Bank on Your Neighbor: The Audiobook Podcast
Building wealth doesn’t have to mean Wall Street. In this exclusive audio series, Mel Dorman brings you Bank on Your Neighbor — a practical, people-first guide to seller financing. Learn how to create ethical, win-win deals rooted in relationships and strategy, and start building financial freedom right in your own community.
https://meldorman.com
Bank on Your Neighbor: The Audiobook Podcast
Bank on Your Neighbor: The Audiobook - Chapter 15
The deal is signed, the ink is dry—but this is only the beginning. In Chapter 15 of Bank on Your Neighbor, Mel shows how the real game of wealth building begins once you step beyond the closing table. From structuring creative exits to repositioning debt, she explains how to design your portfolio like a chessboard—moving notes, flipping terms, and raising capital with clarity and trust.
Hear how a $500 deal became 23 units, why flipping is a tool (not freedom), and how cultivating terms can unlock opportunities most investors overlook. This chapter is about vision, advanced strategy, and learning to play the long game on your own terms.
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Hi, friend. I'm Mel Doman, real estate investor, former social worker, TEDx speaker and financial activist. And this, this is Bank On Your Neighbor, the podcast. You're probably here because you felt it too, that the system wasn't built for us. That building wealth shouldn't mean selling your soul to Wall Street or crossing your fingers every time a bank says no. That there has to be another way. Well, there is, and this podcast is my free gift to you. That's right. Free, no paywall, no audible subscription, no gatekeepers standing between you and the knowledge that can change your life. Because here's the truth, just because something's free doesn't mean it isn't valuable. Sometimes the most valuable things, clarity, empowerment, freedom, don't come with a price tag. They come with purpose. I created this podcast because I'm on a mission to decentralize wealth, to take power out of the hands of billionaires and put it back into our communities. Each episode is a chapter from my book Bank on Your Neighbor. Read by me. It's my way of making sure this knowledge reaches the people who need it most without a single algorithm getting in the way. We'll walk through the real strategies I use to go from dumpster diving in my twenties to building a multimillion dollar portfolio in my thirties without banks, without credit, and without compromising my values. We'll talk seller financing, community centered investing. And creative ways to build wealth that actually serve people, not exploit them. But this isn't just a podcast, it's a movement, a radical reclaiming of power, a blueprint for creating more community-minded millionaires and fewer billionaires extracting from our neighborhoods. Every chapter builds on the last, so I recommend listening in order. I'll drop links, visuals, and extra resources in the show notes to help you take action. Not just absorb information, and if something in an episode strikes a chord, send it to someone you care about. That's how we spread financial literacy. That's how we grow a movement. That's how we rise together. Welcome to Bank on Your Neighbor. Welcome to the movement. Let's build something together. Chapter 15, after the ink dries, exit, expand, and multiply. The mind once stretched by a new idea, never returns to its original dimensions. Ralph Waldo Emerson. It's late. The room is still, you're sitting at your kitchen table, the kind of table that's held a lot. Morning coffee, hard conversations, bills birthday, candles. Tonight, it holds something different, a signed purchase agreement. It's your first creative deal. The ink is dry, but instead of the rush you expected. What you feel is a strange stillness, like standing in a doorway, one foot in the familiar, one foot in the unknown. You thought this would be the finish line, but something tells you this is just the beginning. See, most people play the game like it's about doors stack enough properties and you win. But if you've made it this far in the book, you know better the real game. It's about how you see. Change the way you see things and the things you see change. This chapter is about vision, not just of what you own, but how you move. Think of your portfolio like a chessboard. Each note, each lean, each term is a piece with potential. And if you know how to move them, when to hold, when to exit, when to reposition, you stop reacting and start designing. I used to walk through buildings only searching for cashflow. Now I value the terms more. A good term is worth much more than granite countertops because with the right term I can divide a note like a karate chop into two smaller notes, each with its own purpose. I can move a note from one property to the next, freeing up equity to fund the next deal. I can create notes with friends and family. Building capital from relationships instead of gatekeepers. This isn't just about holding real estate, it's about holding the pen in the pages ahead. I'll show you how to exit wisely, grow intentionally, and think in decades, not just deals. We'll walk through how I turned $500 into 23 units, not through luck, but through leverage of paper trust and imagination. What comes after the ink dries is where you stop playing someone else's game and start composing your own, knowing your exit plan before you move the next piece on the board, pause and ask, what game am I playing? Your exit isn't just about how you leave the deal, it's about what kind of investor you're becoming. Hold it, the long game. Holding a property is where true wealth builds slowly, predictably, and often quietly. This is the strategy for those thinking in decades, not flips. When I hold a property, I'm not just thinking about the cashflow. I'm thinking about whether it attracts stable tenants, whether the neighborhood is gaining value, whether the terms of my debt are giving me breathing room, whether the property can serve multiple future strategies like conversions, expansion, or repositioning. A hold doesn't just earn you rent, it earns you time and time is where leverage lives. Not every property is meant to be held with long-term tenants. Sometimes you don't wanna deal with 2:00 AM water heater calls, lease renewals, or chasing down rent checks. Sometimes the best way forward is a soft exit, a structure that lets you step back without letting go entirely. The lease option, passive cash flow without the plumbing calls. That's when I return to a strategy. You learned in the last chapter, the lease option By giving a tenant buyer the right, but not the obligation to purchase the home. Later, you offer access and agency without fully parting ways. With the property, you collect an upfront, non-refundable option fee. Often set the monthly rent above market rate and give them time to secure financing or get their credit in order. They get a path to ownership. You get cashflow without tenant management headaches. And if they don't buy, you keep the fee and try again. It's a strategy that quietly turns paper into profit and the better you vet the potential buyer, the more likely they will be successful. Lease options work, especially well when you've bought on strong terms and wanna pass on opportunity without giving up control used wisely. They let you hold loosely offering ownership to someone else while keeping your strategy intact. Flip it a tool, not a destination. Flipping gets the spotlight, the sizzle reel, the before and after glow up. And yes, sometimes flipping is the right move, especially when you need capital to fund your next long-term hold. But let's be clear, flipping is not building wealth. It's a job. And like any job, it comes with risk, labor, and a tightrope of timelines. Flipping can create opportunity when it's used intentionally. It can inject cash into your system, give you momentum and free up capital to play a bigger game. But don't confuse it with freedom. Freedom doesn't come from the sale. It comes from the terms you hold long after the photos are staged and the buyer signs the dotted line. I flip when the numbers make sense and the capital serves a greater purpose. And when the flip is a stepping stone, not a finish line. When I do, I do it with discipline. I budget for delays. I pad the surprises. I plan for the market not to care about my timeline, because a flip that has to work perfectly isn't a flip, it's a gamble. So use flipping as a lever, not a lifestyle. And if you're going to flip, flip with purpose, not to prove something, not to cash out for cash's sake, but to create the next move on your board, turning $500 into 23 units. This is the best part of the story where the game changes. I've already told you about the $500 triplex deal, my entry point into seller financing. What I didn't tell you yet is how that one triplex became 23 units, not through a windfall or flashy renovation, but through a pair of creative clauses and the slow, deliberate art of repositioning debt. It started in 2018 when I bought that triplex on seller finance terms from Kelly and Susan. We built a great relationship and I made my payments on time, but I also laid groundwork early. I said to them, there might come a day when I wanna sell this property but not pay off your loan. Would you be open to us building in a few clauses that give us options down the road? They agreed. So we included two powerful tools in the promissory note. One was the exchange of notes clause and two was the substitution of collateral clause. A few years later when interest rates dropped in 2020, I saw my opening. The original loan had a 5.5% interest rate. Meanwhile, banks were offering me 4.125%. It was time to get strategic. First, I use the exchange of notes clause to divide the $700,000 promissory note into two smaller notes of $350,000 each. That clause allowed it as long as one. The total of the new notes equaled the original balance, and two, the combined monthly payments remained the same. In other words, same loan split into two chess pieces. I could move independently. Then came the substitution of collateral move. I took one of those $350,000 notes and I moved it off of the triplex, collateralizing it against a different property I owned. To reassure my lenders, I provided comparable sales rental comps and a title report. I even offered a 1% interest bump to sweeten the deal. My sellers Kelly and Susan agreed. Now the triplex only had $350,000 of debt left on it, so I refinanced that half with a bank at the lower 4.125% rate, freeing up my seller finance node and pulling out $205,000 in tax free cash, zero tax on debt. I used that money as a down payment on a 20 unit building in Ohio, 20 units from a deal that started with $500. And here's the best part. I kept my sellers involved the whole time. I honored the terms. I made sure their investments still performed because of that, they trusted me to do more deals in the future. This wasn't about outsmarting anyone. It was about structuring well, communicating clearly, and building terms that move that deal became the foundation of my portfolio. I named the LLC that bought the 20 unit building. OPM Estates short for other people's money. But what I was really leveraging wasn't just capital, it was relationship-based trust, well-written clauses, and a vision for what good debt could do. Cultivating terms, if your brain feels like it just attempted hot yoga for the first time, awkwardly stretching in directions, it's never gone before. Dripping sweat and wondering if it'll ever feel normal again. You are exactly where you should be. Advanced techniques do that. They stretch your thinking in ways that feel uncomfortable at first, but eventually unlock a whole new level of possibility. When I started investing, I thought real estate was about property, finding a deal, fixing it up and making it worth more simple, tangible. But the deeper I got, the more I realized property is just the vessel. The real power is in the terms. Debt structured well. Is not a burden. It's a tool. And when you learn to shape it, stack it, and move it, you stop asking permission to grow and you start designing growth on your own timeline. Most people treat the mortgage and the house like they're stuck together like peanut butter and jelly. But in creative finance, you learn to peel them apart. To treat the debt as a standalone asset, a movable piece, something you can redirect, rewrite, and reinvent. Let's play a game. I'm offering you a million dollar loan and you get to choose the terms loan A is 10% interest rate, $200,000 down and 12 months until the balloon payment is due. Ouch. Loan B is a 2% interest rate,$2,000 down and a 20 year loan term. No brainer, right? Loan B is the dream scenario. It's so good that you might actually pay for the privilege of securing that kind of debt. This is where the shift happens. Good debt has value, the kind of value that can make you rethink everything you thought you knew about real estate. Here's the shift. Good debt has value. The kind of value that makes you fall in love, not with the building, but with the note. So let's stretch the imagination a little further. Say it's Monday and you buy a fixer upper for $300,000 with seller financing. It's nothing special. Needs some love, but the terms are incredible. 2% interest rate, $2,000 down, interest only payments a 20 year term. Ah, by Tuesday you re collateralize that note onto a property you already own. By Wednesday, the fixer upper is owned free and clear. So by Thursday you sell it to that flipper and by Friday. You have $300,000 in your pocket and the debt is still performing elsewhere. You didn't flip the house, you flipped the terms, and because you bought it for 300,000 and sold it for 300,000, you owe nothing in taxes, no gain, no tax, just movement. Now, if you're wondering who in their right mind would give me those kinds of terms, good question. Meet enough people and you'll come across a seller navigating something like this. An adult child with a disability who relies on social security or Medicaid, a lump sum from a property sale could jeopardize those benefits and create unintended stress by structuring the sale as a long-term note. With low monthly payments, you help the seller protect their child's stability while still getting the deal done. In cases like this, seller financing isn't just smart, it's compassionate For them, it's a no-brainer. And hunting for terms like this, that's a no-brainer too because cultivating terms is more than negotiating. It's tending it's vision. It's the art of creating alignment on paper, it pays to ask. A friend of mine came over for dinner recently and casually dropped a story that made me set my fork down mid bite. He had just bought a duplex without spending a single dime of his own money. Not one. His name's Robert, and this wasn't his first deal, but it was the first time he pulled off something this elegant and like most great deals, it didn't start with capital, it started with relationship. For two years, Robert had slowly built rapport with a couple who owned the duplex next door to one of his rentals. They'd stop by to see his renovations, ask about the neighborhood talk shop, nothing pushy, just consistent presence. At one point he said, if you ever decide to sell, I'd love to talk. No pressure, just a planted seed. Eventually the call came, they were ready to sell for $500,000, but they wanted $250,000 down problem. Robert didn't have $250,000. That didn't stop him. Instead, he asked a clarifying question, when do you need the money? Their answer, not for another six to 12 months. That opened the door. Robert proposed splitting the purchase into two promissory notes. Note number one, 250,000 due in 12 months secured by the duplex. Note number two, 250,000 due in five years secured by a different property. He already owned an eight plex with solid equity and cashflow to sweeten the deal. He offered to renovate the duplex himself, $20,000 worth of work to improve its rental value. During the first few months after the rehab, he leased it up and refinanced the property, pulling up $270,000 from a bank loan that paid off note number one and reimbursed his renovation costs. By the time the dust settled, Robert had acquired a cash flowing duplex, invested zero out of pocket, added long-term value to his property. He didn't rely on a hard money loan. He didn't beg a bank for permission. He used creativity and trust to front the investment, then structured the deal so it paid him back. He listened, asked smart questions, and created a structure that met everyone's needs. This is what creative finance does. When done well, it shifts the focus from what you don't have to what you can build through trust, structure, and vision. It's not about money, it's about mindset. The best part, everyone walked away with what they wanted. The sellers received interest, security, and a trustworthy buyer. Robert grew his portfolio, built instant equity, and turned a casual friendship into a win-win partnership. Deals like this aren't rare because they're impossible. They're rare because most people don't know how to ask differently. Raising private capital, let's start with the obvious. Most people think raising capital means going to the bank, getting in line and hoping they say yes, but you don't need a gatekeeper to tell you what you can afford. You just need to know your numbers and offer someone else a win alongside yours. The first place I look for capital. The seller themselves. If a seller has already financed one deal with you and you've honored that agreement, they may be open to doing more. They already trust you. They've seen how you operate. Sometimes the fastest path to your next deal is simply asking, would you consider reinvesting with me the second place, friends and family, not with shame, not with awkward text messages and bad PowerPoints, but with clarity and confidence. When you've done a few deals and you can show your track record, you're not asking for a favor, you are offering access. But before you call Aunt Susan, let's do some math. Raising capital starts with knowing your numbers. Say you own a property that brings in $3,000 in rent each month, and your total expenses, insurance, maintenance, taxes, underlying mortgage, add up to $2,500 a month. That leaves you with$500 a month in cashflow. Now, let's say the property's worth $500,000. You subtract a 10% cushion to account for the cost of sale and market swings, bringing the value down to 450,000. If you owe 400,000 on a mortgage, that leaves $50,000 in lendable equity. So now you know two things. You can safely raise $50,000 against the property, and you have $500 a month available to pay back a lender.$500 a month in income equals $6,000 a year.$6,000 divided by $50,000 equals a 12% annual return. You could confidently offer a lender up to 12% interest and still sleep well at night. But here's the thing, you don't have to, most people aren't earning 12% on their savings. They're earning one to 4% in a CD or a money market account, offer them 5%, and you're giving them a huge upgrade. It's not just a better return, it's a chance to partner on something real. To attract the right kind of capital. Show your numbers. Offer a clear repayment plan. Provide real security via recorded liens and promissory notes, and communicate like a professional, not a desperate borrower. When I meet with potential lenders, I don't show up empty handed. I bring a packet with before and after photos from past projects, a property valuation report and rental comps, a profit and loss statement for the building. Sample loan documents, like promissory note, deed of trust, and my own financials and plan for repayment, everything they need to say yes is right there, wrapped in clarity and professionalism to sweeten the deal. I prioritize larger lenders by giving them better lien positions in the event of a foreclosure. Liens are paid off in the order. They're recorded first in first out, so offering first position on title is a way to reward bigger investments with greater security. I also create urgency by setting a clear deadline. A real opportunity doesn't wait. I start with the people most likely to say yes, and I give them 48 to 72 hours to decide before I move on. That's not pressure, that's reality. These deals are real and they don't sit on a shelf. One rookie mistake asking with shame in your voice, if you pitch an investor like you're trying to unload expired yogurt, expect a no. If you show up with confidence, alignment, and a well-structured opportunity, you're not begging, you are inviting someone to partner with you in something meaningful. As for logistics, use escrow or a qualified attorney to draft and record all loan documents. Personally, I don't bother raising anything under $10,000 because the legal fees outweigh the benefit of that size. And here's one of my favorite structures. I build in a six month payment deferral into the loan, that gives me breathing room to find my next deal. In the meantime, I don't wanna make payments on a loan I haven't placed yet, so I add the accrued interest to the principle. That way my lender earns interest on interest and I buy myself time. Literally. Raising capital is not about what you have, it's about what you know how to offer. If you understand the numbers, your value and your structure, you'll never run outta money again. Some notes on notes. Let's talk about financing contracts. I know it doesn't sound like edge of your seat material, but once you understand how they work, these little pieces of paper become powerful tools in your wealth building arsenal, like legal origami, they fold and unfold in ways that can change your entire portfolio. So let's break it down first, how banks do it. When you buy a house with a bank loan, you sign a mortgage agreement and a mortgage deed. The bank hands the seller cash, and in return they record a lien on your property. That lien says you own this place, but don't even think about refinancing, selling, or skipping payments without our permission. You are on title, but the bank holds the leash, miss a payment, and they'll use that lien to foreclose and take the property. Other types of creditors can file liens too, unpaid contractors, tax authorities, and even ex-spouses. This is why title searches matter. They're your chance to uncover what's hidden before a surprise. Ruins your deal. Now enter seller financing. For most of my seller finance deals, I use two types of paperwork. One, a promissory note, which is the agreement to pay, and two, a deed of trust, the enforcement mechanism. Let's break those down. The promissory note is essentially a legal IOU. It's where all the terms live, the loan amount, interest rate. Payment structure, balloon date, special clauses like the substitution of collateral or right of first refusal, it's usually not recorded publicly, which keeps your terms private, but don't mistake it for informal. This is a legally binding document that governs the entire relationship between you and the seller. The deed of trust is the enforcement tool often recorded with the county. It involves three parties, you, the borrower, the seller, which is the lender. And a neutral third party, the trustee, if you stop paying, the trustee has the power to initiate non-judicial foreclosure, a faster, cleaner process than going to court. Until then, you are fully on title. You manage the property, make decisions, and hold all the typical responsibilities of ownership. Now, here's where it gets interesting with ad of trust. You're on title from day one. You own the property, manage it, and make decisions. Even while you're still paying off the loan, that's a big win for you as the buyer because it gives you control. But there's another option you should know about the land sale contract. In this arrangement, you don't receive the deed until the loan is fully paid off. That's why in some states, it's literally called a contract for deed. It's like the seller saying, I'll let you move in, but I'm holding onto the keys until we're square. From a legal standpoint, the seller retains title during the term of the loan. You get possession control and all the responsibilities of ownership, but you don't technically own the property until the final payment is made. This gives the seller more control and makes it easier for them to reclaim the property if you default. While that might sound more restrictive, sometimes it's the best or only tool that fits the situation. Here's a real life example. When I bought my 20 unit apartment complex, the seller was still paying off an underlying seller financed mortgage to their own seller. That meant they couldn't pass clean title to me without triggering a payoff on their end. So instead of using a deed of trust, we structured the deal with a land sale contract. It worked like this. I paid my seller and they paid their seller like financial dominoes clicking into place. I didn't get the deed up front, but I got everything else I needed. Control of the property, cashflow, and a structured path to ownership. This kind of setup can also be used when the seller is nervous about risk. Or if title is cloudy, but still clean enough to move forward with caution. It's important to understand. Creative financing doesn't always follow the normal path, but that doesn't mean it's less safe. It just means you need to know which tools to use when, because when you're structuring around liens, legacy or layered debt, the strategy is rarely cookie cutter. It's puzzle solving. It's pressure and possibility wrapped into one. You've just unlocked the advanced tools, how to split notes, reposition debt, raise capital and structure, win-win deals that grow with you. But the next few chapters aren't about building more. They're about becoming more because knowledge alone doesn't change your life. Integration does. What happens next isn't about spreadsheets. It's about trust, risk, courage, the part where you stop reading and start doing. So take a breath. If you're not just collecting skills anymore, you are becoming the kind of person who can move mountains on terms you wrote yourself.