đź“ť Overview:
In this value-packed episode of the Generations of Wealth podcast, host Derek Dombeck interviews Peter Russell, a seasoned real estate wholesaler and founder of a nationwide transactional funding company. They dive deep into the evolution of wholesaling, the impact of shifting laws, and the critical role of transactional funding in today’s market. Listeners gain firsthand insights into how Peter scaled his business, navigates legal changes, and keeps the process smooth for investors and title companies alike.
💡 Key Takeaways:
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Wholesaling Evolution: Peter went from bandit signs to multi-state operations, then transitioned into funding.
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Transactional Funding Explained: A same-day, double-closing method that helps wholesalers protect profits and remain compliant.
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Why Wholesalers Need Double Closings: Large assignment fees and legal restrictions are making it essential.
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The Legal Landscape: Anti-wholesaling legislation is growing—knowledge and adaptation are key.
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Operational Excellence: Clear communication and efficient systems are the backbone of a successful funding company.
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Low-Risk Lending: Transactional funding offers minimal risk when done right—Peter outlines his secure process.
🎧 Why Should You Listen?
If you're a wholesaler, flipper, or real estate investor navigating the post-2020 market, this episode is essential. You'll learn how to:
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Avoid common wholesaling pitfalls.
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Stay compliant amid tightening regulations.
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Close more deals using double closings.
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Understand the real process behind transactional funding.
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Hear straight talk from someone who’s done 200+ deals in 18 months.
🗂️ Relevant Topics Discussed:
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Real estate wholesaling journey
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Double closings & transactional funding
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Legal changes in wholesaling (e.g., North Carolina, Illinois, Ohio)
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Protecting profit margins through deal structure
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Scaling a lean business
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Title company challenges & best practices
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Earnest Money Deposits (EMD) funding
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Sales and negotiation skills in real estate
⏱️ Timestamps GuideÂ
    Time                  Topic
00:00 – 02:30   Intro to Peter Russell & episode theme
02:30 – 07:00   Peter’s real estate journey & early wholesaling
07:00 – 12:30   Discovering double closings through institutional buyers
12:30 – 17:30   Creating a better transactional funding experience
17:30 – 21:00   Scaling the business lean with a strong team
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
Yeah, a lot of our clients and new clients arereferrals, even though we pay, you know, we
pay for Google ads for, we do other marketingand that sort of thing. A majority, probably
75 % of our clients are current repeat clientsor their referrals because they had a great
experience. People like to do business withpeople that they like and that handle it well
(00:23):
and that are efficient. We're just, we're hugeon communication. You know, we could fund a
couple of deals for a guy in Florida. And thenwe get a call from a guy in Iowa that's like,
you know, my buddy that I'm in this group withtold me that you guys are great to use for
double closings. Can you fund mine? And we'relike, yeah, we can do it in any state. So it's
not just geographically or like city specific.These referrals pop up all over the place and
(00:46):
we're like, yeah, let's do it. you
Welcome to the Generations of Wealth podcast.I am your host, Derek Dombak. Today's show,
another incredible show. They're all incredible.I think that we have some of the best guests
(01:11):
and best lineup. I got to tell you, I justhad a compliment from somebody this morning
as I'm getting ready to record this show. Andhe's been listening to it. He said, I really
appreciate the different genres and the differenttypes of people you bring on and different
types of investing. And I'm really, really happyfor that feedback. And I hope that anybody
(01:32):
listening to this, if you have suggestions,feel free to reach out. Go to thegenerationsofwealth.com,
go to derekdombeck.com, shoot me a direct email,derek at globalgow.com. And we want to keep
bringing value to you. So all of that said, I am going to bring on Peter Russell and
(01:56):
Peter. Started off as a wholesaler, did a lotof wholesaling, still does a lot of wholesaling,
but found that he needed to start doing doublecloses and was looking for funding sources
for that and ultimately realized he could dohis own better. And so he's got a, a double
(02:18):
closing transactional funding company now.And so that's the conversation today is going
to be about wholesaling. changes in the wholesalinglaws and transactional funding. So let's
get on with it. And here he is, the one, theonly Peter Russell. Peter, thanks for being
on the Generations of Wealth Show, Thanks forhaving me, Derek. I appreciate it. I have
(02:43):
to tell everybody right up front, like the conversation,the topic we're gonna talk about today, it's
transactional funding, but it's so much biggerthan that. Like there's, there's wholesaling
laws that are changing. There's markets thatare shifting. There's, there's so many different
pieces that come into this. But before we getinto any of that, Peter, just tell us a little
(03:05):
bit about yourself, your background, and we'lldefinitely dive into more details after that.
Sure. Yeah. I, my background in real estateis for the last 10 years, I've been a wholesaler.
I started it. uh, 20 late 2015. It's hard tothink and imagine that it's been 10 years already.
(03:28):
Sometimes I go to these meetups and everythingand everybody's like brand new or two or three
years and I'm like, Oh my God, it's been a decadefor me. Um, but I, I was curious about, uh,
real estate investing for a long time, but likea lot of people, I just didn't know that much
about it. I didn't know about wholesaling. SoI thought you had to be a general contractor
(03:49):
or have a crew or have a rich uncle or somethingto get involved, right? I was always interested
in whatnot, but I just didn't know. And thenfound out about wholesaling by somebody just
posting a lot of stuff on Facebook lives. And he kept posting, posting about like, hey,
I got this deal. I pretty much flipped it withno money. I'm not having to put anything into
(04:11):
it. I'm making 15, 20 K. So finally I reachedout and connected and I was like, tell me a
little bit more. He was in my own market here in Charlotte. And I went to one of his meetups
and events and just ran with it from there. Um, just learned as much as I could through
YouTube. This is like pre guru coaching, bigevent space. This is early on. Um, and then
(04:35):
just took with it, started doing some deals,failed forward, figured it out, put out bandit
signs, knocked on doors, did all the stuff thatyou do when you start out and don't really
know what's going on or you're on a small budget. And just one thing after another, just started
doing some deals, left my nine to five, wouldadd pieces, you know, an acquisition person
here, transaction coordinator there. And thenactually grew it out to something pretty big.
(05:00):
about four or five years ago, had an office,had about 10 people in house and we were doing
stuff virtually along with our own market herein Charlotte. were in Phoenix, Dallas, Houston,
Alabama, a little bit in Florida. So we dabbledwith virtual. Um, and then we started in 2020
(05:21):
selling to institutional buyers, like hedgefunds. And that's how I came across a double
closing. It was before for the first four orfive years, I'd only done assignments, right?
Never needed to, or thought about a double closeor didn't know, you know, there's a couple
of large deals that I had blow up on me at theclosing table because of that assignment fee
(05:41):
and didn't really know that there was a wayaround it. Nobody talked to me about it. And
then with these institutional buyers, theymade us double close. They're like, cool, this
is a great deal. But by the way, you're goingto have to buy it and then turn around and
sell it to us on the same day. And I was like,what is that? Like, how do you do that? How
does, what's the process? So like anything else,just figured it out, right? Start calling people
(06:03):
up and I was like, Hey, can you fund this dealfor a day? How much would you charge me? And
they're like, a lot of people that I was reachingout to is like, What are you talking about?
Like, do you want to fix and flip it? Do youwant to buy and hold it? And I'm like, no,
I already have a buyer, but I can't assign itto them. So after a few of those and a really
terrible process and people charging me fouror five points and leaving me hanging on the
(06:24):
day of closing on the golf course, they're like,Oh, I'll get to the bank tomorrow. That sort
of thing. I was like, this sucks. This is terrible.Like I can do a better process than this.
I'm an investor. I'm a wholesaler. It's gotto be happening all over the country. definitely
in my own backyard. Charlotte's a great market.There's always a lot of interest here. You
know, the institutional buyers went crazy herewhen it was, when it was doing its thing. So
(06:48):
it just kind of got my wheel spinning, um,about how I could put something together as
a wholesaler for wholesalers that I would wantto use every time and hitting on the points
of same process, right? And that it's not differentevery time you reach out or you're working
with a different person. And then on top ofthat, the, uh, the fee, what people are charging.
(07:10):
Like you work hard as a wholesaler and you havea big marketing budget for them almost every
single month. So you're trying to capitalizeand make as much as possible on every deal,
but also protect that, especially deals of 20,25 K or more. And you don't want the seller
to see it. You don't want the buyer to see it.What would that process look like? And what,
(07:33):
what's something that I would want to go backto every time if I was using somebody else
for transactional funding. So I put it together,I've tweaked it over the years and that sort
of thing. And that's where I'm at now is Istill wholesale. have a much smaller team.
I do deals here locally in Charlotte. Can'tget away from wholesaling yet. It still pays
(07:54):
the bills and it's pretty great. I still getpumped on getting a 50, 60 right now. We have
like a $90,000 assignment fee lined up. So hard to get away from that. But we, I do transactional
funding for double closings nationwide now.So the one thing that kicked in for me when
(08:14):
you were talking about your background was youwere like, ah, it's hard to believe I've been
doing this for a decade. And I instantly thought,shit, I've been doing this for decades, 21
years. And it does go by fast. And there'sa lot of stuff that happens good and bad in
these timeframes, which shapes us and makesus either evolve or fall by the wayside, know?
(08:41):
But what were you just curious, what were youdoing before you got into real estate investing?
I was working sales and marketing. I was salesover the phone. I worked for a company that
took in perfected sales process for othercompanies and they would send the leads and
(09:03):
everything to us. So under that one company,there was people doing sales for DirecTV,
for life insurance. I was doing the energy sideof things where in certain states and markets,
you can choose who your energy provider is andtry to compare the rates and all that kind
of stuff. So was on the phones, I was talkingto dozens and dozens, sometimes over a hundred
(09:27):
people a day. And I think that really helpedwith strengthening and sharpening. just the
sales side and just having conversations withpeople, right? Because wholesaling really is
a, it's more on the marketing and relationshipside than anything else, I think, in being
able to talk to people and know that it's anumbers game. A lot of people we talk to aren't
(09:50):
the right fit and we're not the right fit forthem and that's fine. Don't let it get you
down, beat you up or anything like that. SoI was on the sales and marketing. company
that I was working for for about three yearsbefore I started wholesaling. then I was wholesaling.
was getting up in the mornings, putting outthose bandit signs and doing all this stuff.
was getting calls and I was taking them on mylunch break and all that kind of stuff to start
(10:13):
out. And it got to a point where I was like,after a few deals, it was like, I can do much
better. And I'm missing out on opportunity bysitting at this desk working for someone else.
So, yeah, it's interesting. Some of the thingsyou just said, because I You know, my listeners
know, and if you're new to the show, um, I hostwhat's called the elite negotiations Academy
(10:35):
and, at elite negotiations, academy.com. Andwe, talk about this all the time when I teach
people how to negotiate it's. It's doesn't haveto be a numbers game. If you actually know
how to talk to people, you can convert or increaseyour conversions. And, you know, there's so
many wholesaling gurus out there that quitefrankly just pissed me off because. They say,
(11:00):
okay, make $10,000 your first month in the business.And it's all about the numbers. So you put
out, you know, 5,000 pieces of marketing andyou'll get, you know, half percent response
rate. And if you can convert one out of a hundred,you get a deal and you make a $10,000 wholesale
fee. Well, is that true? Sure. But can you doit with much less marketing dollars, much less
(11:26):
Phone time, yeah, absolutely. If you actuallylearn just like you did, learn how to talk
to people. And that's all it is. So I lovethat that's your background and it makes a
lot more sense, right? Cause wholesaling isvery much a marketing business and a people
business. You have to be able to talk to bothsides. So. Yeah, a hundred percent. So, okay.
(11:52):
So now. You've kind of worked out the kinks,it sounds like over a period of a few years,
as far as being the transactional fundingside of it now. What are you seeing long-term?
I mean, is this something that you really wantto maximize and grow as big as possible? Or
are you trying to stay, you know, just you anda couple of employees? What are you seeing?
(12:15):
I want to grow it to see what it really canget to. with regulations, with things going
on in the market, kind of anti-wholesaling, it's really taken off and the demand for it
is going up every single month. We see our numbersincrease with requests and deals funded. So
(12:38):
I really wanna take it and put it out thereand be the go-to for transactional funding,
again, as a wholesaler to other wholesalers. At the same time, I'd like to do that. with
as tight of a group of people as possible. I'vedone the bigger scale and the larger teams,
that sort of thing. I know it wasn't massive.There are some wholesaling teams that are probably
(13:02):
20, 30, 40 people in an office and tons of internationalemployees, that sort of thing. But with the
team that I have now, my coordinator has beenwith me for six years. She's amazing. She's
had her hands involved in probably six, 700transactions by now. Um, and then we just
have some support around that. We're, we'regoing to take that as far as we can and then
(13:26):
start adding other members to that as support.then, um, as things grow, but the way that
I have it now is, is what I really, really like,you know, not, not a bunch of people. Um,
and I'm very strict about who I bring on board,right? I've learned that over time is like,
have a good core and then bring people on boardthat can, that can add to that, but also.
(13:49):
I don't want anybody on my team at any pointin time where other people are trying to avoid
that person. Right? I've been through that before,held onto him probably longer than I should
have and that sort of thing. Um, but we'regoing to grow it and we're going to make sure
that we can handle the volume, but super selectiveabout who all that we work with because we're
communicating day in, day out, right? Like you're,you're spending a lot of time with these people.
(14:11):
So you want to have them be a great fit, butthen also someone that you actually enjoy communicating
with and interacting. Yeah, I can tell you,you know, when we had the hard money lending
business, we hit super growth mode. And I cantell you the exact month. It was April of 2020
(14:32):
because COVID hit and all the national hardmoney lenders couldn't sell their paper anymore
on Wall Street. And so our applications wentup 400 % overnight and we couldn't, we couldn't
possibly fund. a fraction of them, which meanswe were turning away good loans. And so that
(14:53):
meant now we have to go raise more money becausewe're all privately funded. And so we went
and raised more money, but that meant we mayneed more staff and it does not grow and it
does not grow profitable profitability wiseeither as you scale. and I know exactly what
you're talking about. had employees that didn'tget along and you know, Big overhead costs
(15:20):
every month and it becomes, it becomes a,dare I say a freaking job and then it's not
fun anymore. Right? Right. So I'm, I'll hearyou. Um, let's talk about the law changes
and what's going to happen with wholesalingin your opinion, both regionally and nationally.
(15:43):
We've seen. I know Illinois for sure, Ohiofor sure. There's quite a few other states
that are in the process of passing these, whatI'll call anti-wholesaling laws. They are
different in every state, of course, but thegeneral consensus on most of them is they just
(16:05):
don't want you acting as a broker or an agentwithout a license is what it kind of comes
down to, the generic explanation of it. Whatdo you think that's going to do both good and
bad for the wholesaling industry and of course,you know, the double closing and the transactional
(16:26):
funding? Yeah, I mean, it's state by state,like you said, it's kind of the idea of like,
hey, we don't want you being part of a transactionin the form of like an agent or a broker. And
that's how they kind of see wholesalers. withthat some of it's we don't want you to market
it. Some of it's we just don't want you to bea part of it. I know in North Carolina, they
(16:49):
have a pretty, pretty heavy one right now whereit's just like anybody, even if you're not
a real estate investor, a wholesaler, even ifit's a private transaction, the way it's kind
of worded right now, it's just any anybody that'sgoing to do a real estate transaction has to
use an agent or be an agent, which is is pretty,pretty intense. That's not passed yet. You're
(17:11):
saying this is in legislation right now, they'reworking on it? Right, right. I wanted to be
clear on that. Sure, sure. I think it's somethingthat they're saying could go through in the
fall. it's, yeah, it's interesting becauseI think it's gonna, the good side of it, I
think it's gonna clean up a lot of issues andthat people have like with consumer protection
(17:33):
and whatnot. Cause there's obviously bad applesout there, right? And people that just go out
there to get a contract under or a deal undercontract and then they don't have any intention
of closing on it or even assigning it to anyoneelse. They'll get it, just put a memorandum
on it, step away, disappear, and then wait tillthat seller is looking to close with someone
(17:53):
else. That memorandum pops up and they're like,Hey, I'll release it for five, 10, 15 K, that
sort of thing. And then there's just peoplethat don't really know what they're doing
and they're holding up these people's propertiesfor months on end, right? So hopefully that
kind of, there's a barrier of entry and thatgets cleared out. And I think it makes more
(18:15):
opportunity for investors, wholesalers, if youhave to go become an agent or if you have to
do things a certain way that you're not gonnahave as much of that kind of messiness of,
I deal with it all the time where I talk topeople now, cause I'm still doing it here in
Charlotte, where they're like, yeah, you know. your offer is good, but somebody else is offering
(18:36):
me 20, 30K more. And I'm like, there's reallyno way that they can do that and perform on
that. Or I ask, have they sent you a proof offunds? Have they shown you reviews or testimonials?
And they're like, no. And you're just like,well, just be cautious about that, right? So
hopefully it clears out a good amount of that.And there is that barrier to entry. I know
(18:58):
in some states where they're just saying, hey,you gotta go get your license and you can do
the same thing. Right? Or some of them are sayingevery time you do a deal, you have to do a
new LLC if you do an assignment, but a way to not have to worry about that, go be an agent
or get an LLC, which is time consuming, costsmoney. And I can't imagine doing that on every
(19:21):
deal. Even if you only do a handful of dealsa year would be to buy it and then turn around
and sell it on the same day. So you have yourcontract with your seller. You have your contract
with your buyer, but instead of them, beingpart of the same transaction, you actually
are the buyer, right? And then you turn around,you actually are the seller to the end buyer.
And that's where I step in, because a lot ofpeople just don't have an extra 100, 200, $300,000
(19:46):
sitting around for these deals. And that's whereI say, hey, I can fund it for you. Just submit
a deal, get in contact with my team, put usin contact with your title company, or if you're
an attorney state. And then on the day of closing,once everybody signed the InviarS funds are
in escrow, they're committed. We'll wire thatfull amount over you as the wholesaler. know,
(20:07):
there's no underwriting. There's no credit check.There's no, Hey, how long have you been a wholesaler?
It's just like, if the deal closes, we'll fundit. And then we'll fund that full amount. You
don't have to bring 10, 15, 20 % to the tableor anything like that. So I think with legislation,
with things coming down a huge, um, part ofit will be able to actually buy and secure
(20:31):
the asset, the home, and then turn around andsell it. And then with double closing, it's
just same day, right? So as long as everythinglines up, it's good to go. We'll step in and
say, hey, we can be the funding part of that.And we do it for 1 % or less on like 95 % of
our deals. It's a low, low fee. So you can captureand keep that profit as much as possible. The
(20:55):
difference between a good deal and a greatone. It usually comes down to what you say
and how you say it. That's where Elite NegotiationsAcademy comes in. We help real estate professionals
master the art of negotiation through real-worldcoaching, live deal analysis, and breakdowns
of actual calls. Learn how to control the conversation, build trust faster, and close deals without
(21:17):
leaving money on the table. Whether you'retalking to sellers, buyers, or lenders, this
is the skill that pays for itself. Try it out.$49 per month for your first three months.
Visit EliteNegotiationsAcademy.com and startnegotiating like a pro. Which for reference
to the listeners, is cheap. mean, most transactionalfunding is one and a half to two and a half
(21:45):
percent. I mean, I've done transactional fundingand we were 2%. But the other side of that
is... As you said, it's going to thin peopleout, which I like. mean, we've got in every
market shift, you've been in this a decade.I've been in a little over two decades. There
(22:09):
needs to be a thinning of the herd occasionally.And a lot of people don't like to hear that.
But I know, I remember reading a statistic,I believe it was 2021, maybe early 2022. There
was more real estate agents licensed in theUnited States than there was properties listed
on the MLS for the first time in history, becausethere was so much upside activity. And if
(22:36):
you could get a listing, you were going to makemoney. Right. So realtors, they popped up like
weeds and now they're, they're dying off. And the same thing happens with wholesalers.
The same thing happens with house flippers. Um, every. Every industry, right? Like transactional
funding was huge in 2009, 10, 11, and 12. Causeeverybody was doing short sales and they needed
(23:04):
the transaction funding. You, you could throwa rock and hit three transactional funders,
you know, any, anywhere you wanted to go ina major area. But then they fell by the wayside
because short sales wound down and people didn'tneed them as much. So. Um, it's absolutely,
it's a great business by the way. Um, do you,do you mind talking about how safe it is as
(23:30):
a lender? Yeah, that's a huge point. I appreciateyou bringing that up. It's just, again, our
safety net and we've done over 200 of thesein the last 18 months is we are very strict
about wiring instructions as one. We use a thirdparty called Certify ID. and all the instructions,
(23:51):
everything have to go into there, have to beverified so they're insured and taken care
of. So that's first and foremost. And then thesecond thing is, is again, we'll fund them
all day long. know, some days we're busy, havefive, six or seven, you know, right now we
average close to two a day, because it's justcreeping up more and more, but we are very
(24:12):
strict with our process and say that this iswhat has to happen. And it's simple and straightforward
is submitting it. getting us in contact withthe closing company. But the biggest piece
for us is we have to have everybody sign theclosing docs. There's no like, oh, this guy's
out of town or my bike's on vacation. He'llcome back. He's great. He's bought 15 from
(24:34):
me. It's like, great. We'll wait till he comesback from vacation because our funding, has
to be as true same day, double closing whereit has to happen just back to back. That just
ensures that everybody's safe. Everything'staken care of. And it's a quick, simple process.
And that's why we only charge 1 % or less. Anything over that to me turns into gap funding,
(24:55):
right? Anything more than 24 hours. It's like,even if it's 48 hours or a week or two weeks.
So everybody's got to sign closing docs. Andthen that in buyer, that's going to be the
rehab or the buy and hold investor, their money,if it's their cash, if it's hard money, private
money, however they're getting funded has tobe sitting in escrow. So they have to be fully
(25:16):
committed. That's how we make sure that it'slike very, very risk averse is taking care
of those wiring instructions and verifyingthat. Cause you send out a wire to the wrong
place. It's not like a credit card. You're notcalling Amex and they're saying, let me get
that money back to you. It's, can be a hassleor it can be like worse than that. Right? So
(25:37):
be gone super sensitive about that. Um, andthen also just, it just, everybody has to sign.
Everything has to be lined up, but The greatthing about it is it's not, you know, it's
not, does this guy, did he get it at 60 % ofARV? Uh, does he know what he's doing as a
rehab or does he have experience? That sortof thing. It's if it closes, we'll fund it,
(26:00):
but it's all got to be lined up and handledproperly. And we, most of the title companies,
closing companies we work with, like they, theydo double closings all the time. And if, if
not, we'll walk them through it and they'relike, okay, that makes sense. Right. Out of
the. 200 I've done in the last 18 months. I'vehad three where we walked away from were either
the escrow agent was just sloppy and all overthe place. Or I had an attorney one time that
(26:25):
was just just a super jerk. And he was justlike, Oh, you're not going to tell me what
to do. You're not going to tell me how to handleit. And I just stepped in and I was like, guys,
I'm not comfortable. I'm not, I would neversend money over to this attorney. And then
just everybody was like, Hey, I understand.I don't know how they ended up figuring it
out. But if, if we get the ick on our end, we'relike, this person is going to drop the ball
(26:47):
or they're not respecting our process. Thenwe, pull the funds. But like I said, that's
only happened probably two or three times sincewe've been doing it. Yeah. And like when we
were doing hard money, we were averaging 20to 25 loans a month, hard money. And, and we
would do the occasional transactional fundingand dealing with the title companies is the
(27:09):
biggest pain in the ass for the lender becauseEvery one of them, I mean, we have very, very
clear closing instructions. Every one of themis a little bit different. And, and we had
a blacklist of who we just flat out wouldn'tdeal with at a certain point in time. We're
like, if you want to use that title company,that's great. Go get your funding somewhere
(27:30):
else. We're not obligated to, to go where youwant us to go. Or, we'll use our own title
company as the lender and you can still closewhere you want to, but you know, you're going
to have more fees. But the beauty of transactionalfunding for the listeners in case they haven't
figured it out is you wire the money to thetitle company and never leaves escrow. It never
(27:54):
leaves the title company. it's, there is nowit's not zero risk. There is still risk. There's
title company screws up on paperwork and they,or they release funds fraudulently. And now
you have to go after them for areas and omissionsinsurance or just straight up fraud. Like there's
still risk. Right. But in the lending world,it's about the lowest risk loan you can do.
(28:19):
And if I'm really peeling back the curtains, um, what's your average transactional funding?
Probably a couple, a couple hundred grand. It'sright under 200 K. Yeah. So let's just say
200. And this is what we looked at back inthe day. Um, if we were going to grow it out,
(28:39):
if you had the same title company in theory,lined up and they had four or five or six
double closings the same day. And they wereall timed perfectly. You could use the same
200 K to fund each one. And so we kind of didthe math on that. We're like, shit that. Yeah.
(29:05):
That dog would hunt. Um, but, and I know backin the short sale days, there was a guy named
Joe. out of New Jersey area. He was doing transactionalfunding. He had a quarter million dollar line
of credit on his house, a HELOC. And he wasdoing transactional funding about the same
as what you're saying, about two a day. AndI mean, he made a boatload of money off of
(29:31):
his HELOC just doing transactional funding.But it is a lot of work. I mean, just the
coordinating and the paperwork and you know,going back and forth with the title companies,
everybody, it's, it's not like, Oh, you know,Peter made 1 % and didn't do shit. That is
not true. There is, it's a lot of handholding.It's a lot of babysitting. You're still dealing
(29:54):
with human beings. So in a lot of times, likeyou said, like with a title company, you're
not working with the same person or somebodycalls out sick or there's some companies that
I I don't know how or why they do it, but they'llhave they share each closing amongst like four
or five different escrow officers or paralegals.And I think for them, they're like, Oh, this
is efficient. Anybody can step in or whatever.But when people don't know how to CC, BCC or
(30:19):
reply to an email and you have five or six differentchains going on the same deal or Tanya was
handling it this way. But then Mark comes inand handles it a different way or he's not
sure where the process is. That's where thecoordination side comes in huge. that's another
big piece that we bring to the table is we'renot just pushing papers and clicking buttons
(30:39):
and wiring money over. A lot of times we haveto say, hey, let's pause. Let's verify where
everything's at. And a lot of times we're holdinghands, especially if the wholesaler's not
super seasoned and saying that's what they'resaying is not right. This is how we need to
respond to it. Or this is where we're at inthe process. that maybe they've done a few
(31:01):
assignments, but they haven't done a doubleclosing. And if they were just to follow whatever
that escrow officer said when they stepped inlast minute to handle it, it would have just
been, you know, it would have blown up the dealor it would have pushed it back even further.
So there's a lot of times where we're steppingin and saying, Hey, that's, that's not a hundred
percent accurate. Or sometimes we'll look ata HUD statement and say, Hey, this is being
(31:25):
charged twice or something like that. You know,It's we bring that experience to the table
where we're really just saying we can do ourbest to get it across the finish line. We don't,
we don't coordinate between all the sellersand the buyers and verify all of that. But
when it gets down to that closing date, we makesure everything's right, accurate, lined up,
and we're more than willing to help the wholesaler.Like if there's an issue, try to give them
(31:49):
a little guidance and help them to get througha deal too. We don't just say, oh, if it's
not good to go, you know, we're going to stepback and not do it. Like, We want the deal
to close. we obviously we want to fund it, butalso we know what it's like being on that side
as the wholesaler and having things all overthe place and whatnot too. So we, we bring
that experience to the table and I think that'sa huge piece of it on our end. Absolutely.
(32:11):
You know, that was why a lot of people cameto us for hard money because we're also actively
buying and selling and flipping and, and youknow, we were, I vetted every deal that we
ever funded. did all the comps. And, I wouldlook at a scope of work and say, yeah, you're
not putting a brand new kitchen in for $2,000. Um, and if you actually are, it's not going
(32:34):
to be worth what you think it's going to beworth. So that you're right. You having that,
that experience versus just somebody off ofwall street that says, Hey, I want to start
lending money and I'm going to do transactionalfunding. They just don't bring the same experience
to the, to your client. And that's all. superblack and white at that point, right? Like
(32:56):
they don't, if they're not in the field andthey don't have the background yet, it's definitely
different. So, and I know we're not the onlytransactional funder, double closing company
out there. But I think being investors andwholesalers first and foremost and hundreds
of deals that way, we understand probably 50% of the requests that we get, get pushed.
Like nothing closes on time, right? It maybe a day or two different, or it may be weeks,
(33:19):
or we have a few of them that if there's cloudedtitle, it's months. it's still sitting in our
CRM and every once in a while we're just pingingthat title company or attorney being like,
hey, how's everything going? How's everythinglooking? Like, when will you need this funding?
That sort of thing. So we stay super activeand involved in it. We understand like hardly
anything closes on time or it's not the exactamount that that cash to close is going to
(33:43):
change a little bit. We don't charge a fee ifwe have to go back and you know, if the numbers
change, cause Right before closing, when wehave those finalized numbers, we send a like
a docu-sign over to the investor, the wholesalerthat says, hey, just to verify this is the
amount that we're funding. This is our fee.We're getting it back when the second deal
closes. And we have them sign off on that, right?Just to verify. So they can't come back and
(34:06):
say, oh, it was more than I thought or whateverit may be. But that, that changes a lot of
times. Those numbers change on the day of closinga lot too. But we're not like, it's $50 for
every redraft or anything like that. We're like,that's just part of it, right? So knowing that
and understanding that, not nickel and diminganybody is I think a really big part of it.
(34:27):
And I think it puts a lot of people at easeonce they work with us. And you already said
it, right? You like working with people, thesame people over and over again, and it just
becomes easier at that point. They know yourprocess, you know their process, or you know
they're going to perform. That's in any industry.If you can have that repeat client base. Yeah.
(34:50):
A lot of our clients and new clients are referrals, even though we pay, you know, we pay for Google
ads for, we do other marketing and that sortof thing. A majority, probably 75 % of our
clients are current repeat clients or theirreferrals because they had a great experience.
People like to do business with people thatthey like and that handle it well and that
(35:12):
are efficient. We're just. We're huge on communication.You know, I would rather bug somebody into
giving me an answer than just not respondingor saying, it'll figure itself out. Um, so
yeah, that's, that's been a huge piece for usis just referrals from other wholesalers. And
it's funny because. Everybody who's got in sucha big network now, we could fund a couple of
(35:34):
deals for a guy in Florida. And then we geta call from a guy in Iowa that's like, Hey,
you know, my buddy that I'm in this group with.told me that you guys are great to use for
double closings. I have a deal worked out. Canyou fund mine?" And we're like, yeah, we can
do it in any state. it's not just geographicallyor like city specific. These referrals pop
up all over the place and we're like, yeah,let's do it. Here's our process and introduce
(35:56):
us to Tidal and let's go. Absolutely. Well,I guess we'll kind of start winding this down.
Peter, what's one question I should have askedyou that I didn't? Let's see. A lot of people
ask me and we don't do it yet, but probablyin the near future, EMD comes up all the
(36:18):
time. People are like, will you fund EMD? Willyou do that? We don't do it yet. But as we
raise more capital and get a process set upfor that, that's something probably by the
end of the year that we'll start doing as well for everybody. the fees will be on that and
how that'll look will probably be a little bitdifferent. If we're funding a $5,000 EMD,
(36:41):
we probably can't just charge 1%. But we'regonna get that locked in. That's probably
25 % of people that reach out to me and say,oh, do you also do EMD and deposits and things
like that? I think there's a huge need for thatout there. But we don't do it quite yet, but
that's something that we're working on. Andfor those of you listening to this that don't
know what EMD is, that's earnest money deposits. And... Russell or Peter was born in Chicago.
(37:07):
So sometimes, you know, he talks a little overother people's heads, like us people in Wisconsin,
right? So- Got to simplify it a little bit.I apologize. Yeah, that's right. We need you
to slow down. Anyways, I was looking for somewhereto get a jab in there against you during the
(37:27):
show for being born in Chicago. And I finallygot one in, you know. Right. I didn't think
it was going to happen, but- Oh, it was gonnahappen. Even if it was in the closing, it was
gonna happen. So awesome, How do people findyou? do they get in touch with you? I am very
(37:48):
transparent and open book. I will give you mycell phone number. People can call me, text
me directly. It is 980-254-8288. If I don'tanswer, just shoot me a text. I will get back
to you. It's not gonna be a a bot or somebodyelse on my team, it's going to be, still handle
most of the inbound right now. It's fresh enoughand I just want to make sure it's handled correctly.
(38:12):
Um, our website is, and I'll shoot you thelink, but it's velocityadvantagecapital.com.
Pretty, pretty nice site. Very straightforward.You can submit a deal on there. You can go
to FAQs. We have a little video, cartoon videothat goes through our process in less than
like a minute, that sort of thing. And thenI'm on, you can look me up on Instagram and
(38:35):
stuff like that too. I'm not, I'm not the most avid poster. I just started having people
kind of put content out there for me. But Ithink if, if anybody has a question and they're
like, Hey, what exactly is a double close orI have one coming up or what does that look
like? Give me a call, shoot me a text and I'llcarve out like 10, 15 minutes and we can have
(38:56):
a conversation about it. Well, I mean, you'revery open with your contact information. Do
you want to give out your home address so wecan come over for dinner too or not yet? No,
we'll get to that point. Maybe when we're doingthe EMD and maybe when we're funding five deals
a day, then I'll set something up like that.We'll set up like a quarterly get together
and everything will be on me. Everybody that'sheard you on the Generation of the Wealth show
(39:20):
will show up for dinner. That's fantastic. and brats all day long. Well, brats, I'm
there for sure. Let's do that. Thank you somuch for your experience and your sharing
everything. you know, we'll definitely be stayingin touch with you and, and, you know, the
(39:41):
rest of my listeners too, anything that youneed. This, you guys already know this, my
regular followers, this is what we bring. Webring real people. mean, Peter's giving out
his cell phone for God's sake. So this is, thisis the way we are. So until the next show now.
y'all know how to go out and find deals. Nowyou have no reason not to get the funding you
(40:03):
need to double close. So go do some deals andtill the next show, we'll see you.
Yeah, a lot of our clients and new clients arereferrals, even though we pay, you know, we
pay for Google ads for, we do other marketingand that sort of thing. A majority, probably
75 % of our clients are current repeat clientsor their referrals because they had a great
experience. People like to do business withpeople that they like and that handle it well
(00:23):
and that are efficient. We're just, we're hugeon communication. You know, we could fund a
couple of deals for a guy in Florida. And thenwe get a call from a guy in Iowa that's like,
you know, my buddy that I'm in this group withtold me that you guys are great to use for
double closings. Can you fund mine? And we'relike, yeah, we can do it in any state. So it's
not just geographically or like city specific.These referrals pop up all over the place and
(00:46):
we're like, yeah, let's do it. you
Welcome to the Generations of Wealth podcast.I am your host, Derek Dombak. Today's show,
another incredible show. They're all incredible.I think that we have some of the best guests
(01:11):
and best lineup. I got to tell you, I justhad a compliment from somebody this morning
as I'm getting ready to record this show. Andhe's been listening to it. He said, I really
appreciate the different genres and the differenttypes of people you bring on and different
types of investing. And I'm really, really happyfor that feedback. And I hope that anybody
(01:32):
listening to this, if you have suggestions,feel free to reach out. Go to thegenerationsofwealth.com,
go to derekdombeck.com, shoot me a direct email,derek at globalgow.com. And we want to keep
bringing value to you. So all of that said, I am going to bring on Peter Russell and
(01:56):
Peter. Started off as a wholesaler, did a lotof wholesaling, still does a lot of wholesaling,
but found that he needed to start doing doublecloses and was looking for funding sources
for that and ultimately realized he could dohis own better. And so he's got a, a double
(02:18):
closing transactional funding company now.And so that's the conversation today is going
to be about wholesaling. changes in the wholesalinglaws and transactional funding. So let's
get on with it. And here he is, the one, theonly Peter Russell. Peter, thanks for being
on the Generations of Wealth Show, Thanks forhaving me, Derek. I appreciate it. I have
(02:43):
to tell everybody right up front, like the conversation,the topic we're gonna talk about today, it's
transactional funding, but it's so much biggerthan that. Like there's, there's wholesaling
laws that are changing. There's markets thatare shifting. There's, there's so many different
pieces that come into this. But before we getinto any of that, Peter, just tell us a little
(03:05):
bit about yourself, your background, and we'lldefinitely dive into more details after that.
Sure. Yeah. I, my background in real estateis for the last 10 years, I've been a wholesaler.
I started it. uh, 20 late 2015. It's hard tothink and imagine that it's been 10 years already.
(03:28):
Sometimes I go to these meetups and everythingand everybody's like brand new or two or three
years and I'm like, Oh my God, it's been a decadefor me. Um, but I, I was curious about, uh,
real estate investing for a long time, but likea lot of people, I just didn't know that much
about it. I didn't know about wholesaling. SoI thought you had to be a general contractor
(03:49):
or have a crew or have a rich uncle or somethingto get involved, right? I was always interested
in whatnot, but I just didn't know. And thenfound out about wholesaling by somebody just
posting a lot of stuff on Facebook lives. And he kept posting, posting about like, hey,
I got this deal. I pretty much flipped it withno money. I'm not having to put anything into
(04:11):
it. I'm making 15, 20 K. So finally I reachedout and connected and I was like, tell me a
little bit more. He was in my own market here in Charlotte. And I went to one of his meetups
and events and just ran with it from there. Um, just learned as much as I could through
YouTube. This is like pre guru coaching, bigevent space. This is early on. Um, and then
(04:35):
just took with it, started doing some deals,failed forward, figured it out, put out bandit
signs, knocked on doors, did all the stuff thatyou do when you start out and don't really
know what's going on or you're on a small budget. And just one thing after another, just started
doing some deals, left my nine to five, wouldadd pieces, you know, an acquisition person
here, transaction coordinator there. And thenactually grew it out to something pretty big.
(05:00):
about four or five years ago, had an office,had about 10 people in house and we were doing
stuff virtually along with our own market herein Charlotte. were in Phoenix, Dallas, Houston,
Alabama, a little bit in Florida. So we dabbledwith virtual. Um, and then we started in 2020
(05:21):
selling to institutional buyers, like hedgefunds. And that's how I came across a double
closing. It was before for the first four orfive years, I'd only done assignments, right?
Never needed to, or thought about a double closeor didn't know, you know, there's a couple
of large deals that I had blow up on me at theclosing table because of that assignment fee
(05:41):
and didn't really know that there was a wayaround it. Nobody talked to me about it. And
then with these institutional buyers, theymade us double close. They're like, cool, this
is a great deal. But by the way, you're goingto have to buy it and then turn around and
sell it to us on the same day. And I was like,what is that? Like, how do you do that? How
does, what's the process? So like anything else,just figured it out, right? Start calling people
(06:03):
up and I was like, Hey, can you fund this dealfor a day? How much would you charge me? And
they're like, a lot of people that I was reachingout to is like, What are you talking about?
Like, do you want to fix and flip it? Do youwant to buy and hold it? And I'm like, no,
I already have a buyer, but I can't assign itto them. So after a few of those and a really
terrible process and people charging me fouror five points and leaving me hanging on the
(06:24):
day of closing on the golf course, they're like,Oh, I'll get to the bank tomorrow. That sort
of thing. I was like, this sucks. This is terrible.Like I can do a better process than this.
I'm an investor. I'm a wholesaler. It's gotto be happening all over the country. definitely
in my own backyard. Charlotte's a great market.There's always a lot of interest here. You
know, the institutional buyers went crazy herewhen it was, when it was doing its thing. So
(06:48):
it just kind of got my wheel spinning, um,about how I could put something together as
a wholesaler for wholesalers that I would wantto use every time and hitting on the points
of same process, right? And that it's not differentevery time you reach out or you're working
with a different person. And then on top ofthat, the, uh, the fee, what people are charging.
(07:10):
Like you work hard as a wholesaler and you havea big marketing budget for them almost every
single month. So you're trying to capitalizeand make as much as possible on every deal,
but also protect that, especially deals of 20,25 K or more. And you don't want the seller
to see it. You don't want the buyer to see it.What would that process look like? And what,
(07:33):
what's something that I would want to go backto every time if I was using somebody else
for transactional funding. So I put it together,I've tweaked it over the years and that sort
of thing. And that's where I'm at now is Istill wholesale. have a much smaller team.
I do deals here locally in Charlotte. Can'tget away from wholesaling yet. It still pays
(07:54):
the bills and it's pretty great. I still getpumped on getting a 50, 60 right now. We have
like a $90,000 assignment fee lined up. So hard to get away from that. But we, I do transactional
funding for double closings nationwide now.So the one thing that kicked in for me when
(08:14):
you were talking about your background was youwere like, ah, it's hard to believe I've been
doing this for a decade. And I instantly thought,shit, I've been doing this for decades, 21
years. And it does go by fast. And there'sa lot of stuff that happens good and bad in
these timeframes, which shapes us and makesus either evolve or fall by the wayside, know?
(08:41):
But what were you just curious, what were youdoing before you got into real estate investing?
I was working sales and marketing. I was salesover the phone. I worked for a company that
took in perfected sales process for othercompanies and they would send the leads and
(09:03):
everything to us. So under that one company,there was people doing sales for DirecTV,
for life insurance. I was doing the energy sideof things where in certain states and markets,
you can choose who your energy provider is andtry to compare the rates and all that kind
of stuff. So was on the phones, I was talkingto dozens and dozens, sometimes over a hundred
(09:27):
people a day. And I think that really helpedwith strengthening and sharpening. just the
sales side and just having conversations withpeople, right? Because wholesaling really is
a, it's more on the marketing and relationshipside than anything else, I think, in being
able to talk to people and know that it's anumbers game. A lot of people we talk to aren't
(09:50):
the right fit and we're not the right fit forthem and that's fine. Don't let it get you
down, beat you up or anything like that. SoI was on the sales and marketing. company
that I was working for for about three yearsbefore I started wholesaling. then I was wholesaling.
was getting up in the mornings, putting outthose bandit signs and doing all this stuff.
was getting calls and I was taking them on mylunch break and all that kind of stuff to start
(10:13):
out. And it got to a point where I was like,after a few deals, it was like, I can do much
better. And I'm missing out on opportunity bysitting at this desk working for someone else.
So, yeah, it's interesting. Some of the thingsyou just said, because I You know, my listeners
know, and if you're new to the show, um, I hostwhat's called the elite negotiations Academy
(10:35):
and, at elite negotiations, academy.com. Andwe, talk about this all the time when I teach
people how to negotiate it's. It's doesn't haveto be a numbers game. If you actually know
how to talk to people, you can convert or increaseyour conversions. And, you know, there's so
many wholesaling gurus out there that quitefrankly just pissed me off because. They say,
(11:00):
okay, make $10,000 your first month in the business.And it's all about the numbers. So you put
out, you know, 5,000 pieces of marketing andyou'll get, you know, half percent response
rate. And if you can convert one out of a hundred,you get a deal and you make a $10,000 wholesale
fee. Well, is that true? Sure. But can you doit with much less marketing dollars, much less
(11:26):
Phone time, yeah, absolutely. If you actuallylearn just like you did, learn how to talk
to people. And that's all it is. So I lovethat that's your background and it makes a
lot more sense, right? Cause wholesaling isvery much a marketing business and a people
business. You have to be able to talk to bothsides. So. Yeah, a hundred percent. So, okay.
(11:52):
So now. You've kind of worked out the kinks,it sounds like over a period of a few years,
as far as being the transactional fundingside of it now. What are you seeing long-term?
I mean, is this something that you really wantto maximize and grow as big as possible? Or
are you trying to stay, you know, just you anda couple of employees? What are you seeing?
(12:15):
I want to grow it to see what it really canget to. with regulations, with things going
on in the market, kind of anti-wholesaling, it's really taken off and the demand for it
is going up every single month. We see our numbersincrease with requests and deals funded. So
(12:38):
I really wanna take it and put it out thereand be the go-to for transactional funding,
again, as a wholesaler to other wholesalers. At the same time, I'd like to do that. with
as tight of a group of people as possible. I'vedone the bigger scale and the larger teams,
that sort of thing. I know it wasn't massive.There are some wholesaling teams that are probably
(13:02):
20, 30, 40 people in an office and tons of internationalemployees, that sort of thing. But with the
team that I have now, my coordinator has beenwith me for six years. She's amazing. She's
had her hands involved in probably six, 700transactions by now. Um, and then we just
have some support around that. We're, we'regoing to take that as far as we can and then
(13:26):
start adding other members to that as support.then, um, as things grow, but the way that
I have it now is, is what I really, really like,you know, not, not a bunch of people. Um,
and I'm very strict about who I bring on board,right? I've learned that over time is like,
have a good core and then bring people on boardthat can, that can add to that, but also.
(13:49):
I don't want anybody on my team at any pointin time where other people are trying to avoid
that person. Right? I've been through that before,held onto him probably longer than I should
have and that sort of thing. Um, but we'regoing to grow it and we're going to make sure
that we can handle the volume, but super selectiveabout who all that we work with because we're
communicating day in, day out, right? Like you're,you're spending a lot of time with these people.
(14:11):
So you want to have them be a great fit, butthen also someone that you actually enjoy communicating
with and interacting. Yeah, I can tell you,you know, when we had the hard money lending
business, we hit super growth mode. And I cantell you the exact month. It was April of 2020
(14:32):
because COVID hit and all the national hardmoney lenders couldn't sell their paper anymore
on Wall Street. And so our applications wentup 400 % overnight and we couldn't, we couldn't
possibly fund. a fraction of them, which meanswe were turning away good loans. And so that
(14:53):
meant now we have to go raise more money becausewe're all privately funded. And so we went
and raised more money, but that meant we mayneed more staff and it does not grow and it
does not grow profitable profitability wiseeither as you scale. and I know exactly what
you're talking about. had employees that didn'tget along and you know, Big overhead costs
(15:20):
every month and it becomes, it becomes a,dare I say a freaking job and then it's not
fun anymore. Right? Right. So I'm, I'll hearyou. Um, let's talk about the law changes
and what's going to happen with wholesalingin your opinion, both regionally and nationally.
(15:43):
We've seen. I know Illinois for sure, Ohiofor sure. There's quite a few other states
that are in the process of passing these, whatI'll call anti-wholesaling laws. They are
different in every state, of course, but thegeneral consensus on most of them is they just
(16:05):
don't want you acting as a broker or an agentwithout a license is what it kind of comes
down to, the generic explanation of it. Whatdo you think that's going to do both good and
bad for the wholesaling industry and of course,you know, the double closing and the transactional
(16:26):
funding? Yeah, I mean, it's state by state,like you said, it's kind of the idea of like,
hey, we don't want you being part of a transactionin the form of like an agent or a broker. And
that's how they kind of see wholesalers. withthat some of it's we don't want you to market
it. Some of it's we just don't want you to bea part of it. I know in North Carolina, they
(16:49):
have a pretty, pretty heavy one right now whereit's just like anybody, even if you're not
a real estate investor, a wholesaler, even ifit's a private transaction, the way it's kind
of worded right now, it's just any anybody that'sgoing to do a real estate transaction has to
use an agent or be an agent, which is is pretty,pretty intense. That's not passed yet. You're
(17:11):
saying this is in legislation right now, they'reworking on it? Right, right. I wanted to be
clear on that. Sure, sure. I think it's somethingthat they're saying could go through in the
fall. it's, yeah, it's interesting becauseI think it's gonna, the good side of it, I
think it's gonna clean up a lot of issues andthat people have like with consumer protection
(17:33):
and whatnot. Cause there's obviously bad applesout there, right? And people that just go out
there to get a contract under or a deal undercontract and then they don't have any intention
of closing on it or even assigning it to anyoneelse. They'll get it, just put a memorandum
on it, step away, disappear, and then wait tillthat seller is looking to close with someone
(17:53):
else. That memorandum pops up and they're like,Hey, I'll release it for five, 10, 15 K, that
sort of thing. And then there's just peoplethat don't really know what they're doing
and they're holding up these people's propertiesfor months on end, right? So hopefully that
kind of, there's a barrier of entry and thatgets cleared out. And I think it makes more
(18:15):
opportunity for investors, wholesalers, if youhave to go become an agent or if you have to
do things a certain way that you're not gonnahave as much of that kind of messiness of,
I deal with it all the time where I talk topeople now, cause I'm still doing it here in
Charlotte, where they're like, yeah, you know. your offer is good, but somebody else is offering
(18:36):
me 20, 30K more. And I'm like, there's reallyno way that they can do that and perform on
that. Or I ask, have they sent you a proof offunds? Have they shown you reviews or testimonials?
And they're like, no. And you're just like,well, just be cautious about that, right? So
hopefully it clears out a good amount of that.And there is that barrier to entry. I know
(18:58):
in some states where they're just saying, hey,you gotta go get your license and you can do
the same thing. Right? Or some of them are sayingevery time you do a deal, you have to do a
new LLC if you do an assignment, but a way to not have to worry about that, go be an agent
or get an LLC, which is time consuming, costsmoney. And I can't imagine doing that on every
(19:21):
deal. Even if you only do a handful of dealsa year would be to buy it and then turn around
and sell it on the same day. So you have yourcontract with your seller. You have your contract
with your buyer, but instead of them, beingpart of the same transaction, you actually
are the buyer, right? And then you turn around,you actually are the seller to the end buyer.
And that's where I step in, because a lot ofpeople just don't have an extra 100, 200, $300,000
(19:46):
sitting around for these deals. And that's whereI say, hey, I can fund it for you. Just submit
a deal, get in contact with my team, put usin contact with your title company, or if you're
an attorney state. And then on the day of closing,once everybody signed the InviarS funds are
in escrow, they're committed. We'll wire thatfull amount over you as the wholesaler. know,
(20:07):
there's no underwriting. There's no credit check.There's no, Hey, how long have you been a wholesaler?
It's just like, if the deal closes, we'll fundit. And then we'll fund that full amount. You
don't have to bring 10, 15, 20 % to the tableor anything like that. So I think with legislation,
with things coming down a huge, um, part ofit will be able to actually buy and secure
(20:31):
the asset, the home, and then turn around andsell it. And then with double closing, it's
just same day, right? So as long as everythinglines up, it's good to go. We'll step in and
say, hey, we can be the funding part of that.And we do it for 1 % or less on like 95 % of
our deals. It's a low, low fee. So you can captureand keep that profit as much as possible. The
(20:55):
difference between a good deal and a greatone. It usually comes down to what you say
and how you say it. That's where Elite NegotiationsAcademy comes in. We help real estate professionals
master the art of negotiation through real-worldcoaching, live deal analysis, and breakdowns
of actual calls. Learn how to control the conversation, build trust faster, and close deals without
(21:17):
leaving money on the table. Whether you'retalking to sellers, buyers, or lenders, this
is the skill that pays for itself. Try it out.$49 per month for your first three months.
Visit EliteNegotiationsAcademy.com and startnegotiating like a pro. Which for reference
to the listeners, is cheap. mean, most transactionalfunding is one and a half to two and a half
(21:45):
percent. I mean, I've done transactional fundingand we were 2%. But the other side of that
is... As you said, it's going to thin peopleout, which I like. mean, we've got in every
market shift, you've been in this a decade.I've been in a little over two decades. There
(22:09):
needs to be a thinning of the herd occasionally.And a lot of people don't like to hear that.
But I know, I remember reading a statistic,I believe it was 2021, maybe early 2022. There
was more real estate agents licensed in theUnited States than there was properties listed
on the MLS for the first time in history, becausethere was so much upside activity. And if
(22:36):
you could get a listing, you were going to makemoney. Right. So realtors, they popped up like
weeds and now they're, they're dying off. And the same thing happens with wholesalers.
The same thing happens with house flippers. Um, every. Every industry, right? Like transactional
funding was huge in 2009, 10, 11, and 12. Causeeverybody was doing short sales and they needed
(23:04):
the transaction funding. You, you could throwa rock and hit three transactional funders,
you know, any, anywhere you wanted to go ina major area. But then they fell by the wayside
because short sales wound down and people didn'tneed them as much. So. Um, it's absolutely,
it's a great business by the way. Um, do you,do you mind talking about how safe it is as
(23:30):
a lender? Yeah, that's a huge point. I appreciateyou bringing that up. It's just, again, our
safety net and we've done over 200 of thesein the last 18 months is we are very strict
about wiring instructions as one. We use a thirdparty called Certify ID. and all the instructions,
(23:51):
everything have to go into there, have to beverified so they're insured and taken care
of. So that's first and foremost. And then thesecond thing is, is again, we'll fund them
all day long. know, some days we're busy, havefive, six or seven, you know, right now we
average close to two a day, because it's justcreeping up more and more, but we are very
(24:12):
strict with our process and say that this iswhat has to happen. And it's simple and straightforward
is submitting it. getting us in contact withthe closing company. But the biggest piece
for us is we have to have everybody sign theclosing docs. There's no like, oh, this guy's
out of town or my bike's on vacation. He'llcome back. He's great. He's bought 15 from
(24:34):
me. It's like, great. We'll wait till he comesback from vacation because our funding, has
to be as true same day, double closing whereit has to happen just back to back. That just
ensures that everybody's safe. Everything'staken care of. And it's a quick, simple process.
And that's why we only charge 1 % or less. Anything over that to me turns into gap funding,
(24:55):
right? Anything more than 24 hours. It's like,even if it's 48 hours or a week or two weeks.
So everybody's got to sign closing docs. Andthen that in buyer, that's going to be the
rehab or the buy and hold investor, their money,if it's their cash, if it's hard money, private
money, however they're getting funded has tobe sitting in escrow. So they have to be fully
(25:16):
committed. That's how we make sure that it'slike very, very risk averse is taking care
of those wiring instructions and verifyingthat. Cause you send out a wire to the wrong
place. It's not like a credit card. You're notcalling Amex and they're saying, let me get
that money back to you. It's, can be a hassleor it can be like worse than that. Right? So
(25:37):
be gone super sensitive about that. Um, andthen also just, it just, everybody has to sign.
Everything has to be lined up, but The greatthing about it is it's not, you know, it's
not, does this guy, did he get it at 60 % ofARV? Uh, does he know what he's doing as a
rehab or does he have experience? That sortof thing. It's if it closes, we'll fund it,
(26:00):
but it's all got to be lined up and handledproperly. And we, most of the title companies,
closing companies we work with, like they, theydo double closings all the time. And if, if
not, we'll walk them through it and they'relike, okay, that makes sense. Right. Out of
the. 200 I've done in the last 18 months. I'vehad three where we walked away from were either
the escrow agent was just sloppy and all overthe place. Or I had an attorney one time that
(26:25):
was just just a super jerk. And he was justlike, Oh, you're not going to tell me what
to do. You're not going to tell me how to handleit. And I just stepped in and I was like, guys,
I'm not comfortable. I'm not, I would neversend money over to this attorney. And then
just everybody was like, Hey, I understand.I don't know how they ended up figuring it
out. But if, if we get the ick on our end, we'relike, this person is going to drop the ball
(26:47):
or they're not respecting our process. Thenwe, pull the funds. But like I said, that's
only happened probably two or three times sincewe've been doing it. Yeah. And like when we
were doing hard money, we were averaging 20to 25 loans a month, hard money. And, and we
would do the occasional transactional fundingand dealing with the title companies is the
(27:09):
biggest pain in the ass for the lender becauseEvery one of them, I mean, we have very, very
clear closing instructions. Every one of themis a little bit different. And, and we had
a blacklist of who we just flat out wouldn'tdeal with at a certain point in time. We're
like, if you want to use that title company,that's great. Go get your funding somewhere
(27:30):
else. We're not obligated to, to go where youwant us to go. Or, we'll use our own title
company as the lender and you can still closewhere you want to, but you know, you're going
to have more fees. But the beauty of transactionalfunding for the listeners in case they haven't
figured it out is you wire the money to thetitle company and never leaves escrow. It never
(27:54):
leaves the title company. it's, there is nowit's not zero risk. There is still risk. There's
title company screws up on paperwork and they,or they release funds fraudulently. And now
you have to go after them for areas and omissionsinsurance or just straight up fraud. Like there's
still risk. Right. But in the lending world,it's about the lowest risk loan you can do.
(28:19):
And if I'm really peeling back the curtains, um, what's your average transactional funding?
Probably a couple, a couple hundred grand. It'sright under 200 K. Yeah. So let's just say
200. And this is what we looked at back inthe day. Um, if we were going to grow it out,
(28:39):
if you had the same title company in theory,lined up and they had four or five or six
double closings the same day. And they wereall timed perfectly. You could use the same
200 K to fund each one. And so we kind of didthe math on that. We're like, shit that. Yeah.
(29:05):
That dog would hunt. Um, but, and I know backin the short sale days, there was a guy named
Joe. out of New Jersey area. He was doing transactionalfunding. He had a quarter million dollar line
of credit on his house, a HELOC. And he wasdoing transactional funding about the same
as what you're saying, about two a day. AndI mean, he made a boatload of money off of
(29:31):
his HELOC just doing transactional funding.But it is a lot of work. I mean, just the
coordinating and the paperwork and you know,going back and forth with the title companies,
everybody, it's, it's not like, Oh, you know,Peter made 1 % and didn't do shit. That is
not true. There is, it's a lot of handholding.It's a lot of babysitting. You're still dealing
(29:54):
with human beings. So in a lot of times, likeyou said, like with a title company, you're
not working with the same person or somebodycalls out sick or there's some companies that
I I don't know how or why they do it, but they'llhave they share each closing amongst like four
or five different escrow officers or paralegals.And I think for them, they're like, Oh, this
is efficient. Anybody can step in or whatever.But when people don't know how to CC, BCC or
(30:19):
reply to an email and you have five or six differentchains going on the same deal or Tanya was
handling it this way. But then Mark comes inand handles it a different way or he's not
sure where the process is. That's where thecoordination side comes in huge. that's another
big piece that we bring to the table is we'renot just pushing papers and clicking buttons
(30:39):
and wiring money over. A lot of times we haveto say, hey, let's pause. Let's verify where
everything's at. And a lot of times we're holdinghands, especially if the wholesaler's not
super seasoned and saying that's what they'resaying is not right. This is how we need to
respond to it. Or this is where we're at inthe process. that maybe they've done a few
(31:01):
assignments, but they haven't done a doubleclosing. And if they were just to follow whatever
that escrow officer said when they stepped inlast minute to handle it, it would have just
been, you know, it would have blown up the dealor it would have pushed it back even further.
So there's a lot of times where we're steppingin and saying, Hey, that's, that's not a hundred
percent accurate. Or sometimes we'll look ata HUD statement and say, Hey, this is being
(31:25):
charged twice or something like that. You know,It's we bring that experience to the table
where we're really just saying we can do ourbest to get it across the finish line. We don't,
we don't coordinate between all the sellersand the buyers and verify all of that. But
when it gets down to that closing date, we makesure everything's right, accurate, lined up,
and we're more than willing to help the wholesaler.Like if there's an issue, try to give them
(31:49):
a little guidance and help them to get througha deal too. We don't just say, oh, if it's
not good to go, you know, we're going to stepback and not do it. Like, We want the deal
to close. we obviously we want to fund it, butalso we know what it's like being on that side
as the wholesaler and having things all overthe place and whatnot too. So we, we bring
that experience to the table and I think that'sa huge piece of it on our end. Absolutely.
(32:11):
You know, that was why a lot of people cameto us for hard money because we're also actively
buying and selling and flipping and, and youknow, we were, I vetted every deal that we
ever funded. did all the comps. And, I wouldlook at a scope of work and say, yeah, you're
not putting a brand new kitchen in for $2,000. Um, and if you actually are, it's not going
(32:34):
to be worth what you think it's going to beworth. So that you're right. You having that,
that experience versus just somebody off ofwall street that says, Hey, I want to start
lending money and I'm going to do transactionalfunding. They just don't bring the same experience
to the, to your client. And that's all. superblack and white at that point, right? Like
(32:56):
they don't, if they're not in the field andthey don't have the background yet, it's definitely
different. So, and I know we're not the onlytransactional funder, double closing company
out there. But I think being investors andwholesalers first and foremost and hundreds
of deals that way, we understand probably 50% of the requests that we get, get pushed.
Like nothing closes on time, right? It maybe a day or two different, or it may be weeks,
(33:19):
or we have a few of them that if there's cloudedtitle, it's months. it's still sitting in our
CRM and every once in a while we're just pingingthat title company or attorney being like,
hey, how's everything going? How's everythinglooking? Like, when will you need this funding?
That sort of thing. So we stay super activeand involved in it. We understand like hardly
anything closes on time or it's not the exactamount that that cash to close is going to
(33:43):
change a little bit. We don't charge a fee ifwe have to go back and you know, if the numbers
change, cause Right before closing, when wehave those finalized numbers, we send a like
a docu-sign over to the investor, the wholesalerthat says, hey, just to verify this is the
amount that we're funding. This is our fee.We're getting it back when the second deal
closes. And we have them sign off on that, right?Just to verify. So they can't come back and
(34:06):
say, oh, it was more than I thought or whateverit may be. But that, that changes a lot of
times. Those numbers change on the day of closinga lot too. But we're not like, it's $50 for
every redraft or anything like that. We're like,that's just part of it, right? So knowing that
and understanding that, not nickel and diminganybody is I think a really big part of it.
(34:27):
And I think it puts a lot of people at easeonce they work with us. And you already said
it, right? You like working with people, thesame people over and over again, and it just
becomes easier at that point. They know yourprocess, you know their process, or you know
they're going to perform. That's in any industry.If you can have that repeat client base. Yeah.
(34:50):
A lot of our clients and new clients are referrals, even though we pay, you know, we pay for Google
ads for, we do other marketing and that sortof thing. A majority, probably 75 % of our
clients are current repeat clients or theirreferrals because they had a great experience.
People like to do business with people thatthey like and that handle it well and that
(35:12):
are efficient. We're just. We're huge on communication.You know, I would rather bug somebody into
giving me an answer than just not respondingor saying, it'll figure itself out. Um, so
yeah, that's, that's been a huge piece for usis just referrals from other wholesalers. And
it's funny because. Everybody who's got in sucha big network now, we could fund a couple of
(35:34):
deals for a guy in Florida. And then we geta call from a guy in Iowa that's like, Hey,
you know, my buddy that I'm in this group with.told me that you guys are great to use for
double closings. I have a deal worked out. Canyou fund mine?" And we're like, yeah, we can
do it in any state. it's not just geographicallyor like city specific. These referrals pop
up all over the place and we're like, yeah,let's do it. Here's our process and introduce
(35:56):
us to Tidal and let's go. Absolutely. Well,I guess we'll kind of start winding this down.
Peter, what's one question I should have askedyou that I didn't? Let's see. A lot of people
ask me and we don't do it yet, but probablyin the near future, EMD comes up all the
(36:18):
time. People are like, will you fund EMD? Willyou do that? We don't do it yet. But as we
raise more capital and get a process set upfor that, that's something probably by the
end of the year that we'll start doing as well for everybody. the fees will be on that and
how that'll look will probably be a little bitdifferent. If we're funding a $5,000 EMD,
(36:41):
we probably can't just charge 1%. But we'regonna get that locked in. That's probably
25 % of people that reach out to me and say,oh, do you also do EMD and deposits and things
like that? I think there's a huge need for thatout there. But we don't do it quite yet, but
that's something that we're working on. Andfor those of you listening to this that don't
know what EMD is, that's earnest money deposits. And... Russell or Peter was born in Chicago.
(37:07):
So sometimes, you know, he talks a little overother people's heads, like us people in Wisconsin,
right? So- Got to simplify it a little bit.I apologize. Yeah, that's right. We need you
to slow down. Anyways, I was looking for somewhereto get a jab in there against you during the
(37:27):
show for being born in Chicago. And I finallygot one in, you know. Right. I didn't think
it was going to happen, but- Oh, it was gonnahappen. Even if it was in the closing, it was
gonna happen. So awesome, How do people findyou? do they get in touch with you? I am very
(37:48):
transparent and open book. I will give you mycell phone number. People can call me, text
me directly. It is 980-254-8288. If I don'tanswer, just shoot me a text. I will get back
to you. It's not gonna be a a bot or somebodyelse on my team, it's going to be, still handle
most of the inbound right now. It's fresh enoughand I just want to make sure it's handled correctly.
(38:12):
Um, our website is, and I'll shoot you thelink, but it's velocityadvantagecapital.com.
Pretty, pretty nice site. Very straightforward.You can submit a deal on there. You can go
to FAQs. We have a little video, cartoon videothat goes through our process in less than
like a minute, that sort of thing. And thenI'm on, you can look me up on Instagram and
(38:35):
stuff like that too. I'm not, I'm not the most avid poster. I just started having people
kind of put content out there for me. But Ithink if, if anybody has a question and they're
like, Hey, what exactly is a double close orI have one coming up or what does that look
like? Give me a call, shoot me a text and I'llcarve out like 10, 15 minutes and we can have
(38:56):
a conversation about it. Well, I mean, you'revery open with your contact information. Do
you want to give out your home address so wecan come over for dinner too or not yet? No,
we'll get to that point. Maybe when we're doingthe EMD and maybe when we're funding five deals
a day, then I'll set something up like that.We'll set up like a quarterly get together
and everything will be on me. Everybody that'sheard you on the Generation of the Wealth show
(39:20):
will show up for dinner. That's fantastic. and brats all day long. Well, brats, I'm
there for sure. Let's do that. Thank you somuch for your experience and your sharing
everything. you know, we'll definitely be stayingin touch with you and, and, you know, the
(39:41):
rest of my listeners too, anything that youneed. This, you guys already know this, my
regular followers, this is what we bring. Webring real people. mean, Peter's giving out
his cell phone for God's sake. So this is, thisis the way we are. So until the next show now.
y'all know how to go out and find deals. Nowyou have no reason not to get the funding you
(40:03):
need to double close. So go do some deals andtill the next show, we'll see you.
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