Wealthy AF Podcast
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Wealthy AF Podcast
An Insider's Journey into Financial Growth and Real Estate Business
Ready for a thrilling journey through the world of financial evolution and real estate investing? Hang on tight as we embark on an enlightening conversation with Malcolm Turner, the financial industry veteran with an inspiring 25-year journey, traversing through roles as a financial advisor, mortgage broker, to founding Castle Commercial LLC. Malcolm's captivating insights into the industry transformation over the years, and the pivotal steps he undertook in his career pivot and business creation, are nothing short of a masterclass.
As we navigate deeper into the financial waters, Malcolm unfolds his unique insider's perspective on the economic impact of the strong jobs report, and the fluctuating economy through the Clinton, Bush, Obama, and Trump administrations. His take on the necessity of government intervention during economic downturns, the pandemic's effects on the market, the effects of capitalism on pricing, and his thoughts on the current state of the job market and the mortgage industry, are thought-provoking. Get ready for a reality check on the economic landscape through the eyes of a seasoned industry professional.
Just when you thought it couldn't get better, we switch gears to the arena of real estate investing. From the current housing inventory shortage to the influx of money in the commercial real estate market and new legislation allowing non-accredited investors to invest in real estate income funds, Malcolm leaves no stone unturned. He even shares an inspiring success story of a real estate investor. Making sense of the complex world of investments has never been this easy! As we wrap up the conversation, Malcolm offers a sneak peek into his book and leaves us with some potent quotes to live by. So, don't wait! Tune in for an episode brimming with invaluable advice for those fascinated by financial evolution and real estate investing. Let the journey begin!
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Hey guys, welcome back to another episode of Latinos in Real Estate Investing Podcasts, where individuals just like you come to learn how to create wealth through real estate investing, entrepreneurship and business ownership, and today's guest is Malcolm Turner. Malcolm is a highly respected and accomplished business executive. He's also been married for 26 years and has three kids. In 2007, he founded Castle Commercial LLC, a national commercial mortgage banker and a brokerage specializing exclusively in commercial lending. With over 25 years of experience in the financial industry, malcolm has developed a deep understanding of commercial lending, capital markets and investment strategies. I love talking about the capital markets, especially where things are today, malcolm, so we're going to wrap about that. I love you. My brother, malcolm is also a speaker and the author of financing the unbankable deal and a deacon for his church at the Greater Emanuel Church for 15 plus years in Detroit. Sir, welcome to Latinos in Real Estate Investing Podcasts. It's my honor to have you, glad that you're here and you took the time to come, and chat.
Speaker 2:Thanks for having me. Thanks for having me, I appreciate it. You're welcome, brother.
Speaker 1:Well, let's tell us first how you got started in this whole financial world. 25 years is a long time. I started in Real Estate as a mortgage broker in 2006, just like you in 2005. Just like you, but I got out after 2009, literally put my mortgage broker's license in the garbage after Dodd Barney, frank, dodd Frank and all that greatness that happened back then with the over-regulation and the over-reaching by these guys. They put it on us so I threw it away. Anyways, tell us how you got started, brother.
Speaker 2:Well, you go back 25, back in those days I was a financial advisor. When I was a financial advisor, it was during the time when there was a lot of change. Of course there's been tremendous change the last 25 years in general relative to technology and the financial markets and whatnot. Back then, when I first started, brokers did brokerage, bankers did banking insurance, people did insurance and there was firewalls in between. Then they repealed Glass-Steagall in like 1996, I want to say yeah, in 1996, 1997, somewhere in there. Now, all of a sudden, banks could sell insurance, brokers companies are offering cash management accounts everybody's in everyone's backyard. That's when a city bank became city group.
Speaker 2:I remember that the one thing you couldn't do was loans, though. Then, around 1999, 2000, they changed that rule. Before we would recommend a refinance if someone was paying a higher interest rate. We would say, hey, go talk to this mortgage company. They get a loan. They come back and it wasn't the loan we told them. We say get a 30-year fixed rate mortgage. They come back with some option-iron crap. They're like what the hell is this? They maxed out their debt and now all of a sudden, the 300 bucks a month we're looking to save that they can then put into the college fund. They don't have that no more.
Speaker 2:When we got to do loans as financial advisors, we had the authority now to also do loans ourselves. We had control over the process. I was like man, this loan stuff is hot, this is a fun business and it's way more lucrative than being a financial advisor which was odd, because inside baseball, financial advisors laugh at loan brokers. They're like you really know how to make money. If you don't, we do it. Everybody feels that way. But once I got to the business, I loved it. I was doing mortgages, full-time, residential in 2006.
Speaker 2:One day I was in my pastor's office telling them about this conversation I had with my boss at. The loan broker was riding me because I put a guy in a fixed-rate mortgage for like an 80-gram mortgage. Why didn't you do him in a $300,000 option? I'm like well, if that thing moves, he's screwed. He's a single-guy prison guard. His income has no opportunity to jump and that was the most appropriate.
Speaker 2:Are we supposed to do the right thing for our clients? Oh, there you go. I'm talking about do the right thing stuff. Again, I said to my pastor why is that a badge of dishonor? He said well, malcolm, if you were going to do a mortgage company, how would you do it? I'm like well one. I'd do commercial, because it's all about the math, it's all about making money, it's not emotional. He goes well, how did you do that? Well, you set up an office, you build a relationship with some lenders, you do this and do this, da da, da da. Then that's how you do it. He said great, let's do it.
Speaker 2:I was like whoa, I thought we were talking hypothetical. He's like Malcolm, you're the smartest guy I know with money. I trust you, I love you like a brother. I was like, yeah, pastor, I love you too, man, but you don't know nothing about mortgages. So we are going to be 50-50 partners. I'm doing all the work, I'm training you, setting up the business. It ain't going to feel good and I don't want to mess up our relationship. He's like Malcolm, you know what? You are absolutely right. You're absolutely right. Tell you what you set it up. You train me, I'm going to be a good student, I'll fund it and then we'll be 50-50. We'll be evenly yoked. I was like oh well, okay, because I can't put in 50% of the money and do 100% of the work, right? So that don't feel good, right? So I was like, okay, well, if I'm going to do 100% of the work, you know, at least for the first two years, let's just say and he's going to do 100% of the money, okay, that'll work.
Speaker 2:And Castle was born. Unfortunately, my dear partner got pancreatic cancer and passed away a year and a half into it. But we're still going, man. We're still cranking 16 years later. Right, that was February 2007. We set it up Great timing, right, great timing to start at mortgage brokers. But thank God, we did commercial, because commercial didn't really crash until 2010. So we all thought we were to cast me out in eight and oh nine, when residential was going to hell in the hand basket and we were still lending. But you know, the great financial crisis was so bad it hit everybody. So it caught up to us in 2010 and now we've survived that. We survived the pandemic, we survived the interest rate increases that they had over the last year. There's a lot of companies I've seen go out of business that you know are quote-unquote competitors of mine, and we're still here.
Speaker 1:So I want to about that right. You mentioned that in 2010 was when it caught up to commercial, got it. I was out, but I'm sorry you said 11. I think you said 2010.
Speaker 2:Oh no 10.
Speaker 1:Okay, so it was when it caught up to commercial, I was out by then. I was out in oh nine. I was like I just couldn't, I was making no money. They killed if you remember, they just killed the compensation for brokers. We had to get licensed. I went to the licensing, got all that stuff and then they just crushed Boom, there was no money. Lenders were lending Right, and you just couldn't make it if you didn't have financial backing. And I did not. I was a small guy and I did not. So you know, there's came the big commercial brother. I should have, but I was. So, you know, when you came to the right side, you know what's the problem?
Speaker 2:to be a regular None of that regulation Right Commercial yeah, it doesn't.
Speaker 1:Yeah, so, but you know what happened to me. I was so hooked and I had, I admitted I was a young man, I was 26, seven years old. I was a younger man then and I was so hooked, malcolm, on the money. I was me Right, because I didn't know what I I didn't know what I didn't know. And this is a problem that if you don't evolve, if people, if people don't evolve and reeducate themselves and reinvent themselves as time changes, you're gonna die, right, you're gonna. So I was so hooked on all the money I had made in four or five, six, right, all the money I made in five, six and seven and part of eight, that it was like no, it was like I'm trying, I gotta do this. I made so much money, how can I, how can I let this go, how can I let this go, instead of reinventing myself and trying to figure out? That's when I bought my first investment.
Speaker 1:But I want to ask you as a mortgage guy well, you're in the mortgage business. So we've seen, I think, 12. This is a 12th. It's the 11th or the 12th interest rate hike, the one that just got passed? Yeah, 11th, on July 26. So we've seen 11th interest rate hikes in a row. Never historically. The feds have never done that Right.
Speaker 1:And we have this thing coming up that we're calling it they're calling it red October, right where four billion dollars of commercial loans are coming to get reset in October, the last quarter of this year and though that DSCR is just not going to work and these people are going to do a capital call, these multifamily are going to have to do a capital call or bring more money, or or the banks are going to take it, there's going to be some blood on the streets, I think, because, just fundamentally speaking, I think there's going to be some issues. I want to get your thoughts on that. So on the residential side, we have a lot of people that think like, well, that's on the commercial side when that happens and those mortgages reset, because obviously on the commercial side, we can't get 30 or fixed unless you are getting doing one to four and you got a DSCR loan, blah, blah, blah, right. So that's on that commercial side. That's not going to impact us here on the residential side. That's not.
Speaker 1:I'm one that doesn't believe that. I believe it's all the same money, the same investors, and when one part bleeds. I believe that the other side is going to be impacted. I want to get your perspective on that. Being an insider of the industry, what are you seeing and what are your thoughts on that? When, if and when that happens, what impact will it? Will it will it have on the overall market and will it bleed over?
Speaker 2:Well, let's, let's start with this. What happened this morning? What was the news this morning?
Speaker 1:labor the labor. I think we had unemployment. I haven't seen it yet. I know it came out this morning at 830am. I wrote it's another good number, what what was the news?
Speaker 2:it was a it was right around 200,000 jobs.
Speaker 1:So it's often a little bit than the previous ones, but it's still strong. About expectations yeah, that's still strong number.
Speaker 2:Yes, sir yeah, that's about expectations. That's not necessarily a low number, but you know, here was the thing 14 out of the last 16 months, the jobs number has come in above expectations. Yes, yes, yes, sir. Okay, now you know I've got. I've been in the business a long time, okay. So, you know, in those 25 years we've seen a lot of ups and downs. You know I live through, you know policy wise, economic policy wise right, the Clinton years, the Bush years, the Obama years, right, the Trump years, right. A lot of changes in economic policy from one you know administration to another. Okay, some things don't change though. Okay, the fundamentals are strong.
Speaker 2:I'm not one of these people that are gloom and doom. I will say this I did for a brief moment by into the word on the street back in like 18, 2018, 2019, they're like all recessions coming inverter. You occur. Okay, let's see what happens. No, didn't happen, didn't happen. 2018, no recession. 2019, no recession pandemic still still. 2020 ended up a good year. Now, we had a moment in the spring where everything looked with the hell in the hand basket, right, but by the summer, everything sort of on the muddy side of the world. Things started, you know, making money and the government did the best thing you know that you could do, and this is, and I'm not. This is not political, this is just economics. I'm talking purely economic.
Speaker 1:Still, trade economics.
Speaker 2:Yes, sir when the private sector cannot provide jobs and money to a economy, it is the job of government to step in and support the companies, the businesses and the workers to provide that opportunity and or that capital, so that now, when things get back to normal, we're not starting from the basement. Okay, then, that's what they did, because two things happened. A means of people got substantial unemployment pandemic payout money monthly why they're sitting at home. Right, businesses got billions of dollars in PPP money why their employees were sitting at home. Okay, so, as soon as you know, 2021 happened, ie the vaccine, and now people are ready to come back to work, business is ready to open up. The businesses were still there. Those people had not lost their cars, they had not lost their houses, right, and they were still, and they still had money to buy stuff. So what happened at the end of the year? Companies were still making money in 2020. They were still making money in 2021.
Speaker 2:Now, 2021 was the year the supply chain blew up, you know, and they still survived it because you know what happened. Eggs went from two bucks $12,000,. You know $10, $8. And you know what happened to the egg suppliers? They sold eggs. Yeah, they sold eggs because people had the money to buy them. They complained, but they spent the money. Gas prices shot up and what do people do? They kept putting gas in their car. You know now, I'm not one. Our inflation problem is not purely a monetary problem. Okay, it's a capitalism function. I'm not going to say a problem function, because if I'm Amazon and I'm charging $99 for Amazon Prime and I raise my price to $129, which is a 30% increase and my clients don't blink and they keep paying me, okay, I should have been charging $129 the whole time. That's capitalism, right?
Speaker 2:The egg producers had a bird flu. They had a cold Millions of birds to keep from destroying the industry. They did that. There was a shortage in supply. Prices went up. We all paid it. All those birds. Birds don't take long to reproduce and all of a sudden, their cost is right back down and like wait, wait a minute, people still paying six. They're happy to pay six bucks. Okay, so what happened in 2022? Grocers, the big, the top six grocery chains, announced record billion dollar profits, not revenues. Profits, because when they worked out those supply chain issues and their costs went down, they kept prices the same because the American consumer had been paying them for a year.
Speaker 1:People got used to paying them.
Speaker 2:People didn't stop with consumption. How do you bring prices down? You buy as a market. You buy less, you buy less. They say, okay, we're going to have to drop prices to spur demand.
Speaker 1:That's what happened, or increase interest rates. So the cost of the year we're priced what I'm saying as a business owner.
Speaker 2:Yeah, yeah, Right, as a business owner. So I got to drop my prices to sell some stuff. Right, I got to put a what Sale on to get people in my store. But if people are still coming to my store, they're paying those high prices, they're complaining, they're moaning, but they're still running that credit card through. Okay, and on the mortgage side, there's an abundance of money. I don't. I've never seen, Martin, I've never seen a recession where everyone is working A and B. All the companies that they work for are profitable and want more people. All these companies are like man, if I had more workers, I could make more money. How can I get more product? Right, If you're the product business, a lot of companies are like I need more product. So you know and I can't get enough people.
Speaker 1:My question for you, malcolm, is this right? So you said something key. You said a couple of things that are key. You said something about fundamentals a little while ago, about the fundamentals or the fundamentals, so I want you to elaborate on what are the fundamentals, cause there might be a listener out there that's not really sure what you meant when you said the fundamentals. When you talk about economic drivers, then I want to talk about. You also said there's a lot of money, especially in commercial out there.
Speaker 1:So if there's a lot of money in commercial out there and there's a listener out here listening to our conversation and they're thinking, okay, great, I want to buy real estate and I need to get my hands on some of that commercial money so I could buy more real estate, and what do they need to do? What are the one, two, three things that they need to do to prepare themselves? Maybe they have a W2, maybe they don't. Maybe they're listening to us and they're starting. They're investing real estate, investing career. They want to buy multi-family, maybe two to four, two to five, you know, small multi. Where do they start? What are the things that they need to do? So there's two questions there, malcolm, there's the question of the what are the fundamentals? And the question of what should people, a listener, do to get ready to, or actually to get their piece of the American dream? To me, that's. The American dream is to buy real estate and become wealthy and create wealth for myself, for my family and my kids and my kids, kids, kids, kids, kids right.
Speaker 2:So let's tie those fundamentals to real estate. Okay, right now we have a substantial shortage of inventory. There's not enough houses on sale for the market, for folks that want to buy. There's not enough apartments and rental for folks that want to rent. Okay, you have a lot of people that are living with parents, you know folks living with grandparents right, they want to buy a house. There's no inventory. Okay, last I checked, we're four million units short of demand.
Speaker 2:It's gonna take us years, yes, years and years, because the financial crisis wiped out all those builders, right, all those builders that were into development in 08, right, 07, all that stuff. So we didn't build anything for a long time, right. And the builders that wanted to build couldn't get loans because the banking system was a mess for quite a few years, right. So we still have not fully recovered from that backlog. Right Now, if people are working, get to the fundamentals. If people are working and everybody who wants a job has a job because when you have unemployment at 3.5%, that's full unemployment I don't care. You go to, you know, wayne County Community College, you go to Harvard University economics 101 everywhere is below 4% is essentially full employment. All my tenants have jobs. To paint me as a landlord. The national average for occupancy is like 95% right now. So if you have a multifamily and you're sitting on 70% occupancy, or let's say you got 10 rental houses and only five of them or seven of them are rented, that's a management problem. You got to manage that. That's not a market problem, okay. So, and on the money side, there's a lot of money because interest rates have been so low. People go to the bank and the CD and they get 1%. Oh, that's terrible. Hey, I got this new income fund. You can put money in here and I'll pay you six, six times what you're getting at the bank.
Speaker 2:And one of the bills that one of the pieces of legislation that Obama cited to allow for crowdfunding. If people think about what's that, what's that? One crowdfunding platform people go to or try to think of whenever like raising, they just try to like go fund me, go fund me. Right, yeah, go fund me. People think about crowdfunding as just a go fund me personally or non-profits. But in that bill was legislation that allowed non-accredited investors to invest in real estate income funds through a crowdfunding platform. So there was a whole we call FinTech financial tech industry that blew up where you had go fund me. Platforms like you have Robinhood with stocks, right, you have the same type of platforms for real estate investors, and I'll say real estate mortgage investors, and they're raising billions of dollars. And now those funds didn't go to lenders like me, right, and in little backstory, we were a brokerage forever, until 2019.
Speaker 2:I get a phone call. Billion dollar mortgage fund calls me and says, hey, Malcolm, you have any debt, we'll buy your paper. And I'm like, actually, no, we're just brokers. So, yeah, but when I search commercial loans in Michigan, where I'm based, you're on the first page of Google. So you must be doing something, right, you must be doing some business over there. I'm like, well, yeah, we're doing. Okay, you know. And he said but you're not a lender, you don't have any paper. No, we're strictly brokerage. Wow, okay, well, do you want to be? And I was like what? Well, what do you mean? Well, you know, I mean you're doing a certain level of volume. Blah, blah, blah. We'll buy all your paper, we'll make you a lender, we'll fund it. I'm like, okay, and within two, three months, going through a vetting process, blah, blah, blah, we became a lender and so now we're loaning money under our own name, you know, because you have these investors and investors are like hey, we raised another. You know 300 million dollars. Who needs a deal? Who needs a deal? No-transcript. So there's plenty of money in the marketplace, especially if you're going to do multifamily.
Speaker 2:Now action steps. You got a new investor. They haven't done anything. They're thinking about real estate, but they haven't really dipped their toe in yet. Would you wait? No, this is a great time. You got a demand. That's crazy. That's going to be there for a long, long time. We have not stopped having babies. You have. Last I checked 20 million kids that are turning 18 this year. Next year is another 20. They're going to come out. They're going to be looking for housing.
Speaker 1:Absolutely Apartments. Even when they go away to college, they're going to need housing.
Speaker 2:Right. That's why flippers have come in to support the market. That builders can't Right. They're coming in taking old houses, buying them for cheap, buying them for 100, putting 50 into them and then renting them for a thousand a month. That's the math in Michigan. That's the theory of the dollar.
Speaker 1:I was going to say. Those are good numbers In Michigan, especially where the taxes are lower and all that those are.
Speaker 2:Yeah, michigan investors are like, just take a look, I'll give you a stat here in Michigan 60% of the multifamily purchases are from last year without a state investor.
Speaker 1:Malcolm. We were looking at some properties in Michigan. We'll talk a little bit off air, because we're looking for my firm is looking for larger multifamily. We looked at some stuff. Where is this rapper from Eminem? Where's Eminem from Detroit? Detroit, yeah, he's from Detroit, but whatever the city is that he's in Detroit, whatever they call the area that he's from, the general area. Anyways, we were looking at some properties. We were looking at some stuff there.
Speaker 1:We just don't know the market well enough, we're not intimate enough because, as you know, real estate is block by block, especially when you're out, right, you don't know if this is the good block and you don't know. There's Google Maps and I know because of my experience. I could look on Google Maps and look at a block, drive up, drive this way, drive that way. I could get a good sense of it. I could get okay, this one's in a bad block. I could just tell by the grass or this or the garbage or that Okay, now we're turned into a better neighborhood here in this block, but it's not the same. We looked at some deals there. There's deals in Michigan, for sure. There's more coming now. We've seen some this year. We looked at some deals in Michigan. We were like, wow, these numbers work there if you have the right boots on the ground.
Speaker 2:Right, well, and this gets to action steps. One thing you absolutely have to do is get a team. You don't win by yourself 100. You don't win by yourself, okay. Team sport Real estate is a team sport, friend. What I did is by myself, okay, you just shaft all your partners. You just shaft it all your. Come on now, right, doesn't bite off self. You need a team, you need a realtor, you need a lender, you need a manager, property manager.
Speaker 1:You're going to get a good property manager construction workers.
Speaker 2:You need a rock solid construction team. You need a rock solid title company that closes on time and knows how to get the paperwork done Right, because everything's local. How do they get this thing through the tax office? How do they get it registered on time? You don't have to say you can create that team.
Speaker 2:You know I talk to out of state investors all the time, but the first step you have to do this is for your listeners. You got to make a decision and I know that sounds like that's not like a hard thing. You know, like you know, buy 33 houses, but honestly, god, it starts there. You make a decision Right, and a decision means I am cutting out you think about D side right, I am cutting out all these other things. I'm not doing. I'm not trying to do toro and crypto and Amazon, fba and I'm going to do real estate. No, that ain't a decision Right. Make a decision. This is the thing I'm going to do and this is the thing I'm going to run with. And when you're doing something fundamental, it is nothing more fundamental than real estate. Okay, and why? I say that?
Speaker 2:Maslow's hierarchy of needs the first one at the bottom is safety and security. And that starts with where do I'm living If I get kicked out of my house? Right, if my house, let's say my house burned out, I'm not worried about where I'm going to eat tonight. I'm worried about where am I going to? Hey, where's right? Right, that's the I I concern about lunch. You know, I'm just. I had a fire last night. I get up this morning. Where am I staying? You know the little stuff that I have. Where am I going to? Who am I going to move? Where am I going to rent a house from? I got to get a place like right now. I'll eat, you know, 10 o'clock tonight, right, because for the sun goes down, I got to figure out where I'm laying my head. It's fundamental, right?
Speaker 2:So once you make that decision, you live in the time of YouTube. People have no excuse. You go to YouTube. It's a smorgasbord. The podcast that you have is awesome, right, there's a ton of information. But you have to make the decision that I'm going to educate myself. Malcolm University, mel Martin University, right. Jane, bob, joe University starts when you come home from work and 100.
Speaker 2:You don't come home from work and turn on the TV and watch American Idol. They're not paying you anything. Those people ain't making no money, right? Only the winner gets paid. Right. All those losers Right, got a little bit of fame and they smorgasbord themselves for that. Then turn that crap off. Tom Brady ain't put no money in your pocket. How you watch football for three hours and you broke. Come on huh.
Speaker 2:Right, you need to be watching YouTube and figuring out how do I source deals. What are the financing options that are available? Now I want to say this my book Financing the Unbankable Deal. We have strategies in our book about how to find deals Right. And now the reason I did unbankable is because bankable deals cherry deals. That represents about this much of the market. The market is this big, right, the market is this big. All the investors are fighting over these deals. Okay, there's deals that people are walking by, driving by, that are they're not bankable deals, they're not cherry deals. But you know what? There's a way to get that deal done. There's enough money in the market. You get funding for that deal and now I can buy.
Speaker 2:I give you a real quick example. I've got an investor that worked for a nonprofit. This is three years ago. I do real estate meetups. I host real estate meetups here locally. Right, she was coming to my meetups for like two years. This is back and starting. I want to say, oh, 2017. She started coming to my meetups Then in 2019, she's like you know what I'm doing it? I'm not just going to sit here and watch other people do it and listen, I'm doing it. Good frog, good January of 2020, when she bought her first investment property. Till today, she just closed on her 11th property. That doesn't seem like much, malcolm. That's a lot there's people that haven't done anything.
Speaker 1:Now here my meetups coming for three years, never done nothing, not even freaking. Got out to walk a house Just coming in and just listening, exactly.
Speaker 2:And what she did is all the things we've talked about thus far. She went to meetups and built relationships. She's like, hey, I'm new in real estate, what are you guys doing? How did that work? How'd you do that deal? And she kept coming and she kept meeting people and she kept listening and learning. And then she found a deal. She's like, hey, I need a partner. Hey, will you partner with me? No, will you partner with me? No, will you partner? And she kept going to someone. She says, whoa, that's a good deal. Yeah, I'll partner with you on that Great and from zero her portfolio. Now the value is $3.4 million.
Speaker 1:Wow, good for her man, Congratulations.
Speaker 2:Okay, of those 11 properties, five of them are like duplexes, single family rentals, right. The other five other six are multi-families, small ones like six units, seven unit, eight unit, blah, blah, blah. I'm really now because of what she did. Her cost basis on all this property was like $2 million. Okay, she's cash flowing monthly. I want to say $26,000 a month. Wow, good for her. She's killing it.
Speaker 2:Okay, the management company, the property manager, on all these prices, 41 units total. The property management company is her company. So her property management company is charging her holding company, okay, a property management fee to the tune of $5,000, low, $4,000 a month. So she's got four grand a month. Come in as a business owner right, she took her own company and then on the top end she's getting another 26 grand, you know, a year. This is gross N-O-Y for herself. But she's also Airbnb. So some of those there's probably about eight of those units that are Airbnbs that she's making a lot of money on, right, that's running through a whole separate company. That's awesome. I've talked about my people how to have holding companies and operating companies and the holding companies own the real estate but they don't do anything. The operating companies don't own anything, but they do all the work and they charge services.
Speaker 1:Yeah, that's a sophistication of an investor. That's sophisticated.
Speaker 2:That's how the big boys play the game. And guess what, when you're starting small, you can do that too if you know how. But all of this stuff I'm saying is all available on the internet, or specifically on YouTube, and people are teaching it, you know. So here she is. Now, okay, I want to get another one. I'm going to refi out for her $760,000 in the next 30 days. Good for her, that's great. That only represents Martin's 65% loan to value LTV.
Speaker 2:Yeah, she's not over leveraged at all at all and she used what I call like unbankable financing right, we call commercial bridge loans to buy all of that property. So she's going to have still great cash flow. She's got 30% equity still in the property. She's not over leveraged. She's got $700,000 that she's going to have in the next 30 days. And now she wants to buy a 50-unit multifamily. She wants to step up, you know, because in multifamily lenders like to see that you're buying the units that you have, if that makes sense. So in other words, if I've got 10 houses, that's 10 units, I can now finance a 10-unit small multifamily. She has 40 units between these 11 properties. So now she can go out and get a 30, 40 unit multi-family and she qualifies for it. No problem, right. And she did all of this in 2020, 21, 22.
Speaker 1:That's great, Malcolm. Thank you so much, brother. We're running out of time. Really appreciate you coming on and sharing your knowledge base and all of your experience and I mean we're gonna get into a moment here I'll help you and reach out to you. But for Frodo Geco, we're gonna get into the entitled round. Okay, we're gonna ask you a series of questions. This is just for fun. You can answer one word. Answer you could justify. If you want to, you don't have to. If you don't want to, whatever you want. Are you ready to play? My friend, let's go. Okay, perfect Real estate is fantastic.
Speaker 1:I've always wanted to travel to Bali. My advice to young people is start where you are. Never underestimate the power of relationships. Inflation is a cost to doing business. I think the president right now is.
Speaker 2:Doing what he's supposed to do.
Speaker 1:Family or bit. And what I said financially? Financially Family or business, family, passion or stability.
Speaker 2:Ooh, that's close. I'm gonna go with passion. If I had to pick, I'd go with passion Wine or beer, oh wine, all day.
Speaker 1:Knowledge or experience. Experience.
Speaker 2:Seafood or steak oh man, that's a toughie. I like a good rib eye, but I love lobster too. So that's both of them Surfing too.
Speaker 1:Both of them Angry client or angry coworker.
Speaker 2:It consists of what?
Speaker 1:context. However, context, your unconscious mind is telling you Angry client or angry coworker.
Speaker 2:I'm stoic, I handle both. It don't bother me.
Speaker 1:Outstanding brother, welcome yeah.
Speaker 2:Yeah.
Speaker 1:Yeah, thank you so much for coming on and sharing your insights and all of your great wisdom and your knowledge with us. If people wanted to connect with you, malcolm, and they wanted to get your book, maybe go to your meetup how do they find you? Where can they connect you? How can they call you? Where can they find you to? If they wanted to get a loan, a commercial loan, and how do they connect with you?
Speaker 2:They can find me at wwwcastlecommercialcapitalcom. That's my company website. The website for my book is the wwwfinancingtheunbankabledealcom. Okay, my book is on Amazon, but they can go to my website first and learn some good stuff there and purchase the book. It's on Kindle, it's on, you know, paperback hardcover, all those wonderful options, and I have a YouTube channel so I'm not hard to find. If you search Castle Commercial Capital, you'll find me everywhere. My phone number is 800-598-5530. I'm option one, my loan officers are the other options after me, and so, yeah, I'm easy, easy, brother.
Speaker 1:Well, thank you so much for coming out, sharing your wisdom, your insights. And, guys, remember, if you like this content and you're listening to it, make sure you drop us a five-star review, make sure you like it and share it with someone that needs to hear this, and make sure you hit up Malcolm. Malcolm, you want to share something.
Speaker 2:Yeah, yeah, can I give you two quotes for your listeners to live by? Go for it Real quick. John Kennedy famously says we choose to go to the moon in this decade and do the other things not because it's easy, because they are hard. Everybody heard that part. The second part of that same quote is because that goal will serve to organize and measure the best of our energies and skills, and because of that challenge, it is one that we are willing to accept and one we are unwilling to postpone, and one in which we intend to win. And the last one I'll share with you is Michael Johnson. The Olympic gold medalist said they don't give you a gold medal for beating somebody, they give you a gold medal for beating everybody.
Speaker 1:That's powerful stuff brother, that's powerful stuff, man.
Speaker 2:So I'll return to you with some fake coins work it, work it.
Speaker 1:Thank you, brother, really appreciate you, man, Thank you for coming out and sharing with my audience and myself your wisdom, your insights and your knowledge, and appreciate you, my brother, Thank you.
Speaker 2:Thank you, Zodder.
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