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Ep 72 - Unlocking Real Estate Investment Opportunities: A Conversation with Ryan Day from Calvert Mortgage
Episode 72 • 14th February 2024 • The Wisdom, Lifestyle, Money, Show • Scott Dillingham
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Show Summary:

Unlocking Real Estate Investment Opportunities: A Conversation with Ryan Day from Calvert Mortgage

In this episode of the Wisdom Lifestyle Money Show, investor-focused mortgage agent Paul McAllister hosts a discussion with special guest Ryan Day from Calvert Mortgage. Paul has over 10 years of investment experience and currently works at LendCity Mortgages, a company that offers mortgage services across Canada.

00:00 Introduction to the Show

00:02 Meet the Host: Paul McAllister

00:06 Introduction to Guest: Ryan Day

00:10 Paul's Background and Expertise

00:15 Paul's Investment Journey

00:20 Working at LendCity Mortgages

Transcripts

Paul Mcallister:

Episode of Wisdom Lifestyle Money Show.

Paul Mcallister:

My name is Paul McAllister.

Paul Mcallister:

I am going to be your host today.

Paul Mcallister:

I have a special guest Ryan Day from Calvert Mortgage.

Paul Mcallister:

But first who am I?

Paul Mcallister:

I am a mortgage agent.

Paul Mcallister:

I'm a investor focused mortgage agent specifically.

Paul Mcallister:

I'm an investor myself.

Paul Mcallister:

I'm investing for over 10 years.

Paul Mcallister:

I work at LendCity Mortgages who, we do Canadian mortgages

Paul Mcallister:

throughout every province.

Paul Mcallister:

We also do, if you're an investor investing in a Canadian investor investing

Paul Mcallister:

in America, we can do your investment property mortgages as well in, in America.

Paul Mcallister:

So I think that's really what's unique about us.

Paul Mcallister:

I'm really excited for today's conversation with Ryan,

Paul Mcallister:

because I use Calvert a lot.

Paul Mcallister:

And I preach it a lot because some of these products that we're

Paul Mcallister:

going to get into are so unique.

Paul Mcallister:

And really I've seen people grow with these products.

Paul Mcallister:

Brian, introduce yourself.

Paul Mcallister:

Yeah, so just introduce yourself.

Paul Mcallister:

Then we'll get into kind of different things about what you guys offer.

Ryan Day:

For sure.

Ryan Day:

Yeah, I'm really appreciate you having me on Paul.

Ryan Day:

Really looking forward to this discussion today.

Ryan Day:

I know we we were talking about it before the show, but we actually

Ryan Day:

have a deal closing as well too.

Ryan Day:

So super happy that you're a big fan.

Ryan Day:

My name's Ryan, been with the company for just over three years now, really

Ryan Day:

focused on business development.

Ryan Day:

So finding new mortgage brokers, real estate investors, wholesalers flippers,

Ryan Day:

primarily in Alberta and Ontario.

Ryan Day:

Company's been around for over 45 years.

Ryan Day:

So we have a long history managing risks, primarily supporting real

Ryan Day:

estate investors in Alberta.

Ryan Day:

We've been in Ontario for about three years now, and we just see

Ryan Day:

so much opportunity going on in the marketplace, supporting real

Ryan Day:

estate investors and primarily.

Ryan Day:

Helping investors create more real estate stocks, just because obviously

Ryan Day:

we're extremely under supplied and trying to help a solution going on

Ryan Day:

in order to essentially help increase supply through our unique products

Ryan Day:

as most clients buy, renovate and sell or buy, renovate and refinance.

Ryan Day:

So I really focus on just building new relationships and

Ryan Day:

managing current relationships.

Ryan Day:

With top accounts and understanding how we can serve our clients better

Ryan Day:

what we can do in order to prove our service, our value proposition.

Ryan Day:

And to your point, we'd like to think we have some really amazing products

Ryan Day:

in the marketplace, something really unique that I'm super pumped and super

Ryan Day:

excited to get into and Just very thrilled that obviously you have first

Ryan Day:

hand experience using our product, so you could vouch for the service.

Paul Mcallister:

Yeah one, one things that stand out to you is like you've

Paul Mcallister:

been around 45 years supporting investors, which is pretty long time.

Paul Mcallister:

That stood out to me and I know you're Calgary based, but you're

Paul Mcallister:

doing mortgages you're doing loans in Calgary and Ontario mainly, correct?

Paul Mcallister:

Are those the two provinces?

Paul Mcallister:

Yes.

Ryan Day:

Yeah, you got it correct.

Ryan Day:

So Alberta, Ontario, we're looking to go start lending in

Ryan Day:

BC in about, one ish years time.

Ryan Day:

We probably said that a year ago, but we're just trying to manage

Ryan Day:

the really unique flow of, capital.

Ryan Day:

lending opportunities, human resources and processes and systems.

Ryan Day:

We were planning on being in B.

Ryan Day:

C.

Ryan Day:

around this time ish.

Ryan Day:

However, there's just still so much opportunity in the marketplace in

Ryan Day:

Ontario because we've only been in that province for three years.

Ryan Day:

So we're going to really look to grow and expand the Ontario base, primarily

Ryan Day:

lending in major urban city centers, so populations 100, 000 and above.

Ryan Day:

Where we do most of our business is southwestern Ontario.

Ryan Day:

Specifically speaking for the obviously the Ontario province, but we do some

Ryan Day:

Northern Ontario Sudbury, Sault Ste.

Ryan Day:

Marie.

Ryan Day:

We don't do Timmins, unfortunately, just because we find it's a little

Ryan Day:

bit too rural, but those major urban city centers we love landing there.

Ryan Day:

The reason being is.

Ryan Day:

There's just a lot of data to support real estate values.

Ryan Day:

So obviously the larger the population, typically obviously more housing stock

Ryan Day:

and with more housing stock, there's more data points to understand obviously

Ryan Day:

what the value is currently right now and what it could be worth as of complete if

Ryan Day:

a client's looking to flip a property.

Ryan Day:

But general rule of thumb is we lend in populations 10, 000 and above.

Ryan Day:

In Ontario, there, there's some exclusions to that, but that's

Ryan Day:

typically a general rule of thumb.

Ryan Day:

And then in Alberta, most of our business is Calgary based, just because the

Ryan Day:

company's been around to your point, over 45 years, primarily here in Calgary.

Ryan Day:

Do a lot of lending in Edmonton, and then Red Deer a little

Ryan Day:

bit, and same with Lethbridge.

Ryan Day:

So those are the markets we focus on, the markets we're going to be expanding to.

Paul Mcallister:

So for the 100, 000, so you said 100, 000.

Paul Mcallister:

I know it's less than five units and I know the terms you

Paul Mcallister:

want to be less than 12 months.

Paul Mcallister:

So if I have a we have Windsor where I'm from we're located,

Paul Mcallister:

we have an office in Windsor.

Paul Mcallister:

But then we have small towns outside of Windsor that are like 25, 000, 20, 000.

Paul Mcallister:

Populations, you would still lend in those places, or?

Paul Mcallister:

Because I think you said 100, 000, but then you said 10, 000, Okay, so

Paul Mcallister:

it's still in there, it's based on the

Ryan Day:

data, you need data, so it's in the calculations.

Ryan Day:

Correct.

Ryan Day:

Our preference is populations 100, 000 and above, or 25 kilometer radius

Ryan Day:

from those city limits, but as long as there's a population 10, 000 and above.

Ryan Day:

And the property is directly in that city, then we will lend there.

Paul Mcallister:

Sounds good.

Paul Mcallister:

So then I had a deal that just closed a minutes ago, about an hour ago.

Paul Mcallister:

So very excited for that.

Paul Mcallister:

We used, you have a cool pro I guess not product.

Paul Mcallister:

It's I don't know what you call it.

Paul Mcallister:

A pro flip in the flip product, basically for when you're flipping

Paul Mcallister:

houses or flipping properties, or when you are doing the birth strategy.

Paul Mcallister:

And you use Calvert credit, you use, you're lending for the

Paul Mcallister:

beginning and then you have an exit.

Paul Mcallister:

So I know everything is tied to the exit, but I just got done actually

Paul Mcallister:

doing one where the guy's doing a burr.

Paul Mcallister:

So he's buying it.

Paul Mcallister:

He's going to rehab the basement and then he's going to, it'll be two units.

Paul Mcallister:

He'll rent it out.

Paul Mcallister:

Then we're going to refinance it.

Paul Mcallister:

I think we have about a three month timeline to do that.

Paul Mcallister:

I just want to, talk about the Flip Analyzer because I know how to do

Paul Mcallister:

that Flip Analyzer inside Note.

Paul Mcallister:

I really think it's a cool kind of tool.

Paul Mcallister:

Can you talk a little bit about your Flip product and then maybe the Flip Analyzer

Paul Mcallister:

and just how do you view things from your

Ryan Day:

side?

Ryan Day:

Yeah, for sure.

Ryan Day:

Super pumped that obviously you've used the product and

Ryan Day:

you have first hand experience.

Ryan Day:

So that's awesome.

Ryan Day:

Essentially our value proposition for what makes us really unique when it comes

Ryan Day:

to our flip product is number one, we all, in some instances, we're able to

Ryan Day:

fund the deal with as little as 20, 000 down for purchase prices up to 800, 000.

Ryan Day:

So low money down option.

Ryan Day:

And that reason how we're able to do that is because we're taking

Ryan Day:

a look at the after repair value.

Ryan Day:

Not so much the as is value.

Ryan Day:

So value proposition number one.

Ryan Day:

Number two is we do not require third party appraisals.

Ryan Day:

And the reason being is that we have four in house analysts currently

Ryan Day:

right now who are employed by Calvert and they do remote valuations

Ryan Day:

completely for free for our clients.

Ryan Day:

So They typically, on average, value around four to five

Ryan Day:

ish properties per day.

Ryan Day:

So we have a really good pulse on the market on what the HPI is doing for that

Ryan Day:

specific for that specific property type and that specific geographic region.

Ryan Day:

So we have really good data to support our lending decisions in order to manage and

Ryan Day:

essentially mitigate risk when essentially the market's going down in order to.

Ryan Day:

Draw back our lending or obviously increase it if the

Ryan Day:

market's going really well.

Ryan Day:

So don't need an appraisal, low money down.

Ryan Day:

We can fund deals in as little as three business days in Ontario.

Ryan Day:

And how we're able to do that is number one, we don't

Ryan Day:

require third party appraisal.

Ryan Day:

Number two, we draw up all of our own mortgage instructions for the lawyer.

Ryan Day:

And this really helps the lawyer essentially act quickly when it comes

Ryan Day:

to closing the transaction because a lot of the lead ways, a lot of

Ryan Day:

the work is already done and it's very clear direction on essentially

Ryan Day:

what our mortgage documents entail.

Ryan Day:

On that note as well too, we've partnered up with a few around two, two to four

Ryan Day:

law firms that really specialize on quick closing fundings and that really

Ryan Day:

helps the client service as well too.

Ryan Day:

If there are any very time sensitive scenarios where.

Ryan Day:

Clients are, they're in a pickle, they're in a pinch, and they

Ryan Day:

need to close in just a few days.

Ryan Day:

Mortgages are fully open as well too.

Ryan Day:

Obviously this real estate investors love this, not having any prepayment penalty.

Ryan Day:

Having it fully open obviously incentivizes them to be in

Ryan Day:

and out as quick as possible.

Ryan Day:

And not having to worry about any of those, pesky fees when it does

Ryan Day:

come to exiting the mortgage early if it's with a traditional lender.

Ryan Day:

Point number, I guess four, four or five we're on now is It's, we are able

Ryan Day:

to also collateralize other properties completely for free using our evaluator.

Ryan Day:

So let's say, typically real estate investors have a property or two

Ryan Day:

at minimum as long as they give us property photos as of today and

Ryan Day:

a most recent mortgage statement.

Ryan Day:

They would hand that off to you.

Ryan Day:

You would hand that off to our underwriter in house.

Ryan Day:

They would pull comps, taking into consideration what's recently sold,

Ryan Day:

using the direct comparison approach and pull three to six comparables and

Ryan Day:

essentially assign a value to what the property our appraiser believes

Ryan Day:

will sell for as of today on the MLS.

Ryan Day:

And we will lend up to 75 percent of that.

Ryan Day:

In second position, as long as there's an A or a B lender in first position,

Ryan Day:

we don't go behind other privates.

Ryan Day:

And then obviously it's subject to the deal as well too, the property

Ryan Day:

type and the and the location.

Ryan Day:

And the benefit to the client for this is they're able to tap into the equity.

Ryan Day:

property that's currently sitting idle and they're able to get in

Ryan Day:

either number one a higher loan to value on the subject property.

Ryan Day:

So we would advance them obviously the down payment or we can advance

Ryan Day:

some renovation funds or it could be a combination of the two.

Ryan Day:

So we're able to really find create, yeah, we're able to find really

Ryan Day:

creative solutions for our clients with the other app with the other assets

Ryan Day:

that they currently have available.

Ryan Day:

And this is all for free as well too.

Ryan Day:

Like we just need property photos.

Ryan Day:

It's hassle free.

Ryan Day:

Don't need to go and schedule an appraiser in there.

Ryan Day:

I'm currently working with one right now for me personally.

Ryan Day:

And it's just less of a hassle as opposed to doing it the traditional route.

Ryan Day:

Obviously with alternative lending you're going to pay a premium.

Ryan Day:

But we typically find that clients of ours there's a time and a place for

Ryan Day:

alternative lending and having a short term mortgage is one of the needs and the

Ryan Day:

requirements that obviously, as long as you're comparing apples to apples, it's

Ryan Day:

a very situation dependent on when you'd use us, but we'd like to think we have

Ryan Day:

a really unique value proposition for.

Ryan Day:

Low money down, no appraisal, quick turnaround time, creative solutions.

Ryan Day:

And hopefully from your experience, really timely service as well, too,

Ryan Day:

when it comes to replying to our

Paul Mcallister:

client.

Paul Mcallister:

So I could attest to all what you've said there.

Paul Mcallister:

A lot of things stood out.

Paul Mcallister:

I just learned about the collateral.

Paul Mcallister:

I didn't know about the collateral thing and that's something I'm going to have to

Paul Mcallister:

be coaching because I'm a coach as well.

Paul Mcallister:

I'm going to be coaching certain people through, I didn't even realize that.

Paul Mcallister:

So thank you for letting me know about using collateral from existing properties.

Paul Mcallister:

It's something that I wasn't really thinking about it when

Paul Mcallister:

I think about that product.

Paul Mcallister:

So you've just evolved my thinking.

Paul Mcallister:

But some other things I want to.

Ryan Day:

Yeah, I find it slip I Was gonna say I could even give it an example

Ryan Day:

cuz I find examples typically help people who aren't you know specifically

Ryan Day:

in the mortgage industry Essentially help solidify their understanding.

Ryan Day:

So say if easy numbers and our property worth a million bucks Obviously

Ryan Day:

people up to 75 percent of that.

Ryan Day:

So 750, 000 Say if they had a mortgage with TD for 500 grand so in this

Ryan Day:

example you just do 750, 000 subtract 500 and that's 250, 000 in equity.

Ryan Day:

And we essentially just view that 250 in equity as quote

Ryan Day:

unquote cash that's sitting idle.

Ryan Day:

Say if they were purchasing a property for a million dollars, then

Ryan Day:

they could use this 250 in equity.

Ryan Day:

As a 25 percent down payment, get our cheapest interest rate, which is 9.

Ryan Day:

99 percent currently as of today in February.

Ryan Day:

We would advance the full million dollars of the subject property that

Ryan Day:

we're going to be going on title.

Ryan Day:

We'll be in second position on the property we're using as collateral.

Ryan Day:

So it's one mortgage registered against two properties.

Ryan Day:

Six month term, fully open.

Ryan Day:

And they're getting it at 100 percent loan to value on the as is value.

Ryan Day:

And the reason why we're able to do that is because we're taking a

Ryan Day:

look at the global loan to value, not so much just obviously the as

Ryan Day:

is value of the subject property.

Ryan Day:

Say if they wanted funds for renovations and they wanted to put 10 percent

Ryan Day:

down, so 100, 000 on the 1, 000, 000.

Ryan Day:

And then they still have 150, 000 left over that we can advance

Ryan Day:

them above the purchase price.

Ryan Day:

If they wanted funds for renovations, closing costs, operating costs,

Ryan Day:

whatever the case may be in order to best service that clients to give

Ryan Day:

them the access to the capital that they're looking for in order to scale.

Ryan Day:

Keep in mind all of this obviously is subject to due diligence.

Ryan Day:

It really depends on the client and the deal, but that's

Ryan Day:

just a very rough scenario.

Ryan Day:

In order to solidify the understanding of the applicable scenario

Ryan Day:

that this could be implemented.

Ryan Day:

Yeah, I think

Paul Mcallister:

it's clear for me, it's 100 percent clear for the

Paul Mcallister:

listeners, like kind of what I do here and what I can give you through

Paul Mcallister:

an example of what I did this week.

Paul Mcallister:

So I got a client that come to me a week ago.

Paul Mcallister:

He said, all right, I have this property.

Paul Mcallister:

I want to buy it.

Paul Mcallister:

It was under contract.

Paul Mcallister:

He's I want to burr it.

Paul Mcallister:

And I said, okay.

Paul Mcallister:

So I sent him I went through with him and built the flip analyzer saying, what

Paul Mcallister:

do you, what's the, what are the scope?

Paul Mcallister:

You have to get clear on the scope.

Paul Mcallister:

And what I've noticed is Calvert don't just want you to

Paul Mcallister:

say, Oh, I'm doing a kitchen.

Paul Mcallister:

It's going to cost me this.

Paul Mcallister:

No, they need to understand what type of cabinets are you putting in?

Paul Mcallister:

What type of some more details, because they're going to be looking at the ARV.

Paul Mcallister:

They need to calculate the ARV.

Paul Mcallister:

If you're putting in garbage cabinets or whatever, that's going to affect

Paul Mcallister:

your ARV compared to you're putting a custom cabinets or you're putting

Paul Mcallister:

granite countertops compared to linoleum.

Paul Mcallister:

Getting very clear with the scope is something that I start with the client.

Paul Mcallister:

I actually do a PowerPoint presentation where we take the listing photos.

Paul Mcallister:

We just put them in a presentation.

Paul Mcallister:

We say, okay, in each picture, what are you going to be doing?

Paul Mcallister:

And get clear on that.

Paul Mcallister:

And then further, so that's just to help them understand,

Paul Mcallister:

verbalize what they want to do.

Paul Mcallister:

And then it's the next step is, okay, you know your scope.

Paul Mcallister:

Now go get a quote from a reputable contractor.

Paul Mcallister:

That, that who's actually going to execute the work.

Paul Mcallister:

And so to me, before we even go to Calvert, we've done this presentation,

Paul Mcallister:

we've figured out the scope.

Paul Mcallister:

They've got their quote.

Paul Mcallister:

And then we've filled in this flip analyzer that just

Paul Mcallister:

basically walks you through.

Paul Mcallister:

What are your costs going to be up front?

Paul Mcallister:

What are your what type of fees are involved, maybe related to financing?

Paul Mcallister:

What type of operation costs, meaning like the bills that you're going to need.

Paul Mcallister:

So they want to know everything.

Paul Mcallister:

And then at the end of the day, they actually have it.

Paul Mcallister:

So to me, this flipping a lot of it is so good because it tells you what is going

Paul Mcallister:

to be your return on your investment, basically, what did you buy it for?

Paul Mcallister:

What did you rent it for?

Paul Mcallister:

What is the ARV?

Paul Mcallister:

What did you sorry, what did you buy it for?

Paul Mcallister:

What did you, what do you think it's going to be worth when

Paul Mcallister:

you're done the renovations?

Paul Mcallister:

How much did you spend on renovations?

Paul Mcallister:

And it's just so clear.

Paul Mcallister:

This sheet to me is, I'm a big, I'm an engineering background

Paul Mcallister:

and I love these little sheets.

Paul Mcallister:

So what I'm actually doing with clients is working them through one, building

Paul Mcallister:

the scope of getting the documents that you're going to need for due diligence

Paul Mcallister:

because I know you're going to need them.

Paul Mcallister:

And then furthermore, what is the exit strategy?

Paul Mcallister:

So if you go to Calvert, from my experiences, if you say, Oh, here's

Paul Mcallister:

what we're going to do and here's what we're going to, and then we're going

Paul Mcallister:

to go and we're going to get refinance.

Paul Mcallister:

And to me, the more detail you can be for what you're doing from

Paul Mcallister:

a lending standpoint, if it's not just a sale if it's a refi.

Paul Mcallister:

The better, right?

Paul Mcallister:

Like for this specific case, he came to me last week, we got him all that stuff.

Paul Mcallister:

Monday we got it to Calvert.

Paul Mcallister:

Today we close, which is Friday.

Paul Mcallister:

So we have Monday to Friday we've closed.

Paul Mcallister:

And with same thing, you have your lawyers.

Paul Mcallister:

I have a lawyer that will close a deal in a day.

Paul Mcallister:

He does is that's why I use him because he can close in a day.

Paul Mcallister:

Not many lawyers will close in a day.

Paul Mcallister:

But he will, especially if he knows if there's pressure on

Paul Mcallister:

him, especially because we do so much kind of business together.

Paul Mcallister:

Like we know how each other work.

Paul Mcallister:

And even he does his in house title searches or anything like that.

Paul Mcallister:

So he has unique things that make me want to use him more and more.

Paul Mcallister:

He can even virtually close.

Paul Mcallister:

Those are things that like and it's not just like a DocuSign thing.

Paul Mcallister:

It's he gets you on camera.

Paul Mcallister:

You can see his screen So there's things like that helped us get from Monday

Paul Mcallister:

to Friday But Calvert the amount of time it took for us to give them the

Paul Mcallister:

package to review the package to ask us some questions To provide maybe more

Paul Mcallister:

documents to get to close is five days We can do it in three days really so

Paul Mcallister:

that's everything you've said is this was a live example that I've seen happen.

Paul Mcallister:

You can supplement if I didn't say anything as clear as I think

Paul Mcallister:

you see it, but This is my example that just happened this week.

Paul Mcallister:

That's why I wanted to share.

Ryan Day:

Yeah, you nailed it on the head.

Ryan Day:

And to your point, a few things I'd like to touch on is we lend to

Ryan Day:

first time flippers all the time.

Ryan Day:

When they are first time flippers, we're gonna share our expertise, even if they're

Ryan Day:

experienced flippers, but share our expertise, our knowledge, our resources.

Ryan Day:

Everything that we see going wrong or potentially going wrong with the deal,

Ryan Day:

we're going to communicate, verbalize that to you just to ensure you have a second

Ryan Day:

set of eyes on your deal from a third party that obviously we're going to be

Ryan Day:

involved in it if we provide a mortgage.

Ryan Day:

Having someone who on average we see around a hundred deals a week.

Ryan Day:

We only approve around 20 percent of them I think it's invaluable to have someone

Ryan Day:

looking at that volume of primarily flip deals on a day to day basis assessing your

Ryan Day:

deal Ensuring purchase price, ARV, reno's, everything's on a conservative basis.

Ryan Day:

And the scope that we like to view the deal at is, does this

Ryan Day:

make sense for the client?

Ryan Day:

Even though that we make money off fees and interest, we have a

Ryan Day:

minimum profit threshold of 20 grand.

Ryan Day:

It's extremely rare that the profit's in and around that 20 grand.

Ryan Day:

It's normally around 40 to 75 ish, depending on purchase price,

Ryan Day:

reno's, location, all that stuff.

Ryan Day:

But you have someone else assessing your financials on the flip.

Ryan Day:

ensuring that it's going to appraise that subject that you're actually do the

Ryan Day:

rentals that you pitch and provide to us.

Ryan Day:

And I just think that is, is so invaluable from someone doing it

Ryan Day:

for, over 45 years, the company's seen everything in their existence

Ryan Day:

of deals going well, deals going bad.

Ryan Day:

So we share all of those resources, all of those learnings for clients.

Ryan Day:

So that's number one.

Ryan Day:

Number two is to your point, if a client is buy renovating and selling, we look

Ryan Day:

at that differently than a client who's burring or buy renovating and refinancing.

Ryan Day:

A lot of our clients are business for self.

Ryan Day:

They're trades people, electricians, general contractors,

Ryan Day:

whatever the case may be.

Ryan Day:

And to be tax efficient, they show that they make, whatever,

Ryan Day:

20, 30, 40 grand a year.

Ryan Day:

And how we underwrite is, as long as they're flipping, as long as you

Ryan Day:

have the capital for all of your operating, purchase price, closing

Ryan Day:

costs, mortgage payments, readily available in either cash or debt that

Ryan Day:

you can show us that's liquid as of today, you can buy a property for 200

Ryan Day:

grand, 700 grand, 800 grand, 800 grand.

Ryan Day:

As long as the numbers make sense in terms of profitability, you show us

Ryan Day:

that you have the capital, there's no issues with location, property

Ryan Day:

type, exit strategy, all of that.

Ryan Day:

And we have confidence in your business plan in order to execute the plan.

Ryan Day:

Sky's the limit for some of these clients.

Ryan Day:

You're able to do subject to due diligence, obviously

Ryan Day:

multiple deals at once.

Ryan Day:

We have one guy doing 20 flips currently right now.

Ryan Day:

I know there's a lot going on with promissory notes and stuff like that

Ryan Day:

we do not encourage promissory notes.

Ryan Day:

All of our mortgages are registered on title, but if you want to scale up

Ryan Day:

your operations we're able to do that.

Ryan Day:

And we've seen clients who, started doing this part time,

Ryan Day:

now they're doing it full time.

Ryan Day:

They have a whole trades people and team under them.

Ryan Day:

So as long as the exits to sale, we're not taking a look at, GDS, TDS, income

Ryan Day:

the typical underwriting criteria and debt service ratios are, sorry, I

Ryan Day:

guess I already mentioned that, but so yeah, we don't underwrite traditionally

Ryan Day:

just because we understand what the property will look like as if complete.

Ryan Day:

You show us that you have the capital to service everything,

Ryan Day:

and the numbers make sense.

Ryan Day:

However, if the exit is a refi, then we will take a look at that

Ryan Day:

the other underwriting criteria.

Ryan Day:

Just because the take out lender, they're going to be focusing on that as as well.

Ryan Day:

Yeah,

Paul Mcallister:

so I think the first thing you said there, I got an example

Paul Mcallister:

of how you used your experience.

Paul Mcallister:

So originally this guy came to me and he wanted to do something with

Paul Mcallister:

a he wanted to renovate the basement and he wanted to convert the ADU.

Paul Mcallister:

He wanted to convert a garage into an ADU.

Paul Mcallister:

And we originally did the numbers based on, all right, doing all that work.

Paul Mcallister:

But Calvert came back and actually was like, we don't like the permit.

Paul Mcallister:

The permit part of that for that ADU is where we feel like you could run

Paul Mcallister:

into some trouble in terms of length.

Paul Mcallister:

So what is, they didn't reject it.

Paul Mcallister:

They said, what is your strategy for permits?

Paul Mcallister:

Or do you have a strategy for permits?

Paul Mcallister:

And then when we went back and looked at it we had discussion with the client and

Paul Mcallister:

he decided, okay, let's just do the one unit in the basement adding unit in the

Paul Mcallister:

basement adding the converting the unit upstairs and leave the ADU for later.

Paul Mcallister:

And so he was like, it still makes sense if we just go in there, do

Paul Mcallister:

this renovation and loose later on, I can come back and I can do the ADU.

Paul Mcallister:

He was happy with that.

Paul Mcallister:

We were able to move forward.

Paul Mcallister:

But it is true.

Paul Mcallister:

When I did ask him about the permit strategy, he's Oh, I know somebody

Paul Mcallister:

and I was like nobody wants to hear that we're relying on because you

Paul Mcallister:

know somebody in the municipality.

Paul Mcallister:

So I was like, that's not going to be a permanent strategy.

Paul Mcallister:

At least like officially.

Paul Mcallister:

So it was funny that was the response.

Paul Mcallister:

But that was one of the ways where you raised your hand and said, listen, we.

Paul Mcallister:

We know that permitting can be an issue here and, you're trying to do

Paul Mcallister:

this project in three or six months and we've seen permit be an issue

Paul Mcallister:

that could push it a lot further.

Paul Mcallister:

So that, that would be your expertise helping in, in a situation.

Ryan Day:

Yeah.

Ryan Day:

And to, to your point, like we don't want to be a hindrance to the deal.

Ryan Day:

We're doing everything within our power, as long as it makes sense to

Ryan Day:

get the deal across the finish line.

Ryan Day:

But we've just seen so many projects where they forecast it will take four months,

Ryan Day:

six, eight months, nine months go by.

Ryan Day:

And the biggest challenges that we see are our permits.

Ryan Day:

And then if they're getting properties with tenants they're

Ryan Day:

not getting vacant on possession.

Ryan Day:

That can be a huge hindrance.

Ryan Day:

And last year we, we did around just over 800 mortgages.

Ryan Day:

So we're not trying to, persuade or push back.

Ryan Day:

It's, we really want to see you be successful from what

Ryan Day:

we see on a daily basis.

Ryan Day:

These are the two most common, one of the two most common reasons of we see

Ryan Day:

deals taking extremely long from the original plan that you have set in place.

Ryan Day:

And it's because it's.

Ryan Day:

It's not within your area of control that you can or your area of

Ryan Day:

influence that you can really control.

Ryan Day:

It's only to some extent.

Ryan Day:

So we're, yeah we're still trying to push everything through the

Ryan Day:

finish line, but we just really want to see clients successful.

Ryan Day:

And those two issues commonly come up of why deals always get go always, typically

Ryan Day:

double over the projected timeline.

Paul Mcallister:

I guess one other thing I wanted to hit on is.

Paul Mcallister:

As you use and keep using or as you I guess get experience flipping in

Paul Mcallister:

general being able to prove that.

Paul Mcallister:

And also with Calvert, is that help the underwriting process?

Paul Mcallister:

Does it get, obviously it's easier because we're going to be better at giving the

Paul Mcallister:

deal and giving it the way you like it.

Paul Mcallister:

But is there any kind of, if there's a close spot or something like that is there

Paul Mcallister:

anything given if I've done five deals or this is my first deal or if I've done

Paul Mcallister:

20 deals with you do you consider that in your underwriting kind of process?

Ryan Day:

100 percent definitely.

Ryan Day:

We have yeah, quite a few clients where now we're at the point where

Ryan Day:

they have a purchase agreement.

Ryan Day:

They have the renovation plan.

Ryan Day:

They just show us our proof of funds.

Ryan Day:

It takes them, an hour or so to put together.

Ryan Day:

And it's primarily the renovation plan and they just submit that to us.

Ryan Day:

We are very relationship based.

Ryan Day:

So once that track record is there, that relationship is there.

Ryan Day:

The timeline in order to fund deals is that much quicker just because

Ryan Day:

we do have a relationship, they have a track record we understand the

Ryan Day:

renovations that they do, we track all of the properties that we lend on as

Ryan Day:

well too, and we essentially have a benchmark of what, the property sells

Ryan Day:

for and what our analysts valued it at.

Ryan Day:

We're typically within around 2 percent of what the property actually sells for

Ryan Day:

versus what our appraiser valued it at.

Ryan Day:

Keep in mind, obviously there's been a lot going on in the market, depending on the

Ryan Day:

property type community and the location.

Ryan Day:

So there's obviously some outliers, but yes, if if a client has a track

Ryan Day:

record, we're more than happy to.

Ryan Day:

Do what's best in order to optimize and have an effortless

Ryan Day:

experience on their end.

Ryan Day:

But even if they aren't doing volume, like if we have a client, they do one deal,

Ryan Day:

the property sells, it's complete and they're looking to submit another one.

Ryan Day:

As long as it's a year or less, we don't need updated documentation every time.

Ryan Day:

So once we have app credit and away proof of funds there and the renovation

Ryan Day:

agreement and the renovation plan on the first deal, the next deal, as long as

Ryan Day:

the years have passed, we can use all the exact same documentation and all we need

Ryan Day:

is the rental funds and or sorry, the renovation summary and proof of funds.

Ryan Day:

So it's quite seamless.

Ryan Day:

We'd like to think.

Ryan Day:

For just not having to update documentation every time because it

Ryan Day:

is obviously a pain having to fill out an app, pull credit, notice

Ryan Day:

of assessments all that stuff.

Ryan Day:

From a client's point of view I've done it and it's, oh, it's a hassle.

Ryan Day:

Like to think we're trying to reduce documentation while

Ryan Day:

managing risk on our end.

Ryan Day:

And creating a win for everyone where not a bunch of documentation,

Ryan Day:

but you give us all the information that we're looking for.

Paul Mcallister:

I love it.

Paul Mcallister:

So that's the second thing I've learned in this call.

Paul Mcallister:

So I'm writing down my nuggets.

Paul Mcallister:

Cause honestly it's, I have certain clients who just, they're going to

Paul Mcallister:

use Calvert to build their portfolio quicker than they can do it themselves.

Paul Mcallister:

So it leads me into, let me make sure I get my note here for that.

Paul Mcallister:

Don't.

Paul Mcallister:

Don't need to resubmit because that's a selling point because yeah, you're right.

Paul Mcallister:

Some clients, they absolutely hate providing documents and if they say

Paul Mcallister:

they don't need to do it, so we're going to get into why use a private lender.

Paul Mcallister:

And honestly, for some clients that might be, I don't have to keep giving them

Paul Mcallister:

documents because they hate it, especially now in the past, even three years or

Paul Mcallister:

even a year of how much more documents we got to give typical a lenders.

Paul Mcallister:

Don't need to update documents.

Paul Mcallister:

So I guess let's get into for sure it's, yeah.

Paul Mcallister:

Why use a private lender?

Paul Mcallister:

For me, I'll start it off saying when you're, I have clients who,

Paul Mcallister:

they're TDS and there is usually the issue, the TDS they're outta whack.

Paul Mcallister:

And there's a lot of things we can do as a mortgage broker that to get you, like even

Paul Mcallister:

all the way to 60 ra 60, 60 ratios or even 70 there's a lot of cool programs, right?

Paul Mcallister:

I have 70 lenders, 40.

Paul Mcallister:

But still there's a time to use private lending and there's a time

Paul Mcallister:

to use it for, what was the question?

Paul Mcallister:

Why use it?

Paul Mcallister:

It's when you're trying to get in and out.

Paul Mcallister:

And sometimes I could have got a B deal with the one that I did.

Paul Mcallister:

I was like, here's, you could go be, you could go private.

Paul Mcallister:

He chose private.

Paul Mcallister:

And why did he do that?

Paul Mcallister:

I was like, we'll be still going to come with fees, They're going

Paul Mcallister:

to hit you with the penalty.

Paul Mcallister:

And I was like, so if you do the calculation between, private and B.

Paul Mcallister:

I personally think you may go better with private because it's all about

Paul Mcallister:

how quick can you do the renovation?

Paul Mcallister:

How quick can you refi?

Paul Mcallister:

How quick can you get out?

Paul Mcallister:

If you go B, they are, you're going to get hit with a penalty.

Paul Mcallister:

And that has to be taken into the account.

Paul Mcallister:

And it actually we did the numbers and it made sense to go private.

Paul Mcallister:

But what are other reasons why you find all your clients, 800 deals?

Paul Mcallister:

Why are they going private?

Paul Mcallister:

Besides it's easier?

Paul Mcallister:

Yeah, what are other reasons that stand out to you?

Ryan Day:

Yeah, the first one that we didn't touch on is

Ryan Day:

definitely quick closings.

Ryan Day:

A lot of our business is, similar to your deal, it closes in under a week

Ryan Day:

or it closes in two weeks, A, lender B, lender just can't close in time so we're

Ryan Day:

able to offer a really quick closing and that's a huge value add to clients,

Ryan Day:

especially if they're active real estate investors, they're working with a seller,

Ryan Day:

maybe the seller's in a distressed situation because we can underwrite

Ryan Day:

deals typically in 24 business hours.

Ryan Day:

If you submit us a deal.

Ryan Day:

And it's for Joe Smith and he's working with the seller and the

Ryan Day:

seller wants to sell next week.

Ryan Day:

A huge value add to some of these real estate investors is having a

Ryan Day:

really quick closing for the seller because they need to offload the

Ryan Day:

property as quickly as possible.

Ryan Day:

So number one, definitely quick closing.

Ryan Day:

Number two is similar to your point is we're GDS TDS.

Ryan Day:

So clients are definitely able to scale up subject to due diligence,

Ryan Day:

but stretch their capital further.

Ryan Day:

And as opposed to doing one deal with, 20, 25 percent down, they're

Ryan Day:

able to scale up if they want to have a lower down payment option.

Ryan Day:

So they can obviously get the benefit that real estate offers in terms of

Ryan Day:

leverage and stretch that even further, specifically when it comes to us.

Ryan Day:

And then to your point reduce documentation.

Ryan Day:

No appraisal, don't have to worry about the headache.

Ryan Day:

They have confidence knowing that if we approve the deal, we're actually

Ryan Day:

going to fund it just due to our history and relationship with our clients.

Ryan Day:

And then the fourth point, probably one of the more important

Ryan Day:

ones is actually a product fit.

Ryan Day:

So the reason why we're in business is because the big banks, B lenders,

Ryan Day:

they hate the short term lending.

Ryan Day:

They think it's too risky.

Ryan Day:

They don't understand it, especially when it comes to flipping.

Ryan Day:

So we really carved out a niche and as opposed to going to a B lender or

Ryan Day:

an A it's just not a good product fit.

Ryan Day:

Clients want something fully open, quick closing.

Ryan Day:

A lender that really works with investors and helps create solutions

Ryan Day:

as opposed to creating roadblocks to help them scale their portfolio.

Ryan Day:

So it's just really having a product that aligns with the

Ryan Day:

client's trying to achieve.

Ryan Day:

And we'd like to feel that we've really tailored our products around really good

Ryan Day:

customer service, a really unique value proposition to create something that's in

Ryan Day:

demand, something that people want to use.

Ryan Day:

And to your point, it's cheaper in that scenario, as

Ryan Day:

opposed to going to a B lender.

Ryan Day:

And it's just breaking down all the costs associated with your legal

Ryan Day:

fees appraisal, prepayment penalties, obviously rates and fees, and just

Ryan Day:

doing a side by side comparison.

Ryan Day:

And when it does come to our rates, fees, and total value proposition, It makes

Ryan Day:

a lot of sense in in most instances, depending on the client scenario to

Ryan Day:

actually go private because it gives them the access to the capital that they need.

Ryan Day:

And and it's a really good product fit.

Ryan Day:

Yeah.

Paul Mcallister:

So basically when you, when somebody asks you why to go private,

Paul Mcallister:

like that, like everything you just said is the opposite of what a lenders do.

Paul Mcallister:

A lenders are slower.

Paul Mcallister:

We want to be, we want to be like one.

Paul Mcallister:

It takes us a whole week just to get a commitment.

Paul Mcallister:

Two, but then we have to meet all these conditions.

Paul Mcallister:

Three, we have to be close.

Paul Mcallister:

Like those conditions.

Paul Mcallister:

I always tell clients within two weeks before it funds, they want to

Paul Mcallister:

have the broker, a broker complete.

Paul Mcallister:

It just, everything, the documentation the time it takes.

Paul Mcallister:

Everything you just said is the opposite of a lending and how they think.

Paul Mcallister:

They think guidelines, they're checking boxes.

Paul Mcallister:

If it's not in the box, it's even though it makes total damn sense,

Paul Mcallister:

they're not thinking about the sense.

Paul Mcallister:

They're just thinking about, is it in this box?

Paul Mcallister:

If it's not, then it can be an issue.

Paul Mcallister:

So yeah, everything you just said that is the opposite of how a lenders think

Paul Mcallister:

be, there's more flexibility, but still a lender, it's like everything

Paul Mcallister:

you just said is the opposite.

Paul Mcallister:

So it's really cool.

Paul Mcallister:

And then so I think one thing I wanted to touch on for that flip analyzer is.

Paul Mcallister:

We will in this show, I'm going to put in a link and I'll put a link,

Paul Mcallister:

like you can send me a direct message or I even, I'll put it in the link

Paul Mcallister:

of the show for the flip analyzer.

Paul Mcallister:

I always try to get my even when I'm coaching now so coaching or even my

Paul Mcallister:

I'm an investor focused mortgage agent.

Paul Mcallister:

So when I know people, they might not even be thinking about private, or they

Paul Mcallister:

might not be even thinking about it.

Paul Mcallister:

I motivate people.

Paul Mcallister:

Cause I tell them, look at this product.

Paul Mcallister:

This is a sheet.

Paul Mcallister:

I want you to think about your deals that you're going through with this sheet

Paul Mcallister:

and it's good even if you're not using whatever you still think about it like

Paul Mcallister:

this because you can tell that sheet is set up for an investor to think and put

Paul Mcallister:

it on paper and come up with a good plan.

Paul Mcallister:

So I have a I share that sheet a lot.

Paul Mcallister:

I go through and coach people on how to fill it out and the big

Paul Mcallister:

value add I think where I'm in this equation is one, I'm going to make

Paul Mcallister:

sure that you're thinking about it.

Paul Mcallister:

That sheet and two, it's making sure you have an exit plan.

Paul Mcallister:

And that's the most important thing I think for, or at least I've noticed and

Paul Mcallister:

getting these deals from Calvert is, if they're only funding 20 percent of the,

Paul Mcallister:

If you did 800, but I'm trying to do the math, but if you're funding 20%, I

Paul Mcallister:

think that I can, my percentage is going to be higher than 20 percent because

Paul Mcallister:

I've, I know what they're thinking.

Paul Mcallister:

I know how they're thinking.

Paul Mcallister:

And the big part is the exit plan.

Paul Mcallister:

And that's the, like my specialist is making sure there's an exit plan.

Paul Mcallister:

And even one thing that I've talked to, to cover this week

Paul Mcallister:

about was part of the exit plan.

Paul Mcallister:

People don't know, like when they go to a mortgage broker and you can, I can figure

Paul Mcallister:

things out that other people can't because I have a residential mortgage department.

Paul Mcallister:

I have a commercial mortgage department.

Paul Mcallister:

I know that you can get a commercial loan even on a residential property.

Paul Mcallister:

Most people don't even consider that in their thinking.

Paul Mcallister:

So yeah, we consider A, B, private, but also there's commercial

Paul Mcallister:

loans on residential properties.

Paul Mcallister:

That could be an exit.

Paul Mcallister:

And the reason, the big difference, and you can Correct.

Paul Mcallister:

And I guess supplement.

Paul Mcallister:

But when you're dealing with a residential mortgage, people are, you,

Paul Mcallister:

the lenders are betting on your ability to pay back when you're dealing with

Paul Mcallister:

the commercial, they're betting on the property's ability to pay back.

Paul Mcallister:

So if you're getting a single family house and turning it into a three unit,

Paul Mcallister:

legal three units, a commercial lender would still would jump all over that.

Paul Mcallister:

If we can't make it work because of your TDS or whatever it is.

Paul Mcallister:

So that to me is an exit that not many other mortgage brokers

Paul Mcallister:

are even going to consider.

Paul Mcallister:

I'll pause there because I know I've said a lot and I want you to think about

Paul Mcallister:

it from the Calvert lens, but go ahead.

Paul Mcallister:

Sorry, Ryan.

Ryan Day:

Yeah no.

Ryan Day:

You mentioned some fantastic points.

Ryan Day:

Absolutely fantastic points.

Ryan Day:

And a few other things that I would mention is, When you're coming to a broker

Ryan Day:

and you have a deal, you are essentially, when it comes to this specific product

Ryan Day:

you're pitching a business plan.

Ryan Day:

You're saying, Hey, I'm buying this property for 500 grand.

Ryan Day:

I'm going to put 50, 000 into it.

Ryan Day:

I think I can sell it for 625.

Ryan Day:

This is the due diligence I've done.

Ryan Day:

I've, I have five different contractors.

Ryan Day:

They walk through the property.

Ryan Day:

They quoted me the exact same scope for the renovation.

Ryan Day:

This, these are the funds that I've had.

Ryan Day:

That I have.

Ryan Day:

I think it'll take 6 months, to be conservative, I'm gonna project 8 months.

Ryan Day:

These are the numbers that I have laid out, and when clients do that, and

Ryan Day:

they submit it through a broker, it is just, it's music to our ears, because

Ryan Day:

we get stuff that's piece mailed.

Ryan Day:

Oh, I think I can sell it for 600, I haven't really dug into the comps.

Ryan Day:

I'm working with a buddy, he's a contractor, he put

Ryan Day:

together this rough quote.

Ryan Day:

I think it's accurate, but I'm just really leaning on his

Ryan Day:

expertise because, I trust him.

Ryan Day:

He hasn't confirmed that he can start work right after closing date, he

Ryan Day:

has, quite a few projects on the go.

Ryan Day:

Stuff like that creates, I don't want to say anxiety, but when you come prepared,

Ryan Day:

you have a plan, you pitch it to us, your likelihood and just the way that you come

Ryan Day:

off in the eyes of a lender is tenfold compared to someone who's just praying

Ryan Day:

and wishing and really relying on the mortgage broker to do, the underwriting,

Ryan Day:

ask them for the due diligence.

Ryan Day:

So that's definitely point number one.

Ryan Day:

I didn't know that you could even get a commercial mortgage on a

Ryan Day:

residential That's something really interesting that you know, even after

Ryan Day:

this or whatever the case may be.

Ryan Day:

I'd love to pick your brain because that Is something that would be so beneficial

Ryan Day:

when it comes to clients refinancing and having the ongoing education to your point

Ryan Day:

is crucial and paramount Because whenever we get a deal, the first thing we're

Ryan Day:

going to ask you is what the address is.

Ryan Day:

We want to make sure that it abides by our location requirements.

Ryan Day:

What property type is it?

Ryan Day:

How much are you looking to put down?

Ryan Day:

Exit strategies usually, question number four, question number two.

Ryan Day:

It's how are you going to pay us out?

Ryan Day:

Is it going to be, is it going to be a sale?

Ryan Day:

Is it going to be a refi?

Ryan Day:

Okay, has your broker pre approved you for the refi?

Ryan Day:

Have they approved you up to the amount that you're looking to exit at?

Ryan Day:

Your GDS, TDS, income credit, like what lender are you going to?

Ryan Day:

What mortgage product?

Ryan Day:

And when you're able to speak the terms of the lender, It's it just really

Ryan Day:

sets you up for success in the lenders eyes and when it obviously comes to

Ryan Day:

the private space It does come down to Obviously relationships due diligence

Ryan Day:

as well, too But having that view of the lender in order to make their life

Ryan Day:

easier is obviously something completely rare but having the view of the lender

Ryan Day:

is It's obviously an important skill to have, especially if you're a real estate

Ryan Day:

investor and understanding what they're taking a look at and how they assess

Ryan Day:

risk in order to grow your portfolio because it's going to be paramount on

Ryan Day:

getting educated on how you can scale your portfolio, working with great

Ryan Day:

brokers like yourself in order to just, yeah, set yourself up for success.

Ryan Day:

Yeah, I agree.

Paul Mcallister:

I think it's for my coaching, I take it as a

Paul Mcallister:

requirement as one of my first steps is you need to think like a lender.

Paul Mcallister:

Cuz a lender is thinking like that for a reason.

Paul Mcallister:

They have experience lending money and they're doing that due diligence They're

Paul Mcallister:

looking at things everything they look at you should get good at plain and

Paul Mcallister:

simple It's not just because you got to get good at it for submitting it to

Paul Mcallister:

them You should be good at it because they're looking at that for a reason

Paul Mcallister:

They're not just randomly saying well, I want to look at these things They are

Paul Mcallister:

doing it for a reason and that's what you got to get good at that's number one

Paul Mcallister:

I think it's you say the business plan.

Paul Mcallister:

You're basically coming to a business plan for the property So one thing we

Paul Mcallister:

do at Lend City, that's very unique To keep trying to sell myself, but it's

Paul Mcallister:

just I think you should be doing this and if you're a broker then listen up

Paul Mcallister:

We do a real estate portfolio investment business plan with you We'll guide you

Paul Mcallister:

in doing that because we don't just want you to think one time we want

Paul Mcallister:

you to think longevity and so when you're not just thinking, Oh, I'm gonna

Paul Mcallister:

close this first deal with covered and then I'm going to do this one.

Paul Mcallister:

No, we want to plan it out.

Paul Mcallister:

Tell me what you're trying to achieve long term.

Paul Mcallister:

Let's plan it out and let's actually put a business plan in place

Paul Mcallister:

and I'm going to be calling you.

Paul Mcallister:

If you told me you want to buy five properties and we've put a business

Paul Mcallister:

plan in place, I'm going to be calling you saying, Hey, what's

Paul Mcallister:

happening with this business plan?

Paul Mcallister:

Do we need to adjust it?

Paul Mcallister:

Do we need to update it?

Paul Mcallister:

What has changed?

Paul Mcallister:

Okay.

Paul Mcallister:

Things can always change, but at least you have something on paper

Paul Mcallister:

that you're working towards and you're being less reactive, more

Paul Mcallister:

proactive, and hopefully that's going to help you build and grow faster.

Paul Mcallister:

So I think that's one thing is the business plan you just mentioned.

Paul Mcallister:

I think that's really important, not just for the actual property purchase, but

Paul Mcallister:

for your portfolio as you try to grow.

Paul Mcallister:

And another thing is.

Paul Mcallister:

And I think that we're really unique in is we give a pre approval when you close.

Paul Mcallister:

We give a pre approval, like my present to you is a pre

Paul Mcallister:

approval for your next purchase.

Paul Mcallister:

I'm always every, if you're an investor the next day, I'm giving you your present

Paul Mcallister:

and I'm giving you a pre approval of how much you can get for your next purchase.

Paul Mcallister:

And if you have a real estate business portfolio plan with me, I'm giving

Paul Mcallister:

you the pre approval and I'm also going to refer to that business plan

Paul Mcallister:

to talk about next steps because I always want you looking forward.

Paul Mcallister:

And that's why a lot of realtors work with me because I'm going to

Paul Mcallister:

generate more business for them.

Paul Mcallister:

But to me, I have this thing.

Paul Mcallister:

It's win.

Paul Mcallister:

Three levels of win at least meaning it's a win for the client

Paul Mcallister:

cause they're building their dreams and their portfolios.

Paul Mcallister:

It's a win for the realtors and the professionals working with them.

Paul Mcallister:

They're going to all be on the same page and because they knew it's not

Paul Mcallister:

just, Oh, I'm going to do business one time and then I'm done with that

Paul Mcallister:

person, but they are continuously maintaining a relationship and then it's

Paul Mcallister:

a win obviously for our business cause we're doing more and more mortgages.

Paul Mcallister:

So I'll pause cause I, I go on my tangents.

Paul Mcallister:

But you got me really excited with the business plan and I just wanted

Paul Mcallister:

to share kind of certain things that we do because that's what I'm

Paul Mcallister:

passionate, I'm not in the mortgage business to just do mortgages at all.

Paul Mcallister:

I want to help people grow portfolios.

Paul Mcallister:

I grow my own portfolio and my general kind of strategy is, and I think

Paul Mcallister:

Calvert's kind of aligned based on the words I've heard before from

Paul Mcallister:

Calvert is we want to grow with you.

Paul Mcallister:

I want to have 20 clients or 50 clients that, have hundreds of

Paul Mcallister:

properties and we're going to keep moving and keep growing and making

Paul Mcallister:

sure that we're growing together.

Paul Mcallister:

I don't want to just get a sick person that's, I'm going to get all those

Paul Mcallister:

documents one time and then go through, Oh, I don't want to give you documents.

Paul Mcallister:

And then we complete a first, a mortgage, but what the average person might do

Paul Mcallister:

a mortgage three to five years every and then I don't hear from you again.

Paul Mcallister:

I actually, if you're an investor, I want to work with you to grow.

Paul Mcallister:

If you want to become an investor, I'm going to grow with you.

Paul Mcallister:

If you're a one off sure, but I still try to convert those people

Paul Mcallister:

to investors because I believe in real estate investing myself.

Paul Mcallister:

I think it's the common person should be doing it.

Paul Mcallister:

In my opinion.

Ryan Day:

Yeah, and that's a key takeaway for me is I have never heard

Ryan Day:

of a broker pre approved, giving you a pre approval next day once you close.

Ryan Day:

I think that is such a huge value add that is, wow, that would blow

Ryan Day:

me away as a client for sure.

Ryan Day:

That is absolutely remarkable.

Ryan Day:

It's,

Paul Mcallister:

think about it, we already have the documents.

Paul Mcallister:

The documents are all updated.

Paul Mcallister:

It's like you not having to give documents within a year, which I have a note here.

Paul Mcallister:

The notes I wrote is that one, but it's the same thing.

Paul Mcallister:

It's I already have updated everything and I know exactly what the new expenses are.

Paul Mcallister:

Boom.

Paul Mcallister:

Shoot that in and tell you, as long as you have that down

Paul Mcallister:

payment, here's where you are.

Paul Mcallister:

And then I even break it down to different things.

Paul Mcallister:

Cause we have certain lenders that will go.

Paul Mcallister:

The typical lender wants their GDS and TDS 39 44, but then certain lenders will allow

Paul Mcallister:

you to go to 50 50 a lenders and certain lenders will look at the subject property

Paul Mcallister:

rents and all those types of things.

Paul Mcallister:

I actually have that in the preapproval.

Paul Mcallister:

I'll give them like different scenarios because like you use that example

Paul Mcallister:

of the million in the seven 50.

Paul Mcallister:

It's all based on scenarios.

Paul Mcallister:

. I never want to give somebody approved pre-approval and

Paul Mcallister:

say, oh, this is your number.

Paul Mcallister:

I always say this is your number and here's the different

Paul Mcallister:

factors we put into your number.

Paul Mcallister:

You always have to make assumptions, right?

Paul Mcallister:

Like your assumption of how much is the tax going to be?

Paul Mcallister:

Your different assumptions need to be clear.

Paul Mcallister:

So I never give somebody a number of you're approved.

Paul Mcallister:

You can go for a million.

Paul Mcallister:

You can go for a million if the tax are this, if there's no boiler, whatever

Paul Mcallister:

it is you have to get, I want to educate the people I'm working with

Paul Mcallister:

so they know the different factors that will impact their mortgage.

Paul Mcallister:

So then it's good for me.

Paul Mcallister:

It's good for them, right?

Paul Mcallister:

I teach them once they know forever and it will cause them to make

Paul Mcallister:

less kind of mistakes as they go.

Ryan Day:

That's awesome.

Ryan Day:

That's awesome.

Ryan Day:

That was such a good best practice and really sets the client up for

Ryan Day:

success and having the understanding of what's possible right when they

Ryan Day:

close is opens up so many doors and great value proposition on your

Paul Mcallister:

end.

Paul Mcallister:

Even I think from Calvert, do you guys have any because I know you guys have

Paul Mcallister:

so many deals, so I always, I give them advice on what types of renovations

Paul Mcallister:

are going to add the most add value.

Paul Mcallister:

Do you have any kind of literature or anything like that that

Paul Mcallister:

you share or that you publish?

Ryan Day:

Yeah, typically I'll reference it in the footnotes here, but there's

Ryan Day:

the appraisal Institute of Canada release an article, I forget how old it is.

Ryan Day:

One of our in house analysts provided it and it's the the renovations

Ryan Day:

that increased the value the most.

Ryan Day:

Typically number one is painting, renovations within the

Ryan Day:

bathroom, within the kitchen.

Ryan Day:

Typically have the most value add.

Ryan Day:

But I'll provide that list.

Ryan Day:

I forget it off the top of my head specifically how they had it broken down.

Ryan Day:

This was like six, six ish, seven months ago.

Ryan Day:

But those three typically right there.

Ryan Day:

From what we see on it, paint is obviously huge.

Ryan Day:

It's one of the most, obviously largest return on investments as

Ryan Day:

well, too, for the work involved.

Ryan Day:

But yeah, more than happy to share that list in order to help clients

Ryan Day:

just stay up to date on the literature.

Ryan Day:

A few other things that I would know, it is.

Ryan Day:

Are you familiar, we released a few new products as of late.

Ryan Day:

Have you heard of the interim purchase one?

Ryan Day:

It's essentially, we just started doing this, I want to say it

Ryan Day:

was about a year ish or so ago.

Ryan Day:

And it's the exact same for the most part as the flip product.

Ryan Day:

Except no renovations are going to be involved.

Ryan Day:

So we are, we're lending on the as is value.

Ryan Day:

And there's two most common user case scenarios that we're

Ryan Day:

seeing with this product.

Ryan Day:

Number one is A lender, B lender can't close in time.

Ryan Day:

So if you have a client's, they were set up for funding on Tuesday of next week and

Ryan Day:

a lender pulled out for whatever reason, this would be a product for clients

Ryan Day:

that are in those unfortunate scenarios.

Ryan Day:

And user case example number two is pre construction.

Ryan Day:

So value number one is we lend on the as is value.

Ryan Day:

So if the client bought two years ago for 500 grand, it's worth 600 today, we

Ryan Day:

would lend on the 600, 000 as is value.

Ryan Day:

Benefit to the client there is they're getting in with lower amount out of their

Ryan Day:

own pocket on the flip side of this.

Ryan Day:

If it's unfortunately gone down because we lend on the as is value,

Ryan Day:

then we need a little bit more down.

Ryan Day:

But going back to the example, number one bought for 500, it's worth six.

Ryan Day:

We can close in just a few days.

Ryan Day:

It's fully open.

Ryan Day:

We don't need an appraisal.

Ryan Day:

So if the client bought two years ago and, rates were significantly

Ryan Day:

lower than they are today.

Ryan Day:

And now they don't qualify and the builder let them know that, Hey

Ryan Day:

we're ready to close in two weeks, a month, whatever the case may be.

Ryan Day:

This project allows the clients to close and they just listed

Ryan Day:

on the MLS to offload it.

Ryan Day:

If the numbers don't make sense, if they were originally looking to keep

Ryan Day:

it as a cash flowing rental property.

Ryan Day:

So we help essentially help clients just close.

Ryan Day:

They list an exit and it's a win for everyone if they're just looking

Ryan Day:

to close an exit on the property.

Ryan Day:

Nice.

Paul Mcallister:

Okay.

Paul Mcallister:

Yeah, send me some literature on that.

Paul Mcallister:

I that sounds pretty interesting.

Paul Mcallister:

I can have some cases in my head where that could be used.

Ryan Day:

Yeah, so just a short term solution with a quick closing where no

Ryan Day:

renovations are going to be completed and it helps the clients close.

Ryan Day:

And if they're looking to exit obviously work with yourself to ensure that

Ryan Day:

they're going to qualify on the exit.

Ryan Day:

But if they're just looking to offload and they're only going to keep it for

Ryan Day:

a few months, they're literally able to close listed on the MLS the next day.

Ryan Day:

If they're in and out in 14 days, they're charged 14 days interest.

Ryan Day:

If it's 45, they're charged 45.

Ryan Day:

However long the capital is out for, then that's how many days at

Paul Mcallister:

their charge.

Paul Mcallister:

Yeah, that's really cool.

Paul Mcallister:

I think some lenders some listeners might have a question about that.

Paul Mcallister:

So you have a deal, you got it through, it's approved, you got

Paul Mcallister:

the money, it's a six month open.

Paul Mcallister:

What happens if I only need two months?

Paul Mcallister:

And I guess, I think we touched on it, but it's still, I want to emphasize

Paul Mcallister:

how the interest works the per day so say I only had it for 14 days and

Paul Mcallister:

it was supposed to be six months.

Ryan Day:

Yeah, so because it's fully open, there's no

Ryan Day:

prepayment penalty, any of that.

Ryan Day:

You're charged daily.

Ryan Day:

So how you calculate the interest rate is the interest rate so say if

Ryan Day:

it's 10 percent you times that by the mortgage amount and divide by 365 to

Ryan Day:

get the daily interest rate and then you just multiply it by however many

Ryan Day:

days you expect to be in the loan for.

Ryan Day:

And it's really handy because it's in the Flip Analyzer tool as well too.

Ryan Day:

So you can able, you're able to see how much your interest is on a daily basis.

Ryan Day:

In order to obviously incentivize yourself to be shave off and be innocent.

Ryan Day:

Yeah, if you're paying an extra 100, 150, 200 bucks a day in interest,

Ryan Day:

depending on, What the mortgages and the interest rate shaving off a few

Ryan Day:

extra days, making a few hundred bucks.

Ryan Day:

It's I know it motivates, motivates.

Ryan Day:

Most

Paul Mcallister:

people motivate.

Paul Mcallister:

I think the guy that closed today, I told him, I was like, if I was you,

Paul Mcallister:

I would have waited until Monday.

Paul Mcallister:

I would have got permission to put all my supplies in the driveway on the weekend.

Paul Mcallister:

And I would have had my, I like putting a storage box there and everything.

Paul Mcallister:

I don't want the trades to say I need to go to the store.

Paul Mcallister:

My goal is no stores.

Paul Mcallister:

You're working when you're here to work, you're here to work.

Paul Mcallister:

And so that's what I would have done.

Paul Mcallister:

And that's because I would be motivated when I, because I seen the flip and

Paul Mcallister:

I seen the day I was like, Hey, that could be the difference of 800 bucks.

Paul Mcallister:

It's 800 bucks, 800 bucks, but I like it in my pocket.

Paul Mcallister:

So yeah, it's it is motivating knowing that if you finish

Paul Mcallister:

early, you can avoid all this.

Paul Mcallister:

Cost obviously, I still did tell him like listen, you still gotta do

Paul Mcallister:

quality work Don't just rush so much.

Paul Mcallister:

Yeah.

Paul Mcallister:

Yeah, there's a fine line, but yeah, it's a cool thing that they

Paul Mcallister:

show 100 percent And then what is

Ryan Day:

so yeah, I'm sorry

Ryan Day:

Then the other one is we're starting to do a little bit of multifamily as well too.

Ryan Day:

Minimum that we need down is 10%.

Ryan Day:

Low money down for multifamily.

Ryan Day:

We go up to 65 percent loan to value of the after repair value.

Ryan Day:

Six month term, fully open, renew for another six months as long

Ryan Day:

as the client's in good standing.

Ryan Day:

And most common user case scenario we're seeing for this is a repositioning

Ryan Day:

product for CMHC MLI Select program.

Ryan Day:

Most will land on a one property, which unfortunately

Ryan Day:

limits a few individuals is 1.

Ryan Day:

5 million.

Ryan Day:

So if, if it's in Windsor, Sudbury, Sault Ste.

Ryan Day:

Marie, where purchase prices are obviously typically significantly lower than in

Ryan Day:

around the GTA or Southwestern Ontario.

Ryan Day:

Is what we're doing.

Ryan Day:

So just started doing that a little while ago.

Ryan Day:

We've had some success with it.

Ryan Day:

We do quite a bit of it up in Edmonton where your money typically goes

Ryan Day:

quite further as opposed to Calgary.

Ryan Day:

So that's an option as well too.

Ryan Day:

With those, we do need an appraisal if the value, if it's five units and over 1.

Ryan Day:

5 million.

Ryan Day:

So with that, we would require appraisal, but anything four units and below and 1.

Ryan Day:

5 million and below.

Ryan Day:

We can use our in-house analysts.

Ryan Day:

And what's

Paul Mcallister:

the minimum down payment on that?

Paul Mcallister:

Is it the 35% or is that, did I miss that?

Ryan Day:

10%.

Ryan Day:

Okay.

Ryan Day:

Minimum down is 10%.

Paul Mcallister:

Yeah.

Paul Mcallister:

If you could send the literature on those two products, those are something

Paul Mcallister:

I'd want to add to my wheelhouse.

Paul Mcallister:

For what I'm doing, my coaching, it's something they can, should consider.

Ryan Day:

And then a few other things to mention, just in terms of qua deals.

Ryan Day:

We've been seeing quite a bit of debt consolidation.

Ryan Day:

Unfortunately, it's just not in our focus.

Ryan Day:

Refinances aren't in our focus.

Ryan Day:

Mixed use.

Ryan Day:

It's high loan to value stuff in second position with unfortunate how the

Ryan Day:

economy is and people being leveraged.

Ryan Day:

We're starting to see quite a bit of it.

Ryan Day:

So just don't do clients in those types of scenarios

Paul Mcallister:

just to save everyone.

Paul Mcallister:

Yeah, I know for sure.

Paul Mcallister:

For sure.

Paul Mcallister:

That's, it's really important.

Paul Mcallister:

It's important.

Paul Mcallister:

So I think the, I want to say.

Paul Mcallister:

One thing that you said about adding value I had a little note on that is

Paul Mcallister:

it's really similar in my approach to your approach on the adding value

Paul Mcallister:

of where to do the renovations.

Paul Mcallister:

Always kitchens, bathrooms, paint is obviously huge and flooring is,

Paul Mcallister:

to me, those are the four common.

Paul Mcallister:

And then I always, I wanted to add the little spice of anytime you can

Paul Mcallister:

add a bedroom and not take away from the property, it's never a bad thing.

Paul Mcallister:

And I think you're always adding a lot of value and you can add a bedroom.

Paul Mcallister:

That's just my general advice.

Paul Mcallister:

I usually give my clients when I'm coaching, but I will take

Paul Mcallister:

that document you said yeah, that's the cool document to have.

Paul Mcallister:

And a part of the, like when I say business plan, these are the things

Paul Mcallister:

that you want to have readily available.

Paul Mcallister:

To you in a, in an organized way.

Paul Mcallister:

So even the three products that you've met through the flip

Paul Mcallister:

analyzer, to me, you should just, that should be something you use.

Paul Mcallister:

Even if you're not doing a Calvert loan or not, like that's

Paul Mcallister:

something you should always have.

Paul Mcallister:

And then knowing about these other products, because if you, a lot of

Paul Mcallister:

times people not knowing that things exist, like you didn't know about the

Paul Mcallister:

commercial exit, that means like there's a lot of deals where they can't exit.

Paul Mcallister:

You can send them to me.

Paul Mcallister:

I'll take them and I'll figure out how to exit because I know that

Paul Mcallister:

I have that, knowledge, right?

Paul Mcallister:

Knowledge is power and who you work with and who that power team is.

Paul Mcallister:

Obviously, if you're doing these types of things you want to have that contractor's

Paul Mcallister:

key and build that relationship.

Paul Mcallister:

But the mortgage broker, you would never think about it as being like a huge key.

Paul Mcallister:

Like I'm proposing.

Paul Mcallister:

But when you have somebody who is an investor focused mortgage broker, investor

Paul Mcallister:

focused professionals in general it's something I really preach and I encouraged

Paul Mcallister:

to listeners to get that power team.

Paul Mcallister:

And I'm not just saying me, I'm just saying in general, make sure you have

Paul Mcallister:

investor focused, real resources around you because it can be the difference

Paul Mcallister:

of your portfolio growing in a flat curve or that upward cycle, right?

Paul Mcallister:

Cause my goal is to get you really, hammering it.

Paul Mcallister:

And I truly think that I can add value by knowing about all these products from

Paul Mcallister:

privates and just knowing about all the different ways that we can help you grow.

Paul Mcallister:

And I care about that more than Oh, I, you don't have TDS the same or

Paul Mcallister:

you don't have all these documents.

Paul Mcallister:

No, that's not ever how I think a lot of people don't even come to the

Paul Mcallister:

table or come to the ballpark to play because they think they don't have

Paul Mcallister:

the tools they think, Oh, I haven't.

Paul Mcallister:

My taxes are bad.

Paul Mcallister:

They've been talking to their banks about they don't put anything on paper.

Paul Mcallister:

There's products out here that if you are good at what you do in terms of

Paul Mcallister:

finding value, being able to execute and you have an exit strategy, you

Paul Mcallister:

can there's nothing holding you back.

Paul Mcallister:

Yeah.

Paul Mcallister:

So that's my, I guess my last I am going to leave it to you, Ryan,

Paul Mcallister:

anything else that do you want to touch on before we start to close?

Ryan Day:

I think you nailed everything on the head.

Ryan Day:

Yeah.

Ryan Day:

I love what you guys are doing.

Ryan Day:

Creating education helping real estate investors and to your point,

Ryan Day:

having someone who's also investing.

Ryan Day:

In the asset class is a huge value add, just because you know it, you

Ryan Day:

live it, you breathe it, you understand it you're experiencing it firsthand.

Ryan Day:

So that is something that we always recommend clients is work with a

Ryan Day:

realtor, work with a mortgage broker who's investing in the same asset class

Ryan Day:

that you're looking to get in, just because having that lens of the firsthand

Ryan Day:

experience as well as coaching others.

Paul Mcallister:

Sorry, you froze for a second.

Paul Mcallister:

So I heard as well as coaching others and then your audio cut out.

Paul Mcallister:

Here, I turned off my video.

Paul Mcallister:

Ryan, can you hear me?

Paul Mcallister:

Okay, yeah, I'm gonna turn off the video and let it just so yeah,

Paul Mcallister:

you said the importance of working with professionals in your same

Paul Mcallister:

asset class and then it cut out.

Paul Mcallister:

Can you repeat that?

Paul Mcallister:

I appreciate that.

Paul Mcallister:

I definitely would be the one.

Paul Mcallister:

I love to always continuously improve just in general.

Paul Mcallister:

That's the engineer in me.

Paul Mcallister:

But I honestly, you guys this isn't just because you're on the show,

Paul Mcallister:

but you provide a good service.

Paul Mcallister:

You're really responsive.

Paul Mcallister:

You'll say, Oh, if it's going to take you two days, you're going to

Paul Mcallister:

say it's going to take you two days.

Paul Mcallister:

So then you're setting an expectation with us.

Paul Mcallister:

You're very fast and you'll tell us why if it's going to take whatever.

Paul Mcallister:

So that's what I really like.

Paul Mcallister:

You're really open book.

Paul Mcallister:

I've enjoyed working with Calvert and I think Ryan, maybe we should,

Paul Mcallister:

we can talk after this about so we have something called the Lend City

Paul Mcallister:

Investor Hub where basically we have a investor community we've created

Paul Mcallister:

this about 100 and 120 days ago.

Paul Mcallister:

We have 600 investors that are in this hub.

Paul Mcallister:

And we actually have live.

Paul Mcallister:

We do the same thing we basically just did, but we just do it live

Paul Mcallister:

with investors that actually can ask questions as we talk.

Paul Mcallister:

So they can do it meeting raising their hand or they can do it via a chat.

Paul Mcallister:

It's usually a team's meeting.

Paul Mcallister:

But we have about 70 or so people in these calls.

Paul Mcallister:

And that's something that, when you talk about working with

Paul Mcallister:

education is a huge pillar for us.

Paul Mcallister:

And I think that, there's some value possibly in us doing a webinar on

Paul Mcallister:

that show where, you'll get live questions from the audience and a

Paul Mcallister:

lot of these people that I coach are actually in this hub already.

Paul Mcallister:

So it's nice that they're going to hear it from, your mouth and not just mine.

Paul Mcallister:

But yeah, that's something we should consider.

Paul Mcallister:

And if any listeners there, you can send me a DM.

Paul Mcallister:

Instagram turnkey McAuley is my handle.

Paul Mcallister:

That's the easiest way to get in touch with me, Ryan, how, do you want to

Paul Mcallister:

leave how to get in touch with you, even though I would still advise you

Paul Mcallister:

that coming to me, then me going to Ryan is the best way, because I'm going

Paul Mcallister:

to make sure that you're presented.

Paul Mcallister:

Kind of, the right way.

Paul Mcallister:

Okay, cool.

Paul Mcallister:

I appreciate you taking the time this afternoon, Ryan, and happy Friday.

Paul Mcallister:

I hope you have a good day.

Paul Mcallister:

Good weekend.

Paul Mcallister:

And yeah, thanks for your time.

Paul Mcallister:

And we'll chat more about some other things we can do in the future.

Paul Mcallister:

All right.

Paul Mcallister:

You too.

Paul Mcallister:

Cheers.

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