MFREE 105 Full Episode with Toby Potter: Are you chasing appreciation or building consistent cash flow?

In this episode of the Multifamily Real Estate Experiment podcast, host Shelon Hutchinson (Hutch the Marine Investor) interviews Toby Potter, a lender and investor who has helped over 7,000 investors unlock real estate wealth through funding deals and strategic insights. 

Toby shares his journey from a dairy farm in Oklahoma to founding one of the fastest-growing private lending firms, Global Integrity Finance. 

The discussion focuses on building a self-funded real estate portfolio, the importance of mentorship, and strategic guidance in real estate investment. Toby emphasizes his lending philosophy, ensuring clients' success by maintaining clear communication and transparency. 

He also outlines the steps for accredited investors and small business owners to achieve higher yield investments through partnerships with Global Integrity Finance. 

The episode aims to empower listeners with insights into real estate investment strategies, risk management, and the importance of disciplined daily practices for achieving financial independence.

00:00 Introduction and Guest Welcome

01:22 Toby Potter's Background and Real Estate Journey

05:31 The Concept of Self-Funded Real Estate Portfolios

07:10 Global Integrity Finance and Lending Philosophy

09:38 Success Stories and Client Relationships

15:49 Investment Strategies and Market Insights

21:02 Steps to Partner with Global Integrity Finance

22:57 Focus Round and Personal Insights

28:03 Conclusion and Final Thoughts

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Thank you to all of our listeners!!! We would love to hear from you!!!

Email me at:
hutch@hsquaredcapital.com

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www.hsquaredcapital.com

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Transcript

TOBY POTTER: 0:00

Wah gwan all you Multifamily Real Estate enthusiast. Welcome to another episode of the Multifamily Real Estate Experiment podcast. I'm your host, Shalon Hutchinson, and if you're in real estate for a little bit, you know me as Hutch the Marine Investor. And today guest. Is a lender, an investor who have helped over 7,000 investor unlock real estate wealth, and not just through funding deals, but through strategic insight that build real independence. See, Toby Potter went from growing up on a dairy farm in Oklahoma to building one of the fastest growing private lending firm in the country. You know, global integrity, finance. Today we're gonna dive into the concept that that could change the game for accredited investors, business owners, and of course for you if you're a veteran as well, listening to this as well, we're gonna talk about how to build a self-funded real estate portfolio. Toby, welcome to this episode of the Multi-Family Real Estate Experiment podcast. You bet, Hutch, and thank you so much for the honor, the opportunity to share this platform with you. I have been following you for a long time. What you do, the message you present, the lives you impact, again, is just an honor to be sharing this platform with you, and I hope that we can enhance what you're already doing. Thank you so much, brother. You know, before we get into the meat and potato of your brother, um, do you have a favorite real estate quote or mantra that drives you? Wow. Uh, you want me to pick one? Really? You want me to pick one? Uh, you know, I think we can, we can sprinkle them throughout. Sprinkle out. Yeah. You know, hutch, it, it's not about real estate mantra. So my mantra because of what I've done, where I've been, and I started in 94. Okay. Went through the massive, uh, real estate crash of, of 2008, then rebuilt in 2015. Okay. Went through COVID and all that. But the mantra that I strive by, the mantra that I teach, the mantra that I coach through all my courses, all that I do is if it's going to be. It's up to me. And when, when people accept that and they realize that nobody's gonna do it for you, now we can coach you. We can give you guidelines, we can give you strategies we can mentor, but the real meat on the bone. The real rubber that meets the road is if it's going to be, if your success is going to be, it's up to me and meaning you to execute, to believe, to thrive through. And that's the mantra that I live by and I teach hundred percent that. That is awesome, man. So, Toby, um, you have a long history and a great experience in this industry. Can you tell us a little bit more, um, about yourself and your current focus? Yeah, absolutely. As you started out, you know, I grew up on a dairy farm up in Oklahoma. Yeah. and what I, when I learned from that was that it's hard work. Life is hard work, but I also realized that that's not a life I wanted. My dad chose that life. I didn't, I wanted more outta life. Um, and I wanted to become more, and I moved to Dallas. I. And I got into real estate lending in the early nineties, uh, where interest rates prior to that was in the 12, 13, 14%. We just had Clinton come into this, uh, presidency. He had dropped interest rates down into the mid fives, low fives, and so we got into it and was really running and gunning. And what was amazing was back then, uh, is that everybody was refinancing. There was a tremendous move in the market, but it was all geared toward that a borrower, meaning the guy that had the, the, the 680, 700. 750 FICO score, great job history, great stability, and everybody was gunning to get his business'cause it was a slam dunk. And there was this other segment of society that was being missed out and that was those people that didn't qualify. Gotcha. And so when I got into the space, I didn't want to compete with all those. A players and I found a segment that was being missed, and that was the individuals who had tarnished credit, maybe not great job stability, not great financials, but they still had the right to have the American dream home ownership. So we created a platform then to be able to teach people. So we would go in and we would con, we would find an individual who got turned down. We would then work with them over a 90 day period, cleaning up their credit. Adding credit, meaning their, their utility bill. Their, uh, car insurance, their cell phone bills. If they had'em back then, we didn't have'em that many back in 94, but whatever you paid on a monthly, we added to your credit report, which wasn't a natural because those companies didn't report to credit bureaus. Gotcha. But we were able to show a pay history, take it to our credit depart, uh, credit repository, add that lines of credit with good pay history, and establish credit for these people and then get them financed. And so we were buying houses. Fixing them up, moving them in owner finance, working on their credit, working on their financials, and then refinancing them out. And it became such a huge platform. It was unreal. Wow. But it showed us that we were able to help people that most people were discarding'cause they didn't qualify. Oh man, that's, that's game changing for a lot of people who game changing. Yeah. Who want to, um, accomplish what a lot of us think is think of as the, a part of the American dream. So let's go, let's go into the concept of this, um, self-funding. What exactly is self-funding, real estates, um, self-funded real estate portfolio, and how is it different from, you know, from most people who are building, when you say, say a real estate portfolio. So when we are looking at self-funding right. You know, we are a direct hard money lender Gotcha. And a real estate partner. So I am a, a lender that has an SEC uh, registered fund. Okay. And we lend money to individuals nationwide that are looking to build their real estate portfolio. Okay. And back in 2015 You know, HGTV was coming out with fix and flip, uh, fix and flop. You had Chip and Joanna Gaines out of Waco, Texas that was running their platform. So it was, everybody was watching this TV show on how to buy these dilapidated rundown houses, fix them up and sell'em for huge profits. Yeah. And so I saved many, many, many times back then. HGTV made me so wealthy. It was unbelievable. And I never spent one day on tv, but because hundreds of thousands of people were watching these shows, and it looked so easy that they would find this rundown, dilapidated house. They would go in there and rip out walls and cabinets and countertops, throw it all back together and sell it for, you know, a hundred thousand profit. And they saw this in 30 days. Well, that was the big movement. In in 15, 16, 70 18, right? And so Global Integrity Finance was conceived and we wanted to be that go-to lender to help every real estate investor get into real estate investing. Because even today, Hutch, even today, I firmly believe that real estate is the only. Solidified investment for long-term generational wealth. Andrew Carnegie, um, Bill Gates, Mark Zuckerberg, um, you know, there's, there's not a billionaire in the world today that won't tell you 80% of their portfolio. Is is not in real estate. They it, it all is. And so if those billionaires are investing billions of dollars into real estate versus technology, ai, oil and gas, stock market mutuals, then you know what? Real estate must be the commodity that everybody believes will, will sustain. So knowing that. We wanted to be that go-to lender. We launched our company to be a go-to company to be able to enhance, teach coach, mentor, and bring people into real estate investing to, and then, and, and not just be a lender, but we, we. Partner with them. We mentor them, we coach them because we need to ensure success and profitability. If Hutch, if you came to me as a brand new client, yeah. And you brought me a property and I lent you money on that, and then you didn't know what you were doing and you failed, guess what? I might have made the commission on the loan, but I now lost you as a client because you weren't doing the next deal. So our concept was if, if Hutch comes to global and he wants to do a deal, we're going to make sure that this thing is set up for success. That his scope of work is contractor. All this partners are in line. To ensure success and profitability. And that's what we've done for the last decade. And this is how we became the fastest growing company in the US Top 100 through Inc. Magazine. We were voted, uh, private Lender of the year in 2020. So all this has happened because of our investment into the individual, not to the property, but to the individual to make sure that they succeed, they grow and do multiple, multiple, multiple deals for the next 20, 30 years. Man, that, that is awesome, man. So. So that comes with, uh, some keen insights from you and your team. Right? So let, let's talk about this briefly. What is your lending philosophy when it comes to risk versus opportunity? You know, and what, what, what lending strategy helps investors, you know, that, that you're bringing in? Um, avoid over leveraging while still growing aggressively. That's, I mean, that's, so you just hit the nail right on the head. The difference is, is we don't look at writing a loan. We look at establishing, creating, and building a relationship. Right? So you bring me a deal and if, and, and here's the deal. We have over 7,000 clients in our database that we've helped over the last 10 years. Okay? And we probably have another 9,000 that we've told no to. And this is where we probably got the biggest reputation, where global won't do the deal, right?'cause the deal doesn't work. And I would so much rather tell you, Hutch, we can't do this deal and here's why. It's over-leveraged. You're buying it too much. Your scope of work is too high. You're overbuilding for the neighborhood. And when you get all said and done, we'll never be able to move the property. So therefore you won't perform. And so many people get so upset because I, my realtor told me this deal would work. My realtor told me this, my whole, and, and so I, I've got so many recordings such where a client would say, my realtor told me I can sell this deal for 650,000. And I'm saying, you know what? I'm looking at five and a quarter max. 535. Big difference. My realtor, who's been doing this for 20 years said she could guarantee that she could sell this for 650. And I say, you know what? Let's do this then. Let's get the realtor on the phone. We'll have her put up her commission. So she's making a 3% commission, right? So let's tell her when we close and fund on this deal, she gives me her 3% commission. We hold it into escrow. When you finish the rehab and you put the house on the market when she sells it for 650 or more, not only would she get that original commission. I'll double it. Plus she gets her listing. Let's see if she'll do that. We get'em on the phone. Oh no, I won't do that. Why not? You are telling the customer you're absolutely dogmatic that this still's gonna sell for 650. I'm telling you. 535 max, you are not willing to invest in the client like I am. Right then we're done. And, and so many times I've done that hutch and, and the borrower came back to me and said, you know what, after I've talked to several other people, you were right. And I said, I know I'm right. We are a lender. We only make money when we lend the money out. It sets in a vault in my bank, non-interest bearing because of our SEC regulations, right? So it sits in the bank, and if I don't deploy it, I don't make any money. So why would I tell you no on a deal? That would make us money or I would tell you no, because we'll both lose and I'm putting more money in it than anybody else. I've lent you the$300,000 to buy the property and another a hundred thousand dollars to rehab it. Your realtor says it's worth 650. I'm telling you it's worth 535. I've got$400,000 invested in. She's got nothing. There's the difference. No, that is huge, man. And we see this stuff in the multifamily space as well too. Right? And one of the biggest way we, we not so much get around buts, we get on the front side of that just to ensure that we are working with reputable, um, especially property managers in the area who have managed, um, properties comparable to the ones we are, we are looking to purchase. And the reason why we want to do that is because we want to get their subject matter expert, their boots on the ground. And they're, they're imagine managing a lot of the renovations, right? They're dealing with the utility companies, whether it be cable, electric, power, whatever, right? They, they understand what is average for racial utility build back system, all that good stuff, right? So. They have the numbers to show here's why this work and here this why this does not work. You know? So I know, to your point, it's really important to talk to people who's actually looking at the deal through a conservative lens. You know? So can, can you share briefly, Toby? Can you share briefly a story of someone, who's lending strategy, as create a situation for them to have a self-funding portfolio? Still trying to capture that self-funding portfolio. Um, case study, I. Yeah, so, so self-funding is where, you know, and we've had multiple clients where they started out and we teach this crawl, walk, run philosophy. Awesome. Meaning you, you don't know what you don't know on day one. Right? You may have read a book, you may have been through a three day, uh, a summit course. Mm-hmm. You may have done all this, and that's wonderful and we appreciate it and we respect it. But until you rip out a wall. In a house, you have no clue what you're missing. Oh, yeah. So, so to get to self-funded, you've got to crawl, meaning you need to do a small rehab, buy 150,000 house, put$30,000 into it, put it back on the market at 275, sell it, then go buy two more. And so you build that portfolio to where you've done at least 8, 10, 12 deals. To where now you know exactly what you're doing, and the good news is, is now you've got enough profitability and you've made enough money over the last 12, 18, 24 months, right, that you can now self-fund your own structures, your own deals, and create an and establish this to where now you control the narrative 100%. Yeah. I, I think that's, that's a great, that's, that is the idea, right? To be able to get the assistant from, say, a hard money lender Right. To, to get in the door. Right. And once again, right, because, yeah, whenever, and, and in, in, in real estate, the biggest cost you have is the loan. Um, yeah. The biggest cost you have is a loan. And, and, and not everybody. Can understand that. And so when you, when you do right, crawl, walk, run, you build an asset, you build a net worth, you build financial stability that allows you to start doing these deals and control the narrative. We have, we have guys, clients that have, you know, 70, 80, a hundred properties. We've done, you know, 200 loans for them and they're holding half of those and they're all free and clear. Those are self-funded individuals because they now have this cash flow of 40, 60,$80,000 a month coming in, and they can take that and go buy another property and, and, and then, and never worry about it. And now they're cutting out that 12, 13, 14% interest that they were paying to me. Yeah, absolutely, man. So, you know, what we do in, in the multifamily space, uh, is something unique for, for our passive investors, right? Um, that, that comes with cash flow with proceeds from rent and some, some appreciation on the backside. Some proceeds from sale as right as well. Um, but, but the business that you, you're involved in is more so rely on the cash flow and high higher yield, you know, so for, for those who credit invest. There's or small business owners that might be listening to this podcast, you know, who are working a full-time job and you know, they see the right on the wall that their job is not guaranteed or they want to improve their lifestyle. They want to use their today money right to, to, to increase the, to make higher interest, higher yield. You know, what would be the first move for them to say, gain some higher yield by working with, um, global. So, yeah. You know, and that's one of the things that is so powerful and so impactful. There's a ton of people out there Hutch, right? I mean, hundreds of thousands that wanna be in real estate but don't want to be in real estate. They want to, right? They want to have the real estate as the asset. They don't know how to achieve that. They don't wanna be swinging a hammer and, and ripping out walls. But they've got an IRA, they've got a 401k. They've got that JOB, that they're, they know that they've been on for 20, 25 years and they ain't ready to retire. And if they continue down this path, they still won't be ready to retire another 20 years. Right. So what do they do? They need to get into investing into real estate without being in real estate? Yeah. And so Integrity Finance has a private equity fund to where people can put money in. We pay a monthly dividend and they can build that portfolio. We've got clients that have been with us for almost eight years who, who started out with about a half a million dollar investment. Right. And now have well over$2 million in growth in their fund because they just compounded that year over year, over year. Mm-hmm. Um, and so it is one of the most solidified ways to invest. And, and as you know, and I know. I pulled here recently and I'll be, I'll tell you straight up Hutch, not less than 90 days ago, I pulled all my money out of the market. I have zero money in Wall Street today because of the volatility of the stock market. Yeah, makes sense. I was making 8, 10, 12% return on the market. Not bad. But you know what? I make 24, 28, 30% return on my real estate, not as a lender in my own investments. I own over 300 doors today. And so on. Those investments I make over double digits every month, every year on that because of the compounding factor of cash, flow, of, of, uh, appreciation. You buy a property today in Hawaii. You buy a 700,000 property today in Hawaii, and in five years that property's worth what, 2 million. Million 5?, and there's no way you're gonna ever compound, uh, capital that way in the market. So being a investor in real estate doesn't mean you have to be in real estate fix and flip acquisition. You can partner with companies like ours, you can be a, uh, an LP investor, silent partner. And then have your money now working for you instead of you working for your money. And it is, it is one of the things that's enabled us to be who we are because of the, the, the, um. The profitability of our industry. You know, even through COVID, one of the things that was so astronomical, Hutch, we were doing amazing from 2015, 16, 17, 18, 19. And in that, in fact, 2019 is when we Ink Magazine, top 100 company, fastest growing company, private lender of the year. COVID hits. And our industry was shut down. Yep. Absolutely. Shut down. Wall Street. Pulled out, uh, insurance funds pulled out, hedge funds pulled out, family offices pulled out. But one of the things that was so profound, and, and, and we can testify to this under oath, is that because of the growth we had and because of all the loans we had that were still performing. We never missed a dividend payment to our investors because we had so much profit, so much capital rolling that they never even knew there was a disruption. Eight months later, we're back up and running and we just took off that much. The you people who put money in the market lost millions. The market tanked. The market crashed. They saw their 5 million portfolio go to 2 and a half million to 2 million, and they're like, holy cow, I just lost all my retirement. Now it's taken almost five years to build it back. They're back. Yep. We never lost. We never lost. Our properties appreciated. More and more and more. Our income increase. Increase, increase our dividends, increase every, nothing ever. We as a real estate investor, we never knew COVID hit other than being a lender. Did we know it? That's awesome, man. Um, Toby, um, have about out of three, four minutes each time. Can you take about a minute and walk through maybe the five step that a investor want to partner with global, um, can expect to get their money to invest all the way from, um, the, um, research, deploying the money to the money return. Yep. Yeah, so absolutely. So you can go check us out Instagram, tobypotterofficial.com or Toby Potter official. Uh, go to globalintegrityfinance.com. Go anywhere LinkedIn. But reach out to me. Tell me what you're doing. Tell me where you want to go. Tell me what you want to do, and here's what we do. We'll do a 30 minute consultation, share everything with you, hook you up with any of our investors for references. Let them share how long they've been with us and how they've never missed a beat in transformation of profitability. Half of my investors, we bought over 300 doors last year, and I brought in our key investors just to profit share with them. We didn't need'em, but we brought'em in. Because of their loyalty, they now put like 200,$300,000 in and are worth a million dollars on that investment on those properties. These are the kind of things we do, so reach out to me. You can DM me. You can come to us, we'll walk you through all the opportunities, all the strategies. We have to run you through our, uh, SEC registered accreditation. And if you're qualified, we would be more than happy to show you how we can transform your retirement plan into a true retirement opportunity. Um, and so the steps are, get ahold of me, let's do a consultation, we'll run you through accreditation and then we'll put a plan together.'cause you tell me, Hey, I got 300,000, I got 500,000. I need to turn that into 2 million in three years, five years. Then we build a plan according to that, whether it be profit sharing in, in projects, whether it be just being a passive investor on our lending side, or a combination of that is awesome, man. Thank you. Thank you so much for sharing that. Um, Toby, I might, I might take an extra one minute, one minute every time to run through the focus round, right? Uh, just have a fun opportunity, communication, understanding and success. Just quick, um, power through, what do you do for fun? Yeah. So what do I do for fun is I, I impact lives. We, I, I get on stage everywhere I can to tell the story. I don't have, this is fun for me. Making a difference in people's lives is so much fun. You know, people go hiking, people go skiing, people go fishing. People go, what? I get on stages to change lives because we have so much fun that I've got over 7,000 people that are in our inner circle that do deals with this. Every day because we ensure their profit and success and we grow their portfolios. That's what's fun for me, buddy. That's, there's nothing else. I come to Hawaii and we'll go sit on the beach. You can teach me how to surf, but we're gonna be on, if I come to Hawaii, we're gonna get on a stage, we're gonna bring in 200 people, we're gonna share our story with them and so that we can impact their lives. That's awesome, man. What is one opportunity that was a game changer for you? So one opportunity that was a game changer for me was, um, being on stage. And this is, you know, I've been a lender for 30 years. I've been in that, but I never really, uh, got on stage to impact more lives. Every, everything that I've ever done was just through marketing and all that. And then one person said, Hey. Can you come speak at my summit, I had a speaker gonna be there. They canceled due to a sickness. Can you get? And when I did that Hutch, when I got on stage and just shared who we are and what we do and how we do it, that was a transformation about five years ago. That impacted my life personally because I didn't realize I wasn't getting the message out there to the masses. And when I realized how easy it was to share who we are, what we do, and the impact that it makes, that was a game changer for me. Man. That's awesome, man. What is your number one communication tip? Be transparent, man. You don't know. Be transparent, be authentic, and be transparent. Everybody wants to help everybody. They can. You do. I do. Everybody wants to impact lives, make a difference. But if the person we're talking to does it. Is it authentic and isn't transformational, meaning telling me what's really going on, what you really want to achieve? We can't get there. If you tell me, Hey, Hutch, um, uh, Hutch says, Hey Toby, I need you to get to Hawaii, but doesn't tell me why, how, where I show up in Hawaii. There's seven islands in Hawaii. I could be on the wrong island. So you've got to be communicative into exactly where you need me to be and, and you say, Hey, just show up in Hawaii. I show up tomorrow. Oh no, no, I'm at six months from now and I need you on Hawaii, not Hawaii. So you know, there has to be a very clear. Message given for us to be able to put a very precise plan in place and communication transformity and transparency is the key to all that. Okay, What is one thing you wish I understood earlier? I wish I would've understood, um, how. To better communicate earlier in life, because I spent 30 years to get where I'm at today, and if I would've known 20 years ago, 15 years ago on the impact it makes, I could have transformed sooner. So one thing that I wish I would've done sooner. Was, uh, align myself with people like you, people that really understand how to get messages out to be able to do more messaging and more communicating. This is the one thing that I feel like as a over 50-year-old man, I'm not gonna tell you old I am, but you can see I got gray hair As an over 50-year-old man, it is taking me a long time to realize or recognize how to get the message out there and to impact more lives. I wish I'd have known that sooner. Okay. Last question. To what do you attribute your success? Um, spiritually or, or mentally, spiritually and physically. So, I teach a course that you must be spiritually, mentally, physically sounded with daily disciplines in order to achieve success. Believing in who you are, believing in God Almighty, that he created us. He built us for a purpose, a plan to succeed, not to fail. Believing in that and believing that you are entitled to success. Not entitled to anything else. I don't believe in entitlement, but I believe that every one of us are entitled to have a very rich, fulfilled life. Yes. When you believe that and you set your destiny to achieve that, you will accomplish it. And I believe that. And that's what's attributed me to go through the crash. COVID, all the disruptions, so many. You know, ignited life stories, but because I am mentally, spiritually, and physically strong, daily disciplines has helped me rise to the success I have today. And this is what we teach. This is what we promote. That is awesome. That's awesome. Toby, if our listeners want to get in touch with you, how do we go about, what's the best way to do that? So the best way is go on to Instagram, Toby, uh, Toby Potter official, or you can go to our website now. You can also go to the unshakeableinvestor.com, theunshakeableinvestor.com. That is where you get all our products, all our programs, all our messaging, and we will then help you become. The unshakeable person, whether it's in real estate investing, whether it's flipping analysis, it doesn't matter. This is our platform. This is who we are, is what we build. So Toby Potter, official Instagram, the unshakeable investor.com, or simply globalintegrityfinance.com. Those are the way to get ahold of me. Perfect man. Toby, I want to thank you. Thank you for breaking down, you know, real estate investment and also we understand that real estate investment can take a lot of people's time. What you do, give them back their time, give them a. Put him on a path towards financial freedom, time freedom, location freedom, and also contribute to the freedom of purpose as well. So listeners, um, thank you for spending the time listening to another episode of the Multi-Family Real Estate Experiment podcast. Until next time, I'm Hutch Marine Investor out.