On Episode 8 we will be talk with Malcolm Turner Who is Founder of Castle Commercial Capital LLC, a National Commercial Mortgage Banker and Brokerage. We will be talking about his 25 years experience in the financial Industry and how it relates to the real estate world.

Malcolm Turner is a highly respected and accomplished business executive. In 2007, he founded Castle Commercial Capital LLC, a national commercial mortgage banker and brokerage, specializing exclusively in commercial lending. With over 25 years of experience in the financial industry, Malcolm has developed a deep understanding of commercial lending, capital markets, and investment strategies. Throughout his career, Malcolm has worked with clients across a wide range of industries, including real estate, healthcare, manufacturing, and hospitality, among others. Malcolm is known for his strategic thinking, innovative approach to problem-solving, and exceptional communication skills. He is a results-driven leader who is committed to helping his clients achieve their financial goals. His ability to develop and execute innovative investment

strategies has earned him a reputation as a trusted advisor and thought leader in the commercial investor community.

In addition to his professional achievements, Malcolm is also actively involved in various philanthropic activities. He is a strong believer in giving back to the community and has volunteered his time and resources to support several charitable organizations over the years. He has served as a deacon for 15+ years at Greater Emmanuel Church in Detroit, Michigan.

Malcolm is a sought-after speaker and has delivered talks on commercial lending at numerous industry events. In his current role as CEO & President of Castle Commercial Capital, Malcolm is responsible for overseeing the company's operations, developing and executing its growth strategy, and ensuring the delivery of exceptional service to its clients. Under his leadership, Castle Commercial Capital has achieved significant growth and expanded its reach to serve clients across the United States.

Web: www.castlecommercialcapital.com

Social Media: http://www.facebook.com/castlecommerc...

http://www.linkedin.com/in/malcolmturner

http://www.youtube.com/c/CastleCommer...

https://twitter.com/CastleLoans

Get PreQualified: http://castlecommercialcapital.com/fo...

Website Video: https://www.castlecommercialcapital.c...

Google Play App: https://play.google.com/store/apps/de...

App Store: https://apps.apple.com/us/app/castle-...

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Hi everyone how's it going I got a new mic this time I wanted to

say welcome to episode eight of real estate talk with Randy Stedwell at that

logo is not very good with Randy Stedwell there you go uh anyways

with that being said we have our guest of honor which is Malcolm Turner

Malcolm Turner is a commercial real estate commercial

commercial lender and so for all of you guys out there

doing multi-family you want to use him uh not only for the lending portion but

also to help underwrite a deal in my opinion so I think he can help you

tremendously in this uh so with that being said let's welcome Malcolm Turner

Malcolm how you doing I'm great how are you oh I'm doing awesome so got the new

mic you got the first episode with the new mic here so you know before it was just my airpods

so but I wanted to uh so you're a

commercial lender is that correct that's correct so with that

how can real estate professionals use you as far as uh being a being a

broker and things like that uh in the context of a real estate agent

or a broker they can call me if they have a deal that they want to pre-qualify for

financing you know in the introduction you mentioned multi-family yes and when you're doing

commercial the focus shifts from the person to the property okay so

eighty percent of the underwriting is on the property yeah and about 20 is

on the person okay so I'm looking at

like example I was talking with an investor this morning about their multi-family deal and I was

saying hey guys I need the leases because I don't care about your W-2s

because you're not making the payment I need the leases on this property so that I can see what kind of income is coming

in when the leases expire uh are they month to month you know that kind of

thing you know so yeah because the property becomes preeminent when you're

dealing with uh commercial whether it be retail office warehouse you know it's

it's the same same bucket okay that's awesome so you know I I just kind of

jumped right into that but I you know so the good thing is

is I I kind of wanted to let people know out there that you're the person to go to for any

multi-family or commercial loan lending also any commercial buildings I

highly recommend go through you as well if you don't know what you're doing if

you don't know what you're talking about if you're another wholesaler that has a deal under contract and you need a

second pair of eyes to underwrite it by all means this is the guy to talk to

because he will tell you whether there's a deal there to be had or not or if you

need us in order for the deal to be had you need a strong buyer for them to be able to lend okay

things like things of that nature now let's kind of get back to back on

track here so how did you get started in in the financial industry and how did

that lead you to real estate well

I was doing residential well you say real estate

you have to go way back I got my real estate license

when I was uh 20 21. okay something like that you know working for Real Estate

one which is actually how I met my wife because I worked out of the real estate one office in Lathrop Village and she

worked out the real estate office in Detroit one office in Detroit and just you know give you a little comparison

this is a 19 80 8 89 something somewhere around in there

okay and interest rates for a 30-year fixed

rate mortgage was 9.75 percent or 30-year fixed and we're complaining

about six or seven percent losing their mind right six seven oh my God 8

. hey oh it's like come on man you know now here's here's the irony back then

when I when I met my wife they had a big company meeting where they brought all the respective Branch offices together

one big uh whole meeting at a hotel in Southfield because real estate won that

year for the first time in their history crossed one billion dollars in sales

and they were the biggest in the state I don't know what the numbers are now but they were like yeah we're killing it

next year's gonna be even better and this isn't a 9.75 interest rate environment we were selling real estate

like crazy and so someone asked me the other day you know as an investor Malcolm you know you're looking at rates

and things like that and where things are going and you know when is the best time to buy when you find a deal

yes because if I'm a if I'm an investor I'm an investor it's what I am right I

invest in real estate so should I buy this multi-family this is 2023

would have been better for me to have bought it 10 years ago 20 years ago 30 years ago

you know yes there's been some ups and downs obviously you know in the market on a month to month quarter to quarter

year to year basis but if you got it 10 years ago you're probably pretty good

right now yep you know now if you bought it two months ago that might be a different story right so you're a long-term investor you

buy for the long term you know when should you buy when you can get a good deal you know or when the deal even

makes sense because sometimes you can't always kill it on every deal

that is true that is true yeah sometimes you got to go for not every deal is

going to be a smoking deal you know that's right that's right and I'll show

you a little bit how I work I had a guy call me this was uh Friday

uh no no no no this was I forgot this Friday well this was the Friday

before last and he was calling me from Washington uh DC area okay you know

it was a referral one of his buddies who also invest in Detroit from the DC area and he's trying

to buy this property this property was in Pennsylvania it was actually he's in

DC but it was in York Pennsylvania right and the listing price was 4.99

I forget how many it was a small I want to say maybe 10 12 units it was a small multi-family

okay so he said yeah me and my realtor we went ahead and offered 425

and so you know I was hoping I could catch you this morning but I couldn't wait so we're putting an offer in at 4

25 and I'm like okay so what's the number so we went over the noi right and

I said okay the cap rate that they're selling this property at is

it was like 8.63 percent okay okay but I asked him did you double check the

numbers and he's like what do you mean I said well you know in the offering memorandum they said here's our expenses right

here's our income and then here's our net down here but did you actually do your own math well you just assumed that

total was right because a lot of times it's not and he's like no I didn't so he did the math and it was 10 grand off

right okay right so okay well you know 10 grand is 10 grand you know so we did

the math based on that Capital it's like okay well that should drop the price down to 3.99 then we found another uh error

in the operating agreement where they didn't account for vacancy loss which should be five percent yep right and

there was a there was one other thing which I can't remember and Property Management

no I wasn't Property Management that was actually in there but anyway it dropped

the noi further you know I want to say like 34

000 31 000 somewhere in there and so I said now based on their cap rate that

they initially was offering this property at you should be offering 352.

yeah he's like holy crap you know the other night as I talked to

just wanted me to throw in an application and I'm like you can throw in an application if you want to

you know at 4 25 I mean you did but I don't see how the values there and you

know just as from an investor perspective I mean it's your you know it's your decision but let's even look kind of cash flow

so I was going strictly from a sales approach yeah right so when I said okay

based on a 30-year amortization because you can get a fully amortized 30-year

loan on a multi-family yeah right so I just did a uh uh I calculated the The

Debt Service on that and was like oh man it's big you're barely making like 700

bucks a month because he had all that other stuff yeah so it's

like 700 bucks a month at 352. why buy a 10 unit then right so

I said now is this property under Market relative to rents yeah and he was like

oh yeah absolutely and it had a it had a first uh the first floor of the

building was retail so I had three units of commercial okay right one of them was at market rate the

other two was substantially under okay right so he's like well once I get those

up to full Market you know that would be like half my

cash flow all by itself yeah which is actually not that uncommon when you have

what we call mixed use yep right and so I said okay what about the uh

residential units he's like oh yeah they're under a market too now based on Market rates he gets that rent up okay

now the value is at 4.99. [Music]

but you're not gonna pay a premium for what what's going on now

exactly now you after you do all the work now you're paying the price of after you do all the work and as some of

your your viewers may know a lot of sellers will say well when you get done

yeah rehabbing this place or changing the rent roll over yeah or you know

raising the rents oh yeah it'll be worth this it'll be worth two million dollars yep yeah but I'm not paying you too many

dollars now exactly it's not that you know that's my Equity yep right if it's

so wonderful you do all that stuff you put all that money in time and work

effort in and then you get it to 2 million you know because the the question that I would think as an

investor I would think well if it's all of that why didn't you just do it if it

was so easy exactly right oh you didn't want to do it okay well if you didn't do

it that means I've got to so therefore I deserve to get paid yeah right but the thing just didn't

cash flow anything above that 352 number and

whether it's worth buying or not gets to after I get it cash flowing after I turn

over that rent roll is the opportunity for growth the answer was yes yeah okay so as a lender I have to underwrite it

as it is [Music] I can't underwrite it for f499 no you

know it is this property by the way was 100 full okay so this was not a property that was beat

up torn up yeah you know it wasn't that kind of situation well it probably was just with tenants in it so

you know old old tenants right right but

physically the property was in good shape you know it didn't need it according to him it didn't have a lot of

deferred maintenance at all that he could see right so but that's where we

sort of did a deep dive and then he's like well man my realtor is going to be upset

right and and I just sort of said to him well let me ask you a question

I was like okay you're looking at 399 now we're looking at excuse me 4.99 now

we're down to 352. you know as a lender is it better for me at 4.99

or 352. he's like well I would think it'd be 4.99 because the loan amount is bigger I

was like yeah exactly so I just cost myself money I'm a terrible loan officer

right and then we just laughed you know they joked about that right but at the

end of the day me wasting his time taking an application on a bad deal when

I could have sat there and literally in 15 minutes 10 minutes do the math

and say does this make sense yes right versus taking a loan application he

spending the money on due diligence for a deal he shouldn't even be looking at for five seconds yeah and

this is going through two months of you know due diligence yeah and this is where I tell people build your team okay

now it does not mean building your team does not mean go higher 10 people or

anything like that no build connections build connections with your loan officers with Malcolm build connections

with people other wholesalers that are more experienced other investors are more experienced that can help you run

the numbers and help you uh look to see what you're not seeing we all have

blinders because we see a deal we need to open up our eyes and building our

team helps Open Up Our Eyes by hey can you can you run through this can you can

you can you look at this again can you see how you know how we run the numbers are these numbers and am I missing

something you know right things like that right so absolutely it well and

here's the thing I know that there might be some investors I think in well man what I'm offering and how much I'm

making it with my hours that's a that's my business that's true yes however

Underwriters on the lending side we're doing that math

sooner or later in the process we're doing that same math because from

our perspective if it's a bad deal and I say a bad deal

let's say it's barely going to make money our perception is if he's paying us two

grand a month and he's only making 400 bucks a month right at some point resentment is going

to build in because the bank in his mind is making more money than he is as the investor and How

likely is he to default and how like well and maybe not right aholically

default but even even more common than that Randy is How likely is he or she

to put the Deferred maintenance and make the improvements you know what

I'm saying do do the repairs and the capital expenditures that they need to keep the

collateral up yeah you know because I don't want to you know I never want to take back a property I'm in the paper

game yeah you guys are in the property game right I yeah I do not want property

this is not a loan to own situation hey I want to be in your game I'll tell you

that that's not my thing right yeah so if if

if if if I feel like man this is a bad deal they're gonna sorrow on the deal and then they're not going to do the

maintenance and then the property if we have to take it back it's going to be worth less

yes right well okay so now what do I got to do take this property back and then

hire someone to go in there and Rehab it and do the things that it should have done been done already

you know it's already going to be expensive right you know so we don't want we want to see a healthy Roi

for the investor because we know that deal is going to be viable long term

you know and if it's that if it's not we're going to ask them what's your plan yep

right because man this this looks really thin you know and they're going to say oh I

plan on doing this I want to change this okay great if there is no plan

and it's like man he's his RIS is is barely equal to the

interest rate on the loan yeah we're not gonna so is that is that the reason why

you ask for a scope of work on uh from a contractor when you do like a hard money loan or or

construction loan whether it be commercial or residential it doesn't matter right right well that's that's a

that's a scenario where we're going to say I plan on you know putting in 50 Grand

and this thing is going to go from let's say 500 000 to 650. got it like okay so we're

going to take that scope of work and that rehab budget and we're going to give it to the appraiser and we're going

to say to the appraiser tell us the value as this now tell us

the value after implementing this scope of work got it right and

sometimes the numbers there you know sometimes it's not no I I 100 agree with you on that

the numbers don't lie and that's one thing I learned the the numbers don't lie to what it is

they may try to lie for what the value could be and that's what I notice people

seeing is oh yeah my house is worth arbitrary use

m uh 500 000. okay oh it's worth five hundred thousand that's what Zillow says

but you need 70 grand worth of work in order to make it actually worth five hundred thousand

right right well I'm not gonna put it while you're getting you'll get into a situation where it'll be this is not

typical but it happens yeah well I'll get into a discussion with an investor

where their number's too low yeah right so example I'm working on a

warehouse deal in New York State okay and it's a huge building almost 400

000 square feet okay and they're like they're buying

this building for two million dollars okay and and actually they they bought it for

two million and they're gonna put some you know they need another two and a half to do some

substantial repairs uh to the building okay and then when it's done it's gonna

be worth seven all right so in their from their brain okay so I'm

doing the math and I'm like this doesn't make sense if I take

the if the average square footage uh price per square foot in Rochester New

York is for for industrial for industrial for industry seven thousand

and you know like 782 a square foot times 377 000 square feet right

that's a huge freaking number yeah right industrial tenants are triple net

typically okay okay so all you have to cover as a landlord is the outside of

the building right so the lights on the on the exterior of the building make

sure the roof is solid the walls are good and you know maybe security for the whole property right yeah fencing very

little expenses so I'm doing this math and I'm like man this is like a 10 12 million dollar

building depending on what you guys charge that says now let's say we don't do seven dollars what if we did five

before we go back through the math again and I'm like okay I'm at 10. at five

bucks am I missing something and the guy's like they can't they can't be worse so

why is that because my expense is gonna be 500 000. how yeah

help this is a math thing let's go through it here's the taxes taxes are 50

000 a year the you know the you know utilities which are which are light

because yeah tenants are covering the utilities right we go through all the

categories so all these make sense yes that's 233 thousand dollars

yeah 1.5 million in income

so where's the other 200 you know yeah 250 000 bucks right

we'll do what I miss something well no that's right okay well now let's take that net

1.2 divided by yeah right a conservative cap rate right unless you

use 10 that's 12 million dollars

oh that can't be right well and getting to your point Randy the math

yes is the math yes right so I'm I'm so

he was thinking I'm gonna have some of these tenants and I'll be a little loosey-goosey with them

and I'm like no if you actually run this property professionally

you know there's a ton more value here than you think

you know yeah and even we chopped the numbers down to like four bucks a square

foot right which I told them doesn't make sense because you got 28 tenants and

look at your rent roll this 10 is paying you six bucks a square foot this 10 is paying you five bucks a square foot this

10 is paying you seven dollars a square foot why would you charge someone four bucks

right you're already getting that from your existing tenants you know that doesn't make sense right

he's like yeah but that number just can't be and I was like dude you you got a better

deal than you thought but you can't run it like a multi-family

so I got a question did he get it for 2 million

oh yeah oh sure did he sure damn he got it on land contract

okay and I my first reaction and sometimes I'm

I'm way too blunt I was like wow this seller was an idiot right he's like oh the guy's not stupid

the guy's not stupid I'm like oh is he your friend oh sorry I didn't mean that such such a

friend I'm just looking at you know no there was a lot of space that he didn't

lease and the guy basically was trying to be an absentee landlord yeah and half

the tennis were a month I said half 75 percent of the tenants were amount to

month okay right and I I truly believe in my heart or Hearts the seller was not banking all

of that money yep you know what I'm saying because I got the distinct impression that some of these tenants

were paying like directly you know what I mean he's like he's you know and

then the the guy was walking I was I'm talking to said the word for me you know

money laundering like because if there's like you know I'm looking at the leases and if they're

paying this much but he's only showing this much on on his bank statements because the bank

statements did not match the rent roll got it so one of the so one of the two are

wrong and he's like oh no they're paying it and I'm like okay he's just not counting it he's like yeah he's not

yeah so he screwed himself honestly yes he did yeah yes he did and honestly my

client was a little tempted to take some of that same type of you know

Freedom with the numbers that the other guy was taking and I was like you're

gonna screw yourself yeah if you account for everything and you do it the right

way there's going to be five million more in value in this property that you expect that

you will then be able to tap yeah on a tax-free basis when we do the cash out refine later and that right there I'm

going to tell you if people are tempted to do that be like because I don't want the government to get it I don't want the government to touch it or anything

like that the government doesn't touch debt that's right period

so if your plan is to cash out refi do everything the right way account for

everything so that when you can get that cash out refi

that all that money is yours to put into other businesses other Adventures

whatever it may be okay yes absolutely because the government's not going to

touch your debt that's right that's right okay people don't get it

the only people that do get it are the people that have

have listened to read the books of Robert Kiyosaki I'm going to tell you

that right now uh or other people who said that but like people like Dave

Ramsey fans they don't understand that so now you still have to

have debt properly because you will need to make sure that you're cash flowing

okay so uh and let me let me be clear

my firm Castle commercial Capital we set it up 16 years ago okay

February 9th uh 2007.

right right before everything went to hell in a handbasket yeah that's right that's that's the best timing right

there that's timing and I was doing uh you know in 2006 I was doing Residential

Mortgages out of uh Livonia for this this company that was hiring like Waiters

and they like literally would recruit waiters and and Busboys and say hey you want to make 10 grand

next month you know yeah and then like I was like yeah and and you know one of

the the owner of the company would take a couple other guys that used to be bus boys and they're like yeah I was over at you

know Olive Garden and yeah I did a grand last month the guy's like really and then it would just

basically put them in front of a dialer and they would dial people all around the country and say hey I can I can refi

your place and save you 200 a month and folks would go okay and then they

went FedEx on my whole loan packet this was obviously before you had excuse me

electronic signatures and you know all that other stuff and this guy was was doing huge Mortgage

business out of uh out of this shop and but I

would not sell a bad deal you know because once I once I got out of uh real

estate I wanted to financial services financial planning right so I was series seven series 63

that kind of stuff so I came out of the the formal training of you have a fiduciary responsibility to do the right

thing for your client yep right so I did a I had a prison guard

in Detroit that I got I got a mortgage for like 85 000 okay FHA fixed

rate and my manager was like what the hell are you doing Malcolm you could got this guy 300 000 mortgage

you know I'm like yeah but that would have been an option arm which are garbage and this guy's a prison guard on

the fixed income he's not married he's not going to be an entrepreneur he has there's no you know he's not on track

where he's gonna make more money if that mortgage moves he's screwed you know yeah but you could have made

five six grand and you're making like six hundred dollars yeah but aren't we supposed to the right thing for our

client oh oh there you go Bankers don't think

about that stuff again you don't want to make money fine you know and I was

talking with my pastor that Sunday after and he was a real

estate investor he had a bunch of rental houses and I was like why should me

wanting to do the right thing be a Badge Of Dishonor uh-huh you know why you know

I'm I'm obviously I'm putting my pocketbook above uh or the client's interest above my

pocketbook but in the big scheme of things I'll be okay and I can sleep at night and he was like well if you're

gonna do a mortgage company Malcolm how'd you do it and I said well first thing I do I do commercial because commercial is not a

it's not about the kitchen how big the yard is it's about the math yep you know and you know how'd you set

that up well you got to open an office got to get some you know basic you know fax machine some laptops blah blah blah

and I said and then you know you're gonna have to set up some uh alliances and some relationships with some lenders

and you know blah blah blah it's like I just talk type my hand after about 20 minutes like yeah that's about how we do

it it's like okay let's do it does it work I thought we were you asked me

hypothetical right like I wasn't actually thinking about doing it because we should do it because you know you like I trust you

like a brother you know I know real estate you know Finance we could be a great team yep

and I was like oh okay well we should talk to our wives he

said I gotta talk to my wife

your wife right I was like okay well I gotta talk to my wife you know and uh

and I was like yeah but you know here's the thing bro I love you you know I love you but you'll know anything about mortgages

and so we're gonna be a little unevenly yoked right in this in a relationship

because should do everything or to train you on everything you know and he's like and then we're splitting everything 50

50. and he's like yeah that's true you know and I was like and I don't want to mess up our relationship you know

yeah and so he's like well you know what here's here's the thing you set it up

you tell me what we need to do how we're gonna do it as you're going to train your stuff I don't know blah blah blah

I'll fund it and then you put all the Sweat Equity into the thing

I was like okay oh so now that becomes worth it oh okay

well all right because I'm not feeling like I'm being taken advantage of yeah right you know what I'm saying I'm doing

all the work and I'm getting half the money right yep so I was like yeah okay

and we did that and then you know 16 years later we're still cooking now in

2019 uh we crossed over from being a

commercial mortgage broker to being a lender okay you know and and that

happened with a quick phone call a billion dollar mortgage fund called me and said hey do you have any paper that

you want to sell right so in other words I've got mortgages people are making payments

so so before you go further like explain what when somebody says paper what does

that mean I know what that means but more maybe the viewers the note okay the mortgage note so if if if there are 200

let's say there's 200 months of payments left yep right at a thousand dollars a

month right it's a time value of money calculation right so what is that what's the net

present value of that income stream right now and the value of the asset that's

there's a couple other factors and then also present interest rates right so if

I've got a note at seven percent in current rates are at

six [Music] that paper is worth more yeah right you

know because of the higher rate on it you know being relative so all those things it gets when you talk about

selling and buying paper it gets really complicated those are the

brilliant the bond investors on Wall Street are the really smart guys at the table okay versus guys are just buying

the company it gets way more complicated when you're looking at that side of it but so anyway

I told you guys listen I don't have any paper he's like what do you mean because we're just a broker he goes yeah

but when I search commercial loans in Michigan you're on the first page of Google you're doing something right and I'm like yeah our SEO game is pretty

good yeah there's no doubt about that but no I'm just a broker he's like well I'm Not A lender he was like oh

okay well you want to be one and I was like well what do you mean and he's like well you know if you're

doing you know good business we'll buy your paper so if you sell the paper yourself and

then we'll come behind it and buy it and then you know that which is how everyone works right that means Banks yeah you

know Banks just use Ginny May Fannie Mae Freddie Mac they do a mortgage they go

to Fannie Mae right that's why for for like uh rental

investors they can't get past 10 loans okay right yeah because the bank says I

gotta cut you off because Fannie Mae won't buy that 11th

note right they say the person can carry no more than 10 mortgages at any moment in

time they give you a hard time about number five too so yeah oh so they're

like okay well you know and so if the if the bank can't sell that paper and there's no

opportunity to create liquidity even just in case they need it later

they're like nah we're not doing it so you know now in in our sector there's

private money which is huge the private money market is huge because

everyone's getting to the real estate game you got Pension funds you got life insurance company you got hedge funds

you've got crowdfunding you have all these private money funds

that are now investing in commercial paper and I say commercial paper being

mortgages that are not on residential home loans

okay so there was a thing in the in the paper some of you guys may have seen it where like Blackstone was getting into

the rental market yeah where they were buying rental property because they're like they're like you guys they're

looking at I'm getting a thousand dollars in rent

for a house it only cost this much money that's way better return than a bond and

I got Security in that investment yeah right so now these guys are playing

in that pond you know so we went through the vetting process and

with those guys and after you know a few months or I would say a few probably about two months uh we became a lender

so now I have three funds the three mortgage funds that that fuel all my

paper internally that's awesome now real quick now real quick anybody out there

who has any questions for this man for myself anything like that put them in

the comments please we will answer them here you know you know Sunny uh Sunny Harvin we see

you here I know you're using your daughter's account here so uh great at least you're joining us now

Mike Michael ostranger Ostrander oh great dude it was great meeting you the

other day uh great to have you here anybody who's here put a comment in there put a comment in the in the chat

ask your questions let us know while we're talking we'll answer them as we go

but let's interact this is a two-way street everybody all right

if for some reason you're watching us replay still leave a comment I will answer them right away as much as

possible so just let you know now so we'll get back back on track here

now as far also anybody who doesn't understand what paper is leave a comment we can explain a little bit further into

detail if you don't any questions you have please let us know so

back to what you're saying you know happy to

kind of work from there and I see where we do

we are still a broker so because no lender

funds everything right yeah so there's deals that you

know you know we don't do I mean you know we don't do every circumstance right so

on situations where it someone brings me a deal that is a a fundable deal

but it's just not fundable with my internal paper that's when I'll go

outside and I'll take my lender hat off yeah and I put my broker hat on and then

there's other Capital sources that we work with uh that we close business with you know

whatever it happened we still right heard of it because typically when you go to the bank and the bank says no

you know you're out exactly you know because the bank because and this is

something some people don't know and what matter of fact I'm writing a book right now on funding the unbankable

deal okay there's a there's a section of chapter narrow about how the internal

the inside baseball of how Banks work right it's just every loan officer at the bank also has a deposit

quota so many loans per quarter but they also about to bring in so many so much money

and deposits because that's the flow everything happens when a bank brings in money and

so if someone does a loan at Chase for

let's say you know a million dollar apartment building hypothetically Chase also wants to do all the banking on all

those rents through Chase yep as a condition of the loan now if that person is banking at PNC Bank

and PNC Bank wouldn't do the deal but Chase would you know then they're going to leave PNC

Bank yep there's no there's no Universe where Chase is going to let that cash

flow go through someone else and they they didn't like it that's that's not

gonna happen that so that being the case when PNC turned you down they don't say

oh well Chase is lending on multi-family right now right

they don't do it they just say well we're sorry we couldn't help you you know the next deal

right well you know I I tell a story and in my book of

I I met with a bank VP about referring business to us because we typically don't deal uh with banks on a

lot of our financing yep and they and our non-bank lenders don't have deposit

minimum so we don't care where they like when I do alone myself I don't care where they Bank okay so it's safe for

the bank to send me a customer that they turned down I do the loan and they stay at at that bank yeah right so I'm doing

lunch with this guy we're walking out of this restaurant in Birmingham we're headed back to uh their their brain

branch and and Bloomfield the guy says oh by the way the fact that we're not doing Inland

or multi-family right now don't mention that that that's that's confidential you know we talked about we're going to

share some confidential stuff yeah so and by the way that's also a confidential loan officer so don't tell

him either [Laughter] wait a minute your old guy don't know right

wow that's messed up that's messed up but that's why if you guys go on

LinkedIn and you look at the profile of the typical Banker

or commercial loan officer at the bank yeah most of them have a tenure no more than three years at any one Institution

and then they're jumping ship to someone else you know for various reasons but a lot of it because you know they play

games with their bonus yeah they're trying to do loans they're trying to bring in deposits

and they're like okay I'm stuck at like 50 Grand and I can't you know I should do better

than that so we got a question from Terry Penny which awesome person by the way uh

hopefully I'll have her next on my podcast uh but she said hey

what's the typical minimum uh loan amount for a commercial loan

that varies depending on the type of property okay right so multi-family is

different from retail which is different from industrial different

locations will also have minimums okay so sometimes like like like one of

our funds they're very very robust in their lending but

if they're dealing with the property in Detroit I was just about to ask typically yep

they won't do anything under uh five hundred thousand dollars okay you know if they're doing if I'm

doing like example fix and flips you know we're doing sfr fix and flips

there's some folks that are like yeah we'll go down to 75 000 or 50 000. but

in these certain markets and they'll say Miami San Diego Detroit Boston now name

them in any of these markets minimum is a hundred thousand right

so location will come in we'll we'll come into play most of our commercial

stuff especially if we're doing Bridge loans we can go down to 200 000.

okay if we're not doing a bridge loan and we're doing straight long-term financing then a lot of our programs the

minimum starts at 500 000. got it so Ron uh Ron Harrell and I know I

butchered that last name sorry about that uh the reason it says Facebook on the screen is because it's from the

Facebook group if you haven't been from the face if you haven't uh if you're not on the Facebook group it's Metro Detroit

off-market Real Estate Group on Facebook come join

but if you want a better viewing experience view Us on YouTube all right I'm trying to build that channel as much

as possible like subscribe on YouTube uh please do now he he does ask what is the

typical credit score needed to be approved for a Fix and Flip loan for either a single or multi-family loan I'm

assuming you only do for multi-family or do you do for single family for Fix and

Flip as well yeah we do you do oh okay yeah what's the typical we do credit

score typically well multi-family

is going to be like 680. okay okay minimum okay minimum we like 700 and

above got it and when I say we right

this is most lenders yeah you know most most of us are going to be competitive yeah okay so

the exception to the rules if you're doing a bridge loan okay the bridge loans are way more they're short-term

commercial loans that are for properties that do not qualify

for traditional long-term financing because there's some type of what we call hair on the deal okay that makes it

unattractive or just or makes it undoable from a long time perspective okay they have looser

guidelines by definition so they may be able to go a little bit lower they may go 660. okay so

but you go below 660 is tough yeah it's tough on single family uh fix and

flips and that kind of stuff same thing uh 680 maybe 660 right now because rates

have gone up so much yeah over the last 12 months a lot of lenders

us included we've hedged our Risk by increasing our

FICO scores oh okay so where some programs that used to be 640 they're now

660. it was our 660 they're now at 680. the ones at 680 are now at 700. now how

much of that is related into the deal the credit score versus the actual deal

you know obviously the deal matters a lot that of course just check your box it's a check your box type okay

yeah okay but you're you're mainly look your core values are mainly looking at the deal but you still have to check

that box for the credit score you still got to just check that box for the credit score got it yep you can have LOE

letter of explanations yep for certain things but they still want to see

uh and understand everybody's getting more conservative yep everyone's getting more conservative I'm scared I have to

get more conservative on my numbers when I wholesale a deal and unfortunately that's the reason why I haven't had a

lot of deals coming through lately is because the numbers have to be conservative and when you get other

wholesalers just spewing out crap and then they don't sell it because of that

then they're breaking them down breaking them down and then now that that buyer or that seller is just sick

and tired of it you know yes it's all fun and Giggles until you don't make money yep right you know and so the game

of underwriting is like a game of musical chairs you know when the Music Stops do you

still have a place to sit and no one wants to be that person that

okay between credit and the value of the property not being what it should yeah

any problem is not as strong as it is the the rent roll was weak the operating

statement was full of holes when it came to the expenses okay I'm not I'm out

right I'm out so this is not Lila this is sunny Harvin

okay he's using his daughter's account he says do all uh Fix and Flip loans

work using uh a draw method my partners and I can't see uh why that's helpful

helpful if we have a have to have the money up front for a minimum materials

or something like that I'll let you answer that I have a reasoning for that but I'll let you take

that one well I mean lending is all about risk right so if if I'm doing a

deal where let's say the purchase and I'll use like an sfr Fix and Flip right so let's say

Sunday you got a deal you're buying it for a hundred your uh rehab budget is 50 000.

and your arv your after repaired value is going to be

say 240. okay hypothetically

well you know we'll go up to 85 percent of the purchase price right

right so we'll land up to 85 000 okay now this is where if there's a hiccup

and let's say that and that person's at let's say 760. okay well say Sonny comes in that week

we pull his credit now he's at 720. okay what I may drop us down to 80 of the

purchase price right okay right you know he gets down to 680

as his mid score that may take that down to 75 percent of the purchase price [Music]

so the more perceived risk right the less we're we're lending let's stick

with the draw question for a second we're always going to find 100 of the rehab functions you know now that's going to be on a

draw basis everyone does reimbursement I I know very few people that'll do

it up front because the problem from a lending perspective is I give the guy to 50 Grand

he doesn't do the work so now he owes me the 80 let's say I did

80 on the value for simple math I gave him 80 000 for the purchase and I gave another 50. for the construction not his

enemy for 130. but the work never got done yes that means it's a hundred thousand

dollar property yep I'm screwed yeah right

you know so lenders are like no you give us a draw schedule

you gave us you know your scope of work and then you say you're going to do hypothetically I've got fifty thousand

let's say ten thousand was the kitchen you call and say hey Malcolm I'm ready for my draw we send someone out they

look at the kitchen they say he was going to put in granite countertops and

you know uh glass backsplash you know new cabinets blah

blah blah and we'll say yep that's about ten thousand dollars worth of work we released the ten thousand

now we go the inspector goes in and says actually he did about 50 of the kitchen it's not quite finished yet what was his

budget 10 grand okay so we're going to release five thousand dollars and then that money is wired

within a couple days right to the investors bank account got it

so you control as an investor though you have full control of that draw yep you

know in the respect of am I going to do and I and just again going with the

fifty thousand dollar number am I gonna do five draws at 10 a piece am I going

to do one draw at 50 at the very end am I going to 225 you decide

when you're ready so you basically you just need enough money to fund that first draw got it

so essentially that's exactly what I was going to say as far as it's about risk

and it's not even about the risk of the of the investor it's actually the risk

with the contractor too because contractors could take your money and run

right they could they could take your money and and just never show up the next day and

what's going to happen you know right now we're not sitting here saying that you're going to be stupid enough to pay

them all up front but some people have and whatever money

you're out of by paying them up front now you're just down that much money

how are you going to pay that up you know right right so you manage your risk the same way we do exactly right

you should never I'm gonna tell you this if it you should always talk to a

contractor and pay for the materials yourself

okay and you pay for the materials yourself and you pay him up for labor

that's how that's how you should be having it um if you don't do it that way

the contractor is going to double dip on You by charging your labor and he's going to up charge you on the materials

at least 20 percent right okay so always have it written

that way if you can just you gotta keep on them about doing the work as far as

getting the material because you don't want them waiting on you well and that gets to something you said

earlier Randy about having a good team yes right you're going to have good

contractors that you know and trust you got a good relationship with you know if

you don't then the best next best thing is to get referrals from people that have already done stuff

you know it's like the guy that had the multi-family in York right he was a referral because he

didn't have a lender right from another investor buddy that did three deals with me

right yep and so that guy was like oh you need to get my guy Malcolm you know this guy's awesome

you know and so and because he had a good experience he felt confident and so that that

specific client in that situation his realtor recommended another lender to

him but he didn't want to use the guy because it wasn't really a referral it

was just here's a bank I think can do it yeah right versus his buddy said I

closed three deals with this guy and they've been great and he's like okay I can trust that yeah right because

not only that but now he's not going in with a wall up with you

he's are you he's already breaking broken down that way he's got a layer expectation yeah because his buddy told

him this is what it's like working with Malcolm just like if it was if I was a plumber yes right and I'm not I'm using

me as an example but this would apply to a plumber a guy that still do your drywall someone is doing your electrical

okay did they work out when they worked for you did they do what they said they're gonna do do they meet the the

time frames they come in on budget you know all those things are going to be important I want to say one thing too

about construction or rehab work when you get to larger projects

uh multi larger multi-family rehabs and things like that you know the lender is

going to come behind and ask for a feasibility study okay okay and what a feasibility study

is you you tell me I'm putting in two hundred thousand dollars and let's let's

say you're doing 10 units you're going to rehab 20 000 a unit okay the feasibility study is going to

look at your scope of work and say based on the improvements you're

making is it reasonable it's going to cost two hundred thousand dollars

and Is it feasible they're going to put in again you know granite and bamboo and

blah blah blah blah and they're gonna do that for three thousand dollars yeah

and that can so you don't really have that when you're doing most like sfr

rehabs but when you get to commercial industrial and and multi-family yeah

you will have feasibility reports they're going to double check your numbers and it won't be a lending guy

doing it's going to be a construction guy right so that brings me up to this

next question that Michael brought up what would be uh the minimum DCR on a

multi-family deal DCR is deck service coverage ratio

right so uh that's the gap between the

payment and the net operating income yep okay so using a you know again let's

say I had a multi-family and after expenses after uh you know taxes

Insurance maintenance Property Management blah blah blah you know I'm netting eight thousand dollars a month

okay and my debt service is four thousand dollars a month

okay yep so that ratio is actually 2.0 okay

right and so if I was doing let's say and I use a house for example if my

payment was a thousand bucks and my net operating was twelve hundred dollars now I'm at a 1.2

okay okay 1.2 is going to be typically your minimum okay

for most uh underwriting guidelines with most

lenders you will have risk factors that can move that number though okay okay so for guys that

let's say he's got low experience yeah you know so we're really you know

in the 60s we're testing is great his capabilities low then we may say we need

to say 1.25 okay or the location is a little hanky

not hanky enough he won't do it but hanky enough to make us a little nervous and we're gonna make sure it's

got a 1.3 on the dead surface got it right okay all things being equal 1.2 should be

reasonable if you're doing commercial uh retail industrial office that kind of

thing you're going to be looking at a 1.3 okay as a minimum at a minimum wind

gusts up to 1.35 okay so

now I have a question as far as do you ever get leads on people trying to sell

the property say they're they're trying to do a cash out refund or they're

trying to see how they can and and they decide you know what I just I think I

want to sell instead of go through all that process do you ever get people like that

typically no okay typically no I mean if the investor really if they're coming

out for a cash refi they want to keep their property right right so and if the

if the cash re-fight because typically happens the cash free fight doesn't work out instead of saying

sell they'll just say well I'll just hold on to a little while longer yeah and and let the natural

progressions of the rents go up over time to where they got enough of a spread because the the bigger the net

operating income the bigger the value got it right so so another reason why I

was asking about this is like how can how can we be of service to you or how

can we be service to you could be a service to MOA I'm

just kidding like if someone where where people can be of service to me yes I mean you know

I'm I make money off the river not the reservoir

got it yep it's the flow yep right so the off the flow of deals I'm one of

those people who like appraisers right like real estate agents right Linda I'm

making money off the flow of the the better the flow is the more my investors are buying and doing more stuff the

better it is for me right so if I can help my investors do more deals

you know it makes me more money right you know I'm not trying to make a killing off of one person yeah you know

I I and I and I mean my ideal situation as a business model is for me to have a

hundred investors that are doing 10 or more deals a year

rather a thousand investors doing one [Music] you know yeah now as a consequence of

that when guys like you find a deal and let's say you know what you don't want

to buy it for whatever reason yeah you know it's not you know it's a nice deal but it's not close enough to me

physically right right because you know most people want to deal that's within the half hour

drive of you know where they're at right or that you know maybe they don't like the numbers per se for their own

parameters you know they want to make they want to knock it out they want to get a home run you want to make 35 on

every deal this deal is only doing 20 that's too small for that okay well call

me with the deal okay send me the deal okay now I'm not

I'm a I am a lender I am not trying to get in your game of making money on the

seller real estate I'm never going to ask someone to say hey can you you know give me a little something on the side

you know you do what you do on the real estate side I'll do what I do on the lending

side right I don't I don't count someone else's money I'm not trying to pick their pocket but I I'm more than happy

to help someone move that real estate if I have another investor and I do have investors that are looking

to buy stuff and if they say and if I call them and then this Separates Me

from 99 of lenders they're dealing with all my investors I know what their criteria is and every time I run across

a deal that fits when I'm calling the phone and I'm like hey Randy I got this deal

it's a 12 unit it's on such and such you know the cash flow was good we'll

Finance it because obviously I'm not going to talk about a deal I can't Finance right right

here's what the down payment is going to look like because what the cash flow is going to look like when you're done here's what the ARB is going to be what

you think got it and so if you got a deal out there and it doesn't work for you you're

not interested in buying it maybe it's a shopping center and you want to do multi-family maybe it's a warehouse

you know yeah if it's a good deal

please send it to me then I can follow to one of my investors and have to make money you know okay

yeah most definitely and that's where I also

how I think investors can use you as well is a second pair of eyes looking

through the deal making sure the numbers work you know you're also somebody who's not going

to go behind somebody's back to try to steal a deal you know what I mean yeah I mean it's just whether it works or not

you know it just kind of goes from there so and that's back to what I said I'm an

investor but I don't I don't play in the same Market that right most of my

investors do you know right right I I do single tenant net lease properties

so me and my investor buddies when we have our our Sunday night conference

calls where we lay out what's our plan for the week we're like hey go check out this property or gross Bank go look at

this property you know we're looking at Singleton and

99.99 of my clients are not investing in that in that blue ocean so explain what

that means single tenant it would be like if an example

I had it we had a deal was a Subway okay right and Subway was leaving

okay so the building was empty got it okay when when commercial property is empty and it's not cash one it's worth

less yep right so we buy it at that lower amount and then we get Tropical

Smoothie in there the Smoothie size a 10-year triple net

lease corporate guarantee meaning if they move out they still got to pay us

the remainder of the lease term yeah those payments and they're paying let's say 400 000 a year

right so you do the math 400 000 divided by you know six and a half percent cap

rate equals blah you know we're buying it at this price okay it makes sense

yeah you know now do you ever work with a tenant about helping out with the

construction or anything like that because I know in commercial it's all on the tenant to do the

construction to to match what they want you know no not my wheelhouse got it all

right so you just kind of tell them hey we take care of the outside you take care

of the inside or whatever signage and the tennis that we deal with on on that

that kind of thing like you know uh Walgreens or Foot Locker or

Tropical Smoothies you know they they have who they want to use you know if it's a Starbucks they already have

relationships with who they're going to use them they have their cookie cutter people that knows exactly their system

that's exactly what they want corporate has specific guidelines

for how how that store has to look now I don't want to jump off too far right but

I do want to ask this how do you how did you develop those relationships to

get those people to you did you put up an ad on Craigslist did

you to find those as far as which relationships specifically to to get

like say the Subway or the the tropical smoothie into your building I mean are

they just calling you up because you have a vacant property are you listing it on something called like an MLs for

commercial YouTube I use YouTube what I use YouTube so when we market and

amen I don't know if this will be applicable to you guys right but like like my quote unquote competition they

don't do this stuff but you know there's a little free stuff but my people won't kill me

[Laughter] we do a YouTube video so but it's private it's not public

you can do a private video with you have the exact number the exactly backslash

one eight seven five three that kind of thing we'll do a private video on YouTube and then I send it to the prospective

tenant you know so there's a video of me you can't find it but it's on YouTube

that says hey I'm Malcolm Turner with blah blah Investment Group and this is

our Walgreens behind us this is the corner you got this business over here you got this business because

corporate tenants want to know what other corporate tenants are around that space yeah it's a whole different type of thing yeah so we explain the traffic

count in the area you know we show them as we swing the camera around I show them the other you

know corporate tenants that are that they like to be near that are near them right and I still show them outside of

the building in the parking lot is you know 13 000 square feet it's this this and this let's go take a look on the

inside and outside the video cuts and I'm on the inside of the building hey it's an empty shell it's move-in ready you know

blah blah blah it's really only like a three minute video tops okay

you know yeah corporate people's time is very it's worth well it's not a lot to

talk about but but it but what it does it gives them a sense of they can hear

the traffic they can see the you know they can see the traffic count going by and they're like oh okay you know and

then we go on the inside we just show them the show yep this is it blah blah blah call me and

then what I do is I send out that email to the the prospective tenant with a

link to that private video [Music] you know so I'll say hey I've got this

property I think you might be interested because every one of those businesses take for example like

Savoy sliders or Tropical Smoothie or Starbucks they've got guidelines on

what the real estate needs to look like for them to participate all right okay I

know what those guidelines are so only send them the stuff that fits their guidelines you know and then if they're interested

they call you know and then we you know we set up a site visit and sign the lease in in in our business

when they sign that lease as soon as that lease is Inked the value of that

property goes up immediately okay because you got guaranteed income coming

in for 10 years or 15 years or whatever it is okay you know I need to get the

commercial game that's the difference but the fundamentals are still the same

location location location right income income income

right buying here doing some type of value-add Yeah in our

situation the value add is getting the right tenant in there you know to get it here

yep you know and then you either flip it you know you know you might buy a

property at 400 000 and then now you you sign that that the corporate tenant now

it's worth eight hundred thousand okay you know and then you sell it you

know there's a Foot Locker on Greenfield and Eight Mile in Oak

Park across from the old Northland Mall yep right it's like a Kids Foot Locker

uh regular Foot Locker and then there's another like Lady Foot Locker I think and it looks like it's three

stores like a little mini strip mall yeah but in actuality it's one building developer went in

you know built that thing from from ground up signed the deal with Foot Locker and

immediately put that thing on the market at six and a six and a quarter six and a

half percent cap rate you know which was you know my estimate

was about a Mill and a half two meal more than what they expect

okay you know that's awesome yeah I I'm in the wrong

business I need to get into that commercial game so but you know you know hey it is what it is you got to work

your way up and that's kind of how you but I don't I don't compete with my clients that's good I'm not buying sfr

fixing flips I'm not buying multi-family you know

because I don't want that to be a conflict of interest I don't want someone to think about well man this is a really good deal it's off Market can I

share this with my lender yeah because you know I will always make more money

as an investor than I will as a lender you know

so 100 and and there's there's loan to own shops out there

that their whole purpose is to do quote unquote bad deals that they hope

intentionally go under got it because if I do a loan at 60 of value

and the guy's got terrible credit and you know the the property he has to work

his Exit Plan perfectly and it doesn't work now I got this property with 40

equity in it right you know where we don't play that game

you know no you and that's one thing I like about you even from the first time I met you

and I met you at a multi-family Meetup by the way so if you're not going to meetups you need to go to these meetups absolutely you meet guys like

this uh and go from there but you're you're super open Super honest and

that's what that's one thing that I really liked about you because that's that's what I do even in my wholesaling

business I still try to be as transparent as possible with even the

sellers right okay I was actually on an appointment today and I told him I may

not be your buyer this is what I do this is what I do it looks like you want more retail you may

have to go with a uh a realtor I can recommend one for you

uh and they sh they immediately shrugs I don't want to deal with a realtor and I'm like great I still make it appraised

and go great I'll follow up with you we'll go from there I was like but my number is this amount it was way under

what they were looking for right and I'm like hey this is the reason why this is what I think I can sell it for after

it's fixed up because of the interest rates being conservative and I gotta account for these big ticket

items that we just don't know about I I know they need to be replaced you know

well you know look I used to be a realtor yeah so I

can say this most Realtors are yahoos yeah

yeah I used to be one you know that's a there's some weird people the real on

the real as realtors in the real estate you know it's just because it's such a bit you know it's it's

it's so unprofessional in the in the sense that it's so easy to get into like anybody could do it yep and you take a

quick test and boom you're there and if you're a realtor out there and we're sorry yeah

that being said the the beauty of it from from my perspective too is in that

my business is the same a lot of guys that are commercial loan brokers they're yahoos too yeah okay you can't trust

them as far as you can throw them yep okay but but the the positive of that is

if you're good and you're a person of Integrity it's so easy to stand out yes

right because people been lied to so often

that when when someone does it and they're like oh my God this guy actually

gave me some advice that's to my benefit and not his holy Mo

I can't believe what I'm hearing is this right because it just you know what I'm saying the vast majority are so terrible

it's easy to to Excel and a good realtor like my my commercial realtor's worth

his weight in gold man and you know the guy just he makes us money and and you

know I wouldn't you know he he would have to go to heaven for me to switch to another

commercial realtor you know I'm not doing it you know because the good ones

that you trust and you know that are good they're just hard to find so when you find them

you know and I and I'm a guy that's real high on Integrity yeah you know

yeah you know yeah yeah Michael said he's a

broker and he hates many Realtors and uh Andre

says I'm a new I'm new to the uh that that has bothered me uh not enough

Education and Training before you can call yourself a realtor my lack of experience and knowledge has cost my

client 4K it bothers me and if it bothers you that's a good thing I'm

gonna say it uh if it does bother you it's a good thing so feel better man yeah and study

and this is him saying this again that is one reason he's going through so much

private education first hey 100 agree with you but also

don't just keep educating yourself take some action okay because this is what I

do is I've learned everything from one deal after the next and I try to create a team around me so that they pick up

the lack of Education well you gotta have a good Mentor

right that's true I I had a tremendous Mentor when I got in the commercial loan business

a guy out of Atlanta that you know first first thing he told me was Malcolm you got to have your fee

agreement tight because if you're doing a you know 10 million dollar deal you're

making a hundred grand yeah people will steal from you they'll let you do the deal they'll take

the 10 million and not pay you if you don't have that right yep you can't trust anything trust me verify right and

you know and I had a rock solid real estate attorney you know that wrote a top-notch you know

agreement I have a NDA at and a non-disclosure

agreement that I work with because people are sharing with me you know very sensitive information

right and I use instead of using my NDA to benefit me

I use my NDA to protect my clients got it right because my NDA says it's it's

bilateral right it goes both ways so anything that the client shares with me

whether it's a realtor a seller any of the financials you know all

that information is confidential yeah right so it's against my own agreement for you to come to me with a deal Randy

that you can't finance and me turn around and flip it to another investor you can do it yep right

that never happens of course never right right

you know ethically it should never happen right right but it kept us all

the time so yeah so I have it in writing yes so I also want to bring up this

thing about Mentor mentorship not everything on mentorship you need to pay

for or do anything now it's great that you can okay but

I never quote unquote had a full-time Mentor my mentor was the people around

me that I surround myself with and how I do that is the first person I jv'd with

first person Todd Chun great wholesaler great guy right okay he went through me

through the whole process if I ever had any questions I call them up and he he'd

answer them for me like he'd take that time out because then I did another deal with him I did another deal with him I

ended up doing another deal with them you know and so on and so forth to me that's the best mentorship because

now guess what I'm bringing him I'm adding value to him by bringing him deals and JB with him

and he's adding value to me because by giving me the knowledge and I'm making him still making money

you know so keep in mind that mentorship does not always have to be paid for it

also does not always have to be one person

I have a mentor in the commercial investment business yep

and I have a mentor uh in the commercial lending business now him and I don't talk as much anymore

because I needed more advice 16 years ago exactly what I do now but

and it is some you know there's some things that I choose to do that he disagrees with yeah right

because of uh you know uh you know I I

give away value that he's like he he would kill me for he's like dude you

need to correct for everything you know and but anyway uh but it's a

relationship so him I can call him up anytime and we can talk about anything

and him and I bonded over our mutual Faith yeah right and he has a ton of

mentees all over the country that he works with but he said to me this guy this is probably like 10 years ago he's

like the thing I love about you Malcolm is I no matter what we talk about whether it's it's business or family or

personal whatever he's like you don't cuss so and it irritates the hell I mean when

other guys talk and that might be a little thing yeah right but this is like a multi-million

dollar guy and he hates that crap yep right so

you know it just that little thing and then him and I can we you know I can

talk scripture with them you know I'm a deacon at my church and him and I can talk to scripture for like 25 minutes

and go deep and I'm right with him he loves that stuff yeah you know the flip

side of that is when I'm working on a deal if I've ever had challenges or something I can talk to him he'll give

me more time yeah find out where that relationship

works and what commonalities do you have and then you know you bond with people because the business is about

relationships to me yeah the better your team is the better your connections are the more successful you can be and I've

built a great relationship with quite a few people in this business you know I've worked with with dingra

Dean grosski I I've worked with I've had

him on this channel by the way a few times I I've worked with Phil Blake uh he's

he's coming there I've done some uh you know impromptu videos with him like he

like his level of philosophy and like he he's an engineer guy and he is

he has a wholesale business he does fix and flips buy and holds everything and he's automated a lot of this stuff

and that's where I'm trying to get to I'm trying to get my level up there but you know so like I'm on my way to get

out to him but I still look at Todd Sean as well and so I don't limit myself to

just one person as a mentor right but at the same time at the same time they all

have something in common and what do they all have in common one they've done deals and they've done

deals ethically right okay I don't want to work with

somebody who I know is

going behind somebody's back or you know like they'll be the first person to say

I can go to them with Audi a contract being locked up and I don't have to worry about a thing right

I had a guy that we were doing an FHA loan on and I say FHA this FHA does

multi-family okay yeah okay I didn't know that yes there's a there's a

221d program and a 223f program through through HUD and FHA more than five units

yeah but but typically they're bigger deals they're like 2 million or more and

it's like the best it's actually how can I almost say the best it is the the best cash flow Loan

program out there because they'll do a 35-year amortization

non-recourse meaning no personal guarantees or that stuff yep the the

interest rate is through the floor I mean it's it's it's No One finances

lower with a lower interest rate than than FHA or Hut you know so I mean

they're going to be a you take whatever the best rate you think you can find and they're going to beat That by a full

point I mean it's not even close you know the negative of FHA is that uh they

take a long time to close okay okay but they'll do high LTV okay

and on the dscr they'll do like 1.15 okay you know so they'll do like a

skinny uh a skinny deal they'll do market rate you know low income housing

senior housing you know so it doesn't have to be you know again it's it's HUD FHA yeah but it could be Luxury

Apartments okay doesn't have to be like affordable you know strictly

but anyway this guy was I was working on this deal this is God this is

probably no more than two years uh maybe yeah maybe like two years into the business maybe three years into the

business and I got it and I was working with the

FHA map lender they can accelerate the process I won't get into the details of that but

the long story short the guy went around me and

I introduced it by Linda's name was John right and

I said who John was at the time John's not long retired but he you know did an internet search or

whatever found him directly called them and said hey I want to do this deal

and you know and uh John's like okay well we were just on the phone with Malcolm like two days ago you know why

aren't you talking about oh no I want to do this deal with you you know blah blah maybe we'll have to use Malcolm you know

blah blah blah and some loan programs the the broker is not an actual expense

to the borrower okay okay where you're paying the broker directly like you do on residential

there's some loan programs in commercial where the lender is compensating the

broker out of their pocket got it okay they're

not they're not ramping up their fee if they don't have a broker to make more money

you know flat out but if the broker is involved it's coming out of their cut they're not actually increasing the fees

to the borrower and so example with SBA or FHA those fees are set

yep so if I'm doing an FHA deal it's coming out the lender's pocket because

FHA does not allow you to throw fees on top of their very restrictive fee

schedule yep okay so this guy caught the the John end up calling me the next day

and he was like remember that guy we had a conference call with a couple days Derek so on and so on I'm like yeah he's

like yeah that guy called me directly tried to cut you out the deal and

I'm done so if you talk to that guy tell him never to call me lose my number

hmm and I was like Wow and and John's point was

if he would work with so little Integrity because I

explained him the deal I explained him the program and set him up with somebody that would do the deal

and then he would still come out and try to cut me out John's like I can't trust the operating

statement I can't trust the financial statements Yep this person his personal financial statement he's going to submit

because the guy has no integrity and this whole business is built on trust yes 100 so yeah I can't you know I can't

trust that guy and and to that you know to John it also looks bad on

you because you brought in that guy you know on unfortunately well yeah but

he probably understood he probably understood because we you know we all need guys in this business yeah who are

like it's all about the money yep okay yeah

this is business this is business ready I'm screwing you over man it's nothing personal it's just business okay

you know and like you mentioned Tai Chun great guy yes right great guy

I can work with great people yep love working with great people because you

know the you know the the real secret to building long-term

uh profitable relationships is you make sure everybody you do business with

makes money when I put my Investment Group together

right that I work with on my deals I called a select group of people and I

said hey guys we're going to do this putting this fun together we're going to do this we're having a meeting on Tuesday

and I was meeting at the church fact right and we're gonna do this meeting

Tuesday night and a couple of my guys like I don't care dude just tell me when wait a minute I tell you what we're

doing yet it don't matter [Laughter]

I'll show up just tell me time and place right and if if you Endeavor to make

sure everybody makes a minimum what you promised or more Yep like well

wait a minute I thought I was getting this and you actually threw a little bit extra in there okay great this is actually better than what I expected and

if every time you do business with people they make money they will never hesitate to join you in your endeavors

or recommend someone else yes join you and that's where building the

relationships come in handy because say I'm a wholesaler and I'm making my

buyers money by giving them properties that are are good margins things like that well guess what when I want to do

my own my first Fix and Flip guess where I'm going to come to to try to get some

connections to see if I can get some cheaper prices hey where did you buy this where do you get this can you hook

me up with your wholesaling uh connection for materials you know

whatever sometimes those people won't be the cheapest people right right yeah I

mean there's this you know but they'll get them done on time uh Zig Ziglar once said good things are seldom cheap and

cheap things are seldom good yep right and it's so true you know people you

can't have quality speed and cheap

yep right you can have two of the three but now I was just thinking about that

saying but I couldn't figure out exactly how it worked but I you literally it

could be cheap and fast right but it's not gonna be good right right and if it's good and fast

it's not going to be cheap right so it's like you know it's so you

got to pick your pick your poison if you would and if you got good people they may not be like you know like my real

estate attorney that I use there's no by no means the cheapest guy in town you know but he's the best guy I know

and I've known him like 30 years you know almost you know like 27 right yep

you know there's no one else I would use for that I don't think about what he charges me I know he's going to do what

I need him to do his advice is going to be top-notch oh by the way I I'm taking that clip that you just said

we're making a YouTube short out of it all right my VA Josie if you're

listening that what he said about the the three things make it make a short

out of that right there that that's gonna get hits right there I'm gonna tell you right now so because it's the

truth it's the truth you cannot I mean you can there's three things you

can only have two of them that's it you cannot have all three it's Gary this

this is just not going to happen and it applies to everything yeah right it

applies to everything right it's like what's your priority

you know what I'm saying are you going to give up speed yeah because you want it cheap and good

it certainly ain't gonna be fast right we'll get to it when we get to it

so I'm so we're coming up to the wrapping up here and I'm very glad that

I got you come on here I really appreciate it now how can people get a

hold of you contact you if they want to do a loan with you they want to just pick your brain about uh maybe they have

a deal that they want you to either fund or want you to underwrite to help them out whatever the case may be

how can people get a hold of you well our 800 number is

800-598-5530 I'm extension one uh my local number uh directed Michigan

is 248-579-8175 extension one both numbers

it goes directly to me okay you can find us on the web at Castle commercial capital

dot com we have a mobile lending app for your

phone okay so with our mobile lending app you can pre-qualify a deal

but in the purchase price the budget the expenses what the noi is and they'll let

you know if the deal qualifies for financing and what's the maximum loan amount so rather have the chase down

the loan officer to figure out you got a viable deal or not you can do it right on your phone and when we do we have 10

loan qualifiers on our app okay so whether it's long-term commercial

Bridge multi-family Bridge single family long you know single family long term

Single family you know Fix and Flip you know uh SBA

you know all that kind of stuff uh uh we do and when you go on the Google Play

store or the Apple App Store just put in Castle commercial capital

now we have those links in the description by the way okay and so if

you had a pedal yes so your YouTube channel we have all those links in the

description check out his YouTube channel happy to you know have it I happy to

have you here on mine so by all the links in the description even for the app for the

Google Play Store and for the Apple Store the links in the description I think

the app would be awesome to have so check it out you know if you're trying especially

if you're trying to underwrite a deal so right yep right right right and it's not

and you know I mean obviously the WHERE app works is you know we're qualifying our programs but in every

calculator we're actually qualifying it against anywhere from three to five loan

programs okay awesome so when you run a deal through our app and it says not

qualifies it's probably not going to qualify with anybody okay you know what I mean yep so you

know whoever your favorite lender is you know you can even use our app to qualify the deal and then take it to them

you know and not know you're not wasting your time you know

right so I really appreciate it

and I'm trying to see who wrote this but they said thank you for tonight it was great conversation uh Andre Andre

wrote this thank you I really appreciate that and so with that uh Malcolm I'll

bring you down just stay in stay in the background for a moment I will talk after all right but I really appreciate

it thank you thank you Malcolm thank you everybody who who's listening who's out

there if you please subscribe to the channel uh you know hit like helps the YouTube

algorithm uh check us out on YouTube if you're watching from the Facebook group

it's uh at Randy Stedwell on YouTube please check us out subscribe uh and go

from there now if you are not getting my emails about these please let me know uh

leave a comment comment with your email I'll add you to my email list I'm trying to send these out as much as possible

and kind of go from there thank you everyone for listening uh we're gonna next week you know what I'm gonna try to

bring on Terry Penny next week I'm going to talk with her see if her schedule not next week but the week after we're doing

every other week all right so I thank you everyone I appreciate that

appreciate saying good show uh have a great day and let's all do deals

together.

Real Estate Talk w/ Randy Stedwell Episode #8 | Malcolm Turner Founder of Castle Commercial Capital →

REAL ESTATE TALK W/ Randy Stedwell

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