February 14, 2024 • 32 mins
Fasten your seatbelts as we embark on a riveting journey through equity funding with none other than Arnold Podrebarac, a titan in the real estate realm with 22 years of experience. Let Arnold be your guide as he uncovers the secrets of investing in one to four units for first-timers, the critical role of a 700+ credit score, and the intense game of real estate flipping.
As we shift gears, we invite you to unravel the mysteries of loan requirements in the world of real estate investing. A knowledgeable insider from the lending community shares the ins and outs of reserve requirements and the often-overlooked aspect of the experience. Hold your breath as we venture into the challenging terrain of new constructions – not for the faint-hearted but rewarding for those who dare.
We then dive headfirst into the sea of real estate investment loans, breaking down their complexities and crucial role in purchasing or refinancing rental properties. Understanding the intricacies of these loans can unlock powerful opportunities in your real estate journey. As we wind down, Arnold shares his wisdom on improving credit scores, networking, and succeeding in a competitive real estate market. So, tune in to this episode, where we crack open the treasure chest of real estate investing knowledge. Remember to subscribe to our YouTube channel for more illuminating content. https://www.youtube.com/@tdjequityfunding. Until next time, happy investing!
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If you need assistance in obtaining funding, email us at podcast@tdjequityfundinginsiders.net. Tell what the scope of funding is needed and the amount. A broker will contact you to discuss your funding needs. And remember, at TDJ Equity Funding, we do not force your funding needs into a lender's box but find a lender's box that fits you!
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Episode Transcript
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Announcer (00:13):
Ready to get the inside scoop on equity funding?
Tune in to TDJ Equity FundingInsiders podcast for an in-depth
look at what it takes to accessfinancial capital and maximize
your investments.
Jacquelyn Jackson (00:47):
Welcome to the TDJ Equity Funding Insiders
podcast, where the secrets tofunding your real estate dreams
are unveiled.
I am your co-host, jacquelineJackson, and join me as a man
whose expertise in the industryis as vast as the properties
he's financed, the one and onlyArnold Poecherbrake.
If you would, arnold, if youwould just say your name for it,
(01:12):
because I want to make sureeverybody has your name right.
Arnold Podrebarac (01:15):
Yes, Arnold Poecherbrake.
Jacquelyn Jackson (01:17):
Podrebarac.
Alright, thank you, Arnold.
I call him Mr.
Arnold.
Alright, brings a whopping 22years of real estate wisdom to
the table.
Arnold is just not like a realestate veteran you all.
He has been in this greatbusiness of guiding the
navigation world of the privatelending area.
He's worked a little bit, youknow.
He's worked in the private, aswe say, the money heart, money
(01:37):
area.
But he's also been workingreally great in the private
lending area, which we're goingto talk more about today.
But either way, he brings usyears of experience in this
field.
So we are really blessed tohave him here on our show today.
So let's get ready forunfiltered insights, juicy
stories and particular tips asArnold spills the beans on how
to secure funding for your realestate deals.
(01:59):
So, if you would, let's welcomeArnold to our show today.
Welcome, arnold.
Arnold Podrebarac (02:04):
Thank you, Jackie.
Look forward to spending alittle time with you.
Jacquelyn Jackson (02:08):
Okay, well, like I said, great, great, great
.
So this is what we want tostart off today.
If you would, let's give ourlisteners a little bit about
yourself, a little backgroundand what all you do.
Arnold Podrebarac (02:18):
Right.
So I am currently at theprivate lender work for a
company based on the West Coastthat does private lending.
We do real estate funding fornon owner occupied investment
properties.
In the case of this company, wedo one to 10 units, so it's
(02:39):
always just non owner occupiedinvestment properties.
Jacquelyn Jackson (02:43):
Properties.
Okay, and for our beginninglisteners, let's talk about
those that are interested orgetting into real estate, those
that are already real estate.
As a loan broker, we work withseveral different lenders that
actually direct lenders to helpus with our clients.
Ernest is one of those that weare like we consider like a go
to, because I call them aboutsome things just to ask
questions, because he knows, sohe has great stuff to bring us
(03:04):
today.
So what we want us to do,starting off for our new ones,
is explain to them what actuallyis our, what is the one to 10
units.
When you say that is playingthat with, that is compared to
other stuff that they're doing.
Arnold Podrebarac (03:18):
Correct?
Yeah, so you have single familyresidents.
Is the one duplex to triplex,three, quad or four plexes four,
and then anything five to 10units in our case, but anything
five plus units is a multifamily.
Okay, the family is a littlebit different loan, it's a
(03:38):
different animal and requiresmore experience from a lender
standpoint and from a borrowerstandpoint as well.
So it's not for the faint ofheart to do a multifamily.
You do need the experience.
But a good way to get it is tobuy one to four units as your
start for investment.
Jacquelyn Jackson (03:59):
Right.
So you're saying, basically,they should start with the one
of four.
Now, when you say start, let'ssay it's a little different than
what we talked about before asfar as what we're going to say
in the beginning, because yousay some things that I think we
need to bring to our audience.
When you say one of four units,they need to start, and you say
, like, if somebody's startingout and with the record lender,
what do you want to see is afirst time starter, because you
(04:20):
all do first time, Am I correct?
Do you all do first time?
Announcer (04:23):
Correct correct.
Jacquelyn Jackson (04:24):
So can you explain what they need to have
when they come to you?
What are you looking for?
They need to know that.
Arnold Podrebarac (04:28):
Yeah, great question, jackie.
It's important because a lot ofpeople look at it like they're
buying, let's say, a $200,000house.
They look at it as if they'rebuying an owner occupied house.
Well, we've got 20% down, so weshould have enough money.
It's different on an investmentproperty.
So you can buy an investmentproperty that's already been
(04:52):
remodeled and is you're buyingit to buy it as a rental.
That's different than buying aproperty that you're going to
remodel and then either bring itto investment or flip the
property.
So a first time investor needsto really look at it like.
They need to have,conservatively, 35% of the
(05:14):
purchase price 30 to 35% of thepurchase price.
Liquid.
Liquid cash is cash in the bankthat you can use for it, unless
you're going to liquidate a helock or something like that, but
we can get into that more later.
So Really it's, it just comesdown to cash and it comes down
to credit.
(05:35):
In today's lending world, itcredit is super important and
you really need to have 700 plusFICO 700 plus right to kind of
skip that started.
Jacquelyn Jackson (05:46):
Okay, especially a first-time investor
, correct right and notice nowthat you are my listeners.
What he's saying is this aslong brokers, we deal with all
types to come through.
But he's saying if you arefirst-time investor, he's not
saying we can't because we takelike 626 for that I think you do
some 680.
He's not saying we won't takeit.
So make sure y'all understandthat.
What he's saying is, if you arefirst-time investor is Best,
(06:08):
you need to have a 700 creditscore.
If you start now for the firsttime and you want to use Lend,
private lending money am Icorrect?
Then that's something he has tolook at and be prepared to
actually come where you'reputting that 30 or 35 percent
down out of your pocket, becausepeople like, well, how much you
got to put down?
And I tell him it's always thebest way to look at it is how
(06:29):
much you got in the bank is howmuch you can afford.
So if you got a hundredthousand dollar house you
looking at and you have thirtythousand dollars in the bank at
30%, you probably could do that,which we know we have a minimum
of a hundred thousand.
But I'm just showing that'syour budget, based on what's in
that bank, so you don't need togo look at a $300,000 house and
all you got is thirty thousanddollars in the bank.
Am I correct?
Arnold Podrebarac (06:49):
Correct right in the brain and the breakdown
really is for the most part youfigure you even an investment
property, even first-time You'regonna put about 20% down on the
property.
The remaining 10 to 15%Liquidity is to cover closing
cost fees, property tax,insurance, title, escrow, and
then also you need reserveRequirement and if you're going
(07:11):
to rehab you need to have atleast 15 to 20% of the rehab
budget Liquid as well to startthe rehab.
So it kind of breaks down likethat a little more right, which
is really good.
Jacquelyn Jackson (07:22):
So let's go to that budget that you
mentioned.
I think again for us tounderstand when you say you need
to have this much For yourbudget.
Where's the reason they need tohave that to get started, 15%
or whatever on for their budget?
Why would they need that?
Arnold Podrebarac (07:35):
Right.
So if you're doing a rehabproject and let's say a
conservatively, your rehabbudget is $30,000.
So the reason you need the 15%of that liquid is Rehab budgets.
Although it is alone, you'reonly paying when the money is
drawn, but you are Starting thework in order to take a draw.
(08:00):
Okay, so you have a rehabbudget with line items, you
complete X amount of work, yourrequest to draw on that and then
you get the draw.
So it's it's more detailed thanwhen somebody does alone.
We'll get into a little more,but that's the basics of it.
Jacquelyn Jackson (08:17):
A basic so they can understand.
So we want you on the and, ifI'm correct, I know you guys do
a hundred percent rehab thoughfor his reimbursement, right On
the rehab, but it's a percentagelike for all most lenders you
have to have a percentage thatyou have to put into purchasing
the property, Okay, so youyou'll come with, like he said
that, 30% or 35%.
(08:37):
You'll have that, or 20% as youget more experience on your
thing.
And I do remind me, I do wantus to talk about what you
consider experience, becausewe're getting a misunderstanding
of what real estate investingexperience is.
Okay.
But but what I'm going back to,what I was saying you ought to
make sure that 15 to 20% thatyou're going to put down that's
what he's saying you need tohave set up to be part of your
(09:01):
budget when you put the thingstogether.
Now we're going to go back tothe other one I want, but let's
talk also right quick before weget off of the reserve.
What do you mean when you saythey need to have so, so much
reserve?
What is the reserve for?
Arnold Podrebarac (09:13):
Correct.
So it's not money that you'regoing to apply at escrow or not
going to apply the money atescrow to the closing the
transaction.
The reserve requirement is youneed to have three to six months
of principal interest, tax andinsurance liquid so that those
(09:36):
numbers multiplied times threeor six.
In the case of a state of fixand flip loan and bridge loan,
it's interest only.
So interest, tax and insurance.
Jacquelyn Jackson (09:45):
Okay, and that just didn't mean that being
a like a count that you all cansee that they have those
reserves.
Right, when you say reserves,you need to see.
Jackie send me the bank accountwith the money in it.
Basically, right.
Arnold Podrebarac (09:57):
Correct, correct.
Jacquelyn Jackson (09:59):
Okay, cause people need to understand the
difference of that.
Again, this one is kind offocused on, maybe, our beginners
, cause we do have a lot ofbeginners that's watching our
show now and so we want them tokind of have some actual
information that's correct,coming from a lender directly.
They can know how they need tohave that.
Now let's go back and talkabout experience, because we
need to.
Really, I know we have a lot ofsituations that come into us
(10:20):
that we haven't explained this,so I want people to hear from
you, as a direct lender, what doyou consider is real estate
investors experience?
Arnold Podrebarac (10:30):
Okay.
So it's changed over time aswell, and in the current market
you have to have, for instance,on a fix and flip loan or a loan
that you're going to do rehabon, you need to have experience
doing those.
If you don't have experience,we'll still do the loan.
It just affects the loan tovalue as well as the rate.
(10:53):
So experience makes a big,makes a big difference.
The more experience, the betterloan to value and the better
rate.
So that is.
That's really a big, a bigthing.
It doesn't mean you can't getinto it and you can't build up
experience, because that'sreally what we encourage.
But you learn from experience.
(11:15):
That's why you get a betterrate and a better loan to value.
We know that by taking thatrisk and making that investment,
you learn from experience andwe reward that.
Jacquelyn Jackson (11:27):
Right, what a good with a with a nice well,
as we say, your terms are a lotbetter for you compared to if
you knew.
So what I want to add to you aswell with that experience too,
is that experience is not thatyou invested into a real estate
investment project.
You put money into that projectand now you have experience.
No experience, and correct meif I'm wrong Experience is when
(11:50):
you have actually had your nameon the LLC of this property
we're talking about, or you partof the settlement.
You know that.
You part of the settlement, sothat's your own the loan.
Is that basically what it is?
So what do you?
How do you all word it?
You know, so they can know.
Arnold Podrebarac (12:02):
Yeah, you're on the title.
Okay, so either through yeah,you're on the title either
through an entity or as anindividual.
Jacquelyn Jackson (12:09):
For individual.
So that means paperwork, statepaperwork, legal paperwork, guys
, not somebody saying, hey, comewith me and invest in this
property.
You're going to put 80,000.
I'm going to give you a returnon your money, or 22% or 33%,
that's not the same.
You just invested your moneyfor ROI.
That's all, which is returningyour money and interest, and
that's fine.
You will return on yourinvestment.
It's all you're going to getout of that.
(12:31):
But you can't come to me as abroker and him as a lender and
say, well, I have experiencebecause I've invested my money
in this, this and this.
Okay, am I correct?
Is that it?
Arnold Podrebarac (12:40):
Right, that's yeah, it's a great point to
bring up too, because it doescome up quite often over
somebody will have experience inthe sense of that they were
investing, like you had said,but now you have to have your
name on title, right.
Jacquelyn Jackson (12:55):
For it to count, for you to count, so that
to count.
Okay, which is the.
If so, everybody can know that.
Now I do know, like you said,they need to have that on title.
But when we do it withpurchasing or fixing or fixing
flips now, not necessarily newpeople, as much our listeners.
But let's talk on this newconstruction, cause people have
a misunderstanding.
Well, the first thing I want tostart, my first thing is I want
(13:17):
to build my house, I want to, Iwant to do new construction.
So I know, me and you didn'tlaugh about this a lot of times
with the stuff we have come ourway, but I want you to talk
about new construction.
As a lender, what are youlooking for?
What they need to look like andwhat they need to do or don't
do when it comes to newconstruction?
Arnold Podrebarac (13:34):
Right, it's definitely not for the faint of
heart.
Experience really comes intoplay for new construction.
It is we require you have atleast if you're doing a ground
up construction.
We require you have at leastfour ground ups under your belt
in the last three years beforewe'll land on a new construction
(13:55):
.
There's an exception forcontractors building their own
investment property newconstruction.
Jacquelyn Jackson (14:03):
So contractors have a little bit of
an out if they've done newconstruction for other people
ground up then we can count thattowards experience Right and
under their own and see and onan experience with that when we
do that too as well.
A lot of the lenders you'reright, they take that as
experience from the contractors,but I would tell you they do
(14:24):
give us a lot, because I've hadit happen before.
They did give us a littlecredit for what he did, but it
was best.
They would like to see the onethat I had, the contractor that
had actually did it in his nameor his company name.
They gave him more of a deal.
So, understand, you need to haveexperience under your belt and
if you don't have it, mysuggestion is this, and I think
(14:46):
I had that conversation with youwhere, if you're not, how do
you get experience?
Because if you don't haveexperience, you can't get along.
Well, get with someone, maybeyour first deal that they have
experience and you all kind ofcan get on that together, right,
Because we talked about that.
So how would you get I want youto really mention that to our
listeners, or what they shouldlook at doing to get on that if
they don't have any experience,how do they get experience with
(15:08):
new construction?
Arnold Podrebarac (15:10):
Right.
So you would find somebody thathas the experience, somebody
you obviously trust, becauseyou're going to have to enter
into an agreement with thatperson.
That agreement could be anentity, an LLC, something like
that, and you're bringing themoney to the deal.
That's your contribution to thedeal.
If you're on an entity withthose people, in an ideal world
(15:34):
you want to be have a majorityor at least 25 plus percent of
the entity.
You're on title with thatentity and you have a major
ownership in that entity ormajor membership in that entity.
Jacquelyn Jackson (15:54):
Now let me say this not to necessarily
break you off, but when you say25%, to have interest in it.
So if a person come to you andthey got 5% interest in a
company that has built it, wouldthat be considered their part
of their reference I mean notreference but their experience
even though they had 5% on thecompany that built, fixed and
(16:15):
flipped the house?
Arnold Podrebarac (16:18):
Not really.
They really need a higherpercentage of the entity and the
reason being risk is percentage.
So if your risk is 5% of a deallet's say a $200,000 deal and
your risk is $10,000, we'relooking for you've taken the
risk and succeeded at that risk.
(16:39):
That's really what we'relooking for.
And that's why you could havedone a fix and flip and lost
$5,000, but it was in your nameand it still counts.
Jacquelyn Jackson (16:49):
Right right.
The fourth percentage is 100%was in your name, so you're
saying that would matter morethan you.
Being 10% of somebody else'sstuff is basically.
Arnold Podrebarac (16:58):
Right, exactly.
Jacquelyn Jackson (16:59):
Right and that's the myth and I'm going
over stuff because that's themyth we have.
When people come in, they don'tunderstand that how that is and
they have partnership, they aregetting to, but it's not the
proper way.
It was not that it was wrongand illegal, because it's not.
It's just it wasn't a properway that we will consider it as
experience.
So I wanted us to would you beit on to really address when you
(17:20):
highly need to look when theyactually come to a lender, even
as a new one.
Our big thing is on aconstruction deal.
I do want to emphasize thatagain, that you need to have
experience with new constructionin order to get new
construction money.
You know that's from a lender.
Now you can go barred and getit for all your family and
everybody want, all you want allday long.
But when it comes to lenders,that's what they're looking for,
(17:41):
is they're looking for thattype of experience.
So I definitely wanted us to goover that and then like also,
which I'm glad.
Thank you so much for helpingto do that.
Let's talk about the differenttypes of loans and I guess what
we call them, when you all callthem, is DSCR.
So explain what those are andthose different types of loans
for people.
Arnold Podrebarac (18:00):
Right.
So up to this point we'vebasically covered what's called
a bridge loan or a bridge withrehab or value add loan.
They all fall under the samecategory, whether it's a stable
asset and you're just simplydoing a bridge or whatever,
they're all basically the sameloan.
Dscr loan is debt servicecoverage ratio and this usually
(18:21):
involves either buying aproperty that it's already
completed and ready to rent outor refinancing a property that
you bought, rehab and now you'reready to rent it out and move
it into a DSCR loan.
So the debt service coverageratio loan is it's like all of
(18:44):
them.
It's not a full dock loan, it'sbasically the same documentation
we need to see about we need tosee two months of most recent
bank statements is the deepestwe dive into your income.
It's your ability to completethat loan as a purchase or as a
refinance.
So debt service coverage iseither cash out or not cash out,
(19:10):
and if you're refinancingproperty under a debt service
coverage ratio loan DSCR loanthen the whole point is this if
you have a property that themarket rent is 2000 a month and
your principal interest, tax andinsurance combined or and you
(19:34):
could add to that HOA ormanagement fee combined, is 2000
or less, then that propertycovers the debt service on that,
and then that's what we'relooking for.
We're looking for a propertythat covers the debt service on
the loan.
Jacquelyn Jackson (19:52):
And basically , in short, you're saying your
rent need to be more than yourmortgage on your rental property
.
Arnold Podrebarac (19:59):
Or at least as much as.
Jacquelyn Jackson (20:00):
As much as, as much as.
Arnold Podrebarac (20:02):
Yeah, I mean there are exceptions and we do
some different loans too, but Idon't want to get into that yet.
Right, we'll go lower.
But it's just you have to be,you have to yeah.
Jacquelyn Jackson (20:14):
What you're saying is everything is not
cookie cutter.
Majority of it is, I think, inlending and stuff.
You let me know, majority it is, but sometimes you have custom
situations and that's where youguys have to do custom stuff and
, of course, on our end as welltoo.
So, basically, that's what thatare.
So that's what that is.
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(20:36):
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(20:58):
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(21:19):
TDJ equity funding.
Let's turn your dreams intodollars.
We definitely appreciate youtelling us that and explaining
it.
I do want to emphasize again,based on what you're saying, if
you are a first time landlord byforce and that that house is
(21:41):
now set up because you're not init anymore, that it is set up
as a rental property.
So when you refinancing youhave to refinance it as a
commercial property, am Icorrect?
You can't go and do it as orsomebody like I've had try to
get a heat lock out of a rentalproperty and you can't.
So let's explain the differencebetween that.
(22:01):
If you would, when you guysdeal with refinancing, what you
looking for compared to you knowthe other way, which is owner
occupied.
Arnold Podrebarac (22:09):
Right, so it's okay.
So we need the lease, the leasefor the property.
We're just looking forlongevity of lease, meaning if
it shows up as that it's yourproperty and there is definitely
(22:30):
ways to find out as opposed toan actual rental property then
if it's your property it's notvalid.
We only do not owner occupied.
So on the DSC R loan it's wecould get into all the
documentation, but that's, youknow, premature, but it's
basically what separates.
(22:51):
It is the lease, and then weoftentimes look for proof that
the deposit and the rent wasmade into your checking account.
So, it's a warning for mostpeople.
A lot of people have tenantsthat are pay cash.
If you're not depositing thatcash into the bank and you have
(23:11):
a lease, it doesn't mean thatthat counts, so that is an issue
.
Jacquelyn Jackson (23:17):
Right and that makes sense and that's what
I was trying to emphasize.
A lot of people think that nowthat I've moved out, I'm not
going to say anything to them.
I can still work it as if I'mthere.
When you get ready to file aclaim or refinance and all of
that, that stuff comes into play.
You're no longer that's thecommercial property.
So we say that to you all, tothe slant lawyers like that, to
(23:39):
be aware of that and then getyourself set up where you can
get funded on your investment orrefinance your investment.
So we want to do that.
So before we leave, get offtoday, I have a few questions
that my listeners have askedthat I ask you, and one of them
would be Arnaud, what would beyour top funding tips for our
listeners?
Arnold Podrebarac (24:04):
The best tip I can give people is we had
touched on it earlier isliquidity.
You think that you're going toneed far less money to do a
project, but always think you'regoing to need more.
So liquidity comes in a numberof ways.
A lot of people it's obviouslythe cash on hand, cash in the
bank checking savings account.
(24:26):
People have retirement accounts.
People have helots, but youhave to liquidate those in order
for those to count towardsliquidity now.
So you may feel you have thereserve in a retirement account,
but a retirement account isonly as good as the liquidity in
the bank.
So just plan for high liquidity.
(24:50):
That's a big one.
And then the other is credit.
If you're planning on doing thisnow or in the future, start
monitoring your credit.
Do the steps that it takes toimprove your credit.
Believe that you need to have700 plus credit, even though we
may go down to 660 or 680, justwork towards 700 plus.
(25:12):
It's a different lending worldnow and you need to.
Really those are the two mostimportant things you could do.
And having an entity is a plus,and many states require that
you have an entity to invest inthose states.
So it's a protection for you aswell to have an entity, but I'm
(25:34):
not an attorney or anaccountant, so I'll leave that
to them to work with.
Jacquelyn Jackson (25:40):
To explain to you right what you do?
Yeah, you are correct in that.
So what would be?
I mean, I know you say work onthe credit, because I want to
call our actions for ourlisteners.
I know you had mentioned youwould like for them to actually
work on a credit is based onwhat you're saying.
And then also let's talk aboutthe process of how they go about
(26:02):
the market as far as pickinghouses and stuff, because you
mentioned that before to meearlier.
So, if you would, can you tellus a little bit about the call
or action that's dealing withthem picking their houses and
for the market and stuff?
Arnold Podrebarac (26:12):
Yeah, Sure, multiple ways to do it and I've
dealt with a lot of differentscenarios People that joined
clubs or groups where the housesare identified for them.
Oftentimes there's a premiumthat you're paying on the
property.
The MLS in Zillow is obviouslypeople's most used choice to
(26:36):
find a property.
Off-market properties areprobably one of the better ones.
But you would do that later inyour investment process Because
if you're going to do mailers ortarget neighborhoods or
something like that, it involvesan investment up front.
So picking a property issomething where you only can use
(27:02):
you best trust your own advice.
Meaning you're going to buy aproperty and you're looking at
that property let's say onZillow is an example and you see
the property and it needs workand you think, well, if I buy
this property and I put workinto it, then I can sell it for
much more than I bought it for.
You have to one understand howmuch work that requires.
(27:26):
It's a 1200 square foot, threebedroom, two baths.
Does it require 30,000 in work?
And then if I put 30,000 into a$200,000 house, then you go
online and you see gutted,remodeled, 1200 square foot
houses in that neighborhood.
What are they selling for?
Well, if it's selling for$250,000, gutted and remodeled
(27:48):
and similar, then you're reallynot making a good investment
decision.
So, a lot of these things youfigure out too late.
When you're inexperienced,meaning you buy it, you get all
excited about it.
You've got a rehab budget youknow contractors made out as
budget for you and you presentit and you're trying to get a
(28:08):
loan for $160,000 on a $200,000purchase and $30,000 for the
rehab, so a combined total of$190,000 alone.
You get your appraisal.
The appraisal shows the as isvalue as well as the after
repair value, arv, and the ARVcomes back and your loan to cost
(28:29):
meaning and your loan to ARVisn't good.
So we're not going to land youthe 80 cents on the dollar on a
loan.
That doesn't make sense.
But you're already committed tothat property.
So you need to really do yourdue diligence upfront.
So find people you trust if youdon't have the knowledge base
(28:50):
for that.
Jacquelyn Jackson (28:51):
Exactly, and on that note, I want to say
because I definitely want themto mention, because I know what
type of lenders you guys are isthat, when it comes to a lender,
our last question is what dothey need to look for in a
lender?
Or because you're a directlender, so what do you think
they need to look for whenthey're looking for a direct
lender to help them?
Arnold Podrebarac (29:12):
So you need to look for people that have the
experience.
So, for instance, jackie, ifthey would call you and they
said we're looking at thisproperty, what we want to do
here's what we're going to spend, you have the knowledge base to
tell them that is or it isn't agood investment.
You have a broad knowledge.
You've done it enough.
And the same when they call medirectly, I can pull up data
(29:35):
that possibly they can't pull upand it either does or doesn't
make a good decision.
You know the old adage youdon't want to buy the most, the
biggest, most expensive house inthe neighborhood, because it's
always dragged down by the lowerpriced homes.
So the same applies here.
You know we don't like to seean ARV at two times what the
(29:58):
neighborhood average value is.
So it may.
It may be the Taj Mahal in a ina neighborhood.
That's not great, but it's it'snot going to have the value.
Jacquelyn Jackson (30:10):
Exactly so.
Like I say, it's about thereturn on your investment, and
that's what the lenders do.
They want to make sure thenumbers work.
That's what we call it.
If the numbers work, then wecan do the deal, but if the
numbers don't work, you can't dothe deal.
So in order to know that you'reright, you have to deal with a
lending power that does haveexperience and that understands
that.
So I totally agree with you onthat.
(30:31):
So we, wrapping everything up,we want to definitely I mean
that was your answers have beenreally awesome and definitely
you've given us a lot ofinformation for our listeners
and we thank you and appreciateyou for coming to our show today
.
Mr Arnold, is there any lastthings you would like to say to
our listeners?
Arnold Podrebarac (30:50):
The best, the best choice that people can
make is to look at investmentslike you would look at
investment in property, likeyou'd look at investment in
anything else.
Many people invest in stocks or401ks or whatever.
But if you look at this thesame way, meaning with an
intelligent approach, thenyou're you're going to have a
higher likelihood to succeed.
(31:11):
I always say it's better to buyfive $200,000 houses and one
million dollar house, becauseyou're putting eggs in different
baskets there.
So probably the best advice isstart slow and start start lower
, even if you could afford more.
Jacquelyn Jackson (31:32):
Right, right, I got you that.
That's a great, great, greatadvice, and thank you again.
Thank you again so much forbeing on our show, mr Arnold.
Arnold Podrebarac (31:41):
Well, thank you, I appreciate the
opportunity.
Thank you again, take care.
Jacquelyn Jackson (31:46):
You take care as well, and to our listeners.
If you like this informationand would like to learn more,
please subscribe to our YouTubechannel at youtubecom, at TDJ
equity funders and Siders.
Until next time, thank you andtake care.
Announcer (32:24):
Until next time, take care.
Ready to get the inside scoop on equity funding?
Tune in to TDJ Equity FundingInsiders podcast for an in-depth
look at what it takes to accessfinancial capital and maximize
your investments.
Jacquelyn Jackson (00:47):
Welcome to the TDJ Equity Funding Insiders
podcast, where the secrets tofunding your real estate dreams
are unveiled.
I am your co-host, jacquelineJackson, and join me as a man
whose expertise in the industryis as vast as the properties
he's financed, the one and onlyArnold Poecherbrake.
If you would, arnold, if youwould just say your name for it,
(01:12):
because I want to make sureeverybody has your name right.
Arnold Podrebarac (01:15):
Yes, Arnold Poecherbrake.
Jacquelyn Jackson (01:17):
Podrebarac.
Alright, thank you, Arnold.
I call him Mr.
Arnold.
Alright, brings a whopping 22years of real estate wisdom to
the table.
Arnold is just not like a realestate veteran you all.
He has been in this greatbusiness of guiding the
navigation world of the privatelending area.
He's worked a little bit, youknow.
He's worked in the private, aswe say, the money heart, money
(01:37):
area.
But he's also been workingreally great in the private
lending area, which we're goingto talk more about today.
But either way, he brings usyears of experience in this
field.
So we are really blessed tohave him here on our show today.
So let's get ready forunfiltered insights, juicy
stories and particular tips asArnold spills the beans on how
to secure funding for your realestate deals.
(01:59):
So, if you would, let's welcomeArnold to our show today.
Welcome, arnold.
Arnold Podrebarac (02:04):
Thank you, Jackie.
Look forward to spending alittle time with you.
Jacquelyn Jackson (02:08):
Okay, well, like I said, great, great, great
.
So this is what we want tostart off today.
If you would, let's give ourlisteners a little bit about
yourself, a little backgroundand what all you do.
Arnold Podrebarac (02:18):
Right.
So I am currently at theprivate lender work for a
company based on the West Coastthat does private lending.
We do real estate funding fornon owner occupied investment
properties.
In the case of this company, wedo one to 10 units, so it's
(02:39):
always just non owner occupiedinvestment properties.
Jacquelyn Jackson (02:43):
Properties.
Okay, and for our beginninglisteners, let's talk about
those that are interested orgetting into real estate, those
that are already real estate.
As a loan broker, we work withseveral different lenders that
actually direct lenders to helpus with our clients.
Ernest is one of those that weare like we consider like a go
to, because I call them aboutsome things just to ask
questions, because he knows, sohe has great stuff to bring us
(03:04):
today.
So what we want us to do,starting off for our new ones,
is explain to them what actuallyis our, what is the one to 10
units.
When you say that is playingthat with, that is compared to
other stuff that they're doing.
Arnold Podrebarac (03:18):
Correct?
Yeah, so you have single familyresidents.
Is the one duplex to triplex,three, quad or four plexes four,
and then anything five to 10units in our case, but anything
five plus units is a multifamily.
Okay, the family is a littlebit different loan, it's a
(03:38):
different animal and requiresmore experience from a lender
standpoint and from a borrowerstandpoint as well.
So it's not for the faint ofheart to do a multifamily.
You do need the experience.
But a good way to get it is tobuy one to four units as your
start for investment.
Jacquelyn Jackson (03:59):
Right.
So you're saying, basically,they should start with the one
of four.
Now, when you say start, let'ssay it's a little different than
what we talked about before asfar as what we're going to say
in the beginning, because yousay some things that I think we
need to bring to our audience.
When you say one of four units,they need to start, and you say
, like, if somebody's startingout and with the record lender,
what do you want to see is afirst time starter, because you
(04:20):
all do first time, Am I correct?
Do you all do first time?
Announcer (04:23):
Correct correct.
Jacquelyn Jackson (04:24):
So can you explain what they need to have
when they come to you?
What are you looking for?
They need to know that.
Arnold Podrebarac (04:28):
Yeah, great question, jackie.
It's important because a lot ofpeople look at it like they're
buying, let's say, a $200,000house.
They look at it as if they'rebuying an owner occupied house.
Well, we've got 20% down, so weshould have enough money.
It's different on an investmentproperty.
So you can buy an investmentproperty that's already been
(04:52):
remodeled and is you're buyingit to buy it as a rental.
That's different than buying aproperty that you're going to
remodel and then either bring itto investment or flip the
property.
So a first time investor needsto really look at it like.
They need to have,conservatively, 35% of the
(05:14):
purchase price 30 to 35% of thepurchase price.
Liquid.
Liquid cash is cash in the bankthat you can use for it, unless
you're going to liquidate a helock or something like that, but
we can get into that more later.
So Really it's, it just comesdown to cash and it comes down
to credit.
(05:35):
In today's lending world, itcredit is super important and
you really need to have 700 plusFICO 700 plus right to kind of
skip that started.
Jacquelyn Jackson (05:46):
Okay, especially a first-time investor
, correct right and notice nowthat you are my listeners.
What he's saying is this aslong brokers, we deal with all
types to come through.
But he's saying if you arefirst-time investor, he's not
saying we can't because we takelike 626 for that I think you do
some 680.
He's not saying we won't takeit.
So make sure y'all understandthat.
What he's saying is, if you arefirst-time investor is Best,
(06:08):
you need to have a 700 creditscore.
If you start now for the firsttime and you want to use Lend,
private lending money am Icorrect?
Then that's something he has tolook at and be prepared to
actually come where you'reputting that 30 or 35 percent
down out of your pocket, becausepeople like, well, how much you
got to put down?
And I tell him it's always thebest way to look at it is how
(06:29):
much you got in the bank is howmuch you can afford.
So if you got a hundredthousand dollar house you
looking at and you have thirtythousand dollars in the bank at
30%, you probably could do that,which we know we have a minimum
of a hundred thousand.
But I'm just showing that'syour budget, based on what's in
that bank, so you don't need togo look at a $300,000 house and
all you got is thirty thousanddollars in the bank.
Am I correct?
Arnold Podrebarac (06:49):
Correct right in the brain and the breakdown
really is for the most part youfigure you even an investment
property, even first-time You'regonna put about 20% down on the
property.
The remaining 10 to 15%Liquidity is to cover closing
cost fees, property tax,insurance, title, escrow, and
then also you need reserveRequirement and if you're going
(07:11):
to rehab you need to have atleast 15 to 20% of the rehab
budget Liquid as well to startthe rehab.
So it kind of breaks down likethat a little more right, which
is really good.
Jacquelyn Jackson (07:22):
So let's go to that budget that you
mentioned.
I think again for us tounderstand when you say you need
to have this much For yourbudget.
Where's the reason they need tohave that to get started, 15%
or whatever on for their budget?
Why would they need that?
Arnold Podrebarac (07:35):
Right.
So if you're doing a rehabproject and let's say a
conservatively, your rehabbudget is $30,000.
So the reason you need the 15%of that liquid is Rehab budgets.
Although it is alone, you'reonly paying when the money is
drawn, but you are Starting thework in order to take a draw.
(08:00):
Okay, so you have a rehabbudget with line items, you
complete X amount of work, yourrequest to draw on that and then
you get the draw.
So it's it's more detailed thanwhen somebody does alone.
We'll get into a little more,but that's the basics of it.
Jacquelyn Jackson (08:17):
A basic so they can understand.
So we want you on the and, ifI'm correct, I know you guys do
a hundred percent rehab thoughfor his reimbursement, right On
the rehab, but it's a percentagelike for all most lenders you
have to have a percentage thatyou have to put into purchasing
the property, Okay, so youyou'll come with, like he said
that, 30% or 35%.
(08:37):
You'll have that, or 20% as youget more experience on your
thing.
And I do remind me, I do wantus to talk about what you
consider experience, becausewe're getting a misunderstanding
of what real estate investingexperience is.
Okay.
But but what I'm going back to,what I was saying you ought to
make sure that 15 to 20% thatyou're going to put down that's
what he's saying you need tohave set up to be part of your
(09:01):
budget when you put the thingstogether.
Now we're going to go back tothe other one I want, but let's
talk also right quick before weget off of the reserve.
What do you mean when you saythey need to have so, so much
reserve?
What is the reserve for?
Arnold Podrebarac (09:13):
Correct.
So it's not money that you'regoing to apply at escrow or not
going to apply the money atescrow to the closing the
transaction.
The reserve requirement is youneed to have three to six months
of principal interest, tax andinsurance liquid so that those
(09:36):
numbers multiplied times threeor six.
In the case of a state of fixand flip loan and bridge loan,
it's interest only.
So interest, tax and insurance.
Jacquelyn Jackson (09:45):
Okay, and that just didn't mean that being
a like a count that you all cansee that they have those
reserves.
Right, when you say reserves,you need to see.
Jackie send me the bank accountwith the money in it.
Basically, right.
Arnold Podrebarac (09:57):
Correct, correct.
Jacquelyn Jackson (09:59):
Okay, cause people need to understand the
difference of that.
Again, this one is kind offocused on, maybe, our beginners
, cause we do have a lot ofbeginners that's watching our
show now and so we want them tokind of have some actual
information that's correct,coming from a lender directly.
They can know how they need tohave that.
Now let's go back and talkabout experience, because we
need to.
Really, I know we have a lot ofsituations that come into us
(10:20):
that we haven't explained this,so I want people to hear from
you, as a direct lender, what doyou consider is real estate
investors experience?
Arnold Podrebarac (10:30):
Okay.
So it's changed over time aswell, and in the current market
you have to have, for instance,on a fix and flip loan or a loan
that you're going to do rehabon, you need to have experience
doing those.
If you don't have experience,we'll still do the loan.
It just affects the loan tovalue as well as the rate.
(10:53):
So experience makes a big,makes a big difference.
The more experience, the betterloan to value and the better
rate.
So that is.
That's really a big, a bigthing.
It doesn't mean you can't getinto it and you can't build up
experience, because that'sreally what we encourage.
But you learn from experience.
(11:15):
That's why you get a betterrate and a better loan to value.
We know that by taking thatrisk and making that investment,
you learn from experience andwe reward that.
Jacquelyn Jackson (11:27):
Right, what a good with a with a nice well,
as we say, your terms are a lotbetter for you compared to if
you knew.
So what I want to add to you aswell with that experience too,
is that experience is not thatyou invested into a real estate
investment project.
You put money into that projectand now you have experience.
No experience, and correct meif I'm wrong Experience is when
(11:50):
you have actually had your nameon the LLC of this property
we're talking about, or you partof the settlement.
You know that.
You part of the settlement, sothat's your own the loan.
Is that basically what it is?
So what do you?
How do you all word it?
You know, so they can know.
Arnold Podrebarac (12:02):
Yeah, you're on the title.
Okay, so either through yeah,you're on the title either
through an entity or as anindividual.
Jacquelyn Jackson (12:09):
For individual.
So that means paperwork, statepaperwork, legal paperwork, guys
, not somebody saying, hey, comewith me and invest in this
property.
You're going to put 80,000.
I'm going to give you a returnon your money, or 22% or 33%,
that's not the same.
You just invested your moneyfor ROI.
That's all, which is returningyour money and interest, and
that's fine.
You will return on yourinvestment.
It's all you're going to getout of that.
(12:31):
But you can't come to me as abroker and him as a lender and
say, well, I have experiencebecause I've invested my money
in this, this and this.
Okay, am I correct?
Is that it?
Arnold Podrebarac (12:40):
Right, that's yeah, it's a great point to
bring up too, because it doescome up quite often over
somebody will have experience inthe sense of that they were
investing, like you had said,but now you have to have your
name on title, right.
Jacquelyn Jackson (12:55):
For it to count, for you to count, so that
to count.
Okay, which is the.
If so, everybody can know that.
Now I do know, like you said,they need to have that on title.
But when we do it withpurchasing or fixing or fixing
flips now, not necessarily newpeople, as much our listeners.
But let's talk on this newconstruction, cause people have
a misunderstanding.
Well, the first thing I want tostart, my first thing is I want
(13:17):
to build my house, I want to, Iwant to do new construction.
So I know, me and you didn'tlaugh about this a lot of times
with the stuff we have come ourway, but I want you to talk
about new construction.
As a lender, what are youlooking for?
What they need to look like andwhat they need to do or don't
do when it comes to newconstruction?
Arnold Podrebarac (13:34):
Right, it's definitely not for the faint of
heart.
Experience really comes intoplay for new construction.
It is we require you have atleast if you're doing a ground
up construction.
We require you have at leastfour ground ups under your belt
in the last three years beforewe'll land on a new construction
(13:55):
.
There's an exception forcontractors building their own
investment property newconstruction.
Jacquelyn Jackson (14:03):
So contractors have a little bit of
an out if they've done newconstruction for other people
ground up then we can count thattowards experience Right and
under their own and see and onan experience with that when we
do that too as well.
A lot of the lenders you'reright, they take that as
experience from the contractors,but I would tell you they do
(14:24):
give us a lot, because I've hadit happen before.
They did give us a littlecredit for what he did, but it
was best.
They would like to see the onethat I had, the contractor that
had actually did it in his nameor his company name.
They gave him more of a deal.
So, understand, you need to haveexperience under your belt and
if you don't have it, mysuggestion is this, and I think
(14:46):
I had that conversation with youwhere, if you're not, how do
you get experience?
Because if you don't haveexperience, you can't get along.
Well, get with someone, maybeyour first deal that they have
experience and you all kind ofcan get on that together, right,
Because we talked about that.
So how would you get I want youto really mention that to our
listeners, or what they shouldlook at doing to get on that if
they don't have any experience,how do they get experience with
(15:08):
new construction?
Arnold Podrebarac (15:10):
Right.
So you would find somebody thathas the experience, somebody
you obviously trust, becauseyou're going to have to enter
into an agreement with thatperson.
That agreement could be anentity, an LLC, something like
that, and you're bringing themoney to the deal.
That's your contribution to thedeal.
If you're on an entity withthose people, in an ideal world
(15:34):
you want to be have a majorityor at least 25 plus percent of
the entity.
You're on title with thatentity and you have a major
ownership in that entity ormajor membership in that entity.
Jacquelyn Jackson (15:54):
Now let me say this not to necessarily
break you off, but when you say25%, to have interest in it.
So if a person come to you andthey got 5% interest in a
company that has built it, wouldthat be considered their part
of their reference I mean notreference but their experience
even though they had 5% on thecompany that built, fixed and
(16:15):
flipped the house?
Arnold Podrebarac (16:18):
Not really.
They really need a higherpercentage of the entity and the
reason being risk is percentage.
So if your risk is 5% of a deallet's say a $200,000 deal and
your risk is $10,000, we'relooking for you've taken the
risk and succeeded at that risk.
(16:39):
That's really what we'relooking for.
And that's why you could havedone a fix and flip and lost
$5,000, but it was in your nameand it still counts.
Jacquelyn Jackson (16:49):
Right right.
The fourth percentage is 100%was in your name, so you're
saying that would matter morethan you.
Being 10% of somebody else'sstuff is basically.
Arnold Podrebarac (16:58):
Right, exactly.
Jacquelyn Jackson (16:59):
Right and that's the myth and I'm going
over stuff because that's themyth we have.
When people come in, they don'tunderstand that how that is and
they have partnership, they aregetting to, but it's not the
proper way.
It was not that it was wrongand illegal, because it's not.
It's just it wasn't a properway that we will consider it as
experience.
So I wanted us to would you beit on to really address when you
(17:20):
highly need to look when theyactually come to a lender, even
as a new one.
Our big thing is on aconstruction deal.
I do want to emphasize thatagain, that you need to have
experience with new constructionin order to get new
construction money.
You know that's from a lender.
Now you can go barred and getit for all your family and
everybody want, all you want allday long.
But when it comes to lenders,that's what they're looking for,
(17:41):
is they're looking for thattype of experience.
So I definitely wanted us to goover that and then like also,
which I'm glad.
Thank you so much for helpingto do that.
Let's talk about the differenttypes of loans and I guess what
we call them, when you all callthem, is DSCR.
So explain what those are andthose different types of loans
for people.
Arnold Podrebarac (18:00):
Right.
So up to this point we'vebasically covered what's called
a bridge loan or a bridge withrehab or value add loan.
They all fall under the samecategory, whether it's a stable
asset and you're just simplydoing a bridge or whatever,
they're all basically the sameloan.
Dscr loan is debt servicecoverage ratio and this usually
(18:21):
involves either buying aproperty that it's already
completed and ready to rent outor refinancing a property that
you bought, rehab and now you'reready to rent it out and move
it into a DSCR loan.
So the debt service coverageratio loan is it's like all of
(18:44):
them.
It's not a full dock loan, it'sbasically the same documentation
we need to see about we need tosee two months of most recent
bank statements is the deepestwe dive into your income.
It's your ability to completethat loan as a purchase or as a
refinance.
So debt service coverage iseither cash out or not cash out,
(19:10):
and if you're refinancingproperty under a debt service
coverage ratio loan DSCR loanthen the whole point is this if
you have a property that themarket rent is 2000 a month and
your principal interest, tax andinsurance combined or and you
(19:34):
could add to that HOA ormanagement fee combined, is 2000
or less, then that propertycovers the debt service on that,
and then that's what we'relooking for.
We're looking for a propertythat covers the debt service on
the loan.
Jacquelyn Jackson (19:52):
And basically , in short, you're saying your
rent need to be more than yourmortgage on your rental property
.
Arnold Podrebarac (19:59):
Or at least as much as.
Jacquelyn Jackson (20:00):
As much as, as much as.
Arnold Podrebarac (20:02):
Yeah, I mean there are exceptions and we do
some different loans too, but Idon't want to get into that yet.
Right, we'll go lower.
But it's just you have to be,you have to yeah.
Jacquelyn Jackson (20:14):
What you're saying is everything is not
cookie cutter.
Majority of it is, I think, inlending and stuff.
You let me know, majority it is, but sometimes you have custom
situations and that's where youguys have to do custom stuff and
, of course, on our end as welltoo.
So, basically, that's what thatare.
So that's what that is.
At TDJ equity funding, weunderstand the challenges you
face, Whether you're expandingyour business, investing in real
(20:36):
estate or launching a startup.
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(20:58):
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Don't let your dreams gatherdust on the shelf.
Seize the opportunity today.
Visit wwwtdjequityllcnet andschedule your appointment with
(21:19):
TDJ equity funding.
Let's turn your dreams intodollars.
We definitely appreciate youtelling us that and explaining
it.
I do want to emphasize again,based on what you're saying, if
you are a first time landlord byforce and that that house is
(21:41):
now set up because you're not init anymore, that it is set up
as a rental property.
So when you refinancing youhave to refinance it as a
commercial property, am Icorrect?
You can't go and do it as orsomebody like I've had try to
get a heat lock out of a rentalproperty and you can't.
So let's explain the differencebetween that.
(22:01):
If you would, when you guysdeal with refinancing, what you
looking for compared to you knowthe other way, which is owner
occupied.
Arnold Podrebarac (22:09):
Right, so it's okay.
So we need the lease, the leasefor the property.
We're just looking forlongevity of lease, meaning if
it shows up as that it's yourproperty and there is definitely
(22:30):
ways to find out as opposed toan actual rental property then
if it's your property it's notvalid.
We only do not owner occupied.
So on the DSC R loan it's wecould get into all the
documentation, but that's, youknow, premature, but it's
basically what separates.
(22:51):
It is the lease, and then weoftentimes look for proof that
the deposit and the rent wasmade into your checking account.
So, it's a warning for mostpeople.
A lot of people have tenantsthat are pay cash.
If you're not depositing thatcash into the bank and you have
(23:11):
a lease, it doesn't mean thatthat counts, so that is an issue
.
Jacquelyn Jackson (23:17):
Right and that makes sense and that's what
I was trying to emphasize.
A lot of people think that nowthat I've moved out, I'm not
going to say anything to them.
I can still work it as if I'mthere.
When you get ready to file aclaim or refinance and all of
that, that stuff comes into play.
You're no longer that's thecommercial property.
So we say that to you all, tothe slant lawyers like that, to
(23:39):
be aware of that and then getyourself set up where you can
get funded on your investment orrefinance your investment.
So we want to do that.
So before we leave, get offtoday, I have a few questions
that my listeners have askedthat I ask you, and one of them
would be Arnaud, what would beyour top funding tips for our
listeners?
Arnold Podrebarac (24:04):
The best tip I can give people is we had
touched on it earlier isliquidity.
You think that you're going toneed far less money to do a
project, but always think you'regoing to need more.
So liquidity comes in a numberof ways.
A lot of people it's obviouslythe cash on hand, cash in the
bank checking savings account.
(24:26):
People have retirement accounts.
People have helots, but youhave to liquidate those in order
for those to count towardsliquidity now.
So you may feel you have thereserve in a retirement account,
but a retirement account isonly as good as the liquidity in
the bank.
So just plan for high liquidity.
(24:50):
That's a big one.
And then the other is credit.
If you're planning on doing thisnow or in the future, start
monitoring your credit.
Do the steps that it takes toimprove your credit.
Believe that you need to have700 plus credit, even though we
may go down to 660 or 680, justwork towards 700 plus.
(25:12):
It's a different lending worldnow and you need to.
Really those are the two mostimportant things you could do.
And having an entity is a plus,and many states require that
you have an entity to invest inthose states.
So it's a protection for you aswell to have an entity, but I'm
(25:34):
not an attorney or anaccountant, so I'll leave that
to them to work with.
Jacquelyn Jackson (25:40):
To explain to you right what you do?
Yeah, you are correct in that.
So what would be?
I mean, I know you say work onthe credit, because I want to
call our actions for ourlisteners.
I know you had mentioned youwould like for them to actually
work on a credit is based onwhat you're saying.
And then also let's talk aboutthe process of how they go about
(26:02):
the market as far as pickinghouses and stuff, because you
mentioned that before to meearlier.
So, if you would, can you tellus a little bit about the call
or action that's dealing withthem picking their houses and
for the market and stuff?
Arnold Podrebarac (26:12):
Yeah, Sure, multiple ways to do it and I've
dealt with a lot of differentscenarios People that joined
clubs or groups where the housesare identified for them.
Oftentimes there's a premiumthat you're paying on the
property.
The MLS in Zillow is obviouslypeople's most used choice to
(26:36):
find a property.
Off-market properties areprobably one of the better ones.
But you would do that later inyour investment process Because
if you're going to do mailers ortarget neighborhoods or
something like that, it involvesan investment up front.
So picking a property issomething where you only can use
(27:02):
you best trust your own advice.
Meaning you're going to buy aproperty and you're looking at
that property let's say onZillow is an example and you see
the property and it needs workand you think, well, if I buy
this property and I put workinto it, then I can sell it for
much more than I bought it for.
You have to one understand howmuch work that requires.
(27:26):
It's a 1200 square foot, threebedroom, two baths.
Does it require 30,000 in work?
And then if I put 30,000 into a$200,000 house, then you go
online and you see gutted,remodeled, 1200 square foot
houses in that neighborhood.
What are they selling for?
Well, if it's selling for$250,000, gutted and remodeled
(27:48):
and similar, then you're reallynot making a good investment
decision.
So, a lot of these things youfigure out too late.
When you're inexperienced,meaning you buy it, you get all
excited about it.
You've got a rehab budget youknow contractors made out as
budget for you and you presentit and you're trying to get a
(28:08):
loan for $160,000 on a $200,000purchase and $30,000 for the
rehab, so a combined total of$190,000 alone.
You get your appraisal.
The appraisal shows the as isvalue as well as the after
repair value, arv, and the ARVcomes back and your loan to cost
(28:29):
meaning and your loan to ARVisn't good.
So we're not going to land youthe 80 cents on the dollar on a
loan.
That doesn't make sense.
But you're already committed tothat property.
So you need to really do yourdue diligence upfront.
So find people you trust if youdon't have the knowledge base
(28:50):
for that.
Jacquelyn Jackson (28:51):
Exactly, and on that note, I want to say
because I definitely want themto mention, because I know what
type of lenders you guys are isthat, when it comes to a lender,
our last question is what dothey need to look for in a
lender?
Or because you're a directlender, so what do you think
they need to look for whenthey're looking for a direct
lender to help them?
Arnold Podrebarac (29:12):
So you need to look for people that have the
experience.
So, for instance, jackie, ifthey would call you and they
said we're looking at thisproperty, what we want to do
here's what we're going to spend, you have the knowledge base to
tell them that is or it isn't agood investment.
You have a broad knowledge.
You've done it enough.
And the same when they call medirectly, I can pull up data
(29:35):
that possibly they can't pull upand it either does or doesn't
make a good decision.
You know the old adage youdon't want to buy the most, the
biggest, most expensive house inthe neighborhood, because it's
always dragged down by the lowerpriced homes.
So the same applies here.
You know we don't like to seean ARV at two times what the
(29:58):
neighborhood average value is.
So it may.
It may be the Taj Mahal in a ina neighborhood.
That's not great, but it's it'snot going to have the value.
Jacquelyn Jackson (30:10):
Exactly so.
Like I say, it's about thereturn on your investment, and
that's what the lenders do.
They want to make sure thenumbers work.
That's what we call it.
If the numbers work, then wecan do the deal, but if the
numbers don't work, you can't dothe deal.
So in order to know that you'reright, you have to deal with a
lending power that does haveexperience and that understands
that.
So I totally agree with you onthat.
(30:31):
So we, wrapping everything up,we want to definitely I mean
that was your answers have beenreally awesome and definitely
you've given us a lot ofinformation for our listeners
and we thank you and appreciateyou for coming to our show today
.
Mr Arnold, is there any lastthings you would like to say to
our listeners?
Arnold Podrebarac (30:50):
The best, the best choice that people can
make is to look at investmentslike you would look at
investment in property, likeyou'd look at investment in
anything else.
Many people invest in stocks or401ks or whatever.
But if you look at this thesame way, meaning with an
intelligent approach, thenyou're you're going to have a
higher likelihood to succeed.
(31:11):
I always say it's better to buyfive $200,000 houses and one
million dollar house, becauseyou're putting eggs in different
baskets there.
So probably the best advice isstart slow and start start lower
, even if you could afford more.
Jacquelyn Jackson (31:32):
Right, right, I got you that.
That's a great, great, greatadvice, and thank you again.
Thank you again so much forbeing on our show, mr Arnold.
Arnold Podrebarac (31:41):
Well, thank you, I appreciate the
opportunity.
Thank you again, take care.
Jacquelyn Jackson (31:46):
You take care as well, and to our listeners.
If you like this informationand would like to learn more,
please subscribe to our YouTubechannel at youtubecom, at TDJ
equity funders and Siders.
Until next time, thank you andtake care.
Announcer (32:24):
Until next time, take care.
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