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If more people understood how money actually works their entire perspective on wealth would change.
Capital is available to almost anyone who can identify an asset worth more than its purchase price. Whether measured by replacement cost or lifetime cash flow. Most people are trapped by the belief that you must first have X (money) before you can buy Y (asset).
That couldn't be further from the truth.
The wealthy don't use their own money to buy assets. They find valuable assets and structure the capital (debt + equity which doesn't have to be their own) to acquire them.
The real skill isn't accumulating money. That's both slow and tax inefficienct. It's recognizing value and knowing how to finance it.
That's the entire game.
“The people that don’t use ai in their business asap are gonna get left behind!!”
Yeah we get it bro, you’re the 814th person that’s said it so far today
What’s yalls favorite books on real estate and/or business? Development stuff like think and grow rich is cool too. Thanks!
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In depth lesson on note (mortgage) investing:
What is is, why I do it, how you are protected, etc
Yesterday was a rough overview, this sucker is gonna be in depth. Turn your TV off, tell your fat wife to leave you alone for 5 min cause school is in session...
First things first, what is a 'note'? It's a loan (in our case, on real estate)
It has two pieces:
1) Promissory note, this outlines the terms (amount, rate, repayment, balloon, etc)
2) Mortgage or Deed of Trust. Depends on state, look up 'Is [insert state] a mortgage or deed of trust state'. Some are both. Anyways, these instruments secure the promissory note. It says if Jim doesn't pay me back according to promissory note I get to foreclose on the property
Now that we know the legal bullshit, we need to know the two types:
Interest only & amortized
Interest only, well, you only get paid interest and the principle is returned at the end of the loan in the form of a balloon
Amortized (your traditional 15/30yr bank notes) is where the balance gets paid down with every payment
Now that you know the technical definitions, we should go into the math, and figure out how these can make us $$$
amortized loans get safer over time, the LTV decreases which in turn, increases your cushion...while interest only keep the same balance throughout the life of the loan
Why do people (including me) buy these?
- We get one of two things, consistent cashflow or the property
- If you buy correctly, they are pretty passive. You can hire a servicer to deal with all the bullshit
(As a general rule of thumb, if you wouldn't be okay owning the property for the amount you lent on it, don't lend on it)
What kind of returns can they offer?
it depends...you can get anywhere from 0% to 40%+ in some situations. though typically i'm seeing ~8, 9, 10% being pretty common for a performing handsoff note
the one below is a 15.78% return (from my quick math...could be off)
SO HOW DO WE CONTROL OUR RISK?????
1) COLLATERAL
This is VERY important. It is what the loan is secured by...
let's go through two situations:
1A) you lend $500,000 on a $500,000 house
2A) you lend $500,000 on a million dollar house
which one would you rather do? probably no. 2. Nothing changed except the collateral. this is the biggest lever in making sure our capital is protected
2) Let's talk about our next variable, LTV (aka loan to value)
How much did we lend / property value
$50,000 loan on a $100,000 property = 50% LTV
$30,000 loan on a $100,000 property = 30% LTV
$70,000 loan on a $100,000 property = 70% LTV
*typically* the lower the LTV, the lower the risk.
as an example, i just bought a note that pays 10% IO on a $135,000 property. it has a balance of $62,500. 46% LTV. So im protected, while getting a bangin' return
3) BORROWER
The person/entity borrowing the money matters (a little, i guess). I personally don't give a shit. If the LTV is good (and true) and the terms look good, i don't care about the borrower...but i guess you can
Now look, the borrower still matters. A borrower with stable income and a history of making payments is obviously preferable.
Personally, I care a hell of a lot more about the collateral and the LTV than I do the borrower's credit score. If I have a low LTV on a solid property, I know I have multiple ways to get my money back if things go sideways.
now we can get into some more 'advanced stuff'?
lien position...what in the fuck is that???
its the order in which (if something goes wrong) that creditors get paid
so if you are in 1st lien position, you get paid first from the sale proceeds
let's give an example:
$250,000 1st position
$100,000 2nd position
$50,000 3rd position
house sells at auction for $360,000
1st and 2nd position get all of their $$$ back ($350,000) while 3rd position only gets back 20% of their original investment. I personally only buy firsts unless the second is REALLY (and I mean REALLY) appealing.
So, as an exercise, let's evaluate the note below (happy to look at anything you guys need help w too, fyi)
We have a $32,000 balance at 12% on a 6yr amortization schedule. We get a monthly payment of $625.61/mo for the next 72 months. We can buy this note for $29,000.
So we discount it:
At $32k it provides a 12% yield
At $29k it provides a 15.78% yield...wow
yield is good, now what about the rest of it??
we have to protect our money, let's make sure that's done....it's secured by a house renting for $875, though we don't know the value i'd assume it's atleast $50,000. That puts our LTV at 58%. That's safe enough for me. Usually anything under 70% i'm happy with
lien position: 1st, so we are 1st in line to get paid in event of default
borrower? we don't really know but probably fine...they will pay the $625 cause they don't want to lose the house paying $875
another bonus, it's amortized so the balance gets reduced every month, this does two things:
1) returns capital every month
2) decreases loan balance every month (which reduces risk)
so you get one of two things:
1) $625.61/mo for 72 months
2) the property (worth $50,000+)
overall, not to shabby
i hope ya learned something. for most people, notes are a GREAT idea (atleast if you hate the sound of sourcing, fixing, managing and financing deals)
This hits. Most ppl are just too tired to do anything meaningful for themselves. My biggest fear is wasting this life
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I operate from ambition, relentlessness, abundance and desire to be great. I don’t operate in fear or negativity. I’ve already been broke, already been depressed, already been alone. Choose to win, choose to let nothing scare or stop you.
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Here’s the harsh truth that’ll sting a little (because it’s 100% true):
Most people spend way more time “getting ready” to do the thing than actually doing the damn thing.
-They research it to death.
-They watch 47 reels about it.
-They make arbitrary rules or prerequisites for doing it.
-They fear a bad outcome (when any outcome is better than no outcomes)
-They wait for the “perfect” moment.
Zero progress. Just spinning wheels.
I split every single second of my life into two buckets only:
Bucket 1: Time in between — the prep, the hesitation, the scrolling, the “research” that doesn’t move the needle at all.
Bucket 2: Time actually doing shit that creates results and makes real things happen. (Bad or good)
Your life would level up overnight and you’d get real feedback, real skills, real wins way faster, if you just stopped living in Bucket 1 and started stacking Bucket 2.
Do yourself a favor right now:
Track every minute today that’s pure “in between” bullshit. Be brutally honest with yourself.
Then get ruthless about deleting it.
Stop preparing to live.
Start fucking living.
How much of your day right now is straight-up “in between” time?
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Lots of peoples goals are to small. You can do CRAZY shit in a year.
Quit trying to get your first deal, go make $10M
You have to work anyways, might as well go big and get rich
Highly recommend commenting a lot on posts you like from people you like. I’ve made a lot of solid connections with awesome people on this app just from not being a spectator all the time
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A man can lie to everyone except himself.
Video games are a waste of time.
Bitcoin won’t make you rich.
Gambling is a loser’s game.
You don’t work as hard as you think.
If that offended you, it’s because it’s about you.
Most men aren’t losing from lack of potential.
They’re losing because they can’t handle the truth.
You scroll too much.
You procrastinate.
You avoid discomfort.
You choose pleasure over progress.
Then you wonder why you’re stuck.
This isn’t about money.
This is about being a man.
You’re living like a loser, that’s why you haven’t been winning the way you want.
It’s pretty simple.
“There are no good girls out there anymore.” There are.
They just don’t want a guy who games all night, chases parlays, waits for Bitcoin, regurgitates the same talking points as the guy before, and has no stories or ambition.
Forget the women.
Do it for you. Build yourself into someone you respect.
You want better?
Be better.
Leave the house.
Touch grass.
Lift weights.
Talk to people.
See the world.
Create stories.
Build yourself.
Your youth is not for comfort.
It’s for becoming someone your future family can rely on.
Deep down, you know exactly what you need to do.
We all do.
It’s just hard.
It’s uncomfortable.
It takes discipline.
That’s why most men never do it.
Truth isn’t your enemy.
Your comfort is.
Your excuses are.
Your habits are.
Your softness is.
If you want a different life, become a different man.
Today is the day. Finally moving and feeling GOOD. Will talk more in depth later, mostly using this post as a bookmark for the future. LFG
Some alpha that’s rarely talked about on this app, great follow
🚨Tired of fighting for deals? Want to learn how to make insane returns in real estate with no management, tenants or repairs?🚨
Me too...oh wait, you can. (And I do)
'This sounds to good to be true'
It is, if this were the stock market. The difference between real estate and the stock market? We know where one is going. (Hint: real estate consistently goes up)
So, how does this work?
We give property owners cash now for the right to buy their property in the future. These are called options.
People use options ALL the time, whether it be in the stock market or real estate.
Developers love them, and so should you. Before I get you excited about 'the next best thing' I should probably do a deep dive, let's go:
An option gives you the right to buy (but not the obligation) a specific asset at a specific price on (or between) a specific date.
An example of this would be: John gives me an option to buy his home between 10/14/2032-10/14/2033 at $250,000.
What does John get in exchange for this? Option Consideration: this can be in the form of cash, other real estate, boat, car, anything you guys agree on.
Another definition you'll need to understand is 'exercise'. All it means is to 'use' the option.
Typically on a deal like this (7yr till exercise on a $250,000 asset) I can give John $9,000 and still DOUBLE OR TRIPLE my money, fast.
Let's break it down.
We price options using a formula called 'Black Scholes'. This uses a culmination of the current risk free interest rate, annual asset volatility, asset price, and duration...all of which we have.
At 100% of FV (using Black Scholes) this option is worth $60,360. We gave John $9,xxx.
Now, we have THREE choices here
1) We can flip this option to another investor
2) We can hold it until exercise and end up owning the property
3) We can offer a buy-back clause and allow the homeowner to buy it back (and make 15%+ on our cash with no management)
Let's assume we wanted to flip this to another investor...what can we expect.
If you are just getting into this you would most likely sell this to a retail investor, they might give you 40-50% of FV. That's still $24,000-$30,000. Your basis is $9,000. That's a profit of $15,000+. Not in years, not in months, but in WEEKS.
Okay, that's a good return but what does the time commitment look like? SMALL.
It's an easier process than buying houses. You don't have to deal with sellers moving their stuff, making life changes, or getting emotional. To them, it's just free money. An average deal like this can be done in less than 10 hours.
So, when can we implement this strategy? Anytime you think you have a deal. Whether it be a mobile home, single family residence, land, etc.
How long until I can exercise my options? Depends on what you and the seller agree too.
You might be asking why people do this. The answer is simple. Humans like stuff NOW. Whether it be a vacation, new car, roof, HVAC, etc. They want it now...and you can give it to them.
Want to learn more about this strategy? I have 5 seats to something I usually don't even promote.
If you are serious and want to learn more, here's what I'll give you:
1) The marketing materials I use to find these opportunities like clockwork.
2) The contract I use (not legal advice)
3) The EXACT workflow I use to make offers (so you don't have to understand any complicated math jargon)
4) Playbook on how to make an extra $2,500+ per deal with ONE SENTENCE.
5) Implementation video
6) Access to my exact pricing calculator so you can make offers with confidence
7) Ongoing support and updates with every change I make
8) Lead generation strategies that you can set up once and get you PAID forever
9) How we find buyers like clockwork
This is the exact formula I've used to generate multiple six figures over the last year with less than 5 hours a week.
I'm so confident in this system, that if you don't do a deal in the next 6 months, I'll give your money back AND work with you 1o1 until you close a deal.
If you're interested, sign up here: whop.com/thmoneycircle/optio…
P.s. I really only have 5 spots, then it's probably closed...forever. See you inside.
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before we give military aid to a country we should make their leaders wear a cowboy hat and touch the wall of a bass pro shops
Marco Rubio and Mike Huckabee prayed at the Wailing Wall in Jerusalem alongside Prime Minister Netanyahu.
Follow: @AFpost
Rest in peace Charlie Kirk. No one deserves to be killed for having respectable conversations with people you disagree with. NO ONE.
I thought I was already radicalized enough, guess I was wrong. These people responsible need to fucking PAY
Who owns the media? Who are the people pushing all these insane narratives?? Those are the people that need to be held accountable
