Episode 72

Ep 72 - Unlocking Real Estate Investment Opportunities: A Conversation with Ryan Day from Calvert Mortgage

Here are the best ways I can help you as an Investor:

Investor Network Access

  • Run the numbers like a pro of any property.
  • Access Insider Events, ONLY for members.
  • Network with other investors.
  • Create joint venture partnerships.
  • Get direct access to a team of experts.
  • Get preferred interest rates on mortgages & lending products.
  • Ask questions and get answers to any investing challenges you have.

Book A FREE Strategy Call With My Team

  • Discover the financing options available to you.
  • Create the proper financing structure for success.
  • Get your portfolio reviewed and identify weak properties and ares to access equity.

Show Summary:

Unlocking Real Estate Investment Opportunities: A Conversation with Ryan Day from Calvert Mortgage

In this episode of the Wisdom Lifestyle Money Show, investor-focused mortgage agent Paul McAllister hosts a discussion with special guest Ryan Day from Calvert Mortgage. Paul has over 10 years of investment experience and currently works at LendCity Mortgages, a company that offers mortgage services across Canada.

00:00 Introduction to the Show

00:02 Meet the Host: Paul McAllister

00:06 Introduction to Guest: Ryan Day

00:10 Paul's Background and Expertise

00:15 Paul's Investment Journey

00:20 Working at LendCity Mortgages

Transcript
Paul Mcallister:

Episode of Wisdom Lifestyle Money Show.

Paul Mcallister:

My name is Paul McAllister.

Paul Mcallister:

I am going to be your host today.

Paul Mcallister:

I have a special guest Ryan Day from Calvert Mortgage.

Paul Mcallister:

But first who am I?

Paul Mcallister:

I am a mortgage agent.

Paul Mcallister:

I'm a investor focused mortgage agent specifically.

Paul Mcallister:

I'm an investor myself.

Paul Mcallister:

I'm investing for over 10 years.

Paul Mcallister:

I work at LendCity Mortgages who, we do Canadian mortgages

Paul Mcallister:

throughout every province.

Paul Mcallister:

We also do, if you're an investor investing in a Canadian investor investing

Paul Mcallister:

in America, we can do your investment property mortgages as well in, in America.

Paul Mcallister:

So I think that's really what's unique about us.

Paul Mcallister:

I'm really excited for today's conversation with Ryan,

Paul Mcallister:

because I use Calvert a lot.

Paul Mcallister:

And I preach it a lot because some of these products that we're

Paul Mcallister:

going to get into are so unique.

Paul Mcallister:

And really I've seen people grow with these products.

Paul Mcallister:

Brian, introduce yourself.

Paul Mcallister:

Yeah, so just introduce yourself.

Paul Mcallister:

Then we'll get into kind of different things about what you guys offer.

Ryan Day:

For sure.

Ryan Day:

Yeah, I'm really appreciate you having me on Paul.

Ryan Day:

Really looking forward to this discussion today.

Ryan Day:

I know we we were talking about it before the show, but we actually

Ryan Day:

have a deal closing as well too.

Ryan Day:

So super happy that you're a big fan.

Ryan Day:

My name's Ryan, been with the company for just over three years now, really

Ryan Day:

focused on business development.

Ryan Day:

So finding new mortgage brokers, real estate investors, wholesalers flippers,

Ryan Day:

primarily in Alberta and Ontario.

Ryan Day:

Company's been around for over 45 years.

Ryan Day:

So we have a long history managing risks, primarily supporting real

Ryan Day:

estate investors in Alberta.

Ryan Day:

We've been in Ontario for about three years now, and we just see

Ryan Day:

so much opportunity going on in the marketplace, supporting real

Ryan Day:

estate investors and primarily.

Ryan Day:

Helping investors create more real estate stocks, just because obviously

Ryan Day:

we're extremely under supplied and trying to help a solution going on

Ryan Day:

in order to essentially help increase supply through our unique products

Ryan Day:

as most clients buy, renovate and sell or buy, renovate and refinance.

Ryan Day:

So I really focus on just building new relationships and

Ryan Day:

managing current relationships.

Ryan Day:

With top accounts and understanding how we can serve our clients better

Ryan Day:

what we can do in order to prove our service, our value proposition.

Ryan Day:

And to your point, we'd like to think we have some really amazing products

Ryan Day:

in the marketplace, something really unique that I'm super pumped and super

Ryan Day:

excited to get into and Just very thrilled that obviously you have first

Ryan Day:

hand experience using our product, so you could vouch for the service.

Paul Mcallister:

Yeah one, one things that stand out to you is like you've

Paul Mcallister:

been around 45 years supporting investors, which is pretty long time.

Paul Mcallister:

That stood out to me and I know you're Calgary based, but you're

Paul Mcallister:

doing mortgages you're doing loans in Calgary and Ontario mainly, correct?

Paul Mcallister:

Are those the two provinces?

Paul Mcallister:

Yes.

Ryan Day:

Yeah, you got it correct.

Ryan Day:

So Alberta, Ontario, we're looking to go start lending in

Ryan Day:

BC in about, one ish years time.

Ryan Day:

We probably said that a year ago, but we're just trying to manage

Ryan Day:

the really unique flow of, capital.

Ryan Day:

lending opportunities, human resources and processes and systems.

Ryan Day:

We were planning on being in B.

Ryan Day:

C.

Ryan Day:

around this time ish.

Ryan Day:

However, there's just still so much opportunity in the marketplace in

Ryan Day:

Ontario because we've only been in that province for three years.

Ryan Day:

So we're going to really look to grow and expand the Ontario base, primarily

Ryan Day:

lending in major urban city centers, so populations 100, 000 and above.

Ryan Day:

Where we do most of our business is southwestern Ontario.

Ryan Day:

Specifically speaking for the obviously the Ontario province, but we do some

Ryan Day:

Northern Ontario Sudbury, Sault Ste.

Ryan Day:

Marie.

Ryan Day:

We don't do Timmins, unfortunately, just because we find it's a little

Ryan Day:

bit too rural, but those major urban city centers we love landing there.

Ryan Day:

The reason being is.

Ryan Day:

There's just a lot of data to support real estate values.

Ryan Day:

So obviously the larger the population, typically obviously more housing stock

Ryan Day:

and with more housing stock, there's more data points to understand obviously

Ryan Day:

what the value is currently right now and what it could be worth as of complete if

Ryan Day:

a client's looking to flip a property.

Ryan Day:

But general rule of thumb is we lend in populations 10, 000 and above.

Ryan Day:

In Ontario, there, there's some exclusions to that, but that's

Ryan Day:

typically a general rule of thumb.

Ryan Day:

And then in Alberta, most of our business is Calgary based, just because the

Ryan Day:

company's been around to your point, over 45 years, primarily here in Calgary.

Ryan Day:

Do a lot of lending in Edmonton, and then Red Deer a little

Ryan Day:

bit, and same with Lethbridge.

Ryan Day:

So those are the markets we focus on, the markets we're going to be expanding to.

Paul Mcallister:

So for the 100, 000, so you said 100, 000.

Paul Mcallister:

I know it's less than five units and I know the terms you

Paul Mcallister:

want to be less than 12 months.

Paul Mcallister:

So if I have a we have Windsor where I'm from we're located,

Paul Mcallister:

we have an office in Windsor.

Paul Mcallister:

But then we have small towns outside of Windsor that are like 25, 000, 20, 000.

Paul Mcallister:

Populations, you would still lend in those places, or?

Paul Mcallister:

Because I think you said 100, 000, but then you said 10, 000, Okay, so

Paul Mcallister:

it's still in there, it's based on the

Ryan Day:

data, you need data, so it's in the calculations.

Ryan Day:

Correct.

Ryan Day:

Our preference is populations 100, 000 and above, or 25 kilometer radius

Ryan Day:

from those city limits, but as long as there's a population 10, 000 and above.

Ryan Day:

And the property is directly in that city, then we will lend there.

Paul Mcallister:

Sounds good.

Paul Mcallister:

So then I had a deal that just closed a minutes ago, about an hour ago.

Paul Mcallister:

So very excited for that.

Paul Mcallister:

We used, you have a cool pro I guess not product.

Paul Mcallister:

It's I don't know what you call it.

Paul Mcallister:

A pro flip in the flip product, basically for when you're flipping

Paul Mcallister:

houses or flipping properties, or when you are doing the birth strategy.

Paul Mcallister:

And you use Calvert credit, you use, you're lending for the

Paul Mcallister:

beginning and then you have an exit.

Paul Mcallister:

So I know everything is tied to the exit, but I just got done actually

Paul Mcallister:

doing one where the guy's doing a burr.

Paul Mcallister:

So he's buying it.

Paul Mcallister:

He's going to rehab the basement and then he's going to, it'll be two units.

Paul Mcallister:

He'll rent it out.

Paul Mcallister:

Then we're going to refinance it.

Paul Mcallister:

I think we have about a three month timeline to do that.

Paul Mcallister:

I just want to, talk about the Flip Analyzer because I know how to do

Paul Mcallister:

that Flip Analyzer inside Note.

Paul Mcallister:

I really think it's a cool kind of tool.

Paul Mcallister:

Can you talk a little bit about your Flip product and then maybe the Flip Analyzer

Paul Mcallister:

and just how do you view things from your

Ryan Day:

side?

Ryan Day:

Yeah, for sure.

Ryan Day:

Super pumped that obviously you've used the product and

Ryan Day:

you have first hand experience.

Ryan Day:

So that's awesome.

Ryan Day:

Essentially our value proposition for what makes us really unique when it comes

Ryan Day:

to our flip product is number one, we all, in some instances, we're able to

Ryan Day:

fund the deal with as little as 20, 000 down for purchase prices up to 800, 000.

Ryan Day:

So low money down option.

Ryan Day:

And that reason how we're able to do that is because we're taking

Ryan Day:

a look at the after repair value.

Ryan Day:

Not so much the as is value.

Ryan Day:

So value proposition number one.

Ryan Day:

Number two is we do not require third party appraisals.

Ryan Day:

And the reason being is that we have four in house analysts currently

Ryan Day:

right now who are employed by Calvert and they do remote valuations

Ryan Day:

completely for free for our clients.

Ryan Day:

So They typically, on average, value around four to five

Ryan Day:

ish properties per day.

Ryan Day:

So we have a really good pulse on the market on what the HPI is doing for that

Ryan Day:

specific for that specific property type and that specific geographic region.

Ryan Day:

So we have really good data to support our lending decisions in order to manage and

Ryan Day:

essentially mitigate risk when essentially the market's going down in order to.

Ryan Day:

Draw back our lending or obviously increase it if the

Ryan Day:

market's going really well.

Ryan Day:

So don't need an appraisal, low money down.

Ryan Day:

We can fund deals in as little as three business days in Ontario.

Ryan Day:

And how we're able to do that is number one, we don't

Ryan Day:

require third party appraisal.

Ryan Day:

Number two, we draw up all of our own mortgage instructions for the lawyer.

Ryan Day:

And this really helps the lawyer essentially act quickly when it comes

Ryan Day:

to closing the transaction because a lot of the lead ways, a lot of

Ryan Day:

the work is already done and it's very clear direction on essentially

Ryan Day:

what our mortgage documents entail.

Ryan Day:

On that note as well too, we've partnered up with a few around two, two to four

Ryan Day:

law firms that really specialize on quick closing fundings and that really

Ryan Day:

helps the client service as well too.

Ryan Day:

If there are any very time sensitive scenarios where.

Ryan Day:

Clients are, they're in a pickle, they're in a pinch, and they

Ryan Day:

need to close in just a few days.

Ryan Day:

Mortgages are fully open as well too.

Ryan Day:

Obviously this real estate investors love this, not having any prepayment penalty.

Ryan Day:

Having it fully open obviously incentivizes them to be in

Ryan Day:

and out as quick as possible.

Ryan Day:

And not having to worry about any of those, pesky fees when it does

Ryan Day:

come to exiting the mortgage early if it's with a traditional lender.

Ryan Day:

Point number, I guess four, four or five we're on now is It's, we are able

Ryan Day:

to also collateralize other properties completely for free using our evaluator.

Ryan Day:

So let's say, typically real estate investors have a property or two

Ryan Day:

at minimum as long as they give us property photos as of today and

Ryan Day:

a most recent mortgage statement.

Ryan Day:

They would hand that off to you.

Ryan Day:

You would hand that off to our underwriter in house.

Ryan Day:

They would pull comps, taking into consideration what's recently sold,

Ryan Day:

using the direct comparison approach and pull three to six comparables and

Ryan Day:

essentially assign a value to what the property our appraiser believes

Ryan Day:

will sell for as of today on the MLS.

Ryan Day:

And we will lend up to 75 percent of that.

Ryan Day:

In second position, as long as there's an A or a B lender in first position,

Ryan Day:

we don't go behind other privates.

Ryan Day:

And then obviously it's subject to the deal as well too, the property

Ryan Day:

type and the and the location.

Ryan Day:

And the benefit to the client for this is they're able to tap into the equity.

Ryan Day:

property that's currently sitting idle and they're able to get in

Ryan Day:

either number one a higher loan to value on the subject property.

Ryan Day:

So we would advance them obviously the down payment or we can advance

Ryan Day:

some renovation funds or it could be a combination of the two.

Ryan Day:

So we're able to really find create, yeah, we're able to find really

Ryan Day:

creative solutions for our clients with the other app with the other assets

Ryan Day:

that they currently have available.

Ryan Day:

And this is all for free as well too.

Ryan Day:

Like we just need property photos.

Ryan Day:

It's hassle free.

Ryan Day:

Don't need to go and schedule an appraiser in there.

Ryan Day:

I'm currently working with one right now for me personally.

Ryan Day:

And it's just less of a hassle as opposed to doing it the traditional route.

Ryan Day:

Obviously with alternative lending you're going to pay a premium.

Ryan Day:

But we typically find that clients of ours there's a time and a place for

Ryan Day:

alternative lending and having a short term mortgage is one of the needs and the

Ryan Day:

requirements that obviously, as long as you're comparing apples to apples, it's

Ryan Day:

a very situation dependent on when you'd use us, but we'd like to think we have

Ryan Day:

a really unique value proposition for.

Ryan Day:

Low money down, no appraisal, quick turnaround time, creative solutions.

Ryan Day:

And hopefully from your experience, really timely service as well, too,

Ryan Day:

when it comes to replying to our

Paul Mcallister:

client.

Paul Mcallister:

So I could attest to all what you've said there.

Paul Mcallister:

A lot of things stood out.

Paul Mcallister:

I just learned about the collateral.

Paul Mcallister:

I didn't know about the collateral thing and that's something I'm going to have to

Paul Mcallister:

be coaching because I'm a coach as well.

Paul Mcallister:

I'm going to be coaching certain people through, I didn't even realize that.

Paul Mcallister:

So thank you for letting me know about using collateral from existing properties.

Paul Mcallister:

It's something that I wasn't really thinking about it when

Paul Mcallister:

I think about that product.

Paul Mcallister:

So you've just evolved my thinking.

Paul Mcallister:

But some other things I want to.

Ryan Day:

Yeah, I find it slip I Was gonna say I could even give it an example

Ryan Day:

cuz I find examples typically help people who aren't you know specifically

Ryan Day:

in the mortgage industry Essentially help solidify their understanding.

Ryan Day:

So say if easy numbers and our property worth a million bucks Obviously

Ryan Day:

people up to 75 percent of that.

Ryan Day:

So 750, 000 Say if they had a mortgage with TD for 500 grand so in this

Ryan Day:

example you just do 750, 000 subtract 500 and that's 250, 000 in equity.

Ryan Day:

And we essentially just view that 250 in equity as quote

Ryan Day:

unquote cash that's sitting idle.

Ryan Day:

Say if they were purchasing a property for a million dollars, then

Ryan Day:

they could use this 250 in equity.

Ryan Day:

As a 25 percent down payment, get our cheapest interest rate, which is 9.

Ryan Day:

99 percent currently as of today in February.

Ryan Day:

We would advance the full million dollars of the subject property that

Ryan Day:

we're going to be going on title.

Ryan Day:

We'll be in second position on the property we're using as collateral.

Ryan Day:

So it's one mortgage registered against two properties.

Ryan Day:

Six month term, fully open.

Ryan Day:

And they're getting it at 100 percent loan to value on the as is value.

Ryan Day:

And the reason why we're able to do that is because we're taking a

Ryan Day:

look at the global loan to value, not so much just obviously the as

Ryan Day:

is value of the subject property.

Ryan Day:

Say if they wanted funds for renovations and they wanted to put 10 percent

Ryan Day:

down, so 100, 000 on the 1, 000, 000.

Ryan Day:

And then they still have 150, 000 left over that we can advance

Ryan Day:

them above the purchase price.

Ryan Day:

If they wanted funds for renovations, closing costs, operating costs,

Ryan Day:

whatever the case may be in order to best service that clients to give

Ryan Day:

them the access to the capital that they're looking for in order to scale.

Ryan Day:

Keep in mind all of this obviously is subject to due diligence.

Ryan Day:

It really depends on the client and the deal, but that's

Ryan Day:

just a very rough scenario.

Ryan Day:

In order to solidify the understanding of the applicable scenario

Ryan Day:

that this could be implemented.

Ryan Day:

Yeah, I think

Paul Mcallister:

it's clear for me, it's 100 percent clear for the

Paul Mcallister:

listeners, like kind of what I do here and what I can give you through

Paul Mcallister:

an example of what I did this week.

Paul Mcallister:

So I got a client that come to me a week ago.

Paul Mcallister:

He said, all right, I have this property.

Paul Mcallister:

I want to buy it.

Paul Mcallister:

It was under contract.

Paul Mcallister:

He's I want to burr it.

Paul Mcallister:

And I said, okay.

Paul Mcallister:

So I sent him I went through with him and built the flip analyzer saying, what

Paul Mcallister:

do you, what's the, what are the scope?

Paul Mcallister:

You have to get clear on the scope.

Paul Mcallister:

And what I've noticed is Calvert don't just want you to

Paul Mcallister:

say, Oh, I'm doing a kitchen.

Paul Mcallister:

It's going to cost me this.

Paul Mcallister:

No, they need to understand what type of cabinets are you putting in?

Paul Mcallister:

What type of some more details, because they're going to be looking at the ARV.

Paul Mcallister:

They need to calculate the ARV.

Paul Mcallister:

If you're putting in garbage cabinets or whatever, that's going to affect

Paul Mcallister:

your ARV compared to you're putting a custom cabinets or you're putting

Paul Mcallister:

granite countertops compared to linoleum.

Paul Mcallister:

Getting very clear with the scope is something that I start with the client.

Paul Mcallister:

I actually do a PowerPoint presentation where we take the listing photos.

Paul Mcallister:

We just put them in a presentation.

Paul Mcallister:

We say, okay, in each picture, what are you going to be doing?

Paul Mcallister:

And get clear on that.

Paul Mcallister:

And then further, so that's just to help them understand,

Paul Mcallister:

verbalize what they want to do.

Paul Mcallister:

And then it's the next step is, okay, you know your scope.

Paul Mcallister:

Now go get a quote from a reputable contractor.

Paul Mcallister:

That, that who's actually going to execute the work.

Paul Mcallister:

And so to me, before we even go to Calvert, we've done this presentation,

Paul Mcallister:

we've figured out the scope.

Paul Mcallister:

They've got their quote.

Paul Mcallister:

And then we've filled in this flip analyzer that just

Paul Mcallister:

basically walks you through.

Paul Mcallister:

What are your costs going to be up front?

Paul Mcallister:

What are your what type of fees are involved, maybe related to financing?

Paul Mcallister:

What type of operation costs, meaning like the bills that you're going to need.

Paul Mcallister:

So they want to know everything.

Paul Mcallister:

And then at the end of the day, they actually have it.

Paul Mcallister:

So to me, this flipping a lot of it is so good because it tells you what is going

Paul Mcallister:

to be your return on your investment, basically, what did you buy it for?

Paul Mcallister:

What did you rent it for?

Paul Mcallister:

What is the ARV?

Paul Mcallister:

What did you sorry, what did you buy it for?

Paul Mcallister:

What did you, what do you think it's going to be worth when

Paul Mcallister:

you're done the renovations?

Paul Mcallister:

How much did you spend on renovations?

Paul Mcallister:

And it's just so clear.

Paul Mcallister:

This sheet to me is, I'm a big, I'm an engineering background

Paul Mcallister:

and I love these little sheets.

Paul Mcallister:

So what I'm actually doing with clients is working them through one, building

Paul Mcallister:

the scope of getting the documents that you're going to need for due diligence

Paul Mcallister:

because I know you're going to need them.

Paul Mcallister:

And then furthermore, what is the exit strategy?

Paul Mcallister:

So if you go to Calvert, from my experiences, if you say, Oh, here's

Paul Mcallister:

what we're going to do and here's what we're going to, and then we're going

Paul Mcallister:

to go and we're going to get refinance.

Paul Mcallister:

And to me, the more detail you can be for what you're doing from

Paul Mcallister:

a lending standpoint, if it's not just a sale if it's a refi.

Paul Mcallister:

The better, right?

Paul Mcallister:

Like for this specific case, he came to me last week, we got him all that stuff.

Paul Mcallister:

Monday we got it to Calvert.

Paul Mcallister:

Today we close, which is Friday.

Paul Mcallister:

So we have Monday to Friday we've closed.

Paul Mcallister:

And with same thing, you have your lawyers.

Paul Mcallister:

I have a lawyer that will close a deal in a day.

Paul Mcallister:

He does is that's why I use him because he can close in a day.

Paul Mcallister:

Not many lawyers will close in a day.

Paul Mcallister:

But he will, especially if he knows if there's pressure on

Paul Mcallister:

him, especially because we do so much kind of business together.

Paul Mcallister:

Like we know how each other work.

Paul Mcallister:

And even he does his in house title searches or anything like that.

Paul Mcallister:

So he has unique things that make me want to use him more and more.

Paul Mcallister:

He can even virtually close.

Paul Mcallister:

Those are things that like and it's not just like a DocuSign thing.

Paul Mcallister:

It's he gets you on camera.

Paul Mcallister:

You can see his screen So there's things like that helped us get from Monday

Paul Mcallister:

to Friday But Calvert the amount of time it took for us to give them the

Paul Mcallister:

package to review the package to ask us some questions To provide maybe more

Paul Mcallister:

documents to get to close is five days We can do it in three days really so

Paul Mcallister:

that's everything you've said is this was a live example that I've seen happen.

Paul Mcallister:

You can supplement if I didn't say anything as clear as I think

Paul Mcallister:

you see it, but This is my example that just happened this week.

Paul Mcallister:

That's why I wanted to share.

Ryan Day:

Yeah, you nailed it on the head.

Ryan Day:

And to your point, a few things I'd like to touch on is we lend to

Ryan Day:

first time flippers all the time.

Ryan Day:

When they are first time flippers, we're gonna share our expertise, even if they're

Ryan Day:

experienced flippers, but share our expertise, our knowledge, our resources.

Ryan Day:

Everything that we see going wrong or potentially going wrong with the deal,

Ryan Day:

we're going to communicate, verbalize that to you just to ensure you have a second

Ryan Day:

set of eyes on your deal from a third party that obviously we're going to be

Ryan Day:

involved in it if we provide a mortgage.

Ryan Day:

Having someone who on average we see around a hundred deals a week.

Ryan Day:

We only approve around 20 percent of them I think it's invaluable to have someone

Ryan Day:

looking at that volume of primarily flip deals on a day to day basis assessing your

Ryan Day:

deal Ensuring purchase price, ARV, reno's, everything's on a conservative basis.

Ryan Day:

And the scope that we like to view the deal at is, does this

Ryan Day:

make sense for the client?

Ryan Day:

Even though that we make money off fees and interest, we have a

Ryan Day:

minimum profit threshold of 20 grand.

Ryan Day:

It's extremely rare that the profit's in and around that 20 grand.

Ryan Day:

It's normally around 40 to 75 ish, depending on purchase price,

Ryan Day:

reno's, location, all that stuff.

Ryan Day:

But you have someone else assessing your financials on the flip.

Ryan Day:

ensuring that it's going to appraise that subject that you're actually do the

Ryan Day:

rentals that you pitch and provide to us.

Ryan Day:

And I just think that is, is so invaluable from someone doing it

Ryan Day:

for, over 45 years, the company's seen everything in their existence

Ryan Day:

of deals going well, deals going bad.

Ryan Day:

So we share all of those resources, all of those learnings for clients.

Ryan Day:

So that's number one.

Ryan Day:

Number two is to your point, if a client is buy renovating and selling, we look

Ryan Day:

at that differently than a client who's burring or buy renovating and refinancing.

Ryan Day:

A lot of our clients are business for self.

Ryan Day:

They're trades people, electricians, general contractors,

Ryan Day:

whatever the case may be.

Ryan Day:

And to be tax efficient, they show that they make, whatever,

Ryan Day:

20, 30, 40 grand a year.

Ryan Day:

And how we underwrite is, as long as they're flipping, as long as you

Ryan Day:

have the capital for all of your operating, purchase price, closing

Ryan Day:

costs, mortgage payments, readily available in either cash or debt that

Ryan Day:

you can show us that's liquid as of today, you can buy a property for 200

Ryan Day:

grand, 700 grand, 800 grand, 800 grand.

Ryan Day:

As long as the numbers make sense in terms of profitability, you show us

Ryan Day:

that you have the capital, there's no issues with location, property

Ryan Day:

type, exit strategy, all of that.

Ryan Day:

And we have confidence in your business plan in order to execute the plan.

Ryan Day:

Sky's the limit for some of these clients.

Ryan Day:

You're able to do subject to due diligence, obviously

Ryan Day:

multiple deals at once.

Ryan Day:

We have one guy doing 20 flips currently right now.

Ryan Day:

I know there's a lot going on with promissory notes and stuff like that

Ryan Day:

we do not encourage promissory notes.

Ryan Day:

All of our mortgages are registered on title, but if you want to scale up

Ryan Day:

your operations we're able to do that.

Ryan Day:

And we've seen clients who, started doing this part time,

Ryan Day:

now they're doing it full time.

Ryan Day:

They have a whole trades people and team under them.

Ryan Day:

So as long as the exits to sale, we're not taking a look at, GDS, TDS, income

Ryan Day:

the typical underwriting criteria and debt service ratios are, sorry, I

Ryan Day:

guess I already mentioned that, but so yeah, we don't underwrite traditionally

Ryan Day:

just because we understand what the property will look like as if complete.

Ryan Day:

You show us that you have the capital to service everything,

Ryan Day:

and the numbers make sense.

Ryan Day:

However, if the exit is a refi, then we will take a look at that

Ryan Day:

the other underwriting criteria.

Ryan Day:

Just because the take out lender, they're going to be focusing on that as as well.

Ryan Day:

Yeah,

Paul Mcallister:

so I think the first thing you said there, I got an example

Paul Mcallister:

of how you used your experience.

Paul Mcallister:

So originally this guy came to me and he wanted to do something with

Paul Mcallister:

a he wanted to renovate the basement and he wanted to convert the ADU.

Paul Mcallister:

He wanted to convert a garage into an ADU.

Paul Mcallister:

And we originally did the numbers based on, all right, doing all that work.

Paul Mcallister:

But Calvert came back and actually was like, we don't like the permit.

Paul Mcallister:

The permit part of that for that ADU is where we feel like you could run

Paul Mcallister:

into some trouble in terms of length.

Paul Mcallister:

So what is, they didn't reject it.

Paul Mcallister:

They said, what is your strategy for permits?

Paul Mcallister:

Or do you have a strategy for permits?

Paul Mcallister:

And then when we went back and looked at it we had discussion with the client and

Paul Mcallister:

he decided, okay, let's just do the one unit in the basement adding unit in the

Paul Mcallister:

basement adding the converting the unit upstairs and leave the ADU for later.

Paul Mcallister:

And so he was like, it still makes sense if we just go in there, do

Paul Mcallister:

this renovation and loose later on, I can come back and I can do the ADU.

Paul Mcallister:

He was happy with that.

Paul Mcallister:

We were able to move forward.

Paul Mcallister:

But it is true.

Paul Mcallister:

When I did ask him about the permit strategy, he's Oh, I know somebody

Paul Mcallister:

and I was like nobody wants to hear that we're relying on because you

Paul Mcallister:

know somebody in the municipality.

Paul Mcallister:

So I was like, that's not going to be a permanent strategy.

Paul Mcallister:

At least like officially.

Paul Mcallister:

So it was funny that was the response.

Paul Mcallister:

But that was one of the ways where you raised your hand and said, listen, we.

Paul Mcallister:

We know that permitting can be an issue here and, you're trying to do

Paul Mcallister:

this project in three or six months and we've seen permit be an issue

Paul Mcallister:

that could push it a lot further.

Paul Mcallister:

So that, that would be your expertise helping in, in a situation.

Ryan Day:

Yeah.

Ryan Day:

And to, to your point, like we don't want to be a hindrance to the deal.

Ryan Day:

We're doing everything within our power, as long as it makes sense to

Ryan Day:

get the deal across the finish line.

Ryan Day:

But we've just seen so many projects where they forecast it will take four months,

Ryan Day:

six, eight months, nine months go by.

Ryan Day:

And the biggest challenges that we see are our permits.

Ryan Day:

And then if they're getting properties with tenants they're

Ryan Day:

not getting vacant on possession.

Ryan Day:

That can be a huge hindrance.

Ryan Day:

And last year we, we did around just over 800 mortgages.

Ryan Day:

So we're not trying to, persuade or push back.

Ryan Day:

It's, we really want to see you be successful from what

Ryan Day:

we see on a daily basis.

Ryan Day:

These are the two most common, one of the two most common reasons of we see

Ryan Day:

deals taking extremely long from the original plan that you have set in place.

Ryan Day:

And it's because it's.

Ryan Day:

It's not within your area of control that you can or your area of

Ryan Day:

influence that you can really control.

Ryan Day:

It's only to some extent.

Ryan Day:

So we're, yeah we're still trying to push everything through the

Ryan Day:

finish line, but we just really want to see clients successful.

Ryan Day:

And those two issues commonly come up of why deals always get go always, typically

Ryan Day:

double over the projected timeline.

Paul Mcallister:

I guess one other thing I wanted to hit on is.

Paul Mcallister:

As you use and keep using or as you I guess get experience flipping in

Paul Mcallister:

general being able to prove that.

Paul Mcallister:

And also with Calvert, is that help the underwriting process?

Paul Mcallister:

Does it get, obviously it's easier because we're going to be better at giving the

Paul Mcallister:

deal and giving it the way you like it.

Paul Mcallister:

But is there any kind of, if there's a close spot or something like that is there

Paul Mcallister:

anything given if I've done five deals or this is my first deal or if I've done

Paul Mcallister:

20 deals with you do you consider that in your underwriting kind of process?

Ryan Day:

100 percent definitely.

Ryan Day:

We have yeah, quite a few clients where now we're at the point where

Ryan Day:

they have a purchase agreement.

Ryan Day:

They have the renovation plan.

Ryan Day:

They just show us our proof of funds.

Ryan Day:

It takes them, an hour or so to put together.

Ryan Day:

And it's primarily the renovation plan and they just submit that to us.

Ryan Day:

We are very relationship based.

Ryan Day:

So once that track record is there, that relationship is there.

Ryan Day:

The timeline in order to fund deals is that much quicker just because

Ryan Day:

we do have a relationship, they have a track record we understand the

Ryan Day:

renovations that they do, we track all of the properties that we lend on as

Ryan Day:

well too, and we essentially have a benchmark of what, the property sells

Ryan Day:

for and what our analysts valued it at.

Ryan Day:

We're typically within around 2 percent of what the property actually sells for

Ryan Day:

versus what our appraiser valued it at.

Ryan Day:

Keep in mind, obviously there's been a lot going on in the market, depending on the

Ryan Day:

property type community and the location.

Ryan Day:

So there's obviously some outliers, but yes, if if a client has a track

Ryan Day:

record, we're more than happy to.

Ryan Day:

Do what's best in order to optimize and have an effortless

Ryan Day:

experience on their end.

Ryan Day:

But even if they aren't doing volume, like if we have a client, they do one deal,

Ryan Day:

the property sells, it's complete and they're looking to submit another one.

Ryan Day:

As long as it's a year or less, we don't need updated documentation every time.

Ryan Day:

So once we have app credit and away proof of funds there and the renovation

Ryan Day:

agreement and the renovation plan on the first deal, the next deal, as long as

Ryan Day:

the years have passed, we can use all the exact same documentation and all we need

Ryan Day:

is the rental funds and or sorry, the renovation summary and proof of funds.

Ryan Day:

So it's quite seamless.

Ryan Day:

We'd like to think.

Ryan Day:

For just not having to update documentation every time because it

Ryan Day:

is obviously a pain having to fill out an app, pull credit, notice

Ryan Day:

of assessments all that stuff.

Ryan Day:

From a client's point of view I've done it and it's, oh, it's a hassle.

Ryan Day:

Like to think we're trying to reduce documentation while

Ryan Day:

managing risk on our end.

Ryan Day:

And creating a win for everyone where not a bunch of documentation,

Ryan Day:

but you give us all the information that we're looking for.

Paul Mcallister:

I love it.

Paul Mcallister:

So that's the second thing I've learned in this call.

Paul Mcallister:

So I'm writing down my nuggets.

Paul Mcallister:

Cause honestly it's, I have certain clients who just, they're going to

Paul Mcallister:

use Calvert to build their portfolio quicker than they can do it themselves.

Paul Mcallister:

So it leads me into, let me make sure I get my note here for that.

Paul Mcallister:

Don't.

Paul Mcallister:

Don't need to resubmit because that's a selling point because yeah, you're right.

Paul Mcallister:

Some clients, they absolutely hate providing documents and if they say

Paul Mcallister:

they don't need to do it, so we're going to get into why use a private lender.

Paul Mcallister:

And honestly, for some clients that might be, I don't have to keep giving them

Paul Mcallister:

documents because they hate it, especially now in the past, even three years or

Paul Mcallister:

even a year of how much more documents we got to give typical a lenders.

Paul Mcallister:

Don't need to update documents.

Paul Mcallister:

So I guess let's get into for sure it's, yeah.

Paul Mcallister:

Why use a private lender?

Paul Mcallister:

For me, I'll start it off saying when you're, I have clients who,

Paul Mcallister:

they're TDS and there is usually the issue, the TDS they're outta whack.

Paul Mcallister:

And there's a lot of things we can do as a mortgage broker that to get you, like even

Paul Mcallister:

all the way to 60 ra 60, 60 ratios or even 70 there's a lot of cool programs, right?

Paul Mcallister:

I have 70 lenders, 40.

Paul Mcallister:

But still there's a time to use private lending and there's a time

Paul Mcallister:

to use it for, what was the question?

Paul Mcallister:

Why use it?

Paul Mcallister:

It's when you're trying to get in and out.

Paul Mcallister:

And sometimes I could have got a B deal with the one that I did.

Paul Mcallister:

I was like, here's, you could go be, you could go private.

Paul Mcallister:

He chose private.

Paul Mcallister:

And why did he do that?

Paul Mcallister:

I was like, we'll be still going to come with fees, They're going

Paul Mcallister:

to hit you with the penalty.

Paul Mcallister:

And I was like, so if you do the calculation between, private and B.

Paul Mcallister:

I personally think you may go better with private because it's all about

Paul Mcallister:

how quick can you do the renovation?

Paul Mcallister:

How quick can you refi?

Paul Mcallister:

How quick can you get out?

Paul Mcallister:

If you go B, they are, you're going to get hit with a penalty.

Paul Mcallister:

And that has to be taken into the account.

Paul Mcallister:

And it actually we did the numbers and it made sense to go private.

Paul Mcallister:

But what are other reasons why you find all your clients, 800 deals?

Paul Mcallister:

Why are they going private?

Paul Mcallister:

Besides it's easier?

Paul Mcallister:

Yeah, what are other reasons that stand out to you?

Ryan Day:

Yeah, the first one that we didn't touch on is

Ryan Day:

definitely quick closings.

Ryan Day:

A lot of our business is, similar to your deal, it closes in under a week

Ryan Day:

or it closes in two weeks, A, lender B, lender just can't close in time so we're

Ryan Day:

able to offer a really quick closing and that's a huge value add to clients,

Ryan Day:

especially if they're active real estate investors, they're working with a seller,

Ryan Day:

maybe the seller's in a distressed situation because we can underwrite

Ryan Day:

deals typically in 24 business hours.

Ryan Day:

If you submit us a deal.

Ryan Day:

And it's for Joe Smith and he's working with the seller and the

Ryan Day:

seller wants to sell next week.

Ryan Day:

A huge value add to some of these real estate investors is having a

Ryan Day:

really quick closing for the seller because they need to offload the

Ryan Day:

property as quickly as possible.

Ryan Day:

So number one, definitely quick closing.

Ryan Day:

Number two is similar to your point is we're GDS TDS.

Ryan Day:

So clients are definitely able to scale up subject to due diligence,

Ryan Day:

but stretch their capital further.

Ryan Day:

And as opposed to doing one deal with, 20, 25 percent down, they're

Ryan Day:

able to scale up if they want to have a lower down payment option.

Ryan Day:

So they can obviously get the benefit that real estate offers in terms of

Ryan Day:

leverage and stretch that even further, specifically when it comes to us.

Ryan Day:

And then to your point reduce documentation.

Ryan Day:

No appraisal, don't have to worry about the headache.

Ryan Day:

They have confidence knowing that if we approve the deal, we're actually

Ryan Day:

going to fund it just due to our history and relationship with our clients.

Ryan Day:

And then the fourth point, probably one of the more important

Ryan Day:

ones is actually a product fit.

Ryan Day:

So the reason why we're in business is because the big banks, B lenders,

Ryan Day:

they hate the short term lending.

Ryan Day:

They think it's too risky.

Ryan Day:

They don't understand it, especially when it comes to flipping.

Ryan Day:

So we really carved out a niche and as opposed to going to a B lender or

Ryan Day:

an A it's just not a good product fit.

Ryan Day:

Clients want something fully open, quick closing.

Ryan Day:

A lender that really works with investors and helps create solutions

Ryan Day:

as opposed to creating roadblocks to help them scale their portfolio.

Ryan Day:

So it's just really having a product that aligns with the

Ryan Day:

client's trying to achieve.

Ryan Day:

And we'd like to feel that we've really tailored our products around really good

Ryan Day:

customer service, a really unique value proposition to create something that's in

Ryan Day:

demand, something that people want to use.

Ryan Day:

And to your point, it's cheaper in that scenario, as

Ryan Day:

opposed to going to a B lender.

Ryan Day:

And it's just breaking down all the costs associated with your legal

Ryan Day:

fees appraisal, prepayment penalties, obviously rates and fees, and just

Ryan Day:

doing a side by side comparison.

Ryan Day:

And when it does come to our rates, fees, and total value proposition, It makes

Ryan Day:

a lot of sense in in most instances, depending on the client scenario to

Ryan Day:

actually go private because it gives them the access to the capital that they need.

Ryan Day:

And and it's a really good product fit.

Ryan Day:

Yeah.

Paul Mcallister:

So basically when you, when somebody asks you why to go private,

Paul Mcallister:

like that, like everything you just said is the opposite of what a lenders do.

Paul Mcallister:

A lenders are slower.

Paul Mcallister:

We want to be, we want to be like one.

Paul Mcallister:

It takes us a whole week just to get a commitment.

Paul Mcallister:

Two, but then we have to meet all these conditions.

Paul Mcallister:

Three, we have to be close.

Paul Mcallister:

Like those conditions.

Paul Mcallister:

I always tell clients within two weeks before it funds, they want to

Paul Mcallister:

have the broker, a broker complete.

Paul Mcallister:

It just, everything, the documentation the time it takes.

Paul Mcallister:

Everything you just said is the opposite of a lending and how they think.

Paul Mcallister:

They think guidelines, they're checking boxes.

Paul Mcallister:

If it's not in the box, it's even though it makes total damn sense,

Paul Mcallister:

they're not thinking about the sense.

Paul Mcallister:

They're just thinking about, is it in this box?

Paul Mcallister:

If it's not, then it can be an issue.

Paul Mcallister:

So yeah, everything you just said that is the opposite of how a lenders think

Paul Mcallister:

be, there's more flexibility, but still a lender, it's like everything

Paul Mcallister:

you just said is the opposite.

Paul Mcallister:

So it's really cool.

Paul Mcallister:

And then so I think one thing I wanted to touch on for that flip analyzer is.

Paul Mcallister:

We will in this show, I'm going to put in a link and I'll put a link,

Paul Mcallister:

like you can send me a direct message or I even, I'll put it in the link

Paul Mcallister:

of the show for the flip analyzer.

Paul Mcallister:

I always try to get my even when I'm coaching now so coaching or even my

Paul Mcallister:

I'm an investor focused mortgage agent.

Paul Mcallister:

So when I know people, they might not even be thinking about private, or they

Paul Mcallister:

might not be even thinking about it.

Paul Mcallister:

I motivate people.

Paul Mcallister:

Cause I tell them, look at this product.

Paul Mcallister:

This is a sheet.

Paul Mcallister:

I want you to think about your deals that you're going through with this sheet

Paul Mcallister:

and it's good even if you're not using whatever you still think about it like

Paul Mcallister:

this because you can tell that sheet is set up for an investor to think and put

Paul Mcallister:

it on paper and come up with a good plan.

Paul Mcallister:

So I have a I share that sheet a lot.

Paul Mcallister:

I go through and coach people on how to fill it out and the big

Paul Mcallister:

value add I think where I'm in this equation is one, I'm going to make

Paul Mcallister:

sure that you're thinking about it.

Paul Mcallister:

That sheet and two, it's making sure you have an exit plan.

Paul Mcallister:

And that's the most important thing I think for, or at least I've noticed and

Paul Mcallister:

getting these deals from Calvert is, if they're only funding 20 percent of the,

Paul Mcallister:

If you did 800, but I'm trying to do the math, but if you're funding 20%, I

Paul Mcallister:

think that I can, my percentage is going to be higher than 20 percent because

Paul Mcallister:

I've, I know what they're thinking.

Paul Mcallister:

I know how they're thinking.

Paul Mcallister:

And the big part is the exit plan.

Paul Mcallister:

And that's the, like my specialist is making sure there's an exit plan.

Paul Mcallister:

And even one thing that I've talked to, to cover this week

Paul Mcallister:

about was part of the exit plan.

Paul Mcallister:

People don't know, like when they go to a mortgage broker and you can, I can figure

Paul Mcallister:

things out that other people can't because I have a residential mortgage department.

Paul Mcallister:

I have a commercial mortgage department.

Paul Mcallister:

I know that you can get a commercial loan even on a residential property.

Paul Mcallister:

Most people don't even consider that in their thinking.

Paul Mcallister:

So yeah, we consider A, B, private, but also there's commercial

Paul Mcallister:

loans on residential properties.

Paul Mcallister:

That could be an exit.

Paul Mcallister:

And the reason, the big difference, and you can Correct.

Paul Mcallister:

And I guess supplement.

Paul Mcallister:

But when you're dealing with a residential mortgage, people are, you,

Paul Mcallister:

the lenders are betting on your ability to pay back when you're dealing with

Paul Mcallister:

the commercial, they're betting on the property's ability to pay back.

Paul Mcallister:

So if you're getting a single family house and turning it into a three unit,

Paul Mcallister:

legal three units, a commercial lender would still would jump all over that.

Paul Mcallister:

If we can't make it work because of your TDS or whatever it is.

Paul Mcallister:

So that to me is an exit that not many other mortgage brokers

Paul Mcallister:

are even going to consider.

Paul Mcallister:

I'll pause there because I know I've said a lot and I want you to think about

Paul Mcallister:

it from the Calvert lens, but go ahead.

Paul Mcallister:

Sorry, Ryan.

Ryan Day:

Yeah no.

Ryan Day:

You mentioned some fantastic points.

Ryan Day:

Absolutely fantastic points.

Ryan Day:

And a few other things that I would mention is, When you're coming to a broker

Ryan Day:

and you have a deal, you are essentially, when it comes to this specific product

Ryan Day:

you're pitching a business plan.

Ryan Day:

You're saying, Hey, I'm buying this property for 500 grand.

Ryan Day:

I'm going to put 50, 000 into it.

Ryan Day:

I think I can sell it for 625.

Ryan Day:

This is the due diligence I've done.

Ryan Day:

I've, I have five different contractors.

Ryan Day:

They walk through the property.

Ryan Day:

They quoted me the exact same scope for the renovation.

Ryan Day:

This, these are the funds that I've had.

Ryan Day:

That I have.

Ryan Day:

I think it'll take 6 months, to be conservative, I'm gonna project 8 months.

Ryan Day:

These are the numbers that I have laid out, and when clients do that, and

Ryan Day:

they submit it through a broker, it is just, it's music to our ears, because

Ryan Day:

we get stuff that's piece mailed.

Ryan Day:

Oh, I think I can sell it for 600, I haven't really dug into the comps.

Ryan Day:

I'm working with a buddy, he's a contractor, he put

Ryan Day:

together this rough quote.

Ryan Day:

I think it's accurate, but I'm just really leaning on his

Ryan Day:

expertise because, I trust him.

Ryan Day:

He hasn't confirmed that he can start work right after closing date, he

Ryan Day:

has, quite a few projects on the go.

Ryan Day:

Stuff like that creates, I don't want to say anxiety, but when you come prepared,

Ryan Day:

you have a plan, you pitch it to us, your likelihood and just the way that you come

Ryan Day:

off in the eyes of a lender is tenfold compared to someone who's just praying

Ryan Day:

and wishing and really relying on the mortgage broker to do, the underwriting,

Ryan Day:

ask them for the due diligence.

Ryan Day:

So that's definitely point number one.

Ryan Day:

I didn't know that you could even get a commercial mortgage on a

Ryan Day:

residential That's something really interesting that you know, even after

Ryan Day:

this or whatever the case may be.

Ryan Day:

I'd love to pick your brain because that Is something that would be so beneficial

Ryan Day:

when it comes to clients refinancing and having the ongoing education to your point

Ryan Day:

is crucial and paramount Because whenever we get a deal, the first thing we're

Ryan Day:

going to ask you is what the address is.

Ryan Day:

We want to make sure that it abides by our location requirements.

Ryan Day:

What property type is it?

Ryan Day:

How much are you looking to put down?

Ryan Day:

Exit strategies usually, question number four, question number two.

Ryan Day:

It's how are you going to pay us out?

Ryan Day:

Is it going to be, is it going to be a sale?

Ryan Day:

Is it going to be a refi?

Ryan Day:

Okay, has your broker pre approved you for the refi?

Ryan Day:

Have they approved you up to the amount that you're looking to exit at?

Ryan Day:

Your GDS, TDS, income credit, like what lender are you going to?

Ryan Day:

What mortgage product?

Ryan Day:

And when you're able to speak the terms of the lender, It's it just really

Ryan Day:

sets you up for success in the lenders eyes and when it obviously comes to

Ryan Day:

the private space It does come down to Obviously relationships due diligence

Ryan Day:

as well, too But having that view of the lender in order to make their life

Ryan Day:

easier is obviously something completely rare but having the view of the lender

Ryan Day:

is It's obviously an important skill to have, especially if you're a real estate

Ryan Day:

investor and understanding what they're taking a look at and how they assess

Ryan Day:

risk in order to grow your portfolio because it's going to be paramount on

Ryan Day:

getting educated on how you can scale your portfolio, working with great

Ryan Day:

brokers like yourself in order to just, yeah, set yourself up for success.

Ryan Day:

Yeah, I agree.

Paul Mcallister:

I think it's for my coaching, I take it as a

Paul Mcallister:

requirement as one of my first steps is you need to think like a lender.

Paul Mcallister:

Cuz a lender is thinking like that for a reason.

Paul Mcallister:

They have experience lending money and they're doing that due diligence They're

Paul Mcallister:

looking at things everything they look at you should get good at plain and

Paul Mcallister:

simple It's not just because you got to get good at it for submitting it to

Paul Mcallister:

them You should be good at it because they're looking at that for a reason

Paul Mcallister:

They're not just randomly saying well, I want to look at these things They are

Paul Mcallister:

doing it for a reason and that's what you got to get good at that's number one

Paul Mcallister:

I think it's you say the business plan.

Paul Mcallister:

You're basically coming to a business plan for the property So one thing we

Paul Mcallister:

do at Lend City, that's very unique To keep trying to sell myself, but it's

Paul Mcallister:

just I think you should be doing this and if you're a broker then listen up

Paul Mcallister:

We do a real estate portfolio investment business plan with you We'll guide you

Paul Mcallister:

in doing that because we don't just want you to think one time we want

Paul Mcallister:

you to think longevity and so when you're not just thinking, Oh, I'm gonna

Paul Mcallister:

close this first deal with covered and then I'm going to do this one.

Paul Mcallister:

No, we want to plan it out.

Paul Mcallister:

Tell me what you're trying to achieve long term.

Paul Mcallister:

Let's plan it out and let's actually put a business plan in place

Paul Mcallister:

and I'm going to be calling you.

Paul Mcallister:

If you told me you want to buy five properties and we've put a business

Paul Mcallister:

plan in place, I'm going to be calling you saying, Hey, what's

Paul Mcallister:

happening with this business plan?

Paul Mcallister:

Do we need to adjust it?

Paul Mcallister:

Do we need to update it?

Paul Mcallister:

What has changed?

Paul Mcallister:

Okay.

Paul Mcallister:

Things can always change, but at least you have something on paper

Paul Mcallister:

that you're working towards and you're being less reactive, more

Paul Mcallister:

proactive, and hopefully that's going to help you build and grow faster.

Paul Mcallister:

So I think that's one thing is the business plan you just mentioned.

Paul Mcallister:

I think that's really important, not just for the actual property purchase, but

Paul Mcallister:

for your portfolio as you try to grow.

Paul Mcallister:

And another thing is.

Paul Mcallister:

And I think that we're really unique in is we give a pre approval when you close.

Paul Mcallister:

We give a pre approval, like my present to you is a pre

Paul Mcallister:

approval for your next purchase.

Paul Mcallister:

I'm always every, if you're an investor the next day, I'm giving you your present

Paul Mcallister:

and I'm giving you a pre approval of how much you can get for your next purchase.

Paul Mcallister:

And if you have a real estate business portfolio plan with me, I'm giving

Paul Mcallister:

you the pre approval and I'm also going to refer to that business plan

Paul Mcallister:

to talk about next steps because I always want you looking forward.

Paul Mcallister:

And that's why a lot of realtors work with me because I'm going to

Paul Mcallister:

generate more business for them.

Paul Mcallister:

But to me, I have this thing.

Paul Mcallister:

It's win.

Paul Mcallister:

Three levels of win at least meaning it's a win for the client

Paul Mcallister:

cause they're building their dreams and their portfolios.

Paul Mcallister:

It's a win for the realtors and the professionals working with them.

Paul Mcallister:

They're going to all be on the same page and because they knew it's not

Paul Mcallister:

just, Oh, I'm going to do business one time and then I'm done with that

Paul Mcallister:

person, but they are continuously maintaining a relationship and then it's

Paul Mcallister:

a win obviously for our business cause we're doing more and more mortgages.

Paul Mcallister:

So I'll pause cause I, I go on my tangents.

Paul Mcallister:

But you got me really excited with the business plan and I just wanted

Paul Mcallister:

to share kind of certain things that we do because that's what I'm

Paul Mcallister:

passionate, I'm not in the mortgage business to just do mortgages at all.

Paul Mcallister:

I want to help people grow portfolios.

Paul Mcallister:

I grow my own portfolio and my general kind of strategy is, and I think

Paul Mcallister:

Calvert's kind of aligned based on the words I've heard before from

Paul Mcallister:

Calvert is we want to grow with you.

Paul Mcallister:

I want to have 20 clients or 50 clients that, have hundreds of

Paul Mcallister:

properties and we're going to keep moving and keep growing and making

Paul Mcallister:

sure that we're growing together.

Paul Mcallister:

I don't want to just get a sick person that's, I'm going to get all those

Paul Mcallister:

documents one time and then go through, Oh, I don't want to give you documents.

Paul Mcallister:

And then we complete a first, a mortgage, but what the average person might do

Paul Mcallister:

a mortgage three to five years every and then I don't hear from you again.

Paul Mcallister:

I actually, if you're an investor, I want to work with you to grow.

Paul Mcallister:

If you want to become an investor, I'm going to grow with you.

Paul Mcallister:

If you're a one off sure, but I still try to convert those people

Paul Mcallister:

to investors because I believe in real estate investing myself.

Paul Mcallister:

I think it's the common person should be doing it.

Paul Mcallister:

In my opinion.

Ryan Day:

Yeah, and that's a key takeaway for me is I have never heard

Ryan Day:

of a broker pre approved, giving you a pre approval next day once you close.

Ryan Day:

I think that is such a huge value add that is, wow, that would blow

Ryan Day:

me away as a client for sure.

Ryan Day:

That is absolutely remarkable.

Ryan Day:

It's,

Paul Mcallister:

think about it, we already have the documents.

Paul Mcallister:

The documents are all updated.

Paul Mcallister:

It's like you not having to give documents within a year, which I have a note here.

Paul Mcallister:

The notes I wrote is that one, but it's the same thing.

Paul Mcallister:

It's I already have updated everything and I know exactly what the new expenses are.

Paul Mcallister:

Boom.

Paul Mcallister:

Shoot that in and tell you, as long as you have that down

Paul Mcallister:

payment, here's where you are.

Paul Mcallister:

And then I even break it down to different things.

Paul Mcallister:

Cause we have certain lenders that will go.

Paul Mcallister:

The typical lender wants their GDS and TDS 39 44, but then certain lenders will allow

Paul Mcallister:

you to go to 50 50 a lenders and certain lenders will look at the subject property

Paul Mcallister:

rents and all those types of things.

Paul Mcallister:

I actually have that in the preapproval.

Paul Mcallister:

I'll give them like different scenarios because like you use that example

Paul Mcallister:

of the million in the seven 50.

Paul Mcallister:

It's all based on scenarios.

Paul Mcallister:

. I never want to give somebody approved pre-approval and

Paul Mcallister:

say, oh, this is your number.

Paul Mcallister:

I always say this is your number and here's the different

Paul Mcallister:

factors we put into your number.

Paul Mcallister:

You always have to make assumptions, right?

Paul Mcallister:

Like your assumption of how much is the tax going to be?

Paul Mcallister:

Your different assumptions need to be clear.

Paul Mcallister:

So I never give somebody a number of you're approved.

Paul Mcallister:

You can go for a million.

Paul Mcallister:

You can go for a million if the tax are this, if there's no boiler, whatever

Paul Mcallister:

it is you have to get, I want to educate the people I'm working with

Paul Mcallister:

so they know the different factors that will impact their mortgage.

Paul Mcallister:

So then it's good for me.

Paul Mcallister:

It's good for them, right?

Paul Mcallister:

I teach them once they know forever and it will cause them to make

Paul Mcallister:

less kind of mistakes as they go.

Ryan Day:

That's awesome.

Ryan Day:

That's awesome.

Ryan Day:

That was such a good best practice and really sets the client up for

Ryan Day:

success and having the understanding of what's possible right when they

Ryan Day:

close is opens up so many doors and great value proposition on your

Paul Mcallister:

end.

Paul Mcallister:

Even I think from Calvert, do you guys have any because I know you guys have

Paul Mcallister:

so many deals, so I always, I give them advice on what types of renovations

Paul Mcallister:

are going to add the most add value.

Paul Mcallister:

Do you have any kind of literature or anything like that that

Paul Mcallister:

you share or that you publish?

Ryan Day:

Yeah, typically I'll reference it in the footnotes here, but there's

Ryan Day:

the appraisal Institute of Canada release an article, I forget how old it is.

Ryan Day:

One of our in house analysts provided it and it's the the renovations

Ryan Day:

that increased the value the most.

Ryan Day:

Typically number one is painting, renovations within the

Ryan Day:

bathroom, within the kitchen.

Ryan Day:

Typically have the most value add.

Ryan Day:

But I'll provide that list.

Ryan Day:

I forget it off the top of my head specifically how they had it broken down.

Ryan Day:

This was like six, six ish, seven months ago.

Ryan Day:

But those three typically right there.

Ryan Day:

From what we see on it, paint is obviously huge.

Ryan Day:

It's one of the most, obviously largest return on investments as

Ryan Day:

well, too, for the work involved.

Ryan Day:

But yeah, more than happy to share that list in order to help clients

Ryan Day:

just stay up to date on the literature.

Ryan Day:

A few other things that I would know, it is.

Ryan Day:

Are you familiar, we released a few new products as of late.

Ryan Day:

Have you heard of the interim purchase one?

Ryan Day:

It's essentially, we just started doing this, I want to say it

Ryan Day:

was about a year ish or so ago.

Ryan Day:

And it's the exact same for the most part as the flip product.

Ryan Day:

Except no renovations are going to be involved.

Ryan Day:

So we are, we're lending on the as is value.

Ryan Day:

And there's two most common user case scenarios that we're

Ryan Day:

seeing with this product.

Ryan Day:

Number one is A lender, B lender can't close in time.

Ryan Day:

So if you have a client's, they were set up for funding on Tuesday of next week and

Ryan Day:

a lender pulled out for whatever reason, this would be a product for clients

Ryan Day:

that are in those unfortunate scenarios.

Ryan Day:

And user case example number two is pre construction.

Ryan Day:

So value number one is we lend on the as is value.

Ryan Day:

So if the client bought two years ago for 500 grand, it's worth 600 today, we

Ryan Day:

would lend on the 600, 000 as is value.

Ryan Day:

Benefit to the client there is they're getting in with lower amount out of their

Ryan Day:

own pocket on the flip side of this.

Ryan Day:

If it's unfortunately gone down because we lend on the as is value,

Ryan Day:

then we need a little bit more down.

Ryan Day:

But going back to the example, number one bought for 500, it's worth six.

Ryan Day:

We can close in just a few days.

Ryan Day:

It's fully open.

Ryan Day:

We don't need an appraisal.

Ryan Day:

So if the client bought two years ago and, rates were significantly

Ryan Day:

lower than they are today.

Ryan Day:

And now they don't qualify and the builder let them know that, Hey

Ryan Day:

we're ready to close in two weeks, a month, whatever the case may be.

Ryan Day:

This project allows the clients to close and they just listed

Ryan Day:

on the MLS to offload it.

Ryan Day:

If the numbers don't make sense, if they were originally looking to keep

Ryan Day:

it as a cash flowing rental property.

Ryan Day:

So we help essentially help clients just close.

Ryan Day:

They list an exit and it's a win for everyone if they're just looking

Ryan Day:

to close an exit on the property.

Ryan Day:

Nice.

Paul Mcallister:

Okay.

Paul Mcallister:

Yeah, send me some literature on that.

Paul Mcallister:

I that sounds pretty interesting.

Paul Mcallister:

I can have some cases in my head where that could be used.

Ryan Day:

Yeah, so just a short term solution with a quick closing where no

Ryan Day:

renovations are going to be completed and it helps the clients close.

Ryan Day:

And if they're looking to exit obviously work with yourself to ensure that

Ryan Day:

they're going to qualify on the exit.

Ryan Day:

But if they're just looking to offload and they're only going to keep it for

Ryan Day:

a few months, they're literally able to close listed on the MLS the next day.

Ryan Day:

If they're in and out in 14 days, they're charged 14 days interest.

Ryan Day:

If it's 45, they're charged 45.

Ryan Day:

However long the capital is out for, then that's how many days at

Paul Mcallister:

their charge.

Paul Mcallister:

Yeah, that's really cool.

Paul Mcallister:

I think some lenders some listeners might have a question about that.

Paul Mcallister:

So you have a deal, you got it through, it's approved, you got

Paul Mcallister:

the money, it's a six month open.

Paul Mcallister:

What happens if I only need two months?

Paul Mcallister:

And I guess, I think we touched on it, but it's still, I want to emphasize

Paul Mcallister:

how the interest works the per day so say I only had it for 14 days and

Paul Mcallister:

it was supposed to be six months.

Ryan Day:

Yeah, so because it's fully open, there's no

Ryan Day:

prepayment penalty, any of that.

Ryan Day:

You're charged daily.

Ryan Day:

So how you calculate the interest rate is the interest rate so say if

Ryan Day:

it's 10 percent you times that by the mortgage amount and divide by 365 to

Ryan Day:

get the daily interest rate and then you just multiply it by however many

Ryan Day:

days you expect to be in the loan for.

Ryan Day:

And it's really handy because it's in the Flip Analyzer tool as well too.

Ryan Day:

So you can able, you're able to see how much your interest is on a daily basis.

Ryan Day:

In order to obviously incentivize yourself to be shave off and be innocent.

Ryan Day:

Yeah, if you're paying an extra 100, 150, 200 bucks a day in interest,

Ryan Day:

depending on, What the mortgages and the interest rate shaving off a few

Ryan Day:

extra days, making a few hundred bucks.

Ryan Day:

It's I know it motivates, motivates.

Ryan Day:

Most

Paul Mcallister:

people motivate.

Paul Mcallister:

I think the guy that closed today, I told him, I was like, if I was you,

Paul Mcallister:

I would have waited until Monday.

Paul Mcallister:

I would have got permission to put all my supplies in the driveway on the weekend.

Paul Mcallister:

And I would have had my, I like putting a storage box there and everything.

Paul Mcallister:

I don't want the trades to say I need to go to the store.

Paul Mcallister:

My goal is no stores.

Paul Mcallister:

You're working when you're here to work, you're here to work.

Paul Mcallister:

And so that's what I would have done.

Paul Mcallister:

And that's because I would be motivated when I, because I seen the flip and

Paul Mcallister:

I seen the day I was like, Hey, that could be the difference of 800 bucks.

Paul Mcallister:

It's 800 bucks, 800 bucks, but I like it in my pocket.

Paul Mcallister:

So yeah, it's it is motivating knowing that if you finish

Paul Mcallister:

early, you can avoid all this.

Paul Mcallister:

Cost obviously, I still did tell him like listen, you still gotta do

Paul Mcallister:

quality work Don't just rush so much.

Paul Mcallister:

Yeah.

Paul Mcallister:

Yeah, there's a fine line, but yeah, it's a cool thing that they

Paul Mcallister:

show 100 percent And then what is

Ryan Day:

so yeah, I'm sorry

Ryan Day:

Then the other one is we're starting to do a little bit of multifamily as well too.

Ryan Day:

Minimum that we need down is 10%.

Ryan Day:

Low money down for multifamily.

Ryan Day:

We go up to 65 percent loan to value of the after repair value.

Ryan Day:

Six month term, fully open, renew for another six months as long

Ryan Day:

as the client's in good standing.

Ryan Day:

And most common user case scenario we're seeing for this is a repositioning

Ryan Day:

product for CMHC MLI Select program.

Ryan Day:

Most will land on a one property, which unfortunately

Ryan Day:

limits a few individuals is 1.

Ryan Day:

5 million.

Ryan Day:

So if, if it's in Windsor, Sudbury, Sault Ste.

Ryan Day:

Marie, where purchase prices are obviously typically significantly lower than in

Ryan Day:

around the GTA or Southwestern Ontario.

Ryan Day:

Is what we're doing.

Ryan Day:

So just started doing that a little while ago.

Ryan Day:

We've had some success with it.

Ryan Day:

We do quite a bit of it up in Edmonton where your money typically goes

Ryan Day:

quite further as opposed to Calgary.

Ryan Day:

So that's an option as well too.

Ryan Day:

With those, we do need an appraisal if the value, if it's five units and over 1.

Ryan Day:

5 million.

Ryan Day:

So with that, we would require appraisal, but anything four units and below and 1.

Ryan Day:

5 million and below.

Ryan Day:

We can use our in-house analysts.

Ryan Day:

And what's

Paul Mcallister:

the minimum down payment on that?

Paul Mcallister:

Is it the 35% or is that, did I miss that?

Ryan Day:

10%.

Ryan Day:

Okay.

Ryan Day:

Minimum down is 10%.

Paul Mcallister:

Yeah.

Paul Mcallister:

If you could send the literature on those two products, those are something

Paul Mcallister:

I'd want to add to my wheelhouse.

Paul Mcallister:

For what I'm doing, my coaching, it's something they can, should consider.

Ryan Day:

And then a few other things to mention, just in terms of qua deals.

Ryan Day:

We've been seeing quite a bit of debt consolidation.

Ryan Day:

Unfortunately, it's just not in our focus.

Ryan Day:

Refinances aren't in our focus.

Ryan Day:

Mixed use.

Ryan Day:

It's high loan to value stuff in second position with unfortunate how the

Ryan Day:

economy is and people being leveraged.

Ryan Day:

We're starting to see quite a bit of it.

Ryan Day:

So just don't do clients in those types of scenarios

Paul Mcallister:

just to save everyone.

Paul Mcallister:

Yeah, I know for sure.

Paul Mcallister:

For sure.

Paul Mcallister:

That's, it's really important.

Paul Mcallister:

It's important.

Paul Mcallister:

So I think the, I want to say.

Paul Mcallister:

One thing that you said about adding value I had a little note on that is

Paul Mcallister:

it's really similar in my approach to your approach on the adding value

Paul Mcallister:

of where to do the renovations.

Paul Mcallister:

Always kitchens, bathrooms, paint is obviously huge and flooring is,

Paul Mcallister:

to me, those are the four common.

Paul Mcallister:

And then I always, I wanted to add the little spice of anytime you can

Paul Mcallister:

add a bedroom and not take away from the property, it's never a bad thing.

Paul Mcallister:

And I think you're always adding a lot of value and you can add a bedroom.

Paul Mcallister:

That's just my general advice.

Paul Mcallister:

I usually give my clients when I'm coaching, but I will take

Paul Mcallister:

that document you said yeah, that's the cool document to have.

Paul Mcallister:

And a part of the, like when I say business plan, these are the things

Paul Mcallister:

that you want to have readily available.

Paul Mcallister:

To you in a, in an organized way.

Paul Mcallister:

So even the three products that you've met through the flip

Paul Mcallister:

analyzer, to me, you should just, that should be something you use.

Paul Mcallister:

Even if you're not doing a Calvert loan or not, like that's

Paul Mcallister:

something you should always have.

Paul Mcallister:

And then knowing about these other products, because if you, a lot of

Paul Mcallister:

times people not knowing that things exist, like you didn't know about the

Paul Mcallister:

commercial exit, that means like there's a lot of deals where they can't exit.

Paul Mcallister:

You can send them to me.

Paul Mcallister:

I'll take them and I'll figure out how to exit because I know that

Paul Mcallister:

I have that, knowledge, right?

Paul Mcallister:

Knowledge is power and who you work with and who that power team is.

Paul Mcallister:

Obviously, if you're doing these types of things you want to have that contractor's

Paul Mcallister:

key and build that relationship.

Paul Mcallister:

But the mortgage broker, you would never think about it as being like a huge key.

Paul Mcallister:

Like I'm proposing.

Paul Mcallister:

But when you have somebody who is an investor focused mortgage broker, investor

Paul Mcallister:

focused professionals in general it's something I really preach and I encouraged

Paul Mcallister:

to listeners to get that power team.

Paul Mcallister:

And I'm not just saying me, I'm just saying in general, make sure you have

Paul Mcallister:

investor focused, real resources around you because it can be the difference

Paul Mcallister:

of your portfolio growing in a flat curve or that upward cycle, right?

Paul Mcallister:

Cause my goal is to get you really, hammering it.

Paul Mcallister:

And I truly think that I can add value by knowing about all these products from

Paul Mcallister:

privates and just knowing about all the different ways that we can help you grow.

Paul Mcallister:

And I care about that more than Oh, I, you don't have TDS the same or

Paul Mcallister:

you don't have all these documents.

Paul Mcallister:

No, that's not ever how I think a lot of people don't even come to the

Paul Mcallister:

table or come to the ballpark to play because they think they don't have

Paul Mcallister:

the tools they think, Oh, I haven't.

Paul Mcallister:

My taxes are bad.

Paul Mcallister:

They've been talking to their banks about they don't put anything on paper.

Paul Mcallister:

There's products out here that if you are good at what you do in terms of

Paul Mcallister:

finding value, being able to execute and you have an exit strategy, you

Paul Mcallister:

can there's nothing holding you back.

Paul Mcallister:

Yeah.

Paul Mcallister:

So that's my, I guess my last I am going to leave it to you, Ryan,

Paul Mcallister:

anything else that do you want to touch on before we start to close?

Ryan Day:

I think you nailed everything on the head.

Ryan Day:

Yeah.

Ryan Day:

I love what you guys are doing.

Ryan Day:

Creating education helping real estate investors and to your point,

Ryan Day:

having someone who's also investing.

Ryan Day:

In the asset class is a huge value add, just because you know it, you

Ryan Day:

live it, you breathe it, you understand it you're experiencing it firsthand.

Ryan Day:

So that is something that we always recommend clients is work with a

Ryan Day:

realtor, work with a mortgage broker who's investing in the same asset class

Ryan Day:

that you're looking to get in, just because having that lens of the firsthand

Ryan Day:

experience as well as coaching others.

Paul Mcallister:

Sorry, you froze for a second.

Paul Mcallister:

So I heard as well as coaching others and then your audio cut out.

Paul Mcallister:

Here, I turned off my video.

Paul Mcallister:

Ryan, can you hear me?

Paul Mcallister:

Okay, yeah, I'm gonna turn off the video and let it just so yeah,

Paul Mcallister:

you said the importance of working with professionals in your same

Paul Mcallister:

asset class and then it cut out.

Paul Mcallister:

Can you repeat that?

Paul Mcallister:

I appreciate that.

Paul Mcallister:

I definitely would be the one.

Paul Mcallister:

I love to always continuously improve just in general.

Paul Mcallister:

That's the engineer in me.

Paul Mcallister:

But I honestly, you guys this isn't just because you're on the show,

Paul Mcallister:

but you provide a good service.

Paul Mcallister:

You're really responsive.

Paul Mcallister:

You'll say, Oh, if it's going to take you two days, you're going to

Paul Mcallister:

say it's going to take you two days.

Paul Mcallister:

So then you're setting an expectation with us.

Paul Mcallister:

You're very fast and you'll tell us why if it's going to take whatever.

Paul Mcallister:

So that's what I really like.

Paul Mcallister:

You're really open book.

Paul Mcallister:

I've enjoyed working with Calvert and I think Ryan, maybe we should,

Paul Mcallister:

we can talk after this about so we have something called the Lend City

Paul Mcallister:

Investor Hub where basically we have a investor community we've created

Paul Mcallister:

this about 100 and 120 days ago.

Paul Mcallister:

We have 600 investors that are in this hub.

Paul Mcallister:

And we actually have live.

Paul Mcallister:

We do the same thing we basically just did, but we just do it live

Paul Mcallister:

with investors that actually can ask questions as we talk.

Paul Mcallister:

So they can do it meeting raising their hand or they can do it via a chat.

Paul Mcallister:

It's usually a team's meeting.

Paul Mcallister:

But we have about 70 or so people in these calls.

Paul Mcallister:

And that's something that, when you talk about working with

Paul Mcallister:

education is a huge pillar for us.

Paul Mcallister:

And I think that, there's some value possibly in us doing a webinar on

Paul Mcallister:

that show where, you'll get live questions from the audience and a

Paul Mcallister:

lot of these people that I coach are actually in this hub already.

Paul Mcallister:

So it's nice that they're going to hear it from, your mouth and not just mine.

Paul Mcallister:

But yeah, that's something we should consider.

Paul Mcallister:

And if any listeners there, you can send me a DM.

Paul Mcallister:

Instagram turnkey McAuley is my handle.

Paul Mcallister:

That's the easiest way to get in touch with me, Ryan, how, do you want to

Paul Mcallister:

leave how to get in touch with you, even though I would still advise you

Paul Mcallister:

that coming to me, then me going to Ryan is the best way, because I'm going

Paul Mcallister:

to make sure that you're presented.

Paul Mcallister:

Kind of, the right way.

Paul Mcallister:

Okay, cool.

Paul Mcallister:

I appreciate you taking the time this afternoon, Ryan, and happy Friday.

Paul Mcallister:

I hope you have a good day.

Paul Mcallister:

Good weekend.

Paul Mcallister:

And yeah, thanks for your time.

Paul Mcallister:

And we'll chat more about some other things we can do in the future.

Paul Mcallister:

All right.

Paul Mcallister:

You too.

Paul Mcallister:

Cheers.

Next Episode All Episodes Previous Episode

About the Podcast

Show artwork for The Wisdom, Lifestyle, Money, Show
The Wisdom, Lifestyle, Money, Show
The Wisdom, Lifestyle, Money Show is here to help you make better decisions with your money, learn about life's finer things, access personal improvement hacks and discover how to be a better investor.

Listen for free

About your host

Profile picture for Scott Dillingham

Scott Dillingham