- Kevin’s Introduction to real estate
- Private capital
- Fear of failure in real estate
- Conventional lending vs private lending
- What Pine Financial Group offers
- https://www.linkedin.com/in/kevinamolsch/
- https://pinefinancialgroup.com/
- https://thepinereport.com/
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- Linkedin: https://www.linkedin.com/in/cmelette/Email @: corwyn@corwynmelette.com Shoutout to our Sponsor: MEME EUBANKS 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 me today MEME EUBANKS Your Country REALTOR at 843-730-3327 that’s 843-730-3327 or visit exitlowcountry.com/joinexit and make your EXIT today.
CORWYN:
So good morning, good morning, and good morning guys. Welcome to another fabulous episode of Exit Strategies Radio Show. I’m your host, yes that is me Corwyn J Melette, broker and owner of Exit Realty Lowcountry group in beautiful North Charleston, South Carolina. If it’s your first time listening to this show you Sir or Ma’am are in for a treat. That is because our mission here is very simple. That is to empower our listeners, and our community, through financial literacy, and real estate education, guys, we are legacy-building. So we have been doing great things. I’m super excited. We’ve been getting amazing guests to come and drop jewels and nuggets on you, sharing their stories, sharing their passions, and providing you with information and opportunities. And we know that many of you out here working to capitalize on those. So today, our word for today is going to be capital. That is money. Moolah. Okay, so we’re gonna be talking about that and we have a very special guest with us today. None other than Kevin Amolsch with Pine Financial Group. Kevin, How are you doing today, my man?
KEVIN:
Corwyn, that was great. , I love that intro. I can learn something from you. Thank you so much for having me. I’m excited to be here. You’re right, we’re gonna drop some nuggets today.
CORWYN:
Look here, I hit a few OJs on to say that money, money, money. Money! I won’t do that the first day. Maybe too late when we put that on air. But Kevin, if you don’t mind, tell our listeners a little bit about you. Who you are and what you do.
KEVIN:
Yeah, for sure. So I got started investing in real estate super young. And I was in the army, I went into the Army out of high school. , they told me, to join the Army! I’ll tell you what, you don’t even have to worry about school anymore. I’m going to teach you how to play laser tag. This is going to be amazing. So I was sold on the laser tech. I went into the Army, it was very different than that. But it was a great experience. And the thing about the army is you don’t make much money or really nothing at all, but you don’t spend money either. I was living in the barracks, my truck was paid off. I was working out of the gym in the barracks. So I was saving this money and it’s like, well, what do I do with this, so I started reading books and you hit the ones that everyone talks about: The Rich Dad, Poor Dad. and the other investment books that talk about real estate and all of these experts, I was looking up to them as I was reading their books, and they were saying real estate, real estate, real estate. So I decided to try it out, I bought my first house, I was just turning 21, moved out of it, kept it as a rental and I saw the appreciation, I saw the tenant paying off my mortgage for me, I saw the tax benefits and the cash flow and all of the things that we know helped make us rich in this business, I saw it and I decided this is the vehicle that’s going to make me rich This is the one I’m going to use to build my wealth. And so I started focusing on it and started buying a house or two houses every month while I was in college and working and anyone could do it.
CORWYN:
So, let’s hover there for a minute first, before we go to where you are. So we had a recent conversation and this thing has been stuck with me so I’ve been talking about how we can leverage real estate over the long term and how we’re failing oftentimes and we get caught up in life. You know what I’m saying you want to go buy a house that you’re going to quote-unquote you are living in forever so you work, and work, and work… you try to save. Inevitably the car that you got goes down so you got to buy another car and all these life things keep happening and slow you down from getting there. But if you’re to meet a need, if you start fundamentally with like you say, you started buying houses when you were in college, you start with the simple okay, let me buy this, let me move in, let me do this. I can sell this make some money, reinvest, and keep going and growing. And if you keep a portfolio along the way, and I’m gonna share this Kevin and I’m gonna stop because our listeners need to hear from you today, they are going to, but I had client years and years ago and he started similarly, he bought a property wasn’t that young when he bought it, but he went on borrowed money, bought a house, moved into it, worked on it, fixed it, so that country Boy went back to the bank said, Hey, Bo, I need some more money. I just sold a house. So he bought enough money and bought two houses. And he moved in one, fixed it up, sold it, moved into the other one, fixed it up, and then turn that into a rental and then went and bought another house. And he just kept going. And by the time I met him, how many years later, he had accumulated. He was still holding about 70 some-odd properties, but at one point in time, he had owned as many as 140-something. And that’s what this thing is about. So tell our listeners you. What is it that you do?
KEVIN:
Yeah, I love hearing that story. And it just reminds me of Monopoly. Four green houses, one red hotel. What I mean, is that’s how you do– you collect this. And I joke about it sometimes, like, I collected baseball cards and that kind of thing growing up, but we all have something that we like, and we start collecting, I just happen to like houses. So I collected those but– Actually, I just lost my train of thought, Corwyn what were you asking me again?
CORWYN:
We were talking about what you are doing now. And you’re now empowering others financially to make these things happen. So tell our listeners about that.
KEVIN:
Yeah, I just got so distracted by the green houses and red hotels. So the progression was: I was doing a lot of deals, a lot of transactions when I was young. I was 23, 24, and 25 years old, this was leading up to 2008 when that crash hit, and we could talk about that if you’d like, that was a very challenging time in my career. But what I was learning through the process is, to be successful, to buy houses without cash and credit, and nothing because I was broke, I was eating Top Ramen. No, that’s I always lived on a budget, and I was eating Top Ramen, I was buying houses. And what I learned was, I need to get creative to be successful, because I don’t have the resources other people have. So how do I do this without the money and that without someone helping me cosign on houses, and all of this, what I learned was the way you structured a real estate transaction has everything to do with how you’re going to fund it. The way I structured my offers, we had negotiated the deals, and the words I was using in that negotiation, had everything to do with how I was planning to take the property down. So I fell in love with deal structure, the hunt and kill they say, but the deal structure is what I fell in love with. And that’s the financing. So I just migrated to that side of the business. I got recruited to do mortgages, like conventional mortgages, and that was a pain in the ass. Like, you’re dealing with underwriting guidelines that you don’t understand. And they’re constantly changing. And here we are leading up to a crash. And I was approving people to buy their dream homes like you were talking about, right? And they were in there getting ready to buy these homes, and all of a sudden the guidelines change, and they no longer qualify. And I had no control over that. But I had to make that phone call, right, I picked up the phone, I called them and said: Look, you don’t get your dream home anymore. That was devastating. And I was losing sleep. So I decided I have to get control of my business. And what I found was if I could raise money privately from private investors, it’s private capital. Capital is the keyword, right? That’s bringing in private capital. And I was loaning that out to real estate investors because that’s the business I do. So I brought in private money and loaned it out, I created the underwriting, and we service all the loans now. So that’s how I got control. Now we’re we use common sense underwriting.
CORWYN:
Okay. All right. I like that. So you guys are structured to look more at the deal versus the other pieces of it? Is that is that probably fair to say?
KEVIN:
Yeah, the way we’re looking at it. Now I’m looking at it, I’m looking at the whole package, quite honestly. But the deal carries the most weight. Look, if I can help my client make money. And that’s what I want to do. I’m not going to put them into a deal that’s going to be a loser, even though I can make money on it and they will lose, right? That’s not fine. That’s just not how we operate, what I want is for them to be successful. And we’ve built our company around that if our clients succeed, we’ll succeed. I know they’ll come back and borrow from me again, and again and again. And then they’re gonna refer their friends and then and then we’re all gonna make money.
CORWYN:
So let’s talk real quick about the difference between– because I know it, you know it. Most people don’t know it, they don’t know that you have different– like you said, traditional conventional lending and private lending, and there are other options as well. So, tell our listeners if you could give the difference or your definition of the difference between the two
KEVIN:
Yeah, that’s good. So when you when you hear about conventional. Most people when they hear conventional think of actual conventional which would be anything purchased by Fannie Mae and Freddie Mac, Freddie Mac, and Fannie Mae are the largest buyers of notes. So to give you an example, you might go to your mortgage broker and they’re going to do you refinance mortgage on your home. And now they might get the money from Wells Fargo, for example, to fund your deal into your refinance. But Wells Fargo doesn’t keep that loan, they sell that loan to Fannie Mae or Freddie Mac, so they can free up that capital. So they can go out and loan it out again because they’re a fee business, they want to make fees, but they keep the servicing rights, which is also a fee. So you’ll still make your payment to Wells Fargo, but they don’t own that loan, chances are very high that Fannie or Freddie purchased that note. So that’s the true conventional. Now each of those entities has a very specific box, you have to stay within. FHA loans, VA loans, that kind of all falls under the same category, pretty restrictive, you have to fit in the box. So a lot of times when you hear conventional, it’s conventional or Fannie or Freddie as a conventional or FHA VA. And then you have banks, which get more creative, especially your regionals or your community banks. So if you think about a community bank, like maybe 1, 2, 3, 4, branches, something like that, rather small, they can get creative. Oftentimes, they’ll keep the notes on their books, we call this portfolio lending or portfolio loans. And because they stay on the banks, books, they’re not selling to Fannie or Freddie, they can have their own rules within reason, they’re still regulation, but they can have their own rules. So that’s how you get the blanket loans and things like that. So you can scale up, we were talking about, you talked about your friend that owned over 100 properties. And you can’t do that with conventional loans, right, you have to get more creative. So maybe he went to bank financing and, and did a loan over 20 or 30 properties at one loan, something like that. So that would be another type of financing. And then you can get creative when you get to the private side. So if you could raise capital yourself or borrow from someone like me, that has raised the capital for you. Now we can get creative, right? There are pretty much no rules to that, as long as we’re not doing consumer lending, we don’t have TILA, we don’t have RESPA, we don’t have tread, we don’t have any of those regulations. So it’s, it’s as creative as we want to get.
CORWYN:
And that’s freeing. So, most people, always focused on– is what everybody else does. Let’s put it that way, they’re trying to figure out how to make a transaction, or if you’re buying a fix and flip, most traditional banks don’t want to touch something that needs extensive renovation, which has the most risk in it. So you need someone or need an option that’s specialized for that type of property. Again, flips, if that’s what you’re doing. If you’re doing other types of transactions, whether it be a commercial, those kinds of things. That is, similar to where you’re in, you’re leveraging, you’re repurposing, and then you’re getting yourself back out of it. Those kinds of opportunities are you gonna find it limited to find that in the traditional lending space, you’re gonna need to go something more private, where people are in it for the investment, and they understand it as you say, you understand real estate investing. So that way you can look at the property, you can look at the comparables, you can look at the estimate for work, and you’d have a reasonable understanding of the potential and ideal to be done successfully. And then we’ll be willing to lend money on it. So Kevin, let me ask you this: So what is– because you guys lend to the first time, but also experienced people, right? What if it was a first-time person we want, we want to talk to our people today, and just say, hey, look, you can get over the hump Most times people are just afraid to get started. So in getting over the hump, what is the number one thing that you run into? And I’m pretty sure I know the answer. But what’s the number one thing that you run into when you’re working with someone new to this space? And getting them started? What’s the number one obstacle?
KEVIN:
Oh, there’s no question about it. It’s fear of failure, right? It’s not taking action. So typically, when they’re working with us, they’re ready to take action, they do. But look, we’re in a business. We’re in a lending business. So we need a big funnel, right? And then we put everybody in the funnel and we just narrow it down to the people that we’re going to try to lend to. So our philosophy is let’s just help as many people as we can make money. So we want to capture like a big funnel and get everybody in here and let’s work with you and help you make money. We’ll teach you how to do it, and try the best that we can to give you the confidence to do it. And then it’s going to be up to you to go out and do it. And then that’s when the funnel starts narrowing down. So the obstacle that we’re seeing is people are just so afraid of that failure that they don’t even take action. And this is what drives me crazy Corwyn, and we could talk about this, but– when we do our seminars and classes, I’m always bringing this up. But look, you’re going to fail, like 100%. It’s going to happen. So if that’s your fear, well, this isn’t the right business, right? Because it’s going to happen. So my thought is, let’s just accept the fact that we’re going to make mistakes, except the fact that we’re going to trip and fall like we were learning to walk, and accept the fact that we’re going to get up and be stronger and better for it. And then that’s once we can accept that, and then we can move forward. That’s how we get rich. That’s how we build wealth. That’s how we build a legacy, as you say.
CORWYN:
So it’s interesting, you should say that because. One, Kevin, I tell people in conversations and stuff, that the average millionaire goes broke three times and I’ve seen that read that on their way to being a millionaire. And what happens is they fail forward. So if today is this, okay, whatever, they know how to get back. And so one of the challenges is that people are– and not that you should want to have a loss, I mean, it’s not that you set out to lose, but the regrouping, because you got to work yourself back to where you were. So if I was at this point, and I made a misstep on this investment in this property, and I ended up losing one, I just learned something that I shouldn’t do again. So then that’s going to should accelerate me now to get past that phase. Because I’ve already made this mistake, I shouldn’t make it twice. KEVIN: [You’re moving forward.] Exactly. So now the next time, okay, we’ll look I already understand what the pitfalls are. Because really, and truly, that’s something that you guys have learned. And that’s also something that people. So I have an investor I’ve been working with, Miss Evans, we have been working together— But, we’ve been working together for now 16 – 17, getting close to 18 years. And in that period, the things that they’ve run into in other places they know. So when they go into a house, it is okay, well, I got to put the water heater in the pan, because they’re very particular. So if a home inspector says hey, this needs to be done, they want to do it, they’re not going to argue about it, they want the house to be right, they want to give someone a great product, which they do, they do a wonderful job. So all the things that they’ve encountered over the years. The water heater needs to be in a pan, expansion tank needs to be on it, which is now cold in our area. I don’t know about yours, Kevin. The electrical panel needs to be labeled when they go in, and that’s the first thing they’re looking at, they already know, windows and doors, and roof. And all that kinds of stuff and plumbing fixtures and light fixtures and flooring and paint and HVAC. They already looked at that. But now they’re looking at these little nuances to say this, because they’ve had it come up on an inspection. So now they want to especially come back so clean dispatch came in fine, nothing wrong with it. That’s number one. So going in and putting this same mindset in what we’re talking about, if you’ve had experience, okay, I know I don’t need to do that again. So next time, I already know what I need to do with this phase. And then I just need to figure out what’s going on past that, then
KEVIN:
You’re gonna make mistakes as an expert, experience is but I’m thinking about some investors right now, as I’m listening to you talk like you have a very successful client sounds like, we do as well. And the most successful ones, the million-dollar-a-year or more guys, they’re still making mistakes. But I’ll tell you what, they make a hell of a lot more money now than they would have if they never tried.
CORWYN:
That is fair. And it’s a risk. So everyone wants to reward but doesn’t want to accept the risk. And we understand that there is a reward that’s commensurate with the risk. The greater the risk, the greater the reward. We are operating from a lot, that’s this new material. We operate it from a lottery mentality where we pay $2 and win millions. That’s how we want to operate in real estate and that’s not affected. That’s not the same right?
KEVIN:
Well, and we’re entitled to that. Winning, right? Okay, we’re living a very much entitled– How do you say it? I feel like our youth is entitled to everything. And they’re not willing to work for what? It’s gonna create a problem. It’s just going to be because you can’t be self-made and have it given to you. I guess.
CORWYN:
So I deserve to win. But we know that to win, you got to play the game. So are you telling me I’m gonna win before I even play the game?
KEVIN:
I’m entitled to what I should do. I don’t need to work. Yeah,
CORWYN:
yeah. So so so I’m gonna, I’m gonna be a real estate investor, and I’m gonna do this, but I’m never gonna have this happen.
KEVIN:
Amazing. Just so amazing to me. That mentality of that.
CORWYN:
So let’s talk about some of the products guys offer. What kind of options do people have in working with you and your company?
KEVIN:
Yeah, so we have two sides to our business, which I’ve described a little bit. But just for clarity, we have our private passive investors, so people that invest in our fund, and they just want the passive, passive return. Deposition so it’s very safe, very stable, all of that. It’s not your home run investment, but it’s something that’s going to you can count on, it’s going to produce. So that’s where our capital comes from, that we loan out to our investors, real estate investors. So that’s one side. The other side is the real estate investors. And these are the guys that are out there adding value. So they’re buying properties, fixing them up, and refinancing them. For rentals, we hear about the burr strategy, right? So we have a lot of clients do that we have a lot of clients that fix and flip, they watch the TV shows that you’re excited. And then they go out and do it, they make a ton of money. So we have our fix and flip clients and we have commercial repositioning. So about 20% of our business is commercial. Okay, we can talk more about the commercial and some of the risks in there. Because right now it’s a bit more risky to be doing that in the current environment. But let’s say, you buy an apartment building that’s half vacant, or mostly vacant, or whatever, banks will loan on that, just like you were saying, for a house that’s not habitable. Well, if an apartment building isn’t cash-flowing, a bank doesn’t want it, it’s not stabilized. So someone like us can come and help them rehab the units, and get them rented up. And then once it’s produced, they go to the bank and get it refinanced. So repositioning an asset like an apartment building, or now we’re starting to see some more conversions, hotel, and office to apartments because there’s a housing shortage. We did a Safeway building where they converted it into a swim school and a gym, and Vasa Fitness moved in there. So they converted to a bigger box and a smaller base. So on the commercial side, you can get super creative, wherever you see a demand. And if you can create or provide that, then that’s where people are making money.
CORWYN:
Which makes perfect sense. Makes perfect sense. So let me do this. Because given we’re quickly getting to them, too, so I want to make sure people know where to reach you. So how can our listeners get in contact with you?
KEVIN:
So we have some free reports that I can give out to your listeners if you want to go to thepinereport.com. And so there’s just some free stuff on there for them to look at. You can reach me at pinefinancialgroup.com. So that’s our company website, whether you want to be a private passive investor or if you’re a real estate investor. The thing though Corwyn is that we don’t land in your area, hard money and private money are very location specific. A lot of lenders like me are like that. And that’s how we keep our investors’ money safe. We know the areas that we lend in. So we’re in Denver, Minnesota, and we’re in Wisconsin, and then we’re starting to do some business in Washington DC. So that’s the furthest East we’ve gotten so far.
CORWYN:
Okay, well, look, that’s a reach man, you go to the district man. That’s a reach you’re going to, it’s real
KEVIN:
We were doing business there. Maybe five or six years ago, we had a hedge fund that was providing all the money so it’s zero risk for us. And then that partnership started to dissolve so we pulled out of DC and so that’s why I mean an easy transition to go back in as we already had some established relationships.
CORWYN:
Okay, good. Well, congratulations. Good for you. Good for the group of our listeners. Guys. Please make sure y’all go to thepinereport. T-h-e pine port.com. Just hit the site. There’s a wealth of information and download all that stuff but get exposed to this. Kevin, look, I’ve been asking our guests when we have them on. That thing that if you would have known this way back yonder. If you would have known it and therefore acted on it it would have accelerated your development and growth. Give me something Kevin for the listeners. It’s a mic drop mistake.
KEVIN:
Yeah, so this is an easy one for me because I made a big mistake. I had my ego in my way. And this is humbling to say, but I was popular in the real estate investment associations because I was so young and I was doing so much business. And so people were attracted to that. And I got attracted to that. So I was making my goals, my annual goals based all around the number of properties I was buying, because it sounded cool. And I thought that made me cool. But the reality was, I was buying deals that weren’t good, just so I could hit that goal. So what I wish I would have known then was, to be very careful with your goals, if you’re as committed as probably your listeners are to accomplishing goals, if you’re committed to accomplishing that goal, setting that goal is so important. And doing it for your ego isn’t the right way to do it. So I would have made goals based on cash flow or income and not on the number of properties.
CORWYN:
Wow, that is, that’s profound, because you don’t hear that most people. You’re driving, you’re pushing. But what I just heard you saying is that all that driving and pushing caused you to make some investments that if you had been focused differently, you would not have made
KEVIN:
Right, and then that led right into 2008. So was that painful? I had 50, but 55 doors, all single-family homes, when I entered that,
CORWYN:
And that is a load then, it would have been much more advisable to have instead of having a scattered site to have multifamily doors in one place. So you can better manage and better control.
KEVIN:
Yeah, or just focus on cash flow. Right? I wanted to buy a house for a month. So I did that whether it was a good deal or not. So I can hit my goal. It’s just the quality of the– You hear all the time? What’s the quality of the questions you ask, whether it’s to yourself, to your mentors, or your friends, or whatever the quality of the question matters, even to yourself? So this is just the quality of the goal. I’m setting it for myself. It was just poor quality.
CORWYN:
Interesting. Well, Kevin, again, thank you. We have quickly reached the end of today’s show. But Kevin, thank you so much for taking time out of your busy schedule to drop these jewels and nuggets on our listeners. I appreciate you.
KEVIN:
Yeah, Corwyn, I appreciate you as well. Thank you.
CORWYN:
You’re welcome. So for our listeners, guys, look, y’all have gotten it. Y’all have been exposed to some great information, you probably learned something about something just over the fence that you didn’t know. So we want to make sure that we apply it, we don’t want this information to just linger. We don’t want to take quote unquote, this seed and we don’t want to cast it, among the swans, so it gets trapped, but we want to plant it on fertile soil, so it will grow so it will flourish. And we need to continue to water it. So we’re going to ask you to continue to engage, to continue to plug in, to continue to be a part of the Exit Strategies Radio Show Family so that you can grow your seed. Kevin, again, thank you so much from the bottom of my heart for being a part of Exit Strategies Radio Family, and for being on with us today. For our listeners for our final time today. You know how I feel, you know what I say? I’m gonna put them together and I’m gonna do it this way. I love you. I love you. I love you. And we’re gonna see you guys out there in those streets.
