Crack open the vault of real estate wisdom as we engage with a seasoned expert in our latest episode. Jeff Mallas, a commercial lender with 30 years of industry experience, graces us with his insights, sharing his journey from residential work to his current specialization in commercial lending for residential properties. He emphasizes the importance of trust and convenience in securing a lender, giving you an edge in your own investment ventures.
Have you ever wondered how to make the most of a high-interest environment? Our conversation takes an unexpected turn as we explore the world of real estate investment opportunities. With less competition for properties requiring renovations, Jeff points out the potential for investors to acquire properties at a discount, fix them up, and reintroduce them to the market. Take note of his tips on making multiple offers and the power of being willing to walk away; these strategies could make all the difference in your next negotiation.
Venturing into unfamiliar territory can be daunting, so Jeff shares his expertise on understanding real estate financing options, especially for those new to the field. If you're short on experience, fear not. We explore how an LLC can be your ticket to partnering with an experienced contractor or investor. Jeff also emphasizes the significance of grasping your lender's guidelines and rules, nurturing a fruitful partnership for long-term success. Whether you're a seasoned investor or just starting out, this episode is your guide to navigating the complex world of real estate investment. Tune in, soak up Jeff's wisdom, and get ready to elevate your investment game!
A loan brokerage firm that acquires funding for business owners and real estate investors.
Disclaimer: This post contains affiliate links. If you make a purchase, I may receive a commission at no extra cost to you.
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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Transcript
Episode Transcript
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Introduction (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 here fromexperienced professionals,
including bankers, underwriters,loan officers and industry
(00:34):
experts, as they share theirunfiltered stories and valuable
lessons on securing funds.
Jacquelyn Jackson (00:47):
Hi and welcome to TDJ Equity Funding
Insiders podcast.
Today we actually have acommercial lender, our direct
lender, that is with us today togive us his insights and give
his thoughts of how thingsshould run when it comes to you
actually getting a loan orgetting funding for your
projects.
So our guest today is JeffMallas.
(01:08):
He's from Nevada and he comeswith us.
Come to us with greatexperience and a great knowledge
of things that we need to do.
So, hi, I'm Jacqueline Jackson,your host for TDJ Equity
Funding Insiders podcast.
Welcome and let's talk withJeff.
Welcome to our show, jeff.
Jeff Mallas (01:26):
Thank you very much , Jackie.
Jacquelyn Jackson (01:27):
And we are glad to have you.
So let's start off today, ifyou wouldn't mind.
Tell us, tell our audience, alittle bit about you as a
commercial lender, yourexperience.
Jeff Mallas (01:37):
Well, I don't know if it's a good thing or a bad
thing.
I've been in the business for30 years now.
I started in the residentialspace, ended up having a
mortgage bank, started amortgage bank with my father.
We ran that together till about2009, when I decided to exit
(02:02):
the business for a little whileand started raising capital for
other businesses, and then I wasapproached in 2013 to move over
to the commercial side and ithas been a fantastic journey.
You know we're not strictlycommercial properties per se,
(02:28):
it's more residential, but fixand flip and construction.
You know primarily one to fourunit residential but we're doing
business with investors.
So most actually all of ourloans at this point are two
investors and two businesses andthat's why it's a commercial
(02:50):
transaction.
Jacquelyn Jackson (02:51):
Exactly.
So basically, let's make surewe don't simplify, because what
you said is a lot for us tounderstand.
Is that you're on the sidewhere we're talking about the
rental property?
Residential property is one offour homes, am I correct?
Jeff Mallas (03:05):
That's right.
That's right.
We do.
Do you know small apartmentbuildings as well?
But it is residential and Iwould say 90% of the business is
one of four Business, is that?
Jacquelyn Jackson (03:16):
So we're talking about non owner occupied
, where when you was in themortgage business with your dad,
it was owner?
Jeff Mallas (03:22):
occupied exclusively.
I mean, we did a little bitnon-onor occupied, but this is
geared specifically to investors.
That and non-onorock.
Jacquelyn Jackson (03:29):
Right Is what we're doing now Residential
real estate and definitely.
If you got any information onthat side you want to say you
can.
As we go through our podcast,we definitely hear for our
listeners to learn.
So, with that said, you've beenworking with boroughs for a
while, so you got to know someoptions.
So, if you would, what would beyour first would be your most
important factor for boroughswhen considering funding options
(03:52):
, and why?
Jeff Mallas (03:55):
Well, ironically it's not just rates and fees.
You know at least 50% of our ofour business is new
construction and fix and flip,or fix and hold.
A lot of people now are buyingproperties and fixing them up
(04:18):
and then refinancing them intolong-term financing and renting
them out.
You know it's the BRRR strategyby renovate, refi or rent and
then refinance.
But it's not the, it's not therates and terms, it's more, I
(04:39):
would say, ease of use andexpertise and getting the deal
done.
If you can't get approved or ifit takes 30 days and you know
before you can get the financingand you lose the deal, it
doesn't really matter what therates and fees were.
You need to be able to movequickly and get properties at a
(05:04):
discount when and with thelender that you trust.
So an example I would give isappraisals.
For example, a lot of lendersrequire an as is value on a
purchase.
We don't.
We just use the purchase pricebecause ultimately that is the
(05:27):
value of the property.
With a willing buyer and awilling seller are willing to
either part with the property ortake down the property at.
That speeds up the appraisaltremendously.
We're getting appraisals backnow in three to four days when
(05:49):
you know other lenders might be,you know, a week or two.
We also have a fantastic dropprocess.
We have an app that we now giveour clients so we don't have to
send out an inspector thatcould take, you know, two to
(06:11):
three days to get out there at atime that works for you.
You can, we send you an app.
You can take pictures rightfrom your phone.
Oftentimes we fund draws within24 hours.
So, I would say convenience,ease of working together,
(06:33):
working with a representativesuch as myself that has been in
the business for a long time andcan tell you any potential
pitfalls your project might haveup front and smooth out the
process so it closes quickly andeasily.
Jacquelyn Jackson (06:55):
So basically, what you're saying which we say
that as well as as loan brokers, we deal with a lot of direct
lenders, including you guys, andwhat you said is so true is for
is, when you come to us and youknow I'm looking for a lender
and what we look for is a lot ofwhat you already do, jeff,
basically, and as a lender, we,as a real estate investor, you
(07:16):
don't just look at the terms andrate, because that's a lot what
they talk amongst themselves,but when it really come to you
doing a deal, like you said, arethey making it?
When you're doing it, is it away where you can get things a
little quicker, like you said,getting that draw instead of
waiting for somebody to come out?
If this is what your companyoffers, that is something a lot
better than other ones, and youhave that to compare as well as
you have to compare.
Is it, do you have a broker orthe lender that's actually
(07:40):
working?
You had kind of holding yourhand through the process,
especially your first time, youjust not thrown out there.
You know and I know you guys,your company for one you all
deal with all over, not justNevada, you all over the United
States and because you've like,say, with clients, we have all
over the United States, soyou're able to kind of work with
them and help them feel theirway out, and I think a lot of my
real estate investor doesn'tknow that you don't have to be
(08:02):
out here by yourself when youdeal with lenders.
You just need to find the righttype of lender.
Don't just look at the rates,and that's what you're saying.
So I think that is excellent,that you're saying that, and
people who start now, the realestate investing, or even those
who've been there you need tolook for things other than that.
What makes this close quicker?
Who's helped you to let youknow upfront what you need to do
, so you know what you need tohave and all of that that is so
(08:23):
important.
So I think what you're sayingis very good.
The next question that Ilistened to one to ask you about
the most important factor for,excuse me, are there any funding
opportunities that you've seento be especially successful for
bars?
Recently, just recently, weknow a lot of stuff changed.
Jeff Mallas (08:42):
Yeah, you know, for closures are starting to come
back into the market.
Okay, you know.
So that's, that's definitely anopportunity.
We're starting to get some moreinventory.
Jacquelyn Jackson (08:55):
Now, when you say for closures coming back in
the market, what do you mean bythat?
Jeff Mallas (08:58):
when you say that, Well, I've got clients, you know
I.
One thing that's that'swonderful about about my, my
business is I can do business,you know, and and your clients
as well as you can do businessnationwide so you can go to
(09:19):
markets where they're stillthere's still opportunity.
You know coven really there waskind of a steady flow of
foreclosures which a lot ofinvestors would rely upon to to
find find opportunities and thatand coven really just shut off
(09:45):
the spigot.
So you know, foreclosures justliterally stopped around the
country and they're starting tocome back online.
Also, I think the higherinterest rates Higher interest
rates have been good forinvestors.
(10:05):
I was actually happy to seethem go up If I had been on the
residential owner occupied sideof I.
You know those.
Those guys are devastated rightnow.
They they don't have, you know,their businesses dried up.
But that's good for us becauseit's taken a lot of the
competition for properties thatneed to be renovated and put
(10:29):
back on the market.
It's it's taken the the amateurrenovator or just you know
couple that thought they'll buythis house and they'll fix it up
and they had no choice, theyhad to buy it.
Now the people who are left inthe market, the buyers for owner
(10:53):
owner occupancy can be morepicky.
So it's a it's a greatsituation for investors because
they can buy properties.
There's still demand at six 7%rates for owner occupied houses.
But those people that are buyingtoday are more discriminating
(11:13):
and they're not gonna buy afixed or upper, they wanna buy a
turnkey house.
So any properties that need tobe fixed up, those are
opportunities now for ourinvestors.
And then there's certain areasof the country that are just you
know that maybe didn't run upas much as you know California
(11:35):
and certain parts of Texas andNew York.
The New York area, WestchesterCounty, got crazy during COVID.
Florida is a little high rightnow, but there's still pockets
everywhere, there's still deals.
They're just a little bitharder to come by and the
properties that really need alot of work.
Those are opportunities for ourinvestors.
Jacquelyn Jackson (11:58):
Right, because I remember last summer
where my investors would go tobe it on wholesale property.
You know property need to befixed up or they try to sell it
wholesale or whatever.
And when they get there thereare real estate agents and there
are clients, you know, forowner occupied that are there
too, bidding on it.
So they are basically at thatpoint.
They had a lot of that that wasgoing on.
(12:19):
They're like wow, they justinvested anymore.
Jeff Mallas (12:22):
It's the homeowners that we're actually bidding
against, so that's right, andthat's that craziness is is you
know, like I said, the higherinterest rates have cleaned that
up.
You know, it was just a frenzy.
Jacquelyn Jackson (12:39):
Right, they were just looking.
So we want to mention this asan investor and you can correct
me, you know if I'm wrong as aninvestor is actually getting
property to where you're goingto come and fix it up and
they're going to give you theinterest rate and everything on
it.
But that's a temporary thingfor you because you're going to
do the rehab of it and then,once you get everything done,
you're going to sell.
It is basically what it is.
Jeff Mallas (13:00):
Or keep it right If it's cash flowing.
Either way, that's you know.
That's.
That's the thing.
I think.
That's where the opportunity is.
If you're, if you're, if youridea is to have, you know, get a
bunch of rentals, I stillwouldn't buy rentals at retail.
I would buy.
I would buy a rental at adiscount that needs some work.
(13:24):
The other thing is you can putin materials.
If you're buying a house thatneeds to be renovated and you
want to keep it as a rental, youcan put in, you know, vinyl
flooring that looks fantasticbut it's very durable, better.
You know, maybe eggshell paint.
And you know quartz countertopsinstead of marble.
(13:47):
You know quartz is impermeablemarble.
I've had marble countertops andif you get a little bit of oil
on them they get stained.
So there's things you can do toset up.
You know a rental.
You know, for example, youwouldn't put carpeting in a in a
rental.
I wouldn't, because you knowit's much better to have vinyl
(14:07):
floors throughout.
So yeah, I just think thisthat's where the you know back
to your question is that's wherethe opportunity lies is there
are.
I think 75% of the housingstock in the U?
Jacquelyn Jackson (14:23):
S is 25 or 30 years old now, so almost every
house needs some form ofrenovation, which is an
opportunity for a real estateinvestor for sure.
So I think that's somethinginvestors have to do and we
teach them that, we talk to themabout it when they come to us
as well.
That one like you what you saidearlier you have to look at the
(14:44):
market, check out the marketsand what's going on and what's
working, and you do have tounderstand if you have interest
rates or you have a foreclosure,areas that are that are
happening again, and then you'vegot some that's not, and then
you got some things that's offthe market and rehab.
All that stuff has to beconsidered for every state,
every area you're looking at,and you don't have to just look
at where you are live, which alot of people do.
(15:04):
There are some other places, ifyou like.
Jeff Mallas (15:06):
I said, if you feel comfortable enough, you know,
to actually do it you know soit's easier now than ever to to
do, you know, do deals in otherstates.
It's just, you know, with thetechnology, like you know this
conversation, you know Exactly,I'm in Las Vegas and you're in
Texas right, right, so that'sexactly right.
(15:28):
Yeah.
So and the other thing I wouldlike to, that I would like to
say is is my best investors.
They make lots and lots ofoffers.
You know they decide.
And now we're.
You know that's the otheropportunity.
You know, a year or two ago youhad to overpay for a property.
(15:49):
Margins got stretched reallythin.
But now you can.
You can determine what profityou want to make on the property
or what, what equity you wantto have built in when you close.
You make an offer.
If they don't take it, no bigdeal, you know.
Move on to the next one.
Jacquelyn Jackson (16:08):
You can control your numbers a little
bit better my best investors.
Jeff Mallas (16:11):
I would say that's best practices.
You got to make multiple offersand be willing to walk away.
Jacquelyn Jackson (16:17):
Okay, and that's a good.
That's a good insight for themto know, too be willing to make
multiple offers, because a lotof people think, just make that
one and done, and that's whatthey do, they get discouraged if
they don't get it.
Jeff Mallas (16:29):
But you know it's better to not do a deal that is
tight, than you know, than tokeep trying.
You know, eventually, I cantell you right now a lot of my
investors you know that I workwith, especially the ones that
are doing volume.
They're making lower, lowerthan ask offers and negotiating
(16:55):
them and if they can't get theprice they want they move on.
Jacquelyn Jackson (17:00):
I know I've had some come to me on a deal
where they offer half of whatthey asking for and I'm like, oh
, they're not going to do that,are they?
Well, they did it.
So you know is like you sayjust ask, you don't know until
you do.
Now, you and I had talkedearlier about as far as finding,
I guess, funding opportunities,like you talked about the
foreclosure and for us probablybeing available.
(17:21):
You were saying it's a site, awebsite that you recommend.
Jeff Mallas (17:24):
Yeah, there's a few different websites, I think.
Well, there's Hubsu, hubsucom,h-u-b-z-ucom.
There's Auctioncom.
You can search under Auctioncom.
You could just search for realestate auction sites and I'm
sure you know they would come up.
(17:44):
There's multiple.
Like I said, I get clients, Iget deals from Auction and Hubsu
quite a bit, and that's what Iwas saying.
That goes back to theforeclosures.
You know they get a lot offoreclosures.
A lot of banks will list theproperties there, oftentimes if
(18:08):
the properties aren't picked upat Auction.
So what happens is and yourlisteners might not know this,
but the bank's bid is what'sowed on the property almost
always.
Oh, okay.
And sometimes that is more thanthe investors at the auction are
(18:31):
willing to pay.
So the bank just gets theproperty back and it goes into
their REO section, real estateowned department, and then those
banks will oftentimes list themon auctioncom and Hubsu and
(18:51):
such.
So foreclosures are picking upand we're getting back to normal
levels and as that'll help withinventory, and a lot of times
those those properties, theymight have tried to sell them
but they were just in too toobad of disrepair to numbers
(19:16):
would just wouldn't work forthem.
Yeah, the numbers didn't work,or or they just they needed work
and nobody was interested.
Jacquelyn Jackson (19:23):
Yeah, that's true.
Now I know you and I had talkedbefore about you're saying some
.
I was asking you about someideas of what people can do is
for us borrows, getting aninvestment, some creative things
that you may not do the normal.
But one thing you mentioned tome and I want you to go into
when you talk about one by ahuge lot you talked about that
(19:44):
as well and building on it andrehab and then doing the land
for building new construction.
Can you kind of go into howthat yeah, yeah, there's,
there's different strategies.
Jeff Mallas (19:56):
There's all different strategies, right, and
one of those I've seen, whichis which I like a lot, is the
buy a property that needs workthe biotech server upper on a
large lot and so they'll buy theproperty with my financing, and
then, while they're renovatingthe property, they're also
(20:17):
subdividing the lot, right.
So, I've seen many people bythe property make enough, fix it
up and create enough value tomake a profit selling just the
one property.
Jacquelyn Jackson (20:31):
And then they use the land now.
Jeff Mallas (20:36):
They've got a lot free and clear and then they
build a house on that and make areal, real, strong profit
profit.
It's almost like funding.
You know, the first renovationfunds, funds the land.
Jacquelyn Jackson (20:50):
The second one I think that's great Now we
run into is loan broker.
Some people, when they firststart off on real estate, the
thing they want to do is newconstruction and you and I know
experience plays a factor for usgetting the funding you need.
You may get something, but theone you really need is where
(21:10):
experience is going to actuallycome into play.
So I know you and I had talkedabout it and you had mentioned
that.
You know, jackie, if because Icame to you, one of my clients
one time, you said well, jackie,if she could partner with a
another person on LLC, soexplain that so they can see,
because I had to explain it toher, but that she said it was
wonderful information.
So I definitely want you toexplain how to work that when
you don't have that experience.
Jeff Mallas (21:31):
Sure, what's what's ?
What's really wonderful workingon the commercial side is you
can do all sorts of really coolthings with LLCs and
corporations.
You know you can bring in otherinvestors.
So, on the on the fix and flipor fix and hold, a flip doesn't
necessarily mean you're sellingthe property.
(21:52):
You could be flipping it toanother loan.
So I'll refer to as fix andflip.
Okay, fix and flip, fix, newconstruction.
We, we look more at experienceand assets really than we do on
our, at your credit score.
(22:13):
Right On the longer term loanswe're going to like more at your
credit score.
Then we give you a little bitof you know credit for having
owned a lot of rental properties.
Let's say you know havingexperience, but it's mostly
credit driven on the and anincome driven.
(22:36):
We're also looking at theincome on the longer term stuff
on the short term and looking atexperience and if you've had
not done bought an investmentproperty and done any renovation
on it, or if you bought maybeyou just bought a rental
property but you didn't do anyrenovation, we, we do not feel
comfortable giving you aconstruction loan.
(22:57):
That that is really jumpinginto the deep end without
knowing how to swim.
Thank you, you can with an LLC.
You can partner with someoneand someone let's say a
contractor who's built somehouses, or another investor
who's who's built some houses inthe past, and and we'll give
(23:19):
you credit for that that personwould have to be Also a
guarantor on the loan to usetheir experience or credit or
assets.
But, but, but, that's that'sone way to do it.
There's all sorts of creativeways to make things, make things
work, but we definitely arelooking at experience,
(23:41):
especially as you get, you know,into bigger, bigger prop,
bigger and bigger projects, evenon the fix and flip side.
We're not gonna let you do, youknow, buy a property and add a,
add a second floor andreconfigure the bedrooms and
bathrooms, you know, for a250,000 renovation.
It's just too Too much, toosoon.
(24:05):
I want you to, you know, gettwo or three fix and flips on
under your you know belt andthen and then Well, we'll go
from there and that and thatactually, let me just Say that
kind of goes back to the firstquestion, or was, which was.
You know, how do you determinewhat lender to work with?
(24:27):
You have to look at this as a,as a partnership.
We, we In this space, we havemany clients who come back to us
, for you know they do 10, 20flips a year.
So we don't want to just do oneLoan for you on the residential
(24:50):
owner occupancy side.
You might not see that clientagain for seven years.
I'm hoping to.
I'm hoping that you do One ortwo houses a month with me.
Ultimately right so it is apartnership, and that's why I'm
saying you got to find someonethat that is just as interested
in your success as His success,you know, or the company's
(25:12):
success, and so we're gonna helpyou all along the way so that
you, you have a successful firstproject and you can come back
to us for the second, third andso on.
Jacquelyn Jackson (25:26):
Right, and that's mainly what would you're
about, and as it's loan brokersare about, you know, we don't
want to just do that one, wewant to continue.
It's a business.
We want to help you build andgrow.
Because you grow, we grow.
So that's what they have tounderstand.
We're here to help you becausewe want it to be a success.
So, with that, you always.
You also said to me one timethat, when it comes to I asked
(25:46):
you about a top funding tip thatyou would give our listeners
and you mentioned that theyshould learn the Guidelines and
the rules of the lender.
So tell me why you think that'ssuch a good tip they need to do
well, I've been.
Jeff Mallas (25:57):
I've been in business for in this business
for 30 years.
Okay, and Early on, I realizedthere are two types of borrowers
.
There's the.
There's the.
There's those that have aproject and they try to find a
lender that will give them moneybased on you know their
(26:19):
requirements.
And Then there's the other typethat say okay, what are your
guidelines, what are what areyour rules?
What do I need to do for you tolend me the money?
And that's what I do is I try toconvey that I, I say, look at
the project and and and I say,well, it doesn't fit.
(26:39):
You know, your FICO score istoo low.
We got to get your FICO scoreup and then it fits in the box
and we'll lend you the money.
So I, what I would say is youknow, play by the rules, figure
out what the rules are exactly.
We, we are solely In businessto lend money and we have
(26:59):
guidelines and if, if yourproject fits those guidelines,
we will give you the money.
So it's not rocket science,it's just what are the
guidelines?
What do I need to do if I, if Itell you I need 50,000 in cash
and you've got 30, don't?
You know?
Don't get mad at me Because I'mnot gonna change my guidelines.
(27:24):
You know I'm not gonna make upfor the twenty thousand by
changing my guidelines.
Jacquelyn Jackson (27:30):
Just go find the extra twenty thousand
dollars and that doesn't meanyou're gonna think we're gonna
take part of the land and letthat go for the Twenty thousand
that you're right.
Yeah, they try to make theirown Ways to go.
Jeff Mallas (27:41):
Just play by the rules and right, you will win
the game.
You know, and we want you towin.
That's.
That's the point.
You know we're in this together.
We don't make any money.
The only thing you ever have topay up front is usually an
appraisal, which we don't get.
You know.
We don't mark it up, oranything right right.
(28:01):
So we don't make any money untilthe loan closes, until until
yours.
We're not successful, untilyou're successful.
Exactly so if, if we tell youthe rules up front and you play
by the rules, you're gonna getyour, you're gonna win the game,
you're gonna get your money andyou're gonna have a successful
project.
Jacquelyn Jackson (28:20):
So, and with each lender, a broker, learn
what those rules are, becausethat's exactly by the rules
right, so that's what do, sodefinitely what I want to
mention before we leave today isthat you had mentioned to me
Earlier about an industryfunding opportunity as far as
those that want to do rehabs,and it's a software that you're
aware of that would even helpbeginning real estate investors.
(28:42):
Yeah do that so definitely.
I want to talk on that rightquick so they can get that
information too.
Jeff Mallas (28:47):
Yeah, I, you know.
There's the four apps I'veheard of.
You know people Call them thefour apps find it, fund it, fix
it and flip it.
So I Don't you know.
I would say look for youwholesalers or find real estate
(29:12):
agents that specialize and youcan call around and get real
estate agents that will help youfind fixer uppers and
wholesalers too.
You can find those on Facebook,you can find them on the
internet.
But on the fix it side you gotto be able to.
(29:33):
One of the skills you got tohave is you got to be able to
find the properties, but youalso got to be able to value
them.
So that's where a good realestate agent comes in, because
you need to know the ARV is theafter repaired value, but then
you also need to know how muchit's going to cost to fix it up.
So one of my favorite websitesthey're using artificial
(29:56):
intelligence isHouseHackerProcom, and on this
website they have they.
You can go in and type in anaddress.
Oftentimes it can find thatproperty in public records and
(30:19):
you can tell it what kind ofrehab you're thinking of doing
if you're going to do a light,cosmetic rehab, if you're doing
a moderate rehab or what'scalled a gut rehab, or you just
do a heavy one right, taking ityou know where you're putting in
new plumbing and electrical andmaybe a new roof, and it will
calculate what your budgetshould be based on your area,
(30:43):
based on material costs in thearea and labor costs in the area
.
And it's amazing.
I've had many investors,developers, flippers and
contractors look at it andgenerally it's within maybe a 5%
(31:05):
variance of what the finalestimate comes in at with the
contractor.
And what's also great about itis so that can help you
determine your purchase priceright and I can.
We don't need to go in theformulas, but I can help you
(31:25):
with that.
You know as well, but I need toknow but you need to come to me
with you know what you're goingto pay for it, what the ARB is
going to be, and what the rehabbudget is going to be.
So that's.
It's a great software becauseyou don't have to.
You know it's hard to get intoa property if you're just
(31:48):
thinking about until you've madean offer on it, you know.
So this is a way to kind of geta ballpark figure of what it
would cost to fix that propertyup without you know, online,
without even you know sightunseen.
Jacquelyn Jackson (32:07):
Exactly so, I think, and that website is
HouseHackerProcom, and we'llhave it on our YouTube video as
well, where they can see that.
And I also want to note too, wehave a running number software
you has discussed, which was thedealcheckerio.
Jeff Mallas (32:24):
Yeah, dealcheckerio is fantastic as well.
That tells you.
You know, once you'vedetermined what you think your
rehab budget is going to be andthe ARV and your purchase price,
then you plug those numbersinto dealcheckerio and it'll
(32:45):
tell you it's really been great.
I've got a lot of clients usingit now and it's, and both of
these are free.
You can get kind of a freetrial and try it out.
Wonderful, but you can determineif it's if it's going to work
for you or not, and again, I canhelp you with those things too.
But those that's a good way to.
Those are good places to start.
(33:07):
You just got to start findingproperties and you can look up,
as we discussed, I'm findingthat you can actually find
properties on, you know, redfinand Zillow and such, and just
kind of run them through these,these softwares and this process
(33:28):
, kind of practice it, whileyou've got maybe some agents or
wholesalers looking, looking fordeals or sending you deals at
the same time.
So it's a good thing.
Those are good skills to workon and practice before you,
before you make an offer anddive in.
Jacquelyn Jackson (33:49):
So part of our what we call do diligence,
you should do it.
So we know he's giving us ahousehackerprocom, which is a
rehab budget software, anddealcheckerio is a where you run
your numbers.
These are free softwares foreveryone to kind of go to.
We're going to list also thoseas well.
We list them in our membershipsite as well for a lot of our
(34:11):
listeners, where we have moreinformation, just like what is
what Jeff is talking about.
So you'll have access to thoseas well.
So I think that is great.
So now we're about to end up.
If you would, what would be theone thing you want to tell our
listeners, just to give themsome advice, some takeaway from
you today?
What would that one thing be?
Jeff Mallas (34:34):
I did a little bit of stock trading during COVID.
I started kind of getting intoit and I would say don't rush
into it.
What I learned by tradingstocks is there's always another
stock that's doing well and inany market there's always every
(34:58):
day there's another stock.
So there's another train comingto the station.
So start.
I would say, start slow.
Start looking online, findingdeals.
Just pick a deal that's forsale and just run the numbers
(35:19):
and then start making offers butdon't feel that you need to get
this one because there's goingto be another deal next week.
So I think that's one of thebiggest mistakes people make.
Just take your time and makesure that you don't compromise,
(35:44):
don't accept a deal that'ssubpar because you think you
need to get started now.
Just take your time in thatYou'll find the right deal and
you want that first deal to be agreat opportunity so that you
can live to flip another day.
Jacquelyn Jackson (36:02):
Definitely, definitely.
Well, jeff minus, we want tothank you for coming on our
podcast today and we want tothank you for your information
and your insight.
It was really helpful and I dobelieve our listeners are going
to benefit.
So, if you guys would like toget in touch with us or get in
touch with Jeff, you know ouremail is podcast at
tdjequeryfundinginsidersnet.
(36:23):
Definitely you can see and sendus an email so you can reach
out and if you want to make it apoint when a loan broker, you
can do that there as well.
I want to thank you guys forbeing part of our show.
Take care and y'all have agreat day.
Introduction (36:54):
Thanks to DJEquityFundingInsidersnet.
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 here fromexperienced professionals,
including bankers, underwriters,loan officers and industry
(00:34):
experts, as they share theirunfiltered stories and valuable
lessons on securing funds.
Jacquelyn Jackson (00:47):
Hi and welcome to TDJ Equity Funding
Insiders podcast.
Today we actually have acommercial lender, our direct
lender, that is with us today togive us his insights and give
his thoughts of how thingsshould run when it comes to you
actually getting a loan orgetting funding for your
projects.
So our guest today is JeffMallas.
(01:08):
He's from Nevada and he comeswith us.
Come to us with greatexperience and a great knowledge
of things that we need to do.
So, hi, I'm Jacqueline Jackson,your host for TDJ Equity
Funding Insiders podcast.
Welcome and let's talk withJeff.
Welcome to our show, jeff.
Jeff Mallas (01:26):
Thank you very much , Jackie.
Jacquelyn Jackson (01:27):
And we are glad to have you.
So let's start off today, ifyou wouldn't mind.
Tell us, tell our audience, alittle bit about you as a
commercial lender, yourexperience.
Jeff Mallas (01:37):
Well, I don't know if it's a good thing or a bad
thing.
I've been in the business for30 years now.
I started in the residentialspace, ended up having a
mortgage bank, started amortgage bank with my father.
We ran that together till about2009, when I decided to exit
(02:02):
the business for a little whileand started raising capital for
other businesses, and then I wasapproached in 2013 to move over
to the commercial side and ithas been a fantastic journey.
You know we're not strictlycommercial properties per se,
(02:28):
it's more residential, but fixand flip and construction.
You know primarily one to fourunit residential but we're doing
business with investors.
So most actually all of ourloans at this point are two
investors and two businesses andthat's why it's a commercial
(02:50):
transaction.
Jacquelyn Jackson (02:51):
Exactly.
So basically, let's make surewe don't simplify, because what
you said is a lot for us tounderstand.
Is that you're on the sidewhere we're talking about the
rental property?
Residential property is one offour homes, am I correct?
Jeff Mallas (03:05):
That's right.
That's right.
We do.
Do you know small apartmentbuildings as well?
But it is residential and Iwould say 90% of the business is
one of four Business, is that?
Jacquelyn Jackson (03:16):
So we're talking about non owner occupied
, where when you was in themortgage business with your dad,
it was owner?
Jeff Mallas (03:22):
occupied exclusively.
I mean, we did a little bitnon-onor occupied, but this is
geared specifically to investors.
That and non-onorock.
Jacquelyn Jackson (03:29):
Right Is what we're doing now Residential
real estate and definitely.
If you got any information onthat side you want to say you
can.
As we go through our podcast,we definitely hear for our
listeners to learn.
So, with that said, you've beenworking with boroughs for a
while, so you got to know someoptions.
So, if you would, what would beyour first would be your most
important factor for boroughswhen considering funding options
(03:52):
, and why?
Jeff Mallas (03:55):
Well, ironically it's not just rates and fees.
You know at least 50% of our ofour business is new
construction and fix and flip,or fix and hold.
A lot of people now are buyingproperties and fixing them up
(04:18):
and then refinancing them intolong-term financing and renting
them out.
You know it's the BRRR strategyby renovate, refi or rent and
then refinance.
But it's not the, it's not therates and terms, it's more, I
(04:39):
would say, ease of use andexpertise and getting the deal
done.
If you can't get approved or ifit takes 30 days and you know
before you can get the financingand you lose the deal, it
doesn't really matter what therates and fees were.
You need to be able to movequickly and get properties at a
(05:04):
discount when and with thelender that you trust.
So an example I would give isappraisals.
For example, a lot of lendersrequire an as is value on a
purchase.
We don't.
We just use the purchase pricebecause ultimately that is the
(05:27):
value of the property.
With a willing buyer and awilling seller are willing to
either part with the property ortake down the property at.
That speeds up the appraisaltremendously.
We're getting appraisals backnow in three to four days when
(05:49):
you know other lenders might be,you know, a week or two.
We also have a fantastic dropprocess.
We have an app that we now giveour clients so we don't have to
send out an inspector thatcould take, you know, two to
(06:11):
three days to get out there at atime that works for you.
You can, we send you an app.
You can take pictures rightfrom your phone.
Oftentimes we fund draws within24 hours.
So, I would say convenience,ease of working together,
(06:33):
working with a representativesuch as myself that has been in
the business for a long time andcan tell you any potential
pitfalls your project might haveup front and smooth out the
process so it closes quickly andeasily.
Jacquelyn Jackson (06:55):
So basically, what you're saying which we say
that as well as as loan brokers, we deal with a lot of direct
lenders, including you guys, andwhat you said is so true is for
is, when you come to us and youknow I'm looking for a lender
and what we look for is a lot ofwhat you already do, jeff,
basically, and as a lender, we,as a real estate investor, you
(07:16):
don't just look at the terms andrate, because that's a lot what
they talk amongst themselves,but when it really come to you
doing a deal, like you said, arethey making it?
When you're doing it, is it away where you can get things a
little quicker, like you said,getting that draw instead of
waiting for somebody to come out?
If this is what your companyoffers, that is something a lot
better than other ones, and youhave that to compare as well as
you have to compare.
Is it, do you have a broker orthe lender that's actually
(07:40):
working?
You had kind of holding yourhand through the process,
especially your first time, youjust not thrown out there.
You know and I know you guys,your company for one you all
deal with all over, not justNevada, you all over the United
States and because you've like,say, with clients, we have all
over the United States, soyou're able to kind of work with
them and help them feel theirway out, and I think a lot of my
real estate investor doesn'tknow that you don't have to be
(08:02):
out here by yourself when youdeal with lenders.
You just need to find the righttype of lender.
Don't just look at the rates,and that's what you're saying.
So I think that is excellent,that you're saying that, and
people who start now, the realestate investing, or even those
who've been there you need tolook for things other than that.
What makes this close quicker?
Who's helped you to let youknow upfront what you need to do
, so you know what you need tohave and all of that that is so
(08:23):
important.
So I think what you're sayingis very good.
The next question that Ilistened to one to ask you about
the most important factor for,excuse me, are there any funding
opportunities that you've seento be especially successful for
bars?
Recently, just recently, weknow a lot of stuff changed.
Jeff Mallas (08:42):
Yeah, you know, for closures are starting to come
back into the market.
Okay, you know.
So that's, that's definitely anopportunity.
We're starting to get some moreinventory.
Jacquelyn Jackson (08:55):
Now, when you say for closures coming back in
the market, what do you mean bythat?
Jeff Mallas (08:58):
when you say that, Well, I've got clients, you know
I.
One thing that's that'swonderful about about my, my
business is I can do business,you know, and and your clients
as well as you can do businessnationwide so you can go to
(09:19):
markets where they're stillthere's still opportunity.
You know coven really there waskind of a steady flow of
foreclosures which a lot ofinvestors would rely upon to to
find find opportunities and thatand coven really just shut off
(09:45):
the spigot.
So you know, foreclosures justliterally stopped around the
country and they're starting tocome back online.
Also, I think the higherinterest rates Higher interest
rates have been good forinvestors.
(10:05):
I was actually happy to seethem go up If I had been on the
residential owner occupied sideof I.
You know those.
Those guys are devastated rightnow.
They they don't have, you know,their businesses dried up.
But that's good for us becauseit's taken a lot of the
competition for properties thatneed to be renovated and put
(10:29):
back on the market.
It's it's taken the the amateurrenovator or just you know
couple that thought they'll buythis house and they'll fix it up
and they had no choice, theyhad to buy it.
Now the people who are left inthe market, the buyers for owner
(10:53):
owner occupancy can be morepicky.
So it's a it's a greatsituation for investors because
they can buy properties.
There's still demand at six 7%rates for owner occupied houses.
But those people that are buyingtoday are more discriminating
(11:13):
and they're not gonna buy afixed or upper, they wanna buy a
turnkey house.
So any properties that need tobe fixed up, those are
opportunities now for ourinvestors.
And then there's certain areasof the country that are just you
know that maybe didn't run upas much as you know California
(11:35):
and certain parts of Texas andNew York.
The New York area, WestchesterCounty, got crazy during COVID.
Florida is a little high rightnow, but there's still pockets
everywhere, there's still deals.
They're just a little bitharder to come by and the
properties that really need alot of work.
Those are opportunities for ourinvestors.
Jacquelyn Jackson (11:58):
Right, because I remember last summer
where my investors would go tobe it on wholesale property.
You know property need to befixed up or they try to sell it
wholesale or whatever.
And when they get there thereare real estate agents and there
are clients, you know, forowner occupied that are there
too, bidding on it.
So they are basically at thatpoint.
They had a lot of that that wasgoing on.
(12:19):
They're like wow, they justinvested anymore.
Jeff Mallas (12:22):
It's the homeowners that we're actually bidding
against, so that's right, andthat's that craziness is is you
know, like I said, the higherinterest rates have cleaned that
up.
You know, it was just a frenzy.
Jacquelyn Jackson (12:39):
Right, they were just looking.
So we want to mention this asan investor and you can correct
me, you know if I'm wrong as aninvestor is actually getting
property to where you're goingto come and fix it up and
they're going to give you theinterest rate and everything on
it.
But that's a temporary thingfor you because you're going to
do the rehab of it and then,once you get everything done,
you're going to sell.
It is basically what it is.
Jeff Mallas (13:00):
Or keep it right If it's cash flowing.
Either way, that's you know.
That's.
That's the thing.
I think.
That's where the opportunity is.
If you're, if you're, if youridea is to have, you know, get a
bunch of rentals, I stillwouldn't buy rentals at retail.
I would buy.
I would buy a rental at adiscount that needs some work.
(13:24):
The other thing is you can putin materials.
If you're buying a house thatneeds to be renovated and you
want to keep it as a rental, youcan put in, you know, vinyl
flooring that looks fantasticbut it's very durable, better.
You know, maybe eggshell paint.
And you know quartz countertopsinstead of marble.
(13:47):
You know quartz is impermeablemarble.
I've had marble countertops andif you get a little bit of oil
on them they get stained.
So there's things you can do toset up.
You know a rental.
You know, for example, youwouldn't put carpeting in a in a
rental.
I wouldn't, because you knowit's much better to have vinyl
(14:07):
floors throughout.
So yeah, I just think thisthat's where the you know back
to your question is that's wherethe opportunity lies is there
are.
I think 75% of the housingstock in the U?
Jacquelyn Jackson (14:23):
S is 25 or 30 years old now, so almost every
house needs some form ofrenovation, which is an
opportunity for a real estateinvestor for sure.
So I think that's somethinginvestors have to do and we
teach them that, we talk to themabout it when they come to us
as well.
That one like you what you saidearlier you have to look at the
(14:44):
market, check out the marketsand what's going on and what's
working, and you do have tounderstand if you have interest
rates or you have a foreclosure,areas that are that are
happening again, and then you'vegot some that's not, and then
you got some things that's offthe market and rehab.
All that stuff has to beconsidered for every state,
every area you're looking at,and you don't have to just look
at where you are live, which alot of people do.
(15:04):
There are some other places, ifyou like.
Jeff Mallas (15:06):
I said, if you feel comfortable enough, you know,
to actually do it you know soit's easier now than ever to to
do, you know, do deals in otherstates.
It's just, you know, with thetechnology, like you know this
conversation, you know Exactly,I'm in Las Vegas and you're in
Texas right, right, so that'sexactly right.
(15:28):
Yeah.
So and the other thing I wouldlike to, that I would like to
say is is my best investors.
They make lots and lots ofoffers.
You know they decide.
And now we're.
You know that's the otheropportunity.
You know, a year or two ago youhad to overpay for a property.
(15:49):
Margins got stretched reallythin.
But now you can.
You can determine what profityou want to make on the property
or what, what equity you wantto have built in when you close.
You make an offer.
If they don't take it, no bigdeal, you know.
Move on to the next one.
Jacquelyn Jackson (16:08):
You can control your numbers a little
bit better my best investors.
Jeff Mallas (16:11):
I would say that's best practices.
You got to make multiple offersand be willing to walk away.
Jacquelyn Jackson (16:17):
Okay, and that's a good.
That's a good insight for themto know, too be willing to make
multiple offers, because a lotof people think, just make that
one and done, and that's whatthey do, they get discouraged if
they don't get it.
Jeff Mallas (16:29):
But you know it's better to not do a deal that is
tight, than you know, than tokeep trying.
You know, eventually, I cantell you right now a lot of my
investors you know that I workwith, especially the ones that
are doing volume.
They're making lower, lowerthan ask offers and negotiating
(16:55):
them and if they can't get theprice they want they move on.
Jacquelyn Jackson (17:00):
I know I've had some come to me on a deal
where they offer half of whatthey asking for and I'm like, oh
, they're not going to do that,are they?
Well, they did it.
So you know is like you sayjust ask, you don't know until
you do.
Now, you and I had talkedearlier about as far as finding,
I guess, funding opportunities,like you talked about the
foreclosure and for us probablybeing available.
(17:21):
You were saying it's a site, awebsite that you recommend.
Jeff Mallas (17:24):
Yeah, there's a few different websites, I think.
Well, there's Hubsu, hubsucom,h-u-b-z-ucom.
There's Auctioncom.
You can search under Auctioncom.
You could just search for realestate auction sites and I'm
sure you know they would come up.
(17:44):
There's multiple.
Like I said, I get clients, Iget deals from Auction and Hubsu
quite a bit, and that's what Iwas saying.
That goes back to theforeclosures.
You know they get a lot offoreclosures.
A lot of banks will list theproperties there, oftentimes if
(18:08):
the properties aren't picked upat Auction.
So what happens is and yourlisteners might not know this,
but the bank's bid is what'sowed on the property almost
always.
Oh, okay.
And sometimes that is more thanthe investors at the auction are
(18:31):
willing to pay.
So the bank just gets theproperty back and it goes into
their REO section, real estateowned department, and then those
banks will oftentimes list themon auctioncom and Hubsu and
(18:51):
such.
So foreclosures are picking upand we're getting back to normal
levels and as that'll help withinventory, and a lot of times
those those properties, theymight have tried to sell them
but they were just in too toobad of disrepair to numbers
(19:16):
would just wouldn't work forthem.
Yeah, the numbers didn't work,or or they just they needed work
and nobody was interested.
Jacquelyn Jackson (19:23):
Yeah, that's true.
Now I know you and I had talkedbefore about you're saying some
.
I was asking you about someideas of what people can do is
for us borrows, getting aninvestment, some creative things
that you may not do the normal.
But one thing you mentioned tome and I want you to go into
when you talk about one by ahuge lot you talked about that
(19:44):
as well and building on it andrehab and then doing the land
for building new construction.
Can you kind of go into howthat yeah, yeah, there's,
there's different strategies.
Jeff Mallas (19:56):
There's all different strategies, right, and
one of those I've seen, whichis which I like a lot, is the
buy a property that needs workthe biotech server upper on a
large lot and so they'll buy theproperty with my financing, and
then, while they're renovatingthe property, they're also
(20:17):
subdividing the lot, right.
So, I've seen many people bythe property make enough, fix it
up and create enough value tomake a profit selling just the
one property.
Jacquelyn Jackson (20:31):
And then they use the land now.
Jeff Mallas (20:36):
They've got a lot free and clear and then they
build a house on that and make areal, real, strong profit
profit.
It's almost like funding.
You know, the first renovationfunds, funds the land.
Jacquelyn Jackson (20:50):
The second one I think that's great Now we
run into is loan broker.
Some people, when they firststart off on real estate, the
thing they want to do is newconstruction and you and I know
experience plays a factor for usgetting the funding you need.
You may get something, but theone you really need is where
(21:10):
experience is going to actuallycome into play.
So I know you and I had talkedabout it and you had mentioned
that.
You know, jackie, if because Icame to you, one of my clients
one time, you said well, jackie,if she could partner with a
another person on LLC, soexplain that so they can see,
because I had to explain it toher, but that she said it was
wonderful information.
So I definitely want you toexplain how to work that when
you don't have that experience.
Jeff Mallas (21:31):
Sure, what's what's ?
What's really wonderful workingon the commercial side is you
can do all sorts of really coolthings with LLCs and
corporations.
You know you can bring in otherinvestors.
So, on the on the fix and flipor fix and hold, a flip doesn't
necessarily mean you're sellingthe property.
(21:52):
You could be flipping it toanother loan.
So I'll refer to as fix andflip.
Okay, fix and flip, fix, newconstruction.
We, we look more at experienceand assets really than we do on
our, at your credit score.
(22:13):
Right On the longer term loanswe're going to like more at your
credit score.
Then we give you a little bitof you know credit for having
owned a lot of rental properties.
Let's say you know havingexperience, but it's mostly
credit driven on the and anincome driven.
(22:36):
We're also looking at theincome on the longer term stuff
on the short term and looking atexperience and if you've had
not done bought an investmentproperty and done any renovation
on it, or if you bought maybeyou just bought a rental
property but you didn't do anyrenovation, we, we do not feel
comfortable giving you aconstruction loan.
(22:57):
That that is really jumpinginto the deep end without
knowing how to swim.
Thank you, you can with an LLC.
You can partner with someoneand someone let's say a
contractor who's built somehouses, or another investor
who's who's built some houses inthe past, and and we'll give
(23:19):
you credit for that that personwould have to be Also a
guarantor on the loan to usetheir experience or credit or
assets.
But, but, but, that's that'sone way to do it.
There's all sorts of creativeways to make things, make things
work, but we definitely arelooking at experience,
(23:41):
especially as you get, you know,into bigger, bigger prop,
bigger and bigger projects, evenon the fix and flip side.
We're not gonna let you do, youknow, buy a property and add a,
add a second floor andreconfigure the bedrooms and
bathrooms, you know, for a250,000 renovation.
It's just too Too much, toosoon.
(24:05):
I want you to, you know, gettwo or three fix and flips on
under your you know belt andthen and then Well, we'll go
from there and that and thatactually, let me just Say that
kind of goes back to the firstquestion, or was, which was.
You know, how do you determinewhat lender to work with?
(24:27):
You have to look at this as a,as a partnership.
We, we In this space, we havemany clients who come back to us
, for you know they do 10, 20flips a year.
So we don't want to just do oneLoan for you on the residential
(24:50):
owner occupancy side.
You might not see that clientagain for seven years.
I'm hoping to.
I'm hoping that you do One ortwo houses a month with me.
Ultimately right so it is apartnership, and that's why I'm
saying you got to find someonethat that is just as interested
in your success as His success,you know, or the company's
(25:12):
success, and so we're gonna helpyou all along the way so that
you, you have a successful firstproject and you can come back
to us for the second, third andso on.
Jacquelyn Jackson (25:26):
Right, and that's mainly what would you're
about, and as it's loan brokersare about, you know, we don't
want to just do that one, wewant to continue.
It's a business.
We want to help you build andgrow.
Because you grow, we grow.
So that's what they have tounderstand.
We're here to help you becausewe want it to be a success.
So, with that, you always.
You also said to me one timethat, when it comes to I asked
(25:46):
you about a top funding tip thatyou would give our listeners
and you mentioned that theyshould learn the Guidelines and
the rules of the lender.
So tell me why you think that'ssuch a good tip they need to do
well, I've been.
Jeff Mallas (25:57):
I've been in business for in this business
for 30 years.
Okay, and Early on, I realizedthere are two types of borrowers
.
There's the.
There's the.
There's those that have aproject and they try to find a
lender that will give them moneybased on you know their
(26:19):
requirements.
And Then there's the other typethat say okay, what are your
guidelines, what are what areyour rules?
What do I need to do for you tolend me the money?
And that's what I do is I try toconvey that I, I say, look at
the project and and and I say,well, it doesn't fit.
(26:39):
You know, your FICO score istoo low.
We got to get your FICO scoreup and then it fits in the box
and we'll lend you the money.
So I, what I would say is youknow, play by the rules, figure
out what the rules are exactly.
We, we are solely In businessto lend money and we have
(26:59):
guidelines and if, if yourproject fits those guidelines,
we will give you the money.
So it's not rocket science,it's just what are the
guidelines?
What do I need to do if I, if Itell you I need 50,000 in cash
and you've got 30, don't?
You know?
Don't get mad at me Because I'mnot gonna change my guidelines.
(27:24):
You know I'm not gonna make upfor the twenty thousand by
changing my guidelines.
Jacquelyn Jackson (27:30):
Just go find the extra twenty thousand
dollars and that doesn't meanyou're gonna think we're gonna
take part of the land and letthat go for the Twenty thousand
that you're right.
Yeah, they try to make theirown Ways to go.
Jeff Mallas (27:41):
Just play by the rules and right, you will win
the game.
You know, and we want you towin.
That's.
That's the point.
You know we're in this together.
We don't make any money.
The only thing you ever have topay up front is usually an
appraisal, which we don't get.
You know.
We don't mark it up, oranything right right.
(28:01):
So we don't make any money untilthe loan closes, until until
yours.
We're not successful, untilyou're successful.
Exactly so if, if we tell youthe rules up front and you play
by the rules, you're gonna getyour, you're gonna win the game,
you're gonna get your money andyou're gonna have a successful
project.
Jacquelyn Jackson (28:20):
So, and with each lender, a broker, learn
what those rules are, becausethat's exactly by the rules
right, so that's what do, sodefinitely what I want to
mention before we leave today isthat you had mentioned to me
Earlier about an industryfunding opportunity as far as
those that want to do rehabs,and it's a software that you're
aware of that would even helpbeginning real estate investors.
(28:42):
Yeah do that so definitely.
I want to talk on that rightquick so they can get that
information too.
Jeff Mallas (28:47):
Yeah, I, you know.
There's the four apps I'veheard of.
You know people Call them thefour apps find it, fund it, fix
it and flip it.
So I Don't you know.
I would say look for youwholesalers or find real estate
(29:12):
agents that specialize and youcan call around and get real
estate agents that will help youfind fixer uppers and
wholesalers too.
You can find those on Facebook,you can find them on the
internet.
But on the fix it side you gotto be able to.
(29:33):
One of the skills you got tohave is you got to be able to
find the properties, but youalso got to be able to value
them.
So that's where a good realestate agent comes in, because
you need to know the ARV is theafter repaired value, but then
you also need to know how muchit's going to cost to fix it up.
So one of my favorite websitesthey're using artificial
(29:56):
intelligence isHouseHackerProcom, and on this
website they have they.
You can go in and type in anaddress.
Oftentimes it can find thatproperty in public records and
(30:19):
you can tell it what kind ofrehab you're thinking of doing
if you're going to do a light,cosmetic rehab, if you're doing
a moderate rehab or what'scalled a gut rehab, or you just
do a heavy one right, taking ityou know where you're putting in
new plumbing and electrical andmaybe a new roof, and it will
calculate what your budgetshould be based on your area,
(30:43):
based on material costs in thearea and labor costs in the area
.
And it's amazing.
I've had many investors,developers, flippers and
contractors look at it andgenerally it's within maybe a 5%
(31:05):
variance of what the finalestimate comes in at with the
contractor.
And what's also great about itis so that can help you
determine your purchase priceright and I can.
We don't need to go in theformulas, but I can help you
(31:25):
with that.
You know as well, but I need toknow but you need to come to me
with you know what you're goingto pay for it, what the ARB is
going to be, and what the rehabbudget is going to be.
So that's.
It's a great software becauseyou don't have to.
You know it's hard to get intoa property if you're just
(31:48):
thinking about until you've madean offer on it, you know.
So this is a way to kind of geta ballpark figure of what it
would cost to fix that propertyup without you know, online,
without even you know sightunseen.
Jacquelyn Jackson (32:07):
Exactly so, I think, and that website is
HouseHackerProcom, and we'llhave it on our YouTube video as
well, where they can see that.
And I also want to note too, wehave a running number software
you has discussed, which was thedealcheckerio.
Jeff Mallas (32:24):
Yeah, dealcheckerio is fantastic as well.
That tells you.
You know, once you'vedetermined what you think your
rehab budget is going to be andthe ARV and your purchase price,
then you plug those numbersinto dealcheckerio and it'll
(32:45):
tell you it's really been great.
I've got a lot of clients usingit now and it's, and both of
these are free.
You can get kind of a freetrial and try it out.
Wonderful, but you can determineif it's if it's going to work
for you or not, and again, I canhelp you with those things too.
But those that's a good way to.
Those are good places to start.
(33:07):
You just got to start findingproperties and you can look up,
as we discussed, I'm findingthat you can actually find
properties on, you know, redfinand Zillow and such, and just
kind of run them through these,these softwares and this process
(33:28):
, kind of practice it, whileyou've got maybe some agents or
wholesalers looking, looking fordeals or sending you deals at
the same time.
So it's a good thing.
Those are good skills to workon and practice before you,
before you make an offer anddive in.
Jacquelyn Jackson (33:49):
So part of our what we call do diligence,
you should do it.
So we know he's giving us ahousehackerprocom, which is a
rehab budget software, anddealcheckerio is a where you run
your numbers.
These are free softwares foreveryone to kind of go to.
We're going to list also thoseas well.
We list them in our membershipsite as well for a lot of our
(34:11):
listeners, where we have moreinformation, just like what is
what Jeff is talking about.
So you'll have access to thoseas well.
So I think that is great.
So now we're about to end up.
If you would, what would be theone thing you want to tell our
listeners, just to give themsome advice, some takeaway from
you today?
What would that one thing be?
Jeff Mallas (34:34):
I did a little bit of stock trading during COVID.
I started kind of getting intoit and I would say don't rush
into it.
What I learned by tradingstocks is there's always another
stock that's doing well and inany market there's always every
(34:58):
day there's another stock.
So there's another train comingto the station.
So start.
I would say, start slow.
Start looking online, findingdeals.
Just pick a deal that's forsale and just run the numbers
(35:19):
and then start making offers butdon't feel that you need to get
this one because there's goingto be another deal next week.
So I think that's one of thebiggest mistakes people make.
Just take your time and makesure that you don't compromise,
(35:44):
don't accept a deal that'ssubpar because you think you
need to get started now.
Just take your time in thatYou'll find the right deal and
you want that first deal to be agreat opportunity so that you
can live to flip another day.
Jacquelyn Jackson (36:02):
Definitely, definitely.
Well, jeff minus, we want tothank you for coming on our
podcast today and we want tothank you for your information
and your insight.
It was really helpful and I dobelieve our listeners are going
to benefit.
So, if you guys would like toget in touch with us or get in
touch with Jeff, you know ouremail is podcast at
tdjequeryfundinginsidersnet.
(36:23):
Definitely you can see and sendus an email so you can reach
out and if you want to make it apoint when a loan broker, you
can do that there as well.
I want to thank you guys forbeing part of our show.
Take care and y'all have agreat day.
Introduction (36:54):
Thanks to DJEquityFundingInsidersnet.
Until next time, take care.
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