Hard Money Lending Secrets with Kevin Amolsch

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Kevin Amolsch  0:00  

Stay positive and focused as possible. I use affirmations and meditation to help with this. then just take massive freakin action. You can't just sit on your ass and expect anything to change. Welcome to

 

Taylor   0:12  

passive wealth strategies for busy professionals. Today, our guest is Kevin a mulch. Kevin is the founder of pine Financial Group, a leader in the hard money and private lending space. Kevin has a degree in finance, which he obtained after serving four years in the US Army. He started out on banking before he started his first real estate investment company more than 20 years ago, he and his companies have closed on over 1400 transactions worth over 450 million dollars.

That is something He is an expert at Real Estate finance. today he's going to tell us all about hard money lending for flipping of real estate. So he is a lender that lends money to people that are flipping real estate, he's going to tell us about his fund. He has a number of tools that are out there for anyone who is looking into flipping wants to get into the flipping game. He's going to teach you how to run those numbers. 

This is a fantastic conversation. If you're interested in the debt side of independent real estate investing whether or not you want to be a lender, or you're interested in investing in real estate debt, this conversation is for you. once again, he has a bunch of resources that he mentions in this episode. They're all in the show notes. But certainly listen to the conversation so that you know what he's offering. 

And you understand how to use those resources. That could be a great use of your time to look those up. Once again, thank you for joining us. Now here's the show. Kevin, thank you for joining us today.

 

Kevin Amolsch  1:52  

It Taylor, thanks for having me. I'm excited to be here.

 

Taylor   1:55  

happy to talk to you. Could you tell the listeners about your background and where you're coming from before we get into the topic for today?

 

Kevin Amolsch  2:03  

Yeah, you know, my background in real estate, I started real estate at a young age I was 20 years old. 21 actually I just turned 21 bought my first house, I kept it as a rental once I moved out to it out of it. you know, I was producing cash flow and appreciation and things were going great. I really enjoyed putting the deal together the structure and everything. so I decided you know what real estate's gonna make me rich, this is a vehicle I'm going to use. So I started studying it and learning about it, I ended up getting a student loan and use that as a down payment on my second property.

So I was low interest tax deductible loan, I didn't need the money for school. So I thought, Yeah, let's go buy another property. that's how I got my first rental property. What I really love about real estate is the deal structure. what I've learned is, the financing piece is the deal structure, the way you negotiate the deal always has to do with the financing, how you're going to fund it. So I focused on the financing side, I ended up becoming a private money lender. So I started my company 10 years ago, and we're about 85 million now on three different states. living a dream.

 

Taylor   3:10  

Great, great, I'm glad to hear it. you told me before we started recording that once you're done, you're going to go to a concert with some friends. So lifestyle exactly right life. Life's good

 

Kevin Amolsch  3:20  

man.

 

Taylor   3:21  

Yeah. So, you know, there are a number of directions we could take this conversation. You know, as far as for somebody when you're starting a lending business, where are you getting that capital from? Presumably you have investors in your business, right? Right.

 

Kevin Amolsch  3:40  

So I told just recently, my company's always been 100%. Debt Free, everything we've done is we've raised equity raise money from individuals. Finally, banks are starting to see like, Hey, man, this guy knows what he's doing. that's starting to work. So I've been able to get some bank financing. But it's still small scale. We're primarily privately funded company.

 

Taylor   4:05  

That's awesome. what structure is that? Under? What how's the legal entity set up? And the syndication? What are you doing?

 

Kevin Amolsch  4:14  

Yeah, you can call it a syndication. That's, that's the hot term. Now. You know, what I've done is I've created just some primary company, another company, which I'm the hundred percent owner of, and then I've structured several different funds, and I just called them mortgage fund. Some people might call it a syndication, but it's bringing a lot of individual investors together into one entity that we use to go out and make these loans. the reason I've had to do several different ones is because of sec regulations, I mean, you're restricted on the amount of non accredited versus accredited IRA versus non IRA. 

So each time I reached a threshold or a limit, I would start a new one. My most recent fund is a Regulation A, which is a wise I public fund, I'm not listed on an exchange, I could if I wanted to, though, I'm allowed to advertise. So I could say, hey, look, I pay 8%. If you're in Colorado, Minnesota, I can, I couldn't market to you now. So that's been a big benefit. But now I'm almost reaching my limit on that one. So now it's just like, what, what's next?

 

Taylor   5:16  

On the other side of the transaction, right, you have the money coming in, but you need a place to put it. So what are you lending funds on. I'd also like to get into some of the business aspects of running other aspects of running this business. Absolutely. Everything,

 

Kevin Amolsch  5:36  

I'll be totally transparent. So we, the big piece is obviously loaning the money out if the money is not out working it, I can't pay my investors what I'm promising them or telling them that they should expect. So that's a big piece of the business I have. If you include me, there's four sales people not including me, there's three, I focus more on bringing the money in those three guys, they are out there lending it out, we have a small element illustration staff as well. 

But they're looking for fix and flip deals that we could fund for our clients. We're looking for a fix and refinance. A lot of our clients want to build a rental portfolio with little or no money down. So this is a good product for that. We've gotten real heavy into the commercial value add space. 

For example, I just financed the deal on a Safeway they're turning it into a three tenants building, it was just a Safeway now there's going to be a gym, a swim school, and then there's one fake and they're trying to figure out what 10 it's going to take that space. Now, once it's all occupied, though, you know, it's bankable at that point. So the refinance me out. That's, that's the direction we're going.

 

Taylor   6:40  

Cool. So that I can see a lot of potential pitfalls in that in underwriting deals. I mean, you still need to know that you're loaning on a viable deal. Right? So how do you handle that back end of underwriting and understand the market and understanding the borrower? How does that all work from a system standpoint?

 

Kevin Amolsch  7:05  

Yeah, that's a good question. it's a little fluid, because of the different asset types take different types of diligence. For example, on a single family house, if we're doing 100% loan, which is really our specialty, we're really careful there. So we're going to qualify the borrower and the project, the project is going to include a full appraisal, we're going to have a budget, so we know what the work is going to be done, what what rehab is going to be done, so we know how to value it. then we do a full package. 

So I'm looking at tax returns, just that's more for disclosure purposes for my licensing, so I can disclose correctly to my investors. But I am definitely looking at tax returns and, and bank statements, not tax returns, I do look at TechStars. But the primary thing is the bank statements because I want to make sure that our clients are set up for success. the problem in this business is liquidity and reserves. you don't have that when you go over your budget, you go over your time, and then you lose your ass. So if I can help them be structured correctly on the front end, I could protect my money that way. On the commercial side, it's completely different.

Right now we have environmental reports to do soils. What's the use going to be? We typically try to get an appraisal on those as well. But it's a totally different appraisal, because now we're based on comparable rental values. we're backing into a value on an income approach. very different than residential, which is simple. It's just what our other house is selling for. Right. So it's a it's a much more complicated process and reports, sometimes there's feasibility studies, but you know, it's all about building a team and having the right people come in and tell you, yeah, this is what you're getting into.

 

Taylor   8:42  

You know, I was talking to somebody about this last week, actually, their perception is the reason that most flippers fail, especially new ones is along the lines, what you said, it's liquidity, it's they run out of money, something in their rehab costs more than they expected and they were fibs, they didn't have enough cash. So they have to sell it or bring somebody in, does that reflect your experience?

 

Kevin Amolsch  9:06  

Oh, absolutely. That's the number one reason any business goes out of business. If you can't weather the storm, you're gonna go out of business. So strong liquid position is vital. Now we loan 100%. But that doesn't mean that you shouldn't have any money. No, that's just I think the money is more important in your pocket. So that if you have a problem, you can handle it.

 

Taylor   9:26  

Yeah, so you're learning, you're learning 100% on the property, and then they have to the borrower has to bring the rehab costs everything to the table or as 100% on the ARV. How's that all work?

 

Kevin Amolsch  9:41  

Yeah, so we, I'm not sure, actually, we didn't talk much before this interview. So I don't know what era you are in or your listeners, but we are in Colorado, in Minnesota. I know different states and different hard money lenders are gonna be a little bit different. But we like to loan 70% of the after repaired value, we don't have a loan to cost ratio requirement. So if you can stay at or below 70%, we're going to learn all the purchase all the repairs, all the closing costs, the repairs are going to come to you and draws just like a construction loan. So we are going to help manage that. I want to see that the work gets done. But otherwise, I'll find I'll find all of it to you. If it's a strong enough deal.

 

Taylor   10:20  

That's awesome. I'm in Richmond, Virginia, just to get that to you there. I'm not a flipper myself, I'm a syndication guy. But my window into the flipping world is that people are getting that that 70% number is getting higher and higher over the years, people used to try for 60 or 65. But that wasn't working anymore. So that had to that spread had to get a little skinnier. is that still happening? Or is that just in Virginia? what's what's the deal?

 

Kevin Amolsch  10:55  

Yeah, that's an interesting point that we could probably have a long conversation about when I got started. Now was almost 20 years ago, when I bought that first house. I mean, you were born borrowing hard money or private money. 80% of the value. Not and that's crazy. I mean, if you're doing if you're working on that fin of a margin, you're probably losing money now. Yeah. So then we seen it, retract right now, go to 75. 

And then sassy and go the other way. now we're seeing lenders get a little bit more aggressive, which is a little scary, because the markets softening at least in the areas I work. if the market softens, and it doesn't bail you out. So you in a good market, you could screw it all up in a year will get bailed out still. Now you got to be much more careful. Because if you're not going to see that appreciation, I'm thinking 65% to 70 is probably kind of the max for hard money lenders should be right now.

 

Taylor   11:44  

So they shouldn't be considering deals that are higher than that. 70%. they should really avoid the

 

Kevin Amolsch  11:52  

skinny deals. Yeah, if I'm telling you from my perspective, I would agree with that. If I was on the flip side, I would say I mean, I believe you should lend me some more money, right? If you're if it's your cash in the deal. Oh, man, I'm saying 70%. Probably kind of a ceiling there. Yeah, that's my humble opinion. Hey,

 

Taylor   12:14  

we're all about humble opinions here. This is a this is a very, you know, it's an opinion show. We're here bringing the experts on asking their expert opinion. That's why you're here. You're the expert.

 

Kevin Amolsch  12:24  

Oh, thank you. I appreciate you having me here. let's get to know more about you at some point.

 

Taylor   12:30  

Yeah, no, absolutely. Well, we'll do that offline will do that. So as for somebody who is I don't mean to be, you know, talking to your competition, potential competition here, for somebody who's considering getting into hard money lending on their own not investing in a fund, but going out and being a hard money lender, what are those some of those key early things that they need to know before they even stroke that first check for 50? grand to, you know, flipper down the street?

 

Kevin Amolsch  12:59  

Yeah, there's a lot of pitfalls here, guys. if you want, you can email me and I'll send you a report on some of the pitfalls to watch out for. But yeah, obviously, that's free. But I'll tell you what, what I'm seeing is a lot of people, when you say 50,000, I automatically think of a junior lien position. It's very rare to see that small of a loan amount in a senior position. I'm telling you, I've seen it happen where people will come into a junior position, they call it gap funding, that's the term right? 

You're covering the gap that the normal heart of the smarter hard money lenders and going alone, yeah. So then you have these private money, guys come in for 50 grand in the junior position, and then they can't support or they can't take out that first. there's a problem. They lose everything. It's unsecured loan, unless you're strong enough or big enough to take out the first I seen someone was $180,000. 

Last year, on a position I was in first I was the first she was in second. I can't protect her. Look, I have my own investors I'm looking out for I felt terrible. But I had to foreclose, I had to repossess the assets she got wiped out. that's not the only time I've seen that. So you said 50. So that sparked up my passion for this one. But there's a lot of pitfalls, right? Email me, I'll send you a report.

 

Taylor   14:11  

Awesome. I mean, that that is a very good point. I'm going to our goal when I was talking to the person about last week, but bigger at my meetup that I host here in Richmond, is a lender herself. one of her strategies in that regard to protect herself was she'll just occasionally showed us by the property and let the flipper Go. Go ahead, go ahead and fix it up. in that sense, she doesn't have investors herself. But as the flipper fixes up the property. If they don't come through, they've just improved her property. Right. If they do come through, it can work. So seems like a valid strategy to me.

 

Kevin Amolsch  14:51  

Yeah, seems good. Because it's you can avoid the foreclosure That way, you'll just you already own it, right? So you don't need to go through a repossession prof process. If they default. Some states might not like that so much. It's like, you've heard of lenders having them sign a quitclaim deed and they put that in your filing cabinet? And if they default, you record the deed? Well, if you get if that gets challenged in court, you probably lose. Release. That's what my attorney is telling me. So I don't I don't think it's a bad strategy, but it's not bulletproof.

 

Taylor   15:20  

Hmm, interesting. So that's definitely good to know. I mean, I can see there are a lot of legal pitfalls here. In addition to the numerical, so to speak, pitfalls of running out of money, the cash flow problems that can come up against these flippers,

 

Kevin Amolsch  15:38  

right. I mean, there's legal issues on both sides of the transaction. I'm not trying to say that her strategy is not good or isn't going to work. I think it's brilliant. If you're going to avoid foreclosure. I just don't know if I would bank on it. I'd still try it. But if you could challenge you might have a little bit of a problem there.

 

Taylor   15:53  

Yeah. Okay. So we're, if we're getting started out, we're not going to count on becoming a hard money lender, with just 50. k, we're gonna have to be, we have to write a bigger check. Basically, if we want to be if, if we want to say safe, okay, though, vetting, vetting flippers to basically loan hard money to from my world of syndication, investing and syndicating, we think about the quality, the experience of the team. All that where do you stand on the experience of flippers that you're loaning money to? And when's the right time? When's the wrong time? and somebody's flipping experience to start loving the money?

 

Kevin Amolsch  16:40  

Yeah, that's a good question, to see how I built this company working with newer investors and building them up. Now, sometimes they'll graduate and go raise their own money, and they'll go off and do their own thing. 

I'm too expensive for them now. that's actually a good win for me too, because I help group them. So I really do think that it's okay to loan to newer investors, everyone starts somewhere. But as you said, I think good team is vital. If they don't have any experience, and they don't have a good realtor or mentor helping them then I'm not really interested in doing a deal with them. I'm not talking about a contractor that's done some rehabs before mentoring them know, it's got to be someone who's seen the whole business cycle, not just the rehab piece of it, because you got to sell the property to right so good realtor mentor is vital.

For me, it's part of the interview process that I go through with my clients. that's actually the very first step right is talking to them by now how they plan to move forward and who's on their team.

 

Taylor   17:40  

Yeah, give me the story of the business here. What's the what's going to happen? If you could write it on an index card? What are you going to do?

 

Kevin Amolsch  17:49  

For the new for this for your listeners, if they're going to just get started, you got the money or you have a group of people that have the money you can put together you could do a syndication and make a loan to right. So you could do that as long as you're in senior position, and you can all figure out a problem together, I think you'll be okay. So the first part is to have the money. Now you want to go out and do a loan. 

So you go out and start networking and trying to find clients, right, you're not looking for real estate deals you're looking for buyers of real estate deals was definitely a people business. The best way to find those are on some online forums, networking groups, like your meetup probably. I would find, I would find good potential buyers fix and flippers and just tell them, Hey, I got money, look, here's my business card, it says I have money. 

So I do and start handing that out. then when they give you a call, then that's when the diligence starts, starts with an interview, financial statement, I want to make sure that they are, again, the reserves to make sure that they're financially able to do the deal. If not, let's bring in a partner or signer to help you get through your first one or two. So it's financially strong enough. then we're looking at the insurance policies, right, I want to make sure that there's a good title insurance policy in place and a good hazard insurance with liability. So in case they get sued, it doesn't slow the project down necessarily. So I'm looking for for all of those things. I mean, it's a simple business, but it's more complicated than we could talk about in 30 minutes. So I'm doing the best I can hear.

 

Taylor   19:17  

No, yeah, me now. Oh, yeah, I appreciate that. we're getting a high level view here. Now one of the things that I've I've seen as a potential problem is under and I brought this up before, but if you're really getting into hard money lending, you're out there on your own, and depending on what level of experience you have, is evaluating the numbers. So maybe you go find a borrower, you go out there and network, you get up a big list, and you building relationships with people, and then they present you a deal plan. They say, here's what I do here, my numbers, all that stuff. Yeah. How do you get started, like knowing and numbers? And, you know, is this guy right? Is he off? You know, as rehab budget, for example?

 

Kevin Amolsch  20:07  

Yeah, that's great. That's so great. So the numbers are the one the most important piece of the deal, right? I mean, this is math, you have to understand the numbers of real estate and girls, it's just a commodity, it could be anything, we just choose real estate, because we enjoy it. But you have to understand the numbers. it all starts with that value. Now I teach our classes on how to value a piece of property. 

And I don't even know what real estate agents and appraisers, especially a lot of real estate agents don't know how to buy property, by the way. But a lot of the appraisers go through a pretty extensive training to learn how to do that, right. So that's, that's a pretty complicated thing. But it all starts with comparable sales that are in tight to the property, but not crossing over into different types of neighborhoods, or major or cereals and that kind of thing. So it's not necessarily just a diameter, it's but it's in the same neighborhood. then you want to get as close to the size as you can. But you want to have some comps that are smaller and bigger, so that you could bracket that. that you want to bracket everything if you can, bedrooms, bathrooms and size to start with the value. then you got to take off the purchase price, you gotta take off all of your expenses, including your profits, what do you think you should be making, and you start subtracting, until you get down to the very bottom number. that's what you should be offering on the property. 

On my website, there's a worksheet you can get for free as well. it walks you through how to run the numbers on a fix and flip. We've shot some videos about that too. there's a calculator on the website as well. Because the numbers are it is that important. As far as the rehab, that's another tricky one. So what's the value in the rehab, those are the two that investors Miss on on the rehab, I would say get a house under contract, do the best that you can, and then have contractors come in. this is how you do it, you want all the contractors bidding the same thing, every contractor is going to come in and say well, you should do this, you should do this, here's an idea. they're gonna start building some weird rehab that you don't even know really want or need to if they want to add that cool, separate line item. But here's the things I want you to bid, do that to work with two or three contractors. 

then you start to learn how to go, you'll learn with the prices and all this cost it takes doing to learn it, you can't read a book and learn how to estimate repairs, because prices are constantly changing. I would also say get it under contract first. the reason I say that is because you want to respect the contractors, you don't want them coming into properties that you don't control. That's not fair to them, they have to have a legitimate chance to earn the job. If you're going to spend their time in my opinion, because they're going to give you that time for free.

 

Taylor   22:37  

Yeah, and getting them I think getting them interested, that they want to come out. That's another big question mark is, how do you get them to want to take that time to look at your property and give you a bit? I mean, now we're kind of on the flipper side, right? But how do you get them interested? And then so that they'll give you a bit give you a competitive bid? You maybe they'll just say I don't work this way, this guy, but my boss says I gotta give it a bit. So here's a go away. super high number. You know, I don't know.

 

Kevin Amolsch  23:07  

It just happens. Yeah. I know, I do keep coming back to the flipper side, because that's where my mind goes when I'm underwriting the deal, though. Yeah, I'm the lender on this side. But I'm always putting myself on their side, or are their numbers, right? What did they do to come up with those numbers? Can I see the contractor bid? Just like they would do for their own project?

 

Taylor   23:25  

Okay, so there is plenty of due diligence there that a lender potential lender can do. They How did you come up with your numbers? And if they got multiple bids from contractors, that's great. They have extensive experience, even though you said you're not afraid of new people. If they have extensive experience. That's probably a good indicator.

 

Unknown Speaker  23:44  

Oh, sure. Absolutely. Okay,

 

Kevin Amolsch  23:46  

yeah, I mean, experience, obviously, Trump's will not reserves. That's nothing Trump's that. But that Trumps a lot, right. I mean, if you ever experienced and you've been through the process, that's big. I just don't think I would deny someone for not being through the process.

 

Taylor   24:04  

That's fair. I like that. As far as the numbers on our money loans these days. I mean, what are we looking at right now?

 

Kevin Amolsch  24:15  

Yeah, and I would just wrote an article today about this, it really me all hard money, lenders are going to be similar, but there's going to be some variations, right. So you really need to understand what you're getting for the price. You can't just look at the price alone. Some hard money lenders are going to be there in your corner, like through the project, you know, giving you advice and helping you and if you get into some trouble, like working through that with you, and some are going to be like, hey, that's a foreclosure. 

I want the property. So I would really understand all of what you're getting, what the down payment requirements are, what the terms are, what the fee hidden fees, and other fees are. What happens if you go over maturity, if they're extensions, what that looks like. So it's much more than just a price. 

But I'm not trying to avoid your question here. We charge between two and three points in origination of which is 1% of the loan amount in a fee. then we're between 12 and 13% as the interest rate. So let's say a brand new person comes in, we've never worked with them before. They're doing a simple fix and flip on a single family house. We're going to be at three points. 12.9% interest. Okay.

 

Taylor   25:18  

Yeah, I think there's a you make a good point in there. It's not about the cost of the price. It's about the value. What do you get from your hard money lender? As a borrower? Do you get help managing the project? Are they involved in anything like that? Are they very hands off? And just ready to foreclose on you?

 

Kevin Amolsch  25:42  

Yeah. can they close the deal? Look, I just got a call Friday. They wanted to close what is to choose, they want to close today? It hasn't quite worked out that way. But we were going to close them today. they called me Friday, because they're they're hard money lender that has been working with them for two weeks, call them said, Hey, I don't have the money to close. Ouch. Yeah, that sucks. 

That's one business day before closing, we got that phone call, I would be sure you know you're working with that on the borrower side. on the lender side, don't commit to something you can't do that. That's a quick way to go out of business.

 

Taylor   26:11  

That's a quick way to not get a call again next time from the same guy.

 

Kevin Amolsch  26:14  

And it'll make them might be sending reviews online. You know what I mean?

 

Taylor   26:19  

Yeah, no doubt about it. No doubt about it. So as far as running a fund, you know, I'd like to talk about the passive investment side of this for somebody that says, All right, I don't want to learn about rehab budgets, I don't want to go out and network four times a week to go meet, you know, a handful of potential flippers, somebody that would like to invest in a fund, like the one you have, what should they look for in a fund the way it's managed, the way they set up their deals? Do all those kinds of things. I'm going to ask the question, What are typical words turns to passive investors these days?

 

Kevin Amolsch  27:02  

Yeah, that's good. So I think the returns on my funds are a little bit less than you might find with other hard money lenders. the reason for that is we're much more established and a lot of other hard money lenders were a lot bigger, and got a great reputation. So I'll just shoot out what we're paying right now. First, and I'll go back and answer your question. So we just pay a flat 8%. So it's a promise to return, it's set, it's going to come every single month, no matter how well the fund does, you're going to get the eight, a lot of funds are structured more of an equity play, which means you participate in ups and downs, that you might have a preferred preferred return a lot of syndicators do this as well. 

Do I say eight or 10% preferred return and then anything above that is going to be a bonus, depending on how well the fund does. The thing between the difference between maybe a syndication on an apartment deal and a hard money loan fund is a hard money loan fund is they're investing in debt, which is much safer than buying property, but you're not going to get the big, you know, the big win, you're not going to get those 2035 returns, like you might participate in a successful apartment syndication, for example. 

So if you're looking for passive income, that's real steady and pretty darn safe secured by properties that are low loan to value than a mortgage fund might be a way to go. it's also I didn't say this, but it's also diversified, right? If you're out there lending money on your own, you're putting, you know, 100, 200, $300,000 into a deal. That might be the only deal you can afford to do or maybe you've got two or three, but however much it is money is finite. If you're in a if you're in a fund, now you're it's like insurance, right? 

Benjamin Franklin is a genius for inventing insurance, because now we have all these people going into been to these deals, and then you have little payouts, but we're all protected with a small fee every month, a mortgage fund or any of those is the same. If one deal goes bad, you're still have all these other ones, and you're all working together to still have that income come in. Right? So back to my example, if you do one deal, and it goes bad, Well, shit, now I have a problem.

 

Taylor   29:00  

Yeah, you do. it back to that example of somebody that are 50 k example from earlier. You could if you're in a junior position, you can lose all of that. poof, it's gone. prudent investors, from my perspective, don't try to knock it out of the park with every single last dollar to their name, they diversify their investments. So there's a very good argument to be made about this diversification strategy and investing in debt rather than equity, in addition to your equity investments. Right.

 

Kevin Amolsch 29:35  

Yeah, I agree.

 

Taylor   29:39  

As far as an investment, you know, people in the syndication world there, when they get into it, they might they might not be comfortable with investing in money, and then it's invested five or 10 years plus, how is the liquidity for passive investors in debt funds like yours?

 

Kevin Amolsch  30:00  

Yeah, a lot of debt funds are going to have a minimum. even an equity fund will have a minimum time, as long as they're investing in like loans because they're still short term, right. So each time the loan pays off our average loans a little under six months. So we always have loans going out and coming in and going out and coming in. So it creates some liquidity in a syndication deal partner syndication deal. 

For example, you're in the deal, right? I've invested in several syndications like that, which is fine, because I'm, I'm hoping for the big, you know, the big win. But you're right, it's not liquid at all, you have to see it through a lot of the loan funds will create some liquidity for you. sometimes they'll be a minimum time like, say, 123 years and after that, then you can call it do and you can get your money back, a mine, everything I've done up until this public fund is totally liquid. If you want your money back, just send in a request. as soon as I free up the capital, I return it. So I built it. 

So I I give myself 90 days return the money, I might have to wait for a loan or two to pay off and then I'll return the funds. this most recent fund from the advice of my attorney was to set up a 24 month minimum. after that it's 100%. Liquid, no penalties.

 

Taylor   31:13  

Well, I think that's very reasonable. it's like you said about in the syndication, your money is parked, and we're not doing a whole bunch of transactions, that money is in the property. that's where it is till we sell it. Whereas with your short term loans, you're constantly churning. You've got just more turnover in your cash, I suppose that can reset exactly right.

 

Kevin Amolsch  31:39  

Now, in words, a lot of assets, not just one and the assets returning. Exactly.

 

Taylor   31:44  

We're going to take a quick break for our sponsor. Sounds good. All right, Kevin, I've got three questions. I asked every guest at the end of the show. Are you ready?

 

Kevin Amolsch  31:55  

I'm ready.

 

Taylor   31:56  

Great. First one, what is the best investment in real estate that you ever made?

 

Kevin Amolsch  32:01  

The best investment in real estate I've ever made? Well, it hasn't come to fruition yet. I'm still working on it. But it's going to be a seven figure profit. The 13 unit townhome project in Sloan's Lake, which is a neighborhood really close to Denver. So it's just right across the interstate from Denver. So I'm sure a lot of major cities have these little hot pockets. Right. Hot Pocket. That's funny. So that's, that's a 13 in development, I ended up tying up that property 10 years ago on a lease option, no money down. then I exercise the option did a little assemblage so I had to buy two other parcels. I put it all together. now we're building 13 townhomes and it's going to be a seven figure payday.

 

Taylor   32:42  

Wow, that's awesome. Good things come to those who wait. Right?

 

Kevin Amolsch  32:45  

That's a good one. Yeah. Yeah, you know, cash flow and everything that entire time when I was on the option. Oh, it's been a real good project.

 

Taylor   32:53  

That's awesome. in that he says in Denver in that time, I mean, Denver itself has appreciated pretty significant over the last 10 years and additional. Yeah, yeah. Awesome. On the other side of that, what is the worst investment you've ever made?

 

Kevin Amolsch  33:11  

I was like, What is he gonna ask you? I get nervous, like, you're not gonna warn me What questions you're gonna ask me here. But uh, yeah, the worst one was a hotel, I bought a hotel in Branson, Missouri. when you think about this, there was a 23 unit. Hotel on the end, the big chunk of that building all had like full kitchen. So they were almost like little apartments, but it was run as a hotel. then they had a back building that had actual apartment units in it. 

So I bought it, rehabbed it, I put in kitchen ads and all the other apartments and I tried to turn it into an apartment building instead of a hotel, what I've learned is you can't do that without permission. So I didn't know that. so that was a big, big mess on my on my end. So I had to continue to grow as a hotel, which comes sales tax and higher regulation and all this other stuff. It was very difficult for you to manage. it was a big time cash business in this in Branson, it's not the highest income area, even though it's close to the strip, it still was a lot of cash customers. I think I had property management companies stealing money from me, I had a drunk guy drive through one of the walls. It was a it was a challenge. So I ended up selling it, I took a six figure loss on that hundred 50 grand

 

Kevin Amolsch  34:34  

Boy, all right, apartments, self storage, assisted living, all of these that not apartments, hotels, self storage, assisted living, all of these are, I'm hearing more and more about this stuff, because you could make a lot of money. The problem is those are businesses, those are real estate deals, a self storage, or let's say assisted living. 

So that's what I'm hearing most of assisted living is absolutely a business. You need to run that business, not just own the real estate necessarily, unless you find someone to run it for you.

 

Taylor   35:04  

Yeah, I mean, that's they've got all kinds of structures on who operates the property itself. But at the end of the day, my understanding of that business is your biggest expense. Is your staffing your people that are in the property. Yeah, if that doesn't indicate that it's a, an operating business rather than a real estate, you know, investment, then I don't know what else would. So these things are all businesses, and they're also you know, where's the blend? That's right.

Taylor   35:41  

Wow, so avoid, I'm not planning on buying any hotels anytime soon.

 

Taylor   35:49  

last question, my favorite one, what is the most important lesson that you've learned investing? so far?

 

Kevin Amolsch  35:57  

most important lesson, you know, I'm a big believer in your mind sets. I think if you go negative, which we all do it, we all go through tough times, this business is no different than the other, you're going to have really, really challenging days, you're going to have really, really challenging weeks and months and maybe years. Got to go to get through that. if your mind goes to the negative side of things, it's just going to spiral. So I think the biggest lesson I've learned is to always, you know, day as positive and focused as possible. I use affirmations and meditation to help with this. then just take massive freakin action. You can't just sit on your ass and expect anything to change,

 

Taylor   36:36  

though, man, that is good. I'm gonna say I'm gonna say right now to my show notes writer. Jennifer, please take a note of that. We're going to make a quote card. I love that.

 

Kevin Amolsch  36:49  

Thank you. It works. It works in your mind. But you got to work.

 

Taylor   36:54  

You gotta work mindsets first, so that you can continue to put in that work when the going gets rough.

 

Kevin Amolsch  37:02  

Yeah, and it's hard. It's hard. You know this, right? Because you're in business. It's hard sometimes. I think that's the biggest lesson is just to really focus on the mind, you know?

 

Taylor   37:10  

Nice. I love that. So, Kevin, thank you for everything today. great conversation, where can listeners get in touch with you? You mentioned you have a bunch of awesome resources that folks should check out late on us.

 

Kevin Amolsch  37:22  

Yeah, if you're looking for more on the private investor side, or the more passive side, we have a website setup for that. It's pineinvestments.com, there's some resources on there for you. If you're more on the borrower side, or just a real estate investor, a good way to go to a good place to go is pinefinancialgroup.com that has all those resources I was talking to you could download the calculator and the videos and, and the worksheet to go through the numbers pinefinancialgroup.com .

 

Taylor   37:51  

Cool. I think this lending side of real estate investing is a great opportunity for passive and active investors are like most of the flippers that I know personally that are considered friends. They fantasize about doing enough flips so they can build up enough capital to just be a hard money lender. Yeah, they're all we're all looking for the passive payday.

 

Kevin Amolsch  38:16  

It's nice on this side. I'll tell you what.

 

Taylor   38:21  

The waters a lot, a lot better over there.

 

Kevin Amolsch  38:25  

You can make a lot of money flipping to you just a little more work.

 

Taylor   38:29  

More work more stressful. It seems like to me from talking to flippers. I agree. Kevin, thank you for everything today. I really appreciate the conversation. thanks for joining us.

 

Kevin Amolsch  38:41  

Yeah, this is great Taylor really appreciate having me.

 

Taylor   38:43  

My pleasure to everybody out there listening. Thank you for tuning in. I hope you're enjoying the show. If you are please leave us a rating and review on iTunes. Be a very big help. Please subscribe wherever you get your podcasts if you know someone that could use a little bit more passive wealth in their lives. Please share the show with them and bring them into our lives tribe we got going on here. Once again, thank you for tuning in. I hope you have a great rest of your day and a great rest of your week and we will talk to you on the next one. Bye

 

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