and now you have a private loan.
00:12:24:18 - 00:12:47:14
Unknown
And second, that's covering all the cost of the entire deal the whole time. And it also tells you what it cost you to do that from an interest perspective, from that second loan and then a couple other really cool things. It also gives you a full sensitivity analysis is to air vs lower if the rehab goes over budget or a whole time extends, you get this full sensitivity analysis.
00:12:47:16 - 00:13:13:04
Unknown
You can turn this right into a PDF by clicking a button. You can save the deal, or you can push it. You know, once you say, yes, I'm buying this deal, you can push it to your deal pipeline with just a click of a button. So it's super, super user friendly in that way. Another thing you might want to do is let's say you have a loan out, with a lender, and you want to generate an interest statement so that you can communicate this to your investor every month on where their interest is.
00:13:13:05 - 00:13:34:10
Unknown
You can literally just click a button. You can add your own personal update, give them a period, the time period you're doing it for, and click Generate Interest Statement. It'll produce a PDF, that you can download. Once you do that, then you can just send this to your investor and they'll see like interest received, interest accrued. So if you don't have payments nothing's received.
00:13:34:10 - 00:13:59:00
Unknown
But you may have accrued certain amount of interest. Really really powerful. We had this built for our business. And I think right now the feedback is like, dude, this clarity that it gives me in my business is absolutely insane. So I would encourage you guys to go check it out. I think the software is insane. I think it's massively, massively valuable.
00:13:59:00 - 00:14:20:16
Unknown
So if you want to know more, you can learn more at PML, os.com or PML, PML loss.com, backslash sign up either way. It's it's in beta, you know, so you're getting like early access and it's cheap. It's super cheap. Now look, I got cost. I'm not you know, it's not going to make me super rich. I have a cost.
00:14:20:16 - 00:14:40:10
Unknown
So we just basically put it out with enough cost, enough on the price that it allows us to to maintain the system and add some improvements as you guys get feedback. And the cool part is, if you're in some figure flipping runway or altitude, you're getting this. This is all included for you guys. So if you're listening to this, you're like, oh, wait, I want to access it.
00:14:40:10 - 00:14:55:15
Unknown
You don't have to go pay for if you're in the mastermind, it's all included. So drop a comment below. Let me know if you've been thinking about a system like this or this would be helpful for you. Or if you're just in spreadsheets and you're text and people and you're kind of a mess. Look, I've been there.
00:14:55:16 - 00:15:06:18
Unknown
Don't feel bad. Me hopefully this was helpful. You can go check out the operating system for tracking all your capital and your money and, let me know what you guys think. I think it'll be super cool. And I'll see you on the next podcast.
