Building generational wealth starts with financial literacy and the right funding strategies. If you’ve ever thought, “I don’t have the money for that,” this episode will change your mindset!
Join host Corwyn J. Melette as he sits down with seasoned real estate lender and investor Paul Anderson to explore how leveraging financing, tax strategies, and alternative lending solutions can unlock real estate opportunities you never thought possible.
With over two decades in residential and commercial financing, Paul shares his journey from working in his family’s brokerage to managing multi-million dollar hotel investments. He breaks down the importance of leverage, smart tax planning, and creative financing to help you build lasting wealth—whether you’re just starting or scaling your portfolio.
Key Takeaways:
3:04 Why leverage is essential in real estate investing
4:08 How Paul helps clients secure funding for residential and commercial projects
5:01 Paul’s journey from brokerage to hotel investments and real estate syndication
6:41 Common financial pitfalls and how to avoid them when seeking funding
8:54 How new investors can start with duplexes and small properties to build long-term wealth
18:51 How taxes can make you look “poor” on paper but “rich” in reality
19:03 The power of bank statement loans vs. traditional income reporting
20:32 The role of different loan programs, from traditional mortgages to hard money lending
24:09 Turning luxury cars into a tax-deductible business with Turo
If you’ve ever said, “I don’t have the money for that,” this episode will change your mindset. Listen now and start your journey to smarter real estate investing today!
Connect with Paul @:
- Email Address: BoiseLender@gmail.com
Connect with Corwyn @:
- Contact Number: 843-619-3005
- Instagram: https://www.instagram.com/exitstrategiesradioshow/
- FB Page: https://www.facebook.com/exitstrategiessc/
- Youtube: https://www.youtube.com/channel/UCxoSuynJd5c4qQ_eDXLJaZA
- Website: https://www.exitstrategiesradioshow.com
- Linkedin: https://www.linkedin.com/in/cmelette/
Shoutout to our Sponsor: EXIT Realty Lowcountry Group
Do you want something more? More Meaningful Moments opportunities, deeper relationships and memorable experiences? Do you want to make a difference? If you say YES, a career and real estate could be the opportunity you’re looking for guiding people to one of the most important decisions they ever made, the purchase or sale of their home can be both rewarding and lucrative.
EXIT Realty has a revolutionary compensation model training and technology that provides you with the tools you need to start and build your successful real estate career. Call EXIT Realty Lowcountry group today at 843-619-3005 that is 843-619-3005 or visit https://exitlowcountry.com/joinexit and make your Exit today.
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CORWYN:
Do you want something more? More meaningful moments, opportunities, deeper relationships, and memorable experiences? Do you want to make a difference? If you said yes to any of that, a career in real estate could be the opportunity you’re looking for. Guiding people through one of the most important decisions they ever made. The purchase or sale of their home can be both rewarding and lucrative. Exit Realty’s revolutionary compensation model, training, and technology provides you with the tools you need to start and build your successful real estate career. Call Exit Realty Lowcountry Group today at 843-619-3005, that’s 843-619-3005 or visit join.exitlowcountry.com and make your exit today.
Good morning, good morning, and great morning, guys. Welcome to another fabulous episode of Exit Strategies Radio Show. Hey, I’m your host, Corwyn J. Melette, broker and owner of Exit Realty Low Country Group in beautiful North Charleston, South Carolina. So if this is your first time tuning in, you’re in for a treat because our mission is very simple. That is to empower our community through financial literacy and real estate education, guys. We are legacy building. That is what we do here on this show. Got to give a quick shout out to those who listen to us faithfully, guys. You all rock. And those who are tuning in, guys, all the way from Hollywood, what you know, know good all the way out to the monkey’s corner. That’s where my mama live. Y’all know that. Thank y’all so much for listening to the show, however you do, whether that’s on your favorite podcast platform, whether that’s on our website, or whether you’re tuning into our local stations that are carrying the show. I want to give an extended welcome to our listeners in Marion County who are now starting to get the introduction, if you will, into what it is that we do and how we’re seeking to give back by educating the people within the community and providing them options, options on how to achieve, how to build, how to foster, if you will, financial independence. That’s what we do here. So again, thank you guys, all of you for tuning in and I’m super excited about this show. Now we usually talk about the range and the gambit, meaning we’re talking strategies about how to do this, whether it be syndicating, whether it be starting an investment group or whatever it is, buying an individual property, buying commercial property, whether it be apartment buildings or we’ve done storage units, we’ve done a lot of that. But hey, one of the things that typically is needed in all those situations is leverage. How do you leverage that financially? And today we got the money, we got dreams and aspirations, right? We always, OK, we want to do this, want to do this. But then one of the things that always seemingly in conversation that I hear oftentimes around is that defeating, that moment when, well, I don’t have the money for that. And there’s a defeating that takes place at that time. And we’re going to eliminate that today because what we’re going to focus on is the fact that when you have the idea, you can figure out and find a way to capitalize it. So today we got the money we got with us, Paul Anderson. Now, Paul is like a money guru. He’s been doing this for a while. If you’re watching me, you’ll see me move my fingers over here and rubbing this money together, because that’s how money makes money, by rubbing together. We make our money work and do things together. So our money grows. And Paul is an expert at helping people acquire the funding they need to complete not only residential projects, but also commercial projects as well. So I want to take a moment, introduce someone who is going to blow your mind today and drop some nuggets as an information education on you. Paul, welcome to exit strategies radio show. Thank you, Corinne. That’s quite an introduction. I appreciate that. So you’re quite welcome. Paul, if you don’t mind, look, you’ve got a lot of connections and a few different silos, if you will. Give our listeners that 50,000 foot view of who you are and what it is that you do.
PAUL:
Sure. I just want to start by saying I think something that you touched on in the very beginning that is so important and so overlooked is financial literacy. It’s a plague. And so it’s something very near and dear to my heart and that I’ve spent a good portion of the last 12 years trying to get people financially literate and get them educated about what their life holds for them. As far as myself, my whole life background has been around real estate. But I grew up in a residential real estate brokerage working for my dad when I was a kid. I started eight years old, licking envelopes, knocking doors, doing mailers, doing whatever I was called. Came up through that, got my real estate license, just did some residential sales. And then ironically, somehow I found myself in the hotel industry, helping a hotel company out of Georgia buy and sell hotels. As happens in industries, they got bought and sold by another company. So I’m working in Georgia, California, and the same business, very different philosophies. So I work with them. I’m getting hotels ready to buy and sell. And for the last 20 plus years, my emphasis has been on residential and commercial lending. And as I mentioned to you earlier, a couple of years ago, I started getting into real estate syndication, which is fun. So as everything’s evolved in the real estate industry, I’ve tried to evolve as well. So it’s been a great ride. It’s not over yet. I got a feeling it’s going to get even better.
CORWYN:
So here we go. So, Paul, thank you for that. You mentioned that you worked from one end of the gambit or one end. I won’t sell it to the other because to be frank about it, the further you go along, in my opinion, the further you go along the wheel, this tangent, this line or this train thing, you realize so much more is beyond that. We think that because we’ve done this to this, that’s it. Sometimes that’s what the outside in looks like. But when you’re inside and looking out, you realize there’s so much more that you can explore in other realms and genres that you can get into as far as real estate, growth, investment, development, blah, blah, blah, blah, blah. The list goes on and on. So let’s talk about let’s touch on some of the lessons, if you don’t mind, that you have learned, like some of the things that you have learned over the years and what you share with consumers that you’re working with who are seeking finance. And what is those initial pinch points, pain points that you tell them to look out for?
PAUL:
Well, I think pretty much everything I’m going to say today does come back to financial literacy and educating yourself, because usually what we do and regardless whether it’s my side of the coin or your side of the coin, when we’re working with clients, so much of this comes down to what they don’t know or what they think they know. And the crazy part of the world is now it’s not like it was when we started out in this. Now everybody’s got a device in their hand that gives them all the information they’d ever need. As to your earlier comment, what I like is the more I learn, the more I learn what I don’t know. And so really working to help people understand the impact of homeownership and how real estate can be transformational for them. I can go back to even a good example for me personally was even when I was working in the hotel industry. Great company. Things were going along well. We had a lot of opportunities to invest in things, but we also had a company sponsored 401k. And that was amazing when you’re seeing steady growth. But what happened is the dot com bubble burst. And all of a sudden, if you were heavy in tech, what happened to your 401k? It goes away. Companies go out and we’re seeing that now. Companies that were strong, vital companies not that many years ago are now going out for a litany of reasons. What I came to figure out, my dad helped me with this when I was young, as we know, real estate values can fluctuate and they can change over time. But you can leverage to your earlier comment. You can leverage massively, which you can’t do with other forms of investment. And as long as you find a way to debt service that property, whether it goes up or goes down, won’t matter until it comes time to sell. So what I’ve always liked about real estate, whether it be residential or commercial, is what I can leverage. And especially for young people starting out, we’re doing a lot more with like duplexes around here where people are figuring out I can come in with three and a half or 5% now and buy a duplex and cash flow it. And I’m starting out as an investor. I’m creating wealth. I’m creating some passive income. And this is a repeatable, duplicatable process. The great thing is regardless of whether the market goes up or goes down, to me, you still control the asset. And I go back to, and to me, Corwin, this doesn’t matter if you’re buying stocks or bonds or ETFs or you’re buying real estate, it’s all when you buy. So that is when the money is made. So with real estate, if you buy it and you’re in it, you’re leveraged, let the market do this. I’ve had people, I remember in 07 and 08, a lot of my investors were like, oh my God, I’m losing all this equity. Were you going to sell? No. So good. So what I told them is go down the assessor’s office and argue your taxes and get your property taxes down and cash flow your property better. Go to your insurance company and say, oh, that property that was worth this, we’re down 75 grand over the last two years. You need to re-rate it. So run your business like a business. For them, what we had happen is the market came back and then it came back and it kept going and going. So like in our marketplace back in 21 and stuff, they’re all like, oh my God, I got a mountain of equity. So now it’s time to sell. So now they have a bigger problem. What do I do with the capital gains tax? And I’m like, ha ha. So not only did you get out of that hole, now you’re so far out of the hole. Now you’ve got a gain issue on the other side. We helped a lot of them through various different vehicles, primarily 1031 exchanges, take and sell those properties here and take those proceeds and go to the Midwest. So I’d never done as much business in my life as I did in Missouri and Kentucky and Tennessee and Arkansas around the Midwest there and buying cash flowing properties that are massively cash flowing. So they took one, wrote it out, sold it, went back. Now it’s kind of like going to Vegas and doubling down except you win. And so they took that money and now they’ve been able in some cases to double the size of their portfolio, not all of them, but now they have all these properties that are cash flowing like mad. And I’m like, and they’re still in control. And during that time, we’ve seen the market come and go. When you’re in your own company, I think you’re going to run it better than anybody else.
CORWYN:
Makes sense. One of the things that you touched on in there, I mean, it’s something we’ve talked about here. It’s been a while, but we’ve said it here because people, you know, equity is phantom money. It doesn’t mean anything until you seek to realize it, meaning that you go to sell the property or otherwise need to refinance it, leverage it, whether you cash out refinancing or whatever it is. That’s when it’s relevant. Outside of that, it’s not relevant at all. And oftentimes I watch people get so hung up on all of that. So thank you for touching on that, because that’s not what we do. We’re trying to move forward. We’re trying to make sure property is cash flowing. If you’re an investor, that’s what’s important, the cash flow, the return on that property, the ROI, the return on the investment. So one thing I’d like to, Paul, I’d like for you to weigh in on is the outside of that, the what you’ve noticed historically was obviously that that time period, the recession, all that stuff, heart palpitations. Right. But what have you noticed historically outside of that, that you leverage in, again, in educating people in regards to what real estate tends to look like, what its performance normally is?
PAUL:
Well, and I think there’s so much, and again, this is kind of where it gets crazy. There’s so much data out there, but if you go to good, reliable sources, and I like on your guy’s side, you guys have access to such incredible data and there’s so much data. But one thing I say is real estate is not an HGTV game. So people, we get into these little pockets of fix and flip craziness and everything like that. And it works for a short period of time, but it’s not sustainable. I’ve never met somebody who could do a 15, 20, 25 year run just doing fix and flips. We’re all investors and we all understand risk tolerance and return and preference. If a fix and flip deal comes up, great. If a wholesale deal comes up, great. But where I’ve seen the most success is the long term buy and hold. And that has changed in the respect that the tenant base has changed. So I’ve got some clients and I myself personally have converted some properties to short term rentals. I mean, that is just like that just makes money. You just have to hire an accountant. It gives you like accountant type problem. So I think, but you know, and that’s what I always tell people. This is not Vegas. Don’t go throw it down on the table and expect to get rich overnight. We’re not playing the lottery here. You have to have a strategic strategy. And that’s back to where that’s where to me the financial literacy comes in, because like I said, and I’m sure you get this all the time, too. Hey, I found this property. I can buy it for this. ARV is this. And I’ve got a thirty thousand dollar margin. Now we need to talk about holding costs. We need to talk about marketing sales expense because HGTV doesn’t do that. And so all of a sudden you get real with them on the numbers and you’re like, but if you can buy it for that and rehab it for that and you can rent it for this cash flow for that, now you’ve got a long term hold property that’s creating passive income that you just have to manage or find somebody to manage it and write off the fees. One of the things that’s really different, though, over the last two years, two plus years with rates where they’re at, too. So we’ve had to look at it from a different standpoint. Now, all of a sudden, when rates on a non-owner occupied property go from four percent to eight and a half, how do I make it cash flow? And how much in mortgage interest do you get to write off your taxes? Now, all of a sudden, that two hundred dollars that it was read is probably two hundred seventy five, three hundred dollars in tax. So now you’re actually positive just through the interest or the interest deduction. There’s so many different ways to do it out there. But again, that comes down to strategic planning and financial literacy. I will probably say more about financial literacy than anything throughout this because it’s so important for you, for me, for everybody. It’s important for our country, whether you’re in real estate or not.
CORWYN:
But for what we do, it’s vital. So you’re beginning investors. Do you work with a lot of them? That’s the first question. Do you work with a lot of them?
PAUL:
I love beginning investors. Now, I will tell you this. I don’t land all of them because some of them have it already figured out. And that’s OK. My deal is this. And this is where sometimes I’ve worked with a lot of agents over the years. And not every agent understands investment real estate. Matter of fact, there’s a select few that do it and they do it really well. But from my side of the equation with an investor, it’s just a math equation. Does it pencil? Will it make you money? And does it meet your risk tolerance or your risk preference? Because that’s a big part of it. So there’s also a whole psychological, emotional side of this, making sure it fits in their emotional box. And this is my risk comfort zone. But no, I think when it comes right down to it, we work with a lot of investors, different stages. Some of my clients who are trying to push their kids into real estate investing will send them to me. And so I love to do, I love the brain side of that. I’m not on the emotional side of, Oh, this is so beautiful. And I’ve got to look at these finishes. I’m like, where’s the equity and where’s the cashflow? So I can look in our market at a three tooth starter. That’s 1200 square feet. That’s dinged up. And I’m like, Oh, wow. Here’s a couple of areas where we could put eight, 10, 10 grand in it. $250 a month return on that eight, 10 grand above and beyond and show them how to do it that way. And seeing young people, bringing them along and seeing them have success. Like I said, we’re doing a lot of, I call them the kiddie condo theory where they buy a duplex or a triplex and maybe mom and dad co-sign because they got to get there, we cashflow it with the rents on the other units, get them started, refi mom and dad off in a year or two, get them into a standard conventional loan throughout the refi. And then they turn back around and they do that with another FHA loan with three and a half percent down. They build a portfolio. So we’ve got the tools out there and you can leverage like Matt. It’s just understanding how to do it and doing it smart.
CORWYN:
Very good input and response there, Paul, because there is a tremendous opportunity. When I like what you talked about, I’ve never heard the term, the kiddie. Um, yeah, I’ve never heard of that before, but I’ve actually had people that have done that. Their parents have co-signed for them to buy their first property. They in turn wrote from there. Ideally buy something multifamily, whether it be a do or duplex or triplex, something like that is going to be a game changer because you leverage the rental from the other side to essentially pay for it. And as you say, then you move to another, now you got essentially a full property, two units, renting two to three units, renting paying for not only itself, but at that point in time, throwing off some cashflow that may actually offset you or help you pay for the other property that you went to, and you can continue to do that. That’s one of the things that is so neat to me about real estate. We always have, I say we always have, but a lot of people have this one and done mentality of they’re trying to go about one house and if they can’t buy the house they want, then they don’t buy a house, which doesn’t make sense because you continue to throw away money and rent, but that’s a whole another story and a whole another animal. Now you guys do on the investment side, again, you guys do private. You do what we refer to as hard money as well. That is only commercial property, if you will, meaning person can’t own occupy, they have to make that into some type of investment, rental or otherwise. But what trends are you seeing on that side of the equation?
PAUL:
And you’ve probably seen this too over the last several years, the emergence of what we call the non-QM loan. So a non-qualified mortgage. I can give you some examples of folks. I was actually talking about this at that breakfast meeting I was speaking about this morning for some local folks who I know, and they’re both in the business, he’s a builder developer. She’s a realtor developer. And so they write everything off. So on taxes, they look poor, poor, like four O’s in court. When we go and we run a bank statement analysis for them, they rich. And so like just simple math on taxes and they’ve got an amazing accountant does his job, he writes their income down to about $11,000 a month. Egg statement loan, they’re both making over $256,000 a month. So it’s a $500,000 swing. Now they’re in the game and where they itemize everything, they’re going to pay a little bit more for that money. Don’t get me wrong, pay more for that money. But I told him now you’ve got additional interest expense. So you got more write-offs. And so now what we’ve seen with them over the years is now they have carry forward losses on their taxes that they can deplete out over time. So even when things turn around and even if they went W-2 and made great money, they would have several years of losses stacked up that they can deplete and not have to pay taxes.
CORWYN:
So the tax strategy side really fascinates me. So, yeah, I love that. And those tools are built into our existing tax code and it encourages growth because in development, because in that situation scenario, they can continue to develop housing and continue to grow, if you will, financially without that added pressure on the backside, because that would actually, in some instances, completely hinder people from being able to do any of what you just said. So that is awesome. I love that. And thank you so much for sharing that. Now, Paul, again, you’ve been doing this for a while and again, you residential traditional program. So you do help with that. You also work and have a niche with investors. Traditional, if you will, non-QM, private, and then hard money on the backend. So if you don’t mind, I want to make sure we get your contact information out here for our listeners. So tell our listeners how they can reach out to you, get in contact with you to ask those questions that I know they have that they can’t ask because, hey, they ain’t able to call into the station today.
PAUL:
I keep it simple. I’m just a simple guy from Idaho. So keep it simple. My website, Paul’s Home Loans. It’s, it’s real simple because I’m a simple guy. Just go in there. You drop me a line. We can talk strategy. Love doing consultations because just like this, it’s good. It works that side of my brain. I love that. I love strategy. I love showing people, Hey, how we can get from here to there and what it can do for you. And then you see them take off and run with that. Now, all of a sudden they get the bug. And as you know, you get the bug and sometimes you end up in the business with the bug, or sometimes you don’t work anymore. I have a couple of clients and we were part of their whole goal and it was to fire their W-2 and now they’ve got so much passive income that, and now to say this and honestly, there’s some of my best friends and once they retired, they now work harder in retirement than they ever did their W-2 job, sourcing deals. But if you can do that, and I think we look at the state of things today and it is more expensive to live now than it’s ever been. So I think that if you, we have to have multiple streams of income and passive income that grows wealth through equity over time, that’s incredible because I truly believe this. I don’t think you’ll ever get wealthy on cashflow, but you can get wealthy on equity and cashflow is great to have along the way and it affords you the opportunity to go out and create more equity.
CORWYN:
That is so true. Investing the cashflow magnifies you. I mean, literally you can magnify its growth and that’s one of the things that counsel, if you will, that I give people, Paul, along that same vein of, you know, invest the cashflow, don’t just let it accumulate and sit quote unquote on a mattress, invest it and exponentially impact your wealth over time. What could it be? And I’ve watched people do this as well. So it’s amazing, the concept. So Paul, high level, the mic drop question, if you will, because you’ve been doing this over 20 years, which means that you’ve learned a lot in that time period, if you are able to go back to the very beginning, knowing what you know now, what would you have done differently that you think would have exponentially or catapulted you much further than where you are now?
PAUL:
I think take more risk. And I don’t say that recklessly, take calculated, educated risk. And I think 20 years ago, like I said, we didn’t have a device in our hand where we could get all this information. So there are so many tools out there for people to go and get educated that are incredible tools like bigger pockets. I get a lot of business from bigger pockets. It’s a great, it is a great site. People can get a lot of knowledge there. They’ve got experts in their backyard, just like you who’ve been doing this forever, and that’s the other thing too, the market. And so markets are all different and they have little subtle nuances. And so you understand your market, just like I understand my market. So from the education standpoint, but if I had to really break it down to one thing, it would be take more risks because you can’t sit on the sideline and it doesn’t all have to be real estate. You’re just talking about cashflow. I’ve got a friend who does really great in real estate. He does really great, but he’s got a sweet tooth for cars and he likes really expensive cars. So what did we do? We showed him how to go buy those cars and put them on Turo and write them off.
CORWYN:
Oh, that is impressive. That’s amazing. I love it.
PAUL:
So the only thing that’s too bad is it snowed here today. So there will be no Maseratis running around making Turo revenue, but no. And then what’s he going to do with that? And he’s bonus depreciation on those and he’s writing them off and he’s going to put more money back into real estate.
CORWYN:
You can create a machine. Yes. Yes. I love that. I love that, Paul. So thank you for that. Thank you for that. Look at, that was the icing on the cake right there. Look, you just literally blew my mind with that one for real. Cause I didn’t think about that. I’ve thought about it, but didn’t think about it that way in the application. So thank you so much for that. So Paul, look, and our listeners, we have quickly come to the end today’s show. Paul, I want to thank you for taking time out of your busy schedule to be here on the show with us. So from the bottom of my heart, man, thank you for doing that. For, for quote unquote, sprinkling that knowledge and dropping those jewels for our listeners. Thank you for the opportunity is great.
PAUL:
And I’m a blow your mind a little bit more. We’ll talk offline about what he’s doing with his expensive watch collection too.
CORWYN:
Okay. Look here, we may have to bring that one back here later. Look, I can’t wait. So for our listeners, guys, look, y’all know, Hey, how we do this thing here. But those of you who are new to following us and working with us and listening to Guys, look, this is an endeavor for our community from my heart. This is an act and a labor of love to bring you all information that can help you transform your life. We don’t need to be worried about what’s going on. Quote unquote, in other people’s worlds, when we can impact change and improve our own. You all know how I feel. I say it to you every week. I am not going to take that back. I’m not going to change it because fundamentally from the bottom of my heart, I love you. I love you. I love you guys. And we’re going to see you out there in those streets.
