Unstoppable REI Wealth

Private Money Lending with Ruben Izgelov

Episode Summary

Today on Unstoppable REI Wealth I am joined by Ruben Izgelov. Ruben had over a decade in the real estate industry – acquiring, flipping, developing and financing over $500 million worth in real estate – Ruben has quickly become a renowned real estate expert, speaker, and guide for many professionals in the industry. Ruben originally, started as a hard-working eight-year-old boy distributing flyers on the streets of New York, and to this day still takes that work ethic with him everywhere he goes. He is a graduate of St. Johns University and Touro School of Law, where he earned a BS in legal studies and his JD, finishing cum laude and magna cum laude. We Lend is a private money lender focused on servicing real estate investors by providing quick and low-cost capital on their investment properties. We Lend’s approach to lending is centered around the investor, therefore allowing the investor to focus more on their investment and less on the loan process. We Lend was founded by a group of real estate investors, whose emphasis was on acquiring and improving distressed properties. So, whether or not you are an experienced real estate investor – We Lend’s team has the qualifications to exceed expectations and can assist in the expansion of your real estate portfolio. Key Takeaways From Today's Episode: [00:03:25] Eventually I was introduced to real estate, right around 13, 14 years old. One of my cousins who was actually a flipper at the time, doing it the old school way door knocking on doors and trying to convince sellers to sell their property to him and he had a hard time with people opening doors. So, he asked me as a 13 year old, he's like, you know what? You're young, you're cute. You know, I think people would open the door for you. Why don't you come and join me and help me. So that's exactly what we did for the summer. [00:07:52] I started flipping, and my go-to guide my mentor to this day. He's my mentor was my hard money lender. Don't get me wrong. He was charging me an arm and a leg. I think I was paying anywhere between 14 to 15% with two and a half to three points at the time. But it was well worth. It, it was worth every single penny for me, but he was old school. He's still around. God bless him. But he was old school, no emails, you know, only phone calls, notes. Only fax machines and we thought that we can definitely change the bar market and definitely improve on it. [00:14:30] So as private lenders, our focus is always the asset, right? We want to make sure that, you know, the borrower, that the property is profitable when they're buying the property and flipping it we want to make sure that the property is vacant or not. Doesn't really matter, but we just want to have that those numbers in mind and have those assumptions that are. So our real focus is the asset in the beginning, but then also we want to make sure that the borrower has a track record. And if they don't, that's fine. [00:14:55] 620 credit for us is excellent credit we want to make sure that the borrower has enough liquidity to not only buy the property, but also start the renovation because when we fund the project to the leverage point, I don't think we even touched on that. And depending on the borrower's experience, we can go up to 90% of the purchase and a hundred percent of the construction cost that huge. Thank you all for listening and I will see you on the next episode. When you are ready head on over to https://billyalvaro.com or go grab your tools to help you at https://billyssecrets.com

Episode Notes

Today on Unstoppable REI Wealth I am joined by Ruben Izgelov.

Ruben had over a decade in the real estate industry – acquiring, flipping, developing and financing over $500 million worth in real estate – Ruben has quickly become a renowned real estate expert, speaker, and guide for many professionals in the industry. 

Ruben originally, started as a hard-working eight-year-old boy distributing flyers on the streets of New York, and to this day still takes that work ethic with him everywhere he goes. He is a graduate of St. Johns University and Touro School of Law, where he earned a BS in legal studies and his JD, finishing cum laude and magna cum laude.

We Lend is a private money lender focused on servicing real estate investors by providing quick and low-cost capital on their investment properties. We Lend’s approach to lending is centered around the investor, therefore allowing the investor to focus more on their investment and less on the loan process. We Lend was founded by a group of real estate investors, whose emphasis was on acquiring and improving distressed properties. So, whether or not you are an experienced real estate investor – We Lend’s team has the qualifications to exceed expectations and can assist in the expansion of your real estate portfolio.

Key Takeaways From Today's Episode:

[00:03:25]  Eventually I was introduced to real estate, right around 13, 14 years old. One of my cousins who was actually a flipper at the time, doing it the old school way door knocking on doors and trying to convince sellers to sell their property to him and he had a hard time with people opening doors.  So, he asked me as a 13 year old, he's like, you know what? You're young, you're cute. You know, I think people would open the door for you. Why don't you come and join me and help me. So that's exactly what we did for the summer.

[00:07:52] I started flipping, and my go-to guide my mentor to this day. He's my mentor was my hard money lender. Don't get me wrong. He was charging me an arm and a leg. I think I was paying anywhere between 14 to 15% with two and a half to three points at the time.  But it was well worth. It, it was worth every single penny for me, but he was old school. He's still around. God bless him. But he was old school, no emails, you know, only phone calls, notes. Only fax machines and we thought that we can definitely change the bar market and definitely improve on it.

[00:14:30] So as private lenders, our focus is always the asset, right? We want to make sure that, you know, the borrower, that the property is profitable when they're buying the property and flipping it we want to make sure that the property is vacant or not. Doesn't really matter, but we just want to have that those numbers in mind and have those assumptions that are. So our real focus is the asset in the beginning, but then also we want to make sure that the borrower has a track record. And if they don't, that's fine.

[00:14:55] 620 credit for us is excellent credit we want to make sure that the borrower has enough liquidity to not only buy the property, but also start the renovation because when we fund the project to the leverage point, I don't think we even touched on that. And depending on the borrower's experience, we can go up to 90% of the purchase and a hundred percent of the construction cost that huge.

Thank you all for listening and I will see you on the next episode.  

When you are ready head on over to https://billyalvaro.com or go grab your tools to help you at https://billyssecrets.com

Episode Transcription

[00:00:00] Billy: What's going on guys. Welcome back to that episode of unstoppable REI wealth. This is episode 47 and today I'm interviewing Ruben. Rubins a fellow new Yorker. This guy has been fixing and flipping for years. He actually started cold, call knocking on doors. At 13 years old, his cousin kind of utilize him as a puppy.

[00:00:19] I think it was either Queens or Brooklyn, door knocking. Cause the cousin was having a hard time getting his foot in. So the cousin was smart. They figured, let me bring this 13 year old kid in with me. Cute little kid, knock on the door. Ruben opened up a lot of doors, made himself some money. And from that day forward, he was hooked with this whole real estate investing he's gone on to do over $350 million worth of real estate.

[00:00:41] Since he, I think he's been doing it since like 18, 19 years old, but in the last four years, he has opened up a private lending bank. We Lend and he's got some amazing programs. He has, he's very aggressive with his underwriting, understands what it's like to deal with new investors and he's doing it nationally.

[00:00:59] So you're not going to want to miss this episode, especially if you are wanting to get into fixing, flipping. Or If you're currently fixing, flipping, and you need an additional private lender that We Lend it. Listen, I just got to know this guy from the interview, solid human being knows what he's doing, and he's open to working with seasoned as well as new investors.

[00:01:21] I hope you enjoy the show. 

[00:01:24] Welcome to unstoppable real estate investing wealth. My name is Billy Alvaro, AKA the unstoppable BA former billion dollar mortgage banker gone bankrupt turned professional real estate fester where each week you'll learn the tools, strategies, systems, and secrets, myself and other highly successful real estate investing entrepreneurs use to start, grow and scale their businesses, creating massive profits and how you can.

[00:01:52] And we'll teach you how to put those profits to work. So you no longer have to get ready to finally experience financial freedom and generational wealth. Now let's get started. What is going on? Everybody Billy Alvaro the Unstoppable BA back in it with another episode of unstoppable REI wealth, today I'm bringing a one, a gentleman who lives in my neck of the woods in New York.

[00:02:17] He's doing business in New York. I'm going to love about this interview is that he's doing an offering. Something that I get tons of questions on, right? When we're fixing and flipping properties. The, one of the questions I get often is how do you finance these properties? How do you package it together?

[00:02:33] You know, is it possible to take on private lending and regular traditional lending and. Ruben, I'm going to interview you today and hoping you get to bring the heat and I'm going to kill your last name. So I'm going to have 

[00:02:45] Ruben: I'm used to that. So it Izgelov. Ruben Izgelov

[00:02:48] Billy: Izgelov. Okay. Very cool.

[00:02:49] Welcome to the show, brother. Appreciate you coming. 

[00:02:51] Ruben: I appreciate it. Thank you so much for having me. 

[00:02:53] Billy: Yeah. So, you know, I looked at your bio and you, and I don't know each other. You're just coming on. We'll meet you for the first time, but you have like a pretty cool history. You've acquired. Develop and or finance over $350 million.

[00:03:06] And since you wrote this, I'm sure it's probably more, it is. Give us a little background about you and how you became into this whole lending . 

[00:03:14] Ruben: Yeah, absolutely happy to do that. So, you know, we, we immigrated to the U S in the nineties, like 1994, I believe it was 95. You know, I was only six years old, went straight into the.

[00:03:25] You know, the department of education system, that the best I can, but eventually I was introduced to real estate, right around 13, 14 years old. One of my cousins who was actually, uh, a flipper at the time was, you know, doing it the old school way door knocking on doors and trying to convince sellers to sell their property to him.

[00:03:43] And he had a hard time. People, you know, had a hard time opening doors, getting doors to be open. So, you know, he asked me as a 13 year old, he's like, you know what? You're, you're young, you're cute. You know, I think people would open the door for you. Why don't you come and join me and help me. So that's exactly what we did for the summer.

[00:03:59] You know, I try to get as many doors as I, oh, I can't open for. And that was my introduction to real estate. I kind of fell in love. 

[00:04:06] Billy: What a gift, your relative to do that for you, man. I mean, absolutely. Amy killer training at 13 years old, 

[00:04:14] Ruben: I think it was self-serving on his part, but I think

[00:04:24] Billy: to be 13 years old. So I'm not going to endorse, I mean, you. Zero fear. Cause you don't really know if you're as a kid at that age. No, you know, I had no idea what was out. Yeah, that's great, man.

[00:04:36] Ruben: People were opening the doors thinking I need help with something, but you know, worked out well for him. I think he put a number of properties and contract with that kind of gave me some money too, just to kind of give me the motivation and the inspiration that I needed for me.

[00:04:47] It was, it was over right. For me, it was real estate, all, all about real estate after that. But you know, obviously I had to go right back to school. Fast forward a few years at around 18 years old, my brother started buying real estate in Florida, buying land, vacant land, building on it, you know, selling it and so on.

[00:05:03] And while he was doing that, I was actually a loan officer for one of these local mortgage shops. And so on. That was the wild, wild west, you know, making mortgages. I was again in the ground 18 years old, making a killing for me was the best time of my life. I was also a high school to trust. 

[00:05:19] Billy: What was the years?

[00:05:20] Ruben: This was, I believe around like 2005, 2006. I was also like a high school dropout. Didn't want to go back to school, but that's not for me. That's what shit was really heating up. Exactly. You know, at that time being a teenager, I was making about 10,000 a month. It was amazing. For me, it was just like, wow. I mean, this is going to last forever and long and behold, of course it didn't, you know, a few years later everything went crashing down.

[00:05:47] Learned a valuable lesson at the time where you have to save your money that time. I really wasn't. I was spending it all I was making and spending it, making it and spending it. But eventually, you know, my father kind of sat me down and said, look, you know, you could see that things go up and things definitely come down.

[00:06:01] And the question is, what insurances do you have to make sure that you protect yourself on the downside? I decided to go back to school. I got my GED, went to St. John's university, got my undergrad, and then eventually went into law school, graduated Magna cum laude, and kind of was, was forever grateful for that.

[00:06:17] Although I don't practice at all, but forever for that, you were practicing,

[00:06:25] but you know, while, while in law school, and while in St. John's undergrad, I was buying, selling, flipping developers. And shortly after law school profit margins, they were, they were kind of compressing. There was a lot of competition and market, and we needed to find a cheaper source of capital for our service, for our own projects.

[00:06:42] So we went out to, to the west coast, to, to an event that was happening with private lenders event. And I was just speaking, interviewing with a lot of, hardware lenders at the time. And, you know, an attorney approached us kind of took down our background, understood what we were doing and said, look, you know, The hard money lender yourself.

[00:06:58] And this is how the process works and kind of gave us like a back of the napkin understanding of what what's necessary. And so on. We had some capital at that time to work with, and, you know, we walked in there as private investors, flippers, speculators developers, and walked out as private lenders. And that was in 2018 and we never looked back since

[00:07:16] Billy: no shit. Congratulations. Very there's all three, four years, you've been doing this. 

[00:07:22] Ruben: We're going onto four years now, you know, we've done a little over a thousand loans at this point, lending nationwide. 

[00:07:29] Billy: So you did a nationwide thing. So I think, you know, one of the things I can appreciate, I'm sure people for you.

[00:07:34] Is that you have that lore background, but you have the investor background as well. And so you're not coming in just from a desk underwrite. You understand what it takes to make a deal, put a deal together and make a deal, make money. 

[00:07:45] Ruben: We're super engaged with our borrowers. We want to make sure that, you know, we're not only bringing them the capital that they need to provide value and that they are seeking.

[00:07:52] Look, when I started flipping, I really don't know much about the market and my go-to guide my mentor to this day. He's my mentor was my hard money lender. Don't get me wrong. He was charging me an arm and a leg. I think I was paying anywhere between 14 to 15% with two and a half to three points at the time.

[00:08:11] But it was well worth. It, it was worth every single penny for me, but he was old school. He's still around. God bless him. But he was old school, no emails, you know, only phone calls, notes. Only fax machines and, you know, Yeah for us, you know, we thought that we can definitely change the bar market and definitely improve on it.

[00:08:30] And that's exactly what we've been doing. But to the point of this, this hard money lender, he provided value to us. He made a lot of introductions for us. He told us where the pitfalls are, what to look out for, how to negotiate, how to actually renovate. And that's something that we took with us for life, because that's what we see as a private lender.

[00:08:47] It's not. You know, value in the sense of capital, but it's also providing value in a sense of guidance and being engaged with your borrowers throughout the entire project. And that's what we bring on, to every single borrower of ours. 

[00:08:59] Billy: So what I'd like to do Ruben is I like to do this interview in like two parts.

[00:09:03] I want to do both the parts today, but I want to get into the nitty gritty. On this start, grow side for people who are getting into the flipping side, but then once we get into that and we get the details of what the lending programs are, I want to flip over and I want you to talk about what it took to actually get your lending arms started, right?

[00:09:20] How you went about doing that. Because I think there's guys that are going to be listening to this that are at that level where they may want to open up their own fund or may start, and they may want to start with. And I think being that you've been doing this now for four years, you'll be able to give them some really good insights.

[00:09:33] So sound good. 

[00:09:34] Ruben: Absolutely. Yeah. 

[00:09:36] Billy: So let's start with guys, new people, somebody who's brand new, right? They don't really have a history of flipping. Is this somebody that you would lend to. 

[00:09:46] Ruben: Absolutely. So I would say majority, not majority, but a good portion of our borrowers today are first time borrowers they're entering the market because guess what?

[00:09:55] This has bigger pocket effect today. There's, you know, social media, all these influencers, real estate influencers, they're driving beautiful cars and, you know, with beautiful ladies by their side. And I think every year. Man or woman kind of aspires to, to do the same and be successful. I think there's a lot of new entrance into the space.

[00:10:11] Rightfully so. I think everyone needs to some way fashion or form be involved in real estate for longevity purposes. Right? So to make sure that you have a nest egg before. But to answer your question, absolutely. We lend to not only experienced investors, but also first-time investors. Now we do that cautiously because there's a lot of pitfalls that a lot of borrowers don't recognize, you know, almost every single one of our investors who is new to the business and it's their first flip, you know, there's so eager that they actually miss a lot of the small little things that can become a very big thing and bring your deal from, you know, super profitable.

[00:10:48] To a complete negative, and you have to bring money to the closing table if you're selling where we financing. So we do take it cautiously. We guide them not only in the sense of educating them, but we also want to make sure that we as lenders are protected. So we may not give them the same leverage as we were to an experienced investor.

[00:11:05] We're still competitive enough to make sure that they have enough liquidity to fund the deal. 

[00:11:09] Billy: I love it. So let's, you hit a couple of really good points. Let's go into some of those things that new investors may not know what they don't know, but that they could get her with. Right. Cause these are like really good tips.

[00:11:20] And if you're listening and you saw it in the flip, you know, everybody looks at it. The only thing it's going to make a hundred thousand dollars, they don't take into consideration the buying cost, the holding costs, the selling because in my view, they always underestimate the rehab. They overestimate the ARV.

[00:11:34] You know, you're off a few percentage points, either way, the deals are garbage deal 

[00:11:38] Ruben: and you hit it right on the spot. So I think those are the two common problems, right? As they overestimate the ARV. And they underestimate the scope of work. Now, a lot of our first time investors, they're not actually sourcing the deals themselves.

[00:11:51] They have wholesalers that are bringing deals to them and pitching them a dream right there. They're saying, oh, this property, the ARV is going to be a million dollars. Right. You look at the comps, there's nothing anywhere near a million dollars. It's just speculation at that moment. So, you know, that's, that's one thing you always want to be conservative with your number.

[00:12:08] And, you know, you obviously don't want to be conservative enough to a point where you kill every single deal that comes your way, but you want to be conservative enough to have a cushion worst case scenario. Now, to your point, you hit it right in the head a hundred thousand, right? When we were flipping more projects, three, four, or $500,000, our minimum profit margin had to have been at least a hundred thousand.

[00:12:28] Now it's not because we wanted to make a hundred dollars. Who doesn't right. But it's because anything can go wrong. Right? Any of your scope of work budgets that you have today, you're assuming, oh, I'm going to put 60,000 instead of scope of work into the project, guess what? You break a wall or you do something and you open up the walls and you find some other issues or, you know, like you see today, the values on the cost of supplies have skyrocketed.

[00:12:51] Anything can happen during that course of time. And you flipping, so your scope of work that was budgeted for 60,000. Can very well end at about a hundred thousand, if not more. So you always want to have that profit margin where if anything was to go wrong, you're still profitable enough to make the deal work for you and make sense for you.

[00:13:10] Billy: Yeah. The fudge factor, you have to add that in because things always go wrong. Absolutely. When you're looking at a deal you're analyzing new guy. Are you going to steer away a little bit, if it's a larger rehab. Cause you know what it is. If somebody gets into these large rehabs where they're going to, they going to do a full gut on their first job down through the studs they don't realize how many different things go home and they don't take in consideration all the budget items that need to go into it.

[00:13:37] So steer away from like new guy full gut. 

[00:13:40] Ruben: So if we see a borrower buying a property for say, hypothetically speaking, a million dollars and their scope of work is 30% or greater of their purchase price, we start questioning that, right? The question is, can you actually execute? Can you bring someone on board as a borrower to make sure that I can feel comfortable giving you a million dollars or whatever that amount is, because guess what?

[00:14:02] On a $60,000 scope of work. A lot can go wrong on a $300,000 scope of work budget, even more will go wrong. So, you know, we question every single one of our borrowers to make sure that they have someone that mentors them that can bring this to the finishing line and make sure that they're executing profitability wise.

[00:14:22] Billy: Okay. So what do you look for in the borrower when you're underwriting? Are you looking for credit? Are you looking for liquidity combination experience? 

[00:14:30] Ruben: So as private lenders, our focus is always the asset, right? We want to make sure that, you know, the borrower, that the property is profitable when they're buying the property and flipping it.

[00:14:40] We want to make sure that the property is vacant or not. Doesn't really matter, but we just want to have that those numbers in mind and have those assumptions that are. So our real focus is the asset in the beginning, but then also we want to make sure that the borrower has a track record. And if they don't, that's fine.

[00:14:55] Six, 20 credit for us is excellent credit. Uh, we want to make sure that the borrower has enough liquidity to not only buy the property, but also start the renovation because when we fund the project to the leverage point, I don't think we even touched on that. And depending on the borrower's experience, we can go up to 90% of the purchase and a hundred percent of the construction cost that huge.

[00:15:14] So, you know, essentially the construction doesn't come at the closing table, it comes into ours. It comes as a reimbursed. So, you know, to the point of liquidity, we want to make sure that the borrower has enough not only to bring the 10% down or whatever that magic number is, but he has enough to actually go ahead and start the project and pay our mortgage during the course of, of holding the mortgage.

[00:15:35] So it's just a number of things, but the focus really is the asset. And. Profitable enough for the borrower for it to make sense for them. 

[00:15:43] Billy: Yeah. Assets always. Number one, after that, you look at it with everything else. Exactly. Love it. Love it. Regarding, the loan, the values and the 90, the 10, when, if a newbies coming in and he doesn't have the assets in his bank account, would you allow him to partner up with somebody that does have the assets that's going to come in to be that gap funder?

[00:16:03] Ruben: So two good question. We actually don't look at the borrower's bank account. Right? What we ask for is a personal financial statement, which is self-declared. What that essentially means is that if you put on your, your personal financial statement, that you have a million dollars, I take your word on it. Now that's on the bridge for the one to four.

[00:16:20] On the multifamily, when it's four units or five units or greater, we do want to see bank statements. We want to make sure that they have enough liquidity to actually execute on the deal. Now, a lot of times it's not in their personal name, it's in some kind of entity corporation, LLC, or what have you. And we want to make sure that we can tie them to it.

[00:16:38] So we usually ask like an operating agreement, you know, bylaws or something to that effect to make sure that they are in fact, you know, have the ability to tap into that liquidity. 

[00:16:47] Billy: I'm surprised that Rubin on the, on the single family, first time flipper, you wouldn't want to tie a real bank statement or some sort of assets that person's name that you're allowing them just to do a, an income statement on, you know, 

[00:17:01] Ruben: Yeah, absolutely.

[00:17:02] I mean, look, there's, there's a lot of ways to look at it, but to answer your question, it's really because of the secondary market and the capital markets out there, right? There's a lot of liquidity in this space today. There's a lot of institutions, large institutions, right? KKR, Blackstone, Goldman Sachs that are entering into the space because they see the value and the strength in this space.

[00:17:23] So there's a lot of money being pumped into this space. Now, when we fund the loan. Most of the time we ended up selling the paper to one of these larger institutions, that security sizes and does whatever they need to. So, you know, we're, we're looking at it from their lens. If they buy paper without having to tie the borrower to their liquidity, then we're okay with lending under those terms.

[00:17:44] Billy: Of course. Good. So I love it. So now let's, let's look at somebody who's. Is looking to grow and scale, right? Guy's coming in. He's a producer, he's pumping out 75 or a hundred deals a year. He's in multiple states. He has systems in place. He has processes in place. He has his controls in place, project managers for a person like that.

[00:18:05] Do you offer any type of line of credit or anything that can assist him to grow his company as he's helping you grow your. 

[00:18:14] Ruben: So, you know, I know there's a lot of private lenders out there that kind of market themselves as, you know, offering lines of credit. And I, I don't agree with them. It's never really a true line of credit because it always has to be tied to an asset the way I view it, right.

[00:18:29] The way I view a line of credit, as you can walk in. You know, you have a hundred thousand dollars line of credit. You can walk in and you could take out the 100 or 20,000 without having to answer any questions. So to your point, no, we don't offer lines of credit and we don't want to be one of those types of wonders that market, something that is not entirely true.

[00:18:45] But what we always try to do is make sure that we can pre-qualify the borrower. To make sure that when they are ready to execute on a deal, we can execute as quick as they expected to be executed. Right. So a lot of our borrowers, a lot of times they need to close within a week. sometimes even days and what we can do to help the borrower to finish in that timeline is to pre-qualify them in advance.

[00:19:10] So we go through their financials, we go through, you know, what their past experience was. We pulled their credit so that when it's time for them to execute on a deal, they know there's not going to be any delays or hiccups. 

[00:19:20] Billy: Got it. I love it. Good. So now take us through your whole process. New guy, seasoned guy coming in.

[00:19:27] What's the process to get the loan looked at. And then what are the steps that we're after to get it approved, funded? And then the draw process 

[00:19:33] Ruben: yeah. So, you know what? First focus is the property. We do a property analysis on every single deal we want to do, you know, an appraisal. We want a scope of work as far as what their budget and construction is going to look like.

[00:19:45] We want to know the occupancy status, right? Is it vacant? Is it occupied? We want to know location. So right away, first thing is we look at the address. We go on Google maps and we see the location. If you see a murder in the building or in a property, just a couple of days prior, we have a bunch of questions like, Ooh, what's going on here.

[00:20:00] Right. But let's, let's face it. I mean, a lot of our borrowers today, they're buying these tertiary markets where there is a lot of high crime and there's a lot of bad things happening. So we recognize that because guess what? We were in that same space as they were, we were buying. In those types of locations, but also we want to see what the current and future rents are.

[00:20:18] If it's a multi-family, we want to see what the current future rents are. And we also want to do a stress test, right? What would happen to the asset or to the borrower? If you know, a downturn has to happen in the next couple of months. So we always want to stress test it. So one is the asset then is the borrower.

[00:20:33] We want to know what their exit strategy is, right? We want to know what their credit is like, what their track record is and their net worth and liquidity normally on a multi-family deal, five or greater. We want to see a net worth of. Say 10% of the loan size. So we take all of their assets, all of their bank accounts, stocks, bonds, and what have you.

[00:20:54] We want to see at least the total loan size that we're offering them and all liquidity. We want to see at least 10% of our loan size after the cost of buying the project and putting the money down to execute on it. 

[00:21:06] Billy: Got it, got it down. It's sort of process. They take a file. They send it over to everything online with your team or.

[00:21:13] It's also 

[00:21:14] Ruben: majority of what we do today. You know, we have an office here in Queens and we have another office in Midtown. I want to say that there's a in, in the past year and a half, two years, I mean, obviously COVID effect, but I want to say there was a handful of borrowers that have met. majority of the time we do everything over the phone and internet, unlike my hard money lender back then, I do have an email address and I do take texts and so on.

[00:21:39] And so it's a little bit of a different perspective, but you know, as far as documented. Uh, from a borrower, a lot of it can be done online. You know, a lot of it is done professionally through title companies and so on. So we look at not only the title, we want to see the contract. We want to see if it's a refinance.

[00:21:56] We want to see a payoff from the existing lender. If there is any entity docs, photo IDs, and that's basically it on our part, 

[00:22:04] Billy: What would you say some of the pain points are for guys that are trying to land that. I'm not saying with your company, but overall. Like, I, I know what some of my pain points on with the little private lenders, right?

[00:22:14] So the whole process for us with certain lenders is an effing nightmare. They go through the ringer in order to take down the money. And it's certain points. I've had lenders where I'm like, look, I don't even need the money. I'm not paying interest on it. Keep it making me, I'm like a circus animal. I'm jumping through these fricking hoops.

[00:22:32] Trying to get some cash like, so what's your process for having drawdowns for the rehabs? 

[00:22:39] Ruben: So if we could recognize many of the pain points that our borrowers are experiencing. And one of the things that we're looking to implement very soon is having the borrower do the construct of the inspection themselves. So now what we're doing is we're.

[00:22:53] And inspected one of our inspectors that we essentially hire to come out to the property, take pictures and send us a report and it's time consuming. And a lot of times our borrowers don't agree with the report that the inspector had said. We recognize that. And guess what? We hear the complaints. I always try to reach out to borrowers and survey them myself.

[00:23:12] To see what they're experiencing with our company. And one of the things is, like you said, is the construction job process. So what we're looking to do very soon is actually implemented procedure where the borrower can do the inspection themselves on their phone. There's going to be a device, an app that they're going to be actually downloading on their phone and doing the inspections on their own and sending us the reports.

[00:23:33] On their own. So it's going to be a lot more simpler and easier and faster, and there's not going to be any dispute of, well, this was done and this wasn't done, or what have you, because of all, I was going to be doing it themselves. 

[00:23:43] Billy: So I'm assuming something with that. It's going to be, geo-coded where they can't commit.

[00:23:47] Exactly exactly where they're at location. Okay. Exactly. Exactly. It's going to pinpoint exactly where they are. Yeah, exactly. Okay, good. So what are the pain points your company, other companies do, do you think rehabbers are experiencing with lenders such as yourself? 

[00:24:05] Ruben: I can tell you right off the bat, first thing is track record.

[00:24:08] So, you know, we always offer leverage based on the borrower's track record. If they tell me they've done 10 deals in the past, I'll go up to 90% of their purchase price. But when I asked them for the 10 addresses that they've done, or at least, you know, send me five out of the 10, I don't need all 10. Five is, is good enough for me, for, for me to give you 90%, guess what?

[00:24:27] A lot of times that five or that 10 doesn't exist. Right? They're like, oh, but you know, it was just a broker here. I wasn't really involved. They just kind of help, you know, make the deal happen. I guess what that 10 deals not only turned to five, but now it turns to one.

[00:24:43] Or sometimes none. And they're like, yeah, but I'm a licensed real estate agent or what have you. And we need to see a track record with, they were personally involved in the deals and, you know, as much as we express that to the borrower, when they tell us it's 10 deals as experienced, You know, sometimes it doesn't check out exactly how the borrower will told us who will.

[00:25:01] And as a result, we have to reduce the leverage. and that's a big pain point. Not only for us, but for the borrower, because now, you know, they're under the gun for pressed, with time to close. And it takes us some time to kind of confirm that it's not 10, it's not five, it's only one. And as a result, it kind of creates tension.

[00:25:19] So what we always try to express our borrowers is, Hey, be truthful, be honest. Tell us exactly where you are because not only will it make things easier for us, but also for you and for our relationship for long term. 

[00:25:31] Billy: It makes sense. I mean, if you know, you can't bullshit anybody these days everything's documented out there.

[00:25:39] Yeah, it's craziness. It's absolutely nuts. So what it comes down to to make these deals happen, I just lost my train of thought for a second. I had a question, but when it comes down, to doing deals with you, everything is just online. They submit the files over everything's on the written you good, right?

[00:25:54] Exactly. Okay. So I want to flip over to your, how your organization structure. I know you said you have, you have Manhattan, you have Queens, what's your structure like how many people do you have in your organization that are doing, you know, work. 

[00:26:07] Ruben: So pre COVID, we were all in the Queens office. We own two buildings on the block and we occupied both of them.

[00:26:14] Right, eventually with COVID happening a lot has changed. So what we've done is we've actually started hiring people, off shores. So we have people off shore, just collecting documents, communicating with Barbara to make sure that we get what we need to start underwriting. So as a result, we were not only able to reduce our expense in terms of salary and cost, but also make sure that people are working almost 24 hours a day.

[00:26:39] They're always, you know, one thing I can, I can tell you is that people in outside of America, when you're hiring. They value you. They want to make sure that you're happy with their services. Unlike some people here in the states where you're paying them 150,000 a year, and it seems like they're doing you a favor by working, but essentially, you know, we, we have the team off shore, but we also have our still our office in Queens where I, and my partners are located.

[00:27:05] I live not too far. So it's very convenient for me. And my sales team is really in the city one. And when I go to the city office, it's very little work that can be done there because every sales person wants to close as many loans as possible. So as soon as you walk in and they're like, oh, the decision-makers here, let's get this approved.

[00:27:21] Let's get that approved and as a result, you can't get anything done. So, so what we do is we work here in the Queens office as partners and decision-makers, and our sales team is in a city office this way. They're easily accessible to any, you know, to the tri-state area. They can go to Connecticut for an event.

[00:27:36] They can go to New Jersey for an event. And so on because there are located in the city. 

[00:27:41] Billy: At smart that you did that breaking up sales and operations is smart because we almost sales guy. And you know, I know how it is. You throw a little bit of place and operations people deal, and you need to be quiet. You need to think you need the folks that exactly.

[00:27:56] Ruben: No, I look, I get the salespeople. I was a loan officer myself back in the good old days. So I get it. They want to close as many loans as fast as possible. And they're always under the gun, just like our borrowers are 

[00:28:06] Billy: how many people you have any sales department?. 

[00:28:08] Ruben: So collectively offshore and in the states, I would say it's about 18 or 19.

[00:28:16] So we have an outbound call center off shore. And we also have our loan officers here in the states that, you know, make sure that they're attending events, they're meeting with borrowers face-to-face and so on. 

[00:28:25] Billy: Got it. And then on your operational side, what's the structure there? How many. 

[00:28:29] Ruben: I would say about six people, uh, six or seven people.

[00:28:33] Um, a lot of them are just collecting documents. They're processing documents. They're making sure that they get what we need. And then the others are underwriting putting a final stamp of approval. And the other set is making sure that we're placing these loans on our lines or selling them into capital secondary markets.

[00:28:47] Billy: So where yourself and your partner is for you at the point now where you're not looking at loans, you've got to delegated the underwritings. 

[00:28:53] Ruben: So one of my partners, who's also my cousin, he's still involved in every single loan. He made sure that he puts his final stamp of approval on every single loan, because you know, a lot can happen no matter how well you train the people when it's not their money, they don't really take it as serious, as much as I love each and every one of them.

[00:29:11] But when it's your money on the table and at risk, I think you take it a lot more serious than, than the other worse. And so my brother is still, my cousin is still very involved in every single loan. 

[00:29:21] Billy: I think that's what, I mean, you need somebody on your team, that's on the executive team to do a final review because they 

[00:29:27] Ruben: absolutely absolutely all the time and he has an eye for it.

[00:29:31] You know, he's very good at what he does. He's very, very detail oriented. He's very focused and he can pick up on any small trend and say, you know what? This is a red flag. This looks fishy. This something just doesn't add up here. Um, let's investigate. Let's make that call. Let's, let's send out that email or whatever it is.

[00:29:48] And he's very good at it. So I'm very proud of how he's been working recently. And, and I think that, you know, with the way he's been kind of focused, it's going to help us grow a lot quicker and scale because that's really the key here for us. 

[00:30:00] Billy: So Ruben, and this is tons of really good information for guys that are starting and guys that want to start to grow.

[00:30:06] I want to now get into how, cause you've only been doing this for four years. How would the. Structure yourself to get in, to switch from acquisitions, sales over to we're going to start a private money company overnight and launch this thing. Like, what did you do? Take us through the mechanics, like the, what did you do in order to get there?

[00:30:26] Ruben: So, you know, originally when we started, We Lend, we started this. You know, as a joke, shits and giggles, let's see if this works. Not as a joke. Well, like it was like a side business. Let's see if it works. We have couple of, couple of dollars laying around. Let's let's put it to work and then eventually it just blew up.

[00:30:41] Right. It just, it it's scaled. And because of our viewpoint at the time where we didn't take it as serious as we should have, we were always kind of trying to chase the snowball that was going down that hill because we didn't set up the right systemazations and foundation. Thankfully with COVID. We were able to do that and set up the processes and systemazations, and the technology that we need to be able to not only execute as quick as borrowers expect us to, but also make sure that we're protected on our end.

[00:31:09] But to answer your question, the way in which we really started is literally from our phone, we had a network of, you know, investors who are also our competitors in this space, who we always stayed friendly terms with no matter what, you know, whether they took my deal somehow and kind of undercut me here on the company, there were also.

[00:31:28] Right. So, you know, because of our ability to keep relationships ongoing, regardless of whether they were competitors or not, it helped us turn these competitors into borrowers. Um, so I always sell, you know, a lot of the people that asked us, how did you scale? It was literally picking up my phone and calling my competitors and saying, well, I'm in the lending space now.

[00:31:46] And this is what I do. You know, I would love to do some of your deals. I know exactly what you do. I know exactly who you are. I feel comfortable lending to you. Why don't you take my money. And, you know, and helped us because not only were we able to lend to them, but they were also influencers in their, in their areas.

[00:32:02] Right. So they were able to. Influenced their partners or their friends or their networks to start borrowing from us and ever from there on it was just, we never looked back. But also for us, a huge factor was social media, a lot of private lenders, like I said, in the past, they they're old school. Right.

[00:32:19] They're just on the fax machine world. Um, they didn't understand what social media was all about, but we were on social media from day one. You know, we grew our social media, uh, tremendously. I think there's still a lot of room for growth and, you know, believe it or not, I. Every single time where we're even on tick-tock, you know, what private lender is on Tik Tok, you know, and I think just last night I was looking at it.

[00:32:40] I think we have like a little shy of 20,000 followers on Tik Tok site now. Yeah. Yeah. So I think it was not only the combination of our network and our good relationships with our existing, you know, borrowers, who were at that time, our competitors, but it was also a huge part with social media. 

[00:32:56] Billy: Yeah.

[00:32:56] So that explains the trajectory of how you guys took off. How did you. How did you handle the backend on the funding side? Cause I'm assuming you didn't come in with yourself and your family having a $50 million fund. So, right. So walk us through, what did you do? You said you went to that conference and you figured out this is a thing you want to do.

[00:33:17] Did you start utilizing warehouse lenders? Like what did that whole process. 

[00:33:21] Ruben: Exactly. So we had a warehouse line. We also had, you know, we, we developed a number of relationships with institutions that were helping us in funding, the loans where they would participate with some portion, we will participate in another portion.

[00:33:34] It was syndicating loans together, but also selling the paper. So not only where we fund the loans ourselves or with these syndicators, but we were also able to sell the paper relatively quickly sometimes. You know, two weeks now it's a lot quicker because our volume has grown. So we have to sell a lot more, but it was just a combination of those three things.

[00:33:52] Now, by doing that, you know, a lot of times we get this question as to why did you do that? If you had enough liquidity to fund these loans and not have to syndicated with other institutions, It was because we needed. So there was a learning curve we needed to learn how to underwrite loans. So, you know, although we did have the liquidity to be able to fund and sell a hundred percent of our paper, we still wanted to syndicate with people who have done it in the past, because guess what?

[00:34:15] They were able to educate us on the. That's so back then, when I started flipping, you know, many years ago, I did it first as wholesaling because I needed to learn this space. I needed to learn how to, how to work, what to look out for, what to kind of avoid and so on. And I did the same thing here. I crawled before I walked in, walked before I ran.

[00:34:34] So that was the key for us.. 

[00:34:37] Billy: I love it, brother, August stuff, information. So listen, somebody out there, they want to leverage We Lend. How do they get in touch with you online? What do they do to start some? 

[00:34:47] Ruben: They can reach out to us at 2 1 2 7 7 7 7 7 8 0. They could shoot me an email directly@rubenatwelendllc.com.

[00:34:58] They could also visit our website www.welendllc.com. And you can also go on any social media platform, including Tik Toc. And find us at We Lend LLC. 

[00:35:09] Billy: Fantastic, bro. Really appreciate you coming on today. Ruben you've been in interview. Good, really good, good stuff to put list. 

[00:35:17] Ruben: Appreciate it man. 

[00:35:18] Billy: Thanks again, bro. 

[00:35:19] Ruben: You got it.

[00:35:22] Billy: Thank you so much for listening to today's episode of unstoppable real estate investing wealth. My mission is to give you my listeners, the blueprint for success inside of secrets for starting growing and scaling your real estate investing business, you could experience. Unstoppable lifestyle. I've been simple for you to catapult yourself success.

[00:35:45] Go to billyssecrets.com. That's B I L L Y S secrets.com. And there you will find every single tool tip trick strategy system and spreading. You used to make millions of dollars. Everything my team uses and my guest use all in one place for you to tap into, you could start, grow and scale real estate investing business.

[00:36:11] I really hope you implement what you're learning. I hope you utilize these tools, tips, tricks, strategies, and secrets, and I hope to see you on the next God. Bless bye-bye.