Are you ready to unlock the potential of your real estate investments with innovative financing? Dive into the world of real estate financing with Kevin Amolsch as he unveils the secrets behind successful real estate investments. Listen to the full episode to learn how to navigate the challenges of today's market.

Key takeaways to listen for

• [05:05] Kevin’s journey from Army service to real estate investing and how it laid the foundation for his success
• [09:53] How Pine Financial Group's flexible financing solutions provide unique funding options in volatile markets
• [13:22] Marketing strategies and tips to turn market challenges into opportunities
• [16:57] Why patience and proper liquidity are crucial for real estate investing success
• [38:28] A transformational project where Pine Financial Group converted a dark safeway into a thriving fitness center

Resources mentioned in this episode

• The Pine Report
• Rich Dad Poor Dad by Robert T. Kiyosaki | Kindle and Paperback

About Kevin Amolsch

Kevin formed Pine Financial Group, Inc. in 2008 after leaving a small mortgage company as the senior loan officer for residential lending. Kevin has a degree in Finance, which he obtained after serving four years in the US Army. Kevin started out in banking, working at First Bank in the lending department while in school. From there, he started his first real estate investment company, which is still active today.

Connect with Kevin

• Website: Pine Financial Group
• Email: kevin@pinefinancialgroup.com

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Links referenced in this episode:

• thepinereport.com
• pinefinancialgroup.com

Links referenced in this episode:

• thepinereport.com
• pinefinancialgroup.com

Mentioned in this episode:

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Kevin Amolsch: 00:00:41

When we do have an appetite for commercial, we do 65% of the stabilized value, no loan to cost ratio, which makes us very unique. You don't typically see that. So you could literally buy and do your construction and we'll fund the entire thing.

So it eliminates the need for syndications and partners. Your 12% rate instead of half the deal.

Neil Henderson: 00:00:59

Welcome to truly passive income. I'm Neil Henderson.

Clint Harris: 00:01:02

And I'm Clint Harris.

Neil Henderson: 00:01:03

ormed Pine Financial Group in: 2008

Kevin's got a degree in finance, which he obtained after serving four years in the US Army.

Kevin started out in banking, working at first bank in the lending department while in school, and from there he started a real estate investment company, which is still active today. We could go on. I don't want to do the whole bio here, Kevin.

So what I find fascinating, I always love talking to veterans and how they transitioned into real estate investing. They've got all sorts of crazy stories. What initially sparked your interest in real estate?

Kevin Amolsch: 00:01:42

Yeah, that's a good question. And I go back to the, my time in the army and I was very frugal, always have been raised that way.

So when you're in the military and you're living on base, in the barracks, you don't have expenses. So I have, my food was covered, my housing was covered, everything's covered, right?

So I'm not spending any money, I'm not making very much, but I did have a little savings going and it's like, what? What am I supposed to do with this? I didn't have any idea. And I knew the bank rate wasn't going to get me where I want to go.

So I just started reading books, you know, and I picked up that purple bible that we all have readdez. That one led me to another book and then led me to another book. And everything I was seeing is real estate is the tool to make people rich.

This is almost like a guarantee. So I just really focused in on that. And I tell you, after that first deal, I just fell in love.

I knew that this was going to be the path to my wealth.

Clint Harris: 00:02:29

So what was that first deal? And let me back up and unpack something.

So we see a trajectory with a lot of real estate investors where especially young people, they start out wholesaling because they don't have money.

And then eventually, if they have success with that, they start flipping or someone starts watching HGTV and they decide they want to flip house, and everybody stumbles on the first one or two, but then they finally start getting success. They realize they're trading time for money and eventually get to the point where they want to hold rentals long term.

Eventually, they get to the point and realize that single families is a very slow way to do that.

ly, and a lot of times over a: 2030

Kevin Amolsch: 00:03:22

Yeah, Clint, I love how you describe that, because that is a very common way that people go through their career, right? So for me, that first deal, I was just bought a house, moved into it, and rented out the bedrooms. What do they call that? House hacking.

Now, that wasn't a thing back then, but I was house hacking before that was a term, and I moved out of that.

You know, I actually used my student loans as a down payment on my second house because I had the military paying for my school, but they still offered me loans.

So I took that at whatever it was, one and a half percent, and use that as a down payment, bought my second house, and then I kept my first one as a rental. I was 23 years old and I had a rental property. So I actually got super lucky because I had a lot of success with that first one until I didn't. Right?

ppreciation. This was back in: 2001

I saw the tenant paying off my mortgage for me. So I was like, yeah, this is why I wanted to pursue real estate as an investment. I went in hard.

Like, I spent pretty much all of my spare time literally calling people on the phone and as I walked between classes in college, just calling for rent by owner, for sale by owner, anybody that showed any signs of possible motivation or wanting to liquidate their property, and I was setting up meetings, one on one meetings with them in their home on the weekends. So during the week, calling weekends meetings, and I was buying one or two houses a month without any cash or credit. Right.

I literally, my refrigerator, you guys, my girlfriend came over and she makes fun of me for this, but I had a can of green beans and a keg of beer. I didn't have money, right. But I was able to buy the house or two a month.

And what I learned through that process is the financing side of real estate is where my passion is. You guys are active investors, so you know this.

When you're out there shopping deals and negotiating and sending in your lois or your offers, it has everything to do with how you're going to take the property down, right? Are you going to ask for some owner carry, are you going to ask for some concession? Whatever it is, it has everything to do with the funding.

, and this is where I landed.: 2006

2008, I started Pine Financial. And here we are 16 years later, and it's just been an absolute blast.

Clint Harris: 00:05:46

So let me ask you this quick answer, and then I'll ask a follow up question.

Basically the equivalent of driving for dollars and making those calls and doing those deals, is that what created your formed your decision to go into finance, or was that of the other way around, that as you, you fell in love with finance throughout the process of getting your degree?

Kevin Amolsch: 00:06:05

I fell in love with financing because of the real estate side. But it wasn't the cold calling. Right. That sucks. Let's be honest with ourselves here. But it did get me in the living room, and that's where it's fun.

When you're actually trying to solve somebody's problem and make a profit doing it, it's just a negotiation. It's like you're just massaging the terms. That's where I fell in love with it.

Clint Harris: 00:06:24

I love that that happened at a young enough age that you could make the decision to get a finance degree.

A lot of time, people figure that out the side of real estate investing that they love after they've got a marketing degree or pursuit of music or whatever it is. And that kind of happened at the same time where you were able to get a degree and pursue that passion as a career.

t you saw in the marketplace,: 2006

Tell us a little bit about that, and tell us about what Pine Financial group does and why you created it and what need it fills.

Kevin Amolsch: 00:06:55

Well, the need, I was an investor, right? I was in the trenches.

I was fixing and flipping, and I was doing lease options and subject to, I knew there was a need for money for investors, especially leading up to the crash. I mean, things were starting to get tough there, and the need was some flexibility in funding.

So we created that by raising capital and we took control. I mean, I say we. I was. It was really me. I knew that being a mortgage broker was terrible because I was at the mercy of the bank, right.

I was just brokering their money. It wasn't my money. I didn't make any decisions, and guidelines were changing so quickly.

So I discovered that if I can get control of that underwriting and make common sense underwriting decisions, I could really get control of my business. And so that's what I did. And it really helped real estate investors. I'm an investor, so I focused in on that niche. That's where we went from there.

Pine financial. I can't remember the second part of your question there, but I could tell you that Pine Financial makes loans to real estate developers.

So if you have any type of value additive, that's. We're involved. Pigs and flips is the big one. Burr strategy, we were doing that before. That was a term also.

But the buy and rehab and refinance, we do a lot of that, and then to some extent, we're in the commercial space. About 20% of our portfolio is commercial value add similar to what you guys are doing. That's the funding that we provide.

Neil Henderson: 00:08:10

You've talked about how funding makes the deal. That's a nuance that a lot of inexperienced investors miss. You make money when you buy, but part of that buy is the funding.

You're either buying it for cash, which is the simplest form, or you're buying it at the right price and you're getting the right funding. So talk to us a little bit about what you mean by that. Unpack that a little bit.

Kevin Amolsch: 00:08:35

Well, I mean, this is the perfect time to be talking about this, because, look, higher for longer, right. We have interest rates that are six, six and a half percent in the commercial space, and we have cap rates that were floating at five and 6%. Right?

So now that's what creates what we call negative leverage. Negative leverage, for the listener, is when the return on the asset is less than the leverage.

So your loan payment, your loan interest rate is higher than the return the asset is producing. And what's very interesting about negative leverage is the more money you put down. Your bigger down payment creates a higher cash on cash return.

Well, that's not how real estate's supposed to be. You're supposed to limit your down payment to produce a higher return. So, literally, you take more risk, you get a less return.

So it's very interesting. The time that we're in right now.

I'll tell you what, when you see interest rates rise, like, we have that change, that's the terms of the loan, right? That's the terms of the money. You could have owner financing terms, you could have private money terms, you could have bank terms.

This is just a term of the loan. And when the interest rates go up, cap rates don't always go up as quickly.

So what it does is the cap rates slowly start to increase to catch up to those interest rates, which brings the values of the properties down. Right. So you're bringing, you're buying properties at a lower or better value because the terms of the loan are not as attractive.

When those rates go back down, that helps real estate values. Right. Then you'll see the values go back up because cap rates will come down.

Neil Henderson: 00:10:00

That's what a lot of people miss. That's been the struggle that a lot of the commercial space has been in lately is with that rapid rise in interest rates. Cap rates.

They took a long time, and a lot of those owners that were holding those properties and thinking about selling were basing their values off of six months ago.

Kevin Amolsch: 00:10:19

A comp.

Neil Henderson: 00:10:20

Right, a comp. And now the buyers are coming in and going, I can't make this work at these new interest rates.

And a lot of those owners are going, well, I'm not backing down. And so then the property just sits and sits and sits.

And then eventually, as you said, the cap rate starts to catch up, starts bringing that value down. And now it meets that point where the opportunity reemerges.

Kevin Amolsch: 00:10:40

Yeah. And you'll see those cap rates start to soften.

bly coming down over the next: 1218

Clint Harris: 00:10:56

Mentioned fix and flips, and you also mentioned Burr strategy.

So obviously, both of those are with the burr, you know, there's a refinance coming, and with the flip, there's a recapitalization coming by way of liquidation.

So is this like DSCR type money that you will hold on in terms of the term, longer term for rental properties, or is there always some kind of recapitalization that's part of the business plan in terms of a flip or a BRrRR or refinance, whatever it may be? So kind of what products are you guys offering? What kind of terms are we talking about?

Kevin Amolsch: 00:11:24

I want to touch on the DSCR, because you mentioned that, and I think that's such a weird term. So DSCR is debt service coverage ratio. It's a ratio that underwriters use to manage risk or evaluate risk. Right? So if there's a.

To keep it real simple, most banks are looking for like a 1.25 DSCR on the commercial side, which means for every dollar, 25 in income, net income, a dollar of that is allowed to go towards the mortgage payment. So 125% of the loan payment in net income. And that's how banks stay safe. So all it is, is a ratio. But all of a sudden now we have a DSCR loan.

That's the name of the loan. All that is is a ratio. It really doesn't make any sense. But for the listener, what a DSCR loan is, is basically a stated income loan.

You're looking at the income from the asset, not the income from the guarantor or the borrower. It does help with these smaller single family duplex, small multis. It helps with funding them if you're not able to qualify at the bank.

And so these are typically private type lenders, maybe family offices or hedge funds that have some more flexibility with their underwriting. And they're willing to hold that paper on their portfolio. They don't sell the loan off into the secondary market. So they keep it. Right.

So that's what the DSEr that you're describing is. We don't do DSCR loans because we're a short term value add lender. DSCR is typically turnkey, so it's already producing income.

Otherwise you wouldn't qualify for the DSCR. So everything we do is short term. Let's add some value to the real estate and get out. So, brrrr, great because you're refinancing. Flip.

Great because you're selling.

Neil Henderson: 00:12:59

So you're doing brrrr loans, you're doing rehab loans, just short term value add. What does a typical term look like on a pine financial group loan?

Kevin Amolsch: 00:13:09

I totally skipped over that question, Clint. I'm sorry. You did ask me about the terms. So we're looking typically a nine month loan, unless there's like some major value add.

Like if you're adding a big extension or, you know, doing a pop top or something where you're adding two square footage. If it's just a regular fix and flip, nine months. Okay. And we're typically two points, 12% interest only. We do like, payments every month because.

Two reasons. It applies pressure which means you move faster and you end up making more money.

And then if there's a problem, we know immediately because you're going to miss a payment. So we do require payments. Nine months, two points, 12%. That's very common.

Clint Harris: 00:13:45

Let me ask a question. So what's the longest if it's a heavy, heavy value add? The reason I'm asking is obviously selfish.

Like we buy old K Marts and grocery stores, we convert those to climate controlled storage. On average, it's going to take us twelve to 15 months to build it out.

We have in house construction and build it out, well, it's worth a lot more when we're done with that. And you technically could refinance then if you wanted to.

But from there it's going to take 18, sometimes 24 months, depending on the size of the facility, to fill it up. Now it's cash flow positive at 40% occupancy. And this thing's going to be a monster cash cow on the back end.

But now we're talking about a couple years, right? A couple years of basically interest only payments is the financing we're currently getting for a larger project like that.

Is there a product that you guys have or a timeline or is that just kind of out of your niche and you guys have, you know, what you're good at and you do one.

Kevin Amolsch: 00:14:33

Thing I mentioned, we're 80% resi, 20% commercial. So on the commercial side, we're actually on a pause right now. So I'm just going to be real transparent with you guys.

We're not taking on any new commercial because we need to properly allocate our portfolio. With that said, when we do have an appetite for commercial, we do 65% of the stabilized value, no loan to cost ratio, which makes us very unique.

You don't typically see that. So you could literally buy and do your construction and we'll fund the entire thing.

So it eliminates the need for syndications and partners and it's, you know, your 12% rate instead of half the deal or whatever you share with your private money guys. So typically it's a lot cheaper to bring in debt instead of equity. 65%, two and twelve.

And we would go up to two years, and then we would have to discuss like a renewal or some type of fee, something like that.

Clint Harris: 00:15:21

Okay, follow up question. This is probably going to be a little bit off the beaten path for most of the questions that you get asked.

And if we need to redirect, we certainly can. But I want to ask this question from a capital raising standpoint.

So I'm a general partner in syndication, Neil, and I do the investor relations, which in our opinion, means investor education, and then talking about goals and see if there's alignment there.

Our job is to raise the capital that we use to go buy these projects, do the construction, and convert them into climate controlled self storage facilities. Now, when you started Pine financial group, obviously you're becoming a bank.

So when you are becoming the bank, what does it look like behind the scenes in terms of how did you raise capital for that? Are you continuing to raise capital for that, or, like, the funds that you guys are lending?

You're obviously holding them in house because these are very unique deals. Where's that capital coming from?

Kevin Amolsch: 00:16:09

the story. When I started in: 2008

So it's hard to raise money when you're just getting started. So the way we did that is one individual private money investor, one fix and flipper, and I just brought them together.

And then that way, the pitch was, look, you're in first position, you're lean, you can see your name in the public records, all of those things.

d our first fund. That was in: 2009

Right. But to get going and actually start bringing in the capital from private investors, it really is education.

So I love that you said that you educate your investor base. I think that's huge. And that's, first of all, it helps them, right? It helps you, and it makes you credible, so they will want to invest with you.

So that's exactly how I did it. We didn't have podcasts back then, but I was literally standing in front of a room of 20 people and teaching them how to flip houses.

And then I, at the end, I'd say, if anyone has money and they don't want to actually do the work, let me know. I could help you with that. You just, I guess, snowballed from there. Now, this is like an actual industry, private lending. It wasn't back then.

I honestly, I felt like I invented it. And then I went to a private lending conference, and I was like, oh, my God. I'm like the smallest guy in this room. Everybody's doing more than I am.

So that was very humbling. But now it's an industry and there's institutional money coming in. So I mentioned family offices, hedge funds, all of thats true.

You could package private loans up and sell them off like you would do with Fannie and Freddie. I mean, Fannie and Freddie is not your buyer, obviously, but you could package them off and sell them off to investors.

And then theres banks coming in and offering guidance lines. So now we pledge loans and we get banks to invest in.

Us got about a little over 30 million in bank money and then 160 or so in private individual investor money. Wow.

Clint Harris: 00:18:07

Okay. That's really cool. I love how that was kind of organic, grassroots and growing it out from there. So that's really impressive.

The economy has a lot to play here. Right. I understand you're doing short term loans. The thing about short term loans is you're only making money when the capital is deployed. Right?

When it's back in your hands, it's sitting on the shelf. That money has to get up and go to work every morning, whether you know we want to or not. Right.

And I love the idea of your money making more money for you. That having been said, like, how does that play in terms of the return for you guys when the economy's up or down? Right. There's always opportunity.

I'm a firm believer that you can operate in any market. The deals may just change a little bit. I spent a 16 year career in medical sales. I started investing in real estate on the side.

I followed the trajectory that a lot of people do and eventually ended up in multifamily properties. I was converting to Airbnb and I got burned out on that.

And as I was looking for the most passive investment strategies that I can find, ultimately, when I talked to the old successful people, it was three things. It was hard money lending and note lending. It was mobile home parks and it was self storage.

I chose to go the self storage route because I liked the idea of renting people a box of air and I was burned out on tenants, so I didn't want to do mobile home parks. The hard money lending side, obviously you have to have money to get started from that side and I obviously didn't have that at the time.

But that money is only earning a return when it's out there.

And we have had some people that were doing hard money lending to fix and flippers recently that decided to invest into Nomad self storage deals because they're more consistent and it's more of a timeline. So is this kind of one of those things that like the market's up and markets down.

I certainly know people still flipping houses right now and having a lot of success with it. The deals have changed and I think things have changed for some wholesalers out there as well.

ou saw, like what happened in: 2008

Between: 2010

So I was paying cash for them one at a time. And it's a very slow way to go ahead.

I know that I personally think we're in a little bit of a recession right now, whether anybody wants to admit that.

But compare what we're seeing now and if you're seeing a slowdown compared to what was happening in the market back then and what that does to your return as a lender.

Kevin Amolsch: 00:20:34

o I went back and I looked at: 2008

l. Look, this doesnt resemble: 2008

What it does resemble is the aftermath of the savings and loan crisis. So if you think about what were experiencing now, its a fight against inflation, right? The governments fight.

To win that fight, you have to put the economy in a whirlwind. I mean, so youve got to create chaos basically in order to get inflation down, which is exactly what happened after the savings and loan.

e's a lot more resemblance to: 1990

eal estate. Take eight aside,: 2008

ly go down at some points. In: 1990

And then I wrote a report about that to share with everybody because I get asked it all the time. So thepinereport.com dot, you can get that report for free.

But coming back to your question about the market and how we navigate that, look, I agree with you, Clint. You can make money in every single market. Now, I get asked constantly is this a tough time for you? And I guess statistically it probably should be.

We have high interest rates, so that makes our leverage higher, our margins smaller. You have low, low inventory pretty much across the board, definitely in the markets we work, which creates thinner margins for fix and flippers.

You know, if there's not a lot of inventory, then owner occupied buyers start buying wholesale type transactions. Right. They're willing to spend more on a beat up house because there's nothing else to choose from. So that drives wholesale prices up.

But retail prices sort of have a ceiling. It takes a little while to get through that ceiling. So all that does is shrink the margin. Right. So this would be a tough time.

anks aren't lending just like: 2008

We've seen that with Silicon Valley. And two, we know regionals are starting to get purchased. So now the bigger banks are hoarding cash so that they can go out and grow.

So they don't want to loan out money because they want to meet deposit withdrawal requirements or demands, and they want to maybe acquire banks. So what do they do? They tighten guidelines. They stop lending money. So guys like us benefit from that.

ook, I've been doing it since: 2006

I started investing in: 2001

Clint Harris: 00:23:38

Robert, I love that because youre really loosely tied to the banking industry. Youre walking alongside them, and it matters.

But really, when youre an alternative lender, its probably hard to pedal your product when youre at ten or 12% and the banks are at three or three and a half. Right. That's tough. I'm sure that there's a difference.

But, like right now, not only did interest rates go up, but the loan to value and loan to cost went from 80% to 65 in some cases, especially on the commercial side. So anytime that there's volatility like that, I see the situation where that definitely makes you more appealing.

It's like, well, why don't I just pay a few more percentage points and just do this with a private lender and do it separately from there and pay interest only for a period of time. And we got to keep it going. You got to keep the crews working. You got to keep flipping houses.

So instead of jumping through all the hoops with the banks or the banks are freezing lending right now, its like, you know what?

If I can find good enough deals, I would rather just pay a little bit more for the funding because I know Im going to be out of the project in six to nine months.

Kevin Amolsch: 00:24:37

Robert, all of thats true, and I agree with everything you just said. And youre focused on the pricing. Right. But what about the house thats falling off the foundation? Do you know a lender that will do that?

What about an apartment complex that is 100% vacant? Are any banks looking at that stuff now? You need alternative sources to get those stabilized, right.

You got to fix that foundation so you can get it rented out or sold. You got to get the occupancy up so a bank will want to touch it. Now, that's not every bank.

Some banks are value added and they will look at that stuff, but typically that's not.

Clint Harris: 00:25:05

I love the fact that you guys are also focused on the LTV and not the LTC, right. The loan to value versus the loan to cost.

So that you're allowing people, if I'm understanding this correctly, capital for the purchase of the property and the renovation, because you're looking at the ARV, the after repair value. So if you're buying a property for 50 grand and it needs $20,000 worth of work, you're into it for 70.

But if you look at it, you're like, the after repair value on this property is 120.

Then you'll give them 65% of that, which is going to be more than enough needed for them to buy the property, fix it up, and then when they sell it, that extra 35% of equity basically is their profit margin.

Kevin Amolsch: 00:25:45

Yeah, you got it. And I said 65. That's on the commercial side, on the residential side, because those assets are more liquid.

Like, it's easier to sell a house than a Kmart. Right. So we go to 70% on those. So 70% loan to ARV, no loan to cost.

So in your example, if that house is worth 100,000, we'll loan up to 70, buy it for 50, 20,000 in construction. We'll fund the whole thing.

Clint Harris: 00:26:09

Heard it here, folks. Listeners, that is zero money down investing the easy way. You're going to get rich overnight. Super easy. Call, Kevin. You're going to make a fortune.

Kevin Amolsch: 00:26:21

Yeah, that's funny. You know, all the books tell you you're going to get rich in real estate, which is true. I think it's pretty much guaranteed.

If you're in it long enough, you will get rich, but you have to be in it long enough. It really isn't a get rich a get rich fast. It's a get rich, but it's kind of slow. It's just like a guarantee, I think. Stay in it long.

Long enough and you will be wealthy. Guarantee it.

Clint Harris: 00:26:39

Yep, that's true. It's a forgiving asset class. Even if you buy a deal, that's not a good deal. If you wait long enough, time usually turns it into a good deal. So.

And it's funny, those, you know, when you do those single family homes, I was buying small multifamily and converting them to Airbnbs, which changes the asset class, changes the formula drastically, pushes up the value. We're doing the same thing now. Just buying nasty old Kmart buildings, converting them to storage. It's the same thing. It's just a couple more zeros.

So the lessons that you learn on those smaller properties are the same lessons you use later.

A lot of times, the relationships that you make early on are the same relationships that you'll use later on, which is why it's always good to be ethical and transparent with everybody.

And even if the people you're working with can't help you with what you're working on, it's likely that they know somebody else in terms of the way that you guys are vetting your operators.

Like, if I'm a fix and flipper, you know, my first fix and flip that I did, I was supposed to make 30 grand and I made eight, I believe seven or eight sounds about right.

Kevin Amolsch: 00:27:37

Yeah.

Clint Harris: 00:27:38

Yeah. So then the next one, I was supposed to make 50. I think I made like 26. Then the third one, we made 85, which was the number that we were hitting for.

Right. We got there, but everybody takes it on the chin for the first couple, which I understand.

Luckily, if you're at 70% loan to value, you got 30% wiggle room there for you guys still to be able to get out of it and get your money back out.

But how are you vetting operators and picking the different people that are working with you, and how are you looking at the properties in underwriting and making sure it's something you really want to be in first position of?

Kevin Amolsch: 00:28:11

Yeah. And you hit that. We're looking at the asset first. So 70%.

We want to make sure that that's an asset we can handle, which we didn't talk about this, but we're pretty geographically focused on the residential stuff because we want to be able to get in and complete the fix and flip if we need to. So we're highly focused on the asset as far as the borrower or the guarantor. We care about reserves most.

By far the most important thing is your liquidity. We just talked about no money down financing, which is true.

You don't need money to close on the deal, but that doesn't mean you don't need any money. And everybody goes over budget. Pretty much everybody. Our best clients go over their budget. Okay.

It doesn't sell for as much as you think it's going to. That's pretty common, and it takes longer. So you said you only made eight and you were expecting what you say, 35 or something. That's very common.

I mean, even experienced investors will see that. So you probably went over your budget a little bit. Right?

So if we had a budget of 50, and that's what's in escrow to release to you, to you do your construction and you go over that, you have to fund that, you have to make the payments. So we just want to make sure that there's a little bit of liquidity so that we're all being smart and safe.

Outside of that, experience is important to us. Now, you don't need to be experienced necessarily yourself, but we want somebody on your team helping you that has experience.

So whether that's a realtor, a mentor, somebody that could help you through your first project or two, that's also important to us.

Neil Henderson: 00:29:34

Now, Kevin, the title of this podcast is truly passive income. And we've spent the last 30 minutes talking about the benefit that Pine Financial group provides pretty much to active investors.

And Clint's pretty much just been picking her brain because he's selfish and wants to. Wants to know this stuff, which is fine, but I want to understand the benefit.

You said you have family offices and you have retail passive investors who invest with Pine Financial Group in order to get a return. How does that work?

Kevin Amolsch: 00:30:01

Yeah, so we don't actually have family office investing with us. I mentioned family offices because they're in the industry. They are investing in this asset class.

Most of ours is just high net worth, but it doesn't have to be. So we have a public fund, which is pretty rare in this industry.

It's a reg a and all that means is we could advertise it, and we could accept non accredited investors. That's the distinction between a Reg A and a reg d. Reg D is a private offering, and now because of the jobs act, you're allowed to advertise.

But it's accredited investors only, and you have to go through this qualification process with them and all of these things. So we do non accredited or accredited, and it's a flat 8% return.

So it's not your syndication, like investing with you guys, where you're probably much, much higher than that. But it is consistent and it is cash flow, and it's going to be every single month.

So it's one of those things that help diversify portfolios into some consistency.

Clint Harris: 00:30:54

. Are you guys able to accept: 1031

Kevin Amolsch: 00:31:02

Yeah. The answer to the second part of your question is yes. A lot of investors do that. In fact, IRA investors, very common.

We have a lot of IRA investors, because it does compound. The first part of the question is tough. This is when I get asked frequently, Clint, and here's the problem. We're lenders, not investors necessarily.

Like, I invest my own, but Pine Financial is a real estate lending company, not an investment company. So we don't actually own the real estate.

and, like, how do we get this: 1031

ion, but no, we're not taking: 1031

Clint Harris: 00:31:49

It's not because that was kind of my question about can you replace the debt? And you're pooling money together. So, like, the only way to do it would probably be with attendance in common.

If you're pooling the money or a Delaware statutory trust.

And I have come to learn that anytime the words Delaware statutory trust come up, you better slow down because you're likely to be getting into a gray area. And if you want to keep doing what you're doing for a long time, it's best to avoid the gray areas. There's some pitfalls there.

So I was selfishly asking to see if that was something you had navigated yet.

Kevin Amolsch: 00:32:20

, they probably know, but the: 1031

And this is so because it's paper investment, not a real estate investment. That's where we're getting tripped up.

Neil Henderson: 00:32:30

Kevin, can you talk about a specific project that you funded that had a significant impact on either Pine financial group or the community that it was in?

Kevin Amolsch: 00:32:40

Oh, that's a good question. I've got several that come to my mind. The first one is in Colorado, down south near Highlands Ranch.

If anybody's familiar with Colorado, it was an old, dark Safeway. And similar to what you guys are doing. They're converting the big box into something else.

And interestingly enough, this was right when Covid was hitting, and they had a vasa fitness, and they were actually already starting their build out. The demising wall was in, and they were starting, their tenant finished. So the lease was signed and everything. And then it was also a swim school.

So it converted a Safeway into a Vasa fitness and a swim school. And then Covid hit and Jim's like, we're going out of business left and right because you can't go work out right.

So Voss ended up paying a million dollars to break that lease. Swim school stayed in, and then it ended up going to, I think it's a planet fitness now.

So it still went the fitness route, but that changed the community, because a dark Safeway, as you know very well with what you do, is terrible for the neighborhood. And so now we have a thriving community and, you know, a seven figure income for our client.

Neil Henderson: 00:33:40

Well, listen, Kevin, we could sit here and talk for another 2 hours. In the interest of your time and our time, I want to thank you for sharing your knowledge with us and our audience.

Any of our audience wants to reach out to you and find out more about you and Pine Financial group. Where would be the best place for them to do that?

Kevin Amolsch: 00:33:57

Yeah, thank you, Neil. I think the best thing for the listeners to check out that report, because we are in interesting times right now. So it's the pinereport.com dot.

And there's actually your two reports on there, the market one which I think is super important. But also, if you're interested in private lending and you want to be safe, like, if you're out there on your own, you can make more money, right?

So by all means, if you want to do that, but be smart about it. So I wrote a report to help keep your money safe. Those two reports are@thepinereport.com dot.

Otherwise, you could reach us at pine Financial Group.com dot.

Clint Harris: 00:34:27

Excellent. Thank you, Kevin. Appreciate that last thing. And we're absolutely going to hold you to this. When's the next rate cut coming?

Kevin Amolsch: 00:34:36

It's so interesting because they're saying September, right? But that's right before the election. So I don't know that that's really going to happen. It is priced in now, in September.

So the expectation is that, I don't.

Clint Harris: 00:34:47

Know, it's going to raise some eyebrows if they do.

Kevin Amolsch: 00:34:50

I think it's 50 50, right? It's a 50 50. The market thinks it's more like 80% or something.

Clint Harris: 00:34:55

Way to take a stand. Thanks, Kevin.

Neil Henderson: 00:34:56

I appreciate, actually, it's funny because I just heard yesterday that Trump reached out to Powell and asked him to not, of course, before the election. Of course. Now that puts him in a position of, you know, it's what a mess.

Clint Harris: 00:35:10

What a world.

Kevin Amolsch: 00:35:11

I did not hear that. That's interesting.

Clint Harris: 00:35:13

Anyway. Yeah, yeah, I read the same thing. Hey, Kevin, listen, I appreciate it. I love what you're doing.

Thank you for your willingness to come on and educate our listeners. So thanks so much for your time. I appreciate it.

Kevin Amolsch: 00:35:22

Yeah, I appreciate you guys. Thank you.

Neil Henderson: 00:35:23

Thank you so much for listening and watching the truly passive income podcast.

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