In every market, there is an opportunity; we lay out some ways people are taking advantage of this real estate market using financing. We want to help investors Make money using our capital.
“Marcy: Hi.
Jack: Hey Marcy Berger. How are you?
Marcy: I’m great.
Jack: Good. So, you know what I’m going to talk about? In this climate we’re making this in July of 2022, interest rates are going up a lot, a little bit. The market feels unsettled; they’re talking about inflation. You know, turn on the news– it’s depressing.
Marcy: There’s a lot of stuff going on and you have to somehow maneuver through it.
Jack: Very hard, very hard psychologically. But I want to focus on making money. It’s all about me making money; that’s what I want to deal with.
Marcy: It’s about you also making money in this market.
Jack: So, that’s what I want to focus on: How can investors and mortgage brokers helping investors make money using our capital? So, we provide; if you think about it, opportunity capital.
Marcy: Right.
Jack: They can buy—
Marcy: It’s like, yeah. So, we’ll talk about one thing. Let’s talk about JV, like how they can make money.
Jack: So, I’ll give you a perfect example. You’re right. So, the goal of this is to educate people– mortgage brokers and real estate investors.
Marcy: Different ways that you can make money using our money.
Jack: Using our capitals, we’re tools in your tool chest. We’re your capital providers, and I want to give you a couple of different examples of it. So, Marcy said JV equity, that’s a great one. JV equity is one, bridge loans, share of sales– by all kinds of ways. But let’s talk about JV equity since we started.
Marcy: Yeah, we’ll break it down. Let’s just talk about each topic. We’ll give a little discussion so we can explain it.
Jack: So, we just approved yesterday a JV equity deal. A guy, I believe that he approached me on Twitter, and he is buying a self-storage facility. I don’t want to give too much information because it’s not closed yet, but in a big southern state. He had a bank lined up to provide the first mortgage financing, and he was short of the capital. He didn’t have any cash; he went and got bank financing.
Marcy: But he was an experienced guy.
Jack: Experienced guy. I think he owns four or five of these. Seems like a young guy over the phone– either way, it doesn’t matter his age.
Marcy: Again, it’s about real estate.
Jack: I looked at the deal, and the real estate looked good. He had a good solid business plan. We made him an offer that will provide a hundred percent of all the capital. He’s actually not taking up us on it because I think his brother or mother is putting in some money. But we would provide 100% of the financing, and we’ll effectively go partners from— it’s not really financing; it’s debt. It’s called JV equity debt. So that’s a way that this guy bought a property under the market because the market’s going through some turbulations now. He didn’t have the capital; he’s using bank debt and he’s using our capital to buy the property. And he’s going to give us – we’re going to be paid for it; he’s going to pay us for it. But at least he’ll – he gets the property without using any of his own money. You know, people all the time talk about how to get 100% financing.
Marcy: Every day, that’s what we get phone calls on.
Jack: But the reality is, they’re not thinking out of the box. How do I get 100% financing?
Marcy: I mean, there are ways of working it.
Jack: That’s exactly right. So, this particular guy – same thing. He’s borrowing money from the bank; we’re putting up the equity, and he’s going to own a majority of the property. We’re going to own a piece of the property too. We did another deal, a similar deal. Let’s go into a little more detail on this because we closed it. It was a suburb of Philadelphia. I happen to know it very well; it’s in Willow Grove. It was a corner right outside of a mall. All three corners were developed. There was an Ollie’s on one corner, an Olive Garden on another corner, a bank on another corner, and then there was this property which is a bunch of retail stores and some auto body shops. A couple of guys I know from the Philadelphia area found the property, put it under agreement of sale, they secured the bank debt. We provided, again, a hundred percent of the equity, and we’re partners with them. The way that generally works is they’re– we get a preferred, and then there’s a split on the deal. So that’s a great way people can find properties in this market, and hopefully, if there’s turbulation in the market, there are always deals.
Marcy: Opportunity to get the deals, and even in that situation, Jack, like, we don’t tell you how you want to play it out. You could – we can make a deal where it’s sold.
Jack: They could sell it, or they can keep it.
Marcy: They could sell it, or they can keep it, and then we take our money back and whatever deal that we made, and they walk away with their profit.
Jack: So, JV equity is a fantastic way to take advantage of opportunities in this marketplace.
Marcy: When you find them.
Jack: When you find them. I want to give people tools so they can watch this video and say, “Oh, I can do this. I don’t need–” They don’t need a college education; they don’t need any real—
Marcy: You just need to like maneuver what’s out there and then come up with a plan. We can help you come up with a plan.
Jack: JV equity is one. Let’s talk about another one. We provide money for people buying property at online auctions, whether it be like Ten-X or Auction.com or sheriff’s sales or whatever, we’ll provide capital for that. Now, there’s a little more risk because sometimes you have to put up the deposit in advance, but I’m going to ignore that. Actually, I made a video on auctions, how to deal with that, so watch that video. But we’ll provide—
Marcy: Just a little bit more, there’s more terms with that. They give you a time frame, and that’s where someone like us is amazing because we could do it so fast for you.
Jack: That’s correct. In fact, we got a deal, there’s two deals we’re working on. One of them we got— today is Tuesday. A deal yesterday, you said we can close it Friday, right? Four days, you know. So anyway, buying property at auctions is another great way, buying properties at sheriff’s sale. Now, another way, which again, I made a whole video on that; it was really good.
Marcy: It was.
Jack: I thought – I thought it was pretty good.
Marcy: I think all our videos and your videos are fantastic.
Jack: No, I could have done it better, but it was decent. It was decent.
Marcy: But we try.
Jack: We try. Totally unscripted. Another way is doing note on note financing; buying distressed debt. You know, if there’s a lot of foreclosures, there may be more and more foreclosures. Banks and lenders are selling them; we’ll provide the financing for you to buy that debt. And that’s a routine matter for us. Again, if it’s a good enough deal, we’ll go to 100% capital, where you don’t need any of your own capital. Again, we’re going to take some of the profits. You know, when you want 100% financing, you want us to take all the risk and put up all the money. Be prepared to give up some of the profits; that’s just the way it is.
Marcy: But you make money too.
Jack: You’ll get the deal done. So again, JV financing, note on note financing, share of sale, Bridge loan. There’s all kinds of deals on there. You know, in this market, people are retreating; deals are falling apart every day. I’m hearing about lenders reneging on deals.
Marcy: When they get to the table and then they don’t have the funds to fund the deal. We’ve even heard like a couple, the loan closed, and then days or weeks after, they’ve never funded. And, you know, obviously, the borrower has to make other provisions.
Jack: There’s an opportunity for buyers who are astute and move quick. If you swoop in the property, we can provide the financing. Again, we have a niche. We focus on the $100,000 to 3 million dollars check size. So don’t bring us a 20-million-dollar deal; we’re not gonna do it. It’s not our thing. But if you bring us, you know, a million to 3-million-dollar deal, we’ll jump all over that. We’ll get that deal closed very quickly, and you could take advantage of someone else’s misfortune. Again, if there’s a deal on the market, maybe the seller counted on that closing, maybe he spent the money, or he, him, or her have the money earmarked, and if the deal dies, it’s an opportunity for you.
Marcy: Exactly. And another thing that we can add here, we do, we allow the sellers to do hold back sometimes too.
Jack: Tell them how that works. It’s very good point.
Marcy: It’s just another way of getting more funds to complete the deal. So, you know, whatever loan that we’re working with, and then whatever money that the borrower has, you know, we sometimes suggest that the seller holds some of the paper.
Jack: So, let’s give an example, If someone is buying a property for, I’m just going to use a million dollars as a round number, it’ll be a hundred thousand, doesn’t matter, okay? And maybe we’ll only lend 650,000, but a seller will hold a second for 350,000; still works. The deal works. So again, be creative in the way you do things, be creative.
Marcy: And that’s really talking more so to the brokers because when you get your borrowers and they present all the information to what they have and what they’re doing, you have to look at it and say, “Okay, how can I accomplish this? Oh, Gelt Financial, I could bring it to them, and they’ll allow this.” So, it’s like the brokers also have to be creative in how they’re thinking too.
Jack: And you have to find the right broker and the right seller. You know, what I find, some brokers, because they don’t want to do it, just say “no” very quickly. I was involved with a deal yesterday, actually. The broker’s instant response was “no, no, no, no, no, no, no.” And I said, “Well, just push. Just ask.” And then they got back to me.
Marcy: And they did it.
Jack: They did it, it happened twice on the same day, and the broker, you could tell, was a little bit annoyed because I pushed her, you know? So…
Marcy: Well, yeah, I mean, we’re not– Jack, I don’t want to say like we’re pushy, but we’re very educated in this.
Jack: We’re talking about you or me? No, I’m joking.
Marcy: I feel like we’re just like, we’ve been around, we’ve been around the block, we got deals.
Jack: The viewer should know to be creative, be creative again. Seller take-backs are a big thing; it’s a way to get into a deal with little money or no money down as well.
Marcy: And it works.
Jack: Blanket loans is another way. We’ve talked about that.
Marcy: Yeah, which we’ve talked about that many, many times, but just a good reminder that if you get a borrower that owns other properties and they just don’t have a lot of cash but they want to buy this new property, we can do a blanket and put seconds on the other properties if there are equities in their deals, so…
Jack: So, we’ve come up with– I just want to see…
Marcy: So many ideas.
Jack: Note on note financing, share of sale, and auctions, JV equity, bridge. What else? We talked about blankets, we talked about seller seconds. We didn’t talk about Mezzanine (mez), which we do mez, we do seconds.
Marcy: Yeah, which is a complete. It’s like a different road, but it comes up. We’ve actually been doing a lot of seconds, Jack.
Jack: You were part of a call yesterday; we had a property in Philadelphia, I think it was 8 condo units. The lender—
Marcy: Very high end.
Jack: High end, oh yeah, they’re gonna sell them for like, I think a million dollars each or something like that. A lender approved the loan, but it was only a certain dollar amount.
Jack and Marcy: They were short.
Marcy: So, the lender came to us.
Jack: The lender came to us.
Marcy: ‘Cause they want to make the deal.
Jack: To provide some Mezzanine finance, I think that was 750 or something like that.
Marcy: Just to complete the deal.
Jack: So, the bottom line is, yeah, you can get creative, you can make money in this market. I actually think more money will be made in a market with some turbulence than in a steady market. You know, if things are just going steady, steady, steady, it’s a little difficult because you’re competing with everyone else. But if you’re in an up-and-down market, a turbulent market, I think there are a lot of opportunities, and you’ll make money. You just have to, frankly, know what you’re doing, learn, be creative, be flexible. And we want to be your capital partners. Again, we’re not everything to everyone; we know what we are, we stick to our footing, and that’s it. Did we leave anything out?
Marcy: We’re very approachable.
Jack: We’re very approachable. We’re very approachable. So okay, remember, check us out at geltfinancial.com. If you have any questions, leave them. Like the video, subscribe to the channel, and more importantly, call us with your deals. We’re sitting here with a lot of capital; we’re looking to deploy it, so we’re looking for a deal.
Marcy: We’ve got a lot of cash on the table.
Jack: Yeah, we’re looking for deals, and believe me, we want to do deals, and we’ll help you get creative with them.
Marcy: Sounds great to me.
Jack: Have a fantastic day.
Marcy: Take care.”
Category: Borrowers
