July 9, 2025 • 35 mins
Ever wonder why some investors consistently land great deals while others are left wondering what happened? The secret often lies in their financing strategy, not just their property selection skills.
Today we dive deep into the world of private lending with Rocky Feinberg from Windstone Private Lending, exploring how strategic financing can transform your real estate investing approach. Rocky shares eye-opening insights about the true cost of financing that go far beyond the headline interest rate. While many investors fixate on securing the lowest rate, they often miss how processing fees, draw fees, appraisal fees, and other charges can dramatically increase their actual costs - what Rocky calls "death by a thousand cuts."
The conversation reveals how speed can be your greatest competitive advantage in today's market. When sellers face multiple offers, the ability to close in days rather than weeks can often secure you a better purchase price that more than offsets any additional interest costs. This speed-for-discount strategy has helped countless investors acquire properties that would otherwise have gone to competitors.
We also explore common rookie mistakes that derail many new investors, from poor comp selection to problematic floor plans. Rocky offers practical advice for presenting deals professionally to lenders, suggesting that investors should approach financing as a business pitch rather than a casual inquiry. The most successful investors come prepared with clear strategies, thorough market analysis, and multiple exit plans.
Whether you're a seasoned investor looking to optimize your financing approach or just getting started in real estate, this episode provides actionable insights that could transform your investment returns. Ready to make your financing work for you instead of against you? Listen now and discover how the right lending partner can become your secret weapon in this competitive market.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:07):
Welcome to Northwest Arkansas Investing Podcast, your
go-to source for real estateinvesting in Northwest Arkansas.
Speaker 2 (00:13):
With your seasoned investor just starting out.
We bring you expert insights,market trends and practical
strategies to help you buildwealth through real estate.
Speaker 3 (00:20):
From buying and selling to property management
and long-term investmentplanning.
We cover it all so you can makesmart, informed decision in
this fast-growing market.
Let's dive in.
Speaker 4 (00:30):
So I think that's super important for us is we
don't just look at a number andjudge immediately.
We try to figure out whathappened, and a lot of the times
, too, when we pull thesereports.
We called a guy last week,right?
Hey, just to let you know, yourscore is this.
You got this going on.
You have a target card with $12on it and I've seen that your
credit score has dropped 100points in the past 45 days
because of that.
He's like I didn't have aconversation with my wife.
(00:53):
Yeah, yeah.
So people like that you know.
Speaker 1 (00:56):
They're just unaware.
Speaker 4 (00:57):
Yeah, they're just unaware too.
So, like those are the onlyfinancial documents we'll rely
on.
Yeah, gotcha, and you know,preferably people who come to us
to do deals with us.
We like them to have some sortof experience.
That experience can be as arealtor, a contractor, have done
(01:17):
deals themselves, have gone toa real estate investing class or
something like something where,when they go to these
investments, they understand theprocess.
Yeah, and I'd always recommendfor somebody doing their first
deal if you don't have acontractor on board, don't try
to sub it all yourself.
Don't save $5,000 by spending$20,000.
Speaker 2 (01:31):
Okay.
Speaker 4 (01:32):
Yeah, you know it's.
You know you may know a bunchof guys who go in there and get
the job done for you, but spendthe extra money make make sure
some of those are thereoverseeing the project and not
it'll pay off.
Speaker 1 (01:47):
Speak to me on rocky.
I come to you guys on mondayand I got this seller who's got
us.
I mean we're talking, need tobe closed.
Quick, like what's our timeframe on getting closed?
If I'm coming to you like yeah,we can.
Speaker 4 (02:01):
We've got a deal at 2 pm before I'm closed by 3
o'clock.
Speaker 3 (02:05):
Crazy.
Speaker 1 (02:06):
That's crazy.
Speaker 4 (02:07):
We just need those financials.
Yeah, we could do a quick anddirty underwrite.
Very, very Rewind that realquick, yeah, yeah.
I mean if title work's doneobviously we need a title policy
.
But we do rush deals like thatall the time.
Yeah, and a lot of times it'syou know, I'm sure you guys have
seen it.
You work with a large hardmoney lending company and you
get to the closing table andnext thing you know, instead of
(02:28):
bringing 15% down, you have tobring 23% down or the terms
change.
You're like how did this happen?
Or last minute, there we can'tdo the deal anymore.
We've heard large big boxcompanies who run out of money
the day of closing or they can'tfund draws and other projects.
So we get called in on the lastminute to do deals.
It's like we're happy to Alittle fire drill in the office
(02:51):
that day, but we'll get it done.
I mean, I will say you bring upa good point, a phenomenal part
about utilizing financing likethis.
Speaker 3 (02:58):
And.
Speaker 4 (02:59):
I don't know if I'm skipping ahead here, but
essentially, I think one thingthat's really important that
investors truly understand iswhat they're paying for.
For instance, I'll go to realestate investors association
meetings all the time and youhear people talking at tables
(03:20):
there hey, I got this new flipunder contract.
I'm so excited.
It's like, oh, who did you usefor financing?
Like, oh, I use this company.
It's like cool, what kind ofrate did you get?
He's like, oh man, I got 11%.
It's like, oh yeah man that'sgreat.
And then, they come to us andlike what are your terms?
I tell them and they're like ohman, I'm getting 11 with them
over here.
It's way better, are you?
(03:41):
What's your processing fee?
What's your draw fee?
What's your appraisal fee?
That doesn't matter.
I'm like no, that's exactlywhat matters.
I can tell you that I'm givingyou 5% in two points.
That does not mean that's whatyou're paying.
So in common times, workingwith closer private money
companies, it's going to be moreexpensive not just the banks,
(04:02):
but also hard money companiesbut that is where investors need
to essentially get savvy andlet the financing work for them.
So in your situation right,where you said I got a deal that
wants to close Monday, howquickly can you close?
You got to look at the inverseway too.
So if you said, hey, I have adeal that needs to close next
week, it just went on the marketand it's for sale for 200,000.
(04:22):
We have clients that come to uslike, hey, I'm going to offer
200,000 for a 30 day close, andthis isn't that.
But I may work with this otherbig company I don't want to name
drop any companies, but it'slike well, what if you went to
that same seller and said I'llpay you 190K cash next week and
be done, and it may be $4,000more expensive to work with me,
but I just saved you 10 000 onthe purchase by utilizing the
(04:43):
speed at which we can close?
Yeah, so it's small things likethat that really allow you to
maximize returns, right, um, soI'd say, yes, we can close
quickly and we like to use thatas like one of our main things
of where we could help out ourclients yeah yeah, you know, it
also gives you the edge, likeI'm not sure how real estate was
here in 2022.
I'm sure it was booming.
You knowville, uh, where I live, if you don't have a cash offer
(05:05):
with no contingencies, youdon't even get a tour of the
house.
So we're in a little bit of adifferent market right now.
But I mean, you can kind ofutilize that same mindset for
coming in on these projects andsaying I want to get this deal
done, I like the deal, I'vewalked in my contractor, I'm
going to come in 10K less thaneveryone else, but I'm going to
put cash in your hand next week,no contingencies, let's drop it
(05:26):
.
Speaker 3 (05:26):
Yeah, that's awesome.
So I mean, just going back tofolks that don't know exactly
what this looks like, what cantheir and you don't have to.
We won't hold you to anythinghere, but what can they expect
as far?
I mean, if someone's getting ahundred percent financed on the
deal and maybe the rehab for aflip, what can they expect when
it comes to rates, fees Based onthe terms, yeah, yeah.
Speaker 4 (05:48):
So we're just going to be upfront about all terms.
We're 13% on rate.
That's annualized you knowsimple interest.
You're only paying interest onmoney that's out to you, so
you're not paying interest onany undrawn funds in two to
three points, depending onlong-term.
So, like I said, we're going tobe inherently more expensive
(06:10):
than anyone else you talk to.
However, our processing feeincludes our BPO appraisal fee
we get for our investors afterclose, all legal work, all that
stuff, it's $575 in total.
We'll never be charged anotherfee for us, unless your loan
matures, you have to extend orany items like that.
We're not going to charge you$350 for a draw.
We're not going to charge youfor a payoff fee.
We're not going to charge you$1,000 for appraisal or $1,500
(06:30):
for processing or all this.
So I actually started this gridbecause sales guys are having
so much trouble trying toexplain how this works.
We have grid A, grid B.
They're next to each other.
You plug in our financingcompared to a competitor's
financing and I mean there'softentimes that our financing is
cheaper than a program that's10 at one point yeah yeah,
because once you layer in allthose fees, like yeah, I take
(06:52):
seven draws over this project,here's my processing b, here's
my appraisal fee.
I'm like that's kind of what Iwas saying earlier.
Yeah, it's not about the rate,it's not about the points, it's
about how much you're spendingin cost on your loan program.
Speaker 2 (07:03):
That's a key piece of advice for any type of real
estate investing, any lendingmake sure you're looking at the
fees.
There's a lot of times hiddenfees.
Yeah, sure, you get the ratethrown at you, but look at the
different fees associated withit, especially if you're not all
about the rate.
Speaker 4 (07:17):
Yeah, it's death by a thousand cuts.
It truly is.
I mean because they seem sosmall the time and they're just
like, oh, it's just a costumebusiness, but like over and over
and over again you're kind ofscratching your head.
Speaker 1 (07:29):
Look back over a five-year period.
Where did my profit go?
Speaker 4 (07:32):
Yeah, so I can be honest.
We're lenders, we make money,right, we provide a service.
But I'd rather just kind of hityou on the back of the head one
time instead of just likekicking you in the ankles every
step you go.
Just to put it plainly, youknow, it's just kind of how it
is when it is and we're going tobe expensive.
But you know what did they say?
(07:56):
You get like good, quick orcheap.
You pick two to three.
We're very good, we're veryquick, we're not cheap.
And to that point, just talkingabout real estate in general,
there's so many times whereclients will come to me with a
deal.
Guys I've done 10s, 20 dealswith.
I'm like, hey, we may not bethe best financing partner for
you on this deal Not because I'dlove to do the deal, by the way
, but I know a guy over here whomight be better suited for you
on this deal.
(08:16):
I prefer my clients get thebest financing option available
rather than just mine, because alot of the time mine, I think,
is best, but there's other timesI'm like we can do it, man, but
it's going to be a lot moreexpensive with us.
You're not really utilizing ourfinancing.
You know all the benefits youhave with us are kind of out the
door with this said project.
So it never hurts my feelingsto be like this is a better,
(08:36):
this is a better option for you,and I think majority of the
time you guys probably see thisoften is every deal kind of
calls for its own needsfinancing.
Yeah, um, it's.
You know every deal doesn't fitone box of one kind of
financing it needs.
Yeah, so I'd be.
You know, I'd really look intothat.
Every deal, underwrite everydeal.
Uh, if you don't have a dealcalculator, get one.
(08:59):
They're free.
Online.
Email me, I'll send you one.
I mean, it's like just plug itinto these different options,
look at the stuff, because youknow you kind of just have to
follow the numbers with thesedeals.
A lot of times people get tooexcited about things that don't
really matter.
At the end of the day, you'redoing this not for fun, you're
doing it to make money.
Speaker 1 (09:25):
So make sure you're maximizing your ability to make
money.
Yeah, I really see uh rocky andthem as a tool in our in our
tool belt.
Yeah, you know, I got, I have ahard money guy, I have a uh,
you know, a commercial banker.
I have a lot of secondarymarket bankers and you know you
guys speak up on this if youwant to as well.
But like for here, locally,like where, where I see you guys
is like I have like three orfour people that come to my head
right now and like the peoplethat are tired of the grind of
secondary market lending andnormal construction loans that
(09:47):
were like, yeah, like I build ahome and I build it quick and
I'd love to just like, hey,here's my pof personal financial
or pfo, personal pfs sorry,personal Financial or.
Speaker 2 (09:58):
PFO, personal Financial, pfs.
Sorry, sorry, yeah, too manyacronyms.
Speaker 1 (10:01):
But there's a lot of, and I guess you did say new
construction is something thatyou guys play.
Yeah, we'll look at it.
Yeah, yeah, stuff like that.
And I mean Jared Martin and youmight have a really good
conversation.
Jared's always finding stuffwhere he gets, yeah.
Speaker 3 (10:17):
I think it's super important.
I I think back to, I mean adeal that we were doing a
podcast.
I was trying to get a uh, I waskind of in the middle of this
just a fourplex deal in rogers,so close on the other side of
town here, um, and I was.
I ended up being there's 36offers, believe it or not, on
this fourplex.
It was priced super well, um weoffered yeah, yeah you probably
(10:38):
did.
Brian, you probably did.
Speaker 2 (10:41):
Eight's probably small.
Well, Kyle did too in this room.
Speaker 3 (10:43):
You know, I was $20,000 over the offer that they
ended up taking.
I just wasn't willing to docash because I didn't have the
tools in my tool belt, just likeyou're talking about.
And so, like you know, it tookmore and more conversations with
bankers that I was close withat the time.
Wish you were in my tool beltat that time because we would
have utilized it.
But eventually, until it didn'thappen, until after, we missed
(11:07):
on it that I, that this bankerthat I wanted to use, said that
you know we could have justoffered cash and I would have
refinanced you out and you wouldhave won it.
Thanks, brother.
Speaker 2 (11:16):
So yeah, it's just you don't know that Too late.
Speaker 3 (11:25):
Thanks, want it.
I mean thanks, brother.
So, yeah, it's just well, likeyou don't know that too late,
well, you don't know those untilyou start, you know, until you
start diving into the dealsnumber one.
But also to meeting guys likeyou and hearing about like okay,
I, I could win this dealbecause of speed and because of
cash, and sure, sure, do youhave clothes um, you could even
get like it reminded me when Ifirst got started in the smaller
multi.
Speaker 2 (11:38):
I would give them hey , I buy traditional, I buy
traditional financing here, butif you sell our finance I'll pay
a higher price.
So the same token here hey,yeah, I could close your
property in 60 days, but I couldalso close it in 10 days.
But you're going to have to doa price discount and they might
be incentivized to have thatdiscount For sure.
(11:59):
Yeah, well, I mean.
Speaker 4 (12:01):
A lot of times too and I'm sure you're a broker,
you've seen it before Somebodyfalls in love with a house but
then appraisal comes back, or aninspection comes back, or they
decided to go and buy a car 25days into escrow, yeah.
And now they can't close thebank and they have to restart
the process and stage the houseagain.
It's like they might bank andyou have to restart the process
and stage the house again.
Speaker 1 (12:21):
It's like they might, they might throw it back on the
market.
Speaker 4 (12:22):
Sure, yeah, right, it's like I I'll take the money
now yeah, just be, done, youknow it's kind of like when you
win the lottery.
It's like, do you want to waitand get yearly payments or just
take the money now?
Sometimes buyers be like I knowwhat kind of product I have,
I'm done you know.
Um, yeah, good, which caps offto them.
Yeah, they're well, theywilling to risk it.
I'm sure like I don't know thestatistics I'm sure 70 to 90% of
(12:43):
transactions that are Astro endup closing.
But you never know.
You caught up in that wash andsometimes you're willing to take
a little less.
Yeah.
Speaker 3 (12:52):
Yeah, I love that.
So just thinking about whenyou're helping others underwrite
like a normal flip, are you?
If they're saying we feel likewe can get this done in three or
four months, does the carryingcosts of what they should expect
from you?
Is that part of yourunderwriting as well?
Yeah, because I mean I know youmentioned like I wouldn't
(13:12):
recommend that we do this dealor whatever.
I'm sure that kind of playsinto it.
Speaker 4 (13:16):
A lot of times.
That does play into it.
I mean, we looked at one thismorning when I came in here and
you look at somebody's financialhealth that's why we asked for
that PFS and I'll get on thephone with somebody.
I'm like this looks like agreat deal.
You're putting about $60,000into this.
I'm like maybe, instead of abase hit, let's bond on our
first one.
You only have about $30,000liquid After a and full-term
interest and your rent and yourother things going on.
(13:38):
Are you sure this isfinancially responsible?
Or, other side of the coin,this is not financially
responsible.
You should go partner up withsomebody who has some cash and
you guys could grow together andif you guys want to split off,
in the end, split it off or youstay together.
A lot of times I'm afraid thatpeople get bad advice or they
get good advice with the wrongintentions of hey, I got to get
(13:59):
into this site.
Yes, you should, but make sureyou understand what you're
getting into, make sure youunderstand the cost associated
with it, because it could getsloppy quickly.
And then, when it gets sloppy,that's when you start seeing
people, let's say, on a deal,they're like, hey, instead of
putting the correct drywall inthe ceilings and putting the
right insulation in there, we'regoing to, we're going to skip
that come that corner and nowyou have a really bad product.
(14:22):
You have a bad product, I'm sure, as you will see, or you've
seen, why is it sitting on themarket for 120 days?
On average, days on market is35.
Speaker 3 (14:30):
Yeah.
Speaker 4 (14:30):
Yeah, so like you're saving right 5,000, to spend 20
more.
And then you're like my cash isrunning out, I don't know what
to do.
So it's like we try to look atit the same way we talked about
earlier Make sure you're able toget through this project.
Make sure you're able to find away out.
You have enough capital to getthrough it.
(14:51):
If you don't, let's make surethe property is probably in a
debt service on a refinance.
If you have to refi, sometimeswhen we get credit scores and
we're shaky about an ARV, we'llsee what's the ability for them
to refi Below a 640, 620 creditscore.
Not likely, yeah Right.
So we have to be verycomfortable with that ARV.
So we look at it differentavenues of that, because we
(15:13):
don't want to put anyone in abad position.
Unless they get in a badposition, what happens to us?
We're in bed with them, youknow.
People are like oh, you guysjust want to take the property
back.
No, we don't.
Have you ever taken a propertyback?
It's not fun.
It's really not fun at all.
It's a long bureaucratic legalprocess.
It's just a massive headache.
And people are like, oh, youcan make some money off of it.
(15:38):
It make like a little bit moreon when we take time suck, oh,
it's a massive time suck.
We could have done 15 deals atthe time.
Speaker 2 (15:44):
It took for me to deal with this one, this deal
yeah, and they're like yeah weprobably break even on in the
end to be honest, would be agood way, like for the deals
that you've seen not work out.
What would you say?
Some advices, like lessonslearned from these guys that are
, yeah, having deals not go.
Speaker 4 (16:00):
well, don't cut corners.
Yeah, yeah, that's the biggestthing, don't cut corners.
And right now, I think the mainproblem with some properties
that are stagnant on the marketis floor plan.
Floor plan is super, superimportant.
We have a deal sitting on themarket right now.
It comps at $280,000 all dayProperty, two doors down, 300 or
(16:23):
less square feet, not evenclose to their renovation job.
The bar property sold for 295.
We haven't got one offer.
It's a two bed, one bath.
The bathroom's in the kitchen,the bedroom's on the other side
of the house.
You don't want to take a showerand walk in your towel through
the kitchen.
We were unaware that theborrower changed the floor plan
to that.
We're still unsure why he didit.
(16:44):
um, it is what it is at thispoint uh, that's what I'm saying
so we we also do a lot of dealsin columbus, ohio, and uh,
traditionally there's a lot ofthese like 1920 bills in
columbus that are um three bed,one baths, with one bedroom
downstairs, two bedrooms up andthe only bathroom is downstairs.
It's like you really want towalk to the stairs, yeah, the
(17:06):
night.
Your resale value is almost 30percent higher if you convert
that third bedroom into abathroom upstairs um so floor
plans is like the number onething I'd say that people are
having issues with right now.
So cutting quarters or floorplans yeah, it's a weird floor
plan.
Promise you walk through yoursignificant other and your
family.
If there's something weirdthey're not gonna buy.
Yeah, yeah, um, people areallowed to be a little picky it
(17:28):
makes sense.
Speaker 3 (17:29):
Well, what are some other rookie mistakes that you
see outside of something likethat?
Speaker 2 (17:32):
oh man, I'd say I think you talked about earlier
too, the exit plans.
It kind of had me, uh, mywheels turning on, like some of
the stuff you know too, the exitplans.
It kind of had me, uh, mywheels turning on, like some of
the stuff you know, havingmultiple exit plans and the
shorter time thing yeah, I'd say, understanding your exit plans
is one thing.
Speaker 4 (17:49):
Rookies need to be.
Looking at outside of floorplans and cutting corners um, I
maybe say comp selection.
Um, yeah, comps drive everysingle decision we make.
Yeah, um, we look at like,let's say like this is a
neighborhood right here, and welook at cops in here.
They're pulling two comps overhere.
They're like, but look at this,I'm like I don't care about
(18:10):
anything west of that mainstreet.
Yeah, that is obsolete.
Yeah, I, when I have threeproperties in the past three
months with your same squarefootage and style that's sold
right here, like I know, butthat I'm like I don't.
Speaker 1 (18:22):
Again, I don't care about it's not personal that
yeah, they change the royal onthe street and that they have a
poa.
Speaker 4 (18:28):
So right and it's just, we see stuff like that too
and you know, like, um, a lotof times in charlotte, north
carolina, we do a ton ofbusiness there.
Um, we see a lot of triallevels and split level houses.
Inherently, your comps need tobe trial levels or split levels.
Uh, same thing with sidingversus brick.
You know, sometimes you can belike well, there's a break come,
maybe we'll deduct a little bitof value because we're siding
(18:50):
and that's breaker.
Vice versa, um, driveway versusno driveway is massive, garage
versus no garage is massive.
Uh, so there are small things.
When we push back, you'd beshocked at how many times we
told a client you're buying thisfor $15,000 too much.
They go back to the wholesaler,they go back to the seller.
Seller's like okay, we'llchange the price.
They get it done and they getmad at us.
(19:12):
I'm like dude, I just saved you$15,000.
Speaker 2 (19:14):
Yeah, yeah.
Speaker 4 (19:15):
I don't know what you want me to do here yeah.
But I think comp selection isprobably the biggest rookie
mistake we'll see.
And when we give you feedback,I'm not saying we're wrong.
I would love for you to closeon that deal.
Call me in six months and belike you're dumb.
I told you so.
Speaker 3 (19:29):
That is amazing.
Speaker 4 (19:30):
Yeah, we're just again trying to help newer
investors hedge risk Right nowin this market.
What are you funding?
That's your favorite right now?
I say as of right now.
My favorite is seeing investorsget super creative, for
(19:51):
instance, in Nashville.
We actually do not financedeals there for a variety of
reasons, but Nashville is agreat real estate market.
If you want to do deals there,I don't think it's bad.
We just can't for other reasons.
There are these things calledHPRs horizontal property regimes
where essentially you'd buy apiece of land, redevelop it into
two lots and build two tall andskinny houses.
It really helped us with ourneed for housing in Nashville.
That is pretty much obsoletenow because every single real
(20:12):
estate developer in the singlefamily space has bought every
single one of those lots andthere's maybe like 70 remaining
that 20 companies call everysingle day.
I'm seeing a lot in upstate andSouth Carolina.
People are picking up acre pads, splitting them, keeping the
main house, maybe even puttingthe main house right back on the
MLS, selling the dirt,developing the dirt.
(20:32):
Strategic deals like that I'mreally enjoying right now
because in every emerging marketthere's a need for housing.
Yeah right, your supply issuper low, your demand is high.
Nobody's selling because theyall have two and a half percent
rates for four months.
Four and a half months so ofsupply yeah, yeah four to five
months of supply yeahso finding ways to get creative.
Or when you go build a bigtrack neighborhood I've saw,
(20:53):
seen you know 20 of them, yeah,driving around in the past 24
hours but saying, hey, here's aone acre parcel talking to your
you know local zoning committeeand say what can I do here?
And they say, oh, depending onthe setbacks, it's not.
You can subdivide it and getanother lot.
Or I can subdivide it, put 40Kinto the main house, renovate it
, sell that, then also sell thislot for you know 2x what I'm in
(21:16):
for it to the other guy andit's a great way to maximize.
On deals, I just say creativity.
Traditionally, I'll always justlove to fix some flips that are
clean cut deals, yeah.
Speaker 2 (21:26):
Stuart was talking about that on our last podcast
about parceling out land,getting a read like buying a
bigger piece and then getting itzoned.
You know there's a lot of asI'm doing more of these
development deals.
The same thing multiple exitstrategy there's.
My intention is to fullydevelop it into 100, 200 unit
multifamily apartment complex,but taking the raw dirt and then
(21:49):
, you know, getting it entitledand getting it.
You know doing some civil andgetting it closer to the finish.
There's a lot of value in thatbecause you're taking the risk
out for the next investor.
So there's another exit thereand it's a shorter term.
Some people just do that.
Some people are just flipping.
Oh yeah, and porcelain.
Speaker 4 (22:08):
Yeah, just horizontal work.
Yeah, oh man, there's a massivebusiness for that.
We get inquiries on that allthe time in Northern Alabama.
But yeah, just say, looking atevery deal with a fine tooth
comb, finding different ways youcan and can't make money on it.
I think it's super beneficialin the long term.
Like I said, strategies flip ona dime.
There's no reason yours can't.
Speaker 3 (22:25):
Yeah.
Speaker 4 (22:26):
But yeah, I'd probably say that's probably my
favorite deal right now.
Speaker 3 (22:28):
Yeah, that makes sense.
Your ideal guy that comes toyou or gal that comes to you and
has a flip deal.
What do they bring into thetable?
End of the table you mentioneda little bit of it before, but,
ARV, maybe they're bringing whatthey're planning to do to the
property, but what personalfinancial statement, anything
else that if someone wanted tobring you a deal and get it done
(22:48):
quickly, what should they havein hand?
Speaker 4 (22:50):
I'd like to see that they have liquidity to be able
to flow payments and start theconstruction process for draws.
I'd like to see that they couldspeak intelligently on why they
picked a neighborhood to investin.
We get it all the time wherepeople are like well, my
wholesaler said this is a goodneighborhood.
I'm like, well, I'm sure it is,but why do you want to?
Speaker 3 (23:07):
do a deal in that neighborhood.
Speaker 4 (23:08):
A lot of times you talk to investors and there's a
reason why you want to work inthat neighborhood.
Well, new school zoning thisnew that I'd like to see.
The change they're putting in anew park in this neighborhood
have a reason for why you wantto be in that neighborhood.
Don't just cherry pick itbecause the comps are good.
I said the pro.
Those are the two mostimportant things liquidity and
understanding of why they wantto do that deal.
Speaker 1 (23:28):
Well, you almost like want to.
You know when I'm, when I'mgoing to a bank and me and a
lender just did this that areteaming up on some of our
housing from North coastArkansas, we're going to a bank
and what I used to call it andwhen I was in printer sales is
you block your exits and soreverse engineering it from.
Hey, what, if I'm in yourposition, what would I be asking
to me?
Um, and going through andalmost like underwrite, I think,
(23:50):
for y'all would probably see alot of value if someone kind of
pre underwrote it themselves.
And you know if, if I just sendyou something and I'm like, oh,
this came up on the market,what do you think?
Here's this, this and this.
But it's like a trash deal.
Those emails that I keepsending, they're going to start
getting flicked up really quickand so, like, if I'm able to
underwrite that, block someexits, go.
(24:11):
Hey, here's a niche in themarket that I'm seeing and
here's why I think that, andhere's the data that backs it up
, and you're almost like abusiness proposal as an email or
something like that to you.
Speaker 4 (24:22):
Sure, yeah, that's that's what you want.
We have one guy in SouthCarolina who sends us.
I mean it's, it's beautiful,yeah, it's, it is stunning.
You're presenting a business.
I have no questions.
No notes, no questions.
I'll let him know within an hourif we could work with him and
we did, I think, when we startedworking and we approved eight
deals for him in like 12 days.
That's like crazy.
(24:44):
Yeah, I mean well, I mean I, Idon't have any questions.
Yeah, we, we a lot of timeswe'll do a loan community like
what, what are we doing here?
Like it's good, but like let'smake sure we're all on the same
page.
So like that's why I said twoto three sentences of strategy
minimum yeah go further.
But yes, you are pitchingbusiness.
It is a business.
You're investing money insomething to make money.
That's, I think, like adefinition of a business.
(25:07):
Yes, you're creating a product.
Speaker 1 (25:08):
Exactly, I love it.
I said don't fear the rate ifyou're missing the opportunity,
and I think that's somethingthat, like Henry and Jared
Jared's talked on that beforeyeah, I mean the opportunities,
I mean the rates are the rates,but the opportunity will make
you money.
Speaker 4 (25:22):
Yeah, right, right.
And that's what I think kind ofbacks into what we talked about
previously about the rate isn'tthe guiding light.
Yeah, how good a deal is orisn't?
Yeah, right, the associatedcosts are the same thing.
Talked about the opportunitywith that Quantplex, right, the
associated costs are the samething.
Talked about the opportunitywith that Quantplex, right.
Even if you did know who I was.
Let's say I was maybe tooexpensive for you.
(25:43):
You had another true privatelending company.
Let's say they're tapped oncash.
Maybe I'm more expensive, butyou just missed out on a great
opportunity.
Yeah, if you would have, youknow, wrote out a financial
model for that deal.
Let's say I was 3,000 moreexpensive to work with
throughout the course, right,you'd be like, yeah, I'm happily
pay three thousand more if Igot it up.
A low market rate deal, right?
Yeah, um, I think it's.
(26:03):
It's a very true quote.
Speaker 1 (26:04):
I said that smart guy give us give us like a minute
on you guys.
If someone's listening to this,yeah, they want, they want to
use you.
Tell them how to contact you.
Things of that nature, ofcourse, rocky, rocky feinberg
and uh winstone.
Speaker 3 (26:20):
Winston.
Speaker 1 (26:20):
Yes, winston is coming into this market, uh,
with private money.
So, listener, listening.
Here's how to get in contactwith them.
Speaker 4 (26:26):
Yeah, first off, we're very excited to be here.
Um, we've been following youguys in your market for about a
year now and we've hadintentions of coming here to you
know, help you guys scale on abunch of investors, get you guys
suited with financing thatmaybe you haven't had before.
You can contact us on ourwebsite it's probably the
easiest way.
That's windstoneplcom.
On there you'll find thecontact information for our
(26:49):
sales team, our operations team,my contact information.
The only other way is throughemail.
That is windstoneplcom or,sorry, info at winstonplcom.
That'll go to our generic emailaccount, which has myself on it
, my two other partners and ourtwo other executives on there,
so we get a lot of inquiries onthere as well.
Or you can just shoot me a text.
(27:12):
We see my number on our website.
I'm a pretty laid back guy.
I don't mind talking.
I probably talk to every singleone of our clients on a first
name basis.
We like to keep it more of afamily office environment, even
though we're kind of outgrewthat.
Speaker 1 (27:25):
Yeah.
Speaker 4 (27:26):
Kind of like to keep that personal touch.
So when you have a deal you cancall me to ask a question about
payoff or closing timeline.
You don't have to worry aboutgoing through a salesperson who
has to ask their manager.
Then go up to the VP, right.
We try to just keep it very,you know, organic conversational
flow.
Yeah, that's the easiest way toreach out to us we don't have
(27:47):
social media maybe, maybe comingin soon.
Speaker 1 (27:49):
No marketing.
Well, we want to thank you guystoo, for they are our biggest
sponsor on this podcast.
So thank you, Winston.
Speaker 3 (27:55):
Of course.
Yeah, rocky, we appreciate yourtime and and again I just
wanted to hit that I think it'sso important that having as many
tools in your tool belt aspossible is so important as a
real estate investor, and Rockyis a great tool and I think
we're excited to continue tolearn about kind of what you
have, and obviously we get tolearn a lot during this episode,
so I think a lot of guys cantake a lot away from that A lot
(28:18):
of good takeaways.
Speaker 2 (28:19):
whether you're doing a lot of flipping in and out,
how people look at deals, howinstitutional investors look at
deal, how private monies look atdeals, different exit
strategies, presenting a deal,making sure you're presenting a
deal thoughtfully organized well.
So, yeah, appreciate your timeand sponsorship.
Speaker 4 (28:36):
Of course, well, hey, thank you guys for having us
here.
Love it?
Let's go eat.
Speaker 3 (28:39):
Yeah, appreciate y'all listening.
We'll talk to you soon, allright, thanks guys.
Love you guys.
Speaker 1 (28:44):
Again, thank you guys for tuning in.
I'm going to go ahead and listsome sponsors off here.
We're going to start with OneStone Private Lending.
This episode is brought to youby One Stone Private Lending,
one of the top private and hardmoney lenders now serving
Northwest Arkansas.
Whether you need short-termcapital for a flip a bridge loan
or creative financing, they'vegot you covered with very
(29:05):
flexible products to fit nearlyany deal, including 100%
financing.
What sets them apart is theirdeep expertise, fast response
times and ability to thinkoutside of the box to help
investors like us close quicklyand efficiently.
If you're looking for a reallending partner, check out
Winstone Private Lending.
Link is in the show notes.
(29:27):
Our next sponsor is from BlackBranch Mortgage, specifically
Colton Kennedy.
Colton and I personally dobusiness together and he's a
wonderful lender.
Here in the Northwest Arkansascorridor Want to invest in real
estate or purchase a home butfeel like you need a secret
decoder ring to understand theprocess?
You're not alone.
First-time investors, househackers and future homeowners
(29:48):
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like you break into the realestate market without the
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Think of him as your mortgagestrategist, helping you turn I
wish I could into.
I just did.
You bring the vision, he'llbring the lending game plan.
Let's make your firstinvestment, a smart one.
Colton Kennedy with Flat BranchHome Loans Contact's F-B
(30:11):
fbhlcom.
Thank you so much, colton.
So our next sponsorship is 1440Photography.
(30:50):
1440 Photography is a localcompany here.
I love getting local companiesto sponsor this podcast.
They're local, they do greatservice and personally I can
speak that they do a great jobon mine and my clients' stuff.
If you're an investor or agentin Northwest Arkansas, you need
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Our next sponsor is AdvantageTitle and Escrow.
They're a local company.
They do great work,specifically Kayla Phillips.
I can speak personally on thissponsor because I use Kayla for
all of my transactions.
It's been two, three, fouryears now and Kayla and I have
(31:55):
done a ton of deals.
We probably do between 65 to 80deals a year together and they
do a great job.
The SOPs, so systems andprocessing that they have over
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Clients love it.
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When I give a deal to AdvantageTitle and escrow I know that
(32:17):
it's going to be taken care of.
There's no second guessing.
I almost am able to treat themlike a second transaction
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I know that they're going tohandle the systems and processes
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(32:37):
They do a great job withcommunication, especially Kayla
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I would highly encourage you ifyou're looking to close on a
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(33:01):
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That's T as in Tim, d as indocument, s as in solution, I as
(33:23):
in information, t as intechnology.
This one hits personal.
It's close to home.
My dad, tim Stanley, runs TDSIT and he decided to sponsor our
podcast, so I can speak frompersonal experience.
I've been able to work for mydad in the past as well and
they're a great, great solutionfor business technology.
(33:45):
If you're a local businessowner, or even out of state, if
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Tds IT is that spot.
(34:06):
They provide the best in-brandbusiness technology with proven
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Speaker 2 (34:14):
Special thanks to one of our sponsors, who I've
worked with personally onmultifamily commercial loans as
well as business acquisitions.
People's Bank works withentrepreneurs, investors,
dealmakers and risk takers.
They're the ones who seeopportunities where others see
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(34:36):
with the status quo.
People's Bank helps you buildArkansas, deal by deal and brick
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They don't just see numbers ona spreadsheet, they see your
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People's Bank, it's wherepeople come first.
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If you're needing loanassistance, reach out to Dakota
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Speaker 1 (35:02):
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Have a question you want us to cover, send it our
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Thanks for listening and
Welcome to Northwest Arkansas Investing Podcast, your
go-to source for real estateinvesting in Northwest Arkansas.
Speaker 2 (00:13):
With your seasoned investor just starting out.
We bring you expert insights,market trends and practical
strategies to help you buildwealth through real estate.
Speaker 3 (00:20):
From buying and selling to property management
and long-term investmentplanning.
We cover it all so you can makesmart, informed decision in
this fast-growing market.
Let's dive in.
Speaker 4 (00:30):
So I think that's super important for us is we
don't just look at a number andjudge immediately.
We try to figure out whathappened, and a lot of the times
, too, when we pull thesereports.
We called a guy last week,right?
Hey, just to let you know, yourscore is this.
You got this going on.
You have a target card with $12on it and I've seen that your
credit score has dropped 100points in the past 45 days
because of that.
He's like I didn't have aconversation with my wife.
(00:53):
Yeah, yeah.
So people like that you know.
Speaker 1 (00:56):
They're just unaware.
Speaker 4 (00:57):
Yeah, they're just unaware too.
So, like those are the onlyfinancial documents we'll rely
on.
Yeah, gotcha, and you know,preferably people who come to us
to do deals with us.
We like them to have some sortof experience.
That experience can be as arealtor, a contractor, have done
(01:17):
deals themselves, have gone toa real estate investing class or
something like something where,when they go to these
investments, they understand theprocess.
Yeah, and I'd always recommendfor somebody doing their first
deal if you don't have acontractor on board, don't try
to sub it all yourself.
Don't save $5,000 by spending$20,000.
Speaker 2 (01:31):
Okay.
Speaker 4 (01:32):
Yeah, you know it's.
You know you may know a bunchof guys who go in there and get
the job done for you, but spendthe extra money make make sure
some of those are thereoverseeing the project and not
it'll pay off.
Speaker 1 (01:47):
Speak to me on rocky.
I come to you guys on mondayand I got this seller who's got
us.
I mean we're talking, need tobe closed.
Quick, like what's our timeframe on getting closed?
If I'm coming to you like yeah,we can.
Speaker 4 (02:01):
We've got a deal at 2 pm before I'm closed by 3
o'clock.
Speaker 3 (02:05):
Crazy.
Speaker 1 (02:06):
That's crazy.
Speaker 4 (02:07):
We just need those financials.
Yeah, we could do a quick anddirty underwrite.
Very, very Rewind that realquick, yeah, yeah.
I mean if title work's doneobviously we need a title policy
.
But we do rush deals like thatall the time.
Yeah, and a lot of times it'syou know, I'm sure you guys have
seen it.
You work with a large hardmoney lending company and you
get to the closing table andnext thing you know, instead of
(02:28):
bringing 15% down, you have tobring 23% down or the terms
change.
You're like how did this happen?
Or last minute, there we can'tdo the deal anymore.
We've heard large big boxcompanies who run out of money
the day of closing or they can'tfund draws and other projects.
So we get called in on the lastminute to do deals.
It's like we're happy to Alittle fire drill in the office
(02:51):
that day, but we'll get it done.
I mean, I will say you bring upa good point, a phenomenal part
about utilizing financing likethis.
Speaker 3 (02:58):
And.
Speaker 4 (02:59):
I don't know if I'm skipping ahead here, but
essentially, I think one thingthat's really important that
investors truly understand iswhat they're paying for.
For instance, I'll go to realestate investors association
meetings all the time and youhear people talking at tables
(03:20):
there hey, I got this new flipunder contract.
I'm so excited.
It's like, oh, who did you usefor financing?
Like, oh, I use this company.
It's like cool, what kind ofrate did you get?
He's like, oh man, I got 11%.
It's like, oh yeah man that'sgreat.
And then, they come to us andlike what are your terms?
I tell them and they're like ohman, I'm getting 11 with them
over here.
It's way better, are you?
(03:41):
What's your processing fee?
What's your draw fee?
What's your appraisal fee?
That doesn't matter.
I'm like no, that's exactlywhat matters.
I can tell you that I'm givingyou 5% in two points.
That does not mean that's whatyou're paying.
So in common times, workingwith closer private money
companies, it's going to be moreexpensive not just the banks,
(04:02):
but also hard money companiesbut that is where investors need
to essentially get savvy andlet the financing work for them.
So in your situation right,where you said I got a deal that
wants to close Monday, howquickly can you close?
You got to look at the inverseway too.
So if you said, hey, I have adeal that needs to close next
week, it just went on the marketand it's for sale for 200,000.
(04:22):
We have clients that come to uslike, hey, I'm going to offer
200,000 for a 30 day close, andthis isn't that.
But I may work with this otherbig company I don't want to name
drop any companies, but it'slike well, what if you went to
that same seller and said I'llpay you 190K cash next week and
be done, and it may be $4,000more expensive to work with me,
but I just saved you 10 000 onthe purchase by utilizing the
(04:43):
speed at which we can close?
Yeah, so it's small things likethat that really allow you to
maximize returns, right, um, soI'd say, yes, we can close
quickly and we like to use thatas like one of our main things
of where we could help out ourclients yeah yeah, you know, it
also gives you the edge, likeI'm not sure how real estate was
here in 2022.
I'm sure it was booming.
You knowville, uh, where I live, if you don't have a cash offer
(05:05):
with no contingencies, youdon't even get a tour of the
house.
So we're in a little bit of adifferent market right now.
But I mean, you can kind ofutilize that same mindset for
coming in on these projects andsaying I want to get this deal
done, I like the deal, I'vewalked in my contractor, I'm
going to come in 10K less thaneveryone else, but I'm going to
put cash in your hand next week,no contingencies, let's drop it
(05:26):
.
Speaker 3 (05:26):
Yeah, that's awesome.
So I mean, just going back tofolks that don't know exactly
what this looks like, what cantheir and you don't have to.
We won't hold you to anythinghere, but what can they expect
as far?
I mean, if someone's getting ahundred percent financed on the
deal and maybe the rehab for aflip, what can they expect when
it comes to rates, fees Based onthe terms, yeah, yeah.
Speaker 4 (05:48):
So we're just going to be upfront about all terms.
We're 13% on rate.
That's annualized you knowsimple interest.
You're only paying interest onmoney that's out to you, so
you're not paying interest onany undrawn funds in two to
three points, depending onlong-term.
So, like I said, we're going tobe inherently more expensive
(06:10):
than anyone else you talk to.
However, our processing feeincludes our BPO appraisal fee
we get for our investors afterclose, all legal work, all that
stuff, it's $575 in total.
We'll never be charged anotherfee for us, unless your loan
matures, you have to extend orany items like that.
We're not going to charge you$350 for a draw.
We're not going to charge youfor a payoff fee.
We're not going to charge you$1,000 for appraisal or $1,500
(06:30):
for processing or all this.
So I actually started this gridbecause sales guys are having
so much trouble trying toexplain how this works.
We have grid A, grid B.
They're next to each other.
You plug in our financingcompared to a competitor's
financing and I mean there'softentimes that our financing is
cheaper than a program that's10 at one point yeah yeah,
because once you layer in allthose fees, like yeah, I take
(06:52):
seven draws over this project,here's my processing b, here's
my appraisal fee.
I'm like that's kind of what Iwas saying earlier.
Yeah, it's not about the rate,it's not about the points, it's
about how much you're spendingin cost on your loan program.
Speaker 2 (07:03):
That's a key piece of advice for any type of real
estate investing, any lendingmake sure you're looking at the
fees.
There's a lot of times hiddenfees.
Yeah, sure, you get the ratethrown at you, but look at the
different fees associated withit, especially if you're not all
about the rate.
Speaker 4 (07:17):
Yeah, it's death by a thousand cuts.
It truly is.
I mean because they seem sosmall the time and they're just
like, oh, it's just a costumebusiness, but like over and over
and over again you're kind ofscratching your head.
Speaker 1 (07:29):
Look back over a five-year period.
Where did my profit go?
Speaker 4 (07:32):
Yeah, so I can be honest.
We're lenders, we make money,right, we provide a service.
But I'd rather just kind of hityou on the back of the head one
time instead of just likekicking you in the ankles every
step you go.
Just to put it plainly, youknow, it's just kind of how it
is when it is and we're going tobe expensive.
But you know what did they say?
(07:56):
You get like good, quick orcheap.
You pick two to three.
We're very good, we're veryquick, we're not cheap.
And to that point, just talkingabout real estate in general,
there's so many times whereclients will come to me with a
deal.
Guys I've done 10s, 20 dealswith.
I'm like, hey, we may not bethe best financing partner for
you on this deal Not because I'dlove to do the deal, by the way
, but I know a guy over here whomight be better suited for you
on this deal.
(08:16):
I prefer my clients get thebest financing option available
rather than just mine, because alot of the time mine, I think,
is best, but there's other timesI'm like we can do it, man, but
it's going to be a lot moreexpensive with us.
You're not really utilizing ourfinancing.
You know all the benefits youhave with us are kind of out the
door with this said project.
So it never hurts my feelingsto be like this is a better,
(08:36):
this is a better option for you,and I think majority of the
time you guys probably see thisoften is every deal kind of
calls for its own needsfinancing.
Yeah, um, it's.
You know every deal doesn't fitone box of one kind of
financing it needs.
Yeah, so I'd be.
You know, I'd really look intothat.
Every deal, underwrite everydeal.
Uh, if you don't have a dealcalculator, get one.
(08:59):
They're free.
Online.
Email me, I'll send you one.
I mean, it's like just plug itinto these different options,
look at the stuff, because youknow you kind of just have to
follow the numbers with thesedeals.
A lot of times people get tooexcited about things that don't
really matter.
At the end of the day, you'redoing this not for fun, you're
doing it to make money.
Speaker 1 (09:25):
So make sure you're maximizing your ability to make
money.
Yeah, I really see uh rocky andthem as a tool in our in our
tool belt.
Yeah, you know, I got, I have ahard money guy, I have a uh,
you know, a commercial banker.
I have a lot of secondarymarket bankers and you know you
guys speak up on this if youwant to as well.
But like for here, locally,like where, where I see you guys
is like I have like three orfour people that come to my head
right now and like the peoplethat are tired of the grind of
secondary market lending andnormal construction loans that
(09:47):
were like, yeah, like I build ahome and I build it quick and
I'd love to just like, hey,here's my pof personal financial
or pfo, personal pfs sorry,personal Financial or.
Speaker 2 (09:58):
PFO, personal Financial, pfs.
Sorry, sorry, yeah, too manyacronyms.
Speaker 1 (10:01):
But there's a lot of, and I guess you did say new
construction is something thatyou guys play.
Yeah, we'll look at it.
Yeah, yeah, stuff like that.
And I mean Jared Martin and youmight have a really good
conversation.
Jared's always finding stuffwhere he gets, yeah.
Speaker 3 (10:17):
I think it's super important.
I I think back to, I mean adeal that we were doing a
podcast.
I was trying to get a uh, I waskind of in the middle of this
just a fourplex deal in rogers,so close on the other side of
town here, um, and I was.
I ended up being there's 36offers, believe it or not, on
this fourplex.
It was priced super well, um weoffered yeah, yeah you probably
(10:38):
did.
Brian, you probably did.
Speaker 2 (10:41):
Eight's probably small.
Well, Kyle did too in this room.
Speaker 3 (10:43):
You know, I was $20,000 over the offer that they
ended up taking.
I just wasn't willing to docash because I didn't have the
tools in my tool belt, just likeyou're talking about.
And so, like you know, it tookmore and more conversations with
bankers that I was close withat the time.
Wish you were in my tool beltat that time because we would
have utilized it.
But eventually, until it didn'thappen, until after, we missed
(11:07):
on it that I, that this bankerthat I wanted to use, said that
you know we could have justoffered cash and I would have
refinanced you out and you wouldhave won it.
Thanks, brother.
Speaker 2 (11:16):
So yeah, it's just you don't know that Too late.
Speaker 3 (11:25):
Thanks, want it.
I mean thanks, brother.
So, yeah, it's just well, likeyou don't know that too late,
well, you don't know those untilyou start, you know, until you
start diving into the dealsnumber one.
But also to meeting guys likeyou and hearing about like okay,
I, I could win this dealbecause of speed and because of
cash, and sure, sure, do youhave clothes um, you could even
get like it reminded me when Ifirst got started in the smaller
multi.
Speaker 2 (11:38):
I would give them hey , I buy traditional, I buy
traditional financing here, butif you sell our finance I'll pay
a higher price.
So the same token here hey,yeah, I could close your
property in 60 days, but I couldalso close it in 10 days.
But you're going to have to doa price discount and they might
be incentivized to have thatdiscount For sure.
(11:59):
Yeah, well, I mean.
Speaker 4 (12:01):
A lot of times too and I'm sure you're a broker,
you've seen it before Somebodyfalls in love with a house but
then appraisal comes back, or aninspection comes back, or they
decided to go and buy a car 25days into escrow, yeah.
And now they can't close thebank and they have to restart
the process and stage the houseagain.
It's like they might bank andyou have to restart the process
and stage the house again.
Speaker 1 (12:21):
It's like they might, they might throw it back on the
market.
Speaker 4 (12:22):
Sure, yeah, right, it's like I I'll take the money
now yeah, just be, done, youknow it's kind of like when you
win the lottery.
It's like, do you want to waitand get yearly payments or just
take the money now?
Sometimes buyers be like I knowwhat kind of product I have,
I'm done you know.
Um, yeah, good, which caps offto them.
Yeah, they're well, theywilling to risk it.
I'm sure like I don't know thestatistics I'm sure 70 to 90% of
(12:43):
transactions that are Astro endup closing.
But you never know.
You caught up in that wash andsometimes you're willing to take
a little less.
Yeah.
Speaker 3 (12:52):
Yeah, I love that.
So just thinking about whenyou're helping others underwrite
like a normal flip, are you?
If they're saying we feel likewe can get this done in three or
four months, does the carryingcosts of what they should expect
from you?
Is that part of yourunderwriting as well?
Yeah, because I mean I know youmentioned like I wouldn't
(13:12):
recommend that we do this dealor whatever.
I'm sure that kind of playsinto it.
Speaker 4 (13:16):
A lot of times.
That does play into it.
I mean, we looked at one thismorning when I came in here and
you look at somebody's financialhealth that's why we asked for
that PFS and I'll get on thephone with somebody.
I'm like this looks like agreat deal.
You're putting about $60,000into this.
I'm like maybe, instead of abase hit, let's bond on our
first one.
You only have about $30,000liquid After a and full-term
interest and your rent and yourother things going on.
(13:38):
Are you sure this isfinancially responsible?
Or, other side of the coin,this is not financially
responsible.
You should go partner up withsomebody who has some cash and
you guys could grow together andif you guys want to split off,
in the end, split it off or youstay together.
A lot of times I'm afraid thatpeople get bad advice or they
get good advice with the wrongintentions of hey, I got to get
(13:59):
into this site.
Yes, you should, but make sureyou understand what you're
getting into, make sure youunderstand the cost associated
with it, because it could getsloppy quickly.
And then, when it gets sloppy,that's when you start seeing
people, let's say, on a deal,they're like, hey, instead of
putting the correct drywall inthe ceilings and putting the
right insulation in there, we'regoing to, we're going to skip
that come that corner and nowyou have a really bad product.
(14:22):
You have a bad product, I'm sure, as you will see, or you've
seen, why is it sitting on themarket for 120 days?
On average, days on market is35.
Speaker 3 (14:30):
Yeah.
Speaker 4 (14:30):
Yeah, so like you're saving right 5,000, to spend 20
more.
And then you're like my cash isrunning out, I don't know what
to do.
So it's like we try to look atit the same way we talked about
earlier Make sure you're able toget through this project.
Make sure you're able to find away out.
You have enough capital to getthrough it.
(14:51):
If you don't, let's make surethe property is probably in a
debt service on a refinance.
If you have to refi, sometimeswhen we get credit scores and
we're shaky about an ARV, we'llsee what's the ability for them
to refi Below a 640, 620 creditscore.
Not likely, yeah Right.
So we have to be verycomfortable with that ARV.
So we look at it differentavenues of that, because we
(15:13):
don't want to put anyone in abad position.
Unless they get in a badposition, what happens to us?
We're in bed with them, youknow.
People are like oh, you guysjust want to take the property
back.
No, we don't.
Have you ever taken a propertyback?
It's not fun.
It's really not fun at all.
It's a long bureaucratic legalprocess.
It's just a massive headache.
And people are like, oh, youcan make some money off of it.
(15:38):
It make like a little bit moreon when we take time suck, oh,
it's a massive time suck.
We could have done 15 deals atthe time.
Speaker 2 (15:44):
It took for me to deal with this one, this deal
yeah, and they're like yeah weprobably break even on in the
end to be honest, would be agood way, like for the deals
that you've seen not work out.
What would you say?
Some advices, like lessonslearned from these guys that are
, yeah, having deals not go.
Speaker 4 (16:00):
well, don't cut corners.
Yeah, yeah, that's the biggestthing, don't cut corners.
And right now, I think the mainproblem with some properties
that are stagnant on the marketis floor plan.
Floor plan is super, superimportant.
We have a deal sitting on themarket right now.
It comps at $280,000 all dayProperty, two doors down, 300 or
(16:23):
less square feet, not evenclose to their renovation job.
The bar property sold for 295.
We haven't got one offer.
It's a two bed, one bath.
The bathroom's in the kitchen,the bedroom's on the other side
of the house.
You don't want to take a showerand walk in your towel through
the kitchen.
We were unaware that theborrower changed the floor plan
to that.
We're still unsure why he didit.
(16:44):
um, it is what it is at thispoint uh, that's what I'm saying
so we we also do a lot of dealsin columbus, ohio, and uh,
traditionally there's a lot ofthese like 1920 bills in
columbus that are um three bed,one baths, with one bedroom
downstairs, two bedrooms up andthe only bathroom is downstairs.
It's like you really want towalk to the stairs, yeah, the
(17:06):
night.
Your resale value is almost 30percent higher if you convert
that third bedroom into abathroom upstairs um so floor
plans is like the number onething I'd say that people are
having issues with right now.
So cutting quarters or floorplans yeah, it's a weird floor
plan.
Promise you walk through yoursignificant other and your
family.
If there's something weirdthey're not gonna buy.
Yeah, yeah, um, people areallowed to be a little picky it
(17:28):
makes sense.
Speaker 3 (17:29):
Well, what are some other rookie mistakes that you
see outside of something likethat?
Speaker 2 (17:32):
oh man, I'd say I think you talked about earlier
too, the exit plans.
It kind of had me, uh, mywheels turning on, like some of
the stuff you know too, the exitplans.
It kind of had me, uh, mywheels turning on, like some of
the stuff you know, havingmultiple exit plans and the
shorter time thing yeah, I'd say, understanding your exit plans
is one thing.
Speaker 4 (17:49):
Rookies need to be.
Looking at outside of floorplans and cutting corners um, I
maybe say comp selection.
Um, yeah, comps drive everysingle decision we make.
Yeah, um, we look at like,let's say like this is a
neighborhood right here, and welook at cops in here.
They're pulling two comps overhere.
They're like, but look at this,I'm like I don't care about
(18:10):
anything west of that mainstreet.
Yeah, that is obsolete.
Yeah, I, when I have threeproperties in the past three
months with your same squarefootage and style that's sold
right here, like I know, butthat I'm like I don't.
Speaker 1 (18:22):
Again, I don't care about it's not personal that
yeah, they change the royal onthe street and that they have a
poa.
Speaker 4 (18:28):
So right and it's just, we see stuff like that too
and you know, like, um, a lotof times in charlotte, north
carolina, we do a ton ofbusiness there.
Um, we see a lot of triallevels and split level houses.
Inherently, your comps need tobe trial levels or split levels.
Uh, same thing with sidingversus brick.
You know, sometimes you can belike well, there's a break come,
maybe we'll deduct a little bitof value because we're siding
(18:50):
and that's breaker.
Vice versa, um, driveway versusno driveway is massive, garage
versus no garage is massive.
Uh, so there are small things.
When we push back, you'd beshocked at how many times we
told a client you're buying thisfor $15,000 too much.
They go back to the wholesaler,they go back to the seller.
Seller's like okay, we'llchange the price.
They get it done and they getmad at us.
(19:12):
I'm like dude, I just saved you$15,000.
Speaker 2 (19:14):
Yeah, yeah.
Speaker 4 (19:15):
I don't know what you want me to do here yeah.
But I think comp selection isprobably the biggest rookie
mistake we'll see.
And when we give you feedback,I'm not saying we're wrong.
I would love for you to closeon that deal.
Call me in six months and belike you're dumb.
I told you so.
Speaker 3 (19:29):
That is amazing.
Speaker 4 (19:30):
Yeah, we're just again trying to help newer
investors hedge risk Right nowin this market.
What are you funding?
That's your favorite right now?
I say as of right now.
My favorite is seeing investorsget super creative, for
(19:51):
instance, in Nashville.
We actually do not financedeals there for a variety of
reasons, but Nashville is agreat real estate market.
If you want to do deals there,I don't think it's bad.
We just can't for other reasons.
There are these things calledHPRs horizontal property regimes
where essentially you'd buy apiece of land, redevelop it into
two lots and build two tall andskinny houses.
It really helped us with ourneed for housing in Nashville.
That is pretty much obsoletenow because every single real
(20:12):
estate developer in the singlefamily space has bought every
single one of those lots andthere's maybe like 70 remaining
that 20 companies call everysingle day.
I'm seeing a lot in upstate andSouth Carolina.
People are picking up acre pads, splitting them, keeping the
main house, maybe even puttingthe main house right back on the
MLS, selling the dirt,developing the dirt.
(20:32):
Strategic deals like that I'mreally enjoying right now
because in every emerging marketthere's a need for housing.
Yeah right, your supply issuper low, your demand is high.
Nobody's selling because theyall have two and a half percent
rates for four months.
Four and a half months so ofsupply yeah, yeah four to five
months of supply yeahso finding ways to get creative.
Or when you go build a bigtrack neighborhood I've saw,
(20:53):
seen you know 20 of them, yeah,driving around in the past 24
hours but saying, hey, here's aone acre parcel talking to your
you know local zoning committeeand say what can I do here?
And they say, oh, depending onthe setbacks, it's not.
You can subdivide it and getanother lot.
Or I can subdivide it, put 40Kinto the main house, renovate it
, sell that, then also sell thislot for you know 2x what I'm in
(21:16):
for it to the other guy andit's a great way to maximize.
On deals, I just say creativity.
Traditionally, I'll always justlove to fix some flips that are
clean cut deals, yeah.
Speaker 2 (21:26):
Stuart was talking about that on our last podcast
about parceling out land,getting a read like buying a
bigger piece and then getting itzoned.
You know there's a lot of asI'm doing more of these
development deals.
The same thing multiple exitstrategy there's.
My intention is to fullydevelop it into 100, 200 unit
multifamily apartment complex,but taking the raw dirt and then
(21:49):
, you know, getting it entitledand getting it.
You know doing some civil andgetting it closer to the finish.
There's a lot of value in thatbecause you're taking the risk
out for the next investor.
So there's another exit thereand it's a shorter term.
Some people just do that.
Some people are just flipping.
Oh yeah, and porcelain.
Speaker 4 (22:08):
Yeah, just horizontal work.
Yeah, oh man, there's a massivebusiness for that.
We get inquiries on that allthe time in Northern Alabama.
But yeah, just say, looking atevery deal with a fine tooth
comb, finding different ways youcan and can't make money on it.
I think it's super beneficialin the long term.
Like I said, strategies flip ona dime.
There's no reason yours can't.
Speaker 3 (22:25):
Yeah.
Speaker 4 (22:26):
But yeah, I'd probably say that's probably my
favorite deal right now.
Speaker 3 (22:28):
Yeah, that makes sense.
Your ideal guy that comes toyou or gal that comes to you and
has a flip deal.
What do they bring into thetable?
End of the table you mentioneda little bit of it before, but,
ARV, maybe they're bringing whatthey're planning to do to the
property, but what personalfinancial statement, anything
else that if someone wanted tobring you a deal and get it done
(22:48):
quickly, what should they havein hand?
Speaker 4 (22:50):
I'd like to see that they have liquidity to be able
to flow payments and start theconstruction process for draws.
I'd like to see that they couldspeak intelligently on why they
picked a neighborhood to investin.
We get it all the time wherepeople are like well, my
wholesaler said this is a goodneighborhood.
I'm like, well, I'm sure it is,but why do you want to?
Speaker 3 (23:07):
do a deal in that neighborhood.
Speaker 4 (23:08):
A lot of times you talk to investors and there's a
reason why you want to work inthat neighborhood.
Well, new school zoning thisnew that I'd like to see.
The change they're putting in anew park in this neighborhood
have a reason for why you wantto be in that neighborhood.
Don't just cherry pick itbecause the comps are good.
I said the pro.
Those are the two mostimportant things liquidity and
understanding of why they wantto do that deal.
Speaker 1 (23:28):
Well, you almost like want to.
You know when I'm, when I'mgoing to a bank and me and a
lender just did this that areteaming up on some of our
housing from North coastArkansas, we're going to a bank
and what I used to call it andwhen I was in printer sales is
you block your exits and soreverse engineering it from.
Hey, what, if I'm in yourposition, what would I be asking
to me?
Um, and going through andalmost like underwrite, I think,
(23:50):
for y'all would probably see alot of value if someone kind of
pre underwrote it themselves.
And you know if, if I just sendyou something and I'm like, oh,
this came up on the market,what do you think?
Here's this, this and this.
But it's like a trash deal.
Those emails that I keepsending, they're going to start
getting flicked up really quickand so, like, if I'm able to
underwrite that, block someexits, go.
(24:11):
Hey, here's a niche in themarket that I'm seeing and
here's why I think that, andhere's the data that backs it up
, and you're almost like abusiness proposal as an email or
something like that to you.
Speaker 4 (24:22):
Sure, yeah, that's that's what you want.
We have one guy in SouthCarolina who sends us.
I mean it's, it's beautiful,yeah, it's, it is stunning.
You're presenting a business.
I have no questions.
No notes, no questions.
I'll let him know within an hourif we could work with him and
we did, I think, when we startedworking and we approved eight
deals for him in like 12 days.
That's like crazy.
(24:44):
Yeah, I mean well, I mean I, Idon't have any questions.
Yeah, we, we a lot of timeswe'll do a loan community like
what, what are we doing here?
Like it's good, but like let'smake sure we're all on the same
page.
So like that's why I said twoto three sentences of strategy
minimum yeah go further.
But yes, you are pitchingbusiness.
It is a business.
You're investing money insomething to make money.
That's, I think, like adefinition of a business.
(25:07):
Yes, you're creating a product.
Speaker 1 (25:08):
Exactly, I love it.
I said don't fear the rate ifyou're missing the opportunity,
and I think that's somethingthat, like Henry and Jared
Jared's talked on that beforeyeah, I mean the opportunities,
I mean the rates are the rates,but the opportunity will make
you money.
Speaker 4 (25:22):
Yeah, right, right.
And that's what I think kind ofbacks into what we talked about
previously about the rate isn'tthe guiding light.
Yeah, how good a deal is orisn't?
Yeah, right, the associatedcosts are the same thing.
Talked about the opportunitywith that Quantplex, right, the
associated costs are the samething.
Talked about the opportunitywith that Quantplex, right.
Even if you did know who I was.
Let's say I was maybe tooexpensive for you.
(25:43):
You had another true privatelending company.
Let's say they're tapped oncash.
Maybe I'm more expensive, butyou just missed out on a great
opportunity.
Yeah, if you would have, youknow, wrote out a financial
model for that deal.
Let's say I was 3,000 moreexpensive to work with
throughout the course, right,you'd be like, yeah, I'm happily
pay three thousand more if Igot it up.
A low market rate deal, right?
Yeah, um, I think it's.
(26:03):
It's a very true quote.
Speaker 1 (26:04):
I said that smart guy give us give us like a minute
on you guys.
If someone's listening to this,yeah, they want, they want to
use you.
Tell them how to contact you.
Things of that nature, ofcourse, rocky, rocky feinberg
and uh winstone.
Speaker 3 (26:20):
Winston.
Speaker 1 (26:20):
Yes, winston is coming into this market, uh,
with private money.
So, listener, listening.
Here's how to get in contactwith them.
Speaker 4 (26:26):
Yeah, first off, we're very excited to be here.
Um, we've been following youguys in your market for about a
year now and we've hadintentions of coming here to you
know, help you guys scale on abunch of investors, get you guys
suited with financing thatmaybe you haven't had before.
You can contact us on ourwebsite it's probably the
easiest way.
That's windstoneplcom.
On there you'll find thecontact information for our
(26:49):
sales team, our operations team,my contact information.
The only other way is throughemail.
That is windstoneplcom or,sorry, info at winstonplcom.
That'll go to our generic emailaccount, which has myself on it
, my two other partners and ourtwo other executives on there,
so we get a lot of inquiries onthere as well.
Or you can just shoot me a text.
(27:12):
We see my number on our website.
I'm a pretty laid back guy.
I don't mind talking.
I probably talk to every singleone of our clients on a first
name basis.
We like to keep it more of afamily office environment, even
though we're kind of outgrewthat.
Speaker 1 (27:25):
Yeah.
Speaker 4 (27:26):
Kind of like to keep that personal touch.
So when you have a deal you cancall me to ask a question about
payoff or closing timeline.
You don't have to worry aboutgoing through a salesperson who
has to ask their manager.
Then go up to the VP, right.
We try to just keep it very,you know, organic conversational
flow.
Yeah, that's the easiest way toreach out to us we don't have
(27:47):
social media maybe, maybe comingin soon.
Speaker 1 (27:49):
No marketing.
Well, we want to thank you guystoo, for they are our biggest
sponsor on this podcast.
So thank you, Winston.
Speaker 3 (27:55):
Of course.
Yeah, rocky, we appreciate yourtime and and again I just
wanted to hit that I think it'sso important that having as many
tools in your tool belt aspossible is so important as a
real estate investor, and Rockyis a great tool and I think
we're excited to continue tolearn about kind of what you
have, and obviously we get tolearn a lot during this episode,
so I think a lot of guys cantake a lot away from that A lot
(28:18):
of good takeaways.
Speaker 2 (28:19):
whether you're doing a lot of flipping in and out,
how people look at deals, howinstitutional investors look at
deal, how private monies look atdeals, different exit
strategies, presenting a deal,making sure you're presenting a
deal thoughtfully organized well.
So, yeah, appreciate your timeand sponsorship.
Speaker 4 (28:36):
Of course, well, hey, thank you guys for having us
here.
Love it?
Let's go eat.
Speaker 3 (28:39):
Yeah, appreciate y'all listening.
We'll talk to you soon, allright, thanks guys.
Love you guys.
Speaker 1 (28:44):
Again, thank you guys for tuning in.
I'm going to go ahead and listsome sponsors off here.
We're going to start with OneStone Private Lending.
This episode is brought to youby One Stone Private Lending,
one of the top private and hardmoney lenders now serving
Northwest Arkansas.
Whether you need short-termcapital for a flip a bridge loan
or creative financing, they'vegot you covered with very
(29:05):
flexible products to fit nearlyany deal, including 100%
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What sets them apart is theirdeep expertise, fast response
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If you're looking for a reallending partner, check out
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(29:27):
Our next sponsor is from BlackBranch Mortgage, specifically
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Speaker 2 (34:14):
Special thanks to one of our sponsors, who I've
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They're the ones who seeopportunities where others see
obstacles, whether it's a vacantlot with a plan for a thriving
business or making an old spacenew.
They work with creators whothink big and are not satisfied
(34:36):
with the status quo.
People's Bank helps you buildArkansas, deal by deal and brick
by brick.
They don't just see numbers ona spreadsheet, they see your
passion and vision.
People's Bank, it's wherepeople come first.
Member FDIC.
If you're needing loanassistance, reach out to Dakota
at 870-883-1706 or d-h-e-D-D-E-Nat peoplesbankarcom.
Speaker 1 (35:02):
If you enjoyed the show, make sure to give us a
follow on your favorite podcastplatform so you never miss an
update.
Speaker 2 (35:07):
Don't forget to connect with us on Instagram,
facebook and LinkedIn for morereal estate insights and behind
the scenes content.
Speaker 3 (35:13):
Have a question you want us to cover, send it our
way and if you're interested insponsoring the show, visit
nwainvestingcom to get in touch.
Thanks for listening and
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