Real Wealth Show: Real Estate Investing Podcast

It’s a story of romance and financial freedom. Rachael Visconte and Patrick Julian both worked in the entertainment industry and met each other on-the-job in Los Angeles. When the pandemic hit, the feverish pace of their work world suddenly turned into a more tranquil work-from-home scenario. They had time to slow down and reflect on what they wanted out of life. It was during that time that they decided to build a real estate portfolio to secure their financial future. With the help of RealWealth and lots of their own investigating, they bought their first investment property last summer and there’s no stopping them now. In this episode, they join both Kathy and Rich to talk about their goals for financial freedom, and their future plans to become parents as Rachael and Patrick Julian. For more information, go to: www.RealWealthShow.com Click here to join the network for free

Many investors work their way up from single-family rentals to larger multi-families, but in today’s episode, you’ll hear from someone who’s taking the opposite approach. Richard Woolley launched his personal investing career with the purchase of two triplexes but decided that single-family homes were the way to go. Richard has a Bachelor of Science in Construction Management and has worked as VP of Preconstruction for a New York multi-family developer. Among his projects are a 40-story building in New York City and a 30-story building in nearby Westchester. He’s now building a portfolio of single-family rentals and has some inspiring advice for new investors. www.RealWealthShow.com Click here to join the network for free

Building a portfolio of rental properties can be your ticket to financial freedom. But it also exposes you to risks and the need for asset protection. One way to do this is by transferring your investment properties into an LLC, or another kind of legal entity, like a land trust. That topic inspires many questions among new investors including where they should set up their LLCs. In this episode, we hear from tax and asset protection attorney, Clint Coons, who will answer that question and many more with easy to understand explanations. Among the topics he’ll cover are the where, the why, and the how you might want to set up your LLC along with the difference between LLCs and other entities. You can schedule a free session with someone at Clint's firm or watch the replay of a recent webinar by Clint on our website. You need to be a Real Wealth member to access the webinar replay inside our investor portal, but joining is easy and free at www.realwealthshow.com. Audio Transcript: [music] [00:00:00] Announcer: You're listening to The Real Wealth Show with Kathy Fettke, the real estate investors resource. Kathy Fettke: A common question we get from our Real Wealth members is where should I set up my LLC for the best asset protection? Well, it's not that simple. I'm Kathy Fettke. Welcome to The Real Wealth Show. Today's guest is full of information on how to protect your assets from lawsuits. I learned so much from this interview, and I'm so glad I don't have to figure this stuff out on my own. We've got an expert here to do that for us. Clint, welcome back to The Real Wealth Show. Clint Coons: Thanks for having me. Kathy: I got an email recently from somebody saying is it illegal to have an entity in another state from where you live? Thinking that you're tricking the IRS into thinking that you live in that state if you have an entity there. What's your response to that? Clint: That's incorrect. Obviously, you can set up a business entity wherever you want. If you're going to own real estate in another state, take, for example, Florida, then you're legally required to have an LLC set up there or registered to do business there. For example, if you lived in California, and you had property in Florida, you take your California LLC, and you would register it in Florida to conduct business. It is doing business there. It doesn't matter where you sit, where you live, and where the entity is located. In the eyes of the IRS, it all flows back to you, and you're going to pay taxes on that money, regardless. They don't care where it's set up. Kathy: What you don't want to do is say open up a Nevada LLC, and say you live there when you really live in California or something like that. That would not be okay. Clint: That's a different strategy. That is basically tax avoidance where people will-- This was [00:02:00] really popular back in the early 2000s. There'll be a lot of advertising, "Hey, set up an entity in tax-free Nevada and pay zero tax." People would do that with the thinking that if they had an entity there, they wouldn't be subject to federal income tax or state income tax on their business that is derived from a particular state. What we found back in those times that you'd have a lot of Californians would set up Nevada entities, run an active business through their Nevada entity that's actually taking place in California and try to avoid all California state tax. Some people even think that they didn't have to pay federal tax. Those people ended up wearing orange jumpsuits out of them or else having a lot of fines when they were caught. Kathy: You don't want to lie about where you live. In our case, our business is in all kinds of states, but we live in California. No matter what, we got to pay California tax unless we moved. In that case, if we moved, you have to live at least more than six months of the year somewhere else. Is that right? Clint: Yes. If you wanted to change your domicile out of a particular state to a different state, then you would have to establish residency, and that would typically require that you register to vote there, you get a driver's license in that state, and more importantly, the way they track it as well as on utility bills. They would look at your utility bills that are in your name, and they would determine whether or not you actually reside in that property for six months if they wanted to be aggressive. I've seen this happen before with individuals who claim residency in Nevada when in reality, they were not residents there and the home state would request their utility bills for that time, the six months they said they lived there. They would find there was no water usage, no electricity usage. They're like, "You weren't really living there. You were just stating you are." That can get you in trouble. What you have to do is put your mother-in-law or somebody in your property during that time. Kathy: [00:04:00] I don't know if it's true, but I've heard that they can even see where your phone is. These days your phone can tell you where you are. I don't know if they go that far. Clint: No. It's one of the things that-- People go to so much trouble trying to avoid state taxes. I just don't think the stress is worth it at the end of the day. Pay your taxes, if you don't want to live in that state then move and just visit it every once in a while, or set up a secondary home. Kathy: Exactly. That's the thing is you can live somewhere else and just visit a lot, travel a lot. Anyway, let's explain, I know I've used the word entity and for some of our listeners, they might not really understand what that is. What am I talking about when I say entities? Clint: You're talking about a limited liability company, land trust, corporation. It's just something that is formed under state law or not that is used for a specific purpose. We talk about real estate a lot. We're looking at a title-holding entity, something that is going to hold your real estate for a few different purposes. One, it's typically in the asset protection. If anything happens with the property, you're not going to be personally liable. If you get sued individually, your property would be removed from that potential claim. That's per our judgment that would be entered against you. Then there's tax motivations as well that you're looking to control how your tax returns look from the real estate when it hits your 1040. There's lots of reasons why we focus on using entities for real estate investors. Kathy: Most investors, most real estate investors use LLCs. Why is that versus anything else, an S Corp, or a C Corp, or something like that? Clint: It really comes down to the tax benefits the LLC offers an individual who's a passive real estate investor. You want to have flexibility number one in order to move property [00:06:00] in and out and not be hit with a transfer tax, or basically, actually, income tax is what can happen when you have a C or an S Corp. Take the example of I have three properties in an S Corporation, and I decided that I want to pull two of them out and move them to a different company. Those properties have appreciated in value over the last 10 years, and there's $400,000 in gain there. Just by deeding that property out to myself, I'll have to pay tax on that built-in gain even though I didn't sell it. An LLC, you don't have that concern, because you're typically going to set them up to be either disregarded, which means the IRS just looks through it and you're considered to be the owner, or a partnership, which, again, it looks through, and you're going to pay the taxes on the income and you put that income on your 1040. It's treated a lot different than an S or a C Corp from being able to move assets in and out and not having to recognize tax on that built-in gain. That's why they tend to gravitate towards an LLC versus a Corp and more importantly, the asset protection. They're easy to set up. It doesn't require a lot of maintenance from you or as a corporation, you got to have these annual meetings, possibly even quarterly meetings. LLC, set it up, forget it, set a bank account, collect your rents inside of there, and you're off to the races. Kathy: Do the S Corp, C Corp, and LLC has the same asset protection? Clint: When you talk about S and C Corp, what you're really referring to is federal taxation unless you're thinking about the actual form of a corporation. From a tax standpoint, an LLC can be treated as a C or an S Corp. From the physical attributes of the entity, if I were to say set up an entity in Texas, and I chose to set up a traditional Corporation Inc versus a limited liability company, for surely that if something were to happen with the asset [00:08:00] held inside of there, let's say I had an LLC and a corporation, I put a property into each of them, if my Corporation was sued, I'm protected as a shareholder. If my LLC is sued, I'm protected as the member of the LLC. That's the distinction between the two. Owners in LLC are members, owners in corporations are shareholders. What's different is when you yourself, let's say you're driving down the street and you clip somebody that's on a bicycle, and the bicyclist sues you individually and they obtain a judgment against you for $300,000 for dental work and face reconstruction. What can they take in that judgment? What can they do with it? They can levy on any assets you hold in your own name. If you held that rental real estate in your own name, then they would just record the judgment in the county where the property is located. It just sits there; it grows its 10% rate of interest. When you sell, they get paid or you refinance, they get paid. If you didn't have any property in your own name, and all you had was a Texas LLC and a Texas Corporation, they have some other ways to recover against you. On your shares of your corporation, they can levy on them and take them because shares are not protected from creditors, whereas the LLC is a different animal. They could not levy on your LLC membership interest and take it from you and thereby owning your property like they couldn't with a corp. All they can do is put a charging order, which means that they're not entitled to anything unless you want to give them something. It's because of that outside protection that makes the LLC such a unique and favorite entity amongst a lot of real estate investors. Kathy: Wow. After all these years, I've never really heard it put that way, or maybe I have when you were teaching and I wasn't paying attention. Clint: Or maybe I didn't put it as succinctly when I was teaching. Kathy: Maybe. Let's say I buy some properties in Florida. What would be the best state to [00:10:00] hold the LLC in? Clint: Well, it really depends. What happens when you're buying properties, you have to look at the state itself and determine what is the best structure for that investment. You bring up Florida. It might be that if I was setting up a structure for a Florida investor, I would choose to use land trust rather than LLCs because land trusts in Florida provide protection from what we refer to as inside creditors, meaning your tenants. If something happens with the property and you have a Florida land trust, they can't sue you as the owner of the trust. They can only sue the trust. Now where the trust doesn't protect you is that if you get sued individually, they can take the trust and the property from you. For a Florida investor, I'm probably going to recommend if you have debt on the property, because now you've got to worry about doc stamps in Florida. Hey, let's set up some Florida land trust, transfer the property and it's exempt from the doc stamp in Florida. Then we got these Florida land trust there then have the Florida land trust owned by a separate LLC, maybe a Delaware series, LLC, and create separate cells for each of the land trust. If you do get sued, they can't take your land trust from you. If you were to flip that structure say look at Tennessee, then it's going to be different. Then I'm going to use a series LLC, in Tennessee when you're owning each of the cells, because they're, they have a franchise tax that you have to be aware of. You have to apply for the fonts exemption, it's set up in a very specific manner, so you don't run into a problem like a client I've started working with where a CPA structured them, and he was paying $45,000 a year in taxes that he didn't have to pay because the CPA, this client is from Florida didn't understand the way taxes worked in Tennessee. By just creating the structure, you can really screw it up for someone. It would depend on where you're owning the property, what type of structure we're going to use and that's why people get confused many times. They think, my buddy set up an LLC. [00:12:00] [inaudible 00:12:01] It depends. If you're in California, I might use a Wyoming statutory trust to avoid the franchise tax there and it'll be at 10 properties. I can save $8,000 a year. Again, it depends. Kathy: Don't try to do this on your own. Clint: Well, you could. You probably pay more in the long run. I always tell people, when somebody starts working with an attorney or even with Anderson, they see the entity set up as a cost and they don't look at it as an investment. I tell them, this is an investment into your property. You're protecting it. You're making sure it's set up the right way so you're not going to run into these problems down the road. If you get caught up on cost, you're going to be tripping over yourself and three years down the road when you're involved in that lawsuit and you're looking back and saying, "Wow, I wish I would have invested the $1,500 because now I'm staring down a judgment of $600,000 and I'm going to lose everything." That's when it comes back into perspective for a lot of individuals. Kathy: Now, at what point do you need that kind of Bulletproof proof type of asset protection? Let's just say you're buying your first property. You don't have a lot of savings in the bank or equity in your home. You don't make a lot of money. How much do you need at that point? Clint: You see, this is where I tend to disagree with a lot of professionals, when it comes to asset protection. Take two individuals, you and me. I have worked hard, saved up my down payment. Now, I have my first house. I have about $25,000 in equity in this property and I have a personal residence that has maybe $50,000 in equity and I got some money in savings. You on the other hand have a hundred properties. Most people are going to look at us and they're going to say, you need more protection than me because you have more to lose. [00:14:00] Granted, there's some truth to that. You have 100 properties, I only have one. I tend to look at it as follows. When it comes to protecting my assets, the new investor needs asset protection more than the experienced investor. It's counter-intuitive for so many people when I say that. They're like, "No, Kathy has so much more to risk than you Clint. You don't need protection there." The way I like to explain it as follows. I've got one or two properties. I'm going to tell you to set up one LLC per property. Whereas Kathy, I might tell you to put 5 properties per LLC, or maybe you want to do 10 properties per LLC. The reason why is that if something happens to me and I'm involved in a lawsuit and I have these two properties that I've saved for the last five years to get into those properties so they're going to produce cashflow for me in the future, is going to be my retirement. One lawsuit, what does it do to me? Wipes me out. Now I've lost everything. All the work and effort I've put in the last five years, I have zero cashflow coming in. Assume those two properties generated a combined income of $15,000 each on an annual basis. I just lost $30,000. You on the other hand, you set up your LLC where you put 10 properties per LLC so you have 10 limited liability companies, each generating the same amount of money. Each generating 150 K a year. Well, you lose one LLC with 10 properties, you just lost 150 grand, but you have nine of the other property still producing income for you. Yes, it sucks, but your lifestyle is not changing. You're still going to Hawaii. You're still doing the things that you like to do because that one lawsuit didn't wipe you out. Whereas the new investor that's worked so hard to finally get some purchasing power, finally grasp the concept of rental real estate. What it can do for you, they're back at square one or worse yet, they're behind because they have a judgment that's been recorded against them and they have to pay off before they're ever going to be [00:16:00] able to qualify for another loan. [unintelligible 00:16:04] with my own investing. I was more concerned about asset protection when I had 50 properties. Now that I have close to 200 properties, I do things differently because I don't have the same issues any longer. I can afford to lose 10 properties. It would suck, but it's not going to change my investing or my lifestyle at all. Maybe it's one less case of wine I buy on a monthly basis, but it ain't that bad. For the new investors, I would say, think of it in those terms. Kathy: Well, that's one of the reasons I love to listen to your advice is that you are a real estate investor yourself. You own a lot of properties. You talk a lot about asset protection and tell people you own properties so they know, that you probably have a high net worth and so you've got to be extra protected and you're a tax attorney. Is that right? Yes and a CPA? Clint: No. I have a personality [unintelligible 00:17:02]. Kathy: [laughs] Okay. What kind of personality would you need for that? Clint: In my experience, getting on something like this would probably take a Xanax or two to calm my nerves down and then you would have to drag all the information out of me. I like to talk too much. That's what I'm getting at. Kathy: All right. What are some of the typical questions that people ask at your live events and now I guess Zoom events? Clint: Everybody gets concerned when you set up an entity, for example, an LLC, that if they transfer their property into the LLC, that it's going to accelerate their mortgage and they can't do it because of the nuance sale clause. That's probably the number one question I receive. Vigil investors is pushback to putting properties into entities and so they forgo asset protection because there's this myth that if [00:18:00] you transfer real estate into an LLC, you've got a lender in the back room who's going to catch it and say, "Oh, you move property. You got to pay that mortgage off or we're going to foreclose." The reality is is that most people who perpetuate this myth or continue to perpetuate, it used to be concerned probably 15 years ago is that you have to look at the loans out there. Most investors are working with a broker to obtain a loan to buy a piece of property and those are always going to be, or 90% of the time, I would say, they're Freddie Fannie conforming loans. They're writing them so they can sell them to [unintelligible 00:18:34], that's what we mean by conforming. They're going through all the guidelines that [unintelligible 00:18:39] put out as if they were writing the loan themselves, underwriting. Now, when you use one of those types of products, you're allowed to transfer title into an LLC and it will not violate the due on sale clause. You can look at their servicing manuals. Both of them have it stated in there, black and white, as long as the member of the LLC is still the borrower or as long as the manager of the LLC is still the borrower, you're good to go. This notion that you can't transfer real estate into a limited liability company for fear that the lender is going to accelerate is just nonsense. On top of that, the only time it actually really comes up as if it was a personal residence, then you have to season it for a year before you can move it in so you have to live in it for a year, treat as your personal residence, because that was a different type of loan, but most people don't know the questions to ask and so they make these assumptions because of a lot of misinformation that permeates the internet, unfortunately. They don't put the right types of protection in place. Kathy: If you've lived in your primary for over a year you could transfer your primary into an LLC? Clint: No. Which probably it is because it's been bought up by them. You can transfer in after one year. That's the one exception you got to see. [00:20:00] The only other types of exceptions you're going to have is if you buy A property and then you're looking to do a cash-out refi. Then you have a six-month seasoning requirement on that before you can do a cash-out refi. Which is different than just doing a straight-up refi. I mean I always talk, not always. I've told people when I first got started investing I think it was maybe I had put down $5,000 for my first property. This was in Memphis. I funded it with a hard money loan where they did it not only the purchase but the rehab. They gave me all the money for it. Then after I bought it it was anticipated that there would be X amount of equity in there so I could go in and do a refi on that property, convert it into traditional loan, and cash out the underlying hard money lender. It took me three months and I got into this property. It was about $105,000 property at the time for a little under $5,000 if I recall. I did a few of those that way where I would use hard money to pay for the property and the rehab and then I would go in because I knew would have enough equity in the property afterwards to cash it out with the traditional loan. Those you don't have a seasoning requirement because I wasn't taking any cash out. If you understand how the way lending work there's a lot of opportunities for people. Kathy: Absolutely. Are you seeing those opportunities today with the [unintelligible 00:21:26] properties out there? Clint: I don't look for those anymore. Everything I do now is I buy for cash because we're at a point now in the things that we do in the markets that we're in. They're more low-income housing so I'm picking up homes for $15,000 and I'm putting in maybe 10-15 grand and then it's producing 500 bucks a month on average, $600 a month. Those types of deals you're not getting a loan on. Kathy: You're still finding those? Clint: Yes, more than I can handle. Kathy: Wow, good for you. Clint: I can't tell you where are though. Kathy: No. [00:22:00] I was going to say-- Clint: I can tell you that. We build up a pretty big network in this area. It's in North Carolina, we'll give you that. Those types of deals a problem that you're going to-- I think you could still find those deals that I was just referring to because the market is appreciating. When I started buying those deals in Tennessee that was back in 2005. You had a strong market. What worked for me is that you had appreciation. You knew when you got done with this rehab, you were typically going to have 20%-30% equity in that property. That's what allowed me to do that. When you're in those types of market, in that type of real estate market, I think you can still do those deals. They're still out there if you can find them. Kathy: That's great. Yes, if you can find them. All right. A common question we get and that we've discussed on this show is the single-member LLC and if that still offers the same kind of protection? Clint: It depends on the state. Everything comes down to state law. In some states such as Florida, they do not provide protection for single-member limited liability companies. When you say protection, it has nothing to do with the LLC being sued. If you have a tenant in the property and the tenant is injured and they sue, the LLC is going to protect you. This notion that if it's a single-member LLC it doesn't offer asset protection. Only pertains to this what we call a charging order that is if you're sued individually, they can take your limited liability company from you. A place like Colorado or as I used Florida, they do not protect the LLC from your personal creditors whereas if you flipped it, you put it in Texas and you're one owner in a limited liability company and you're sued individually and they get a judgment against you, in the example that I used earlier, they couldn't take it there because Texas law prohibits a creditor from taking [00:24:00] a single member's interest in a limited liability company. Kathy: Wow. Again, don't try this on your own unless you've spent-- How many years have you been studying this? [laughter] Clint: Oh my gosh, you're going to make me feel old now. I got to back into it. It's probably 25 years. Kathy: It's just amazing how every state is different. If you owned properties in Texas, would you want to just get a Texas LLC? Clint: If I had properties in Texas, which I do, I have a bunch in Houston, I would use a texas series limited liability company and I would set up a separate sale for each of those properties. The reason I would do this is that for each sale that you set up it's treated like a separate limited liability company, but you don't have to file it. You escape all of the additional filing fees and legal costs associated with setting up multiple LLCs and you get the same baked-in protection for those deals. That's the structure I would recommend for a texas investor that's buying single-family homes. Again, it's also going to be based on how you're buying. If you're buying onesies and twosies, yes, that's the way it's going to work, but if you're buying in bulk and you're using may be institutional financing then it's going to be a different structure on how you're going to go about putting that one together. Kathy: It sounds there isn't really one answer to my next question which is how many properties should you have in one LLC? [laughs] Clint: It depends on-- All right. I always look to the finance inside of it. If you're dealing with an institutional lender and you're going to be packaging up, say it's a 10 pack or 20 pack of properties, you're looking at one limited liability company for all those. They're not going to allow you to separate them out. Many times what I'll do is I'll start in Delaware and then I'll foreign file it in the state where the property is being acquired because those [00:26:00] types of lenders prefer Delaware LLCs. They think that they have more protection for the lender from a fiduciary standpoint. If you're not and you're just a new investor, you're buying single-family homes here and there. If it was in Texas I would set up one Texas LLC. If you want anonymity I might have a second Wyoming LLC to own that Texas LLC so people don't associate the company back to you. Then I would just create sales for each of my properties. I would recommend when you're starting out I would do one property per LLC because if something goes wrong like we were talking about and you took the approach, I'm going to save a little money because of the cost. I'm going to put four properties in one LLC. That's fine. The likelihood of being sued is probably pretty small but if you're the one that gets sued, you'll be the next story at my future event when you call me up and say, "Man, I wish I would have followed your advice. I lost all four of my properties and I'm having to start over. My income just dropped by $37,000 a year because of that mistake." Focus on the cash flow as well. It's not only about equity which a lot of people-- I used to make that mistake when I first started practicing and buying property. I would focus on the equity, not on the cash flow. For many of us, we buy for cash. Kathy: Which again leads to my next question. We've had Real Wealth Network almost 18 years now, speaking of aging and feeling it. I don't know if I've heard of one of our members. We have 54,000 now. I don't think I've heard of one single lawsuit. Which is great news and yet, here I live in California where we have fires and it's very strange how the fires jump from house to house. The house that we own, the fire seem to just jump over it. It's been there [00:28:00] 100 years and it's never burned but the house next to it does. We still have fire insurance and it's expensive in California. It's just an interesting question of the chances of getting sued are pretty small but you don't want to be that one especially with the more properties you have I guess the more your chances increase. Clint: Correct. All right. I've never been sued on my properties. I use the same protection I tell my clients they should set up. I've had some scares. I had a tree fall through a house during a wind storm and narrowly missed the occupant right through the master bedroom. Had it been another four feet one way it would have killed the individual. That could have been a horrendous lawsuit. It potentially happens. I run into people all the time who have stories where they've lost everything and they're 55 years old and they're starting over. The reason why I set up LLCs is for the same reason you buy fire insurance although your houses never burn because that one time there's no going back. You can't put that hose back in the barn at that point and there's nothing we can do for you. The other benefit of using the limited liability companies and structuring the right way which transcends just asset protection is the fact that real estate investing is a business. I tell individuals LLCs can help you do more if you understand that and you set them up the right way so your tax returns appeal to lenders, underwriters. A lot of people don't understand that other side of it, the ability to borrow that you can really massage a tax return so it is more appealing to an underwriter when they're going through and they're trying to determine whether or not you qualify for this loan. I see a lot of investors they'll have their properties, they'll show up in their 10-40 scheduling page one and then they get up to this point where they're struggling [00:30:00] with their debt to income ratios and trying to close on that next deal. They're having difficulty. They're looking at the lender and they're seeing what the lender is doing like, "This is BS. I make more money than you're giving me credit for." Again, because they're Freddie, Mannie typically conforming loans they have to put you through an underwriting procedure that limits how much of your rental income they can count. If you change your tax return and you use entities in a different manner, you can get 100% of them. It's amazing. All you have to do is put the information in a different box on your return because the entities allow you to do this and it then gives credit for 100% of your income. Kathy: Once again. Clint: I just found that from working with underwriters. We used to have our own mortgage business I set up back in 2002. It was just little tricks you started learning from doing it. Kathy: Oh, I didn't realize that. How hard is it to get a loan? Let's say you own 10 properties within an LLC, how difficult is it to get commercial financing for that? Clint: I don't think it's going to be difficult if you can find the right lender. We have clients that do it all the time so you're going to cross-collateralize all those assets at that point in time. The best thing to do in those situations is work with a community bank and get them to take that loan on. Then, when you close one of the conversations you should have is I would rather not have 10 assets in one entity. I'd like to spread those out amongst other LLCs even though you cross-collateralize them all. You'll find that a community lender many times is going to be open to that. I just did one for a client that has a bunch of property in Maine. He was refinancing 15 properties that were formerly in one LLC. Now, we've broken them up and the lender accepted it on the refi even though we cross-collateralized. [00:32:00] It's good. The thing is too when you're negotiating those types of loans you want to make sure that you always seek the ability to substitute assets because if you're going down that road you'll find in many of the loan docs that the lender will require as you sell properties to pay back down the loan. You want to write a substitution which gives you the ability then to escrow the funds, to take those funds and use them to acquire replacement property without having to pay the loan off. That's just an aside. I went down a little rabbit hole there but if you're going to do it you should at least know that. That's an option you should be looking for that in the loan docs. Write a substitution. Kathy: There are so many more questions I have but I know that you do ongoing education that's very in-depth and you also have consultants. I believe if people just click the link in the show notes they can get a free consultation. Is that right? Clint: Yes, we'll definitely set up a free strategy session for them. Look at their individual situation and then because they come through Real Network we have some special offers for you as well. Kathy: Okay, great. Again, that link will be in our show notes. All right, Clint. Well, thank you so much for being with us here today on The Real Wealth Show. Wishing you a happy 2021. Clint: Thank you. Likewise. Kathy: Thank you for joining me here on The Real Wealth Show. You can go to realwealthshow.com for more information. Announcer: The views and opinions expressed in this Podcast are provided for informational purposes only and should not be construed as an offer to buy or sell any securities or to make or consider any investment or course of action. For more information, go to realwealthshow.com. [00:33:51] [END OF AUDIO]

One of the best things about investing in real estate is the use of “other people’s money” or OPM. You can use OPM to pay for your deal while you get all the cash flow, appreciation and tax benefits. What do we need to know about the lending environment today? In this episode, we’ll hear from private real estate lender Brian Stark. Brian has more than 20 years experience as a lender and is currently VP of Originations at real estate lender Icecap Group in New York City. He has actively invested in single-family, multi-family, and commercial real estate. He’s bought and sold hundreds of properties, wholesaled many more, and originated more than 1,400 real estate loans totalling well over $150 million. www.RealWealthShow.com Click here to join the network for free Transcript: [00:00:00] [music] Presenter: You're listening to The Real Wealth Show with Kathy Fettke, the real estate investors resource. [music] Kathy Fettke: One of the best things about investing in real estate is the ability to use OPM, other people's money, to fund your deal. Yet you get all the tax benefits, the appreciation, and the cashflow from that deal while somebody else pays your loan off for you. What is the lending environment today? I'm Kathy Fettke and welcome to The Real Wealth Show. Our guest today has been a private real estate lender for about 20 years. Brian Stark is VP of originations at IceCap Group, a direct private lender in New York City, making loans to real estate investors nationwide. He's wholesaled hundreds of properties, bought and sold hundreds of properties, and originated over 1,400 real estate loans, and he's here with us today on The Real Wealth Show. Brian, welcome. Brian Stark: How wonderful to be with you, Kathy. How are you today? Kathy: I am doing wonderful. I'm glad to have you on because we're seeing some changes a bit in lending, and I would love to get some understanding of it. We're seeing interest rates go up, how much have they gone up, and do you think that will continue? Brian: Not to be contrarian, but the truth is, in the investment side, we still see rates pretty well depressed. Not in a negative way, we see them held pretty low. In some areas, they're even going down a tiny bit because there's so much investment activity and there's a lot of, you would call it competition among lenders, like the company that we run and others like us. Everybody's feeding for the borrowers and depressing rates a little bit. While there's a little interest rate bump for consumers, I think investment rates are staying stable, or maybe reducing a tiny bit. Kathy: [00:02:00] That is really good news. Brian: It's great news. Kathy: I could see that because there's so much money out there chasing some kind of yield and not able to get it, but lending provides that. I'm not surprised, but I just haven't really heard that. Is it more private lenders and not so much the Fannie, Freddie lenders, the conventional? Brian: Yes. For the purpose of this discussion, Kathy, there's two buckets, if you will. One bucket would be government-backed money like Fannie, Freddie banks, the people with the big fancy buildings downtown. Then the other bucket would be all the private lenders. When we say private lenders, we're not just talking about the nice guy that you sit next to in church who's got a couple of hundred thousand in their IRA, I'm talking about what have now become, in the last five, six years, multi-billion-dollar companies that have raised huge rounds of capital raises. Hedge funds, private equity funds are in this business, our company has own fund, family offices. We're talking about very substantial private institutions that are in the business of making loans to real estate investors for fix and flips, buy and holds, and those companies are very competitive. We're not governed by United States government regulations, in most cases, we're not governed by stockholders. We're basically governed by the owners of the company, who on a given morning might say, "Hey, let's get into this business. Hey, let's lower rates. Hey, let's do higher LTVs. Let's go compete with this company or that company. I want 50 more borrowers this month. Let's do another 50 million this month." Just that fast, they can lower their rates because it's their money. Kathy: They must fall under some kind of regulation, I imagine it's pretty strict stuff. Brian: To the extent that you and I are both regulated, we're not allowed to drive past a certain speed or steal somebody's car, we're regulated to that degree, but there's very little regulation of business-to-business lending. [00:04:00] Very little in most states. There are half a dozen states in the country where there's a lot of regulation and most of us stay out of those states actually. Kathy: Which states are those. I assume New Jersey, California? Brian: Actually, California's one, New Jersey is not. Arizona, Nevada, North and South Dakota, Utah, most of us are not too active in Alaska. The territories are tough because just it's a whole different business, like Puerto Rico and stuff. Kathy: Interesting Brian: Lower cost of money comes in a lot of forms. One form is, "Hey, our rates are low, we're charging 5%. Oh, now, we're charging 4.75. Oh, we can do it for 4.5." Another lower cost of money is lowering fees, closing faster, raising what we call leverage. So, "We'll lend 80%. Oh, we'll lend 85%. Oh, we'll end 80%. We'll lend 100%." All those things are coming together to make more money available at a lower rate. It's been said by the way, that there's over $2 trillion, with a T, looking for a home. Liquid money that's literally sitting in investors' bank accounts. Kathy: I'm not surprised since $ 5 trillion was just created in the past year. It has to go somewhere and it likes to go to real estate. Brian: It sure does, absolutely. [crosstalk[ You were going to say? Kathy: I was going to say that we know that there were eviction moratoriums, there were all kinds of mandates this past year that was confusing, but it mainly applied to government-backed loans. If there was a private lender, they didn't necessarily fall under that regulation, or did they? Brian: Eviction mandates are different from foreclosure mandates. I think any property owner wasn't allowed to evict a residential tenant. I think there were some, I don't know this law perfectly, but it's different in every state, first of all. I think if the tenant was in default before [00:06:00] the pandemic began, then an eviction was allowed to continue, but I think it's fair to say very, very, very few evictions have taken place in the last year. I think it's also fair to point out that, by and large, residential tenants have paid their rent. I think you don't see large apartment buildings, large apartment communities with 60% unpaid rents. I'm sure there's landlords that have felt some pain, but by and large, people did pay their rent. Because not a whole lot of people at the upper and middle levels lost their jobs. Remember, people still worked, they just worked from home. There's definitely a strata of people that were feeling a lot of pain and we feel for them, but even many of those people paid rent. They had savings, they had other ways to get money. Anyway, private lenders were affected to the extent that we looked at residential assets, and are still looking at residential assets, with a little greater level of concern than we may have a year or two ago. Before this virus came along, it was an automatic assumption, just like it would be for you that, "Oh, it's a house. It can rent for $1,300 a month. We can definitely get $9,000 a month for this," or whatever the number is, "We can get it." Now, suddenly everybody has to say, "Well, wait a minute now, people are moving out of that neighborhood to get out of the city and out to the country. People aren't renting in that area too much anymore. That's a tough area, there's a lot of non-pay in that part of the city or part of the region or whatever it is." Suddenly, we're looking at residential assets not quite as solidly as we did maybe a year ago. That's all gonna stabilize out, it's all going to play its way out over the next six or eight months. I think we're going to see that settle out, but definitely, it's affected us in that way, but I don't think any lender has been affected by eviction. Foreclosure is a different matter. When we know we can't foreclose, we're definitely a little reluctant to lend. [00:08:00] That's definitely been a thought. Kathy: Absolutely there are certain states I would not want to be a lender in, and [unintelligible 00:08:07] judicial states where the foreclosure has to go through the courts. Brian: Absolutely. We all love Texas, you can foreclose in 30 days. Kathy: California is surprisingly pretty easy too, isn't it? Brian: Is it? We don't do very much business at all in California, so I'm not as familiar there. You have all the sunshine and golden gate bridges and Rice-A-Roni and all that stuff, we don't get that. Kathy: Oh, I'm sorry to hear that. We have [unintelligible 00:08:34] too. Brian: That's true. Sand. Kathy: Okay, sand. Brian: Fabulous people with tans. Kathy: Mountain skiing. YOu know what, everyone's leaving, no they're not. I just found out it's only 2% more than normal are leaving the state, but that's having a big effect on other areas. Brian: Of course. It's funny, you mentioned 2%, and we don't think of 2% as very much, but 1% or 2% or 3% change in any industry, but especially in the mortgage industry and housing, those numbers add up to be hundreds of billions of dollars worth of results in a big industry like the housing industry across the country. If you hear something like, "The apartment community has a 2% rise in vacancy," that's a big number. That's a lot. Kathy: As a lender, I'm curious what your thoughts are about the future. Do you think there will be a lot of foreclosures as the more moratorium lifts? Brian: I'd love to be one of those guys that gets a lot of attention by saying how awful everything's going to be, but I like to tell you what I really think is going to happen, Kathy, and I don't think there will be. First of all, I think most residential lenders, most consumer lenders will put unpaid balances on the backend of mortgages and will work with homebuyers, homeowners. I think homeowners that are really in trouble, many of them have an exit right now because the market is so hot [00:10:00] that in some cases people will sell and become renters for a while. If they're finding that, "Look, I've lost my job. I worked in the theater, I worked in restaurants, I worked someplace where my job's not coming back. I worked in some industry that's scaled down because of the pandemic and that's not going to come back." They're going to have so many options to sell. If they've got a little equity they'll probably do that. I think there's going to be a very, very small uptick in foreclosures and I do not think people are going to lose their homes at record rates and suddenly there's going to be an avalanche of residential opportunities. Not so much in the commercial world, that's a whole different business that we could discuss. If you'd like to buy a large office building, now's a good time to be looking. Kathy: Is it? Because I haven't really seen the impact yet, but are there starting to be defaults in commercial? Brian: Well, there definitely are a lot of discussions and there are a lot of lawsuits already beginning, and there certainly are a lot of defaults in hospitality. Those are definitely areas where if you're interested, that's a good place to look. I think also retail. Those are not areas where I lend, but we see the trades and all that stuff and there's definitely a huge uptick in defaults and in lates. On the residential side, I don't think so. I think most people will keep their homes, who want to keep their homes, and I think lenders are going to be, "This is a different thing from a mortgage industry collapsing because of financial reasons". First of all, the mortgage industry is not collapsing. Second of all, this is a non-manmade thing that everybody understands, including every company in the world. They have to work with people, and they are. Kathy: I don't think any bank wants to go through that foreclosure crisis again. Brian: No. Just think of the awful press if a large company would be found to be taking on a large amount of foreclosures against people. Kathy: When people weren't allowed to work. Brian: [00:12:00] No bank could tolerate that. Kathy: It would be canceled. Brian: It sure would, it certainly would. [laughs] By the way, foreclosures, even at the height of the pandemic, and I don't remember the exact statistic, but we never reached anything like 20% of all mortgages going into default, it was maybe 6% or 7% or 8%, something like that. It's a big number. Like I said, a little percentage like that is a big number. Sure it was hundreds of thousands a month or whatever, but the banks, by and large, could support that, it's built into their loss ratios. Sure it was extraordinary but it's not going to put a large bank out of business. Kathy: What about with the eviction moratorium lifting, are lenders concerned that landlords will run into trouble because they haven't been able to collect rent? Or like you said, has that not really been an issue that you've seen. Brian: Not an issue that I've seen. It's not quite in our space, but as I look at how that piece of the puzzle plays out, I really don't think lenders are going to be too worried about it for open loans because landlords will need to make an adjustment. A landlord has to make a decision, "Okay. Mrs. Johnson in unit two hasn't paid for three months and now I'm allowed to evict and I got to get rid of her because I need the unit back. Do I have the money to pay for the legal, can I afford the clean-up and unit prep? Do I have the cash to hold the unit and pay my mortgage for another two, three months while I wait for a new tenant?" If the answer's yes, they're going to keep paying their mortgage, there'll be no effect on the lender whatsoever. If the answer's no, then they're going to have to get creative and figure out a solution. I suppose there might be a little uptick as some mortgagees decide they're going to walk away from their properties, but I just don't see that as being a big deal right now. Kathy: Even if it does happen, there's such a lack of inventory that those rentals would turn into primary residences. Brian: Right away [00:14:00] or rentals for somebody else. I think you're going to see shake out at the lowest end, that's where there's going to be problems, and maybe at the very, very, very highest end. If you have a $4 million house and you're trying to rent it and you found that, "Gee, there's not a lot of people paying $50,000 a month right now, maybe that's going to be a problem." Or if you have a $39,000 house and you're having trouble finding a $650 tenant, that's not too surprising either. Everything else should be fine I think generally. Don't have a $39,000 house, that's rule number one. Kathy: Good advice. Thanks. [laughter] Kathy: For somebody who is preparing to buy property and get more investments, what do they need to know? How do they become a very good borrower? Brian: Well, that's a great, great question and I wish more people would ask you that question long before they call my telephone number. Kathy: [laughs] Brian: First thing we want to see, and I think every lender wants to see, is that you have decent credit. We understand that you could have a 580 credit score and be a good person. We're not saying that you're not a good person if you have "Poor" credit, but we make loans, and all lenders make loans, based on specific numerical criteria. We need to be able to sell our loans either to our own fund, to our own cash management structure, or to Wallstreet or other institutions that will buy our loan so that we can turn around and use that money and make more loans. That's the business that we're all in as lenders. No lender, very few lenders hold all their loans, lend all the money, and then just wait for people to pay back. Number one, got to have decent credit. I would say don't even settle for 650, get that credit up to 700, 720 as a mid-credit score [00:16:00] before you come to a private lender to be in this business. If you're going to work with a formalized private lender, if you're going to go to raise private capital from private individuals, credit's not as important and it's definitely true that you can do that in that way. Speaking from the perspective of somebody who's working in the private lending industry, that's number one. Number two, you got to have some cash. It's true that there are many ways to do this business without money. It's true. No money down, all these things, you can definitely do all that stuff, but from the perspective of somebody running a private lending company, we want to deal with people that have liquidity. We want to deal with somebody who can show us that they have in the bank enough money to make their payments for six months, enough money to pay your closing costs, your origination fees, and a little bit more. Because we don't want to make a loan to somebody who is going to be out of cash by month number two. Have some capital, have some credit, have some liquidity. If you don't have any experience at all, definitely get some knowledge. Take a course, go through a workshop, get a partner, give up some equity. It's okay. Get a partner who's done 10 deals, done 5 deals. To jump into this business, or any business, all alone, knowing nothing, having done nothing, with nothing, you're just asking for trouble. It's so easy to make a wrong decision. It's great to do the first 6, 8, 10 deals with someone who knows what they're doing. Those are three pieces of advice I could share with you. Kathy: That's great. Your suggestions for helping people improve their credit. I know we've worked with a credit repair company forever, and they help keep our scores really high- Brian: Very important. Kathy: - but any other tips that people should know about how to improve their credit? Brian: Yes. I have had a couple of excellent credit repair professionals on my shows and we work with them as well. What we hear all the time is utilization. Keep it low, keep it under 30%. [00:18:00] One way to keep your utilization under 30% is to get a little more credit and use a little bit of it. In other words, some people think, "Oh, I pay all my bills off." That's wonderful, great to pay all your bills off, but if you only have two bills, and you only have $3,000 worth of credit limit, you're not going to have much of a credit score. Get another couple, three, credit cards or credit accounts with a couple of $3,000, $5,000 limits. Use 22% of those credit limits so that your utilization rate stays low, but your available credit grows. Keep your utilization low, number one. Pay everything on time, everything. There's no such thing as making one late payment, it can't exist. Pay on time, always. Pay a day early if you have to, set it up [inaudible 00:18:48]. [crosstalk] Kathy: Get it automated. Get it automated EFT. Just get it because that one late will really your credit. Brian: It really does. Avoid letting anybody pool your credit, unless you absolutely need to. Definitely, definitely, definitely avoid letting anybody have access to using your credit. Don't give your kids a credit card that can affect your credit score unless you're paying the bill. Don't get a credit card with your-- Kathy: Don't get a credit card with your new boyfriend. Brian: I was just about to say, boyfriend, girlfriend, whatever, definitely dangerous. Just be very-- You got to guard your credit like you guard your life, you really do. It's an ongoing process to build it and manage it and maintain it. Check it all the time. Once a week go in those accounts, make sure everything's cool. If it's not, set aside time and fix it. Kathy: It's a really good advice. We're doing a refi to these incredibly low rates. We missed the super, super low, but we're still getting a good rate. We almost didn't get funded because I didn't have enough credit cards. I have two credit cards and one I never use and actually couldn't even find it. The other one, I just buy a cup of coffee [00:20:00] every now and then. I don't use them and they didn't like that I didn't use them and didn't have more, who would have thought. Brian: I will say it's a little different once you become truly wealthy, and I don't know your actual net worth I know you're successful. Once you become truly wealthy it's a little different because you can do different things when you're in the high sevens, low eights credit score, 800 credit score area, and you have assets and you have substantial income, you can operate a little differently. You might not need to follow those rules that I've just described for somebody getting started. Kathy: Got it. We're just about out of time, but is there anything else that our audience needs to know? Brian: I will say this, first of all, the best time to get started investing in real estate was yesterday. Whatever day you're thinking about starting, don't let any time go by. Just get started. Jump in, figure it out, get going. Real estate takes time. It's a building thing. It takes time to build equity, it takes time to put deals together, it takes time for deals to happen. Get started as soon as you possibly can, get all the education that you possibly can, learn everything. Become like a sponge, learn as much as you possibly can. Balance that knowledge against people who are trying to sell you courses that may or may not have good information. Spend as much time as you can with people who are truly successful in the business, not people who act successful, but people who are successful. What kind of a watch they wear or shoes they wear or car they drive, which may or may not be paid for, doesn't matter. What assets they own is what you want to look for. I know a guy who's worth easily $1001 million, he wears mostly t-shirts, sandals, and shorts now. You'd never know he's got all that stuff. In fact, most of the guys in this business, I say guys because I really mean men, that I know, who are very, very, very successful, you'd never know. If you look at their assets, [00:22:00] those are the guys you want to hang out with. You're going to learn a lot in 10 minutes from those people. Spend your time with people who are where you want to be. Kathy: That's our favorite game where I live, is trying to figure out, "Are they a billionaire or a homeless person" Because in the streets sometimes you can't tell. [laughter] Kathy: It seems like the one reason why somebody wouldn't do it you just said is fear that the economy is going to collapse, that prices have been going up for too long, that we're going to see another 2008. What are your thoughts on that? Brian: The economy is going to collapse, yes. We don't know when but it will happen. The economy is cyclical, it always happens. The economy will collapse sometime. Who cares? There's always good deals to be had. Just learn to watch, be careful, don't borrow too much, don't leverage yourself too heavily. Always have cash, keep your credit strong. When the economy collapses, great, go buy more. Kathy: I knew lots of people wrote about it in my book Retire Rich With Rentals. My mom's pastor had 10 rental properties during the downturn, they most certainly lost value, those properties, but he didn't serve them. He didn't sell them. He was collecting the rent and he was living off of the rental income. During that time, actually, rents went up because more and more people had lost their homes and were renting. He didn't actually feel the recession, and now those homes have gone up dramatically in value. If you're holding for rental income, you don't need to worry so much about the value of the property. Brian: That's just right. This is a long game. 10, 20, 30, 40, 50 years you're going to be in this business. Kathy: All right, Brian. It was really a pleasure to have you here. Thank you so much for joining me here on the Real Wealth Show. Brian: Pleasure is mine, Kathy. Thank you very much and make it a fantastic day. Kathy: Thank you for joining me here on the Real Wealth Show. You can get [00:24:00] a whole list of resources on our website which includes lenders and property managers and teams who can help you find the property, they'd renovate it for you, and have that property management in place. Insurance agents, inspectors, all kinds of information, and resources again at our website realwealthshow.com. Just click on the Invest tab. Have a wonderful rest of your day. Thanks so much for joining me here on the Real Wealth Show. Presenter: The views and opinions expressed in this podcast are provided for informational purposes only and should not be construed as an offer to buy or sell any securities or to make or consider any investment or course of action. For more information go to realwealthshow.com. [music] [00:24:53] [END OF AUDIO]

This past year, we learned a lot about which states are more business-friendly than others. Some had mandatory shut downs, like California. The rules were particularly strict in Los Angeles where the city would turn the water and electricity off at businesses that defied the shut down order. On the other side of the country in Florida, the economy and businesses have been mostly open for the entire year. It was certainly a risk for Florida, but the state gave people the opportunity to make choices for themselves. And now we can see the results of that decision. CDC statistics show that the Covid-19 case rates and death rates since the beginning of the pandemic are nearly identical in both states. As an aside, Florida’s death rate is 40% lower than in the State of New York, along with dozens of other states. But even though Florida and California had nearly identical public health outcomes, their diverging strategies have had an enormous economic impact. You'll hear more about that in this episode along with an update on the Florida real estate market right now from someone who's been in the business for 25 years. He's from New Jersey but has flipped homes in California and moved back to Florida where he is now, and specializes in locating great rental income properties for investors. www.RealWealthShow.com

In March of last year, the WHO officially announced COVID-19 as a global pandemic. And here we are, one year later. How has the pandemic has impacted the commercial real estate industry? And where we might be going from here? In this episode, we'll hear from John Boyd, Jr. of corporate site selection firm The Boyd Company. John's expert perspectives on corporate site selection, economic development and the real estate industry are routinely featured in the global news media. The Boyd Company clients include Boeing, Chevron, PepsiCo, Visa International, Shell, Honda Motor Company, Hewlett-Packard, JP Morgan Chase, Sanofi, Royal Caribbean Cruises, Dell, and TD Canada Trust. www.RealWealthShow.com theBoydCompany.com

What happens when you dream of being a pilot but, after years of work in pursuit of that goal, you are told you don’t qualify? For one entrepreneurial woman, you take the skills that you’ve already developed and dedicate them to a new passion -- in this case, it was real estate. During her time with the U.S. Navy, Beka Shea earned her mechanical engineering degree. When she crossed “pilot” off her list, she worked as an engineer until her third pregnancy which made her realize she didn’t want to travel as much. That’s when she decided to try her hand at real estate and took on her first fix-and-flip. From there, she turned her skills into an amazing real estate career rehabbing dozens of homes, wholesaling many more, and buying several rental properties along the way. She attributes her success to a certain kind of mindset which you’ll hear more about in this episode! Currently, she works full-time helping other investors reach their real estate goals or what she calls “Freedom Dreams.” You’ll find her at: https://www.7figureflipping.com For this episode and more, go to www.RealWealthShow.com If you like our show, please subscribe and leave us a 5 star review and comment!

Today’s real estate market is worlds different than it was ten or so years ago. Back then, it was easy to find great deals on homes you could fix-and-flip or buy-and-hold as rental property. Now, home buyers and investors are competing for a record-low inventory. That’s pushing homebuyers and investors toward the new construction market. In today’s episode, RealWealth investment counselor Ben Erik Smith will talk about how his investment strategy has changed, and why he’s so enthused about newly built rental properties. Spoiler Alert: He just closed on a brand new four-plex in Florida. Ben owns 18 doors in Florida, Ohio, and Pennsylvania, and is looking to buy two more for a total of 20. All of his properties are older renovated homes, except his new four-plex. He has worked for RealWealth since July 2014 helping other investors build their portfolio. In this episode, he will talk about the positives and the negatives of buying new construction rental homes, along with some of the markets where you can find them. Markets mentioned in this episode include: Jacksonville, Orlando, Palm Bay (Space Coast), Charlotte, Atlanta, Houston. If you’d like to learn more our new-build markets, and the purchase of new construction rental homes, please join RealWealth and log in to the Investor Portal. You’ll find market data by clicking on New Construction Rentals under the Invest tab. www.RealWealthShow.com

Building wealth is something that we do for ourselves and our family, and for some, it’s also a way to “give back” to people in need. In today’s episode, we’ll hear from someone who started his real estate career so he could raise enough money to help orphans around the world, as well as his family. He’s truly a good, good soul. If you think investors are more self-serving than that, this interview might change your mind. Our guest, Whitney Sewell, became a federal agent after serving in the military at a very young age. When he got married, he and his wife, Chelsea, decided to adopt at-risk children but realized they needed more time and money to fulfill their charitable dreams. Whitney had heard that other people could build wealth through real estate, so he thought he could too. He and his wife bought two triplexes. They also lost a lot of money on those initial investments but learned a lot, as well. Today, they personally own more than 250 units and their company, Life Bridge Capital, has invested in more than 900 doors worth more than $120 million. Inspired by their desire to help orphans and their families, the Sewells founded the Life Bridge Foundation, and donate 50% of their profits to the foundation. Whitney is also the host of the Real Estate Syndication Show. Links: www.RealWealthShow.com https://lifebridgecapital.com/ https://lifebridgecapital.com/podcast/

It takes imagination and courage to break out of the financial safety net we create for ourselves with a 9-to-5 job. Many of us dream about doing it, and few of us actually go through with it, especially when it comes to giving up a cushy high-paying job for a career field we know little about. Leka Devatha took that chance about 7 years ago. She quit her job at Nordstrom to try her hand at fixing and flipping homes. After a string of successful flips, she obtained her broker's license in 2017 and became one of the top-producing agents in her office. She has now flipped over 50 homes and has expanded her focus to include land development, additions, acquiring long-term rentals both in-state and out-of-state. She also serves as an advisor on the board of Certain Lending, a FinTech company based in San Francisco. She enjoys inspiring and motivating other entrepreneurs to build successful businesses and for this reason hosts a monthly meetup, “Real Estate at Work” to bring new and seasoned investors together. www.RealWealthShow.com