Episode 3: Real Estate Financing Options: Real Estate and Business Funding Made Easy
Lane O’Bryon got into the mortgage business back in 2001. Before that, he was in corporate America and hated his job. He quickly fell in love with the mortgage business and made more money in his first three months than he was going to make all year at his job that he had just left.
He had a few lucky breaks and found himself in the top 10% of producers among his peers. In 2010, he was asked to become a coach in the national program known as the Direct Lender Alliance.
Since then, he has successfully coached and mentored hundreds of individuals on all aspects of the lending business. He has also closed over 1000 deals in his career and is a full-time student of the business.
Lane has interviewed hundreds of people at all levels including many industry experts to find out what works and what doesn’t work. This led him to create an agency business where he had over 100 agents nationwide.
He discovered the one UNIVERSAL PROBLEM that Investors, AND Brokers ALL have: Finding, vetting and building relationships with the BEST SOURCES of Capital for YOUR SPECIFIC DEAL NEEDS!
Lane made it his personal mission to actually solve this problem, and now is helping hundreds with this unbelievable but very simple solution. Mitch says: “I personally have never seen anything like this anywhere, and I know that you are going to love it!. It’s the Perfect Solution.”
What you’ll learn about in this episode:
- There are better real estate financing options, and we have found them for you
- Get up to 90% of the purchase and 100% of the rehab funds for a house
- What buying at discount means when getting a loan
- What is ARV, and what is your ARV?
- Do lenders need to know where the down payment is coming from?
- How do loan minimums affect you when flipping a house?
- Resources for brokers and investors-The Perfect Solution!
- How to find financing for Self Storage Facilities
- There are 3 types of cash — which one do you want?
- Mortgage brokers, Realtors, Commercial Real Estate Brokers, Business Brokers, CPA’s, Attorneys, Financial Planners AND MORE will greatly benefit from this program.
Mitch: This is Mitch. Your wonderful all-knowing host of the Real Estate Investors Summit podcast. I’m here with person we all need to know “The Money Guy”, the guy that can put you in touch with the money to find you deals his name is Lane O’Bryon, Lane has a company called Capital Connection, He’s been in this business since 2001, he’s made-I don’t know hundreds of thousands of dollars of connections- he’s in the mortgage business where was ranked top of his field, he’s done a whole bunch of staff in his life but, we could go on forever about what Lane has done but probably what you want to hear is what can he do for you and what can he do for us and how can he help you make more deals. So, Lane O’Bryon how are you today?
Lane: I’m doing great Mitch, good to talk to you and thanks for having me on here.
Mitch: We’ve been doing business together for a while and tell us how you’re-how you’re kind of morphing into this ability to help people find money, investors find the right color of money for their different kinds of deals and what kind of colors of money are you finding just-let’s just jump in-how’d you get started in this direction.
Lane: Well is OK, I’m kinda take a step back and talk a little bit about how I ended back here..
Lane: and I’m gonna tell you about boring-boring details but just, so the story make a little sense. I actually got into the mortgage industry as a mortgage broker back in 2001 as he mentioned and had a great ride, with very-very successful for about 6 or 7 years until about 2007, in 2007 I went from making roughly, I don’t know $40,000, $50,000 a month on average to down to completely zero and it happened about 2 to 3 month period when the subprime market collapsed. So, it was a devastating period there for me personally, kind of rough patch obviously, kinda went through a tough time in terms of just trying to figure out what it was I wanted to do because everything I had known at that point kinda just felt-fell away and so I tried the insurance industry for a little while, no offense to anyone that’s in that industry but I actually didn’t like that industry at all, I didn’t get it and my passion and my heart really always kept coming back to financing and it’s the only thing I think I’ve-I’m actually pretty good at it and I really like it and I seem to get it.
So at that point I really-I kept looking for ways to kinda get back into the industry, and I got introduced to a guy so is actually a son of a friend of mine, who was doing something called Merchant Cash Advances back then and he had been doing this Merchant Cash Advances for several at this point and was very-very successful and basically what he was doing was helping businesses find money, find capital because what they have been used to, in terms of just going down to the bank and getting a line of credit or whatever, those ways of doing business really, with the banking meltdown pretty much went away for a lot of businesses as well, so he kinda figured out another way to help people, albeit very expensive for businesses, but most of the time the return of these guys were getting for the money justified the cost of the capital.
So, that intrigue me and I kinda went back in and in about 2008 I got into helping businesses in my community I’m in Tampa, Tampa Florida, became pretty entrenched in that side of the business but because of my experience that I had just gone through I wanted to make sure I wasn’t just doing one-you know kinda one business line. So, at that point I really begun to open my eyes up and learn about more and more sources of capital just all these different ways that were essentially alternative means of capital than what the people are used to which was going to the banks and through that experience I begun to see things, you know just all kinds of different programs, like I’m into commercial financing, real estate financing of all different strides and I began to see these lenders and these sources were lending out literally hundreds of millions of dollars every month but most people still didn’t really know where to go to get this or where to find out it and it’s just sort of-been chaotic environment and I think in some cases it really still is, for most people it’s a challenge that most investors have, I mean really most brokers even have is where are the best sources of capital and — where do you go for whatever deal you’re trying to do.
So, I kinda made it my mission at that point to really understand, the who is doing what and really where are — where is the capital coming from, where is it flowing from and in addition to that in 2009 I was asked to come on to a program called “the direct lender alliance”, you remember “the direct lender alliance” that’s where we actually meet but in “the direct lender alliance” I was asked to speak to the folks that were in that program and it gave me the opportunity to come on every week and talk to literally hundreds of really-they were brokers about my experiences and what we were having success with and really kinda option to that was, these brokers begin to contact me personally and they would tell me-mainly they were telling me their challenges and the hard things that they were finding in their own marketplaces and I began to see patterns and so as I started to see the patterns, in one sense it was kind of refreshing because I began not feel so alone, you know I saw that other people were having the same challenges I was experiencing here with my own business and so, at that point I decided to study the broker community and find out who were the top producers over there, who was having the most success and kind of really analyze what they were doing differently than the rest of the pack and what that lead me to was a company-I started a company in 2012 called Business Funding Alternatives.
Business Funding Alternatives our model there was, we’re gonna have and we did have agents and it was similar to like a franchise, so we brought agents in they were mainly brokers, we would train them how to go out and talk about sources of money and how to get their clients financed, and then we would bring the deals in and through our own sources here we would help facilitate the deal and them closed and that model proved to be very-very good financially it was very successful. However, it became self-limited into a sense, that we got so busy doing transactions, and I think at one point we had – I person was working over a hundred, so it dawned on me that I need to be focusing on the sources and so now where we are is were spending, we developed Capital Connection and Capital Connection our model is we here at the Corporate level we spend our time, focus and energy mainly on sourcing the sources, not on transactions, so what we’ve been able to do over the last year, we launched over about a year ago, is we’re now really developing out and finding the sources for the marketplace that are so desperately needed and were consolidating them all into one place and making them available directly to our investors and to our brokers.
So, we have training for brokers and we have really a system that connects these folks, both brokers and investors directly to the best sources that we can find and again many of them I’ve known for years, they relational — you know the people that I know or they come highly referred, we have really high bar in terms of who we look for, who we let into our system, it’s very comprehensive but it’s not like we have a thousand sources here, everybody we have is very competitive, they’re very niche, they cover real specific needs and kinda find a thing that is, the advantage I think I have right now is I get to listen to people and I think I spent most of my day actually just listening to our subscribers which are again mainly investors or brokers and I asked them what is it you’re looking for, what kinds of capital needs to you have and then I take that information, I take those request and we go out and have specific ways that we go out and find these sources. We’re not magic, we can’t make things that don’t exist but, I will tell you I think- I mean I can barely sleep at night half the time, because I–we find a new source and I know it feels a huge need-you and I were just talking about a source before the call that we’re gonna work on, so there’s all these thing that we’re helping people with and it’s a great place right now.
Mitch: OK, so let’s start with an obvious niche that I’m gonna assume that you have found some real estate financing options for already, how about the fix and the flips, the wholesale guy or the rehabber that buys and fixes and retails?
Lane: Yeah, great-great question I’m glad you asked that one first, because I-actually I think that’s probably our-I think that’s our entire-our top-our most active space right this minute, and the thing I’ll say about that is, the most people that I talked to, then again I maintain a very flourishing business here in Tampa with my own investors and stuff, their using the hard money or the private money source for their fix and flip, that kinda thing they go to ever since the meltdown, which nothing against the hard money or the private money in fact we used them in certain instances, but I think most people realized they can be very-very expensive, in some cases they don’t give you the leverage that you really need and you don’t really know — if that’s the best deal for you and I’ll tell you-you know frankly it isn’t, there are probably better real estate financing options, the problem is most people don’t know what that option is or where they go to, to get it. So, we’ve been able to find an ad for the last year, I think we have 3 or 4 and one really are-is I think our best, the one I go to is a lender that can go to up to 90% of the acquisition. So, 90% of the purchase price and a 100% of the rehab budget can all be put into the loan.
So, it’s effectively over 90% if you take the total loan, it’s over 90% loan to value, now that is constrained by certain L.P.V. as is L.P.V. requirements and A.R.V. requirements After Repair Value but in essence if the property is being bought right which I actually find most of my guys are doing so, they’re buying them at discounts and wholesale and things like that, these numbers typically do work, and so again 90% of acquisition, 100% of rehab that loan is a short term loan and it’s a 12 month interest only, no pre-payment penalty loan and the rates are decent we can typically close those in 10 to 14 days from the time we start, we do them like clockwork down here, I mean we’re-I picked them up almost every day, so that’s it, that’s a great program for us. —
Mitch: So in that program could probably be made easier if someone just wanted the acquisition money and they can fund their own rehab, via their own saving or their 0% credit card or their own credit card for that matter, right? Does that make a lot easier when you don’t even need to ask for the rehab money?
Lane: Yes and No. I mean I actually not really — honestly it’s not challenging, it’s really about the numbers, so if the A.R.V the After Repair Value works, here’s what they do, they take total loan. So they take the acquisition loan, let’s say somebody is buying the property for $100,000.
Lane: As it sits there, it’s worth a $130,000 just to use easy numbers.
Mitch: So they bought it at a $30,000 discount
Lane: Correct, they can get a loan of $90,000 to purchase, so they’ll walk to closing, they’ll have bring down $10,000 to closing, so that would be where they might want the 0% credit cards or…
Mitch: Yeah, OK.
Lane: In my world there’s always a down payment requirement and how you get that is really up to the borrower, we have some ways we help our borrowers as well, so they get $90,000 and then they’ll furnish their rehab budget, let’s say they need $40,000 for the rehab budget, that $40,000 will be added to the $90,000 that a $130,000 loan, but let’s say the A.R.V. is $200,000 which is very typical.
Lane: Your numbers work. cause $130,000 is 70% or 75% or less than 75%, so it’s plug right in, so off they go, I mean-it’s one way that we do it, I could go on and on there’s so many different methods now for these investors and again, this is where we live in right now, it seems the market is-I guess, I don’t know everywhere but, I know down here and lots of places in this country there’s a lot of opportunity and everyone seems to be jumping on that opportunity so…
Mitch: There is, there is a lot of opportunity, I think there’s a lot more opportunity if there’s a little bit of a dump turning the economy but, let me ask you this, one thing that struck me, so they want 10% down, do these people care? Where you get these 10% down. Do they borrow it from mom and dad or you borrow it from a partner or you put it on a credit card, do they care?
Lane: No. The only thing is it have to show up in the bank account, so they’re gonna have to ask for a bank statements and if it’s in the bank account they’ll-it’s OK.
Mitch: OK. So you have to borrow it, you’ll have to put it in a bank account. How long does it have to be in the bank account?
Lane: It just have to be there.
Mitch: Just have to be there. OK so..
Lane: Yup. It’s not like, where they see where the money come from and all that stuff…
Lane: I don’t see a lot of that, at least in this space.
Mitch: OK. That’s one type of money, the quick turn money, you’ve got a handle on that, plenty of sources, what about the buy in whole strategy? You’ve got some money for that, some longer term money, or what kind of money you have for buying whole strategy.
Lane: I did, I’m glad you’ve asked about that one, so there’s a couple of different things about those guys, let’s talk about a buy-just a straight buy in hold, we have acquisition money that will go down to $25,000 loan minimum and that’s a big deal because one of the constraints that we work against always is that loan minimums that a lot of lenders will give us, the theory is, it takes as much work to close a $50,000 loan as it does to a $500,000 loan therefore we are not going to do a $50,000 loan, I mean we hear that from a lot of lenders.
So, every lender have their own minimum loan that they’ll do and they’re typically a pretty hard line, the best we have up until very recently was a $50,000 minimum the average is more like $75,000 or $100,000 or $150,000, so as you’re get into this smaller arenas with this low minimums, it opens up the doors for a lot more investors, because I know a lot-a lot more investor are investing in the smaller stuff, there’s a lot more-they seems more action, more opportunity…
Mitch: This is very particular to my listeners and some of my students, because we do function in lot of areas where the houses are very inexpensive and this has been a problem the minimums, so it’s nice to hear you’ve got the minimum at least down to $25,000…
Lane: Yeah and if it goes, I’ll probably let you know — I’m always looking, but this was a big find for us and they’re not in every state, don’t ask me the states that they’re all in, I think they’re in about 30 states currently, so they’re not everywhere, but that’s a growing list, this particular lender does-all they do is-will end to 1 or 4 unit investors and they probably do 50 to 60 million a month in loans, to that group, so they’re very-very active…
Mitch: They’re serious, very serious.
Lane: They ain’t playing, yeah [Laughter], they’re a good deals, and their raise a very good, they’re a long term lenders, so again if you’re buying, you can get 75% of the purchase price and put it into a long term loan, it’s a 30 year loan, it’s gonna have a fixed rate period, of either 5, 7 or 10 I believe, don’t hold me into this, I’m not looking at the rate sheet but it’s a very good long term loan, the amp schedule is long and rates are very-very good on that program, so it’s..
Mitch: the properties right, — you can stand a little bit higher rate, if the terms is long enough and, you know, there’s no argument there, so Lane I think I wanna do is I wanna introduce a couple links here, I understand that you have two kinds of people that maybe listening to this podcast, you have investors that are looking for money and then you have other people out there that would love to be brokers and help participate in connecting investors with the money, is that right?
Lane: That’s exactly right.
Mitch: OK. So, let’s-I’m gonna give a link out here for investors that are looking for real estate financing options and money, if you wanna talk to Lane and learn more about the different program out there, tell Lane what your situation is, let Lane help you put-you together with the right kind of money for your niche, then I want you to go to reinvestorsummit.com/investor, alright so if you’re looking for money that’s where you’d go, reinvestorsummit.com/investor, if you’re a broker and you wanna help Lane connect investors with money and get paid for it, then let’s go to reinvestorsummit.com/broker, reinvestorsummit.com/broker. How’s that right Lane? Did I do it OK?
Lane: You did great and if I can, can I just add a couple of quick things — to the broker and also to the investor. So, for the broker, just so everyone knows the-that broker link just gonna show you what we’ve done with our training for brokers, as I mention kinda at the beginning of the call, I studied the broker community and through that study I actually developed a fairly comprehensive training course, it’s really stuff that I learned here in my own business, making all the mistakes and also-you know- learning and talking to so many people in the field about what was working and what wasn’t and we kind of consolidated all that down, trying to make it fairly easy and fun to follow, but I think that training, if you’re a broker is worth taking a look at, because again it really is the real world stuff, it’s the stuff that we use here every single day, just to make a quick comment on that, I had a great month here on August, I closed-I think 7 deals, very-very good financially for me and all of those deals were closed through marketing efforts that were done in 2011, I haven’t marketed for business here locally and so, just to give an idea I mean there are methods here you can use and employ that we’re really help your business.
And so, to take a look at that if you’re a broker, if you wanna learn more about how you could make some money here by helping people get access to some real estate financing options and just a final thing I say to the whole program is, my vision for this whole thing is really just to sort of, be here, listen to you and kind of work for you, I hope can hear, from what we’re saying is that, the hardest part of this whole equation for most people, is really just knowing where this sources are, who’s doing what, there’s a lot of stuff on the internet, I mean I know that, I see these things like Scotsman Guide and these other kind of-there’s like this search engine out there, but nobody’s really hit the mark in terms of actually looking to really connect to you-for your deal and wherever that deal is and whatever that deal is, I think we may have home for it already and if we don’t, just tell us and we wanna work for you, as kind of what I’m trying to convey here…
Mitch: Finding it, trying to find it…
Lane: Yeah, Like what we talked about earlier you and I. So, that really the message, we-right now, we have access to commercial in every different instance, small balanced commercial, large commercial, office complexes, really anything you can think of, self-storage Mitch, — It runs game it, I think we’re probably the most comprehensive, collector of good sources that you’re gonna find out there, at least that’s we’re trying to be, so that’s the last thing I’ll say on that….
Mitch: Lane, you are providing an invaluable service, because internet’s a very confusing about this, everyone says they can give you some money and then you get down there, you waste all this time to figure out that they a quad zillion points and like – you know – they want you to jump to all this hoops and it’s just not even worth it, I’ve done it so many times, it’s not even funny, I’ve kinda given up. Having you, as a go to guy, is gonna be great, because I can explain to you what kind of money I need, for what kind of niche that I’m into, you know I figure, if you can’t find it, I’m glad I didn’t waste my time, that’s what I’m gonna figure and also, I wanna say that I always learn stuff by doing this call for the Real Estate Investors Summit podcast is-you know-I’m really excited that you brought it up, you can find real estate financing options for storages, because I’m about to need that and I had no idea that this was gonna come up and didn’t even think about to ask about storages or apartment complexes or anything else like that, and low and behold you brought it up yourself, I may be working through you here in a very short period of time, because I love buying self-storage places…
Lane: I hear that rumor. [Laughter]
Mitch: I do, you know, my strategy is to buy houses with O.P.M Other People’s Money, owner financed it for about double and create wealth, like in Jack Bosch’s book Forever Cash, there’s three types of money, there’s the one time cash, there’s temporary cash and there’s forever cash, and so you’re providing money for one time cash which is like you buy something and you sell it wholesale or you sell it retail and that deal’s over and dead, you made your money and you got paid once. And there’s temporary cash where, like what I do, I buy something, I owner financed it for years but at some point that note ends, it’s temporary, it could go on for 10 years, 12 years, 15 years, 20 years 30 years, but the average note in America last about 7 and a half years, right? the average mortgage note, because something happens, they either sell the house and they get paid off or burns down the insurance pays it off or they win the lottery or they given inheritance, whatever the reason, that’s temporary cash, but forever cash is rental, some kind of rent or business that goes on until you decide you don’t want to do it anymore, which could potentially be forever, and I find storages to be, my forever cash choice was storages….
Mitch: No sheetrock, no plumbing, no carpet, very-you know a lot less to deal with than apartments or houses and a very quick foreclosure time if I need to. So, I just wanted to point out that, how rewarding this call is, even for me and people think, people like Lane and I know everything, well we don’t know everything, we’re humans like everybody else, so join in this kind of podcast is always beneficial, and I find it very interesting-I’m gonna talk about my Q & A call Lane if you don’t mind, I’m gonna talk to my students about getting in contact with link-through this link also, re investor summit/investor, I’m gonna hand that out like Q & A, I have a ton of people that listen to that and maybe we can help them connect with some capital.
Lane: Let’s hope so, I think-I’ll certainly try. [Laughter]
Mitch: That’s it, that’s all you can ask, I really appreciate you being on today, it’s been insightful and encouraging, that someone’s out there trying to put investors and money together to the degree that you are. Thank you so much.
Lane: Yeah. Thank you Mitch, I really appreciate it. Thanks a lot.
Mitch: Alright. We’ll talk to you soon Lane.