Creative Financing Before It Was Cool with Kevin Amolsch

Kevin Amolsch: [0:00] I actually agree with all of what we're probably gonna talk about the sub twos, the wraps, the contract for deed. My niche was the lease option. That's really what where I got my traction. Yeah. I I chased foreclosures for a while, and that was super tough. The lease options are easy. Now you could buy a pretty home in a nice area and no equity at all and still figure out how to make money, and the seller can understand the concept. It's pretty simple.

Speaker 2: [0:25] Welcome to the Collecting Keys Real Estate Investing Podcast with your host, Mike DeHaan and Dan Austin. From wins, losses, horror stories, and tactics for optimizing your business, Mike and Dan take a real uncensored deep dive into the ins and outs of running a full time real estate investment and wholesaling business.

Mike DeHaan: [0:48] What's going on, guys? In this episode of the collecting keys real estate investing podcast, we are joined by Kevin Amolsch. I think I said it right after going the whole episode. Yeah. He told me at the beginning. Do

Dan Austin: [0:59] your Amolsch. You did Amolsch. So you did good.

Mike DeHaan: [1:01] Oh, yeah. That's right. There we go. But he is a investor that has been around for a long time. Started buying properties in the early nineties, doing creative finance stuff originally, back in like the nineties, way before, you know, Pace Morby YouTube and all these gurus and stuff out there. And went through the crash, kinda lost everything, and then now has started a lending company that has done almost $1,000,000,000 in loans over the last few years and scaled to something that's super, super impressive, especially for someone that honestly got their ass handed them in 2008.

Dan Austin: [1:37] So Well, I know the difference I'll say with him is a couple things. A, he's I can tell he's high ethics because of how he said he takes he took during that crash, he was doing a lot of creative stuff, a lot of lease options. He took care of those individuals first before the banks because anyways, you have to listen to that. The second thing is is like, he got his ass headed in 2008, but he just kept going and he pivoted and he adapted. He didn't stop investing at any point. He kind of went back down to zero and then right back up. And so it's kind of a cool story. He didn't wait ten years. He he didn't just quit. So I think he's a super great guy. Obviously, high ethics as well, which I thought was great.

Mike DeHaan: [2:11] Yeah. Absolutely. And going through all that, he got damaged. He's damaged his credit and all those sort of things, but he found ways to persevere. Like you said, he kept growing. And he did so in a way where he didn't have to, like, file bankruptcy or do any of the others other stuff. It's like the easy switch that a lot of people do when they're, you know, just trying to get out of their own situation. So totally got a job, learned how to, like, make partners, did all the hard stuff, and that's why he's doing a billion dollars in loans now. So good for him, and he's freaking crushed

Dan Austin: [2:39] Just a just a be Just a be. To be in there.

Mike DeHaan: [2:41] I mean, even just do, like, the basic math about it. Right? Like, let's say you're collecting you said that on his lungs, he does, like, two points on average. Right? So let's say he does two points on a billion dollars. What size is that? 2,000,000? No. So I don't know. It's a lot of money. $20,000,000. Right? 20,000,000. 20,000,000.

Dan Austin: [2:56] I was about to do the yeah.

Mike DeHaan: [2:57] It went out

Dan Austin: [2:58] 200, but $2,020,000,000.

Mike DeHaan: [2:59] Yeah. Just in points that he's generated from his lending. So that's not including all the interest and everything else. So and, like, admin fees and all the other shit that lenders so he's making legit money.

Dan Austin: [3:08] I just realized that. I just realized that. That was crazy.

Mike DeHaan: [3:11] Yeah. Yeah. So, anyways, guys, enjoy this episode with Kevin Amolsch. Tons of great information in there on lending, creative finance, everything in between. And reach out to Kevin as well if you vibe with kind of the stuff that he's saying. On top of that, please share this episode with anyone who might find it interesting. I'm sure you know at least one person. And also too, if you wanna start generating off market leads, go to effectivekeyspodcast.com/free and get our free five step guides on generating off market leads. And then you can start using lending services like Kevin has to go and make big money, which is what we're on this tour anyway.

Dan Austin: [3:44] Big money. Oh, that is that a shirt? Get some BFM?

Mike DeHaan: [3:48] Get some BFM. After you get your BDE shirt. Yeah. Go get your BFM shirt. I do kinda like that though. But alright, guys. Well, enjoy the show. And man, you threw me off here. Enjoy the show with Kevin Amolsch.

Dan Austin: [4:01] Get some BFM.

Mike DeHaan: [4:03] Alright. Kevin Amolsch, You are a lender, creative finance whiz investor first lender second. Thanks for coming on the show, man. Very excited to have you here. And I would love to hear your background and where you came from and everything that you're working on.

Kevin Amolsch: [4:20] Yeah, no worries. Mike, Dan, thank you so much for having me. I'm super excited. I we talked right before you hit record how much I love you the name of your your podcast.

Mike DeHaan: [4:28] I'm I'm

Kevin Amolsch: [4:29] just glad that you, you know, let me come on. So appreciate you. Yeah. Yeah. Got started super young. I was just getting out of the army. Was had a little tiny small savings account, not like you'd make very much in the military, but I had enough to I was thinking like, I gotta do something with this. So I started reading books and Good. You know, that Purple Bible that we all know about, Rich Dad Poor Dad, we

Mike DeHaan: [4:46] Oh, yeah.

Kevin Amolsch: [4:47] We read that first, and then it was like, okay, everything's sane. Go to real estate. Go to real estate. So I I went to real estate, bought my first house. I just turned 21, rented it out, or I lived there for two years, moved out, rented it out. I realized, gosh, dang, this is going to be the vehicle that's going to make me rich. I just know it. So I really focused in on it. And here I am in school, working, trying to figure out how to buy houses, and I figured it out. Started buying one or two houses every month, you know, calling motivated sellers as I was walking between classrooms. And you do that, you know, I didn't have money or credit or any of that. So I really had to figure out how to to do that. And it comes down to the creative finance. And like you said, Mike, and as I was going through my career, I just really focused in on the financing side of real estate. That's really where my passion was, and I became a private money lender. So now we have multiple mortgage funds. Super proud. I just got my first public fund approved till about eighteen months ago, and so now we're raising money publicly, and we're loaning it out to real estate investors. So I really found what I'm supposed to be doing. Thanks.

Mike DeHaan: [5:45] I love it. I feel like we just What? Did a really quick travel through time there.

Kevin Amolsch: [5:49] Yeah. I went fast, didn't I?

Mike DeHaan: [5:51] Yeah. Because because going from buying your first property first off, how long ago was that? 2001. 2001. Okay. And then

Dan Austin: [5:59] 2001. Yeah. While you're in college. Yeah.

Kevin Amolsch: [6:01] Was still in college and you know, moved out after two years. So I've now I've been, know, two decades as a real estate investor. I've done developments, built townhome projects, developed land, but I had a hotel for a little while.

Mike DeHaan: [6:13] Yeah. I've kind of done quite

Dan Austin: [6:15] a bit. A little bit of everything. Yeah.

Mike DeHaan: [6:17] Were you getting into creative finance back then too? Because that's before there was like the people on YouTube that were pretending to teach you how to do it, even though they didn't know what the hell they were doing themselves.

Kevin Amolsch: [6:24] It was much, much harder to learn the business. You'd read a few books, and I would just

Dan Austin: [6:29] go out

Kevin Amolsch: [6:29] and do what books said and fall on my face. And then eventually, got a mentor and it's a two two person team that kind of helped lift me up and brought me through. But yeah, I was doing creative financing way back then because I couldn't get a loan.

Dan Austin: [6:41] Yeah. I'm always impressed with real estate. It's easy to be a real estate investor these days. You literally just go to YouTube.

Kevin Amolsch: [6:46] Yes, sir.

Dan Austin: [6:47] Always impressed with people that have been doing it before the YouTube sensation of real estate gurus and stuff, especially if you're doing anything outside of like, buying a rental property with 25% down. Yeah. Know.

Kevin Amolsch: [6:58] You know, actually go to Barnes and Noble to buy the book to, you know? Yeah. Yeah.

Mike DeHaan: [7:03] So I guess, one of the reasons I'm super excited to have you on, Kevin, is because you have this creative finance experience, but coming at it with the experience as being a lender. Right? And I feel like most people out there that teach creative finance or super into creative finance, it's always about how can we do things that are legal enough that if the lender gets upset that we don't get slapped, especially when looking at sub twos or wraps or, like, all these other sort of things that you see out there right now. But you you're gonna have a whole different perspective. So I guess when you started out doing creative finance, like like, what exactly that mean? Were you just doing like seller carries? Were you doing sub twos? Were you doing like the wraps and all that sort of stuff or what?

Kevin Amolsch: [7:44] Yeah. It's very interesting because I actually agree with all of what we're probably going to talk about the sub twos, wraps, the contract for deed. My niche was the lease option. That's really what where I got my traction. Yeah, I chased foreclosures for a while. And that was super tough. The lease options are easy. Now you could buy a pretty home in a nice area and no equity at all and still figure out how to make money and the seller can understand the concept.

Mike DeHaan: [8:09] It's pretty simple. So like you are buying on a lease option.

Kevin Amolsch: [8:12] I was buying on a lease option and selling. So I was I was sandwiching myself between the two. Oh, very cool. Now it's a little bit tougher to do that now, but it's I mean, if you set up the you structure the deal correctly on the front end, you could still exit with your tenant buyer on the back end without ever owning the the home at all.

Dan Austin: [8:29] Yeah. What do you think makes it a little bit tougher to do it nowadays? Is the market conditions or, like, from then till now, I'd love to know it's different.

Kevin Amolsch: [8:36] Yeah. I mean, there's quite a bit different. The SAFE Act is a is a big piece of that because of 2008. Mhmm. You know, now we have licensing, and we have ability to repay, and we have all these different guidelines that's protecting consumers. But really the big change or the big shift that I saw in the industry was the dry double close basically went away. It's really difficult to find that. The dry double close is when I'm gonna buy a property from a seller, and I'm gonna sell it to a buyer on the same day or the same time, but not bring in any funding. My buyer's funding is gonna fund both transactions. Gotcha. Title companies don't really do that much anymore. Now I gotta bring in flash cash. Right? I gotta close on my side before I could sell.

Dan Austin: [9:17] Mhmm. I know a guy that calls that Gator Lending.

Kevin Amolsch: [9:20] Gator. Yeah. Heard that one.

Mike DeHaan: [9:22] Gator Lending. That's Pace Morby, who's the current creative financing guru out there that Dan and I like to hate on a little bit. But yeah. So, yeah, you're right. Normally, see transactional funds and that sort of stuff that come in up, you know, you can find the a to b, b to c sort of escrow companies. But in certain states, it's illegal to do, as you've sort of alluded to. And then you have to find like the, I don't know, the one attorney that like kind of has a weird office that no one really goes to that's willing to do like under the table in a lot of places. Right? Yep. So yeah, that makes sense. I mean, 2008 changed a lot of things on the investment and purchasing side. So I guess as you went through that, like, what did you, I guess, build up before things started to get difficult? Like, what did your portfolio look like? Because you say you transferred to hard money lending. Mhmm. I guess unless you were raising a fund, you must have built a pretty decent nest egg to transfer over to that unless you were just brokering or renting a fund or something.

Kevin Amolsch: [10:15] Yeah, so let's let's dig into that that transition there. So it was it started getting very difficult with the way I was structured. I had a I had a lot of loans also, and I had a bunch of lease options and subject twos. Mhmm. And we were getting close to 60 when I say we, I was getting close to 60 doors. These are all single family homes. Wow. And we're leading up to 2,008, but a lot of people weren't investing there at that time, so they don't know. But 2006 and '7 were actually the tough years.

Mike DeHaan: [10:42] Mhmm.

Kevin Amolsch: [10:43] That's when interest rates were rising, and we were all in adjustable rate interest only loans. That's what everybody was borrowing. So you have interest rates rising. We had rents coming down. And so I started feeling the squeeze 2006 and 2007. And then, like, I was losing everything. I was trying to negotiate with the the banks to take the properties back, the ones that I owned. I was doing everything I could to get rid of my my properties that I owned, and so I could continue to make my payments to the lease options. I was not gonna default on those. So I went and got a I got a job. I became a bond analyst on for Wall Street company and started analyzing mortgage bonds, and and then then I got into hard money lending. The reason I got into hard money lending is I had a mentor that gave me one investor. She knew one little private money guy. He had $100,000, and she said, why don't you just go out and loan out this guy's money? So $100. So I went to a real estate sales meeting, and I got up in front of the room and said, have a $100,000 to lend to somebody that's gonna do a fix and flip, and got a deal out of that room, and I just brokered it. Mhmm. I charged four points origination, 15% interest. I gave two points to him. I kept two points.

Kevin Amolsch: [12:00] He got all the interest, a ridiculous business model, I made $2,000 on that deal, off that one conversation. Yeah, but it I'll tell you, that one $2,000 check that I made on that on that deal changed everything, because I saw it, This could work.

Dan Austin: [12:14] Yeah.

Kevin Amolsch: [12:15] I was going broke. I mean, you told me at the beginning of this call to be real candid with you. I was losing everything. Wow. And I had to figure out how do I adjust here. I had a port a big portfolio that was losing value like crazy. Yeah. Personal guarantees on a bunch of loans, and and and this is it. This is what worked.

Dan Austin: [12:32] Yeah. First of all, I would say I super respect how you said that you weren't going to default on those lease options because those are people that you genuinely they're not a bank. Right? Those are that could be people's retirement. They're real people where it's it's just different when you're talking about a bank loan and the processes for that. So I really respect that, because most people would be like, I don't care about those people, I care about my credit over here with the big banks. That's huge. And I also think it's pretty awesome that conversation because that's how things start is like with the $2,000 check and you're like, holy shit. I can make $2,000. I can make money again. I can do these things. So that's had to have been super empowering at that moment. So what ended up happening with all your properties, like, when you were going through that process? Like, what did that look like on the back end before we dive into anything else?

Kevin Amolsch: [13:21] Yeah. So if I can remember correctly, it was about eight, I think, that I owned with loans on them. So on my credit report, Fannie Mae type loans, I lost them all. I did deeds in lieu on the ones that I could. I short sell the ones that would negotiate with me. But remember, this is the very beginning of 2000. The banks weren't in the trouble they were at the end of the year when I was trying to so they didn't care about me. So some of them, they just had to, you know, went through the process, and I lost them.

Dan Austin: [13:47] Mhmm.

Kevin Amolsch: [13:48] Kept all the lease options. As soon as my option terms were coming due, I I was on the phone, and I had a bunch of them. I had, like, 40 something of these. So I would be calling and, like, trying to renegotiate with them. And and the ones that were willing to work with me, I redid the deal, lowered my option price, lowered my rent payment. The ones that said no way, they got the property back. I chose not to exercise my option, and they ended up with the property back. So my portfolio went from almost 60 down to about 20, and then I started rebuilding because now we're getting into two thousand nine, ten after I worked through all of this. That's the best buying time that we'll ever see.

Dan Austin: [14:24] Yeah, right.

Kevin Amolsch: [14:24] I was like, I have to figure out how to buy some of these properties. So, started bringing in partners and sign on debt, and started building my portfolio back up. That's awesome.

Mike DeHaan: [14:32] That's awesome. I love that. That's like the such a great story of overcoming that situation. And well, I guess what I look at now is that's comparable to a lot of flippers. You know, we know a ton of people that are in this situation. They started flipping houses 2019. Then 2020 and 2021 started taking off, they got greedy. And they lost their ass this year. Right? In 2022, they're losing huge amounts of money. People are getting properties foreclosed on. And most of the people that I know, they have packed up shop and are done with it. They filed bankruptcy. They're doing all this sort of bad stuff. And what you were going through there is, you know, it's very similar situation, I would say is much more difficult at the end of it. But you're able to come out, figure out all the details. And then you said, I'm gonna stick with it and keep going, which I think a lot of people did not do after 2008, and a lot of people are not gonna do after 2022 either. So no. So that's cool. So I guess that's what led you to start learning how to raise money and getting into the lending game. And I guess going back to what you said before where you got that $2,000 check, and that sort of got you the lit you up a little bit. Was the original goal with that to start raising money to basically bail people out? Or were you looking at more like traditional bonds? Or like, what was the strategy, I guess?

Kevin Amolsch: [15:50] Yeah. So I was a mortgage broker at that time. I that was the easy transition. I don't want to say a transition, but that was an addition to what I was already doing. But I was bleeding, so I needed cash flow. And lending is where my passion was, so I I became a mortgage broker. Again, before SafeAct, so there was no licensing. It was literally the Wild West. Yeah. So we could just write loans, and it was really easy. But as we got closer to 2008 and through 2008, it became very challenging. So I stopped doing a mortgage brokering for, like, owner occupied type stuff, and I I just focused in on the real estate investor. Mhmm. Now my story is kinda blend here because there's a real estate investor side and the lending side. I've I've been lending since 2006, again, to help supplement the cash flow.

Dan Austin: [16:33] Hey.

Kevin Amolsch: [16:33] That first guy was in 2006. Okay. And so from there, I realized that this this is going to work. It's just gonna take some time to build up. So I started teaching classes like, here, let me show you how to fix and flip a house. And so people would show up, and I would show them well, I can also loan out your money for you. Here's the kind of returns you can get. Totally illegal, by the way, I didn't even know it. And so I got people like investing with me, and I started raising money for me and my mentor. And then her and I started to conflict because I was raising all the money. I was loaning out all the money, and she was taking a a lion's share of it. So we just started getting some friction. And 2008 hit. She's like, peace out. I like teaching real estate. I don't like doing real estate. I wanna be in the trenches, so we split. And I started Pine Financial. That that was in 2008.

Dan Austin: [17:22] Oh, wow. Oh, wow. Okay.

Kevin Amolsch: [17:24] It's crazy. Losing everything. Got a my daughter was born, started a brand new company on 2008.

Dan Austin: [17:30] There you go. Thanks. I love that you like admitted to like, I was doing it illegally, because

Kevin Amolsch: [17:34] I can help

Dan Austin: [17:35] see so many people. They'll post on Facebook like, hey, I'm raising money for my real estate business. If you have any self directed IRAs, or just money sitting around your grandma's bank account, send it to me. I'm Yeah, really?

Kevin Amolsch: [17:46] Yeah. And ever since the Jobs Act, it actually became easier. Before that, I mean, was really illegal.

Mike DeHaan: [17:52] Yeah.

Kevin Amolsch: [17:52] And they were, you know, I got few wanted me to share a story, I will. But I got invited into the regulator's office. We sat down at the the table and dude had a badge and a gun. Oh, shit. He's like, Kevin, you're under investigation.

Mike DeHaan: [18:07] Oh, Talk about changing your day. It's notoriously violent white collar criminals, man. Like, that that's wild. Yeah. So so that's how you started the business. And I guess, how has that grown over this, you know, these last few years since 2008 and you're coming out of that, I guess, a a recovery period? How has your private money business grown? Like, what does that look like at its core? And how does like your love, I guess, for creative financing sort of tie all into this? Because that's the real real questions you want.

Kevin Amolsch: [18:35] Yeah. We can go back and forth here because they're very different. So the creative financing side, the subject tos and the wraps and all of that stuff, you know, that's that's where I started. Mhmm. That's what helped me understand that my passion is for the financing side. But I found that I could be more profitable, and I could build a bigger company and scale Mhmm. By going to the lending side. So even though I still love that piece of the business, I'm really focused on the lending side now. So we went from, you know, brokering private money, two points I'd share with them, two points I would keep, to I'm paying way too freaking much money. So now I'm gonna keep all the points, but I'm gonna give you the interest rate to, okay, let me service this loan for you because you don't know what you're doing.

Mike DeHaan: [19:13] Mhmm. Yeah.

Kevin Amolsch: [19:14] I'll click the payments. If there's a default, I'll handle all of that. So I started making a little servicing fees. And then the feedback was, you know, the value started going up. So the the feedback is, I can't fund an entire project. Mhmm. So we need to have lower investment entry points. We need to have bigger diversification because if there's a default, it's a big deal. And when was some liquidity? Notes aren't private notes aren't liquid. People tell you that, but they're not. If you wanna sell a private note, you're gonna have to discount it. So that's not liquid to me. So You're needed a I had three problems I needed to solve. So I started my first real estate fund. It was just a red d, and I started bringing in, you know, private investors. And I screwed that up. I wasn't charged at getting management fees, and I bought some software that wasn't working right, so the math was wrong. And so I had to work my way through that. And so I started another fund and started charging management fees, I got good I could afford good software, and then I maxed out my non accredited investor limit on that one, so I had to start another fund. And then we decided, you know, this is working. Let's go Reg A. We're gonna go public, and so I could actually tell you an interest rate that I could pay you, could this is promising, so I could promise a return, and I don't have to worry about accredited versus non accredited. I

Dan Austin: [20:29] got a question, but first, I love what you're saying when you're like, I screwed that up, I screwed this because like, I'm putting myself in your shoes. I'm like, man, how many things have Mike and I screwed up, including everything you're talking about we screwed up? And I'm like, I'm so glad you're honest about it because nobody talks about like, how they screw things up. But this is an interesting question for me, maybe not so much for our audience. What is the difference between Reg A and Reg D? Yeah. So a

Kevin Amolsch: [20:52] Reg D is a private placement. So it's a PPM. You probably you guys your in your audience probably knows this, but there's different types of Reg Ds. So you could have app, you could because of the Jobs Act, you could actually advertise a Reg D now, which was never the case before, but you have to only advertise to accredited investors, and you can only accept accredited investors.

Mike DeHaan: [21:09] Mhmm.

Kevin Amolsch: [21:09] That's like the five zero six, that's not really important to know, but it's the type of offering. All reg a or reg d is is a an exemption from a licensing requirement. So you're exempt from licensing because you're notifying the SEC and the states of what you're doing, basically. Now you can't, with the exception of five zero six c, which is accredited investors only, you can't advertise for this. It has to be through your private network. Reg a, now we're going public. So we could actually literally be listed on an exchange if you chose to go that route. You could mark it. I could put up a billboard, and I could pay you 8% return. There's no restrictions on accredited versus non accredited. So it's falls more into, like, almost like a bank. Like, they could advertise their CDs that they're paying. So it falls in more of that category. But because of that benefit or privilege, it's highly regulated. So we have twice a year reporting. We have fully audited financials. It was a freaking bitch to get through the process with the SEC. I'm bad.

Dan Austin: [22:09] Yeah. Yeah. And that's what you're talking about, five zero six Reg D Reg A. These are SEC, Securities and Exchange Commission regulations. Exactly. And what I'm understanding when you say Reg D, like an exemption saying, hey, this is an exemption. If you follow these rules, you don't have to go and do this whole rigmarole like you're talking about your

Kevin Amolsch: [22:29] your Reg A. Exactly. You have to be licensed. Like, I didn't know I had to be licensed to raise money in Colorado until I got the invite. Right? Once that once the invite was there, then I'm like, oh, k.

Dan Austin: [22:39] So for like a reg d, would you have to be licensed to raise the money? No. Not at all? Okay. Because there are state specific regulations probably too, I would imagine.

Kevin Amolsch: [22:48] Yeah. Every state, even on the reg a surprisingly, Like Texas, for example, which is the most pro business state that I know of, requires you to sell your security through a broker dealer. So even though I have a reg a fully approved reg a, I still have to hire a broker dealer to advertise and bring in money from Texas. Every state's different, and they're more strict on the Rick D side. But if you're just bringing money in for your own deals, or you're brokering private money notes, and you don't have a license, I think every state's gonna have a problem with that.

Mike DeHaan: [23:18] Yeah. They might. Yeah. It's funny you say Texas being the most one of the most business friendly states. I mean, the reason that exists is because there's a whole group of people that make a killing being that middle person. Right? That middle person. That's the pro business that they have is, you know

Dan Austin: [23:33] That's the pro business they have. Yeah. You know, those people.

Mike DeHaan: [23:36] Yeah. There's some sort of lobby that, like, has that portion of our we're not giving that up. You absolutely have to go through us so we can get our piece of the pie. Yeah. Let's raise here.

Kevin Amolsch: [23:44] Yep. So they want you to be licensed. But when when the attorney said, don't raise money from these specific states, and I saw Texas on there, I about fell out of my chair.

Dan Austin: [23:52] Yeah. Like,

Kevin Amolsch: [23:52] that's the one that I thought didn't care.

Mike DeHaan: [23:55] Yeah. Right. Yeah. That that that's interesting. So that's cool. So as you built that out, what is your lending business look like now? Have on my my notes here. You have multiple mortgage funds, and you're approaching a billion dollars in fundings. Yeah. Like that is that is a lot. Wow.

Dan Austin: [24:09] It's legit.

Mike DeHaan: [24:10] So like, what is your whole system set up like now with all that?

Kevin Amolsch: [24:14] Yeah. And we're really growing now. We're we're refocused. I went I went through a divorce about seven years ago, and I just like, you know, I'm making money now. I don't I don't need to grow the company. So I went through a lull. But now we're starting to see some pretty, pretty impressive growth. We're about 140,000,000 in assets under management right now. We have four mortgage funds. We're loaning pretty regularly in four different markets. Although national on the commercial side, but for the fix and flip and type stuff, we're very geographically focused. And we'll do 200 or, you know, our goal for this year, 225 loans to close another $140,000,000. My guess is we probably beat that. We have a

Mike DeHaan: [24:53] small office 13 people to I guess, what what sort of like rates and stuff, I guess, do you normally advertise? Because that's sort of the big thing that everyone's looking at with hard money loan and DSCR private money lenders, is you can go and talk to 10 different companies right now and get things that are so wildly different based off of what their back end fund structure looks like.

Kevin Amolsch: [25:11] That's exactly right. DSCR is a funny product because it's it's very institutional. Mhmm. Nobody's holding that out their balance sheet. No private lenders holding that. It's all going off into into Wall Street or Mhmm. Know, this basically. So that you shouldn't see too much variance in that product, but the private lending side, like the fix and flip Yeah. All over the place because a lot of the lenders hold it on their books. Right? We charge typically, it's two points 12% interest, which used to be on the high end. We we kick everyone's ass in service. Mhmm. We don't compete on pricing. Do you want do you want a steak or do you want a McDonald's? So that's kinda how we looked at Mhmm. But now, we're holding firm on our prices and everybody else is coming up. So Yep. We're pretty close in there and shit. We'd like to we'd like to lower our prices. So we're working hard to bring our cost of capital down. Nice.

Mike DeHaan: [25:59] And that's 2 and 12 for a year, and what 10% down on loan to cost, I would expect?

Kevin Amolsch: [26:03] Yeah. So we we still do the 100% financing. So we're 100% loan to cost, 70% loan to repaired value

Dan Austin: [26:10] Okay.

Kevin Amolsch: [26:11] Or stabilized value. So we're ultra focused on that end value and less concerned on what it's gonna cost you. If you could find a great deal, we're in we're in it with you. Right.

Mike DeHaan: [26:20] I love it.

Kevin Amolsch: [26:20] Normally, it's a nine month loan. Yep. We want in and out of these. That helps Sure. Reduce market risks. Yeah. But we'll go longer if it's like new construction or it's it's a pretty massive rehab. We can go a little longer.

Mike DeHaan: [26:32] Nice. Yeah. That's huge. Yeah. That 100% financing, I mean, that alone warrants the extra cost from some of these other companies. Totally. Be like ten and three, but you have to bring some sometimes significant money down. And this is something that Dan and I, we've gotten so frustrated as we've done our flips and our acquisitions over the last couple of years is like, we'll get quoted something, and then it's almost like a sketchy wholesaler trying to change the deal on you the day before closing. Like, well, literally be the day before funding, and they're like, yeah, you actually have to bring an extra $35,000 down now just because I hate you.

Kevin Amolsch: [27:03] Yeah. Keep cheering.

Dan Austin: [27:05] Right. Please. It's the worst. Or they will get you'll get the disclosure, and then you're like, what what are these $8,000 in fees that just showed up? And then you call them like, oh, yeah. Yeah. That was a mistake. We gotta take those off. Yeah. Right. You made a mistake.

Kevin Amolsch: [27:17] And they just wanna see if you could see it. Oh. Yeah.

Dan Austin: [27:19] Exactly. Yeah. We've had that with we've had several issues with certain people. Yeah. Certain lenders.

Kevin Amolsch: [27:25] We're pretty transparent. We don't play those games like you see a one in 7.9%. And then you call them, it's like, oh, we're gonna add on a little bit for this and this and this, like, adjust risk adjusted rates, right? And then all of a sudden, you're right.

Mike DeHaan: [27:38] Yeah, he's right. Yeah, exactly. No, that's that's cool, though. I like that you're doing that. And then what markets are you guys in? Like, you do your hard money?

Kevin Amolsch: [27:45] We're in Colorado up and down the Front Range. Okay, we do a ton of business how the cities Twin Cities in Minnesota. We're at Milwaukee, and we're starting to build some traction out in Washington DC. Wow, all over the place. I know, but each one has its own story. But yeah, we're, we're hyper focused on on the markets that we're in.

Mike DeHaan: [28:02] Nice. Okay, sweet. So let's, let's talk creative financing from a lender's perspective, As that is always the biggest thing that that comes up with creative finances, like how do you get around things like the the deal on sales clause or do some of these wraps and all that sort of stuff. So I guess from your experience as a lender with your lending knowledge, I guess, what is the correct way to approach a lot of these seller financing? That's all I say, like, creative deals when there's, like, a loan in place or, like, from a lender's perspective, like, how do you feel about them? You know, I see you guys you said you agree with them, but, like, what are the appropriate tactics people should take with these?

Kevin Amolsch: [28:41] Okay. So you gotta remember, I'm a private lender. I'm not, like, loaning out bank money. Right? So I'm very much more on the investor side when it comes to this stuff. Yeah, I have a do on so close in my loans, too. And if I find out that a mortgage or a property change hands, I'll definitely give them a call and try to find out the story. At least want that. Gosh, if that loans current, why would I call that do? Exactly. Right. That could change if it's small banks, and they were loaning out at three, and now they're seven or eight.

Mike DeHaan: [29:12] Mhmm.

Kevin Amolsch: [29:13] I could see like a little little tiny bank or something wanting to call those due, but it's so rare to see a due on sale clause called if the loan is current. You know, when I was working in, you know, on Wall Street for as a bond analyst, what I learned was every foreclosure that the bank takes, first of all, they get judged and graded on that. Mhmm. Right? It's not the Wells Fargo's and the Chasers that own the loan, they sell it to Fannie and Freddie, they're just servicing it. So as a servicer, they get graded. Right. And they have written the rate. So they don't want defaults. So you're telling me you're gonna move a current loan. It's in the current bucket, which makes you look really good and smart. And then you're going to move it all the way past all the three thousand sixty ninety day buckets all the way over to the foreclosure bucket, because it changed hands. You're just not going to see that.

Mike DeHaan: [29:59] Yeah, Yeah. I think that's always the mindset people sort of have too is current. Yeah. No one's gonna find out, but there's always the underlying factor.

Kevin Amolsch: [30:07] And what you what you

Mike DeHaan: [30:07] said there too has been the biggest thing that I've cautioned people on, especially as you see all these people that are out there like, oh, yeah, just go and inherit these like 2.125% mortgages and, you know, just like pay it, no one will find out. Like, tell you what, like Wells Fargo or some these people, they can lend it out at like 8% now, 7%, and they find out that it violated that contract that you have that they have with the original person at, like, you know, 2%, they're absolutely gonna pursue that. For them, that's billions of dollars in difference across, like, their entire portfolio with a bunch of different

Dan Austin: [30:43] I would argue the opposite point though because the cost of doing so that you could be potentially taking back a house on a note that is worth the same as the note, and now you're gonna add all the costs that you have to go to resell it. So I think there's a I think you're very valid point there, but I also think there's a good argument about it. Yeah.

Kevin Amolsch: [31:01] I would actually lean more towards you, Dan. I think that where I was going is when I was analyzing those bonds, you know, the average loss is 50%. It's almost 50% on a foreclosure.

Dan Austin: [31:11] That's crazy. That's so much.

Kevin Amolsch: [31:12] It's crazy because people are smart. They could extend that foreclosure out. Just file

Mike DeHaan: [31:17] bankruptcy. Mhmm.

Kevin Amolsch: [31:18] Yeah. It's gonna slow you way down. I'm gonna stop making payments, and I'm gonna file bankruptcy.

Dan Austin: [31:22] Mhmm. Yeah. That's been the go to.

Mike DeHaan: [31:24] We know several people that have done that this year.

Dan Austin: [31:26] Right. I do think, I lean towards what you're saying, Mike, if it's a local small institution

Mike DeHaan: [31:31] Mhmm.

Dan Austin: [31:31] That knows their market, they know what's on their balance sheet, and they have a very specific relationship, and they're like, hey, I know what's happening, we can make some money here. And that person has potential promotions for doing stuff like that. I don't I don't know. But like for the big Wells Fargo bank, like, people don't go to work to do their jobs in big corporations. They go to work to do the bare minimum.

Mike DeHaan: [31:51] I guess that's true for like the Wells Fargo example. But like, look at the deal that we're dealing with right now. So we have one a deal that when we bought the property, we told the lender, hey, our plan is to fix up this property, keep it as a rental. It's an oversized lot. We're gonna segment off the back of the lot, and we're gonna sell it. This was, you know, early twenty twenty one. And they were like, I was gonna say, what late twenty twenty one. They're like, cool. That's fine. No worries. We'll do that. Went like 3.5% rate. Oh, went through the whole process, segmented off the lot. We got it under contract to sell. And we're like, hey, cool. So you remember what we talked about? We need a partial reconvene. And they're like, nuh-uh. We're not letting you do that now unless you refinance your loan. Right. You increase your rate to eight and a half percent. You pay your 5% early payoff penalty. That's a step down. Right? And they're like, we're not gonna let you do it anymore. And that was a, like, smaller private lender.

Dan Austin: [32:43] They weren't gonna let us do it from the beginning, though. Let's be honest.

Mike DeHaan: [32:45] I know. Probably. Yeah. They they yeah. They're just trying to get our business.

Dan Austin: [32:49] They just said that because they wanted to sell you the loan. Right? You know what I mean? That's probably true. Some of these people. Somebody.

Kevin Amolsch: [32:54] So what do you do? Sell off our contract for deed until that 5% goes away and then have them refinance it?

Dan Austin: [33:00] Well, we really can't do anything because in our county, we can't record the new APN until we get partial refinance. They won't recognize it as all because there's a lien against it still. Yep. So we have to basically we have it. We have two lots. The city is just like, no. Not quite yet. Yep. So we just gotta sit on it and wait. But until the we could do it. Like, and we still profit quite a bit, but it's like, we don't need to. That's why we're kind of sitting on it.

Mike DeHaan: [33:24] Yeah. We basically would pay, like, $20,000 in fees and lose our cash flow on the rental. And, you know, even though we we'd make like, what, a 160,000 on the lot, we might as well hold onto it because it didn't like the best part of town. Like, it's still gonna be worth Yeah. Good money in a few years. Yeah. Oh, yeah. Be worth more. But, you know, that was supposed to be my vacation fund this year though, man. I know. I know.

Dan Austin: [33:47] That was a big money. Big money, dog.

Mike DeHaan: [33:49] So anyway but no. So that's good. So I guess for people that are interested into getting into lending, can I give that? What would you tell them is a good place to start? Because obviously, everyone thinks like, well, I need money to lend. Right? You can go raise money like you have. What's like step one for people?

Kevin Amolsch: [34:07] How to learn the business? I mean Yeah. You could look, you could be really, really safe and probably never lose money at all. Or you could lose everything. Mhmm. It's not like an in between like you would get if you were an operator or you owned the property. I'll give you an example. We had a you know, there's a big national team that goes out there, and they were on TV, and they were getting a lot of people into their program. And they so they would have like a $40,000 program and you go for a weekend boot camp and then you have coaching for after that. Right? Well, they're teaching people to get fund everything. For you that don't know, gap funding is, okay, I'll use my hard money up to max out my hard money loan, and then anything else that I need, I'll bring in another private lender to fund all of that, so that it's no money down for me, but it may or may not be a great deal because the hard money lender didn't fund the entire thing. So I'm gonna gap from this. I'm gonna get my uncle or my aunt or my friend or someone to do that. They're gonna go to a junior position, they're nice and safe. Here's the problem. You don't have any collateral. Nothing. If you're not strong enough to pay off that first loan through a foreclosure, you don't have any collateral at all, zero. So that second doesn't mean shit.

Kevin Amolsch: [35:16] Right. And then what happens is they fault on me or another hard money letter, and we have to foreclose to protect our money, and they just get any juniors behind us, if they don't pay us off, they just get wiped off the title. We had someone lose $80,000 in her retirement account, her entire retirement. It's sad for me to even think of sit here and tell you this, but what am I supposed to do? My fiduciary responsibility is to my investors, and I just wiped out this $80,000 loan.

Mike DeHaan: [35:42] Yep. Well, it's yeah. I mean, you shouldn't feel bad, honestly, because it's not your responsibility. It is the responsibility of the person that, you know, swindled their grandma into Into doing that. You know, using their their IRA to do that. Right? It's terrible, though. But you think, Mike, that's, like, ruined her retirement. It's absolutely horrible. And the thing that really upsets me is this is such a plague right now amongst the real estate investment sphere with all the influencers. Yeah, I can't scroll through a single thing on Instagram without having some dude with like a snapback hat that's like, this is how I got rich using OPM, you know, other people's money. And it's like OPM. You just go find your grandma in Florida, teach her how to get a HELOC, and then have her wire you all of that, and you can just go and do shit, like it's so dumb.

Kevin Amolsch: [36:30] Yeah, scary. It's really scary. So I wrote a report for people that want to get into private lending, not self serving. I really don't want the the $80,000 loss. So Yeah. I mean, that's a I could give that report to your listeners for free. That'd

Dan Austin: [36:44] be great. That'd great. Yeah. Absolutely. Yeah. I'd love to read it too. Yeah. Yeah. Absolutely. I'd probably learn something.

Mike DeHaan: [36:49] Yeah. Learn the business, I think, is huge. And then I would say from our perspective, we do a little bit of lending, is talk to other people that are in the business

Dan Austin: [36:58] Mhmm.

Mike DeHaan: [36:59] And sort of, like, listen to the things that they have to say. Because here's the thing that as well, I used to work for a hard money lender. And, you know, everyone's in business to make money, but ultimately, the goal of a lender is to not lose money. Right. Like, at the end of it.

Kevin Amolsch: [37:15] Priority one. That's right. Absolutely.

Dan Austin: [37:16] Like, that's worst case scenario.

Mike DeHaan: [37:18] Yeah. And that's that's what my boss told me at the company I used to work for. He's like, we're gonna make good money here. It's a it's a hard money business. We get good returns. But ultimately, if we lose money, we are failing.

Dan Austin: [37:26] Mhmm.

Mike DeHaan: [37:26] And it's not just about growth. So you need to have that view when you're making these educations as a lender. You're looking to lend money or you're looking to do anything like that.

Kevin Amolsch: [37:35] Great advice. Yeah. And you can make a ton of money in in lending too and be really safe. You could. If you're doing it on your own, you could charge the $2.03, whatever points in fees plus the high interest rate.

Dan Austin: [37:44] Mhmm.

Kevin Amolsch: [37:44] You If wanna work with a professional that knows what they're doing, maybe you have to give up the points or a spread on the rate, or whatever it is to because they need to be compensated also. You know you have someone that knows what they're doing. Yeah.

Mike DeHaan: [37:56] Right. Exactly. Awesome. Well, good stuff, Kevin. Alright. So we're gonna roll into the end of the show here. We always have our end of show questions that we like to ask everybody. First one is always the favorite question. I'm guessing you probably have a few since you've been in this game for a long time. But what is your craziest real estate investing story?

Kevin Amolsch: [38:15] And this can be a big win, a big loss, a crazy tenant or seller? Anything in between? The one that's come into my mind immediately, Mike is my very first deal, the one that I moved out of and and rented out. So I rented it out to I think a gang. I didn't even know it.

Mike DeHaan: [38:32] A gang. I said no. This is so nonchalantly. Just like it was

Dan Austin: [38:35] just like Oh, yeah. Just they're good. One of those gangs

Kevin Amolsch: [38:37] in South Denver. So it's funny. It's all back up when I first bought the house. It was all I could afford. I was I was in that Denver is actually not that I mean, it's a pretty safe city for the most part, but there's little pockets here and there. Was in the worst pocket of them all. Like, helicopters would flare out with the spotlights every once in while, that kind of thing. When I first got there, the gang members welcomed me to the neighborhood by letting me know that who they were. So I got spray paint all over my house when I when I first bought that thing. Yeah. So that when I moved out of it, I I rented it out. I didn't do any screening on this tenant. I got an application, but I didn't I didn't do it. They lived there for a little while, and I had to evict them. So my very first rental property, my very first tenant was my very first eviction. And this is actually pretty rare. Usually, you don't go all the way through an eviction process to where you're pulling their shit out of the house.

Dan Austin: [39:26] They do.

Kevin Amolsch: [39:26] Normally, when it starts getting close to that, they they just move out. I learned that later. This time, went all the way to the to the sheriff, and I had to get my friends. I I couldn't afford a moving company or anything. So my friends I took off of school. Dad took off of work. I had my sister, my some of my buddies, and we all went over there and to take all of our stuff out. What's what's funny about this one is they ran an extension cord from the house into the shed because someone moved into the damn shed.

Dan Austin: [39:50] Oh my goodness.

Kevin Amolsch: [39:51] So now we have someone living in the shed. We had to evict the shed. As I'm pulling this stuff out, it was like, I don't know, 40 or 50 car stereos.

Dan Austin: [40:00] Oh my gosh.

Kevin Amolsch: [40:01] So I think they were operating a business out of the shed as Hell yeah. Know, black

Dan Austin: [40:05] market Six calls audio business.

Kevin Amolsch: [40:07] Anyways, got them out. They left the car there. I called my next door neighbor who has some connections in Mexico. He got rid of the car for me. I have no idea where that went. And I got my property back. Two days later, they broke back in because apparently, they had a bunch of illegal firearms in the attic. So is that a crazy enough one for you?

Dan Austin: [40:28] I'm laughing at your misery.

Mike DeHaan: [40:30] That's pretty gay. You're saying it so calmly. Right.

Kevin Amolsch: [40:32] And I stayed in the business. People ask me sometimes how in the hell did you survive that? Yeah, here I am.

Mike DeHaan: [40:37] You did? Did you have any future issues with that property after that? Yeah, did. I was on like the gang members' radar. I mean,

Kevin Amolsch: [40:43] yeah, had no, no, because I made friends with a neighbor, and he's like, he kinda ran the neighborhood.

Mike DeHaan: [40:49] Oh, okay. You go.

Kevin Amolsch: [40:49] So him and I would drink beer together, listen to rap music together.

Dan Austin: [40:52] So you're you're good. You're in, like, Flint.

Mike DeHaan: [40:55] So yeah. So it was basically like, you know, you see in in movies, there's like the convenience store that's protected by the mafia. Yeah. You basically had that

Dan Austin: [41:02] for, like, your first rental. You had that.

Kevin Amolsch: [41:05] It felt like that. It really did feel like his name was Ricky. He was awesome. He didn't like me at first, but once I invited him over and had a beer with him on my patio, he was like, dude, you're cool.

Dan Austin: [41:12] Yeah. Yeah. He's like, you're good, man. That's awesome. That's funny.

Kevin Amolsch: [41:15] You tell me if anybody messes with you.

Dan Austin: [41:16] No worries.

Mike DeHaan: [41:18] That's a

Dan Austin: [41:19] good one. That's super funny.

Kevin Amolsch: [41:20] I love that.

Mike DeHaan: [41:20] Cole, I'm glad you got through that too, and you didn't have any, like, actual confrontations. Because we've had a couple stories that are kinda similar, and, like, gang members will, like, show up to, like, interfere, and that's

Kevin Amolsch: [41:30] a whole other Oh, gosh. That's scary. Situation. Yeah. That's a whole other.

Mike DeHaan: [41:33] Yeah. Yeah.

Dan Austin: [41:34] But no.

Mike DeHaan: [41:34] That that that is a crazy one. Alright. Second question is, what is the number one tip you would give to either a new investor looking to get started or to a small time investor looking to take their business to the next level? Yeah.

Kevin Amolsch: [41:47] I think this can go for every investor. You really got to get control of your subconscious mind. So especially for the newer folks, but your mind will limit you on what you're going to accomplish. And if you want to break through that and really grow, you need to figure out how to remove that ceiling. And your subconscious mind does that. So I'm thinking like, what's the one thing that prevents people from what their potential is, and it's fear. It always comes out of fear. I'm not gonna do this action item to reach this goal because I'm scared of it. Right? So how can we get past that fear? And I would say just start reading and understanding how to control your subconscious and and you could beat that fear.

Mike DeHaan: [42:28] Yeah. I think that's huge. That's Love it. I I think that that's such a core thing that most people don't even realize. Like, we we talk to a lot of people, especially if they're not like entrepreneurs, and they will blame things like

Dan Austin: [42:39] Yeah.

Mike DeHaan: [42:39] You know, time or like laziness or, you know, bad habits or all sorts of stuff. But at the very, very root of it, it's because you are afraid of fear of either the outcome, you're afraid of the fear of the work, you're afraid of the fear of the discomfort of, you know, whichever you're gonna put yourself in. And I think that that's

Kevin Amolsch: [42:55] It's failure.

Mike DeHaan: [42:55] It is.

Kevin Amolsch: [42:56] You're afraid to fail.

Dan Austin: [42:56] Mhmm. Great advice. Yeah.

Kevin Amolsch: [42:58] Look, everybody fails. I I say it all the time. You're failing now. Like, you're going to fail. Let's stop being afraid of it, and

Mike DeHaan: [43:04] let's embrace it. Yeah. There you go.

Dan Austin: [43:06] Right. That's true. Well, and everybody has fear. Right? I think I think everybody does, unless you're a sociopath. Like, there's some level of fear, just have to overcome it. And Hyden and Tim Rhodes in the book Quitter's Manifesto talk about that as a cliff. Talking about leaving your job and going for what you're passionate about. And it's like, sure, there's probably a bridge somewhere, but it doesn't go to the same place. Like, you can cross that cliff, get to the other side, but it's just not the same place because that bridge, it's like anything in life, if there's no risk, there's

Kevin Amolsch: [43:34] not the same reward. Yeah. I love it. I haven't

Mike DeHaan: [43:36] heard that, but I love that. Perfect. Alright. Last question. Where can people find you, follow you, and reach out to you

Dan Austin: [43:41] if you'd them to do so?

Kevin Amolsch: [43:42] Yeah. So that that report I was talking about, there's actually two reports on this website. It's the pinereport.com. I compared the nineteen ninety crash to to what we're going through right now in one of them. I think that the nineties, the ninety crash with the savings and loan crisis, and the high high interest rates and high inflation much more resembles what we're going through right now than 2008. Everyone tries to compare 2008 to today, but they're totally different.

Mike DeHaan: [44:06] Right.

Kevin Amolsch: [44:06] It's not even remotely close. Today, we're going into a recession because the government is forcing us into a recession.

Dan Austin: [44:11] Yeah. Okay.

Kevin Amolsch: [44:12] In 2008, greed forced us into the recession. So you how do compare those two? So that report and how to stay safe as a private lender, you can find that at the pinereport.com. You can reach out to me if you like. You can find me at pinefinancialgroup.com. Yeah. I guess that's the best way to reach me.

Mike DeHaan: [44:28] That's for sure. Perfect. Cool. Perfect. That's great. Yeah. I'm definitely gonna check out that report because

Dan Austin: [44:31] Me too.

Mike DeHaan: [44:32] You're the first person that's talked about the nineties financial crash. Everyone always talks about 2008. You are. No one even talks about the the nineties crash, which is, you know, just as relevant as all the other ones.

Kevin Amolsch: [44:42] Well, how do you compare eight to now? It doesn't You can't.

Dan Austin: [44:45] It's like generals are they always say generals are always trying to fight the last war, but that last immediate war is not the tactics you're fighting this war.

Kevin Amolsch: [44:51] That's right.

Dan Austin: [44:51] Yeah. So I love how you're talking about going back to the nineties to something that's actually resembling what's happening. Right. Awesome. Cool. I'm definitely gonna read that.

Mike DeHaan: [44:58] Yeah. Definitely check it out. So awesome, guys. Well, thanks so much for listening. And Kevin, thanks so much for coming on the show, man. It was great to meet you. And super insightful stuff on, like, the lending side that we don't get a ton of on here. So I'm really appreciate you taking the time. So hey, guys, go check out those reports from Kevin, and we will put all the links in the show notes. On top of that, please share this podcast with anyone who is interested in lending real estate, business, or anything in between. It's a greatest way for us to grow the show is if you share it with your friends. And I'm sure you know, at least one person is interested. So challenges go and share with at least one person who would want to learn about how to make their lives and their financial pictures a little bit better. On top of that, if you want to start learning how to generate off market leads, go to collectingkeyspodcast.com/free, you can get our free five step guide for generating off market leads. And that will get you started getting into positions where you can use services like Kevin's lending business to go and buy properties and, you know, make some big money for yourself.

Mike DeHaan: [45:55] So make some cash. Yeah. Oh, yeah. Make some cash. Thanks so much for listening, everybody, and talk to y'all next week. See you.

Speaker 2: [46:02] Thanks for listening. Please leave us a review on iTunes or wherever you get your podcasts, and check us out at collectingkeyspodcast.com for tips and guides on starting your own real estate investment and wholesaling business.