How Our Passive Investors Earned 26.9% On A House Flip | Ep 33

James: Welcome to the Furlo Capital Real Estate Podcast, where we dive into the intricacies of passive real estate investing. And our mission is to equip people to invest wisely in both property and residence so that together we can not only build our wealth, but improve housing. I'm James and this is my wife, Jessi.

Jessi: Hi. Hey, I'm here. I'm kind of excited for the thundershowers that are happening.

James: Really?

Jessi: It reminds me of growing up in Colorado. We had, I mean, pretty much like every summer afternoon there was a thundershower, but like, Actual lightning and yeah, not like Oregon rain. I think one

James: of my favorite memories of visiting your family was I think it was before kids, but we were there and I had just downloaded this app that was all about now casting, which is the art and science of predicting the weather in the next hour.

And I remember we wanted to go barbecue and I pulled up the app cause I didn't have a fancy watch at the time. I was like, Oh, it looks like it's going to start raining in 12 minutes. Let's go for it. And your dad was like, really? Like, okay, we'll see. And it, it was like 13 minutes later I felt the first drop and I was like, dude, it was impressive.

Yeah. Super cool. So, yeah. So we got a little bit of here. It's not the same here as it is in Colorado at all. No, not that's right. Not really. Yeah. No. But here what we're doing is we are buying and selling real estate. Woo. Yeah. In the

Jessi: rain,

James: in the rain. Yeah. I don't, we honestly, this is kind of interesting where we're working on a place, this is unrelated to what I'm, what we're gonna actually talk about, but.

We're supposed to start a roof replacement today, but it didn't happen because there's some other stuff going on with the contractor and they got a delay a week. So maybe it'd be okay. At the day, maybe so,

Jessi: cause looking out for showers were today. But

James: instead, what I actually want to talk about is a property that we just finished.

So there's a term in investing that's called full cycle going full cycle. In other words, it's all the way from the purchase to the sale and the disposition. And so we have just gone Full cycle on a deal. It was a flip of a single family home. We actually talked about it a while ago, back on the podcast.

And so I'll, you don't have to go back and listen to it. I'll recap it, but it's done. And so I just kind of want to talk about it, talk about the numbers and ultimately talk about what we were able to do with our investors. Yeah. Yeah. Exciting. Yeah. It's very cool. Yeah. So here's the, here's the headliner.

If you will, and that is we had some investors who lent us debt and those investors earned on an annual basis. If you were to calculate from like a APR standpoint, 26. 9 percent on their money.

Jessi: Whoa. Yeah, that's a lot. Actually, it's not bad. You know, if you think about. What you would get like in the stock market.

That's what it right around like 10 percent if you leave it in longterm, right? Yeah, 8 percent technically.

James: So that's how the math actually works out. Yeah. So that's what, so they actually earned an 8 percent return on their investment, but they did it in such a short amount of time that when you annualize it, it's almost 27%.

Jessi: All right. Yeah. Interesting.

James: So here's the So if they, it's

Jessi: just like a clarification. If they were to, Clarify when? Let's just say you had like multiple ongoing deals and they just kept rolling their money in. Yes. Then that's how much

James: they would have earned throughout the entire year. Okay. Yep. Yeah.

100%. Which is often times how that math is done when you like when you ever listen to a commercial and they're like, you know, 9 percent APR or APY, which is annual percentage yield. Okay. There are differences. We don't need to worry about it. Based on a

Jessi: year.

James: Yeah, it's all based on a year. It's just, it's an easy way to measure and compare different investments.

Makes sense. So, that's often. And it's, in this case, it's a bigger number, so we talk about it. So, are

Jessi: you going to get into, like, what the investment was for this particular property and what the

James: time frame was? Yeah, but we can, like, ask your questions. I'll just dive in. Oh, well,

Jessi: I'm just curious, like. I got an

James: order, but who cares?

Jessi: That's true. I mean, I'm just curious, you know, your, You're kind of, you're basing it on this like annual percentage because that's a way to measure it. But it's like, all right, my curiosity is like, well, how much, how much time did go on? You know, you got this investment from people.

James: Yeah. Okay. What was the time frame?

It was exactly 107 days.

Jessi: Interesting.

James: So like a

Jessi: little over three months, three and a half months.

James: Yeah, it was actually 3. 57 months is how I mathed it out. Good job. Yeah. So that's the trick. So you take the 12 divided by 3. 57 and then you multiply it times the 8 percent that we paid. Now here's the interesting part where you're like, well, that's kind of weird.

That's like a random number. How does that work out? Okay. So the answer to that, cause. In theory, let's say that we offered our investors like, Hey, we're going to give you an 8 percent average, like we'll give you an 8 percent APR. Then they would have earned a fraction of that. They would have earned like a 3.

57. Oh, because it's just, but what we offered was what we call straight interest, or sometimes it's called full interest, depending on the language of it.

Jessi: Okay.

James: I like straight interest where essentially what we say is we will pay you 8 percent no matter the timing. If we go super fast, you're going to earn 8 percent on your money.

If we take really long, you're going to earn 8 percent on your money. So you can imagine I'd rather invest

Jessi: that way.

James: Well, you can imagine a couple scenarios where let's say we're doing a flip and we say 8 percent and the flip takes six months, you effectively earned 12 percent on an annual basis. Right.

Cause it was half the year. So therefore you multiply by two. But if our flip, let's just say it took two years just again to make numbers really obvious, you would have earned 4 percent annually on your money. Not as exciting.

Jessi: Right.

James: Yeah. And but for us, there's a lot of advantages and for our investors as well.

For us it's very obvious to calculate what our what our costs are. It's 8%. Done. Yeah. Whatever that is. And and then for our investors, it's always, it's also easy. You know, exactly how much money you're getting back. You just don't necessarily know the timing of it. And in this kind of case, obviously it worked out really, really well for them because we were way ahead of schedule.

We originally were thinking nine months and then we made some changes and we're like, Oh, I think we can do this in six months. We ended up doing it in under four months. And so, you know, they're, you know, Their annualized return just kept ratcheting up as a result. Sometimes again, what they'll offer is they might say, Hey, we might go, we'll give you 12%, but it's an annual

Jessi: 12%.

So

James: it's like, so you incrementally earn 1 percent every month. So had we offered that they would have earned a 3. 57%.

Jessi: Right. Cause it was just actual return

James: on their investment, but it still would've been a 12 percent ROI. Okay.

Jessi: So in actual, like all these percentages, whatever, can we like, give me a scenario of actual dollars.

Like, let's say for this particular deal or, or another particular deal, that's similar to this. Yeah. Let's say I gave you a hundred thousand dollars. How much did I make back?

James: Yeah. Okay. So in this case, a hundred thousand dollars, what you got back was 8 percent of that, which is eight grand.

Jessi: So I got my 100,

James: 000

Jessi: plus 8, 000.

James: Yes, correct.

Jessi: Alright.

James: Yeah.

Jessi: That's more concrete in my mind. And again, had

James: we gone with like a 12 percent just annualized straight for as long as we have your money, you earn 12%, you would have earned 3, 570.

Jessi: Okay. But that's not what you did.

James: It's not as, it's not as cool.

Jessi: Yeah. But again,

James: let's say that this project took longer, longer than a year, you still would only have earned.

It's kind of an interesting, it's an interesting deal because it rewards them, our investors for going fast. And in some ways there's no downside for me taking a long time. My, my costs don't increment up.

Jessi: Huh.

James: Yeah. It's

Jessi: kind of interesting. Yeah.

James: So actually, we're doing another one and we structured it slightly differently.

Jessi: Huh.

James: Because we had some people who were like, well, I want 12 percent and I was like, no, you actually want eight. Trust

Jessi: me.

James: Interesting. But, yeah. All

Jessi: right. I, I think I understand.

James: So now what we're doing going forward, pending changes, obviously, is 12 percent annual return with a 6 percent minimum. So let's say that in this particular case, you invest 100, 000 we go, Hey, we think this, we think this project will take six months or what's a better way to say it.

Yeah, and, and let's say we go, Hey, we think this project will take a year. You go, cool. I'll earn 12 grand. If the project ends up taking six months, you actually only earn six grand. But if the project like this one took three and a half months, you would still earn six grand. Cause we would. We'd say, Oh, it's a zip.

We would do the minimum of six months. Oh, and so what we're trying to do there is protect our investors both on the front end. Hey, you're going to earn a significant amount no matter what. And if this project goes longer, you will continue to earn on it. It's kind of the thought, how we've progressed it.

And it's a little bit easier to explain.

Jessi: We

James: just go, yeah, it's a 12 percent APR with a 6 percent minimum.

Jessi: I could see that. And it's like, you, you have to remember that like these investors, we've kind of talked about this on other podcasts. It's like. This is passive investing. So yes, there's some learning and some vetting of people you're working with and that kind of thing.

But for the most part, you're not putting in hours and hours of your time. Right. So if you were to calculate it out, like, The time that I put into this and my return, that's a pretty good return, like per hour. Oh yeah. Oh my gosh. So like,

James: yeah, no, totally. And, and so that's actually what we did is we create an entire website for this and, or what page really.

That laid out the entire investment where it said like, Hey, here's the highlights. Here's the deal story. Here's the financial modeling. Here's the expected results. Here's the risks. Here's the business plan. Here's our construction budget, laid it all out. Here's the team who's going to be doing it and here's the relevant experience.

And so I, we ended up having three investors come in on this. We raised 95, 000 for it. One of the guys who invested, I've known for a really long time, have like, just spent years hanging out with him, and so he read it, and was like, I'm in. That was it. Had another guy who also who we know, has spent some time with, just personally, Not professionally at all, just personally and was talking with him.

It's like, Hey, just review this, look at it. He went and shared it with his dad, who he trusts as he should. And his dad was like, yeah, this all looks legit. So he's like, cool, I'm in. And then the third guy was someone who I'd never met. And so it was a third party, shared it with him and said, Hey, I think you might be interested in this.

So he read the website.

Jessi: How did you get connected with him?

James: My partner shared it with a friend who then shared it with him. Yeah. And so then he read the website. And then said, Hey, I want to talk to me. And so he called me and we talked on the phone for, I don't know, half hour, 45 minutes. It was like, sounds good.

I'm in. And so we were funded like that. Wow. And so that's like, so that was the homework process. And a lot of what passive investors are doing at that stage, it is their due diligence. And it's really like, I highly recommend for any prospectus or anything that you get, like read it all. I know it can be confusing.

It can be boring. But read it all, look at it. Things that I do is like, I'll add videos that explain here's what's going on. And like, oftentimes I'll have a video of me actually going through the financial model and explaining it and things like that.

Jessi: Yeah.

James: So.

Jessi: Well, and that's some of those questions that you, what do you call that document?

Oh, it's my

James: 196 due diligence vaults of questions. It's kind of

Jessi: like, you don't need to think up questions to ask, like use that document and just kind of work through it.

James: Yeah. And now what are the differences here? Is that we versus say like a syndication, right? Which is what we spent a lot of our time talking about is that in this case, we were offering debt, not equity.

Jessi: Okay.

James: And typically with debt, or I'm sorry, typically with equity, you get a percentage of the profits. And oftentimes that's, that's called a common equity

Jessi: and

James: it's exactly as it sounds, you have a percentage and you get a percentage of everything.

Jessi: Is that better for a property that you might buy and hold?

Because you get a certain percentage of what it's worth.

James: It depends, you know, I don't, it's, it depends. There, there are definitely pluses and minuses. And I'll, let me answer that question just a little bit. So in this one, we offer debt with a fixed return. Okay. And in this case, it was a promissory note. It was collateralized by the real estate and it says, Hey, we're going to pay you a fixed amount of interest at a fixed time.

Yeah. And so there's pluses and minuses to both. So the debt, what's nice about it is a, it's guaranteed by me. I will pay it. And But it's fixed. You don't get to participate in it. Like if we had blown the doors off this investment somehow, like, cool, you still get your 8%. Whereas if you are common equity, if we blow the doors off of it and it exceeds all expectations, cool, man,

Jessi: example of like blowing the doors off.

Cause I'm like, isn't it? So let's say

James: you invested a hundred thousand dollars and. You get 8 percent interest, this case that we're here, you would get a grand, right? But let's say that we're projecting the profits of this thing, and let's say that would give you 50%, if you had done it as equity, you'd get 50 percent ownership of the property.

And let's say that we're projecting that the profits could be somewhere in the realm of eight to 20 grand. Okay. Okay. So that means your, your expected return could be anywhere between four and 10. And so, but you don't know till you get to the end and it could be four in which case you go, Oh, I only made four grand.

I could have made eight or we blow the doors off of it. Someone comes in with a massive offer and the profits on this property were actually, I don't know, 40 grand. Then you go, Oh my gosh, I could have made 20 grand and I only made eight. So it's this weird. So you get to share and quote the upside. But, there's no guarantee of that.

Whereas with a debt, there's absolutely no guarantee. How often does

Jessi: that happen? I'm kind of like, I don't know. We've talked about numbers enough that I'm like, you kind of know what the property's worth. You know the aftermarket, or after repair ARV. Is that it? Yeah. After Repair Value. Huh. Is that what that stands for?

Huh. You got it. So, you know that ahead of time. You calculate it. So it's like, You already know from the beginning almost, like what it's going to be worth and what you're going to sell it for.

James: Yeah, they really only like the big savings is going to be on the construction side. If, for whatever reason, this thing you thought was going to be huge turns out, oh, it's actually not a problem.

It's an easy fix. Something like that. So

Jessi: you overestimate the expense.

James: And, and I would say too, like, for shorter term flips, that's definitely like, there's a lot of knowns. For the longer term stuff, it's hard to tell, like, because cap rates could compress, which means just values go up. And all of a sudden you're like, whoa, we're making a ton of money.

That's

Jessi: a market change. And I would say that's one of the big

James: differences in like a syndication is when you're talking about a syndication, you're holding it for 5 to 7 years, but we're also going to double your money in the amount of time. You know, so that 100, 000, we're not talking 8, 000. You're talking 200, 000.

Now, what is but if we're holding it for 5 years. That's 8, 000 times 5 years, you know, let's say that's still 40 grand. That's not bad. It's not the hundo, but the hundreds also not, the doublings also not guaranteed, right? You just don't know. Yeah. Now there's also, there's also some other big differences and why this is important is if I'm getting a loan.

Then then those other people need to be equity to help me qualify for the loan. And, cause otherwise the lender's gonna like freak out about it, where in these cases that's often not the case. Like, and so we can have lenders on it, cause there isn't another person coming in with a loan. That makes sense.

Kind of, that's, there's nuance behind that, but it's not important for what we're doing. Yeah, so, those are kind of the Wow. All right. We go right into the numbers. I'm here. We're just going to keep going. So I'm interested

Jessi: in the numbers.

James: Yeah. So a little more context. This was a pre foreclosure, so that means it was going to be up for auction.

And so that was where we came in and said, Hey, we're actually going to buy this property subject to the existing mortgage, which it was like 80, like nine, 87, 90, 000 on that mortgage. Which was a pre foreclosure, so we had to pay that off. And then we said, and then we're going to bring in this 95, 000, which will help us complete the purchase.

It'll put some seller in the cashes. It'll put some cash in the seller's hand. It will also pay off anything that's late or due on this property. And then it also gives us some money to go in and do some repairs. That's kind of how we structured that. And again, our game plan was make it pretty quick. In the process of us starting the fundraising process, I was talking with a friend who was like, Oh man, I would love to buy a fixer upper.

I was like, really? I might have one for you. And so we took it from like doing just a standard, we're going to flip and make this thing awesome, to we're just going to do enough to make it lendable. And then we priced it in such a way where the amount that we make was pretty much the same. And so he gets all that additional equity upside by doing the work himself instead of us paying a contractor to do it.

Yeah,

Jessi: as he should.

James: Yeah. Because he's going to put in all his sweat equity. Which he's doing right now, borrowed on my paint stuff and I'm like, dude, that's awesome. He's getting after it. And, and there's a ton of value there and which is super cool. And it reduced a lot of risk on our end because it went from this massive list of things to do to like, okay, we just got a very short list of things.

Yeah. Now it did include putting on a new roof. We had to improve the sump pump. There was an issue with the wall and also the floor in terms of water damage. And so we had to take care of that. There was a water leak. We took care of that. There was junk everywhere. We filled the. 30 yard bin of trash. I had one day where I worked 15 hours just moving junk.

That was it. Got a lot of steps in a lot of good exercise. That's how I'm choosing to think about it. And then we also, I didn't do all the cleaning, but we did a bunch of cleaning and we like top to bottom, cleaned it all out. And I was even talking with a guy, he's like, yeah, I came in the next day, you can still smell it.

It's like, it's still dirty. I'm like, yeah, I know. So that's why he's painting everything with some kills. Yeah. Just going to cover it all. Cover it all. It'll be reset. So we did a ton. Our budget to do all of that was 182, 000 and then we were going to sell it and then we're going to pay off our investors and actually pay a guy for giving us a lead.

So how well do you think we did on our budget of 182, 000? Yeah. So, to help you out here, stabilization cost for it, we said it was going to be 20, 000 to do all that different stuff that I just rattled off in terms of repairs.

Jessi: So how do you think we did? That was like the roof and the water leak and everything?

James: Huh. Huh. How'd we do on our budget? If you had to guess. I

Jessi: have no idea. You probably came in under.

James: No.

Jessi: Oh. I did. Oh. Oh. No. How much did you spend?

James: We ended up going over by five grand.

Jessi: Oh, that's not terrible. It's not terrible.

James: Well, it depends, right? Remember how I was talking about how, like, that profit margin piece at the beginning?

Jessi: Yeah. That,

James: that has a direct impact. Okay. That was five grand less for you and I. Wow. That's how that, that's how that worked out.

Jessi: Yeah, but relatively. It could have been, like, five grand.

James: Yes. In which case, you and I would have been contributing to this project, and that

Jessi: would've been lame. Yeah. That would've been like, no.

Yeah. Especially

James: since before we started all the work, we had already come to an agreed upon price with my friend. Okay. Yeah. So it was really like, yeah. Because you know, you could always be like, hey, let's just goose the price up by two grand. Right, if you're going to list it. Yeah, and yeah. Yeah, no.

Jessi: That's not bad though.

Yeah,

James: yeah, you're going to wish you had that twenty five hundred bucks, but that's okay.

Jessi: I mean.

James: It's all good. Yeah, no, we, it turned out well for you and I. I think it'll be okay. We get some money out of it, which is also great. But yeah, so we ran over by five grand. Not horrible, you know, but I'm, I'm a perfectionist in that regard.

So I'm like, ah, I could do better. I could do better. And so I've actually, this new project that we're working on, what that sound was this new project that we're working on, we have a rehab budget. I think it's 10, 000. I think it's 82, 000 for the entire rehab. So much bigger project, like four times the size.

As of right now, it was 82, 500. Huh. We were given a bid by our general contractor and we were given a bid by my yard guy. Huh. And those two combined came out to 82, 500. So as of this moment, I am 500 under budget and I will admit I'm very nervous about the entire thing. How

Jessi: likely is it that one of the two will

James: fail?

Well, my yard guy, he's going to be, he's already done because he did it and he honors his price. So I feel good about that one. It's the other one. I'm like, Oh man, find something to try to help out. I did some of the demo work to try to get that number back down. Cause it's like, okay, let's, that's definitely thunder.

That's awesome. They don't hear it at all on the mic. There's thunder happening, trust me. And yeah, so, but I'm like, But one of the big differences in this other project that this new one is I have a reserve of fund, an emergency amount of almost 9, 000. It's, you didn't have an emergency

Jessi: fund for this.

James: No, no. We just went for

Jessi: it. Okay. I was

James: learning. What can I say? It was our first time doing a flip. Well, in

Jessi: retrospect, like it closed and then we're done, so I don't need to worry about it. A little insight

James: into how I work. I am definitely in the school of ready, fire, aim.

Jessi: Oh gosh. Yes. Yes, you are. And so

James: saw this.

I was like, okay. Let's go for it. And I watched some stuff and I'm not an idiot. And we've like, we've been, we've done other things. Yeah. I was like, okay, I feel decently good about it. And again, like I was off by five grand. Like it's not, it's not bad. Five percentage wise. It's not small, but I was off by 5%, which honestly in the realm of forecasting, like that's world class, I guess.

Anyways. Yeah, it is. No, it totally is in terms of forecasting. And so It's a little more than that, I guess, technically, because it wasn't quite a hundred, but anyways what one of the things that I then do is once I had that experience, I then go and I scour the internet and other places to learn everything I can.

And so like in that initial underwriting model, I had a couple lines like, okay, we've got to buy the property, we've got to pay for arrears. The seller needs some cash. And that's the total. Now I have like eight different lines. I'm like, okay, yes, there's the arrears, there's paying for a lead, there's closing costs, there's this reserve fund, there's all the other stuff I mentioned and and just added it all.

And as a result, it lowers the ultimate price I can offer. Cause I'm like, yeah, cause I want to account for all of these expenses. And Yeah. So anyways, that's what we did. Yeah. So let's see, what else do I want to talk about? So one of the interesting things that happened with this property was we gave the seller 90 days to move because part of it was he was in foreclosure.

He didn't really want to move. His kids were still in school and he wanted to finish out the school year. And so we're like, all right, we can make that work. And like I said, we closed in 107 days and he moved out. I think it was like on day 94, which was, it was incredibly frustrating. It was a situation where, I mean, this makes sense.

He didn't want to move, you know, like it was near school. And so when we were like, you got to find a new place, he's like, yeah. Yeah, I'm going to do it. And thankfully my partner, he like, he took the reins on this one. He looked up places, he took tours with them. He looked at different listings with them, help them move forward, help them just kind of wrap their heads around this entire process and like this big change that was coming in their life.

And we did have, we had a pretty funny interaction though where we're sitting out in front of our house, we're chatting and it's before our small group when, when we The new buyer is like about to show up when the seller calls us again. He's supposed to be like moved out when we had this phone call.

He was supposed to moved out early, like in a couple of days he calls us and goes, Hey, I'm sorry to tell you this, but I'm going to need another week. Okay. I just don't think I can be moved out in a couple of days. All right. So I'll let you know that. Bye. And we're both on the phone when the other guy pulls up and we already have a closing, it's already fixed.

And we're both like, Dude, we didn't have a week to spare in the schedule. We gave ourselves two weeks to do all of this other work. Okay. We'd already done the roof. We'd already done a sump pump. So it was just the inside piece. And so we're like, I would have, we don't have time for this. And Oh my gosh. We were just like, again, my friend pulls up, who's going to buy it.

And I'm just like, okay, I don't know what's going to happen here, but may I have to delay by a week? I don't know. And we ultimately didn't, which is why I put in that 15 hour day because I was like, I don't like. We just have to get ahead and that was ultimately did to make it work. And it was to the point where he was like, I don't think we can do it.

And so we ended up hiring two people and renting a moving truck, showing up at his house and like, guess what? It's moving day. We call them ahead of time, but we're like, this is what we're doing. We're coming in. We're helping you move your stuff. And so they packed that 26 foot moving truck, and then I filled a 30 yard dumpster after the fact.

It's

Jessi: so

James: much stuff. It's so crazy how much

Jessi: you can accumulate.

James: Oh, I know. In such a short time. I think our house would be similar, honestly, like if we were to, just the amount of stuff.

Jessi: Yeah.

James: Yeah, it was, it was intense. I did have, in the process of me cleaning everything out, you know, the, the neighborhood started to come out and say hi to me, which was super fun.

And at least one guy pulls up. And he goes, Hey, I'm part of this. What's it? It's a, it's like a volunteer slash community. Um, like play.

Jessi: Yeah.

James: What are they? What are you? There's another term for that.

Jessi: Theater.

James: Theater. Yes. Thank you. Like theater company. Theater group. Theater group. He's like, mind if I go through your stuff to see if there's anything good for our theater?

I was like, dude, have at it. Yeah, take it. I was like, anything. He grabbed some paint. He grabbed some tools. He grabbed some interesting looking things. He was like, these would be cool props for decorations. It was pretty wild. I'm like, dude, go for it. Fantastic. Super fun. And met a neighbor who's an interesting cat.

She's lived there for a while. She talked to me for a while. It was pretty funny. Okay, we talked about rehabbing the interior. And, oh one of the things that we do is, We, we decided to communicate with our investors via email and I like it because I'm just naturally I'm a writer. That's how I express.

I think that's how I best express myself despite doing this and so I just like it because I can slow down. I can edit it. I can think it through. And so we aimed for like once a month updates and for the most part, it was just like for It was kind of fun. Like that first one was like, it's exciting. They got a new roof.

It's awesome. And then the next one was like, well, we're just sitting around waiting for the seller to move. And a month after that was like, well, the seller hasn't quite moved out yet, but we're working on helping them with it. And then it was like, in between updates, he moved out. We did all the work and closed.

And so the final update was like, and we're done. Yeah, it was pretty, it was, it was pretty wild. Like not typically how you would do these updates, but it was good. And so we But yeah, that's how we did it. And I kind of have like three different lists that I go through. So there's the first one that's like new people who join.

So if you go to furlo.com and hit the join the investor club that I got on this entire series where it goes through and really educates you, here's what it's like to invest passively in real estate. And then I do. to everybody, these monthly business updates from just, Hey, here's the last things I did in this month.

Some ways it's kind of a nice accountability, but in others, it's really like, yeah, these are the things we're doing. Sometimes I give economic updates. Sometimes it's just kind of like, Hey, here's my philosophy of life, things like that. And then if you are a current investor in a, in a specific project, I have a whole separate email that I send out just to that, which is primarily, these are just the updates.

And so that's what we did.

Jessi: So where in those three, do you hear about

James: new stuff coming up? Ooh that'd be in the, everyone. monthly, the monthly one. Yeah. But if I've got a deal, I then I just answered a new email right then. Like, Hey, new opportunity. Here's what it is. Check it out. It's like a special.

Yeah. Yeah. It happens whenever we're ready to raise funds, which in this case, I think it took us, took us about a week, I think, to do it. And This newest project that we did took all of two days. And so I was like, boom, it was quick. And I had a bunch of people who, and it was like, I sent it on a Friday and we were done by Sunday and I had a bunch of people on Monday and Tuesday like, Oh, I was too slow.

I was out of town. Like, yeah, sorry, man. That's how

Jessi: that happens. Next deal.

James: So yeah, that's exactly what I told him. So that's what I want to share. So quick highlights just to recap it. So we bought this property pre foreclosure for 160, 000. We took over an existing loan. And we raised 95, 000. Then that let us reinstate the loan.

Let us make the repairs and provided the homeowner some cash so that he could go and find a new place to live. We offered our investors 8 percent straight interest, which we happily paid out to them. And then it took us 107 days or 3. 57 months to do everything. So therefore we, we still paid our investors 8%, which in this case was 70, 7, 600 total spread between the three guys.

And, and then what we did is when you annualize that, it comes out to. 26. 9 percent is what our investors earned. It's pretty cool. This quick little project. Yeah. And, and I really do believe it was the kind of project that met the mission that we have perfectly. Yeah. Right. It was a situation where we built wealth for, for our investors, right?

Like they'll earn money and. It's the kind of thing where we improved communities because we took a house, we made a lendable, cleaned it all up, and we got a new guy in there. Who's going to start building his wealth, which is super exciting. And just to top it all off, because sometimes you get lucky with this kind of stuff, the people who sold it.

Are also in a better financial position. They unfortunately don't qualify to buy a house right now, but because they avoided foreclosure and because they got some cash and are able to pay off some other debts in a year, once all the credit bureaus catch up, they will actually be able to qualify to buy a new home if they want to.

And so it really was one of those, what was it in the office? Win, win, win,

Jessi: win, win.

James: Yeah. One of those situations. So yeah, so super cool. So I think it like, it definitely hit the nail on the head of what our mission is, where we're building wealth and improving communities together. So it's super cool. Love it.

Yeah, cool. Glad, glad you love it. And if you enjoy this podcast and love it as well, we would really enjoy it. If you left us a rating and review, wherever it is that you listen to podcasts, and if you are interested in learning more about investing with us, you can check us out at furlo.com. Thanks for listening and have a great day.