Investor Conversations

Private Lending

with Edwin Epperson III

If you’re dead set on finding the best ways to invest right now, it makes sense to understand what successful investors are already doing to diversify, reduce risk, and boost their annual yields into double digits.

Edwin is a former Green Beret special forces solider turned full-time investor and educator. Today, he makes his living loaning his own money to real estate investors in Florida, AND he has a passion for educating others.

During this conversation with Garnaco CEO David Garner, Edwin shares his experience, from doing his first private lending deal standing on a mountainside in Afghanistan (taking a break from chasing the bad guys), to becoming a full-time private lender, investor and broker.

Transcript

David Garner (00:00:11):

Sorry, I am here. I’m blessed with the company of Edwin Epperson. Do you use the third when you introduce yourself? [inaudible]

Edwin Epperson (00:00:22):

It is the third. I am the third in a long line of Epperson. So

David Garner (00:00:26):

There you go. A line of three at the very very least. Um, so, uh, I’ve been dying to speak to Edmond, uh, Edwin on, um, on a call for a while. We spoke at some time ago when I was putting together something that never materialized like nine out of the 10 things that I have great ideas about, uh, which was an educational series for private lenders. And you’re in that space. I think we connected initially through a Facebook group, right? I think, uh, I think it was private lending lessons, Alex’s group. Um, so I, uh, I’m speaking to Edwin, he’s got a fantastic story. Um, uh, and an interesting skillset, which you now apply to the private lending space and other areas of investment as well, but you’ve kind of branched out, right? Well, when we first started speaking, you were lending your own money out. Um, you’ve now brought a business around that and you’re now, um, looking at other stuff as well, which is sort of way above my pay grade. Um, I need to listen to some of your training videos, but, um, you have an interesting paths that people love to talk about, right? So you are a veteran, um, somewhat of a special veteran in that you, uh, a Greenberg, right?

Edwin Epperson (00:01:41):

That is correct. I suppose you still

David Garner (00:01:43):

Are.

Edwin Epperson (00:01:45):

Yes. We’re. We’re not so hardcore about that. Like the Marines, like once a Marine, always a Marine. Yes. Uh, I definitely earned the Bray and, uh, enjoyed my time all of a sudden.

David Garner (00:01:56):

So how do you make the switch from doing that today and what you’re doing now?

Edwin Epperson (00:02:02):

That is a loaded question. Uh, so I will do my best to honor the time that we have here and not stay on too much of one topic. I, I think like a lot of people wanted to get invested in real estate. You see the value of having your, your investment dollars secure to a piece of hard, tangible, real estate and a, or a hard tangible, anything, a hard asset. And so I started go on, this is back in 2010. So social media was not what it is today. And the only way that you could really get information about how to invest in real estate is go to like actual physical meeting meeting of groups. And so I went to a group, uh, in Fayetteville, North Carolina, as I was going through the special forces qualification course to earn my Greenbrae. Uh, it’s a gentlemen sport.

Edwin Epperson (00:02:48):

So we had some nights, not every night off clearly, uh, but there were some times when we had some availability and I could go and do things. So I went to these groups and a gentleman was staying at the back of the room and he would say, any of you, real investors that need money for your real estate projects. Come talk to me, I’m a private lender. Well, like everyone else, I thought that would be who everybody wants to know the money guy. So I’ll go back there and introduce myself. Um, he told me in, in not so, uh, not these words, but this is how I took it. He said, I wouldn’t loan you money if you’re the last person on earth. So, and being, uh, being, having served in the military at that point for almost nine years, um, you know, I’ve been deployed multiple times, Iraq, Kuwait, uh, Afghanistan, Egypt, uh, I had seen, and I felt that was very, I was, I was a man of honor and integrity somebody that anyone else would be happy to work with.

Edwin Epperson (00:03:39):

And so I took that personally. That’s true. That’s true. And so he ended up explaining to me what I now consider the, the keys to being successful, not only in investing, but in anything that we do, you need to have the knowledge of what you’re going to be doing, whether you’re investing or whether it’s a business strategy or structure, you have to have the knowledge. Well, you cannot gain the knowledge unless you dedicate the time to gain that knowledge. And you can’t get the experience unless you have the time to implement the knowledge, to gain the experience. And so he was explaining to me that I didn’t have the ability the time because I was completely dedicated. And because I didn’t have the time, it didn’t matter the knowledge that I was gaining. I didn’t have the time to then implement the knowledge. He said, so continue to gain the knowledge.

Edwin Epperson (00:04:24):

But until you have the time to do what you want to do, then it’s, you’re, you’re going to sort of be stuck, not stuck. I mean, you’re, you’re going to be in this position to where you have this knowledge, but you don’t have the time to implement it. And so after a few months, he actually asked me a question that radically shifted the way I looked at real estate investing and really opened up a door for my path, uh, to change trajectories completely. He asked me, uh, one of the meetings, he said, have you ever considered becoming a private lender? And, uh, I thought that was a novel idea, but you know, in my mind, as I’m sure many people’s mind, you can’t be a private lender when you don’t have millions of dollars and you don’t have a yacht that you can go down to the Caribbean and just cruise around and like all this stuff, right?

Edwin Epperson (00:05:09):

That’s like the mentality that a lot of people have. And, uh, and he said, no, that you’ve got it all wrong. So I’m going to introduce you to a few guys. So he introduced me to some mentors. So I’m very big on mentorship. I think if, if you’re trying to be successful in something and you don’t have a mentor to be underneath, um, to walk alongside of you, then you’re, you’re, you may get where you’re going, but it’s going to take you a lot longer to get there. And thankfully, I had five mentors. Uh, we would get together on Skype calls at that time. Um, and I flew out to California, flew out to Texas. I would meet with them when I had the availability and they really just walked me through the process of creating a business around private lending and learning how to loan my money as well as partner investors capital.

Edwin Epperson (00:05:54):

Uh, the, and so I learned, I studied, and this is the key David. I studied for three years before I even did my first investment. And I think in today’s age where everything is, wait, wait, wait. I’m like, you have to be, if you’re not out there like taking action, then you’re missing the boat. And I would just encourage anyone who is thinking of investing or starting a business, or starting something new in life to where they have to gain the knowledge to, you know, feel comfortable, take the time that it’s necessary for you to feel comfortable, to be able to take those first steps and don’t feel rushed. You know, were you, you hear people on both sides of the spectrum, you know, have, uh, have, uh, an abundance mentality, you know that well, and then on the other side, it’s like, Hey, if you’re not taking action now, then you’re missing out.

Edwin Epperson (00:06:38):

Well, that’s not an abundant mentality. And, uh, even though time is pro is our most valuable resource. There is plenty of time to gain the knowledge. You just have to allocate that time appropriately spinning down, uh, spending hours in the evening on this, you know, social media is, is not a wise use of our time spending hours watching TV, or going with your buddies out to the bar when you could be studying that is not a wise. So we all have adequate adequate amount of time. It’s just, how are we implementing and using that time available to us. So, yeah, absolutely. Absolutely.

David Garner (00:07:13):

Oh, the other side, before we hit record, I’ve largely come off of social media now. So I’ve found myself, I’ve got a way addictive personality, whatever it is. It’s been really bad stuff. When I was a young man, you know, drugs and alcohol, because that’s what I could get my hands off as, um, uh, as a grown man is, is anything like, I’ll get an idea how can become addicted to it. Social media does that. And he does it. I’ll pull out this, right? It’s it needs your attention. It feeds off your attention. Um, and it’s absolutely true. We live, I couldn’t agree with you more. We live in a, um, an instant world and everyone wants to get rich quick and things people do now. Like everything, you know, people explode into social media started overnight, but that’s not the real world. That’s my sustainability. Um, I, it’s not sustainable full stop. So yeah, I, I absolutely respect that. I guess that’s one of the transferable skills that you have the discipline and patience to be able to see

Edwin Epperson (00:08:18):

My wife would argue your point about patients.

David Garner (00:08:23):

Well, this is something we share in common, right? We both Latinas. So we both over there, uh, um, amazing, adorable character traits. Uh, but one, one of which is they are brutally honest. So

Edwin Epperson (00:08:37):

Brutally, and you know what? She does a great job. I’m sure as your wife does too, of holding me accountable to what I’ve committed to.

David Garner (00:08:45):

Absolutely. She, uh, when we first got married, she let stuff slide like once and then, but maybe twice, but after that, it’s like, no, you promised to do this. This is getting done. Right. So yeah, we need this and a lot. This is men and women are a partnership, right? There’s no, other than that, we’ve been partners in cooperation. I mean, we’ve been cooperating for years, thousands of years, however far back you want to go. So yeah, it’s great to have somebody like that on your team. So you spent a bunch of time learning three years, three years learning your trade before you did your first.

Edwin Epperson (00:09:25):

I did my first investment. Um, and actually I had my aha moments. So, you know, you’re, sometimes you can be in the trenches, you’re learning this new strategy, this new test technique, this new investment, this new, whatever it is that you’re looking to do. And sometimes, you know, you can get, so laser focused, you, you, for you forget to slow down and take, take a look at what’s going on and how, how you’re setting yourself up to be successful. And I think sometimes that can be a distraction. We get so focused in accomplishing that next goal, that next task that we forget, all the beauty that is around us, whether it’s, you know, with our, our, our loved ones, the environment, and just the, the passion of the journey to get to that goal. And then you get to the goal and you’re like, okay, what’s the next goal?

Edwin Epperson (00:10:07):

And man, you, you could have enjoyed and added so much more fulfillment to your life if you would have enjoyed that time. And I had the ability to really enjoy if you will, this journey that I was on because I was actually deployed, uh, my last trip to Afghanistan in 2014 with my ODA, which is operational detachment alpha. So it was a green braid team. We had, uh, 12 dudes on our team and we had a few other attachments from the air force and the Navy. And, um, then of course our, our special operations, Afghan partners that we were working with and we would run missions all night. Like that’s, that’s, that is our bread and butter. And then in the daytime, you’d reset refit, rest, relaxing, and get ready to go out in the next night. So that was sort of the, the cycle that we were on.

Edwin Epperson (00:10:54):

Well, I realized during the daytime, uh, well, early morning and late in the evening was about the time that it was back in the states. And I had a gentleman that I had met at a local real estate club. Actually, I will give a shout out to, uh, Matt who owns the Pensacola investors group or the pig. Uh, it’s not a Pensacola, excuse me, it’s the, um, uh, man, I think it is a Pensacola investors group, but it’s pig pig. They’ve got a great mastermind, uh, there in Pensacola. And so I met this gentleman there and he was going to be doing a fix and flip. He sent me an email. So this is the thing that turned me on the private lending. I’m not geographically restricted. And this is one of the ahas that I had. I could be anywhere like David you’re over in England right now or where you were in Paris and now you’re back home.

Edwin Epperson (00:11:41):

I think. So when we’re, you know, as a private lender, I was not geographically restricted and, and there are people that can do real estate investing, meaning owning the property, everything necessary to the property and be remote. And I have a huge amount of respect for that because it takes a lot of setting up systems and processes to be able to do that, which I believe that’s the world that you operate in. So you have a, you have a valid, like a really solid team to help you operate as a private lender. You can do that as well. And you’re you’re, you are able to leverage these licensed professionals in the industry to do all the work for you. And so, uh, this gentleman, he sent me an email. I reached out to an attorney that I had, I had met in the panhandle. I opened escrow in order title.

Edwin Epperson (00:12:29):

So they were doing that aspect. I had re uh, requested or went on to a, what’s called an appraisal management company. These are companies that have connections with a bunch of appraisers. I sent them an email and ordered an appraisal while I was in Afghanistan. Everything that I was able to do, I did on an email. And we, I ended up funding the loan, uh, not all with my capital. And that’s a different story. I ended up doing a fractional note, uh, with three other investors, uh, guys that I had personally known Pete and guys that were friends and I had an uncle involved in that one. And so the four of us, we did this note and I was able to collect a yield spread because I put the deal together and the points upfront, I was able to collect it closed. Uh, I sent wiring instructions via email to all the investors.

Edwin Epperson (00:13:17):

They sent their wire into title. We invested through a, a trust. So the trust was the lender and then loan closed payments were dispersed. I got the points up front for putting the deal together and vetting it. And then I got paid a yield spread every month, every time the investor paid their monthly payment, you know, the, my capital investors received their payment and I would make the difference. And I just, it was like, my mind was blown and I knew exactly what I wanted to do. I had 13 and a half years in, uh, or 12, 12 and a half. At that point, I was up for reenlistment at 15 years, you actually get, uh, benefits and, and you actually get a retirement. So I was one and a half years away from retiring, but we had a really rough trip, uh, that time Afghanistan,

David Garner (00:14:03):

15 years in the army might not sound all but 15 years in Afghanistan at that time at 15 days.

Edwin Epperson (00:14:11):

Yeah. So that, that trip to Afghanistan was a rough one, probably one of the roughest deployments that I had in my entire career, less, uh, 2006, we, we went to Ramadi. Um, but it was a, it was a tough trip. And I started to take a step back, right. And, and realize I started to slow down and realize the beauty that was around me, not necessarily in Afghanistan though. There is, I mean, the, the environment, the physical space of Afghanistan is, is a beautiful country. But I started to realize that life, I was so focused on the military and I had this, this opportunity out here to get out and do something. And I realized, man, I would have so much more time with my wife. I would have so much more with my boys. I would have, I would have the freedom to be able to go do whatever I want with whoever I want whenever I want, which is sort of like the golden carrot that’s hung out for, Hey, if you want to be an entrepreneur, this is what you can do, do whatever you want with whoever you want whenever you want.

Edwin Epperson (00:15:08):

And I realized that private lending actually would provide that opportunity for me. And so when we got back from Afghanistan, that trip, obviously we get back in our, our rotation cycle. As you get back, you have like a couple of months of downtime. Then you have a couple of months of train up for your next deployment and then your next deployment. So I had a really short window to tell my team that I was not going to re-enlist and, you know, it’s a very high paced, uh, you know, they’re top, top operators. And they’re like, well, if you’re not going to be honest for our next trip, then you’ve got to get off the team, which was actually a blessing in disguise at the time I was just devastated. Um, but it allowed me a whole year to really build a business. So when I got out of the military in October of 2015, by that point, I had already made 27 more loans. Um, and I, I, my income, uh, that I was generating through private lending had far surpassed what I was making in the military. And so I thought, I, I believed I was making the right decision and I stepped out and have not looked back.

David Garner (00:16:10):

Right. It sounds, it sounds like because you’re operating, you’re not just like in the army, right. You’re operating with a very specific skillset, very highly trained, very fast paced. Um, it is kinda like when you see these athletes quit the game or a fallout from injury, a lot of them go downhill super quick because they have transitioned into business. They got transitioned, those skills like golf into a viable business. And you spent kind of three years transitioning before you left, which I would imagine accounts for a great deal of the 16.

Edwin Epperson (00:16:44):

You know, I’ve never thought about that, but yeah, I would say you’re absolutely right, because I took the time. Uh, and, and I understand like everybody’s in a different stage and people will come up to me and say, well, you know, that worked for you, but you don’t understand. And you’re right. I don’t understand where everybody’s coming from. And everybody’s situation is different. I do know this, that I actually enjoyed my job, the military. I actually enjoyed that. So it wasn’t like I was in this position where it was miserable and I desperately wanted to get out and pursue something.

David Garner (00:17:14):

When you put in the reality of about and entering a civilian life, I’m not having that drama on your doorstep dice dice. I can’t imagine it must be crazy. Like I have a little bit of drama in my life, but nothing quite like that. But when you take that alive, it is a peak performance. My wife, um, uh, she has a master’s degree in coaching psychology. So she talks a lot about peak performance and things like that. And it’s not something you can maintain forever. You sign in and out today, but also, you know, if you don’t have that agitation to, um, and, uh, uh, I guess outside influence to perform again, still perform full, then all of a sudden you can’t, you can be lost.

Edwin Epperson (00:17:56):

Yeah. And, you know, that’s, that actually speaks to, uh, you know, the, the, I think the military suicide awareness as something that’s been brought to the light to the forefront in the past couple of years, and you know, I, in this past, this past February, I had a buddy that I knew very close. We, we went through training together, we deployed together. He was, he was, uh, he was considered a brother of mine and he took his life in February. And so, you know, it affects every aspect high-performers down to, you know, somebody who’s brand new into the military and just starting their journey. If you know, that demand of performing at a level that you may not be comfortable with, or maybe that you’re just so comfortable with, you just fall into this repetitive of staying at this peak performance all the time. And, you know, you, we could dive into the PTSD symptoms and syndrome that is out there.

Edwin Epperson (00:18:48):

Uh, and a lot of that is just the inability for an operator or anybody in the, in a high demand job. And that goes for operators that goes for athletes. It goes to anybody, that’s got a high demand job. And if you cannot find a way to disconnect and a way to reset your you’re going to be running on fumes and you’re going to be completely burned out. And I have to say that finding something I was passionate about allowed me to sort of disconnect from the world that, that I’ve found myself in and focused on something that I knew would bring that was building something for me in the future. Yeah,

David Garner (00:19:24):

Yeah. Right. I it’s, um, you can’t BJ, you just call my title, but also, you know, when it’s gone, when, when the drawing, or if you’d like is gone, you’ve got to find something to replace it. You get my wife talks about, um, and I listen to 90% of what she says now. Um, I’d say that I understand about 30%. Um, uh, yeah, it’s, um, it’s a, it’s a very, very sensitive subject PTSD, especially with soldiers. Um, I, I think we’ve been tool, but I think the, the, the issue is, it’s interesting what you say about it affects everybody at every level, because we, I had, um, the guy in the white house say the other day that America is finally at peace, not at war. And I thought, what America has not been at peace since America was, America is always something going on somewhere. There’s always some level of stress and there’s always people on those front lines. So to kind of stand up there. And I thought that was a tiny bit disingenuous, perhaps just on the banner, say, Hey, we’re at page lock. Everybody sat down and having a picnic. Um, it’s not really the case, you know, there’s still,

Edwin Epperson (00:20:33):

So I agree. I agree. I think that there’s, uh, while the war, as we have understood it for the past 20 years, two decades, uh, may that, that active involvement, that type of war is done. If you, if you want to be bold enough to say that, uh, my opinions are different. I think we’re facing as, as just a human race and people in different nations. I think we’re facing a different war that is right on the doorstep. And that is really an economic warfare that is going to start taking place across the spectrum of all different type of assets. And, you know, we talked about briefly mentioning, you know, as talking about different subjects and things that we can, uh, discuss on the call, you know, the people can be so, and some of, some of the listeners may be so ingrained in this, and I’ve noticed this, uh, through, you know, uh, going through training and, and being invested in real estate.

Edwin Epperson (00:21:31):

People can be very, uh, I don’t want to say clique-ish, but that’s the only word that comes to my mind, where you go to a training, you go to an event, you start getting educated and in your mind, that is the only, like that is the litmus test. And you see that you see that a lot between stock investors and real estate investors, most investors who would invest in the stock it’s so it’s so volatile and that’s horrible. And the stock investors who would invest in real estate is so slow. And, and so you actually have, it’s not that one is, is worse than the other one is better than together. It’s that you have two different mindsets that are looking at two completely different investment models. You know, there was a yeah, exactly. There was a quote by, uh, Warren buffet actually in, I love it.

Edwin Epperson (00:22:17):

He said, risk comes from not knowing what you’re doing, and if you can gain some knowledge and understanding in whatever it is that you want to do. Uh, and, uh, you know, we touched on it briefly, you’re you, you and I are connected on social media of all places. And, uh, and so I’ve actually started to invest in crypto, but actually taking a methodical approach to crypto cryptocurrency investing. And I have to say, it’s been, it’s been a little bit eye opening to, to look back on the way that I had approached investing as a whole, because when I talked to investors, you know, I’m, I’m raising capital for our investments. And, you know, my approach has always been well, you know, if, if you want to be, you know, if you want your funds to be secured, like there’s these little keywords that we throw in when we’re talking to people and, you know, I’ve, I’ve come across a lot of people like, well, I want more risk.

Edwin Epperson (00:23:10):

I’m willing to take on more risk. And for me, it’s like, wow, that’s just, why would you say that? But now that I’m actually in a, what many people can say consider a very high risk and not even an investment. I think a lot of people still consider a gambling. Um, you know, well, I, I’m looking back at my thought like, wow, I was actually, I was very narrow minded to think that real estate investing and even more so, like my style of real estate investing was what was the creme de LA creme. It was the only way to do, because you know, this David, even in the real estate space, you have little communities that say, well, will, is the best way to go. Well, fix and flip is the best way to go. Well, the bird strategy is the best way. And you’ve got all of these camps within the real estate world that think that their way, their method is the best. And so, yeah, it’s been a, it’s been a learning experience for sure. My ma’am,

David Garner (00:24:00):

I think that spreads into all parts of our lives right now. This is where social media, I think we used to blame for that because it polarizes you in this feedback loop where you you’ll maybe have a conversation with someone and they might mention, uh, let’s say, for example, cryptos, that you stopped setting your crypto. And then all of a sudden he found out about my bomb. It’s all you see on social media and get into it. And then you pick up some training and you can’t see anything outside of that. And it happens with especially things like politics and people just get extreme and polarized and it just doesn’t, uh, they, it doesn’t serve the community and the people involved in those ridiculous fights about who’s right. And it seems to be the most important thing. It’s not about being right. It’s just about being first.

David Garner (00:24:41):

Doesn’t matter if I’m correct. I just want to be louder than that going. I don’t want everyone to agree with me. And if there’s something uncomfortable in the weld, just remove it from the world. So the unwell comfortable rather than, okay, I’m going to got stunted about an uncomfortable thing and grow and learn and get used to it. Um, but you know, that’s the world we live in. I have a 17 year old son, so I’m very wary to think about that, man, very wary of his exposure, to things about social media and kind of this instance, Instagram world, it’s a, it’s a scary place to be raising a kid. It really is. And it’s the side of the world, but in terms of your business, um, I mean, I tend to agree with you that I, I look at right now. I love getting my hands dirty, right?

David Garner (00:25:24):

I’ve got, I think, 18 properties right now. Um, they are, most of them we’re transitioning most of our tenants into a rent rent to buy program. So they hired a houses from us. So we’ve really transitioned our business into trying to solve in our own way, on our own level, the affordable housing crisis on a house by house basis, by providing an opportunity for these guys to buy their homes. And it means we don’t make a huge amount of money day. What we do, I say it as is sometimes some months we’d run a loss, right? Because these are small houses, they were on thin margins. Um, but we do okay. Um, and the end result is we improve the neighborhood, the street and all that kind of stuff. And it’s wonderful. But from my investor’s point of view, that kind of looking for what all of those things you described, they want to, they’re a little bit older.

David Garner (00:26:12):

They’re not looking to get their hands dirty. They want somebody else to go and do that work, and they want to sit back and go Ronica, I’ll take my interest check. I just want to know that you’re competent. Y’all want to know that you’re capable of knowing what you’re being honest about, what you say you’re going to do. And I know the two that you you’re actually capable of the deck. Um, so I think that’s, that’s almost everybody is we get a little bit older, uh, maybe a little bit more spiritual as well. We, uh, we stopped to look around ourselves and say, why, why are we doing this? Why are we spending this amount of time or taking this amount of risks, learning these things when really we should be spending time with our families, we should be actually living life.

Edwin Epperson (00:26:52):

Yeah, exactly. Living to

David Garner (00:26:54):

Working, to live, not living to work. I think I find as I get older, all of the things my mother dad said to me when I was growing up all those little phrases like that, they would write, I didn’t listen and it’s taken me decades by mistake. And if I listened maybe out of a negative reminder, a few of us were cited, but then maybe I wouldn’t be where I am now. But in terms of your private lending business, that’s, I’ve seen that expand this from the outside, looking in, um, you know, uh, and correct me if I’m wrong, Broca full, um, other lenders, um, and you’ve raised capital from other investors. Um, so you how invest with them. So you’ve got a bunch of different ways of doing things, but it’s all based around lending. You don’t necessarily, unless something goes wrong somewhere, you don’t own the asset, you know, into buying.

Edwin Epperson (00:27:47):

It

David Garner (00:27:48):

Comes to that for you. Say that again, has it ever come to that for you, but for closing and owning something,

Edwin Epperson (00:27:55):

It, it has come close. So, um, I have to be honest, I’ve not gone through the foreclosure process. We had, uh, an investor that we had performed. So I’m very big on relationships. Um, and I want to do business with people. I know like, and trust just the same way as a lot of people in business want to do. And in the real estate world, especially when in the lending world, that’s, that’s easier to find, I think then like in your side where you’re having to go out and find people that are willingness that want to sell their house, like you’re negotiating with new clients every single time. Um, and I kudos to you guys. Cause I just, that would, that would wear on me having to build that, build that level of trust so that the seller, uh, can, uh, decide that they, you know, what I, I want to, I want to sell this house to David and sell it at the price that you need it for to meet your margins.

Edwin Epperson (00:28:46):

Right. Um, on the lending side, we get to the advantage is that I get to, when I really appreciate somebody’s approach to business, and I’m much better now at diving into their background and, and how they manage their business than I was at this time that the situation happened. But, um, we had completed, I want to say over 10 loans, like the gentlemen had bought and then sold. So we had 10, what we call a full cycle loan. We had 10 full cycle loans with him and he was just a stellar performer. And, um, and I realized that as a private lender, part of my responsibility is to actually help the investor realize when they’re getting to their breaking point. Because at that point I was just like, I was pushing him. I was like, man, get out there, go, go, go, like, get more properties.

Edwin Epperson (00:29:32):

You know, we’ll, we’ll buy a Kia. And he had four loans with us on four different properties. Uh, and he was what he was doing was taking the money that we were dispersing for the renovation on project a, he was taking it and applying it to a, excuse me. Um, he was, uh, uh, applying it to another project that he was as a side hustle, because just the way that we do our draws, it’s, you know, I require that the investor have their skin in the game. And so if he’s not able to manage the bills or the cashflow, and he’s not a good manager of cashflow, which is what his issue was, then he would go in and do like a quick three or four day job here, quick three or four day job here to raise money, to pay for bills and stuff. And then he would request the loan for us. We would disperse the funding, but he would take that funding and then apply it to buy material or pay for labor on these other jobs in hopes that when those jobs completed and he got paid, he would then put that money towards our project.

Edwin Epperson (00:30:33):

Yeah. And so he had four projects. We ended up taking, uh, he ended up finishing, uh, two, one of them. And then we ended up taking two back in, in a deed in lieu of foreclosure. And if anybody is in that position, uh, you definitely, if you’re the lender and you’re taking an asset back, foreclosure is the cleanest, it’s the most sure way that you’re going to get that asset back without any liens. That’s the key, right? And if there’s any lanes that are not going to be, uh, wiped out through foreclosure, like a tax lien, that’s actually attached to the property, then you need to take it through all the way through the foreclosure process to make sure that all that’s cleaned up, especially if it’s a federal tax lien or something, but in the case that there are no additional liens you can do.

Edwin Epperson (00:31:16):

What’s called a deed in lieu of foreclosure as a lender. You of course want to have that, that title search done, which we did, and the properties did not have any other liens. So we took those properties back actually as quick as possible because when somebody is in that position, you don’t know what else is going on. Um, and you don’t want something attaching. So I, to date have not actually had to go through the entire foreclosure process. Uh, the closest that we got were the deed in lieu. And we were, we are honestly very lucky because he didn’t have any additional liens attached to that.

David Garner (00:31:46):

If someone’s running their business like that, then the chances are, it’s probably not keeping up with property taxes. He’s made it a mechanic’s liens on there. Some of which can supersede even a first position, um, leans a that the whole lean position and priority. All right. And also if you want that water, that salt blower, um, lead, uh, read it, but this is why you need an attorney. And it goes back to one of the first things that you said on the tool you do in your product, any business, exactly what I do. I’m thousands of miles away from my house. So that’s why in a sense COVID has been great for my business because it’s forced me to really double down on making sure that I’ve got the right people in the right place, doing the right job with the right level of motivation to make sure that I look good.

David Garner (00:32:34):

Right. Uh, my aha moment was when figured out that Rita site was nothing to do really with buildings. That’s just a by-product it’s people, people, guy, it’s absolutely a relationship. I ended up being guy an interesting AI actually took hold of my first properties, taking a deed in lieu. Um, so I, I was representing some private lenders lend money to this guy. He turned out to be a, uh, shock and, um, ripped a bunch of people off. Uh, so I took a deed in lieu on behalf of those lenders and what sparked is around. And that’s how I ended up in reinstate really before that I had a consulting business. Um, but yeah, you’re absolutely right. It’s a full punches. The pain is way to do it, but, um, it, it, especially if you’ve, if it’s a recent acquisition for this guy and he’s not having a property for that long, did you lose sight to see that there’s a limited amount of financial boundaries you can do, if it’s just your period of time, did you end up, well, you might hold on those lines when you sold.

Edwin Epperson (00:33:41):

Yeah. We, uh, we were able to line up another and a contractor to come in and finish the project for us. Um, and then we sold those three properties. Uh, all the investors obviously were made whole on their initials simply because of my underwriting criteria and what I require from the borrower. And then the profits, we ended up splitting 50 50 on the backend. So their, their annual returns were actually pretty good on those three projects. Oh, there was this, there was this period of time, right. Where they weren’t receiving their monthly interest. And that can, that can, that can cause a lot of stressful nights. So I think, you know, if you’re, if there’s somebody looking to do passive investing, having an operator like yourself, uh, that is that’s, you’re basically offering a turnkey solution for passive investors, right. And that’s really important for passive investor. You don’t want to be a passive investor in, in investing by, with, and through someone and that person doesn’t have their stuff together. So I think it’s really important. Um,

David Garner (00:34:38):

It’s about, it’s about people. I use professionals. Same as you. If I want to know when a house is worth, I probably know what a house is worth in my markets. Now, if somebody said to me all, I’ve got a three bed, two bath home, this street, all know the street and I’ll be like, yeah, that’s going to rent fright 58, probably going to sell the 75, but I’m going to go out and get a broker’s price opinion because that broker is going to go out and draw. And, um, the, the, my partner on the ground in Pennsylvania, she’s absolutely amazing. Christina’s, uh, people want to say, you got to the previous projects and our websites. You just walk throughs of all of our before and afters of our rehab so that you can see kind of the quality of the work we do. But, uh, she also runs the brokers.

David Garner (00:35:19):

Uh, the BPO is right. So I will find a house from a wholesaler. They’ll ring me up, I’ll say, hi, as whole set of this day, I’ll call the best daily. I’ve, uh, you’re gonna buy these right here. It’s going to be brilliant. And you’re going to have to do Noah. It’s fantastic. She’ll find out, she’d be like, yeah, this is a bag of crap. I’m not even going in that without blindness. Um, and so now I’ll just listened to them. I don’t think I know best because she’s stood outside the house saying you ain’t buying this. I’m not, I’m not acting as your realtor to buy those. Um, because she knows where it’s going to light up. If I do, and I’m looking at the no-nos guide, oh, I’m gonna, we’re going to make some money. This is going to be great. And she’s like, no, you’re done.

David Garner (00:36:00):

Go ahead. And this is what you need in your, in your business. You need people that have your interests at heart when you have on an operational level. Certainly from my point of view, um, that’s important for me to communicate to my lenders as well, as you can imagine when somebody says, Hey, I’ve seen you program, tell me about it. And the first thing I say is, well, I’m going to call you from the UK. They’re like, how the hell are you doing what you’re doing from that? Sometimes I ask myself the same question. It’s what out so far. Um, so we, uh, yeah, it’s definitely, definitely a people guy. Um, so why do you see, I mean, we, you posted some stuff. I think we share a similar opinion, to be honest, and this is a deeper conversation than we have time for now, but in terms of the dollar and the economy and where it’s headed, um, the future, how crypto maybe weaves into that, especially now, like I, I had a conversation with, uh, Karen Hola, uh, a big, um, uh, IRA custodian, and they’re trying to pass some legislation right now to UFC and I’m sure, um, that could be devastating to some people.

David Garner (00:37:13):

I mean, do you run your business through a retirement account sort of wrap up or is it just sort of TA after tax cash that you invest?

Edwin Epperson (00:37:21):

So I, you know, when I, when I talked to a passive investor and, you know, obviously, uh, someone who is, you know, investing for income that they’re either living on or just passive investment, they want to roll that money into other investments. You know, the tax question always comes up and unlike owning real estate to where you get the appreciation, and there’s some other advantages to owning real estate. When you were being the lender, you forego some of those advantages for the security of being able to control the asset at a pretty significant discount. Um, and so there are, there are pros and cons to both lending and then owning real estate. And, you know, it all depends honestly what the risk tolerances are and what the goals of the passive investor is. If the goal of the passive investor is to capture those, uh, the depreciation and capture other aspects of owning than maybe investing through a turnkey property, uh, solution, uh, would be the best route or owning rental property.

Edwin Epperson (00:38:19):

But if your goal is to simply generate cash flow control assets at a deep discount, then lending is a great solution for that. But within the lending sphere, as in a lot of different investment methods, the tax advantage is not necessarily, uh, based on the investment itself. The tax advantage comes from the vehicle that you’re using to invest. So, uh, you know, in, in my, in my industry, I have passive investors that, that have cash sitting in a checking account or a money market account. I’ve got investors that use a self-directed IRA, uh, that has a Roth component or a traditional I’ve got investors that use a solo 401k for those that are entrepreneurs. And they have got their own business. I have investors that actually leverage their IUL policy, uh, at, uh, it’s. They have a high cash value index, universal life policy, and, and they leverage that.

Edwin Epperson (00:39:11):

Uh, and right now it’s actually a pretty good, uh, cashflow play for them. They’re able to create a pretty good yield spread on that. Uh, but at the end of the day, uh, retirement investors utilizing the retirement funds is always going to be a hallmark of, of what I do and how I access capital. So yeah, some of this legislation that’s coming down, uh, is, could have devastating impacts in, in my opinion. And, uh, quite honestly, a lot of other professionals opinions in the industry, as well as to what that can do to the industry. So,

David Garner (00:39:41):

Yeah, absolutely. If you think about it, it’s not just those folks with all of those types of accounts that you talked about. It’s where that account goes. Like if, if I was a multi-family syndicated, for example, um, and I’ve just run a syndication, I’ve just raised money from say, 50 investors, and then there’s legislation hit. So now they’ll say, well, I’ve got to get rid of this. I’m going to dispose of this within two years. I can’t buy it back off them. So I’ll use that money to buy a building. I now need to fire sale that building or find it in, uh, uh, an investor that does qualify time, those assets to buy their investment from them. And that guy’s not going to want to pay full price because he’s rescuing everybody. So there’s a discount premium that comes with that. So the model I see it, ultimately it turns into another transfer of wealth from, from small investors to big investments. And

Edwin Epperson (00:40:35):

I agree, 100%,

David Garner (00:40:38):

It’s just what will end up happening. Um, you, you just blocking sort of the average Joe for participating in more esoteric investments and they can only then go buy stocks and shares, um, pretty much, uh, any, even if you’re in a courtesy investor, you can’t hold those assets in your, in your tax shield. So you’re going to get taxed on them. And you can bond that with the changes that make it an inheritance tax and how much you can withdrawal from things on the money market accounts and how much you can, um, without having to go through the 10 99 thing. Um, it’s just, uh, it’s from everywhere.

David Garner (00:41:17):

The thing that really boils down to for me is the fact that this, uh, the government plan that they using as the, the, the, the funding with all this stuff, right. There’s record the reconciliation action plan or whatever it is. $3.5 trillion. I can’t imagine just 5, 6, 7 years ago saying the word trillion ever. It sounds like some five-year-old little girl is talking about how many sweeties she wants. [inaudible] billion. It’s like numbers don’t even make sense anymore. Right. It’s just praising. Um, but I definitely think we’re in a town. How do you see, would you, you’re way more in tune with this than I am. How do you see print type buying into real estate? Because I’ve heard sort of mumbles from people talking about how blockchain technology is going to revolutionize real estate. Um, but aren’t fully understanding blockchain. Yeah. Good luck explaining that in five minutes, but, uh, but yeah, I kind of, you see the two converging.

Edwin Epperson (00:42:25):

I think that absolutely it’s, it’s going to happen. Uh, cryptocurrency. So cryptocurrency is right now, it is for lack of a better word. It is a gamble, right? It’s straight you’re you’re gambling. Um, you know, and a buddy of mine and I, I come from a very risk mitigation mindset. Like, I’ll look at things I’m not averting risk, meaning avoiding it. Um, I look at the risk and say, okay, how can I mitigate that risk? Meaning, reduce it, control it, manipulate it to where it fits within my risk tolerances. And so crypto is just

David Garner (00:42:56):

It’s 13 years of your life doing that to make sure that you didn’t get killed. Right. [inaudible]

Edwin Epperson (00:43:03):

Yeah, that would be one of the skills I’d definitely, uh, brought over from the military and have been able to successfully apply it to the lending space. But the crypto world is like, man, this is just, it’s so crazy. And I think for most people, like there are a cryptocurrency and I know Bitcoin is sort of the it’s the term or the cryptocurrency that’s used as all, as when you say investing in Bitcoin, it’s like I’m investing in cryptocurrency, right? Yeah. Um, but the blockchain is the technology behind it. And I think that the blockchain, uh, offers some solutions to real estate, uh, ownership and real estate investing that could radically revolutionize the transfer of ownership and, and, and really ensuring that there’s no fraud. Uh, you know, a case that I remember earlier this year, maybe it was late last year was, um, a gentleman.

Edwin Epperson (00:43:55):

It was a company here in, I want to say St. Pete, right at, right across the bay from us. I’m in Tampa, Florida, by the way. So right on the other side of the bay of St. Pete and clear water, and there was a gentleman, or maybe it was down in Sarasota either way, uh, there was a gentleman and they were, they were basically hypothecating tax deed sales. So you can’t do that. You buy a property, like you can do that as a lender, which is one of the, what I call power tools that we have to make lending really, really, really awesome and generate some much higher returns than what just straight lending is, is when you’re able to hypothecate. But he was doing that with actual property. You can’t do that. You can’t hypothecate property hypothecation of property basically says that, you know, we are taking, for instance, in the lending space, I can take a mortgage.

Edwin Epperson (00:44:42):

I can, I can leverage the mortgage. I can basically borrow against that mortgage. Should then go get another, uh, make another loan. I can get that loan. I can then borrow against that loan to make it so I can take the same $200,000 and generate a million, $2 million in loans on that same million dollars. Um, you can’t do that in real estate. Once you buy the property, you’ve got that money invested in the property, and you only control that property. You can’t hypothecate it, but that’s what they were doing with the deeds. And so blockchain. And I say all that blockchain would prevent that type of fraud from happening. And I think it’s going to happen. It’s not, not if it’s, when is it going to happen? And I think that’s where a lot of Americans and really people all over the world, they’re so confident in the Fiat currency, you know, the, the greenback right here, right?

Edwin Epperson (00:45:29):

They’re so confident in this or whatever currency of the nation that they’re in, that the speed and the rapidity, if that is a word, the rapidness of the changing world to where we are going to be transitioning from tangible paper to digital coin is going to make people’s heads spin. I, I predicted earlier, uh, it was about, uh, a couple of weeks ago, I was in a conversation with somebody talking about our methodology to investing in crypto. And he was like, I just don’t see it, you know, changing. Like it’s not going to happen for many, like I’m going to be dead and gone. And I said, you know, honestly, I think in 10 years, the dollar is going to be absolute or abs obsolete, excuse me, obviously you, this dollar bill, you might as well start saving some of the dollars in $5 bills and different dollar bills because of one day, very soon, they’re going to be, they’re going to be gone and there’ll be a collector’s item. Right.

David Garner (00:46:23):

It’s not really that big a change. Like I just got back from a short trip to Paris. So I, whenever I traveled, I’m 41 years of age. So I guess you could say I’m a little bit old school and say, I got to change some money up. Right. So I’ve got some, some ready cash. Cash is always valuable. It can get you out of trouble. It can get you into trouble and get you out of trouble as well. Right. So it’s always useful to have some, some actual physical cash or get rid of someone real quick, or need to buy something with people’s money, et cetera, the cashflow that you need in an emergency phase for a useful tool to have not a penny of it, did I spend it was all cards and not even putting in pins now, uh, um, how what’s local to you, but now it’s just tapping.

Edwin Epperson (00:47:06):

Yeah. That, that, what is it like ETF or EFT? Yeah,

David Garner (00:47:12):

Yeah. Yeah. I mean, we’ve

Edwin Epperson (00:47:14):

Been, we have been conditioned for the past. I don’t know, since what tooth, the early two thousands to the late nineties, when cards starting started to become more prevalent and it started to switch away. And then it just became a simple transaction. Like there was, there was not this actual transfer of physical, uh, you know, dollar bills or physical items. It was just a digital transaction. So we’ve been, we have been being conditioned to accept this, and I don’t think it’s going to be that far off to just, Hey, before long it’s like, Hey, okay, I’ve got my, I’ve got my money and my cryptocurrency, and I’m just going to transfer crypto currency to you. And I think it’s going to, but for those that are, are not willing to change. And there’s, there’ve been some older gentlemen that I’ve talked to recently and, and they’re just, that’s just never going to happen. That’ll never happen. And I’m telling you, it is it’s happening where I’ve been right beneath our feet.

David Garner (00:48:08):

Yeah. They say like, it’s flying cars, right. Oh, I’m going to happen. Actually happens. Um, and it’s posted, but it doesn’t feel like spending money, but he, we all, we can just do it. The user experience path will not be that different. And I think a lot of people would read cat, like as long as they book food in the fridge and they can go out and live their life and be entertained and go vacation and look after their families, whether it’s called a dollar or a Bitcoin or whatever. Um, you know, as long as people are living in relative peace and have access to all of the things that they need. Um, I, I think people have become a little bit disconnected with reality in that respect. But I agree there are also people out there, a job I had in my very early twenties.

David Garner (00:48:57):

I sold kitchens, not door to door, but I was knocking on doors. People would set the appointments by phone and I would go out, I would measure up the kitchen and design it for them and sell them this kitchen on RMM. But the fact of this long house, and it was, I got in there and I quite wrongly judged the people that were there. Cause the place was gross that you walk in there and it’s like, make it kids for an interaction, but it’s just an odor about the place. And it’s rose. I was like, well, she’s going to be a waste of two hours of my time. They had more money stashed away in that caboose than I’d ever seen at that point in my life, because everything they had was cash. They didn’t have bank accounts and there were people right. That just have cash.

David Garner (00:49:41):

And I would not want to be one of those people five years from now because you might as well set it on fire. Because even just putting in, even if the whole blockchain thing doesn’t take off in the trajectory that you production thinking will being able to take that look of cash that you’ve got to put it in a bank. You’re not gonna be able to do that. You can even take it out of the bank. Now what’s the limit box, $600. Now you have to report it to the IRS and the IRS will then graciously tell you whether you should pay more tax on it. And good luck. I’ll give him those guys. So it’s going to be the second put in money in the bank. Um, uh, if you put Molden, I think he’s fine rounded now in cash. There are questions to answer, which, you know, is sensible to an extent you don’t want, every time they go hiring, just throwing a lot of cash in the bank and with no questions asked, there has to be some checks and balances and certain controls, but there are people out there that do do the proverbial, sticking it under the bond kit, under the mattress.

David Garner (00:50:39):

Um, those unite,

Edwin Epperson (00:50:40):

I feel like those, those will be the, unfortunately they will be the people like much like Venezuela, where one morning you wake up and you think your, your currency can buy you a gallon of milk by that evening, that currency can’t even buy a car. And, um, and, and when that the hyperinflation cause, uh, I hesitate to put my tinfoil hat on, but I’m going to sort of dip it in there. Uh, if, if, and I, I believe that there’s good reason to believe that the dollar will go through a hyper inflationary period. So I would say when not if, but when that happens, that’s sort of what, where I’m thinking that could, that could happen within five years, is that hyperinflation because the dollar has to become unseated right now, it is sort of the foundation point for a lot of currencies all around the world.

Edwin Epperson (00:51:30):

And if the powers that be are, are moving us towards a digital digital currency than the dollar has to become unseated, that’s, that’s my strictly personal, not professional. And it is not backed by anything other than what I’m looking at in the world around us and thinking, yeah, that, that seems to be the trend right now. And if that happens, man, I tell you what, that, that would be a scary thing to have whatever wealth that you have in dollars. Going back to the reason that you and I are in the business we’re in is because if you’re have that secured asset, a hard tangible asset, you go through a hyper hyperinflationary period. You just hold the asset, you hold that asset. And then on the other end, you can transfer that asset for whatever the stable currency is at that time or whatever value it is. So, um, yeah.

David Garner (00:52:20):

And having something that’s useful to sell on a house it’s useful if it’s well-maintained. Yes. So one of the questions that I come across from new prospective lenders is that of inflation. My personal thoughts are inflation are what we’re experiencing right now is a short term COVID related supply chain issue. But I think in the longer term, um, I totally agree with you. It’s, it’s heading only one way. Um, and it’s a, it’s a scary, scary place, but it’s a question I get a lot, but because my notes, my private lenders invest with being full a set time of 60 months, which is way longer than most lenders would lend to fix and flip investor. You need to cycle your cash real quick. These guys don’t want to do that. They don’t want to do it all together. They just want to forget about it, but that comes at a price because if they’re investing say a hundred thousand dollars with me today that a hundred thousand dollars is going to buy a whole lot less stuff in five years time.

David Garner (00:53:20):

And that’s, what’s important at the end of the day. How, how many medical bills do you pay with it? How many roofing tops can you buy and fix all on your roof? That’s the really important thing. So we kind of come up with a structure and we toying with it at the minute in that what we’ll do, um, is shedding asset price inflation with the, uh, lender. So they’ll invest say that $1,000 and a, sorry, $150,000 house. Uh, I am asked the other lender that a bypass, right? I’m paying them their interest. And then at five years. So we always set on notice at 65%. So there’s, there’s good wiggle room in that for the lender, like getting a significant discount, but, uh, I’m not asset in that respect. So what we then do is we revalued the asset at five years and let’s say it was worth 150.

David Garner (00:54:08):

Let’s say it’s worth 200. We recently repaid them 50% of their relative capital gain. So we say, okay, well you invested a hundred. Um, and let’s say, they’re probably just going up in value by 30%. So, um, in new notes at 65% on that too, it would be whatever it is, half of that. And we will give you an a half of day, we would keep so they, and that’s one way we’ve done it. We’ve, I’ve linked. I did it. Um, dreading this. I did a couple of loans with a couple of investors. When we first started toying with this, my mind I’ll tell you, well, I would just, uh, re you’ll pay off. You get your capital plus CPR. [inaudible]

David Garner (00:54:49):

ah, it’s not even funny, but they already bought their small loans, right? That’s $30,000 line, so we can afford to make mistakes like that. And we learned as we got it, that’s not sensible thing to do. And also, you know, tying in what I have to pay someone to an official government figure. Um, really, I might as well be tying into a fairy fairytale book because they’re just going to say whatever they need to say, remind me time now, manipulate the calculation to say whatever it needs to cycle. Um, so yeah, I think inflation’s a massive concern for people at the moment. Certainly based on the, um, the conversations I’m having with people, they’re worried about, it’s a, this kind of dance that Myla is too of, okay. I don’t want to go out and buy property because I don’t want to own it. And I don’t want, you know, calls two in the morning.

David Garner (00:55:37):

And I don’t want all of the issues to do with being a landlord, which I have to deal with, but also, um, all on something that’s going to go with your body. And this is where this is where my product probably falls down a little bit. When you compare it to traditional private lending, it falls down in two ways. It falls down because number one, my lender foams the entire acquisition and the entire rehab, which you’re you wouldn’t do as a lender. That’s definitely not in your ballpark. And also it’s a longer term, which again, for you, you don’t want to be Tonya money out for like 9, 10, 11, 12%, whatever it is you can, you need to restart.

Edwin Epperson (00:56:18):

Yeah. We, we like to keep our loans. It for me, it’s again, it’s about risk mitigation. The best way for me to the biggest risk is besides the borrower defaulting, which is a whole different way that we, we vet the borrower and vet the project. The second biggest risk is the market takes a tank. And if you even look back from 2000, actually, so everybody points in 2008, but the market started to tank in 2006. So this is really key because people realized that the market was tanking in 2008. And it went down from 2008 and bottomed out some estimate between February and April of 2012 is when it hit the bottom. And then it started to slowly work its way back up. So you saw a four year period that you saw the price or the values depreciate rapidly, or get cut in half.

Edwin Epperson (00:57:07):

Right? Um, but there were two year period before that, where there were key indicators. If you’re watching what’s going on, like w where we’re, there’s a several MSA or metropolitan statistical areas here in Florida, that we’re tracking that we’re seeing the same type of, uh, cooling down the happen. But the rest, everybody else is like, oh man, this is a great place to invest. And we’ve already started to make our adjustments on the lending. And I have that. I have, that’s one of the things that, that my private, my capital investors are able to take advantage of is because we have such short loans. And honestly, David, like nine months, the investor has to have a really good reason why their loan is going to go nine months. My expectation is that as long as the renovation cost is built $60,000 or below, I want to work with a professional individual that can get in there, renovate the property and get it listed and sold within six months. If you can’t do a 60,000 renovation project and sold in six months, you probably don’t have the business being in real estate investing, and you’re going to lose your shirt, or you’re going to lose your investor. Whoever’s providing the capital. And I don’t want to provide the capital for somebody that doesn’t have that professionalism when it comes to doing their business. Yes.

David Garner (00:58:16):

And it going to be able to execute, right. For me, it’s different. I’m not fixing flicker. I’m keeping these, some of these happens is I’m going to, I’m full the rest of my days, because what we’re trying to do with the tenant, what walk out. So I, I, and again, this, I think probably counteracts that a little bit in the my lenders know that what I’m looking to buy a house, I’m looking at through the lens of, I might end up owning this thing for the next 10 years, but if all else fails, I will refinance that lender out with a portfolio loan, the commercial lender, uh, which we’ve done a bunch of times. It’s super easy to do it, replaces that lender. They get their pay off. And I ended up keeping the property. So I’m looking at it through the eyes of, I’m not creating a product to sell on creating something that ideally we’re gonna rent and then sell to the tenants, but long-term, I might end up keeping them out.

David Garner (00:59:07):

So it’s a kind of different perspective that we have. Um, but yeah, it it’s, uh, it’s a trade off, um, because my investors are tying mine, that money up for you and your business that just would work. And this is why I love the lending space because there’s something for everybody. Um, I, if I said, I can think of at least three regular lenders that I have, but if I said to them, right, we’ve got a six month loan. They wouldn’t want to do it because they don’t have to go through this again in six months, I’m on my buttocks, but leave me alone. I’ll just keep it rolling into something else. I’m sorry. It’s horses for courses, but let’s, let’s tie it. Let me ask you a question that I’m going to be asking everybody. Um, and I’m interested to hear that, um, uh, that I’m talking about you two questions, actually, if I were to hand you a hundred thousand dollars right now on the condition that you invest it, the way you’re going to split the profits, where would you put it? How would you allocate it? I’m telling you, this is my W2 job. It’s not your thought out, the magic money tree. This is like, okay, take it, but don’t lose it. Cause I’ve got a kid in a very expensive wife, right?

Edwin Epperson (01:00:24):

So my first followup to anybody who wants to invest through by, with, and through me is what is your risk tolerance? Because there are opportunities that yeah, we could get you 18 plus percent, but the position that that capital is going to be in the exposure to risk is significantly higher than let’s say 6%. It really depends on what the person’s risk tolerance is. Um, as well as what is their expectation for the investment? Is there expectation that it is, uh, like you, your investments in there, their expectation is monthly payments. If I were to go to them and say, Hey, listen, we’re going to invest your a hundred thousand into X, Y, and Z, but you’re not going to get paid, but once a quarter, that might not work. So those are my two big fi unfortunately I can’t say because I mean, there are a ton of different options out there, but those are the best, the best response that I can give. I’m going to have to ask two more questions.

David Garner (01:01:19):

Well, now this is the point. There’s no magic bullet isn’t and this goes right back to what you said about, oh, no, this is best. This is best. No, my way of doing what’s right for this guy might not be right for that. Lady might not be right for this family. And you know, you, we, we, we, what we’ve created in my business works for me and it works for the model that I have, and there are plenty of people out there that it works for. And there are also plenty of people that it does not work for. So my job is not trying to sell it to everybody. It’s trying to find the right people.

Edwin Epperson (01:01:50):

Bingo. And you know what, David, I think that, that in the real estate space, because, you know, there was a lot of, you know, I’m sure, very motivated, very intelligent, very, um, they will become very successful new people in the game. And so obviously the big thing is how do I raise capital? And it’s like, well, if that person, if you’re capital investor, you just got to convince them that this is the best method. And I ha I would strongly encourage anybody that is going into, or just started into the real estate space. That’s the wrong attitude and the wrong approach. You need to be, you need to be more protective about your capital investors capital and ask them all the right questions so that you can tell them, this is probably not a good fit for you. You know, I appreciate your interest, but this I’ve had to tell dozens and dozens and dozens of investors that had a lot of capital and they wanted to put it behind me.

Edwin Epperson (01:02:41):

And I either said, listen, this is, this is, this does not fit. The method that I’m doing does not fit your risk tolerances, or it doesn’t fit your return type. Like the, the expectation, as far as the returns or in the case where I’ve had an investor approach me like, Hey, I’ve got about $20 million. I can invest with you. And I’m sorry, that’s more than I can handle right now. And if I were to take that investment, I would be endangering our relationship as well as I would be endangering myself, because you could very well come after me for not performing based on what we discussed. So a lot of questions now.

David Garner (01:03:14):

Absolutely. And it’s, um, a massive red flag for me when you hear these people that hold themselves up and they’ve always got the rags to riches story. They’ve always got that five years ago. I was in jail and now I’m like a million properties. I’ll teach you how to do it too. For the low price of $997. I don’t know why it is, but it’s always something, something in $7, but the, some massive, massive red flag to me Wednesday, because ultimately they’re gonna ask for your money. And no matter what I got, I had a guy the other day he was trying to, and it’s in England and he was trying to sell me an investment client, personal portfolio, um, and bless him. He was trying to sell me a property bond, which is like a low note. Security gets a company, which I entered property, right? Interest is just a bond called a bond instead of a note. Um, so he’s like, oh, look, there’s no risk involved in this. Cause you’ve got security over the asset and blah, blah. I’m like, okay, I’ve got a few key questions for you. Number one was the asset worth, who I am days or any debt, what positions did that enter? You didn’t know any of it. Cause you just

Edwin Epperson (01:04:17):

Decide, oh my goodness.

David Garner (01:04:18):

Any of that turns out that the properties were like 11 million, uh, which is great, but it’s by three or four people that took out an 8 million loan against it. And the bonds secured in second position for like five minutes. So it’s already underwater. And don’t worry though, because, um, it it’s, uh, the whole point of it is we’re getting planning permission. So it’s going to be worth loads more and we’ve already spoken to them and they’re probably going to do it, but okay, I’ll pass on this one. But you know, you selling that as there’s no risk attached to it because you, you, um, I like, as I said on the first property, they weren’t the first properties I own, but that what first got me into real estate on mass was taking these properties of this guy that had defrauded being afforded the lenders. And it couldn’t be done.

Edwin Epperson (01:05:06):

You can be done absolutely as seen it since.

David Garner (01:05:10):

Um, and it’s always with, unfortunately, it’s always with people in my space by low-income properties, the low bar, the casserole type, but don’t rehab them properly, had the property taxes type thing. Investor’s money and screw over a lot of that. And I’m saying that three times now in the five years that I’ve been doing this, um, and the, the only ones that lose out ultimately are the lenders because they’ve been sold this supersize thing. Um, and it is safe if people do what they say they’re gonna do, but if they don’t have you can’t account for that, like the guy that you do, data Lou from it didn’t fall down because they were about a property or you got a bad evaluation or rehab figures were wrong. It was just, he was about active. It was a dude that didn’t do what he said he was going to do. And you can’t account for that unless you’re living with someone and watching them, but you’re not going to have to get a little snack and get back on and sit,

Edwin Epperson (01:06:04):

Oh, I was going to say earlier, you said, ah, well, let’s talk about some of the things you brought over. And I was like, well, there’s some things I probably will not bring over as

David Garner (01:06:14):

I was gonna say, like, if you’re going to borrow money off someone, try not to, to pick somebody, have someone that could kill you with that thumb. It’s the other, I’m sure there’s some, uh, interesting skillsets. But again, I guess that makes people, if you’ve your, your background is, uh, inspires trust and credibility, right? Cause if you can operate in those kinds of environments, number one, you gonna, you’re gonna be able to organize yourself pretty well because you caught me disorganized adviser environments, and you’re going to have discipline and you going to be honest. Uh, and those, uh, really some of the most important things, I think if you’re, if you’re having someone money, you want someone to do on the side, they’re going to do be transparent. And there isn’t that much more to it.

Edwin Epperson (01:06:58):

And if I can say, if anybody brags about themselves being all of those things, that’s probably another red flag. You need to let somebody else talk about. They’re like, oh yeah, I’ve worked with that person. Like that’s they are honest. They are transparent. They are a man of integrity and honor, but somebody that walks around like, oh, I’m this and that. Nah.

David Garner (01:07:18):

Yeah. Well, you gotta need to say it because your actions included so you can get on with the whole stolen valor thing. People like to, you know, address us and whatnot that I would imagine brought your gaze. Um, so, well, because you’ve gone through what you’ve gone through to, um, the right to wear the uniform and such, and then somebody turns up to a parade or whatever it was Paul Hawks with construction, I think four with all the wrong stuff on it and was like, you know, basically I was James Bond. Um,

Edwin Epperson (01:07:50):

I think for one you’re not even British, you can’t be James.

David Garner (01:07:55):

Well, we’ve, we’ve had, we’ve had a stuffed it, we’ve got a Scottish James Bond. I don’t know who they’re logging out next to the one brigade we have probably about, I don’t know, a five year old girl that identifies as a cucumber. Apparently. Yeah. James wan is just another old white dude that used to be unemployed. Um,

Edwin Epperson (01:08:20):

We’re going to start getting into the politics

David Garner (01:08:23):

That listen, I really appreciate your time. Uh, it’s always a pleasure speaking to you. I was imagining I’m going to hop on and listen to your training video that I’ve saved on my social media, on my Facebook. I’ll get my wife to tell me how it works and access my site again. I do really appreciate the time. I know. Um, my group of investors will find real value in hearing your story. Uh, good luck with everything at w stranger,

Edwin Epperson (01:08:49):

Not David. Hey, best of luck to you guys tell the tiny, tiny wife we said, hello,

David Garner (01:08:54):

And then

Edwin Epperson (01:08:56):

You got, you’ve got a following man. You’ve got a,

David Garner (01:08:59):

I know I was tempted to set up another Instagram account just with Tanya washed up. Whenever we see something out of a size, uh, it’s just about the spectrometer, the stand next to it and take a picture. Um, and she’s off really sat next to the giant Christmas tree. Well, listen, tight cab speaks it.

Edwin Epperson (01:09:21):

Absolutely. My man. Thank you so much.

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