In this episode of Money Talk with Tiff, we dive into the world of slow flips with guest Scott Jelinek. Tiffany Grant sits down with Scott to unravel the concept of slow flips, a unique strategy for flipping properties for the fastest path to wealth.

Scott shares his journey into slow flips, the pitfalls he experienced with conventional rentals, and his innovative approach to creating wealth through real estate. He breaks down the process, addresses questions about vetting potential buyers, and offers invaluable tips for anyone interested in getting started with slow flips.

Tune in to explore this fascinating approach to real estate investing and gain insight into a strategy that's turning heads in the industry.

About Our Guest

Scott Jelinek is a successful entrepreneur and real estate investor with over 30 years of experience in the industry. His passion for entrepreneurship started at a young age, and he started his first business venture at just fifteen years old. After serving in the army, he turned to real estate and has since completed over 800 deals, establishing himself as a leader in the field.

Scott's "slow flip" investment strategy has allowed him to own 158 houses and generate a steady monthly income without the typical landlord headaches. He is a creative investor who buys houses without money or credit and turns them into long-term investments. He has shared his knowledge and expertise through teaching seminars and classes, helping others achieve their financial goals through real estate investing.

As a full-time real estate investor, Scott has gained extensive knowledge and experience in the industry, which he uses to coach and mentor other investors. He is passionate about helping others succeed in this lucrative field. He is trying to empower as many people as possible to set themselves free through real estate investing.

Connect with Scott

Website: slowflip.com

Twitter (X): @scottjelinek123

Instagram: @scott_jelinek

Facebook: Scott Jelinek Coach

Connect with Tiffany

Website: https://www.moneytalkwitht.com

Facebook: Money Talk With Tiff

Twitter: @moneytalkwitht

Instagram: @moneytalkwitht

LinkedIn: Tiffany Grant

YouTube: Money Talk With Tiff

Pinterest: @moneytalkwitht

TikTok: @moneytalkwitht

Timestamps

[00:00] Introduction to Slow Flips with Scott Jelinek

[02:15] The mechanics of Slow Flips: buying and selling properties

[05:30] Scott's transition from traditional investing to Slow Flips

[09:45] The pitfalls of leveraging and the power of owning free and clear

[12:20] How to handle defaults and protect your investments

[15:00] Top tips for getting started in Slow Flips

[18:10] Vetting buyers and understanding lending discrimination laws

[20:50] How to access Scott's free book and connect with him online

Key Themes

• Slow Flips: Property investment strategy for wealth building.
• Financial Resilience: Recovering from real estate market failure.
• Mortgage Strategy: Short-term buy, long-term sell approach.
• Risk Management: Balancing leverage and paying off mortgages.
• Seller Financing: Operating like a bank, not a landlord.
• Property Vetting: First come, first serve approach, minimal criteria.

Additional Links & Resources

• Making Money Through Real Estate With Andray And Maisha Stroud | Ep. 74
• Zillow
• FHA Loans | HUD.gov / U.S. Department of Housing and Urban Development (HUD)
• VA Home Loans
• Using Hard Money Lenders As A Real Estate Investor

Support this Podcast

Copyright 2024 Tiffany Grant

You know what it is. That's right. It's time to talk money with your

money nerd and financial coach. Now, tighten those purse

strings and open those ears. It's the money talk with Tiff

podcast. Hey, everyone. I'm

so excited because I have Scott Jelenick on the line now. Scott is here to

talk to us about a concept that I've never heard before. And so I was

curious to have him on. And that is slow flips. So, hey,

Scott, how are you today? I'm doing fantastic, Tiffany. Thank you for

having me on. Yeah, thank you for coming on. So, let's just

hop right into it. What is a slow flip, and how did we get

here? So, we only have 2 hours for this podcast,

so I'm going to give you a short version. But slow flips are

basically, it's flipping a property as slowly as possible for the

fastest path to wealth. What it actually is, is

we buy low end properties with short term

mortgages and we sell them. So there's two sides, a buy side and a sell

side. Then we sell them immediately on long term

mortgages. So we don't operate like a landlord, we operate like a bank.

So we pay them off in five years, and yet we sell them on a

30 year mortgage. And I know that's a real short version because

I'm trying to make it brief for you, but we buy properties on five year

mortgages and we sell them on 30 year mortgages. People always say, we buy them

like a car and we sell them like a house. Interesting.

So what made you get into slow flips? Like, how did that even come

about? So, to give you a short version, once again,

I've been real estate investing since 1994, and I know that makes

me feel really old every time I say that. And I did conventional

rentals, I did the burr method for years and I was all over it and

I loved it until the bust. And then I got crushed.

And after I got crushed, I had 84 houses going into the bust, and

I had 84 mortgages, and I got crushed, and I lost about

55 of them to foreclosure. Well, as I was

recovering from that, I started seeing there were still people who were doing really

well. When everyone else got busted up and went back to their jobs and went

back to their previous lives, they were still people doing really well.

And I started paying attention to what they were doing different and

what they were doing different, which goes against what everybody teaches, and it

goes against everything I believed at the time. But they owned everything free and

clear and I was wholeheartedly against free

and clear. I knew everything. They taught leverage, leverage. Leverage, right. And

all of that, and I was all about it. But then I learned they were

crushing it, even during the bust, when everyone else went out of business. So we

were at an interesting time where houses were at the best price they've ever

been. But I had no credit left, I had no money left, and I had

no way to buy them. So I had to come up with a plan to

be able to buy them with private money, but not hard money because I couldn't

pay them off in four or six months. So I had to get amortized

loans. And so I basically did the math on what's the quickest I can pay

these off and not have a balloon, just actually pay them off. And that's where

we came up with the five year plan. But then also in doing

rentals, as I'm sure you know, the expense on the maintenance was

outrageous. And so I was coming up with a plan on how could we no

longer spend that money, which is where we came up with the sales side of

the slow flip. We call it kind financing, where we sell it with long

term owner financing. So these people can put three to five grand down and

have a monthly payment and never have an increase in their payment and never have

to move, and they're paying it off just as if they got a loan from

a bank. Very interesting. Very interesting. Now, I want to back you up a little

bit, because you threw out a lot of jargon, and you probably didn't

even notice, because this is your talk, but I want to back it up for

the audience just in case we have people listening. That's like, what did

he just say? So what is hard money? So

the difference between hard money and private money? Hard money is typically people,

hard money lenders are typically in the business of lending money. That's what

they do. And they will loan it to you if you're, like, flipping a

house. Everybody talks about all these books you read and the courses and everything

says you can do real estate with no money. And they are correct. They're

100% correct. You can do all the deals in the world you want with no

money. It doesn't mean no money transfers hands. It just means it's not

your money. So typically, you would use a hard money lender, which is an

individual who's lending his own money. And it's called hard money because it's

expensive. So they'll lend their own money, but it's very short term.

Typically, it's for six months. And that gives you enough time to renovate it, put

it on the market and sell it, and then pay back your lender. Private

money is just individuals, and this is my definition of private money.

I know some people say they have a private lending business, and I'm like, well,

then you're not really a private lender. You're a business lender.

So to me, a private lender is an individual that you

cultivated. You met them, you cultivate them into being a

lender. They might just have money in their 401K, in their IRA, sitting

in their bank account, earning 2%, and you're giving them an opportunity.

We pay 12% on our private loans, so we're giving them an

opportunity to make a higher return secured by real estate. They're not in

the business of lending money. They're just somebody that we cultivated and are giving

them a higher rate of return than they were making in their other avenues. Got

you. Okay. So we got hard money out the way. Private

lenders out the way. What is a balloon? So a

balloon would be like, I'll give you, for instance, if it was an interest only

payment, say it was a five year interest only. At the end of five

years, the full balance is due. That's the balloon. The entire amount

that was borrowed, or the entire amount of the balance is due in full

at the balloon. The way we do it, we amortize them so that there is

no balloon. At the end of our 60 months, it's paid off, it's

done. And I kind of came up with that because I started thinking,

houses got so cheap at the bust, and houses were 30 grand and 40

grand. And then I'm looking for money, and everybody's talking about

30 year mortgages, and I'm like, wait, I buy cars for 50, 60, 80

grand, and it's a five year note. Why would a house have to be 30?

And so that's when I kind of went back and did that math, and I

said, you know what? We're going to make it five years and suffer for five

years, but then be free for the rest of our lives. That is a really

good point. And I'm glad you brought that up, because when you go to social

media, there's a ton of people that

say, why would you pay off your mortgage? Leverage, leverage,

leverage. Use that equity to buy your next property, and so on and so

forth. And it sounds like what you learned in your

process was that can crumble really quick,

depending on how the economy does. And so you're taking

this slow flip approach where you're like, you know what? I want to pay it

off as fast as possible, then turn around and sell it to someone

else and be that bank for them. And then that's how I'm going to make

my money. So I think that is really interesting. And go ahead.

So it's interesting because they're not wrong. And this is where I try

never to have the argument with somebody who still loves leverage and debt because they

are not wrong. I have 178 houses now. I have

109 of them are paid off. And so, so many times people will be

like, you know, if you can just pull that money out, you could buy so

many more. And they are not wrong and they're completely right. But it's all

predicated on the fact that everything stays going well.

And the problem is, if it doesn't, and everybody's like, we're not going to have

another crash like 2008. I'm like, well, that's great, but if we do, I'm

too old to start over again. So if nothing ever goes wrong,

then they are correct. You will make more money going that route. But if

something does go wrong, I'm going to be the guy buying all the crap you

lose to foreclosure because that's the way it's going to

go. And if nothing goes wrong, you're going to laugh at me and say, oh,

I could have made so much more if I went that other route. But only

time will tell what ends up happening in the future. Yes, and I love

that perspective. So with these loans,

so you're turning around and you're selling them to

people acting as the bank. What happens if someone doesn't

pay? How does that work? Or has that even

happened to you? Oh, it happens. I mean, that's part of the business, part of

any, even a bank. No matter how well you vet anything, people are going to

default. So we do them through an agreement for deed. I'm

sure you know what that is. Basically, some states call it a land contract,

an agreement for deed, a contract for deed. And basically it's an

amortized note for 30 years. But the deed does not transfer,

the deed stays in our name. And the way I explain it to people, I

generally tell them when I sit at the table, I say, the way this works

is if you buy a house with the bank, the deed goes in your name

and then you pay for 30 years. If you buy a house from me, you

pay for 30 years and then the deed goes in your name. It's the exact

same end result. So if someone was to default, it's

a regular eviction, as if they were a tenant who didn't pay. We

only invest in states that allow that. Certain states don't allow that.

On an agreement for deed, they would make you foreclose. And so we do not

invest in those states. Okay, got you. So that makes sense.

And I can see how that can protect you

as you're going through this process because that was one of my concerns. I'm like,

oh, gosh, these people, they're probably like, oh, it's not a bank. I can

just do whatever I want and it can land

you in a lot of trouble. So if someone's listening to this and they're

like, I want to get started in slow flips, what are some

quick tips that you can give people? Maybe like your top five

on getting started into slow flips. So before

we even get into the top five, Tiffany, I think I told you, I wrote

a book called the Art of the slow flip, which basically goes over every

part of the process step by step. And I'm going to give a free copy

to all your listeners that want one if they go to slowflip.com

slow. And it goes through everything step by

step. But what I would say if somebody was interested besides reading

the book, because that's the best way to wrap your head around it, is first

off to pick your market, because we do lower dollar properties.

And sometimes when people hear the numbers I talk, they're like,

you're out of your mind. These houses don't exist, right? And when I say lower

dollar, I'm talking $30,000 houses, 40,000, $50,000

houses. So depending on where you are, a lot of areas that's like, you

can't buy a garage for 30 grand, right? But there are entire

states where there are thousands and thousands of properties available for

17 grand, 25 grand, 30 grand. So my

first thing I would tell somebody to do is to pick your market.

And by doing that, you can do it right on zillow, just pick a market

and then put in a sub 50,000 and see what comes up.

Now, some states you're not going to find anything. And some states you're going to

find an abundance. And then this is the part people don't like. I

always tell people, look at 100 houses before you ever even think about making

an offer. Because if you do that, then you know what a good deal looks

like. Otherwise you're so used to houses being 300,000, you

see one for 30 and you race off thinking it's a good deal and then

you find out later on it should have been 20, but you don't know because

you only looked at that one. Right? So pick

your market. You want to make sure that it's a viable market. And

the way we do that is we'll run test ads to see

advertising, a similar house, similar price points, and see the response

rate just so that we know if there's a demand in that area for

what we're offering, and then that's it. Then you close on it, then we market

it for sale. We get it sold. Most of my houses I have never seen

in my life. The ones in my local market, obviously I've seen

those, but I buy them in several states that I've never even been to. And

we get them filled. I have zero vacancies. They get them filled typically

in hours because there's such a high demand for what we offer. And

that's it. I mean, it's not a challenging business because we're not landlords. We

operate like a bank. Very interesting. This is so

like, first of all, thank you so much for the free books. I'm definitely going

to get one because I'm so interested in what this is about and how this

works. But you have dropped so many gems. I'm

like, where do I even begin?

Okay, here's a question I have when you're vetting people

for these properties, what does that process look like?

So are you checking credit scores and

all those different things? What does that look like? So I'm going to tell

you two answers. So I train and teach a lot of people, and I always

tell them, we're all adults. You can change and do whatever it is that you

like, right? But I can tell you what I do is I do first come,

first serve. And the reason I do that is, first off, I started buying

in 1994, and when I started buying, there was a thing called non

qualifying assumptions. They did away with, I don't know if you remember them, they did

away with them in 87 for FHA and 89 for VA. But anybody could take

over the mortgage with no credit, no job, no anything. They just had to work

a deal with the seller and it was like a sub two, but with the

bank's blessing. Well, I started my 1st 20 houses were all

non qualifying assumptions. And so when I sell, I kind of feel

like, well, I got to start that way. Why am I checking someone else's credit

when nobody checked mine when I got started, right. And so I don't check

anything. I do it 100% 1st come, first serve. And the

second reason I do that is so that nobody can ever say

anything. There's a lot of laws regulating, obviously, discrimination

and stuff like that. And so by doing first come, first serve,

you do not have to even think twice and worry about it because you're

accepting the first person who comes with the down payment. And

it's a challenge. A lot of people don't understand the laws with

discrimination laws. People think like, if you made a listing

and you had ten applications, you as the owner feel that you can read all

ten of them and pick the best person, right? And you feel like, well,

I got ten applications, I'm going to read all ten and pick the one who's

best qualified. But actually, the way the law works, it says you

have to have a minimum acceptable criteria, and then you have to accept the first

person to meet that minimal acceptable criteria. And so a lot of people

don't realize that, and they take the best qualified person, which technically is

discrimination. And so I try to avoid all of that

by doing first come, first serve. First person to put the money in my hand

is the one who gets it. Got you interesting. And I did not

know all of that. You gave us a great historical

background of how the lending industry

works, and now I'm like, I definitely need to get this

book and learn more about this process. So can you give us that

website one more time? And also where people can find you

if they were interested in connecting with you. So the

website where you can get the free book is slowflip.com. That's

slowflip.com. And where

you can find me is everywhere. I'm on all socials just under my name.

So I'm on everything from TikTok to the new threads

to everything in between. And it's just under my name. Scott

Gelinick. What? You're on TikTok? I'm on

everything. That's awesome. Well, I will make

sure that I have all of that information in the show notes, so please

check it out. And check Scott out because I feel like I've never heard

of this before, but it's an, like,

I'm over here. Hmm, interesting. So I will check

it out as well. Thank you so much, Scott, for dropping so many

gems in such a short amount of time. I'm like, my head is

spinning with everything that I need to go and look up. But thank you

so much for coming on the show today. Thank you for having me, Tiffany. Have

a fantastic evening. All right, you as well. Bye bye.

Thank you for listening, joining and being a part of the Money Talk with TIFF

podcast this week. You can check Tiff out every Thursday for a new

money talk podcast. But if you just can't wait until next week, you

can listen to previous podcast, past

episodes@moneytalkwitht.com or

follow TIFF on all social media platforms at

moneytalkwitht. Until next time, spend wise

by spending less than you make a word to the moneywise is

always sufficient.