Unlock the secrets behind one of real estate's most dynamic strategies with Peter Russell. From navigating the challenges of wholesaling to pioneering the game-changing double-closing model, Peter’s story is a masterclass in turning obstacles into opportunities. So, if you’re curious about how you can leverage these insights for your own investment success, this is the episode for you!

Key takeaways to listen for

• [07:16] What wholesaling is, how it works, and the typical challenges new wholesalers face in the industry
• [15:57] How wholesaling evolves into a more systematized and potentially passive business model over time
• [19:12] The double closing strategy and why institutional buyers have shifted toward this process
• [22:32] New laws affecting wholesalers in South Carolina and how to adapt to these changes
• [33:25] Things you need to know about the operations and future of Velocity Advantage Capital

About Peter Russell

Peter has over eight years of experience running a wholesaling operation that has completed over 500 transactions across multiple markets nationwide. Throughout his career, he has utilized various sources for transactional funding and discovered that the process was often overwhelming, with funds coming at a significant cost. 

To address this challenge, Peter founded Velocity Advantage Capital, aiming to empower real estate investors to take control of their deals and protect their profits. With the constantly evolving regulations surrounding wholesaling, the need for a reliable source of transactional funding has never been more crucial. Velocity Advantage Capital offers a hassle-free process and competitive rates for double-close funds.

Connect with Peter

• Website: Velocity Advantage Capital
• Instagram: @peterussell.official

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Peter Russell: 00:00:42

When you start out and when you get things going, it's not, it's the opposite of passive.

You're in it and doing anything and everything you can, and one deal after another, you cash out on that deal and it might be a good payday, but then you have another one that you have to get to. So eventually you work on the business, grow the business, where you're not involved in the day to day.

Neil Henderson: 00:00:58

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

Clint Harris: 00:01:01

And I'm Clint Harris. And today's guest is Peter Russell with Velocity advantage Capital.

So we had the pleasure of meeting Peter at one of our alternative investing mastermind groups a couple months ago. Was very intrigued by what he's up to and the scale and the direction that it's headed. So excited to have him on.

Peter Russell, he's a real estate expert.

He's got eight years of experience in wholesaling, which I don't think we've talked about before on the podcast very much not a passive strategy, but we'll get into that. He's completed over 500 transactions across multiple markets, grossed over 90 million in sales.

He obviously realized some of the challenges in transactional funding, especially some of the headwinds that wholesaling has been heading into recently. And he founded Velocity Advantage Capital, providing innovative solutions to help investors protect the profits through double closing.

So a lot to dig in there, Peter. Welcome to truly passive income.

Peter Russell: 00:01:51

How are you doing? Great. Thanks for having me on.

Clint Harris: 00:01:53

Yeah, absolutely, man. Excited to have you here. So before we dive into what you're doing now, which I'm certainly no expert, I talk about real estate a lot.

My wife would say too much, but there's not a lot of things that I haven't heard of before at all. And ive heard of double closings before.

But when we had a chance to meet a few months ago, the way that youve put things together and structured it, I thought was very unique. And there were several things that I had not heard about before.

So why dont you tell us a little bit about yourself, your background, a very brief overview of wholesaling, and then we can talk about the way thats changed recently and some of the headwinds youre facing into with that sure background.

Peter Russell: 00:02:34

Like you touched on before is I've had started about eight going on nine years ago, actually next month in September, co founded a wholesaling operation. At the time it was an operation, it was just two guys trying to figure it out.

I'd heard about wholesaling through a friend of mine who's actually posting little videos on Facebook. Years and years ago, before Instagram was kind of big and that sort of thing.

But he kept on talking about how he was getting houses, just cheap houses, under contract and wouldn't have to buy it, wouldn't have to flip it, wouldn't have to go the traditional route of a fix and flip, and he would get it under contract and then assign it over to somebody at closing and get paid for it, whatever that difference was. So he was posting and was a little bit intrigued by it and he kept posting, posting. So eventually I just reached out to him.

I said, tell me a little bit more about this, because I always thought with traditional real estate investing, you had to have a bunch of money or a rich uncle or somebody that was involved or a license or whatever it may be. I thought there was a big barrier of entry. So it always just kind of scared me. And he introduced me to wholesaling.

He would have a monthly meetup and event, and I went to one probably a few weeks later, and I sat down at a table and people from every different sort of background that you could think of were at that table and they were just before the event kind of started just discussing deals and throwing numbers around where to them it was nothing. But they're like, yeah, I'm going to get a $20,000 assignment fee on this deal, or I might make 30k on this one.

And I was just like, man, what is going on here? So dug into it. I learned a lot from him right away. I started going to YouTube University.

Sean Terry was kind of the big guy back then before all the other gurus and other people stepped into the scene. So just started deep diving in, learning as much as possible, as quick as possible.

My business partner and I, we worked together at a sales and marketing company.

Wed get up really, really early, like 435 oclock in the morning and either go put out the bandit signs that we buy houses signs on the side of the road, or leave little sticky notes on properties that look abandoned. Looking back on it is funny because nobodys probably going to go there and read those notes and call a number.

But eventually we started to get some traction and we started to do probably three or four months into it, did our first deal from there. You just kind of learn how to market a little bit better, where to put your time, your resources into.

But a wholesale deal is literally getting a deal under contract with the seller. Usually they're motivated for one reason or the other.

They're behind in taxes or they're out of state or the property was left to them in an inheritance and they don't really have a use for it, or they just can't really sell it the traditional route, you know, they're not going to put a bunch of money into it, fix it up, hire a realtor, that sort of thing. So you get in front of that person and say, hey, I'll work with you on it. I'll take it as is. I'll cover closing costs and close on it.

Within a few weeks, you get a contract with them, and then at that time you have some buyers, or you go out and find buyers. A flipper that has a crew has the experience. They just don't have the time to go find the properties and you put it in front of them.

And whatever you have it under contract for you, let's say it's $70,000, and then you have it to them for $90,000. They're going to buy it and then they're going to put 30 or 40 into it and then turn around, maybe sell it for 200.

So you are more of, it's definitely real estate, but it's almost more of a marketing thing where you are just marketing, trying to get in front of as many people as possible that you can work with, that you can help, and then at the same time you have these in buyers lined up that you put the properties in front of. So you're kind of like a middleman.

So started out that, and then just one thing led to another and started building up a team, an acquisition person, a dispo person, a transaction coordinator, that sort of thing. And just over the years, my markets, I live in Charlotte, North Carolina, so I've done a lot around here within an hour radius.

But we've also done a lot of deals in Dallas and Houston, Texas.

We've done some in Alabama, some in Florida, because once you get a feel for it, you can kind of start doing it almost nationwide or virtually in different markets. And then Covid hit, and that changed things for us a little bit.

But then after that is when the institutional buyers, when interest rates and everything went way, way down and money was a lot cheaper, the institutional buyers came in like big hedge funds and things like that, and we started selling to them. But with selling to those big institutional buyers, they wouldn't allow you to do an assignment for one reason or the other.

You could have everything lined up. You had to literally physically purchase the property and then turn it around and sell it to them on the same day.

That's how I found out about double closings. Is that a necessity for my business?

And that kind of changed the game for me as well, not knowing that that was really a tool and available out there. All my other deals had been assignments.

Assignments are great, but it can get tricky, too, as far as if your in buyer sees how much money you're making and then comes back and tries to retrade on you or something happens at the closing table, whatnot.

So with the double close, you buy it with your own capital or with someone else's capital, and you turn around, sell it to that end buyer on the same day. Everything's lined up.

It's just a much smoother, cleaner process, and it protects everything that you have going on to get that deal and secure that deal.

Neil Henderson: 00:07:52

All right, Peter, a lot to unpack there. And I want to circle back just a little bit.

The podcast called truly passive income, we were talking beforehand about how we wanted to attack this interview. And I love the wholesaling strategy. We mention it all the time, but I want to break down what were talking here.

You started off essentially, youre doing a lot of driving for dollars. Youre looking for deals. Youre constantly looking for deals. Youre looking for distressed properties, distressed sellers in various ways. You do that.

Youre market to those owners somehow to try and get them on the phone and have a conversation with them. You need to know how to negotiate with them, negotiate the sale of that property.

And then you need to be able to find end buyers, which are typically going to be house flippers that have experience of how to flip a house, but maybe not finding those good deals. As we've said, this sounds wildly active. I just want to make that clear for people.

It's not, you know, I mean, you were talking about as the gurus sort of came in, it's often touted as a strategy that someone can get into real estate with no money, and you'll learn how to do it and it'll take no time at all. Now, it sounds like you have built it up to the point where now it's a business.

You've got systems, you've got processes, you've got people handling different systems and processes. So it's become, I would say passive for you, but it's more of a business.

And you're running, you're working on the business, not in the business as much. But is that a fair assessment of everything I just said?

Peter Russell: 00:09:28

Definitely. When you start out and when you get things going, it's not, it's the opposite of passive.

You're in it and doing anything and everything you can, and one deal after another, you know, you cash out on that deal and it might be a good payday, but then you have another one that you have to get to. It's not buy and hold or anything like that.

So eventually you work on it and build it up, get a team around you, and like you were touching on is try to more. So work on the business, grow the business, that sort of thing. Where you're not involved in the day to day. It's a lot.

It's building up business and going after deals and marketing and talking to new people every day, every week, every month, that sort of thing.

Clint Harris: 00:10:05

All right, we're headed somewhere with this. So Neil's right. There's nothing active or nothing passive about this strategy, but we're headed someplace with this.

And I'm excited for to close this kind of whole loop with where we're headed with this. You brought up a word earlier that I think is really important.

And wholesaling doesn't always have the best reputation because of the players involved. A lot of times they're chasing a buck. You're negotiating this value delta. Right. How cheap can I buy it? How much can I sell it for?

And you brought up a unique point of, like, at the closing table, that seller is usually going to see that you're part of the same transaction. You're not closing on the property, you're selling it to somebody for 90 grandd.

You took the assignment from them for 70, and the closing attorney is cutting you a check for 20 grand. And they're seeing that on the settlement statement.

That makes for a pretty awkward car ride home if you came together, which I don't recommend doing. Right. The whole idea is like, it's all getting exposed, and it hasn't always created the greatest reputation. You use the word helping people.

I think that's a really important way to look at this, is that these are people, typically families or individuals or people dealing with health challenges or going into elder care or whatever it may be, that they don't have the 50, 60 grand it's going to take to put into this property to get it up and running. It can be predatory, as is just about any level of business and real estate or personal relationships.

But the reality is the people that seem to have longevity with it come to it from a place of trying to help people. So I'm glad you used that word. And I think it's really important that you keep that in mind.

And you don't paint everybody as one thing or another because the reality is there are people out there that are doing well at what they're doing because they're trying to help people. Now, two part question.

I want to go in the direction of the double closing because that's obviously what leads us to opening up the door to velocity advantage capital. But in terms of.

Quick question for myself, in terms of the double closing, when Blackrock and the bigger groups came in and started buying up properties when money was dirt cheap, why are they doing the double close?

Is that just to get rid of any kind of title issues that may have come up and it was just a way of protecting themselves so they don't get stuck holding the bag of they're actually making you close on the property and an hour later they will close on the property and buy it from you. What was the reasoning behind that?

Peter Russell: 00:12:27

That's a good question.

So I asked quite a few representatives from the different institutional buyers and I never 100% got a solid answer or consistent answer from all of them. One of the answers was, it's just part of their sops. Like they're only going to buy a property from the person that is on title and owns it.

Another one is they don't like to.

If you start showing them the assignments, then it would be an issue maybe down the road for them knowing what kind of spreads or margins that you're making. So I had a few different answers and some different pushback on it.

And then just after a while, it's just like this is the way it is, that we're going to work together, we have to do it this route.

So I didn't get a consistent answer on that, but I think it was just part of their process of, the biggest part of it kind of like what you touched on was they want to make sure it's clean title, they want to make sure it's a legit transaction. And for them to do that, they were most comfortable with buying it for whoever actually held title at that point.

So it could have been for 20 years or it could have been for 2 hours. I think that was their quick and easy way to just say, hey, this person owns it, there's clear title, we're good to go, let's move forward with it.

Clint Harris: 00:13:34

Okay, so golden rule. He who has the gold makes the rules. They just set that up and that's what they wanted. Okay, so talk to me about.

So we've briefly described a double closing, which is exactly what it sounds like. Instead of taking a $20,000 assignment fee at the closing table, you're buying it for 70 grandd and an hour later you're selling it for 90 grand.

And that same closing attorney ultimately is giving you a check for $20,000. But the first seller never sees the second closing statement, so they never know what you're. They walk away and they're happy.

There's no seller's remorse there. They got what they wanted for the property. They didn't have to deal with the headache.

The flipper still knows that they're going to make a 30 40% margin. Whatever it is, they don't know what you bought it for. They're just happy to find another deal and they're going to come back to you for more.

As long as they're getting quality deals that fits their buy box, you're getting your profit. So essentially you are protecting your profit. Nobody knows what you're walking away from, and it keeps your reputation intact.

And ultimately, like the deal was the deal either way. But it's funny when people find out how much you're making, that suddenly their opinion can change. There. That's what a double closing is.

Talk about your geographic location in North Carolina, but close to the South Carolina border. Tell us about what happened in South Carolina recently.

And I may be oversimplifying this, and this is certainly not my wheelhouse, but my understanding is that there was some legislation put in place that created some significant headwinds for wholesalers, specifically in South Carolina.

I think this is a really important time to know that no matter how fast the government changes the laws, real estate entrepreneurs and investors will always be faster and more nimble in navigating them. And I don't think this went 30 days before there was a fairly significant loophole here.

Tell us about what happened in South Carolina, how your geographic location and your knowledge from already handling double closes helped with that, and how that turned into velocity advantage capital.

Peter Russell: 00:15:32

Yeah, so pretty much in a nutshell, it's illegal at this point. It's really mucky muddy waters for you.

Talk to ten different investors, even ten different attorneys, and they'll probably interpret a little bit differently because the law itself doesn't seem to be very clear.

But pretty much if you do an assignment and a wholesale deal in South Carolina now, you run the risk of getting called out in trouble, possibly find their big thing is they dont want anybody marketing a property for sale unless you own the property is the biggest piece of it, and then assignments themselves. Thats still a coin flip as to, if an attorney will even do it for you down there.

So anybody being smart about it, safe about it, is just like, all right, I'm not going to do assignments anymore. I'm going to get this deal. I can't, I'm not supposed to publicly market it, but maybe I have my buyers that I already work with sort of thing.

And now the way around that is to do the double close so you find someone to help out.

And touching on that again, I can't tell you how many times after closing someone's called me and thanked me or even sent letters to the office or stayed in contact years later and then referred us to other family members that sold their property because we really helped them out in a tough situation. They tried to sell it different ways or they just were overwhelmed, didnt know what to do. So that always feels really, really good.

But if you get in front of a seller that wants to sell their property and you get an under contract and you get to the closing table, now in South Carolina, you are running a big risk and youre not supposed to do assignments anymore. So the way around that is in a lot of people.

If you have a proper internal contract for $120,000, a lot of people just don't have that capital just sitting around to fund it themselves, or they're going to have to pull it.

Maybe they have to pull it from their investment fund or their IRA or 401K or whatever it may be, and that ends up costing them how much it costs them to take it out of the market, whatever kind of fees or penalties they would have to pay. So someone like myself steps in and says, hey, I've done hundreds of these transactions.

My background is I'm a wholesaler investor, too, so I know my way around it. And then also a lot of people that do double closings charge a pretty decent amount, one and a half percent, two points on the money.

So I step in and say, I can handle this transaction and I know the ins and outs, I'll work with you on it. And then also my fee is less than 1%. So I try to make that as attractive as possible.

Again, I learned about double closing through a need of myself and my own company, and I use different people for it. And it was just never that great of a process.

It was just double closing to them was kind of an afterthought of, yeah, I'll fund this, but I got to make it worth it.

I'm going to gouge you a little bit with points or you're going to have to do everything for me and line it up, and you're lucky if I fund it on time. The day that you need to. And with the double closing, you have to be very precise.

You have to have everything lined up because that needs to fund two transactions on the same day. Sometimes it's with two different attorneys or two different title companies. So you got to know what youre doing.

You have to be strong in communication.

And my whole thing was, I just want to package this and make it a great experience for investors, for wholesalers, because ive dealt with it time and time again, and then at the same time, I want to bring them back around. I want them to spread the word that its a great process. And also it was affordable. That was my whole thought and got super intentional about it.

I was doing it here and there for about the last 18 months, but the beginning of this year, really buckle down, really set up processes and everything to it, and I'm coming up on 100 of them for so far for this year. And I feel like it's just tip of the iceberg, like just scraping the service, because it's something you can do nationwide.

And people more and more are doing double closings instead of assignments to protect their profits, not just on the sell side, but on the buy side. I've had buyers come to me and be like, hey, last deal, you know, you made 40k on that. Why don't you cut me a little break on this one or whatever.

They'll tell you all day long, you make what you make whatever, it's fine.

But once people start counting money and looking at it, and they're like, this guy just made what I'm gonna make on this flip, that I'm gonna put four months into, they will notice it and that they've verbally told me before, hey, let's work together a little bit. Or, hey, you know, you made a killing on me on the last one, and you're kind of like, I thought you didn't care, right?

But everybody starts counting it, other peoples paychecks and whatnot. So with the double close, like you said, you protect yourself, you protect your profits.

All that time, energy, effort you put into the deal, all the money you put into marketing, nobody really sees that with the wholesaler. They just think theyre getting these contracts, theyre selling them off. Its super easy, but theres a lot that goes into it.

So just like anything else, you want to try to maximize that return. And with a double close, its just a cleaner, simplified process, but you want to have a good experience.

And then you want to be able to have access to that capital for a fair price or better than one and a half or two points because that gets real pricey real quick.

Clint Harris: 00:20:35

So using the same example, you put a property under contract for 70 grand. You find a buyer on the property for 90 grand. Same thing you were doing ahead of time.

I go to Peter and Im like, hey, heres the property, its under contract. Heres the buyer ready to go. This is the ARV. Like, this is the numbers. I want to know what you're looking at and what you care about.

And then how intensive is the underwriting? Like, what is the burden on the wholesaler to provide you with the information that you need?

And then essentially what's happening is on the day of closing, you're providing the 70 grand. They close on the property, they turn around, they sell it for 90 grand, and you're getting less than 1%.

So less than $900 of the 20 grand that they just made, they're cutting you a check for eight, $900, it's going to you and the other 19,000 and some changes coming straight to them. They literally showed up with no money down.

And it protects them from getting their hands slapped or getting fined by going through the wholesaling process, which is now illegal. What do they have to show up with you for you to like, how are you underwriting that deal? And how labor intensive is it for the wholesaler?

Peter Russell: 00:21:42

So this morning, case in point, I had someone reach out to me that hadn't done a deal with me before, and somebody else referred them over to me. They are in Wisconsin and they have a deal under contract. Let's just use the same number for 70. And they have an in buyer for 90.

He's never done a double close before, only kind of heard about it. So he came to me with like, do you have to do a credit check? Do you have to see previous deals I've done?

And the great thing about this is I don't care about any of that. None of that is going to affect the deal that you have on the table right now.

If you have a deal and if you have a buyer, you could be making $5,000, 50,000, $100,000. As a wholesaler, I hope you're making as much as possible, because I know how exciting that is. But my whole thing is I have a simple link.

I have a website you can go to and click on and submit a lead, or I can send over a link to anybody and it just asks for general information, your info, email, phone number, and then the address of the property that you have under contract. And then the biggest piece to it is whoever you're doing the closing with.

We'll just call it the settlement company because it could be an attorney and one say it could be a title company. Another general information, you just submit it, click, it comes through, pops up in my CRM.

And typically when it's the first time I've worked with you, we'll hop on a quick call, I'll answer any questions, walk them through the process, and usually it only takes that one time. And then anytime after that you're submitting that it comes over.

And then I get in contact with the closing company and just start things going on my end.

I asked for a finalized HUD as you get closer to that closing date for the exact amount that's going to be needed to fund that first deal, the ab side. So 70,000 probably turns into about 72,000 because most wholesalers cover the closing costs for the seller.

So whatever that exact amount is, we get that lined up, and then I just let that closing company know I will fund it. Once everybody signed the first transaction, they've signed for the second transaction, and then the in buyers funds are in escrow.

Because I don't go through the steps of putting myself in like a lean position or recording an extra deed because that just bottlenecks the whole process. So on my end, I just make sure everything's lined up. I'm in communication with the closing company, and then everybody signed in.

Buyers funds are in escrow, so it's committed. And then I have a process that I verify wiring instructions through. I use a third party for that. Cause that's another piece to it as well.

You just want to make sure that that's all tight as far as wiring instructions for myself for the closing company. And then on the day of closing, this guy's closing is going to be on Thursday.

Once everything's there and everything's kind of checked off my list, I just wait for the closing attorney to say, hey, everybody signed. Here's a copy of the signed closing statements. And here's transcription of the in buyer's funds in our escrow account.

And then I just wire it over, and then it just bam, bam, back to back. So it's just literally same day. Usually the money's gone out and back within about 2 hours. Two and a half hours is the average for me.

d up on Friday, but we got to: 05:00

ing, nobody was recording. At: 09:00

That's the beauty of it on that end for the double closing as well, is it's not tied up in a project that's going to take 60, 90 days, six months, that sort of thing. Those guys get higher returns than I do, I'm sure. But then you have to underwrite it. You have to see what's going on.

The market can change at any point in time. Housing market, total us economy, that sort of thing.

So the funds I have, my goal is to just keep that in play and just have as many of those going on as possible.

Neil Henderson: 00:25:38

Now, Peter, how are you protected? Because as you touched on, the guys that are maybe holding a little bit longer, they're underwriting the deal.

They're looking at what happens if this transaction goes south after you've funded the purchase of the deal and now the end buyer blows up.

Peter Russell: 00:25:56

Luckily, it hasn't happened yet. That's why I wait till everybody signed and their funds are committed in escrow.

I guess there's still a tiny, tiny chance that for some reason they changed their mind. But for that to happen between the first one closing and theirs closing is very, I mean, they would have to be like right there.

I do also sign up promissory note with the wholesaler saying if anything were to happen, then the next step is we'd have to sell the property, get the funds back, that sort of thing.

But I think the biggest piece of it is just setting the expectation, having all the documents signed and having those funds committed, because every once in a while I will get someone that says, hey, I sold to this guy 30 properties in the past, he's good to go. He's just not going to have the money ready till Tuesday. Can we close it on Thursday?

Seller really wants to close, and I just won't veer from the process of, I understand where you're coming from, been in that same position, but I have to have it like same day, back to back.

Clint Harris: 00:26:49

Yup, got it. Okay, so that is velocity advantage capital.

And it's funny to me how you get a mortgage for 30 years, you have one interest rate, you get a shorter mortgage at 15 years, the interest rate is higher, and then you get a hard money loan for twelve months or 18 months. Its even higher. And then you get a short term hard money loan for 30 days. Its points and its even higher.

But if you do a one day hard money loan, its less than 1%. Its so funny basically how that retracts like that. I think youve obviously identified a really unique need here.

So now lets take the next step in this conversation. We've talked about wholesaling the headwinds and the double close.

We talked about how that helped you identify a problem that you were also facing as a wholesaler. And then you stepped in to provide funding here. You basically swam upstream.

You were one of probably thousands of wholesalers in the country, probably dozens and dozens of wholesalers in north and South Carolina at least. And then you swam upstream from there until as of right now, you're one of very few people providing the capital for same day double close.

And that kind of leads us to velocity advantage capital. And this is where I want to land the plane on the conversation we were having earlier about passive versus active investing.

This is obviously not something that just anybody can do. You can do it because you're a highly successful wholesaler and you built out the systems and the people in place to make that work.

You were there to recognize a need when the legislation changed and you were there to solve the problem. You could solve it for yourself by double closing and capitalizing your own deals. But now you've got to have money for other people's deals, right?

And you're picking up speed. You've done 100 of them so far this year. You did one this morning, you got another one on Thursday and probably some more in between.

So this is what really piqued my interest is that we met you through Dan Pearson with the Pearson Equity Group. We had him in to speak at our alternative investing mastermind. You came in for that.

You guys are working together to put together some capital so that you can continue to fund these deals. This is the reason I wanted to have you on this podcast is I want to talk about where you're at right now.

And then let's talk about where this is headed. Because in my mind, this is early days for either a debt fund or a syndication. This is exactly that.

You have a person who has identified a need, who has put together a business model and is executing a business plan. And you have a bottleneck, I would imagine, and I may be oversimplifying, my vision of what I see as your bottleneck is capital.

If you've got somebody from Wisconsin calling you and you're not pushing this out, you're growing basically through word of mouth, but you're going to have essentially an unlimited number of transactions that potentially could come your way and they're going to get bigger and bigger. I know that you've already been to the point where you had to turn some transactions down, which nobody wants to be at that point.

So the only way through that is you have to have more money involved. And this is a situation where you're not going to get there by making 1% on each transaction and growing it that way.

You're going to have to have a shot in the arm. And in my mind as a syndication operator and as a passive investor, as a limited partner, I invest my retirement funds into passive investments.

To me this screams opportunity both for you and for potential investor partners, because you are going to either attract a big amount of capital in the terms of a fund coming and investing into your business model, or syndicating and inviting other investors in and giving them basically a promised return based upon how fast you can turn the money.

So talk to me about where you're at now in terms of your vision, where your growth trajectory is, and where you're looking at in terms of the recapitalization or liquidity for velocity advantage capital as you take it to the next level.

Peter Russell: 00:31:03

Yeah, I mean you hit the nail on the ED.

Thats exactly where Im Adam in that fun, exciting, but scary place of growth where at times theres more that comes in than I can handle because ive been self funded with my own capital and funding all these deals since I started.

And it is a numbers game where I just want to pump out and offer it to as many people and get as much volume as possible, the three quarters of a point. And I have like a small admin fee that I do on each one.

You're not, unless you're doing multiple of those a day, you're not in it for just the 1% or the less than 1% return. It's definitely a volume play.

But the cool thing and the interesting thing is with legislation in, with just the explosion of wholesaling in the last, you know, five, seven years, there's a ton of opportunity out there. I've sponsored a few events. I've got some affiliates that I've started with some bigger names, but that's just kind of grassroots.

Like you said, word of mouth, talking to people, picking up the phone, building off past relationships. But I haven't. I just started doing some Facebook marketing.

I'm sure in the not too distant future I can run some Google Ads and I can do it nationwide. I just havent at this point because its a capital crunch. Ive had to turn a few down and I hate to do that.

And I dont want to open the floodgates in the faucet and just have to pick and choose or say, I can handle it, or hey, I cant fund this one, but come back to me on the next time.

So with Dan, I met Dan probably three years ago at actually a commercial real estate event I went up to and Raleigh and he was there and he spoke and he was kind of just getting started. His background is he ran a gym or a few gyms.

And then from there he kind of got his way into raising capital and raising funds and that sort of thing. But I talked to him a little bit afterwards and told him how impressed I was just by his presentation.

And hey, I would love to work with you down the road, not knowing where that would come from or that would be, but once I started taking off and I was like, man, I need to raise some money, that's a whole new world to me. I'm not a syndicator. Ive never raised a debt fund before. I have limited knowledge on it. But its always been interesting and fascinating to me.

But my philosophy on it was get in front of somebody that does it, that you like to work with and you respect as a person and then dont start from scratch again. I dont have the ultra wealthy family member to hit up and be like, let me borrow a couple mil and get you a good return on it.

So I reached out to Dan and right away hes like, this sounds awesome. This is amazing. This is really neat. Let's work together on it.

And we are right at the point right now where paperwork and everything is in with the attorney to finalize docs for a fund. We're going to go in for a raise and it's something I could send once it's kind of finalized. We're working on a pitch deck and everything too.

And we're going to do a couple presentations in the next couple of weeks in front of some rooms of potential investors. That's exactly where we're at right now, is raising that capital so we don't have to turn anyone away.

I've had people come to me actually, where they have portfolio of houses under contract that they had a buyer for that they were going to sell, but they needed $2.53 million.

And I was like, thats way above my head right as I go out west and do some deals ive funded some California deals and everything before that average goes from 150,000 per deal up to four or 500,000 per deal. So it jumps up pretty quick.

And I want to be able to work with anybody and everybody that comes across velocity, advantage, capital, and not turning one down and just be able to take that at any point in time, be like, all right, let's start marketing to anybody and everybody and getting the word out. So I'm at that stage where it's a proven concept.

I've done over 100 of them, and I have a great process and everything set up for it, but I want to grow it, but I also need the capital to be able to support that. And that's exactly what we're doing right now.

Clint Harris: 00:34:57

So this is kind of what I wanted to bring home for the truly passive investor listeners is that there's nothing about what you're doing that is passive. In fact, it's very pigeonholed to wholesaling in your background.

But to have success in any type of real estate investing, or in this case, like you're investing into a business, to have success with any of that, it's the same three things that we always talk about. It's time, it's experience, and it's money. You've put in the time, you have the experience, and now your bottleneck is the capital.

So the opportunity is for someone else to put capital into a business model, understanding that they know, like and trust the person they're in business with, and they understand the business model they can put money in. And after that, first upfront vetting, from then on, it's a passive investment.

And so this is like, as a syndicator, I see people in similar situations. Most people haven't taken it nearly as far as you have. But that's the next jump, right?

The next jump to the whole being greater than the sum of its parts. You got a business model that works for a million dollars. Okay, it will work for $100 million. How do you get $100 million? Right?

And then the opportunity lies in. You can go find someone, you can go find a Peter Russell, which is very hard to do, and you can partner there and put money there.

Or you could have the opportunity like a Dan Pearson.

And what he is most likely doing, I'm sure you're going to have a fund, essentially a debt fund that someone could invest in, and the money's getting recycled, and they're earning probably a preferred return on that. And monthly or quarterly cash flow distributions, whatever it may be.

That's very attractive, especially for people probably looking to use self directed retirement funds because this most likely would not incur ubit because you're not taking on any debt. Whole separate conversation to have there. That's probably where I would go when I'm targeting it.

If I was you, that's a big marketing pitch that I would put together there.

I could invest into your fund, or a limited partner investor could invest into a Pearson equity group fund that's going to have 30% of that fund is in velocity advantage capital, 30% is in multifamily, 30% is in self storage, and 10% is in other. Right. And it's diversified, and you're creating your own mutual fund.

There's all these different layers of, you can find an opportunity that you like, you can invest in that opportunity or invest with that person, but you don't have to go all in.

You can also create diversification and spread it out and create some security in your portfolio by being diversified across different assets, different geography, different location, different operators, and different time.

In terms of the time structure, when it's kicking out, like these are kicking out probably monthly or quarterly distributions, but your deal cycle is 24 to 48 hours. That's ridiculous. If it's at the end of the day, maybe it's the next day before it comes through.

But this is kind of where I see the conversation is for our listener base is this is a wildly active strategy that has a bottleneck, and the solution to the bottleneck is capital. That can be a passive investment for those people that choose to go in this direction. So I appreciate you sharing all that.

Is there anything else we need to focus on or where you're headed in the future that we need to let people know about, or any way we can help you push forward with what you're doing?

Peter Russell: 00:38:13

Yeah, I mean, when we get kind of everything tightened up and together within the next few weeks and finalize everything on the fund and have our offering and everything put together, I'll definitely pass that along to you and just put it out in front of anybody that would be interested and hop on a call with myself or with Dan to discuss it even further. That's the biggest thing. I mean, it's just the bottleneck is the capital, the opportunities there.

The great thing about it is it's not a product or a widget that we're like, hey, we put this together and we hope it goes out into the market, performs well. Something that's been going on long before I was introduced into wholesaling, and we'll keep going.

And more and more it's becoming almost a necessity, especially in certain markets that have outlawed assignments and the proof of concept in doing over 100 of them in less than the last twelve months. It's just at a growth period.

So I always say I'm just kind of scraping the surface with it and that's what has me super intrigued and excited about it. I would say this too, being in wholesaling for years and years, it changed my life.

Being a real estate, investing in wholesaling and what its brought to the table and changed the trajectory for what I have going on personally. So ive always kind of looked and wondered how I could in a sense contribute back to that community or back to other investors and have a product.

Im not really a data guy.

Im not a coach or guru in a sense, but with a, this, what I'm really excited about too is like I said, putting together, crafting the double close, the offering for other investors coming from their background in space and being able to almost kind of give back, to be able to offer it at such a great price and that sort of thing and give them a good experience. That part of it is really cool for me too because I feel like I've been able to almost give back in a sense to something that's given me so much.

I've been looking for that for a long time. And then this eventually just came around recently.

And that's another piece of it that's really neat and really cool for me too is to be able to present this to other investors and have those conversations where they're like, oh, this is so easy, or I didn't really know about it, but you laid it out there for me and walked me through the first one. And now that I've done this, I have the confidence to do it on other deals too. So that's been a really neat piece of it.

Just super excited to see the growth of it and where it goes. I would love to in the next 30 to 60 days be doing about five of these a day.

But again, I think ill look back six months or a year from now and just be like, that was a good goal but youre twice as much as that, three times as much as that because the need is definitely out there, as many transactions that happen across the country every single day.

Clint Harris: 00:40:57

Yeah, theres no doubt about that. All right, well listen, Peter Russell, velocity advantage capital. Thank you so much for unpacking a lot here.

Give us educational journey along the way and letting us know what youre up to these days. I'm very excited for you. I'm rooting for you.

So if any of our listeners want to hear more about what you're up to and what you have coming down the pipeline, or if they're looking to fund any of their deals, what would be the best way for them to contact you or find out about what you're offering?

Peter Russell: 00:41:22

-: 8288

And I don't mind people submitting a deal just to kind of get in front of me and just ask questions. I have people submit stuff all the time where they're like, hey, I don't have a buyer yet. But when I do, walk me through the process.

What do we need to do? Or they're just not totally familiar with the double close, so they can call me, text me, submit a lead or a deal.

And like I said, if I haven't worked with them before, I always hop on a call, talk to them directly, like you're going to get me to deal with not just some random person on the team or anything like that, but I think call or text or I'll give you a link to with all my information and everything too.

Clint Harris: 00:42:10

That sounds great. We'll be sure and add that in the show notes. Peter, thank you so much, man. Really appreciate your time today.

Peter Russell: 00:42:16

Thanks, Clint. Thanks, Neil. I appreciate it.

Neil Henderson: 00:42:17

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

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And remember, with truly passive income comes freedom of time, place, and the freedom to pursue your higher purpose.

Peter Russell: 00:42:54

Ha.