How Saurabh Shah is Empowering Private Real Estate Loans For Investment Properties: An EOFire Classic from 2022

0:01Who's ready to rock today, Fire Nation. JLD here and welcome to Entrepreneurs on fire brought to you by High Level, the all-in-one sales and marketing platform. On today's classic episode, we'll be breaking down how to empower private real estate loans for investment properties. To drop these value bombs, I have brought Mr. Shaw into Eagle Fire Studios. Mr. Shaw has extensive experience in real estate transaction structuring. He is a co-founder of InstaLend, a lender for real estate loans providing fast and convenient capital to real estate investors. And today, Fire Nation, we talk about value bombs, how you do not have to have the perfect product to start your journey, how insulin's goal is to make sure you have access to real estate investments and how it's democratized and oh, so much more.

0:42And a big thing for sponsoring today's episode goes to Mr. Shaw and our sponsors. Are you ready for the ultimate all-in-one platform for entrepreneurs, marketers, coaches, and agencies? Build funnels, automate follow-ups, manage clients, and even white label your own software. Say hello to our featured partner, High Level, and visit highlevelfire.com to start your free trial today. Fire Nation, success isn't a solo journey. It's about who you surround yourself with. That's why I built the Freedom Circle, a powerful community of entrepreneurs ready to support, inspire, and share the ideas that move you forward.

1:24Visit freedom-circle.com to learn more. So Rob, say what's up to Fire Nation and share something that you believe about becoming successful that most people disagree with. Morning, everyone. It's good to be here. And I think one quick thing in my experience is you don't have to have a perfect product to launch. I rather believe in, you know, failing forward if you have to, but launching something which is your basic prototype and then building onto the final product once you have more customers and the feedback can be incorporated. So I would say start early, don't wait for the final product to launch.

2:07But yeah, get that journey started. Fire Nation, today we're talking about empowering private real estate loans for investment properties. And I want to talk about the origin story of InstaLend. What is InstaLend? How'd you come up with this idea? InstaLend is your private lender if you're looking at real estate investments. Typically, when you want to buy real estate to invest, you either go to a bank, a credit union, or you work with a hard money lender to access that capital available to buy real estate and then either fix it up and sell it or hold on to it as a rental. Instalend being a private lender comes in where we finance your acquisitions, your rehabs, we refinance your stabilized properties, essentially being a one-stop shop nationwide across the US for everything that's related to real estate investments.

3:05We started off flipping properties ourselves. And as we started scaling, we realized the gaps that were available in that we saw in this market. And we wanted to address those gaps with an institutional color of capital. So that's when we thought of Instaland and we rolled out a fund to bridge that gap of private pool of capital. Now, what states do you currently lend in? We are nationwide except for the Dakotas. Okay, so North Dakota, South Dakota, no go. Every other state, you're good. Let's talk about the specific loan programs that you offer. And I want to really make sure we're doing a lean towards entrepreneurs, small business owners, because that's our listener base here today.

3:53So talk about the loan programs you offer and how Fire Nation, our listeners who are small business owners, who are entrepreneurs, how could they benefit from these programs? Sure. So many times you'll see properties which are in distressed condition or available through auctions, foreclosures, which you believe are a good buy. You can fix them up and then flip it for a good profit. When you're looking to buy these properties and get the rehab done, Incident will finance that purchase for you and will also finance the rehab for you, allowing you to go through the real estate investment. So typically we finance up to 90 % of your purchase and 100 % of your rehab over a short term 12 month loan, which has interest only monthly payments.

4:42This is an investment purpose loan. So the loans go out to your business entities such as an LLC. We are a no doc lender. What that means is, you know, unlike your traditional banks or credit unions, we only underwrite the property, not you as an individual. This allows us to move really quick. You know, we're not going to request for your tax returns, W-2s, pay stubs. All we need is an appraisal report to underwrite the value of the property. And we typically close within 12 to 15 days. In addition to this, we also finance you for 30-year mortgages. If you own investment properties as rentals and you're looking to either cash out or just do a quick rate and term refi, we have these programs available across single families, multi-families, as well as mixed-use properties, and we're nationwide.

5:35So what I want to now talk about are a couple of success stories, because I feel like what could really help our listeners out here today is if you could give us some specific examples of loans that you've given your clients. Now, of course, we don't have to talk about the exact numbers and of course, definitely not the names, but just talk through specific examples, specific success stories so that our listeners can start to understand what it would look like to work with a company like Instalent. Most commonly what we see is investors who are looking to buy properties through foreclosures, auctions, short sales through REOs, or just buy a neighborhood property which they think they want to own as an investment property.

6:19So we'll step right there. We'll issue you a proof of funds or a pre-approval, which basically gets you qualified to put the property under contract. And once you have it under contract, we'll ask you if the property needs any work to be fixed up so it can be brought up to current market condition. And that's when you see a profit on that deal as an investment. we'll get an appraisal ordered which usually comes back in seven days and we typically finance 90 % of purchase 100 % of rehab so you're looking to put only 10 % down with only 10 % down that really allows you to work through these sort of investments at scale and we typically close within three to five days once we have the appraisal so all in all it's about two weeks from start to finish where you know you saw a property you wanted to buy it you made that purchase and you're breaking ground and ready for your rehab.

7:14Okay. So give us that example, though, like an example of one of your clients that used you for something like this. Like, what did it look like? So we're based out of New York. That's where our offices are. So in our backyard in New Jersey, typically we see many investors who would want to buy a property for say 300 ,000. They believe, you know, they put in about 50 to 70 ,000 in rehab, which is more or as making some upgrades, putting a new paint, putting a new roof, just fixing your framing, your kitchen cabinets, flooring. They typically work with a licensed contractor. So they control the timing as well as the cost of the rehab.

7:54And we'll finance 100 % of your rehab budget. So say that's about$70 ,000. You borrow for$300 ,000, you put in$70 ,000 towards fixing it up. And now the property is worth 500 ,000. This typically would take you no longer than say five or six months. You finish the work in six months, you put the property on the market for sale, you sell it for 500 ,000 in your sixth or seventh month. Typically today the market is very, very hot. So your time to market and days on market is minimal. So investors are usually selling properties within a week and there you make your sale for 500 ,000. So what's really happened here is you've only put 10 % down for the$300 ,000 purchase.

8:35So you've put$30 ,000 into the property. We financed everything else for you, which is the$270 ,000 towards purchase. You're$70 ,000 towards the rehab. So your total loan is$330 ,000. At sale from the$500 ,000, you're going to pay us back the$330 ,000. And you're left with$170 ,000 minus your transaction costs. So if you look at if you look at the numbers from an investment perspective you put in 30 ,000 and you got a profit of 170 ,000 minus your transaction costs all within a six-month timeline so that's a really quick way to earn some good profit and also do it with real estate which is a more tangible asset so in case things went wrong you always had recourse to a physical asset which you know you could either fix up later or sell again to recoup whatever you put in, but you had some recourse.

9:31So this is typically the life cycle and what numbers look like when you're looking at a quick fix and flip. Fire Nation, we're going to talk about mistakes that people make when it comes to getting loans. We're going to talk about the exact documents you might need and so much more when we get back from thanking our sponsors. Okay, let's talk about a platform that's completely changing how entrepreneurs are running their business, and they are also our featured partner, HighLevel. If you're an entrepreneur, coach, agency, or a course creator looking to grow faster and smarter, HighLevel is the all-in-one platform that replaces your entire tech stack.

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11:21And when I scaled my business to eight figures and mentored thousands of entrepreneurs, I saw the same thing again and again. People trying to do it alone. And that's why I created the Freedom Circle. You've heard me end every episode of Entrepreneurs on Fire by saying you are the average of the five people you spend the most time with. That's not just a quote, it's the reality of success. The Freedom Circle instantly becomes your family of five and then some. It's a community of driven entrepreneurs ready to pour ideas, connections, and support into every part of your journey. So Fire Nation, if you're ready to level up and finally create freedom on your terms, head to freedom-circle.com to learn more.

11:58That's freedom-circle.com. All right, let's talk mistakes. I mean, I feel like you must see a lot of mistakes that people make. Hopefully, you're there with InstaLens to guide them through some of these mistakes to avoid them. But what are the mistakes that people are making over and over again when it comes to loans and getting loan programs that they're diving into? What are those? Often we see investors under budget on rehab, especially over the last 18 months where we've seen inflation just skyrocket because of a supply constraint. So your rehab budget may be$70 ,000, but it's ideally going to cost you maybe$80 ,000 to $90 ,000 to finish your work.

12:37So what we recommend or rather advise our investors is to always build in a contingency of maybe 10 % of your rehab budget, which gives you a cushion in case there is any macro events that take place, whether there's inflation, whether there's a supply constraint, whether the costs have gone up or, you know, you've taken longer to finish your project, which means you're carrying the interest for longer than what your timeline was. So, yeah, it's always better to have some cushion to see your rehab through. Okay, I definitely understand thinking that you're going to be able to get a rehab done for a certain dollar amount, but then it takes, you know, X times more.

13:12So that's always a huge problem. What's another big mistake people are making when it's coming to loans? I think one other thing is it's not really a mistake, but what we've noticed, you know, given how quickly the market changes is your exit strategy. A lot of the times you want to make that sale, see that profit, but then also be subject to taxes. You know, and what we've seen off late is investors are holding on to these assets where once they finish the work and the property is at market value, they come back to us for a refinance. So we also refinance the rehab into a 30-year mortgage, which basically gives you a 75 % cash out on your current property value.

13:53You hold on to the real estate as your income-producing cash-flowing asset. And at the same time, over the course of years, you're the beneficiary of the online capital value appreciation. The mortgage that you have on it gives you a tax break. At the same time, your net cash flow positive because the property is income producing because you potentially brought in a tenant. So we've seen this as a quick shift in how investment strategies evolve. And we call it a BRRR strategy, which is a build to rent, build rehab rent. Let's get specific on the documents that people need when they're underwriting a loan.

14:33I want my listeners to be prepared to know what they need when they're going to be going in, applying for one of these loans. What did those documents look like? We only need two documents, which is a purchase contract and your rehab budget to get started. And we usually send across our templates for the rehab budgets. So you just have to fill out that Excel sheet. It's really quick and easy. Once we have this, we order the appraisal. And since these are investment purpose loans, we would finance your LLC. So all we would need is your LLC to be in good standing. And the supporting documents for that would be our operating agreement, EIN letter and articles of organization.

15:10That's pretty much it. There's nothing else. We don't need no bank statements, no W-2s, no tax returns, none of that. Now that we've talked about the origin story of InstaLend, we talked about what states you lend in, not the Dakotas, the programs you offer, the mistakes people make, the documents you need. What do you want to make sure Fire Nation gets our listeners who are entrepreneurs, who are small business owners in this world of lending? That's a great question. We want to make sure access to real estate investments is democratized. And many times we've seen that investors are not aware of such private lenders who are also nationwide but are also institutionally backed.

15:53So we'd like to make sure that these programs reach a wide audience and anybody who's interested or has been on the fence to take the first step towards real estate investing can reach out to us. We can definitely, whether it's your first investment or your 50th investment, whether you're a US citizen or a foreign national, our programs are available for everyone who's interested in real estate investments. And where do you want Fire Nation to go to learn more about InstaLend? We have all information available on our website, which is www.instalend.com. You can simply request a pre-approval from there.

16:35You can submit your loan application from there and someone on the team will get back to you with all the relevant information and the next steps. Instalend.com. Fire Nation, you're the average of the five people you spend the most time with. You've been hanging out with SS and JLD today. So keep up that heat. Head over to eofire.com and just type Saurabh in the search bar. That's S-A-U-R-A-B-H and his show notes page will pop right up. So I just want to say thank you, Saurabh, for sharing your truth, your knowledge, your value with Fire Nation today. For that, we salute you and we'll catch you on the flip side.

17:14Thank you. Hey, Fire Nation. Today's value bomb content was brought to you by Saurabh. In Fire Nation, successful entrepreneurs accomplish big goals. That's why I created the Freedom Journal to guide you in accomplishing your number one goal in 100 days. And we're talking step by step. Visit thefreedomjournal.com and I'll catch you there or I'll catch you on the flip side. Are you ready for the ultimate all-in-one platform for entrepreneurs, marketers, coaches, and agencies? Build funnels, automate follow-ups, manage clients, and even white label your own software. Say hello to our featured partner, High Level, and visit highlevelfire.com to start your free trial today.

17:58Fire Nation, success isn't a solo journey. It's about who you surround yourself with. That's why I built the Freedom Circle, a powerful community of entrepreneurs ready to support, inspire, and share the ideas that move you forward. Visit freedom-circle.com to learn more.

18:22Thank you.