Latest / Motion and Success / How To Buy $1 Houses From The Government ft. Jordan Ferrarini | Affordable Housing Investing

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How To Buy $1 Houses From The Government ft. Jordan Ferrarini | Affordable Housing Investing · Motion and Success

0:00
[SPEAKER_02]: We got an initiative where we're building 90 total homes from the ground up in the West Philadelphia section of the city and you know, we purchased those pieces of land for $1,000 a piece.
0:09
[SPEAKER_02]: It worth about $60,000 a piece, so we're on $700,000 for land for $10,000.
0:14
[SPEAKER_02]: You buy to spend $10,000 on 50 units.
0:17
[SPEAKER_02]: How much you put into the deal yourself?
0:19
[SPEAKER_02]: Zero the U.S. residential real estate market is a 43 trillion dollar market with a T 75% of people can't afford to purchase a home you know 50% of people can't afford to pay rent I buy a property for a dollar or I buy you for a hundred thousand dollars I'm a go to a government program or a bank that does affordable housing loans and I'm not going to bring any money to the table
0:41
[SPEAKER_02]: How is the affordable housing market like is it recession proof and affordable housing You only put not 1% 2% 3% 0% so you ever turn on investment is infinite if you Had an investment strategy where you can make 10 times your money whether it's real estate Or whether it's selling t-shirts a lot of developers began rob like I don't know if it's on the back And like the numbers affordable housing one of the most recession proof segments of the real estate industry period all these things
1:11
[SPEAKER_02]: We just didn't know anything about it.
1:13
[SPEAKER_02]: A lot of times, you'll see black developers, brown developers, community developers get the bad deals or the affordable housing space.
1:20
[SPEAKER_02]: They get approached and pushed to who these deals that the numbers are and are really tight and you're really going to need God, tend to be directly involved and if they get it across the finish line, like I said, that jokingly, but like,
1:32
[SPEAKER_00]: Before we jump into this episode, if you are a coach, consultant, service provider and you're relying on referrals, running as that's causing you way too much money and that aren't working, you need to hear this.
1:45
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1:49
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1:52
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2:00
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2:03
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2:11
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2:12
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2:24
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2:32
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2:35
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2:43
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2:46
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2:48
[SPEAKER_01]: Now let's get back to the episode because this one is going to be a banger.
2:51
[SPEAKER_01]: Alright y'all, so welcome back to another episode of Motion in Success.
2:54
[SPEAKER_01]: Listen, guys, my name is Cody Brown and I got my coals for me today.
2:57
[SPEAKER_00]: It's Io and yo bro, we back with another amazing episode.
3:01
[SPEAKER_00]: Yo, we got a return guest bro.
3:03
[SPEAKER_01]: We got a returning guest, and this is, but this is back by...
3:06
[SPEAKER_01]: popular demand.
3:07
[SPEAKER_01]: The people who's been asking, the people who's been checking them out, the people who's been winning, the people who's been running and starting to get more properties and closing more deals.
3:15
[SPEAKER_01]: So I'm like, you know what, it only makes sense to bring back the guests that's teaching you guys how to go out there and buy your properties and start investing into affordable housing.
3:26
[SPEAKER_01]: So if you guys are looking to learn how to start investing into affordable housing
3:33
[SPEAKER_01]: finding the funds and the grant money to go out there and start doing these things.
3:37
[SPEAKER_01]: This is the podcast episode that you have to tune into from the start all the way from the end because I'm telling you the last podcast we did was a master class.
3:47
[SPEAKER_01]: So this is master class 2.0 where we get the chance to interview once again, Jordan Ferini, Jordan go ahead and introduce yourself.
3:57
[SPEAKER_01]: Tell the people what's going on and we can get started from there bro.
3:59
[SPEAKER_02]: Yes, sir, yes, sir.
4:00
[SPEAKER_02]: So first and foremost, I'm glad to be back y'all.
4:03
[SPEAKER_02]: You know, the last session we did was amazing.
4:06
[SPEAKER_02]: It got out to the people, right?
4:07
[SPEAKER_02]: Because what we're trying to do here is get this messaging and understanding of how we're rebuilding our communities, providing affordable housing, working with the government, sourcing properties for a dollar, getting special loans, getting to the table with zero dollars down, getting cheap interest rates, getting grants, getting all this money that we don't have to pay back to build quality homes in our community.
4:29
[SPEAKER_02]: That mission is so important.
4:31
[SPEAKER_02]: And last time when we did this, I seen the reach, I saw the impact.
4:36
[SPEAKER_02]: And I seen the people come in, get educated, get tooled up, get resource.
4:40
[SPEAKER_02]: And we still got more work to do, y'all.
4:42
[SPEAKER_02]: So I'm super happy to be back, y'all.
4:44
[SPEAKER_02]: If you didn't catch the last podcast that we did,
4:47
[SPEAKER_02]: Real quick, just reintroduction.
4:49
[SPEAKER_02]: My name is Jordan P. Farini.
4:51
[SPEAKER_02]: I'm born and raised in the city of Philadelphia.
4:54
[SPEAKER_02]: You know, my mother raised me uptown.
4:56
[SPEAKER_02]: I came up in the situation to where we had to figure out some solutions and figure out some ways out.
5:03
[SPEAKER_02]: And construction was a pathway for my family to be able to create some prosperity.
5:08
[SPEAKER_02]: We started out at the trunk of a car with a bucket full of tools from the poncho.
5:12
[SPEAKER_02]: And we was able to overcome a lot of challenges and hurdles and grow into multiple businesses when the national awards getting into magazines, having TV shows, I had a bunch of other successful businesses in the construction space, an electrical contracting firm.
5:27
[SPEAKER_02]: I've been doing a real estate development for over 15 years, a whole bunch of awards.
5:32
[SPEAKER_02]: I hope a bunch of accolades, 30 under 30.
5:35
[SPEAKER_02]: 40 on the 40 person out of year from the National Association of Home Builders took them out.
5:40
[SPEAKER_02]: These these officials, the National Kitchen and Bath Association, some of the biggest associations in the country.
5:46
[SPEAKER_02]: I've been blessed to get high levels of ranking, high levels of recognition and I sent on some of the biggest boards with some of the biggest players in the country.
5:56
[SPEAKER_02]: And you know, that leaves me no back here to what we hear to do today because in the mission of all
6:04
[SPEAKER_02]: There's a responsibility on all of us to take our success, take our blessings and turn around and share them with other individuals and spread the prosperity so that it can grow.
6:14
[SPEAKER_02]: We got saying we say, you keep the blessing by sharing the blessing, and I firmly believe that God continues to have my cup overflow because I'm a good story of my blessings and of my resources and of my knowledge.
6:26
[SPEAKER_02]: So we back here today.
6:28
[SPEAKER_02]: to share this share this knowledge share this recent these resources.
6:32
[SPEAKER_02]: We not gatekeeping any of it.
6:33
[SPEAKER_02]: I'll give you awesome information last time.
6:36
[SPEAKER_02]: I hope I'm method.
6:37
[SPEAKER_02]: I know some of y'all took it and expanded upon.
6:40
[SPEAKER_02]: I had a brother hit me up in Milwaukee and said, yo, I watched the podcast.
6:44
[SPEAKER_02]: I got a property for a dollar just from watching the podcast.
6:47
[SPEAKER_02]: It's good.
6:48
[SPEAKER_02]: Like we hear the
6:52
[SPEAKER_02]: Double down on that double spread and spread the word and make sure that people love in the position the build-off communities and tap into this opportunity too.
7:00
[SPEAKER_02]: Let's get it.
7:01
[SPEAKER_01]: I love it.
7:01
[SPEAKER_01]: He's throwing it off on a great note.
7:03
[SPEAKER_00]: Yeah.
7:03
[SPEAKER_00]: Once again.
7:05
[SPEAKER_00]: Once again.
7:05
[SPEAKER_01]: Well, I let you kick it off, bro.
7:07
[SPEAKER_00]: Nah, Jordan, definitely appreciate you for coming by again, man, like I was telling Cody after the last episode before he even posted any clips before he even went on an and I was like, yo, that episode is kind of crazy, like.
7:18
[SPEAKER_00]: He says something that I've never heard of before, bro.
7:21
[SPEAKER_00]: Like, we never heard somebody break down, get it into affordable housing, the need.
7:27
[SPEAKER_00]: Like, music kind of things, we see the buildings, but nobody really cared to ever think about like, yo, how's this done?
7:33
[SPEAKER_00]: Like, what's the process?
7:35
[SPEAKER_00]: Can I even possibly get into it?
7:37
[SPEAKER_00]: We kind of think it's only for like other people.
7:39
[SPEAKER_00]: So the way you broke it down and really gave the game,
7:42
[SPEAKER_00]: I definitely know it impacted lives, but you know now we might have a new set of viewers, people might come stop by again and watch this episode again.
7:51
[SPEAKER_00]: So just tell us a little bit about affordable housing, what got you into that side in real estate.
7:59
[SPEAKER_02]: Yeah, so it started off with
8:01
[SPEAKER_02]: service right and it started off with trying to make ends meet so I was doing construction and doing contracts and doing electrical contracting and commercial contracting and I was making money doing good when it all these awards you know doing these multimillion dollar projects and I was having my successes.
8:19
[SPEAKER_02]: But the service piece came into play because the more successful I became, the bigger the rooms I got into, the more I realized that none of us was there.
8:27
[SPEAKER_02]: None of us were in these rooms.
8:29
[SPEAKER_02]: He's black Thai, gala's, he's fancy, fun raises, and I'm looking for us and we're not there.
8:34
[SPEAKER_02]: And so I said to myself, like, I don't want to be here by myself.
8:37
[SPEAKER_02]: You trying to be in these rooms, being these great opportunities, having fun with your people.
8:43
[SPEAKER_02]: The service piece came into play from the successes.
8:46
[SPEAKER_02]: And I said, I got to share this.
8:48
[SPEAKER_02]: So I went back to Philly in 2015.
8:51
[SPEAKER_02]: I started a free training program called Trades for a difference.
8:54
[SPEAKER_02]: We started training local community members.
8:57
[SPEAKER_02]: Young people coming out of foster care, brothers coming home from prison.
9:00
[SPEAKER_02]: We started doing free repairs for seniors, single mothers, and helping people learn construction, get jobs, grow businesses.
9:07
[SPEAKER_02]: And in the process of providing that service,
9:11
[SPEAKER_02]: I was doing real estate too.
9:12
[SPEAKER_02]: I was being successful with my construction businesses.
9:15
[SPEAKER_02]: But I seen like we could help people and mix the services with the real estate and that's when affordable housing came into play.
9:23
[SPEAKER_02]: So like, I was literally approached just and sharing my blessings to state rep came to me.
9:28
[SPEAKER_02]: The housing authority came to me and was like, what if we worked with you to build affordable housing while training young people in the neighborhood?
9:36
[SPEAKER_02]: And I was like, let's do it.
9:38
[SPEAKER_02]: And there was okay, cool, we wanna sell you.
9:40
[SPEAKER_02]: These houses for $2.
9:42
[SPEAKER_02]: I mean for a dollar and I got two houses in that first round for two dollars, there's I gave it one so you these these two houses I might how much because this is in a neighborhood where it's getting gentrified it's called brewery town it's North Philadelphia you're not from Philly you got somewhere similar you used to be the hood now people getting this place people getting gentrified push down how's it selling for 400 to 600,000
10:06
[SPEAKER_02]: Even a distrust house selling for a hundred k and they came to me and was like we won't sell you these two houses I'm like, yeah, these were for at least two hundred.
10:14
[SPEAKER_02]: There's I gave it some to for a dollar piece.
10:16
[SPEAKER_02]: It's give us two dollars.
10:18
[SPEAKER_02]: I'm like two dollars and that's when I was introduced to the understanding of what a nominal fee is That the government will sell you properties for way less than what they're worth as long as you provide in service And so through the first two projects
10:33
[SPEAKER_02]: we provide the services, we built them, we remodeled them, did beautiful amazing remodels, put $100,000 plus into them, we sold them for $150K a piece, they were worth about 280,000 a piece, but we sold them for $150.
10:49
[SPEAKER_02]: We taught young people construction and trade in a process, I'm talking about framing the buildings from the ground up, all the way from the basement, we even did some underpinnings and foundation work, we educated,
11:00
[SPEAKER_02]: We sold the properties deliver equity, generation of wealth, and just, you know, it had a fun time and in creating impact by doing it.
11:08
[SPEAKER_01]: And that's when I was like, I can help people.
11:13
[SPEAKER_02]: I can do real estate.
11:14
[SPEAKER_02]: I can make money all at the same time.
11:16
[SPEAKER_02]: And that's really when it all kicked off of me.
11:19
[SPEAKER_02]: And I realized that there was these partnership opportunities to partner with the government in like these similar type of ways.
11:25
[SPEAKER_02]: And we just been doing it ever since.
11:26
[SPEAKER_00]: Wow.
11:27
[SPEAKER_00]: It's kind of crazy because, you know, ever since even the episode, now I kind of look around even in New York.
11:33
[SPEAKER_00]: You just look left, right?
11:34
[SPEAKER_00]: You see a new building rising.
11:36
[SPEAKER_00]: What is this building for affordable housing?
11:39
[SPEAKER_00]: And it's like,
11:41
[SPEAKER_00]: at the person who's living in the community, you never really know like the real reason behind people wanting to create more and more affordable housing.
11:49
[SPEAKER_00]: So the way you kind of broke it down is like, it's a real need for it.
11:52
[SPEAKER_02]: The major need, major need.
11:54
[SPEAKER_02]: And just for Claire, because I didn't answer your full question when you, when you, when you, when you retract that, I realized like, when we talk about affordable housing, right?
12:02
[SPEAKER_02]: it's a broad term like everybody like affordable housing nobody knows what it is like what is what it is actually it actually means and what affordable housing is is provide in housing for home ownership or provide in housing for
12:16
[SPEAKER_02]: rental or even providing resources for people.
12:20
[SPEAKER_02]: Support, you know, vouchers, section eight, you know, assistance with your water bill.
12:25
[SPEAKER_02]: All these things are affordable housing related in affordable housing resources and affordable housing programs.
12:31
[SPEAKER_02]: Whether they selling you houses, brand new houses, they're giving you resources to help you fix your house or keep your house.
12:37
[SPEAKER_02]: The big thing though is that these resources for people that what we call cause burden.
12:42
[SPEAKER_02]: People that are struggling, people that are, you know, struggling to be able to make ends meet after all those bills and expenses are paid.
12:49
[SPEAKER_02]: And the way the government qualifies it is anybody that spends more than 30% of their gross income on housing and utility, you cause burden.
12:59
[SPEAKER_02]: So if you make $3,000 a month and you spend more than $1,000 a month on housing and utility,
13:05
[SPEAKER_02]: You're right in your bill, and you tell the bills, you're cause burden.
13:09
[SPEAKER_02]: Makes sense.
13:09
[SPEAKER_02]: And so anybody that falls into those cause burden categories, we're just spending more than 30% at a gross income.
13:17
[SPEAKER_02]: on housing and utility, they're a candidate or somebody that's in need of affordable housing solutions.
13:23
[SPEAKER_02]: And the crazy part though is a lot of people these days men have spent on like majorly severely caused burdening spending 40%, 50%, 60% of their gross income on housing and utility.
13:35
[SPEAKER_02]: So there's a major need in the major problem right now, like in the US today 75% of people can't afford to purchase a home.
13:45
[SPEAKER_02]: 50% of people can't afford to pay rent.
13:48
[SPEAKER_02]: So like it's a huge problem right now.
13:50
[SPEAKER_02]: We got people sleeping in cars, people sleeping on the bridges.
13:53
[SPEAKER_02]: We got entire communities getting displaced.
13:56
[SPEAKER_02]: And so when you talk about affordable housing, it's all those resources for people that's in those type of positions.
14:02
[SPEAKER_00]: Sorry to break this amazing episode.
14:04
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14:06
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14:13
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14:16
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14:21
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14:37
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14:47
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15:07
[SPEAKER_01]: Go ahead and click the link down below, and I'm going to see you guys in that next masterclass.
15:12
[SPEAKER_00]: Yeah, I definitely, especially out here in New York, we see it every day.
15:16
[SPEAKER_00]: Like the rent is just, the numbers just keep going up.
15:19
[SPEAKER_00]: It's not even coming down at all.
15:21
[SPEAKER_00]: So now some people, they force to try to figure out ways to get housing.
15:25
[SPEAKER_00]: They got like a lottery system.
15:27
[SPEAKER_00]: It's that bad.
15:29
[SPEAKER_00]: So for people watching this and they do want to get on the other side, a lot of them is probably like, hi, you know, affordable housing sounds cool.
15:36
[SPEAKER_00]: But how do I get started?
15:38
[SPEAKER_00]: How do I get into the door and get my first product?
15:43
[SPEAKER_02]: 100% so it's so many so many doors that you could go through any affordable housing space, right?
15:49
[SPEAKER_02]: So y'all hear me talk a lot about the dollar houses.
15:52
[SPEAKER_02]: We get them for a dollar.
15:53
[SPEAKER_02]: Really it's a nominal fee.
15:54
[SPEAKER_02]: We purchase them for way less than what they worth.
15:57
[SPEAKER_02]: That's the opportunity to purchase the stress properties for a nominal fees for a dollar, for far less than what they worth.
16:03
[SPEAKER_02]: but there's also other, a whole bunch of other opportunities.
16:06
[SPEAKER_02]: They'll be able to purchase land for way less and what is worth purchase schools and old government buildings and turn them into housing for way less and what they were.
16:15
[SPEAKER_02]: There's all these resources and tools where the government will give you grants.
16:19
[SPEAKER_02]: to use for your down payments to buy buildings or loans that you don't have to pay back or give you loans where you only got put 1% down.
16:27
[SPEAKER_02]: So it's like the so many layers to this and so what we've been trying to do is put people in the know.
16:33
[SPEAKER_02]: So like people hair about the dollar house but it's so much deeper than just purchase and houses for a dollar.
16:39
[SPEAKER_02]: There's so many ways of structure this.
16:41
[SPEAKER_02]: But for somebody who's trying to get in, you know, doing a single family home with duplex,
16:48
[SPEAKER_02]: The first step is really just to understand that you can partner with the government to
16:56
[SPEAKER_02]: build affordable housing and sell it.
16:58
[SPEAKER_02]: Rehab homes that you purchase from them and rent them.
17:02
[SPEAKER_02]: You know, get pieces of land from them and build multifamily apartment buildings.
17:06
[SPEAKER_02]: That's the first thing is what people would understand.
17:08
[SPEAKER_02]: That's a real thing.
17:09
[SPEAKER_02]: We call it public private partnerships.
17:12
[SPEAKER_02]: It's P3s for short.
17:14
[SPEAKER_02]: The public, the government partners up with the private, developer, it'll matter if you were.
17:20
[SPEAKER_02]: Trying to do single-family houses or whether you try and build 50 unit buildings.
17:24
[SPEAKER_02]: They're public government partners up with the private Don't matter if you for profit a non-profit and able collaborate with you to build a affordable housing the first step is knowing that Because so many people are anxious.
17:37
[SPEAKER_02]: Yeah, this ain't going on.
17:38
[SPEAKER_02]: It's not real go on the Google right now and Google public private partnerships for affordable housing watch what pops up
17:48
[SPEAKER_02]: all over your community.
17:49
[SPEAKER_02]: You won't see $100,000 projects all the way up to $500,000 projects where people are partnering up with the government.
17:57
[SPEAKER_02]: The first piece is to understand that.
18:00
[SPEAKER_02]: The second step though is to start understanding like what specific government agencies have the housing, which ones will sell you the housing, which ones will partner with you to be able to provide the housing.
18:12
[SPEAKER_02]: Now it's literally like,
18:14
[SPEAKER_02]: 20 different places to source, but the top ones are going to be land banks.
18:21
[SPEAKER_02]: If you don't have a land bank, it might be called a repository where you live.
18:25
[SPEAKER_02]: It might be called a redevelopment authority where you live.
18:28
[SPEAKER_02]: Like, this is a government agency, or sometimes a partial government agencies, they take all the condemned land, tax on land, city four clothes, land, however the city, or the county came in possession of that land.
18:40
[SPEAKER_02]: These land banks redevelopment authorities, repositories, land trust.
18:44
[SPEAKER_02]: They control it.
18:47
[SPEAKER_02]: Now, once you understand any willing to partner with you, that's step one, step two is who has it?
18:54
[SPEAKER_02]: Step three is learn how to approach them to ask for it.
18:59
[SPEAKER_02]: Right.
18:59
[SPEAKER_02]: Learn how to be able to make that request of where like, hey, will you sell this property to me?
19:04
[SPEAKER_02]: You know, that's that next step.
19:05
[SPEAKER_01]: Right.
19:06
[SPEAKER_01]: And then since we last spoke, I mean, since we had our last podcast, I know you didn't came across like a whole lot of wins.
19:13
[SPEAKER_01]: Since we had, you know, since we lost code up.
19:16
[SPEAKER_02]: I think that got us good.
19:17
[SPEAKER_02]: Yeah.
19:18
[SPEAKER_01]: Tell us about the wins.
19:19
[SPEAKER_01]: Like, I know you went out and bought some property.
19:21
[SPEAKER_01]: I mean, some pieces of land.
19:22
[SPEAKER_01]: Over the past few months like how was that process looking like and oh sure she here wins this well, bro We always work command.
19:28
[SPEAKER_02]: God is good.
19:29
[SPEAKER_02]: We always work and so Since the last time I came we picked up another 12 pieces of Land and the stress houses so we picked up nine pieces of land
19:44
[SPEAKER_02]: three homes that are distressed.
19:46
[SPEAKER_02]: We got them all for nominal fee, $1 per.
19:51
[SPEAKER_02]: Each one was worth roughly $80,000 to $120,000 a piece.
19:56
[SPEAKER_02]: We got roughly $1.2 million worth of parcels in the city of Philadelphia's Brewery Town section.
20:03
[SPEAKER_02]: And we already hit the ground running.
20:05
[SPEAKER_02]: We got it financed.
20:06
[SPEAKER_02]: We get ready to break ground.
20:08
[SPEAKER_02]: We already kicked off three of the re-hats.
20:10
[SPEAKER_02]: So we rolled it on those.
20:14
[SPEAKER_02]: We got another closing coming up on another 10 pieces in West Philadelphia that we're going to be doing the ribbon cut and then the ground breaking on June 28th, the mayor's pulling up, you know, the local state raps and local council people's pulling up.
20:29
[SPEAKER_02]: We got an initiative where we're building 90 total homes from the ground up in the West Philadelphia section of the city.
20:35
[SPEAKER_02]: And, you know, we purchased those pieces of land for $1,000 a piece.
20:39
[SPEAKER_02]: They were for about $60,000 a piece.
20:43
[SPEAKER_02]: So, around $700,000 for land for $10,000, we've been working down over town Miami.
20:50
[SPEAKER_02]: Just had a mentee wrap up a 44-unit tax credit project.
20:54
[SPEAKER_02]: This brother in Mount Zion Church, Reverend Pete Peterson, they down there doing a thing.
20:59
[SPEAKER_02]: They building affordable housing using tax credits, and units for like $200 to $600 a month.
21:05
[SPEAKER_02]: Helping people that are really in need because you know, Miami's getting super expensive.
21:09
[SPEAKER_02]: It is.
21:10
[SPEAKER_02]: We got projects going right now up in Rhode Island.
21:12
[SPEAKER_02]: We got six houses we building up in Rhode Island.
21:15
[SPEAKER_02]: We partnered up working with the government.
21:16
[SPEAKER_02]: They given our buyers up to $190,000 a piece to buy them.
21:20
[SPEAKER_02]: We work and man, we work and.
21:22
[SPEAKER_02]: But the big thing I want everybody to know is,
21:25
[SPEAKER_02]: y'all can do this, too.
21:28
[SPEAKER_02]: I have people that will say like, oh, you can do that because you're a licensed man, so that trash can can certify construction and manage it.
21:36
[SPEAKER_02]: All these things, I got all these awards, I know all these people.
21:39
[SPEAKER_02]: I want you to understand though, y'all can do this, too.
21:42
[SPEAKER_02]: We have people that have never done the affordable housing before.
21:46
[SPEAKER_02]: Once they realize the government will partner with them, they apply for something that we do.
21:50
[SPEAKER_02]: We call it RFP, a request for proposal.
21:53
[SPEAKER_02]: Because my son, the first thing is knowing is going on.
21:56
[SPEAKER_02]: Second thing is to know who has it.
21:58
[SPEAKER_02]: Land banks, repositories, land trust, redevelopment authorities, even housing authorities.
22:04
[SPEAKER_02]: Once you know they got them, that's like, okay, how do I apply?
22:09
[SPEAKER_02]: How do I ask for them?
22:10
[SPEAKER_02]: You're going to apply through over request for proposal.
22:13
[SPEAKER_02]: or you're going to require two of the quest for qualification.
22:17
[SPEAKER_02]: All you got to do is go to all those agencies I mentioned, just go to their website, filafate news letter, filafate do business with us, opportunity's tab, filafate be a vendor with us tab.
22:28
[SPEAKER_02]: They're going to start sending you emails.
22:29
[SPEAKER_02]: It's going to say, we got a request for proposal going out for purchasing these seven pieces of land.
22:34
[SPEAKER_02]: These 12 pieces of land, the 15 houses, these three houses, these one house, this one house, to turn it into affordable, de-restricted affordable housing.
22:44
[SPEAKER_02]: That's that next step.
22:47
[SPEAKER_02]: Now you just learn how to apply, you know, and we got mentees that the state first time applying.
22:53
[SPEAKER_02]: Yeah.
22:54
[SPEAKER_02]: They're putting in the work.
22:55
[SPEAKER_02]: They're working with us.
22:56
[SPEAKER_02]: They attack GBT in it.
22:57
[SPEAKER_02]: They're working with consultants.
22:59
[SPEAKER_02]: They stay in up to one o'clock at night grinding out the application and getting into the game too.
23:04
[SPEAKER_02]: So I want everybody to know.
23:07
[SPEAKER_02]: you can do this too.
23:08
[SPEAKER_02]: I don't care if you've been convicted of felonies.
23:11
[SPEAKER_02]: We got brothers that have done time made mistakes that have built in 70 plus houses right now.
23:18
[SPEAKER_02]: We got brothers that came out of the projects.
23:22
[SPEAKER_02]: No money, no financing.
23:23
[SPEAKER_02]: They are taking these houses, getting them.
23:26
[SPEAKER_02]: and leverage in the equity in them to get to the table with no money, even getting cashed out at the table.
23:32
[SPEAKER_02]: We got people that got full-time jobs, doing corporate work, we got lawyers, we got full-time entrepreneurs, 100 of employees.
23:40
[SPEAKER_02]: That's learning to do this and that's getting involved in this.
23:44
[SPEAKER_02]: You just got to learn the steps.
23:45
[SPEAKER_02]: First, you've got to be made aware.
23:47
[SPEAKER_02]: You've got to know this is real.
23:49
[SPEAKER_02]: Second, second, though, who has it?
23:53
[SPEAKER_02]: RFP, RFQ, join the news letter, follow through.
23:58
[SPEAKER_00]: There you go.
23:59
[SPEAKER_00]: Another side I wanted to talk about too because I know you mentioned it like real quick in the beginning was the finance inside of things like people were hearing how much how much these houses worth $100,000,000,000,000 and it probably like thinking like damn, like I got to put this percent down, like if I were doing that math in their head but what are some ways that people could get into affordable housing and get into getting these properties
24:25
[SPEAKER_00]: whether it's without coming out of pocket, whether it's getting some type of funding somewhere, I was like, how did they get in and get their first property?
24:32
[SPEAKER_02]: Good question, right?
24:33
[SPEAKER_02]: So the first step is to understand that there's a bunch of different ways to fund these deals.
24:39
[SPEAKER_02]: There's such a huge need for affordable housing right now that the government is literally
24:44
[SPEAKER_02]: giving out grants that you don't have to pay back to use for your down payment and how to make funds happen in spread away.
24:49
[SPEAKER_02]: I got you.
24:50
[SPEAKER_02]: I got you.
24:51
[SPEAKER_02]: The banks are giving out loans with 1% down payments.
24:55
[SPEAKER_02]: You got, you got lenders that are doing loans instead of having to pay 10 to 12% interest like these hard money lenders is charging.
25:02
[SPEAKER_02]: You only got to pay 4%.
25:04
[SPEAKER_02]: Like there's so many funding resources.
25:07
[SPEAKER_02]: The first thing to understand was the government is doing this because you're building a affordable housing.
25:12
[SPEAKER_02]: So if you're building a affordable housing, they're going to give you all these different funding options.
25:16
[SPEAKER_02]: So like, purchase and houses for the dollar, that's amazing, but it don't matter what you really purchase these homes for, what you purchase these lands for, if you know how to use all these special resources that the government has set up to fund and deal, without
25:35
[SPEAKER_02]: I'ma go to a government program or a bank that does affordable housing loans and I'm not going to bring any money to the table.
25:42
[SPEAKER_02]: And I'm adding if I purchase it for a dollar, I purchase it for $500,000.
25:46
[SPEAKER_02]: I'ma go to a government program or maybe two government programs in one bank and I'm going to bring zero money to the table.
25:52
[SPEAKER_02]: I'm going to get all my costs covered.
25:54
[SPEAKER_02]: What is some of these government programs?
25:56
[SPEAKER_02]: So the first I would say to understand is,
26:02
[SPEAKER_02]: You don't even have to go to the government.
26:04
[SPEAKER_02]: You could go directly to a regular bank.
26:06
[SPEAKER_02]: This is for everybody that's just getting started.
26:08
[SPEAKER_02]: Because some of these government programs y'all gonna go to them and then we want you to have a little bit more experience.
26:14
[SPEAKER_02]: They don't expect you to, you know, have maybe done some deals before.
26:17
[SPEAKER_02]: Not that many, don't get discouraged.
26:19
[SPEAKER_02]: But one of the easiest ways to do it is to apply for RFP, apply for RFQ, source to land, or get the property.
26:28
[SPEAKER_02]: And then go to a hard money lender.
26:30
[SPEAKER_02]: And everybody hurt a hard money lender before, right?
26:32
[SPEAKER_02]: You know, they alone, you money for purchase and rehab or purchase and new construction, except with this situation, you don't need the hard money lender to finance the purchase for you, because you buying it for a nominal fee, getting it for $10.
26:49
[SPEAKER_02]: it's worth a hundred thousand dollars.
26:51
[SPEAKER_02]: You're getting it for, you know, a thousand dollars.
26:54
[SPEAKER_02]: It's worth eighty thousand dollars.
26:56
[SPEAKER_02]: You don't need them to buy it.
26:57
[SPEAKER_02]: The government's selling it to you for way less than what it's worth.
26:59
[SPEAKER_02]: We call it nominal fee, because you're building affordable housing.
27:04
[SPEAKER_02]: So you go to the hard money lender you say, I don't need your money to purchase it.
27:08
[SPEAKER_02]: But I do need a 100% construction loan.
27:10
[SPEAKER_02]: You go to the Messiah.
27:12
[SPEAKER_02]: I need a 100% construction loan.
27:14
[SPEAKER_02]: It's 90,000 in rehab.
27:16
[SPEAKER_02]: It's 150,000 in the bill that whatever it is.
27:18
[SPEAKER_02]: I want a 100% construction loan.
27:20
[SPEAKER_02]: So the hard money money will say, OK, well, you'll need money to purchase.
27:23
[SPEAKER_02]: But you want a 100% construction loan.
27:25
[SPEAKER_02]: We'll give you a 100% and a construction money.
27:28
[SPEAKER_02]: The next thing you want to say to them is,
27:30
[SPEAKER_02]: And I don't want to put down any down payment.
27:33
[SPEAKER_02]: But because a lot of times, these hard money lenders, they want you to put some money up.
27:37
[SPEAKER_02]: They want you to put skin in the game.
27:38
[SPEAKER_02]: They're like, well, give you 100% in the construction money, but we want you to put some skin in the game.
27:42
[SPEAKER_02]: We want you to put some money up.
27:43
[SPEAKER_02]: Usually they say, put down 10%, put down 15%, put down 20%, you say that I'm like, no, I don't want to do that.
27:50
[SPEAKER_02]: The land has equity in it.
27:53
[SPEAKER_02]: The house has equity in it.
27:54
[SPEAKER_02]: The government gave it to me for less, the build affordable housing.
28:00
[SPEAKER_02]: as my down payment.
28:02
[SPEAKER_02]: So I want 100% construction loan.
28:04
[SPEAKER_02]: I don't want to put down any down payment.
28:06
[SPEAKER_02]: I want to use my equity in the asset as the down payment.
28:09
[SPEAKER_02]: And the last thing you're going to see to them is, and I want you to cash me out.
28:13
[SPEAKER_02]: Some of that equity at the closing table and added on to the loan.
28:18
[SPEAKER_02]: So the property worth 70,000.
28:20
[SPEAKER_02]: I want you to give me 25,000 of that, add it on to my 90,000 construction loan, you know, not all you want 15.
28:28
[SPEAKER_02]: Why do you want them to cash you out of this because you want to use that money to cover your upfront closing costs?
28:33
[SPEAKER_02]: Because you still got to pay a little closing cost, a little transfer of text, and you still have to start your construction.
28:40
[SPEAKER_02]: Because even when these lenders are given you on 100% construction loan,
28:45
[SPEAKER_02]: They're not giving you the money up front.
28:47
[SPEAKER_02]: It's a reimbursable loan.
28:49
[SPEAKER_02]: So what that means, they'll give you the whole 90,000 and do the construction.
28:52
[SPEAKER_02]: But they won't give it to you to start the construction.
28:55
[SPEAKER_02]: Once you've done the demo, once you've done the windows, once you've done the framing, they'll give you the money back for that.
29:01
[SPEAKER_02]: So you get reimbursed it.
29:02
[SPEAKER_02]: But if you ain't got any money, some of us coming from the situation, we don't have any money.
29:07
[SPEAKER_02]: You want to use the asset as leverage.
29:09
[SPEAKER_02]: That's to get a 100% construction loan.
29:12
[SPEAKER_02]: Tell them I won't pay any down payment down.
29:14
[SPEAKER_02]: The equity in the property or the land is the down payment.
29:17
[SPEAKER_02]: And I want you to cash me out.
29:19
[SPEAKER_02]: Just a little sliver that equity in the beginning so I could cover my clothes and clothes.
29:23
[SPEAKER_02]: And I could start my construction.
29:26
[SPEAKER_02]: You take that 20 year at that extra money they gave you to start the construction.
29:31
[SPEAKER_02]: Now you're getting reimbursed from your construction loan and you can roll from there, right?
29:35
[SPEAKER_02]: So that's how you would do it in a typical sense without even you didn't have to go to the government outside of just getting that property and a lot of people
29:44
[SPEAKER_02]: been talking about, I don't know if y'all heard about that, that Baltimore program.
29:48
[SPEAKER_02]: Don't hear about that program, down in arm, and Baltimore is called vacant to value VTV V2 V program.
29:54
[SPEAKER_01]: But I know like Baltimore definitely got a lot of vacancy for sure.
29:57
[SPEAKER_02]: Baltimore got them vacancies.
29:59
[SPEAKER_02]: They'll sell you houses in Baltimore for nominal fees for $1.
30:03
[SPEAKER_02]: The catch is though you had to have the finances set up to do it.
30:06
[SPEAKER_02]: And people, but like, oh, you guys, you got to had $90,000 in your bank account.
30:09
[SPEAKER_02]: Know what you don't.
30:10
[SPEAKER_02]: Go to a hard money lender.
30:12
[SPEAKER_02]: 100% makes sense.
30:14
[SPEAKER_02]: Construction loan.
30:15
[SPEAKER_02]: Know what to posit?
30:16
[SPEAKER_02]: Because there's some still some equity in the property.
30:19
[SPEAKER_02]: And tell them that you want them to cash you out.
30:21
[SPEAKER_02]: So I'm going to equity at the closing table.
30:23
[SPEAKER_02]: If you find an answer to it, we'll know money.
30:26
[SPEAKER_02]: That hard money lender will give you a...
30:28
[SPEAKER_02]: a proof of funds or pre-approval.
30:30
[SPEAKER_02]: That little pre-approval.
30:31
[SPEAKER_02]: That's how you show the lender.
30:33
[SPEAKER_02]: They call it proof of funds.
30:35
[SPEAKER_02]: You show the land bank.
30:36
[SPEAKER_02]: You show the housing authority.
30:37
[SPEAKER_02]: You show the repository, the redevelopment.
30:40
[SPEAKER_02]: Whoever's selling you, you don't need to head $90,000 in your account.
30:44
[SPEAKER_02]: People with all you've got had $90,000, $100,000, know you don't.
30:47
[SPEAKER_02]: You don't have proof of funds that a lender's going to give you that.
30:51
[SPEAKER_02]: if you get the land, if you get the property.
30:53
[SPEAKER_02]: So you could do that with a hard money lender.
30:54
[SPEAKER_01]: And almost sounds like the process of buying a car, almost.
30:57
[SPEAKER_01]: You read me and like, you go to a dealership, you come in with the funds already.
31:02
[SPEAKER_01]: You ain't got no money in your pocket.
31:03
[SPEAKER_01]: But you know, all right, cool, my credit is good.
31:05
[SPEAKER_01]: I got a credit union that's backing me for the loan.
31:10
[SPEAKER_01]: They just, all you got to do is just pick the car out.
31:12
[SPEAKER_01]: And if it qualifies within the ranges of the bank,
31:16
[SPEAKER_02]: You good.
31:16
[SPEAKER_02]: It almost sounds the same.
31:18
[SPEAKER_02]: It's similar, brother.
31:19
[SPEAKER_02]: It's just, you just gotta be prepared.
31:21
[SPEAKER_02]: Yeah.
31:21
[SPEAKER_02]: I mean, you just gotta not to put that paperwork in place.
31:23
[SPEAKER_02]: Right.
31:24
[SPEAKER_02]: And you could close these with just a traditional hard money lender.
31:27
[SPEAKER_02]: Right.
31:27
[SPEAKER_02]: But I got some more, listen, let's, I came here bearing gifts.
31:30
[SPEAKER_00]: I just, I was going to ask you two, because I know last time you had mentioned something too with the tax credits.
31:38
[SPEAKER_00]: Can you talk a little bit about that side, too?
31:40
[SPEAKER_02]: So the tax credits we spoke about last time, like the government got tools, y'all.
31:44
[SPEAKER_02]: A whole bunch of tools, like you can use, you can acquire land and do the construction and pay yourself through the construction process and cover up the 80% of your project costs.
31:58
[SPEAKER_02]: Come on, million dollar project, the government will give you tax credits, award you tax credits as you apply for cover up the 80% of that million dollars.
32:09
[SPEAKER_02]: home funds.
32:09
[SPEAKER_02]: We spoke about home funds last time.
32:11
[SPEAKER_02]: When you're working with the home funding program, the home reinvestment program, they'll give you $50,000 to $100,000 per unit of affordable housing that you provide.
32:22
[SPEAKER_02]: The reason why they do these programs don't want you to understand is because they make you commit to running these units for $300, $500, $800 a unit.
32:33
[SPEAKER_02]: Now, you know, nowadays, that's not a whole lot of money for a unit.
32:38
[SPEAKER_02]: And as an investor, you're not going to make a whole lot of money right in units for 300, 500, 700 dollars a month.
32:45
[SPEAKER_02]: But it's going to help a bunch of people.
32:46
[SPEAKER_00]: Yeah.
32:47
[SPEAKER_02]: So the government helps you, they come in and help you out.
32:50
[SPEAKER_02]: They'll give you the tax credit program cover up the 80% of your costs that you could buy the building, renovate the building, do move construction or the building and pay yourself.
32:59
[SPEAKER_02]: Or with the home program,
33:01
[SPEAKER_02]: They'll give you $50,000 per unit, $100,000 per unit.
33:05
[SPEAKER_02]: Because they know you're not going to make a bunch of money, you've written these units for $300 to $800 a month.
33:10
[SPEAKER_02]: So people get units for affordable prices.
33:13
[SPEAKER_02]: And then,
33:14
[SPEAKER_02]: every then you as an investor you don't wind up in a bad position and you can finance it because you can extra help you know you buy ten unit build and they give you a hundred thousand per unit that's a million dollars towards your project that you don't have to pay back right you buy twenty unit thirty unit build and they give you a hundred thousand per unit that's two million three million you get a word of tax credits
33:34
[SPEAKER_02]: People are getting the word of tax credits and getting three million five million eight million tours a project.
33:39
[SPEAKER_02]: But it's always because the rent and these units much to people that are caused burden and people that are at lower income levels and people that need help.
33:48
[SPEAKER_02]: And so like the reason why I want to emphasize that people need to help the reason why they're doing it is because there's so many other programs out there that are similar to like these type of programs.
33:58
[SPEAKER_02]: You got community development block grants, you know these CDVG money.
34:04
[SPEAKER_02]: Community development blocker is the same concept.
34:07
[SPEAKER_02]: You build in affordable housing.
34:09
[SPEAKER_02]: They know you're going to be renting or selling to people that are low income.
34:12
[SPEAKER_02]: There's not a whole lot of profit.
34:14
[SPEAKER_02]: So the block grants come in to help you to be able to cover the gap.
34:18
[SPEAKER_02]: you got all types of other funding and finance and no set-up through something that we call like preservation money.
34:24
[SPEAKER_02]: This son-up, this son-up, I want you all to hear about this a little different ad on, because I want everybody to be aware, because we really need you all to get involved in this affordable housing, and we really need as many community developers to know about this type of stuff.
34:36
[SPEAKER_02]: We don't talk about this type of stuff in our rooms, right?
34:39
[SPEAKER_02]: In the rooms, we're in our communities.
34:41
[SPEAKER_02]: Preservation money.
34:42
[SPEAKER_02]: I want you to go and Google right now, affordable housing preservation money, affordable housing preservation funds, affordable housing preservation grants.
34:53
[SPEAKER_02]: What preservation means is, you're going to maintain buildings that used to be affordable housing.
34:59
[SPEAKER_02]: You know, these big buildings in New York right now, it used to be affordable housing and they want to get in Seoul and out and out of affordable housing anymore.
35:07
[SPEAKER_02]: That's because.
35:08
[SPEAKER_02]: They had affordable housing requirements on them for 15 years, 20 years, 30 years.
35:14
[SPEAKER_02]: Like, someone 20 years ago, 30 years ago, got some, they did the affordable housing programs.
35:19
[SPEAKER_02]: They got some tax credits.
35:20
[SPEAKER_02]: They got some home funds.
35:22
[SPEAKER_02]: They got some of that money to help them put the deal together.
35:24
[SPEAKER_02]: So the government makes you keep that building as affordable housing.
35:27
[SPEAKER_02]: They said, yeah, we gave you a hundred thousand of units.
35:30
[SPEAKER_02]: You got to keep that building as affordable housing for 20 years, 30 years, 40 years, 15 years.
35:36
[SPEAKER_02]: what happens is at that time expires, however long they put that restriction, that building can either get sold to the highest bidder and you know New York, Miami, you know, fully like those Chicago, those buildings are worth a lot of money, but there's something that's called preservation money, preservation funds, preservation grants that if you buy that building and keep it
36:06
[SPEAKER_02]: at 4% 5% they'll give you a loan to buy that 50 unit that 100 unit building in 30 days.
36:15
[SPEAKER_02]: They'll give you a loan to cover 80% of the cost and then you go to another CDFI or another local community bank or you go to what we call like home loan banks these are like federal banks and they'll give you that other 20% with some of those with some of the name of those home loan banks.
36:35
[SPEAKER_02]: You got federal home loan banks just Google federal home loan bank.
36:39
[SPEAKER_02]: You got them in a bunch of different states throughout the country.
36:43
[SPEAKER_02]: Like there's like there's a bunch of them that are in Georgia that are in Pennsylvania.
36:47
[SPEAKER_02]: Not every state has one, but a lot of states have them.
36:50
[SPEAKER_02]: And even if you don't live in that state, you could still work with these home loan banks.
36:54
[SPEAKER_02]: They got something called HP Grants.
36:56
[SPEAKER_02]: You could get 80% of the money to buy that 40 unit building from a preservation.
37:02
[SPEAKER_02]: fund or preservation loan program.
37:06
[SPEAKER_02]: You go to get that from a CDFI.
37:08
[SPEAKER_02]: You could go to get that from a state housing finance agency.
37:12
[SPEAKER_02]: You could get those sometimes directly from your city government.
37:15
[SPEAKER_02]: They got these preservation funding programs.
37:17
[SPEAKER_02]: They give you the money to purchase that 50 unit building.
37:20
[SPEAKER_02]: They'll give it to you at a great interest rate.
37:22
[SPEAKER_02]: They'll give it to you in 30 days because they give it to you quick because they don't want someone else to the rich players that come in
37:31
[SPEAKER_02]: Don't cover like 80% of your calls the buy that building all you got to do now is go to Get a grant or go to another City agency or state agency and get what we call get financing Okay, so preservation funding We'll cover that 80% the buy that 50 unit building and keep it as affordable housing no move quick I'll give you good interest rate
37:55
[SPEAKER_02]: You'll still have a gap in there.
37:56
[SPEAKER_02]: That's still said, you're still 20%.
37:58
[SPEAKER_02]: Somebody got a cover.
37:59
[SPEAKER_02]: Is it you're going to be covering that 20%?
38:01
[SPEAKER_02]: Are you going to buy that 10 million out of your pocket?
38:05
[SPEAKER_02]: But this affordable housing will need to do that.
38:08
[SPEAKER_02]: We'll say, OK, get me that preservation fund, get me 8 million.
38:12
[SPEAKER_02]: Cool.
38:13
[SPEAKER_02]: I'll take that.
38:13
[SPEAKER_02]: Y'all could close in 30 days.
38:15
[SPEAKER_02]: Good interest rate.
38:16
[SPEAKER_02]: We're going to keep this building as affordable housing.
38:19
[SPEAKER_02]: Then I'll go to a home-known bank.
38:22
[SPEAKER_02]: I'll go to a housing trust fund.
38:24
[SPEAKER_02]: It's the keywords.
38:25
[SPEAKER_02]: I got to know the keywords.
38:26
[SPEAKER_02]: I go to a housing trust firm with my city.
38:28
[SPEAKER_02]: You know, I'll go to a housing authority with my city.
38:31
[SPEAKER_02]: I'll go to some sort of city program, a county program, and I'll ask them for additional preservation money or additional preservation grants.
38:39
[SPEAKER_02]: The keyword is preservation.
38:41
[SPEAKER_02]: Preservation and you buy the buy.
38:42
[SPEAKER_02]: A big building that used to be affordable housing and keep it as affordable housing.
38:47
[SPEAKER_02]: But I'll give the big, the big preservation
38:52
[SPEAKER_02]: The smaller preservation fund from the home loan bank, or from the housing trust housing authority, housing trust fund, sometimes housing authority will get involved use some preservation money, sometimes community development, financial institutions, CDF files, they'll give you that other 20%.
39:10
[SPEAKER_02]: So now you got 10 million out of do, just quick recap for y'all.
39:13
[SPEAKER_02]: You buy to spend 10 million dollars on 50 units, 100 units.
39:17
[SPEAKER_02]: Preservation Funding covers 80% of that 10 million so they give in you to eight.
39:22
[SPEAKER_02]: And then you go into a housing trust fund, a home-known bank, a CDF file, a state housing finance and agency to get the other 20.
39:32
[SPEAKER_02]: They give you the other two million.
39:35
[SPEAKER_02]: How much you put into the deal yourself?
39:36
[SPEAKER_02]: Zero.
39:37
[SPEAKER_02]: Zero.
39:38
[SPEAKER_02]: Sometimes, though, I'm gonna keep it real with y'all.
39:41
[SPEAKER_02]: Sometimes they say, we want you to put up something, put up one percent.
39:45
[SPEAKER_02]: Got 100k towards the 10 million I'll deal, yeah, I've got 100k towards the 10 million I'll deal.
39:52
[SPEAKER_02]: Sometimes don't want you to put up 2% now.
39:55
[SPEAKER_02]: I want to be clear like 2% you know of a million 10 million I was that's not much money in the grand scheme of things.
40:01
[SPEAKER_02]: You might get a 10 million I'll asset put up 200,000.
40:05
[SPEAKER_02]: You could go partnering with somebody to raise that.
40:08
[SPEAKER_02]: You could go bringing some investors.
40:09
[SPEAKER_02]: You could put that liquidated credit card.
40:11
[SPEAKER_02]: You could go get a business line to credit.
40:13
[SPEAKER_01]: Yeah.
40:13
[SPEAKER_02]: You can get creative with that, but you're about to get $10,000 s if 1% 2% down.
40:18
[SPEAKER_02]: We're always going to push them in the cover on honey.
40:21
[SPEAKER_02]: and covered a whole course, but sometimes 1% 2% ain't far on either.
40:27
[SPEAKER_02]: And like so, I want you to take note of that because when you look at it from these deals too, from like a 1% perspective, it's a game changer.
40:35
[SPEAKER_02]: Mm-hmm.
40:36
[SPEAKER_02]: Like most hard money lenders are most gross day deals, they want 15%, 20% down.
40:42
[SPEAKER_02]: If you only have to put 1% down with that big game changer for you, it would be, a lot of people it is.
40:47
[SPEAKER_02]: And so,
40:49
[SPEAKER_02]: We've been doing a lot of that in our communities with minority developers, local developers, women developers, developers of color, because one of the biggest things that keep us out is that up front money.
41:05
[SPEAKER_02]: So once you learn how to structure using these methods, I'm talking about getting some money from this government program, getting some other money from this government program, you only got to put up 1%.
41:15
[SPEAKER_02]: It opens up a lot more doors for a lot more people.
41:18
[SPEAKER_01]: So let me actually question now.
41:19
[SPEAKER_01]: So is there a requirement when it comes to affordable housing?
41:23
[SPEAKER_01]: Like if I, let's say, I made it my mind, I want to go out there and start running some affordable housing units and properties and pieces of land.
41:31
[SPEAKER_01]: Do I have some kind of history, any kind of permits, any kind of classes, any kind of experience in the back end, before I can go out there and start buying these affordable housing units?
41:45
[SPEAKER_01]: It's definitely levels to it, right?
41:47
[SPEAKER_02]: So I wouldn't recommend somebody never did a real estate deal.
41:50
[SPEAKER_02]: Going out and applying and trying to put together a deal for 50 units, 100 units.
41:54
[SPEAKER_02]: It's just like starting a little smaller than that, you know, acquire a property or two or three for a nominal fee.
42:02
[SPEAKER_02]: Knock those out, get them for a dollar, ten dollars, distress property, renovate them.
42:06
[SPEAKER_02]: I call it put in point sooner board.
42:08
[SPEAKER_02]: I would heavily recommend like newer people to stay under 10, 10 properties or less, like you don't need much experience to get five pieces of land.
42:18
[SPEAKER_02]: You don't need much experience to get four dollar houses, because that's really not that big of a project.
42:25
[SPEAKER_02]: So like newer players, people first timers anywhere between like one and ten,
42:30
[SPEAKER_02]: is a good place for you to start.
42:32
[SPEAKER_02]: The one thing that you always want to keep in mind no two is they're not just looking at she experience, they're looking at the experience of your development team.
42:42
[SPEAKER_02]: So like you are going to be the project sponsor, the person who's
42:46
[SPEAKER_02]: applying the paperwork, the person who knows about the opportunity.
42:50
[SPEAKER_02]: You may be the person that's working in the community to make sure young people get jobs through this.
42:54
[SPEAKER_02]: So make sure that community contractors are working with the church or where, like, your role can be all of those things as paperwork helping the community and you could go and hire a good G.C., a good general contractor that's done 500 units and say, I'm not that
43:15
[SPEAKER_02]: On the development team, I got my good general contract.
43:18
[SPEAKER_02]: He's done 500 units before.
43:20
[SPEAKER_02]: But I'm not that good at architecture.
43:23
[SPEAKER_02]: I don't have much architecture, but my architect just did 50 affordable housing projects in the city.
43:29
[SPEAKER_02]: My lawyer, you go and get the lawyer that's done, dozens of affordable housing projects in the city.
43:36
[SPEAKER_02]: I don't have a whole lot of experience myself.
43:39
[SPEAKER_02]: what your team do.
43:40
[SPEAKER_02]: But my team does.
43:41
[SPEAKER_02]: You're going to hire somebody that's your project manager.
43:43
[SPEAKER_02]: You know what I mean?
43:44
[SPEAKER_02]: You got Cody construction.
43:46
[SPEAKER_02]: Cody construction has over five, 50 years of experience because my project manager has 30 and my other form has 20.
43:54
[SPEAKER_01]: Like you can build up your resume, build up your team experience.
43:58
[SPEAKER_01]: I do want to actually two questions on the flip side now because it's like all right, cool.
44:02
[SPEAKER_01]: General contract is a lot of times people say they have horror stories.
44:06
[SPEAKER_02]: and then now if you don't have the experience and you're borrowing their experience are they part owners of the properties or the they don't have to be yeah they don't have to be at all like if you go to a general contractor right now first of all credible general contractors you find credible general contractors at like association meetups
44:27
[SPEAKER_02]: real estate networking and invent meetups where other people can vouch for them.
44:32
[SPEAKER_02]: Like good contractors hanging, places where good contractors hang, like you won't find a place like you.
44:37
[SPEAKER_01]: I don't know who took them all, but about a poppy store like, you know what I mean?
44:40
[SPEAKER_02]: Like you're gonna find them in places where like good contractors are like, like professional supply houses, you know, um, but at the end of the day, you go to a contractor right now and say, you're like, I've got five houses that got 150,000
44:56
[SPEAKER_02]: You're trying to make, you know, you're trying to make a bunch of money.
45:00
[SPEAKER_02]: I got 10 houses for $200,000 in construction of peace.
45:04
[SPEAKER_02]: You're trying to make $2 million, but you didn't even say, so if you got the right, if you got the right workflow, good contractors are going to be a lot easier to find.
45:13
[SPEAKER_02]: Don't get me wrong.
45:14
[SPEAKER_02]: People got their horror stories, but a lot of times it's because people don't know how to find the right contractors.
45:19
[SPEAKER_02]: They look in the wrong places.
45:20
[SPEAKER_02]: and they don't know those red flag signs like at the end of the day license and short contract that spells out how to get in P when they get in P referrals references and insurance certificates and w nines for taxes like those are all bare minimums if you even just do those little bit of things the likelihood of your contract to be in
45:43
[SPEAKER_02]: better, and not having a hard story is going to be a lot, there's going to be a lot higher.
45:47
[SPEAKER_02]: Yeah, make sense.
45:48
[SPEAKER_00]: I wanted to ask you to, like, how does the development process look like for these type of properties?
45:55
[SPEAKER_00]: Like, from finding the land to having the first few tenants moving, like, how does that process look like?
46:01
[SPEAKER_02]: It really just depends, like, if you're doing rehabs, it's going to be completely different than if you're doing new construction.
46:08
[SPEAKER_02]: If you're doing single-family, there's
46:12
[SPEAKER_02]: You know, if you don't rehab, this is going to be faster.
46:14
[SPEAKER_02]: If you're doing multi-family projects, it's going to take a little bit more time.
46:18
[SPEAKER_02]: Multi-family rehabs, you know, going to take you six months or so.
46:23
[SPEAKER_02]: You know, single-family rehabs are going to take you, you know, two to four months or so.
46:28
[SPEAKER_02]: You know, new construction, single-family, going to take you four months, the six months or so.
46:35
[SPEAKER_02]: multi-family new construction could take you six months plus depending on how big the projects are.
46:42
[SPEAKER_02]: But at the end of the day, you just want to really focus on getting the deal finance correctly.
46:47
[SPEAKER_02]: So like all these funds we're talking about, money from, you know, these preservation funds, these home funds, or even doing with the hard money lender.
46:56
[SPEAKER_02]: Were you only going to put any money out of your pocket?
46:57
[SPEAKER_02]: You want to have the deal finance really well?
47:00
[SPEAKER_02]: so that like you can you can get through the construction without being all stressed out.
47:04
[SPEAKER_02]: That's like the number one thing I would tell people to focus on is like don't go to the heart money lender and get alone at 15%, 17%, because you're going to be stressed out throughout the whole construction process because every month they're going to call you for these big interest payments.
47:20
[SPEAKER_02]: Go to the
47:22
[SPEAKER_02]: CDF-A go to the community lender that's going to give you a loan at 6%.
47:27
[SPEAKER_02]: Find that lender that's going to give you a loan where you ain't even got to pay interest because they gave you an interest reserve to cover the interest inside of your loan.
47:35
[SPEAKER_02]: So you're not stressed out.
47:37
[SPEAKER_02]: Things like that, you're going to make the process move or whether it's a three month process, or whether it's a, you know, it's a nigh month process.
47:43
[SPEAKER_02]: But, you know, it's a nigh month process.
47:45
[SPEAKER_02]: the multifamily piece though with something that's, you know, usually going to take a little longer than the single family piece.
47:51
[SPEAKER_00]: Okay.
47:51
[SPEAKER_00]: I was going to add to this real quick, because I was going to actually a lot of people they're going to be comparing traditional real estate to affordable housing.
48:00
[SPEAKER_00]: So a lot of the thing I'm going to be looking at, like the returns on that side.
48:03
[SPEAKER_00]: So kind of like,
48:06
[SPEAKER_00]: compared to like how does the return on like a affordable housing deal look like versus a traditional real estate deal because I know some people probably going to be looking at it trying to compare the two how does this make more sense to me you know how how would it make more sense for me on that yeah so your ROI is going to be a lot higher like so your ROI is going to be a lot higher
48:33
[SPEAKER_02]: getting that profit divided by the initial investment times 100 is going to be your return on investment.
48:40
[SPEAKER_02]: So the less money you put into your deal, the higher your return on investment, the higher your ROI is going to be.
48:48
[SPEAKER_02]: In affordable housing, you only put enough 1%, you know, like I get where you're going.
48:53
[SPEAKER_02]: 2%, you know, 3%, 0%, so your
49:00
[SPEAKER_02]: you may make a little less money on the project that you may only make 50,000 per house, you know, 40,000 per house, but you did 10 houses and you only had to put up $40,000.
49:13
[SPEAKER_02]: So you just made $400,000.
49:17
[SPEAKER_02]: But you only had to put up 40,000.
49:20
[SPEAKER_02]: You made 10 times your money.
49:22
[SPEAKER_01]: Yeah.
49:23
[SPEAKER_02]: If you had an investment strategy where you can make 10 times your money, whether it's real estate or whether it's selling t-shirts, if every dollar you spent you may back 10, or better yet for every thousand you spent you may back $10,000.
49:37
[SPEAKER_02]: How many times would you make that $1,000 investment?
49:41
[SPEAKER_01]: It's like a vendor machine.
49:43
[SPEAKER_02]: It's like a vendor machine, it's a cash printer, right?
49:46
[SPEAKER_02]: So affordable housing has those same dynamics, like you want to make a little bit less than you would, like some people like y'all I'm trying to make $150 for every house I sell.
49:55
[SPEAKER_02]: For the housing, you're going probably making more like $40 to $60,000 for every house you sell.
50:01
[SPEAKER_02]: Plus you'll make money on the construction, too, but that's another story if you do the construction.
50:05
[SPEAKER_02]: But you can do 10 houses at one time and do it with barely any money out of your pocket and make 10 times your money.
50:13
[SPEAKER_02]: So it's it's it kind of needs a skill and it's a higher a higher ROI.
50:19
[SPEAKER_00]: And what about light?
50:21
[SPEAKER_00]: in situations like a recession.
50:25
[SPEAKER_00]: Like, you never know what could happen.
50:28
[SPEAKER_00]: Real estate markets always going up and down, up and down.
50:31
[SPEAKER_00]: How is the affordable housing market?
50:33
[SPEAKER_00]: Is it recession proof?
50:35
[SPEAKER_00]: Like, what would happen to these deals when the economy tanks?
50:40
[SPEAKER_02]: affordable housing is one of the most recession proof segments of the real estate industry period because it's backed by the US federal government right these programs are largely federal or state or city and if you're federal government or your city or your state can't pay you got some major problems going on so the most the most guaranteed
51:08
[SPEAKER_02]: You know, revenue stream, a lot of times it's gonna come from pipelines through the government, right?
51:14
[SPEAKER_02]: So just for that fact, that it matter, like it's pretty recession proof.
51:20
[SPEAKER_02]: The other thing though is, any affordable housing space, the interest rates are way better.
51:26
[SPEAKER_02]: So like the number one problem real estate investors are having right now is you have refinance and a deal, you bought a property, you did it for you in the project.
51:39
[SPEAKER_02]: You try and make money off of the rent, right?
51:41
[SPEAKER_02]: The cash flow, right?
51:43
[SPEAKER_02]: If you got $2,000 coming in a month and your mortgage is $1,600, you're making $400, right?
51:53
[SPEAKER_02]: Mind you after all expenses.
51:54
[SPEAKER_02]: That's the bad.
51:55
[SPEAKER_02]: Like you still got expenses.
51:56
[SPEAKER_02]: Like even if we use a better example right with expenses, right?
52:00
[SPEAKER_02]: You may bring it in $2500 a month in rent and you know you got a $1800 mortgage You know, so you got $700 before expenses, right?
52:09
[SPEAKER_02]: You might be packing in a few hundred bucks If you have more goods is less
52:15
[SPEAKER_02]: you're gonna make more money though, right?
52:17
[SPEAKER_02]: So if you bring it in $2500 and you're more than just $1700 a month, it's because the interest rate is eight percent, nine percent.
52:25
[SPEAKER_02]: Some people got bad credit.
52:27
[SPEAKER_02]: They pay eight nine percent on a mortgage.
52:30
[SPEAKER_02]: the lower the interest rate, the lower your mortgage.
52:32
[SPEAKER_02]: So if you got $2,500 a month coming in and get mortgages only at 4%.
52:38
[SPEAKER_02]: Now you mortgages, you know, I'm just throwing some numbers at 1,200 a month, you know, 1,100 a month, because a much lower interest rate, your mortgage is less.
52:45
[SPEAKER_02]: So now your net is higher in this market that we in right now, the bank don't care.
52:51
[SPEAKER_02]: They're like, you're loaned 7, 8, 9%.
52:54
[SPEAKER_02]: But when you do affordable housing, the loan is 4%, 5%.
53:00
[SPEAKER_02]: Because it's backed by the government, because the government needs it's affordable housing to happen.
53:04
[SPEAKER_02]: So you go to CDFI and get a 5% loan.
53:07
[SPEAKER_02]: But everybody else is paying way more, because it's affordable housing.
53:12
[SPEAKER_02]: You can go to your government and get
53:15
[SPEAKER_02]: tax exempt bond money.
53:16
[SPEAKER_02]: The government got investors at the, they're, they got purchase in city bonds and they give them 4% giving those investors 4% and investors like unforepercating a lot but it's tax exempt.
53:27
[SPEAKER_02]: So those investors that are buying these city or municipal tax exempt bonds from the city, they, they give them the city a whole bunch of money for 4% returns because it's tax exempt and they ain't got paid no federal tax is on it.
53:40
[SPEAKER_02]: The city's turning around or the housing authorities are the states that turn around rent lending it to affordable housing developers at 4% because the city's giving it out tax exempt states giving out tax exempt they get in the money they get they paying 4% for the money they'll give you loans at 4% using tax exempt bonds.
53:58
[SPEAKER_02]: The government got tiff, something called tiff districts, tax incremental finance and districts.
54:03
[SPEAKER_02]: These are areas of your community where these buildings and projects that you're doing, the government will allow you to pay your loans that are towards your project.
54:14
[SPEAKER_02]: To do the construction, to do the infrastructure, you can pay it with the future taxes that are going to be coming from your building.
54:20
[SPEAKER_02]: Well, you got to explain that one.
54:22
[SPEAKER_02]: So, first thing first, the government has a whole bunch of resources for you to get cheaper financing.
54:30
[SPEAKER_02]: When you're doing affordable housing, it's nothing to get a loan at 4%, 5%, 6%, because one, the banks are giving it out cheaper because they're trying to qualify and cover for something that's called the Community Reinvestment at CRA.
54:47
[SPEAKER_02]: Every single bank throughout this country has a requirement.
54:49
[SPEAKER_02]: It was established in 1978, the community reinvestment act.
54:56
[SPEAKER_02]: Banks are required to make investments and do loans in low income and disadvantage communities.
55:03
[SPEAKER_02]: Every single year these banks got to do these loans and investments to keep a CRA score.
55:08
[SPEAKER_02]: They got to keep their CRA score up.
55:10
[SPEAKER_02]: So they do these loans and these investments into low income communities.
55:14
[SPEAKER_02]: A lot of these loans go to affordable housing developers.
55:18
[SPEAKER_02]: They get these loans out at 4%, 5%, 6%.
55:23
[SPEAKER_02]: Because they need to do it so they can keep they score up and stay in good Greece's with the government.
55:28
[SPEAKER_02]: You got these tax exempt bonds that the government is doing.
55:32
[SPEAKER_02]: Those selling investors bond at 4%.
55:34
[SPEAKER_02]: Then investors don't got paid no.
55:38
[SPEAKER_02]: income tax or no capital gains tax on it so they eat in them up you don't try to mind a lend it to you for affordable housing development you'll get money at four percent memory talking about you get money at eight you do it doesn't work if you get money at four now you cash for one lovely to do is working really well right the testimony that the tax incremental finance and districts
56:02
[SPEAKER_02]: is when the government will use future taxes that.
56:05
[SPEAKER_02]: So when you buy a piece of land, right, and you develop a 50-unit building on it.
56:12
[SPEAKER_02]: That piece of land, when it's raw, bare land, the taxes on that land are going to be what, you know, 1,000 bucks a sow, give a take, maybe a little bit more.
56:20
[SPEAKER_02]: But after it is a brand new building on there, they're going to come back and reassess the building.
56:25
[SPEAKER_02]: And then, like, oh, now this land with this 50-unit building on the taxes every single year is $25,000 a year.
56:32
[SPEAKER_02]: You know, the government will say, OK, we know over the next 10 years you're going to be paying.
56:39
[SPEAKER_02]: $25,000 a year in taxes to us.
56:42
[SPEAKER_02]: Don't let you use that future $250,000 towards financing and covering the debt with your current investment into the land into the project.
56:52
[SPEAKER_01]: So is that like a tax like exemption?
56:57
[SPEAKER_02]: This is Texas financing that allows you to use future income towards the current debt to build the project.
57:07
[SPEAKER_02]: You can actually pay your debt, service your debt, that more than every single month that's coming in, that portion is underneath that tip money will be service by it.
57:16
[SPEAKER_02]: Now, when you start talking about tax exemptions, bro, the government got tools as a bunch of them.
57:21
[SPEAKER_02]: That's a completely different advantage.
57:23
[SPEAKER_02]: That's a completely different tool.
57:25
[SPEAKER_02]: You've got something called tax abatements.
57:27
[SPEAKER_01]: Yeah.
57:28
[SPEAKER_02]: A tax abatement is not as not tiff money, is not where you finance and your project over off of future taxes, what a tax abatement is is the government will help you to keep your taxes lower on your project for the next 10 years, 15 years.
57:43
[SPEAKER_02]: So same concept, you go and you build, uh, uh, renovate a building, right?
57:49
[SPEAKER_02]: Take a full gut through a full gut rehab of a bando.
57:56
[SPEAKER_02]: $600 a year you know if that because it's a bando it doesn't have much volume yeah after you fully renovate that bando Now it's a brand new building now the government become back and reassess the next year They say it's not a bando anymore.
58:11
[SPEAKER_02]: Okay, this building's worth $500,000 $300,000 now the taxes are 3500 a year 3600 a year when you get a tax abitment
58:22
[SPEAKER_02]: Don't let bait that new value.
58:24
[SPEAKER_02]: They won't make you pay that new value.
58:27
[SPEAKER_02]: They'll treat it like it's still a bando there.
58:29
[SPEAKER_02]: They'll say, OK, you made this investment into this building.
58:32
[SPEAKER_02]: You made investment into this raw land.
58:34
[SPEAKER_02]: We're going to give you a 10 year tax abatement.
58:36
[SPEAKER_02]: Even though next year, the taxes would have went way up.
58:39
[SPEAKER_02]: We're going to bait those taxes for 10 years to incentivize you.
58:44
[SPEAKER_02]: because other than that, this deal might have not worked, this deal might have just stayed raw land, and this property might have just stayed as a bando.
58:51
[SPEAKER_02]: So as an investor, as a developer, that's going to help you, because the lower your taxes, you know, taxes is a part of your cash flow, your net cash flow as well, right?
59:03
[SPEAKER_02]: Cause you're going to pay your mortgage, it's going to be your principle, your interest, your taxes, and insurance.
59:09
[SPEAKER_02]: So if you wipe the taxes out, now,
59:13
[SPEAKER_02]: get your debt services lower and now that twenty five hundred you making you got more you got more spread in there what happens is at scale single family it helps a lot but when you're doing twenty units thirty units that reduce tax you know really increases your income your net operating income right
59:36
[SPEAKER_02]: which in multi-family is going to increase the value of your building.
59:40
[SPEAKER_02]: So everything in multi-family, I want to make sure I drive this home, though, because I want to make sure you're connected that to them.
59:44
[SPEAKER_02]: This tax abatement too.
59:46
[SPEAKER_02]: I know we got some people as novices, and I know we got some people as middle-level, but I want to try to check into this, right?
59:51
[SPEAKER_02]: Multi-family buildings were five units or more.
59:54
[SPEAKER_02]: They are worth whatever the net operating income is, divided by the capitalization rate.
1:00:01
[SPEAKER_02]: That's basically a score that praises the use and how the what is worth to investors.
1:00:06
[SPEAKER_02]: It's too deep to go into on this, right?
1:00:08
[SPEAKER_02]: But basically, the higher your net operating income is, the higher the value of your build in this.
1:00:20
[SPEAKER_02]: Depending on what the value of your bill, depending on what your net operating income is, is going to dictate the value of your multi-family project.
1:00:27
[SPEAKER_02]: Every $500 you save will increase the value of your building by $100,000 on average.
1:00:35
[SPEAKER_02]: So if you're reducing the taxes by $500 a month, you just increase the value of your building by $100,000.
1:00:44
[SPEAKER_02]: So that tax abatement is not only just helping you
1:00:50
[SPEAKER_02]: It's increasing net operating income and now your buildings were for $100,000 more.
1:00:56
[SPEAKER_02]: So $2,000, $2,000, $2,000 more.
1:00:59
[SPEAKER_02]: $6,000 more.
1:01:00
[SPEAKER_02]: The bigger the building, the more that tax abitment is going to have the effect on getting in the wild.
1:01:05
[SPEAKER_02]: The higher the volume of your buildings going because you just remove the big chunk of your expenses.
1:01:10
[SPEAKER_02]: So now your net operating income is going to be higher.
1:01:14
[SPEAKER_02]: For a homeowner though, when you're doing affordable housing,
1:01:18
[SPEAKER_02]: we love to do tax abatements because when we're selling somebody at house and we try to make sure it's affordable for them.
1:01:24
[SPEAKER_02]: When somebody buys a house for most, if it comes with a tax abatement, that $3,000 a year savings, that $4,000 a year savings, that's abated by the tax abatement, it helps them too.
1:01:36
[SPEAKER_02]: So this is a major tool in the major resource for the homeowner as well.
1:01:41
[SPEAKER_01]: So the reason why to kind of like get it better
1:01:48
[SPEAKER_01]: like the tax abatement, all these things exist is simply because the government wants affordable out like they they they're incentivizing you for doing affordable housing basically.
1:02:03
[SPEAKER_02]: Largely, almost everything I mentioned exists in all these tools and so many more tools that we're not even mentioning Exist because of the need for affordable housing that's incentivizing But they're not even just incentivizing they're making it possible Because the thing is that the 8% interest rate is not gonna be a lot of buildings and homes getting built true Because the numbers the numbers just don't work you can't rent a building at $500 to $800 a month
1:02:31
[SPEAKER_02]: $1,100 a month, he's lower numbers with 8% interest rate.
1:02:34
[SPEAKER_02]: The numbers just won't work.
1:02:36
[SPEAKER_02]: Yeah, income won't be able to cover the debt.
1:02:39
[SPEAKER_02]: And if your income doesn't cover the debt, the bank won't do the loan.
1:02:43
[SPEAKER_02]: So this is not even just, and if the bank doesn't do the loan, then no houses get built.
1:02:48
[SPEAKER_02]: No apartments get built.
1:02:50
[SPEAKER_02]: So it's not just because they want to incentivize it.
1:02:52
[SPEAKER_02]: It's because without a lot of these resources in these tools,
1:02:56
[SPEAKER_01]: It just won't happen, but how does this won't get built?
1:02:59
[SPEAKER_01]: And then I do want to answer about the, because you said a lot of community, like a lot of community developers are getting robbed at this point.
1:03:06
[SPEAKER_01]: Like, would you really mean by that?
1:03:08
[SPEAKER_01]: Well, I said a lot of community developers are getting robbed.
1:03:12
[SPEAKER_01]: What's the content?
1:03:12
[SPEAKER_01]: I'll let it be like, we're chopping up a forehand and he's like, one of the things that's been going on lately in the industry is a lot of developers begin robbed.
1:03:21
[SPEAKER_01]: Like, I don't know if it's on the back end, like the numbers is probably not bad for him.
1:03:26
[SPEAKER_02]: I mean, you got several ways that's happening.
1:03:28
[SPEAKER_02]: I mean, one, most small developers that are dealing with hard money lenders, hard money lenders, I'm taking most of your money, taking most of your profit.
1:03:38
[SPEAKER_02]: When you get a loan at 12%, and then you got to pay two additional points, three additional points.
1:03:43
[SPEAKER_02]: You paying 14 to 18% to a hard money lender, they're basically taking your profit.
1:03:50
[SPEAKER_02]: You know, you want to, that's why you want to get into spaces where there's tools that can help you.
1:03:55
[SPEAKER_02]: Like enough affordable housing space.
1:03:56
[SPEAKER_02]: You can help people and make money at the same time.
1:03:59
[SPEAKER_02]: You know, create impact and get better interest rates and get better tools.
1:04:04
[SPEAKER_02]: You know, and get more support.
1:04:06
[SPEAKER_02]: What I might have been talking about though was developers getting taken advantage of was, um, a lot of times in affordable housing space.
1:04:14
[SPEAKER_02]: Everybody acts like,
1:04:17
[SPEAKER_02]: you're not supposed to make money.
1:04:19
[SPEAKER_02]: Like everybody acts like you just do this, you just do this work for free.
1:04:22
[SPEAKER_02]: If you really want to help people, unfortunately, if you can want to help people, you can want to save the world, but if the bank won't do the loan, then you can't get it done.
1:04:32
[SPEAKER_02]: And a lot of people don't want to hear that.
1:04:34
[SPEAKER_02]: The other thing that you see though is like,
1:04:37
[SPEAKER_02]: You see, developers of color, minority developers that are getting bad deals.
1:04:43
[SPEAKER_02]: Not every house that you buy for a dollar is a good project.
1:04:46
[SPEAKER_02]: If you can't sell for a certain amount and make more than what your construction cost is, you got to get some extra grants to help you while you're going to lose money trying to sell in a affordable home.
1:04:58
[SPEAKER_02]: If you buy property for a low cost, a dollar, or reduce cost from the government, and the construction cost succeeds, what you can rent it for and refinance it for, you got a bad deal.
1:05:10
[SPEAKER_02]: You're going to be in a rough spot, unless you get some additional grants, because some additional hope.
1:05:15
[SPEAKER_02]: A lot of times you'll see
1:05:18
[SPEAKER_02]: black developers, brown developers, community developers, get the bad deals or the affordable housing space.
1:05:24
[SPEAKER_02]: They get approached and pushed to do these deals that the numbers are really tight and you really when he got hand to be directly involved and if they get it across the finish line, like I said, that jokingly, but like, just bad deal.
1:05:36
[SPEAKER_02]: So it's levels to it.
1:05:38
[SPEAKER_02]: Like you gotta make sure that you get into the right affordable housing deals, work with head of right guidance, work with the right groups, you know, to be able to pull it off.
1:05:48
[SPEAKER_02]: You gotta make sure that you get good incentives.
1:05:51
[SPEAKER_02]: Like that's why I'm here telling people, I know there's all these tools, there's all these resources that help you to be able to do it successfully.
1:05:58
[SPEAKER_02]: And other cultures know about all this stuff we've talking about.
1:06:02
[SPEAKER_02]: Everybody's like, yo, JP, you talking about dollar houses, and this is like, yo, this has been going on for 40 years.
1:06:08
[SPEAKER_02]: These loans, these special finance, and these low interest rates, people getting money from one place, and then 80% from the one place, and 20% from the tax credits, all these things and time I've been going on for decades.
1:06:20
[SPEAKER_02]: We just didn't know anything about it.
1:06:22
[SPEAKER_02]: You know what I mean?
1:06:23
[SPEAKER_02]: So the reason why we highlight in this and sharing all this is because we need more community developers to get involved in all of this.
1:06:30
[SPEAKER_02]: People from the neighborhoods, again, involved in this because
1:06:33
[SPEAKER_02]: We don't want to just be consumers, right?
1:06:36
[SPEAKER_02]: We've been just, we want to want that consumer and the spectrum in big business a lot.
1:06:40
[SPEAKER_02]: When you start talking about affordable housing, the first thing you got to be able to afford the house, right?
1:06:46
[SPEAKER_02]: Off-road the rent and that comes from good jobs.
1:06:49
[SPEAKER_02]: that get created by these being built, you know, that come from money being made through commerce, billions of dollars flowing through these projects.
1:06:58
[SPEAKER_02]: Right now, in my city, there's a $2 billion fund to build affordable housing.
1:07:03
[SPEAKER_02]: In New York City, the marriage is announced a $23 billion fund to build affordable housing.
1:07:09
[SPEAKER_02]: The U.S. residential real estate market is a $43 trillion market with a T. You want to talk about us being in the position
1:07:18
[SPEAKER_02]: and be in a position to be able to control and create an economic base in, you know, disadvantaged communities.
1:07:25
[SPEAKER_02]: We got to know about all of this stuff.
1:07:26
[SPEAKER_02]: Yeah.
1:07:27
[SPEAKER_02]: We got to be on the side where the 43 trillion is.
1:07:31
[SPEAKER_02]: We need houses.
1:07:31
[SPEAKER_02]: We need quality rentals.
1:07:32
[SPEAKER_02]: We need all of that.
1:07:34
[SPEAKER_02]: We do the zero quality places to live.
1:07:36
[SPEAKER_02]: You know what I mean?
1:07:37
[SPEAKER_02]: You know, safe and comfortable over our head, but when we start tapping into that 43 trillion dollar side, that $2 billion dollar budget side, in New York, that $23 billion dollar budget side, we start creating jobs, we start creating businesses.
1:07:51
[SPEAKER_02]: You know, we start growing and bringing that money into our neighborhoods.
1:07:54
[SPEAKER_02]: That's how we really afford some stuff inside this affordable opportunity.
1:07:58
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1:09:08
[SPEAKER_02]: I'm glad that you mentioned that you breaking down the affordable housing.
1:09:12
[SPEAKER_01]: Like,
1:09:13
[SPEAKER_01]: like in a way where it's more understandable because like traditionally everybody thinks, you know, that way to get in a real estate is probably through, you know, buying a house, doing, you know, living in a basement, rent up the top or, or, you know, doing short-term Airbnb or, you know, get a venue, rent it out to people or people even think affordable housing is only just public.
1:09:38
[SPEAKER_01]: housing authority, you know what I mean, but it's way deeper and it's way bigger to what we actually think it is.
1:09:44
[SPEAKER_02]: 100% bro, and there's a lot of, one is a need.
1:09:48
[SPEAKER_02]: That's the biggest thing why I'm so passionate about this.
1:09:50
[SPEAKER_02]: We need.
1:09:52
[SPEAKER_02]: Mad houses, dozens, tens of thousands of houses, millions of houses are in our community.
1:09:57
[SPEAKER_01]: And even for the seniors too, seniors, they've been living in certain houses or certain apartments for 10, 20, 30 years.
1:10:06
[SPEAKER_01]: And then next to you, you know, they retired.
1:10:08
[SPEAKER_01]: And they don't have any way to go.
1:10:10
[SPEAKER_01]: You know what I mean?
1:10:11
[SPEAKER_01]: Like sometimes they got a moving with a family member.
1:10:13
[SPEAKER_01]: or this seniors, that's their leisure's homeless, you know what I mean?
1:10:17
[SPEAKER_02]: Major problem, brother.
1:10:18
[SPEAKER_02]: Yeah.
1:10:18
[SPEAKER_02]: Seniors, people that, you know, have disabilities, people that live in my ailments, you know, people that have come home from the war, you know what I mean?
1:10:26
[SPEAKER_02]: People that have come home from spending a whole life in service, like, it's a major need.
1:10:30
[SPEAKER_02]: It's a major crisis.
1:10:32
[SPEAKER_02]: And so a lot of what we do in here is we level in the playing field.
1:10:36
[SPEAKER_02]: one getting us onto the development side like that's my mission how do we get more black developers brown developers community developers involved in the big money side
1:10:46
[SPEAKER_02]: So that money could come through our hands, create jobs, create businesses, and that's how we're going to be able to control our own feet.
1:10:53
[SPEAKER_02]: I want us to be able to own some stuff too, rent some stuff too.
1:10:56
[SPEAKER_02]: Yeah.
1:10:56
[SPEAKER_02]: That's a level in the playing field too, but I feel like we got working from both sides, right?
1:11:00
[SPEAKER_02]: So while we talking about home ownership, though, I want to bless everybody that's watching us, right?
1:11:05
[SPEAKER_02]: Because you may not be a developer just yet.
1:11:07
[SPEAKER_02]: You may be still trying to establish yourself.
1:11:10
[SPEAKER_02]: with your own home, your own foundation, your own home base.
1:11:14
[SPEAKER_02]: So I wanted to give some resources to y'all as well for people who try to establish home ownership.
1:11:20
[SPEAKER_02]: One of the best parts of this affordable housing.
1:11:22
[SPEAKER_02]: development and his movement is these houses that were selling come with instant equity.
1:11:29
[SPEAKER_02]: So when we sell a house we get the property for a nominal fee for a dollar.
1:11:34
[SPEAKER_02]: We can afford to do the construction on the project.
1:11:36
[SPEAKER_02]: The budget still not be, you know, super high because we got in for the lower amount.
1:11:42
[SPEAKER_02]: That's the whole reason why they're doing this.
1:11:44
[SPEAKER_02]: We can sell homes and we sell homes with anywhere from $60,000 to $180,000 an equity day one.
1:11:54
[SPEAKER_02]: The moment you buy this house, you step into $60,000 to $180,000 an equity.
1:12:00
[SPEAKER_02]: This is equity that you go later, you start businesses, send your kids to college, you can pull, you know, you can pull from, you know, this instantly increases your net worth.
1:12:09
[SPEAKER_02]: So you get a beautiful home.
1:12:12
[SPEAKER_02]: plus you get instant equity and net worth.
1:12:16
[SPEAKER_02]: We cover in and level in the playing field because a lot of wealth has been built in this country through home ownership.
1:12:22
[SPEAKER_02]: Especially people that have owned their homes for long periods of time, the longer you own your home, the more equity you have in it, right?
1:12:28
[SPEAKER_02]: Back in the 50s, 60s, 70s, red line in, restricted covenences, other cultures and other ethnicities was getting loans from the government, that black families couldn't get.
1:12:41
[SPEAKER_02]: And people that bought those homes back then, now they're sitting on a bunch of generation of wealth because there's a whole bunch of equity in those properties.
1:12:48
[SPEAKER_02]: The best part about what we're doing here when we sell these buildings, when we sell these properties, they come with that equity that catch people up.
1:12:55
[SPEAKER_02]: So, every house we sell comes with the ones I sell come with, $180,000 an equity.
1:13:02
[SPEAKER_02]: Every 10 houses we do is push on $1.8 million worth of wealth back into the community.
1:13:07
[SPEAKER_02]: But you all got to know the community needs to know,
1:13:10
[SPEAKER_02]: It's some resources for y'all too.
1:13:12
[SPEAKER_02]: What people need to know is about something that's called a mortgage buy-down program.
1:13:16
[SPEAKER_02]: So a mortgage buy-down program is when you from the community want to go and use a government program, sometimes it from the city, sometimes it from the state.
1:13:27
[SPEAKER_02]: The city or the state will give you money to buy down the price of the home that you purchased.
1:13:33
[SPEAKER_02]: Quick example, what's out of the house for $280,000, right?
1:13:40
[SPEAKER_02]: We got to make the 280 to be able to cover the construction cause of construction causes to 200, 220 plus if we can't make any money, it's going to be a struggle for us to be able to keep doing it.
1:13:51
[SPEAKER_02]: We're not going to be able to do it.
1:13:53
[SPEAKER_02]: When we sell these houses, they come with a 100, they come with a mortgage body on program.
1:13:59
[SPEAKER_02]: The city will give the buyer up to $80,000 to buy down their mortgage.
1:14:04
[SPEAKER_02]: So instead of them getting the house for 280, they'll get the house for 200.
1:14:11
[SPEAKER_02]: plus you go and get an additional grant from the city for first time home buyer to give another 10,000.
1:14:17
[SPEAKER_02]: Look into first time home buyer grants.
1:14:20
[SPEAKER_02]: Sometimes these banks, Bank of America, Citadel Bank right now, they got additional grants to give you 10,000, 15,000 dollars.
1:14:29
[SPEAKER_02]: So now, it started off as 280.
1:14:31
[SPEAKER_02]: You got a mortgage buy down for $80,000, plus you got another grant for first time home buyer for 10,000.
1:14:38
[SPEAKER_02]: Plus, you got Citadel Bank to come in and give another 15,000.
1:14:42
[SPEAKER_02]: Say more from 280, the two hundred to 190 to 175, using these mortgage body-owned resources, and these first-time home-buyer grants, you get in the house for 175.
1:14:54
[SPEAKER_02]: But the house is a new construction property.
1:14:57
[SPEAKER_02]: in a neighborhood where the new construction houses are worth $400.
1:15:00
[SPEAKER_02]: So we selling these houses for $280, but they already were $400 out of the gate.
1:15:04
[SPEAKER_02]: Because a lot of these houses aren't good neighborhoods in the environment.
1:15:08
[SPEAKER_02]: You get a house in New York.
1:15:09
[SPEAKER_02]: It doesn't matter where you get it is.
1:15:10
[SPEAKER_02]: It works in, it's a lot of places in Philadelphia.
1:15:15
[SPEAKER_02]: And a lot of these major cities, you buy a house for $250, is new construction is worth way more.
1:15:20
[SPEAKER_02]: You know, a lot of times these houses are worth way more than what they're being sold for, so you already get that equity.
1:15:25
[SPEAKER_02]: But the mortgage bottom gives you even more equity.
1:15:27
[SPEAKER_02]: So real quick recap, selling it for 280 is worth $400.
1:15:30
[SPEAKER_02]: You got 120 in equity in it.
1:15:33
[SPEAKER_02]: You get a mortgage bottom program.
1:15:35
[SPEAKER_02]: Now you're getting it for 200, plus some other grants.
1:15:39
[SPEAKER_02]: You're getting it for 180 is worth $400, though.
1:15:42
[SPEAKER_02]: How much equity is the person that's buying that home walking into?
1:15:46
[SPEAKER_02]: 220k instant equity from the day day by brand new construction 3 bedroom 2 bathroom house with granted countertops recess lights like someone everybody here if you sit on the sidelines and you looking for home ownership want you to go to Google right now and look up.
1:16:01
[SPEAKER_02]: home ownership programs and look up mortgage body on programs and the city of Philadelphia they got one called turn the key but give you 75,000 dollars towards purchasing affordable housing properties that were way more instant equity.
1:16:15
[SPEAKER_02]: Up in Rhode Island there's a program right now they're giving buyers $190,000 dollars.
1:16:20
[SPEAKER_02]: towards purchasing a home.
1:16:21
[SPEAKER_02]: You can get a 400,000 out of the house.
1:16:23
[SPEAKER_02]: The government will give you a $190,000 for it.
1:16:25
[SPEAKER_02]: You pay $210.
1:16:27
[SPEAKER_02]: The house where foreign some change instantly, you walk in a $200,000 equity.
1:16:33
[SPEAKER_02]: When we get that equity into our communities, like we level in the playing field.
1:16:36
[SPEAKER_02]: These mortgage buy downs, these homeownership programs, I want you all to Google it.
1:16:40
[SPEAKER_02]: Because 28 of us houses come into the neighborhood, 30 of us houses come into the neighborhood, 30 of us houses come into the neighborhood, we're talking about millions of dollars of wealth that's coming into the community too.
1:16:51
[SPEAKER_00]: I wanted to ask you because people are gonna be watching this and some people might be in Cali, some people might be in Milwaukee,
1:17:03
[SPEAKER_00]: How could they like, is it like a affordable housing isn't every city or is it like specific cities is really high in?
1:17:12
[SPEAKER_02]: Every single city in this country right now struggling with affordable housing.
1:17:16
[SPEAKER_02]: Just a couple of days ago there was a meeting, they have an annual mayor's conference, all the mayor's from all the cities from around the country come together.
1:17:23
[SPEAKER_02]: It was just a long beach California.
1:17:25
[SPEAKER_02]: Every mayor that got up on the stage said they're just cities number one priority right now is affordable housing.
1:17:32
[SPEAKER_02]: Anywhere where you got HUD, which is federal, none of us are right, HUD is the housing of urban development from the government, right?
1:17:41
[SPEAKER_02]: So anywhere where you got HUD, which is a federal program that's in every single state, anywhere where you got state agencies, every single state has a state housing finance agency or some sort of state housing agency.
1:17:56
[SPEAKER_02]: And every single city that has a housing authority or some sort of housing trust fund or some sort of land bank or some sort of redevelopment authority which is every city.
1:18:06
[SPEAKER_02]: This is everywhere.
1:18:07
[SPEAKER_02]: In fact, honestly, this is all around the world right now.
1:18:11
[SPEAKER_02]: I was just in Ghana.
1:18:12
[SPEAKER_02]: I was in West Africa.
1:18:15
[SPEAKER_02]: Gardner, Benin, Togo, they're all pushing affordable housing initiatives.
1:18:18
[SPEAKER_02]: Costa Rica, the Dominican Republic, Jamaica, everybody's pushing affordable housing initiatives.
1:18:24
[SPEAKER_02]: The big thing y'all need to tune into is just the key words I've been talking about.
1:18:28
[SPEAKER_02]: These key words?
1:18:29
[SPEAKER_00]: Uh-huh.
1:18:30
[SPEAKER_02]: Homeownership program, mortgage buy-down program, preservation funds, preservation money.
1:18:35
[SPEAKER_02]: It's synonymous everywhere, and it's going to put you in place, a little bit different in certain places.
1:18:41
[SPEAKER_02]: Some people are new, and they're just stumbling through it, and you might be ahead of the game.
1:18:47
[SPEAKER_02]: Some cities already hit to it, been doing it, years.
1:18:51
[SPEAKER_02]: But no matter where you are, this is needed everywhere right now as we speak.
1:19:01
[SPEAKER_00]: for people who are like their own single family homes, they can open like little apartments inside of their homes.
1:19:08
[SPEAKER_00]: How does that work and how much does it cost to set something like that up?
1:19:12
[SPEAKER_02]: Yeah, yeah.
1:19:12
[SPEAKER_02]: So a affordable housing is so needed right now, right?
1:19:17
[SPEAKER_02]: The government is pulling out all these tools and resources.
1:19:19
[SPEAKER_02]: I hope y'all like light bulbs are going off.
1:19:21
[SPEAKER_02]: People's head is like, it's not just a dollar house.
1:19:23
[SPEAKER_02]: Like it's not just, it's all these loans, these programs, these grants, these investments.
1:19:29
[SPEAKER_02]: but they're also now teens and zone and laws.
1:19:32
[SPEAKER_02]: So now like all around the country, zone and laws basically tell you what you can't do with your building or can't do with the land you own, right?
1:19:40
[SPEAKER_02]: All around the country right now, like never before, you're seeing zone and laws change to help support affordable housing.
1:19:48
[SPEAKER_02]: They try to make it easier to provide more buildings, make bigger buildings, you know, provide more houses on pieces of land, add additional units to single family houses that people own.
1:20:00
[SPEAKER_02]: So watch for it as an entirety, it's only laws of change and they change in the game and the more you want top of it, the better position you win and one help people and two, as the competitive advantage as a developer.
1:20:13
[SPEAKER_02]: Two things I want to tell you all about, actually three real quick, I know we've been pushing, but three things I want to just give you all real fast before I go.
1:20:23
[SPEAKER_02]: With zoning laws, the top three things to watch out for, that will help you to help people and make more money in the process and build more legacy for your family.
1:20:32
[SPEAKER_02]: One is accessory dwelling units, 80 use.
1:20:36
[SPEAKER_02]: So the government now is allowing single family houses
1:20:41
[SPEAKER_02]: apartment building apartment units inside of your attic or an apartment unit inside of your basement or even building apartment unit in the back of your land before the new laws change you wasn't allowed to add to extra apartment building do it illegally now they said okay these 80 years will bring extra unit into the neighborhood we need more units that are affordable so you can add an apartment once you add it to your basement or to the back of your property inside of your basement or in your attic's probably only won't run you like
1:21:10
[SPEAKER_02]: $40 to $60,000 to add it.
1:21:13
[SPEAKER_02]: What is going to bring you in rent and you're going to make your money back in one, two years, plus is going to increase the value of your building, you know, the value of your property.
1:21:21
[SPEAKER_02]: And I'll allow you to provide affordable housing.
1:21:23
[SPEAKER_02]: The buildings in the back, they get a little bit more expensive, but you'll be able to recoup it with the rent.
1:21:29
[SPEAKER_02]: You might build a building in the back of your house with the 80-U, for you know, 120 to 200.
1:21:35
[SPEAKER_02]: But it's going to bring in rent, it's going to increase the value of your land, it's going to increase your net worth.
1:21:40
[SPEAKER_02]: So 80 use a big one.
1:21:42
[SPEAKER_02]: The next one that I would tell y'all to look for is subdivision laws have been changing.
1:21:48
[SPEAKER_02]: So you got these big pieces of land that some people are living on 6,000 square foot lot.
1:21:54
[SPEAKER_02]: And the zoning used only allow you to build one house on that 6,000 square foot lot.
1:21:58
[SPEAKER_02]: You got this one house and a big behind.
1:22:02
[SPEAKER_02]: land all around it and the zone and law only allowed you to have one house on that 6,000 piece square foot piece of land.
1:22:08
[SPEAKER_02]: Now they're saying we need more affordable housing.
1:22:11
[SPEAKER_02]: So now you don't need to just have one house on that 6,000 square foot piece of land.
1:22:16
[SPEAKER_02]: We're going to allow you to subdivide it.
1:22:18
[SPEAKER_02]: Take that 6,000 square feet piece of land split it into three 2,000 square foot pieces of land and build two more houses.
1:22:27
[SPEAKER_02]: So now that piece of land, you own just became more valuable, you could subdivide it, break it into two more additional pieces of land, just sell them.
1:22:36
[SPEAKER_02]: 200,000 of peace.
1:22:38
[SPEAKER_02]: Can't 100?
1:22:39
[SPEAKER_02]: Some places more than that.
1:22:41
[SPEAKER_02]: If you were sitting on land that you couldn't do enough and what you just had a real big backyard, then I would sub-divide your land, and split into multiple parcels, and sell the rest of, or develop them.
1:22:51
[SPEAKER_02]: A lot of investors in developers of concert set is now.
1:22:55
[SPEAKER_02]: Last year, on that $6,000 piece of land, you could only build.
1:22:59
[SPEAKER_02]: one house.
1:23:00
[SPEAKER_02]: Now developers at a savvy, they change in these laws all around the country because of affordable housing needs.
1:23:06
[SPEAKER_02]: Now they buy in that one house and nobody even realizes they get made to split it into four pieces of land and build four houses.
1:23:14
[SPEAKER_02]: That's going to be worth way more money and split it into four pieces of land.
1:23:17
[SPEAKER_02]: Keep the one, saw the other, and still make the money off of the house and subdivide the rest of all all over.
1:23:24
[SPEAKER_02]: Sometimes nobody's big pieces of lame with a house, little tiny house, knock the house down and build five houses.
1:23:31
[SPEAKER_02]: So with these new laws with subdivision.
1:23:34
[SPEAKER_02]: They're changing.
1:23:35
[SPEAKER_02]: Be one to look out where you live, you might be able to split it into more pieces of land this year than you was last year, because he subdivision laws are changing, but so that we can build more houses and provide more affordable houses.
1:23:48
[SPEAKER_02]: And so if you had to occur, you could capitalize.
1:23:51
[SPEAKER_02]: And help a lot of people in the process or don't ever forget that.
1:23:54
[SPEAKER_02]: The last piece don't want to leave y'all with.
1:23:57
[SPEAKER_02]: With zoning that's changing, is the government is now allowing
1:24:02
[SPEAKER_02]: you to make bigger buildings, that's worth more money, that can help more people.
1:24:07
[SPEAKER_02]: So like certain zoning that you all have, you gotta zone in that might allow you to build three units.
1:24:15
[SPEAKER_02]: You might have zone in on a piece of land or property that you have, there's a lot you'd have for units.
1:24:19
[SPEAKER_02]: Maybe it's only allowed to be a duplex.
1:24:22
[SPEAKER_02]: Whatever it's allowed to be by zone in, you gotta double check your zone in because a lot of government,
1:24:28
[SPEAKER_02]: agencies now are allowing what we call a density bonus.
1:24:33
[SPEAKER_02]: Identity bonus is when the government will say, even though you only zone for two units, you only zone for three units, if you make these units affordable housing, will that you do?
1:24:44
[SPEAKER_02]: Identity bonus and now instead of doing three, you can do five units.
1:24:48
[SPEAKER_02]: If you're doing affordable housing instead doing five units, we'll let you do eight units.
1:24:53
[SPEAKER_02]: If you're doing affordable housing, it's only allowed you to do 10 units, but we'll let you do 16 units.
1:24:59
[SPEAKER_02]: And now once you've realized that you've realized that you can make your buildings bigger, but more units in them, even make your buildings taller and help more people in the process, but the best part about these density bonuses is that it helps you to make the building
1:25:15
[SPEAKER_02]: more financeable.
1:25:17
[SPEAKER_02]: So remember we saw in a while earlier, right?
1:25:20
[SPEAKER_02]: The more income you have coming in and a while is that the rental income or you know incomes coming in minus all your expenses, the more units you have, your income is going to go up, right?
1:25:30
[SPEAKER_02]: Yeah.
1:25:31
[SPEAKER_02]: So now you got higher in an in a while.
1:25:34
[SPEAKER_02]: Now, your building is worth extra $1,000,000, $2,000,000, $3,000,000, because of the density bonus.
1:25:40
[SPEAKER_02]: And you help them people in the process, and you provide them more units, but you're making your building worth more money.
1:25:46
[SPEAKER_02]: The more money your building is going to be worth, the easier it is to get financing from the bank.
1:25:50
[SPEAKER_02]: The more money your building is going to be worth, the easier it is to do a refinance at the end.
1:25:56
[SPEAKER_02]: The more units that you got in the more your building is worth, the more net worth.
1:26:00
[SPEAKER_02]: and wealth you building for you and your family and your loved ones, that's a fact.
1:26:04
[SPEAKER_02]: All while helping people.
1:26:05
[SPEAKER_02]: So the government got these density bonuses that allow you to make the buildings bigger and more units so that you could help more people.
1:26:12
[SPEAKER_02]: But in the process, you could build more wealth for you and your family if you hit.
1:26:16
[SPEAKER_02]: He worked density bonus.
1:26:18
[SPEAKER_02]: I'd let you put more units make the buildings bigger and help more people.
1:26:22
[SPEAKER_00]: So out of games, this is a whole lot of game, and I think one thing we might have not touched on was you could basically use, I know you mentioned at the last time, but you could use the properties you have, and borrow against them, and do other things with them as well, too.
1:26:43
[SPEAKER_00]: It took a little bit about that side, like real quick.
1:26:46
[SPEAKER_02]: Yeah, I mean 100%.
1:26:46
[SPEAKER_02]: I mean, at,
1:26:48
[SPEAKER_02]: At the end of the day, when we build enough these portfolios, we build enough equity, right?
1:26:53
[SPEAKER_02]: Whatever our debt is, you know.
1:26:57
[SPEAKER_02]: The value of the build and minus whatever that is, that equity just keeps getting bigger and bigger and bigger.
1:27:02
[SPEAKER_02]: You know, there's a bunch of ways to capture that equity, right?
1:27:05
[SPEAKER_02]: You can do 1031 exchanges and, you know, sell those properties and buy other properties in the void taxes.
1:27:14
[SPEAKER_02]: You could use those properties and get to taxes down, do something that we call tax segregation and bonus depreciations,
1:27:26
[SPEAKER_02]: $300,000 in taxes, but you depreciate those buildings, meaning like you write off all of the value that's gonna be lost over 27, and the 36 years, government will say, you owe us $300,000, but you can use those buildings to depreciate against that, that taxable income now you own any money, right?
1:27:44
[SPEAKER_02]: You can also just do simple things, like use the equity in the building, or the properties that you purchase from the government to be able to finance your projects.
1:27:55
[SPEAKER_02]: If I get 10 houses, that's worth $120,000 a piece.
1:28:01
[SPEAKER_02]: But I got them for a nine-minute fee, because I'm doing it for the bullhousing, and they worth $1.2 million.
1:28:06
[SPEAKER_02]: I can go to my lender and ask for a business line of credit that's backed by the asset, backed by the equity in the houses.
1:28:15
[SPEAKER_02]: They're the houses of worth $1.2 million, get them a price, $1.2.
1:28:19
[SPEAKER_02]: Well, man, I paid $12 for them.
1:28:23
[SPEAKER_02]: I'll ask for a business line of credit anywhere from like 20 to 35% of the volume and give me a business line of credit for $250 to $400,000 back by those 12 houses that I paid $12 for, but they had praise for 1.2.
1:28:38
[SPEAKER_02]: Now with that business line of credit, I'm a friend of eight, two houses at a time, three houses at a time, sell them.
1:28:46
[SPEAKER_02]: because it's only, you might only get $300,000 for $100,000.
1:28:48
[SPEAKER_02]: That's enough to renovate three of them at a time.
1:28:50
[SPEAKER_02]: Sell them, replenish the line.
1:28:53
[SPEAKER_02]: Repeat, renovate three more, sell them.
1:28:56
[SPEAKER_01]: Renovate them, repeat, sell them again.
1:28:58
[SPEAKER_01]: So why not do like kind of like home equity line and credit versus like a business line and credit?
1:29:05
[SPEAKER_02]: I mean, so business lines of credit that are secure by assets are going to have a much better interest rate.
1:29:11
[SPEAKER_02]: Makes sense.
1:29:12
[SPEAKER_02]: So you got people home equity line of credit has good interest rates too, but you put in your house up.
1:29:16
[SPEAKER_02]: Right.
1:29:16
[SPEAKER_02]: I don't really like to put.
1:29:18
[SPEAKER_02]: I don't really like that advice.
1:29:19
[SPEAKER_02]: We would have put your house up.
1:29:20
[SPEAKER_02]: If you can avoid it.
1:29:21
[SPEAKER_02]: In the beginning, getting the game, you know, but once you get to a point where you don't have to put your personal house up, I encourage you to not put your personal house up.
1:29:30
[SPEAKER_02]: In the beginning, though, you get a home equity line of credit against your house.
1:29:36
[SPEAKER_02]: If you go to get a business line of credit though, you know everybody be talking about no doc, no doc, no doc, you could use doc now because you got, you got assets.
1:29:45
[SPEAKER_02]: And you're gonna get a way better interest rate.
1:29:47
[SPEAKER_02]: Yeah.
1:29:48
[SPEAKER_02]: Like if you go no doc right now, man, you might get an interest rate of like fricking 12 to 18%.
1:29:53
[SPEAKER_02]: One at one at no doc, unsacquired line of credit.
1:29:57
[SPEAKER_02]: If you go to get a line of credit back by these assets if you got from the government, the bill of affordable housing, your line of credit is gonna be like seven, eight percent.
1:30:05
[SPEAKER_02]: If you go to a CDF, I can get this line of credit or you go to a bank that has a need to get CRA and they want to look good in the community and get good marketing.
1:30:17
[SPEAKER_02]: might get that line of credit against those houses or those assets or that land for 5% 6% because remember the government incentivizes giving affordable housing developers lower interest rates.
1:30:27
[SPEAKER_02]: So you might get that line of credit for the super low.
1:30:29
[SPEAKER_01]: Yeah.
1:30:30
[SPEAKER_00]: Now this was a whole lot of game.
1:30:33
[SPEAKER_00]: You know, I do want to I do want us to close off and you know, if you could
1:30:37
[SPEAKER_00]: Give somebody who's watching this like a actionable step.
1:30:40
[SPEAKER_00]: They could take in the next 24 hours to get like their first or work towards getting like their first or four of a house and like what would you tell them?
1:30:47
[SPEAKER_02]: I would tell them to go to Google right now and just cross reference all these things we talk about because I'm going to try to see it.
1:30:55
[SPEAKER_02]: The reason why I'm so forth coming with this stuff, I'm going to get you this stuff is because we want people to see it so that people know it's real so that people can be a part of it.
1:31:04
[SPEAKER_02]: because we need way more community development.
1:31:06
[SPEAKER_02]: We just can't be consumers in this.
1:31:08
[SPEAKER_02]: You know, so the first thing I always tell people's go to Google, Google, or chat GBT, all these things I just said, all the all these keywords and see it for yourself.
1:31:17
[SPEAKER_02]: You know, the next step though, I will tell them to do with.
1:31:21
[SPEAKER_02]: to get what individuals that had done it before, and that can show you the way.
1:31:26
[SPEAKER_02]: And so we have a program that's been training people in the community, is to buy back the block program.
1:31:33
[SPEAKER_02]: We've been doing this for coming up on five years now.
1:31:36
[SPEAKER_02]: We've been training community developers first in Philadelphia.
1:31:39
[SPEAKER_02]: Now we spread this all around the country.
1:31:41
[SPEAKER_02]: We're in multiple states, working with the biggest associations, the biggest organizations in the country to push these efforts.
1:31:49
[SPEAKER_02]: I would say whether you get with somebody like a bob-back, the block program, or you get with somebody who's done it before to help you to close the get and make it easier.
1:31:58
[SPEAKER_02]: The awareness is the first step, the second step is getting through the process applying and getting your first deal, you're putting your first points on the board.
1:32:07
[SPEAKER_02]: Because once you do one, once you do two, once you do three,
1:32:10
[SPEAKER_02]: you in the game.
1:32:11
[SPEAKER_02]: So I'm gonna encourage everybody to check us out at the Buy Back to Block, masterclass.com.
1:32:18
[SPEAKER_02]: We got a free training that's coming up.
1:32:21
[SPEAKER_02]: It's gonna be running all through this month.
1:32:23
[SPEAKER_02]: It's free 100% y'all see.
1:32:25
[SPEAKER_02]: I don't get keep the information.
1:32:27
[SPEAKER_02]: Like we break this down even more in depth.
1:32:29
[SPEAKER_02]: That's that by step because we want people to execute and get involved.
1:32:34
[SPEAKER_02]: You hit it on the head with execute.
1:32:36
[SPEAKER_02]: We're not just learning just to be learning.
1:32:38
[SPEAKER_02]: Like, knowledge with all execution is, is worthless, you know, I'm saying, like, we now learn just to be learning.
1:32:44
[SPEAKER_02]: We need people to execute on this because there's a 10 million home need right now, there's a wealth gap.
1:32:51
[SPEAKER_02]: There's people that's homeless right now, it's people that's getting pushed into this place out of the community right now, as we speak, so we need this to happen.
1:32:58
[SPEAKER_02]: We want this to happen.
1:32:59
[SPEAKER_02]: We need this to happen.
1:33:00
[SPEAKER_02]: So by back the block, masterclass.com, tapping with us is free.
1:33:05
[SPEAKER_02]: We're going to be doing it all throughout this week.
1:33:08
[SPEAKER_02]: Cross-references stuff.
1:33:09
[SPEAKER_02]: I'm going to try to see it for y'all so much.
1:33:11
[SPEAKER_02]: I see it.
1:33:11
[SPEAKER_02]: So y'all know that it's real.
1:33:12
[SPEAKER_02]: So y'all could be a part of it.
1:33:13
[SPEAKER_00]: I'm just getting it.
1:33:15
[SPEAKER_00]: That's not a value in this one.
1:33:16
[SPEAKER_00]: Definitely.
1:33:17
[SPEAKER_00]: So definitely just let them know where they could tap and which you social media wise.
1:33:23
[SPEAKER_00]: I know you said the the the the chat the bi black, the black.
1:33:27
[SPEAKER_00]: You know, challenge.
1:33:28
[SPEAKER_00]: I know you do the free workshops.
1:33:29
[SPEAKER_00]: Just tell them where they could go out and you know find those things.
1:33:32
[SPEAKER_00]: We're going to include in description as well too.
1:33:34
[SPEAKER_02]: Absolutely absolutely so follow me a j dot p dot for rainy I know for any hard it's for F, E, R, R, A, R, I and I want you to get to the j dot p and you put like F, E, R, R is going pop up.
1:33:48
[SPEAKER_02]: follow me on Instagram so you can see a lot of things that we have going on in the community.
1:33:52
[SPEAKER_02]: Go check me out just in general though.
1:33:55
[SPEAKER_02]: A big body of work out there.
1:33:57
[SPEAKER_02]: I've been working with the National Association, the Home Builders, National Kitchen, the Bath Association.
1:34:02
[SPEAKER_02]: I sit on the Mayor's Commission for the Delphiah.
1:34:05
[SPEAKER_02]: I'm the economic chair.
1:34:06
[SPEAKER_02]: We've been pushing these initiatives in Rhode Island and Miami and Delaware and Maryland.
1:34:12
[SPEAKER_02]: This isn't something new, this is something that has been growing.
1:34:15
[SPEAKER_02]: This is a movement that's been spreading, and we would love for y'all to be a part of it.
1:34:19
[SPEAKER_00]: Let's go.
1:34:20
[SPEAKER_01]: There we go.
1:34:22
[SPEAKER_01]: This was worth a second.
1:34:23
[SPEAKER_00]: This is good.
1:34:24
[SPEAKER_01]: I think this guy even talked the first one.
1:34:26
[SPEAKER_01]: Yeah, absolutely.
1:34:27
[SPEAKER_01]: Also, this is another episode of MotionIt Success.
1:34:31
[SPEAKER_01]: I told you guys, definitely stay all the way to the end.
1:34:34
[SPEAKER_01]: He shared a lot of banks, a lot of great opportunities, a lot of different incentives.
1:34:38
[SPEAKER_01]: a lot of different programs, a lot of different opportunities that you guys can use, to go out there and start being successful when it comes to investing into your first affordable housing unit, or if not your first, your next few set of affordable housing units.
1:34:53
[SPEAKER_01]: So go ahead and tap in, click all the links down below, and don't forget to like, comment, share, and subscribe.
1:35:00
[SPEAKER_01]: And we'll see you on the next podcast episode.
1:35:02
[SPEAKER_01]: Peace.
1:35:02
[SPEAKER_01]: Yeah, that's work.