In this current market, flippers are struggling, and so are some investors that have bought in the last couple of years. So today we have tarl on to discuss it all. Tarl, Tarle, Tarle, Tarle, my business partner from Limitless. Some people don't know. You've got flippers anonymous. You're a hard money lender. You're getting hundreds of applications every month for flipping. What's going on with Flip? And you've been flipping for 16 years.

So you know a thing or two about all of this.

Yeah. hundreds of applications every month for flipping. What's going on with flip? And you've been flipping for 16 years. So you know a thing or two about all of this.

Yeah. Yeah. I like to joke that I'm more of recovering house flipper these days, right? Because of

back in 2018, I started keeping properties a lot more. So doing more of the Byr method by rehab, rent, refinance, repeat. And ever since becoming business partners with you can on the Limelis Expo, I have learned the folly of my ways of flipping houses. And I started cash flow, baby. Cash flow, right? So I do focus quite heavily on the Burr method more than anything these days, but I'm still recovering as a house flipper. So let's talk about house flipping though because house

flipping's been a really good business for the past 10 or 15 years because essentially real

estate prices kept going up. Yes. Yeah. So essentially like yeah, it's been easy. So you see we meet,

actually we just did an event with a bunch of people in real estate last week. And one of the

conversation pieces was

how many operators that were buying that maybe got started in 2015 or 2018 or 2021, even,

and how easy it was for them to do the business because the market kept going up all the time.

We know since 2022 that has not been the case. And right now there's, you know, there's a few of us, there's a number of operators out there that thought maybe the market had hit its like, you know, trough back in like 23, 24, and some markets still had more to go. And I'm not so so much thinking that the markets had more to go down, but more that it's stalled. You guys talk about this a lot on your channel already,

but there's a lot of local markets out there that the market's just kind of chilling. Yeah. But maybe house flippers were used to the market going up, and it didn't do that so much. Well, let's talk about why the stalling's an issue, because on a normal seller, you know, they are either living in the home or they're in a super low interest rate and, you know, they have three or four months or six months for the house to sell. A flippers and

hard money. So if their business plan was this house is going to sell in 60 days, then every day

beyond that is a hit to the profit that they were planning. Yeah. I mentioned the fact that they were putting money into the property. Correct. To make it worth more. So you have that as a while. Yeah. So you have factors of somebody maybe bought a dilapidated property, right, a POS, look it up. And they decided to put money into it. So they got to force the appreciation, right? So through rehab and construction. So maybe the, you know, a typical hard money loan would be a 90% LTC loan to cost.

So if somebody bought a property for 100 grand and put $50,000 in construction into it, that's $150,000

a cost. 90% of that would be $135,000. So they put $15,000 down. So they're fronting 15K and then they do the construction and do all that great stuff. Cool. In a perfect world, that's great. And they have holding costs. So most hard money lenders right now are charging, you know, if you're super savvy investor that's been around for a while, you might find a hard money lender. they'll get you 8, 8 and 1 half percent right now, which is actually like really, really freaking low, right?

Really, really low. But most people are going to be around 10 to 12. And so if you take the average being 10%, right? So at $135,000, that is $13,500. Now this is a low cheap area, right? So let's call it a, let's say most projects are

350,000 because that's typically what it's going to be for most of the US. That'd be $35,000 a year

in interest, right? Or let's call it, what, $3,000 a month in the hard money cost every single

month that they have. There are points too, right? Typically there's, if you're a savvy investor, most hard money lenders will get you down to one point. But historically, most are going to be two, for the most part. And what does two points mean? Two points. Point is a fee. So it's a, it's one point would be one percent of the loan origination. So if somebody borrowed 100 grand, one point would be 1% of that.

So it would be a $1,000 fee in addition to interest. So the whole concept, wait, one of you guys

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