Real estate investors often ignore the true cost of borrowing money, where tenants' rent payments may cover only 10% of the mortgage while 80-90% goes to interest, meaning investors could be paying $26,000+ in interest to gain just $3,200 in equity; understanding amortization schedules and strategically prepaying principal can save investors $100,000+ in interest costs over the life of a loan.
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🔥INVEST IN REAL ESTATE ON A LIMITED BUDGET WITH PILL METHOD‼️REPLAY!!!Added:
[music] [music] [music] [music] [music] [music] [music] [music] >> Hey.
>> [music] >> Good morning everyone. My name is Don Daniel, founder of Pill Method International, a better way to eliminate debt. And today we're going to be talking about investing in real estate on a limited budget with the Pill Method.
I am admittedly today distressed.
The more I look at this situation about investing in real estate, the more I understand the front part of investing in real estate, buying it correctly.
All right, you have to buy it right.
You're right, you don't want to pay too much for it. So, you're going to negotiate hard, and you're going to uh uh acquire the property.
Then, if you have to rehab the property, then you want to do that right.
You don't want to put too much money into something which makes it impossible for you to make money when you get ready to exit your strategy.
I understand that.
You also want to make sure that you're renting it right, renting it to the right people, renting it for the right amount. If you're in real estate, you know, if if you're investing in rental property, whether it is um mult- if it's single family, whether it's multi-family, whether it's uh it could be commercial property. You could be office space. You want to rent it right.
Okay? At market rates.
Not above, not below.
If you want to offer good service, all right? Strategic Secrets comes in and says, "Good morning. Good morning. Good morning." All right? So, folks, we want we want you I I I I I'm physically distressed and mentally distressed when I look at all of that.
We spend 100% of our time on those things, and we should. We should spend a lot of time on that.
But, what >> to say? But, what we're not what what what we're not doing, ladies and gentlemen, what we're not doing is paying attention to what it cost to borrow the money.
We're paying no attention to that.
Folks, start inviting some people in here because we're talking about a real estate investing on a limited budget. I need you to understand what it is that we're talking about because we're giving away way too much money. I have some folks here that are online that are watching me right now on YouTube, Facebook, Twitter, LinkedIn. We have some people in here from Clubhouse, okay? And I want the folks in Clubhouse to start sharing and to say, "Good morning." Okay? I need you I'm so I'm going to say good morning to all of you.
Good morning. Good morning. All right? I see you in here, Queen. So, we're going to we're going to start inviting some people in here, and we're looking for more people to come and watch us online.
There may be some illustrations, and if you want to see them, you'll I need you to go to YouTube on a secondary device. You get if you have a second phone, a a laptop, or a tablet, or something. Just go to YouTube.
When you get there, search Pill Method.
All right? And when you search pill method, you'll see our live.
And go ahead and um you want to also um uh when you get to YouTube, you want to subscribe. Go ahead and subscribe, like the videos, and comment, okay? That means a lot to the people who are are watching these videos. So, here's what we're talking about today. I heard I heard and I keep hearing that when you're borrowing the money for your real estate it's cheap money.
Number one.
And your tenants are paying your mortgage.
Can I Can I give you an example? I I And And And you tell me, Queen listen, tell me if you if you like this or not. Tell me if you like this or not, and everybody else who's watching me online.
We We are all going out to dinner.
Okay?
I'm taking everybody out to dinner.
All right, everybody, let's go. Don's paying. Don is paying for dinner at your favorite restaurant. No holds barred.
You can order whatever you want.
I mean, whatever you want. I'm paying.
And when you put in your order and everybody's anticipating what they're going to get.
You only get 10% of the food.
And the person who invested in the restaurant gets 90% of your food even though I pay for it.
The person who invested in the restaurant gets 90% of the food that you had ordered and you get 10%.
Do you think that's a deal? Queen, do you think that's a deal?
Hm?
What do you think?
You folks online that are watching this, do you think that's a deal? Would you like uh and Kurt, listen, whenever you can listen, I know you're in the gym, but I when you have when you if you can pop in here whenever you can, let's do that. Let's talk. Let's talk about it.
You tell me, ladies and gentlemen, is that a deal?
I'm looking for some folks online who are watching this. Go ahead and put it in the comment section whether you're on Facebook or YouTube.
Okay?
So, I'm buying dinner.
Okay?
Uh uh uh Diana Whitley says, "Absolutely not." What Why not?
Uh uh uh uh uh uh Kasha Johnson says, "No, that's not a deal."
What? I'm Listen, you didn't spend a single dime on this. I'm paying for it.
I'm paying for everything.
And you're not satisfied with getting 10% of it uh uh of the food and the person that invested in the restaurant, you're not And I see you you you meal just came in here. You meal I'm Listen, you came in late. I'm going to tell this I'm going to tell this story again because the the I got people here that are disagreeing with me and I'm saying I'm saying I'm taking you all out to dinner. All right? You You get to order whatever you want and I'm paying.
And by the time the food comes out, everything you've ordered comes out, you get 10% of that And the person who invested in the restaurant, they get 90% of the food and they get to distribute it to whoever they want, but not you.
Do you think that's a deal, Yummy Land?
I'm paying.
Shouldn't you be happy with just the 10%?
>> [laughter] [gasps] >> And I got Surge says, "No. No. No. No.
We're not satisfied with that. We're not satisfied with that."
Okay? We're not. So, let me I'm going to put something on the screen here, ladies and gentlemen, to to to talk about what I came here to talk about today because I'm not talk There are plenty of people that can teach you how to get into the real estate. They can teach you how to get into the real estate.
But nobody I'm talking about I've talked to real estate investors. They refuse to look at this.
I've talked to um I listened to yesterday I even listened to um seasoned professionals, lenders. They lend and they've been doing it for years on lending people money and they're talking about the high interest rates and how people are balking at the interest rates and uh getting them to understand that the interest rates aren't high, they're just normalized.
They're trying to get them to to see that.
And they're giving all these things to do on the front end to make the payment better.
But no one no one is talking about the cost of borrowing the money.
How can How do we get here?
Where we're not talking about what it cost me to do something.
And and okay with the bank just taking 90% of my food at 90% of my money, 90% of what the um my my tenants give me.
Oh my gosh.
Let me Let me put something on the screen here. I'm going to put in put my new window up here.
And bring up my amortization schedule from Brett Whissel.
I kind of like that Brett Whissel guy.
And uh so we're going to make sure that Kurt can um um I want to share my screen.
Make sure that we have a screen to share. There we go. All right. So, here's what I'm talking about. I just gave you an example. I just gave you an example where someone is buying dinner, but all you get is 90% of it when it comes out. So, we're going to put in we're going to put into um this uh situation um a $350,000 mortgage. $350,000 Kurt. We're going to put that on the screen.
Okay?
And interest rates are around 7 and 1/2% 7.5.
Okay?
And they're talking about people are talking about all the things you can do all the things you can do to get into investment properties, to do whatever you need to do um um to do that, but once you're in the property, once you're in the property, no one talks about how to manage the loan once you're in the property.
Okay?
So, you got Now you have this 30-year loan on the property, and nobody cares about it because the tenants are paying the rent.
Okay? And we're going to do some we're going to do some numbers here for you guys today so you can understand what I'm talking about. Hello Carolyn. Hello uh uh Delvin. Listen.
$350,000 at 7 and 1/2% we've got a payment of $2,447.25.
That's what we have.
And here's what's happening. I need you to watch this when we look at these numbers. I'm going to put my calculator on the screen, okay? In the first year in the first year in the first year you are going to pay out you're going to pay down your loan by $3,226.41 and the amount of interest you're going to pay is $26,140.59.
So, let's add it up. $26,000 $140 and $0.59.
Okay?
And we're going to add to that we're going to add to that plus $3,000 226.41.
That's $29,367.
Your tenants gave you $29,367 of their dollars. They gave that to you.
Now let me I'm going to write that down. Let me write that down. Let me write that down.
$29,000 367.
Okay?
Now, let me show you this. Let me show you this.
That's not all the tenants gave you.
They actually gave you more than that.
Because if you're cash flowing on this property, they gave you more than that, but you're taking part of the money and paying the mortgage with it.
But the focus here, the focus is on the $2,000 you're able to clear on this.
Okay? So So if your payment So if your payment, ladies and gentlemen, if your payment is two is 24 47.25, okay?
You're You're You're Let's say you're charging um enough rent so that that you have $2,000 more than that. So you got 4,000 over $4,000 coming in. $4,400 coming in.
So $2,000 of it $2,400 of it pays the mortgage and you get to keep the 2,000.
Everybody okay with that?
Everybody okay with keeping the 2,000?
So we're renting it right. We At the end of the month, we're clearing $2,000 on this deal. We've We've done everything right.
But in the first year in the first year out of the money my tenants gave me $29,367, something happened.
Well, let me put it this way.
What if we took the 24 the the just the payment the the mortgage payment is 24 47.25.
Okay? That is the mortgage payment. I'm going to multiply that by 12. I'm going to multiply it by 12.
That's 12 months of mortgage payments.
Okay?
times 12.
29,367 is the same No matter how I do it, Brenda, no matter how I do this, whether I look at um I add up each of the principal payments and each of the interest payments, that's what I did here, okay? I first of all, I took a look at cumulative principal and then cumulative interest and added it up. Or I could take the mortgage payment itself and multiply it by 12, I still get 29,367.
Okay? So, out of the money that my tenants gave me, 20 almost $30,000 went out the door.
Now, what happened to that?
I'm told as a real estate investor that my tenants are creating equity for me.
So, how much equity do I have? How much principal pay down did I get out of that money?
So, for all the money that was given to me, and I'm just talking about on the mortgage side. I'm not even talking about the $24,000 I was able to clear in a year. So, see, remember, 24, I got $2,000 a month on this deal.
All right? That I'm cash flowing times 12, that's $24,000.
When you add it all up, that's a lot of money. 24,000 plus the 20 Let's let's let's let's let's let's let's look at it. Let's look at it. Okay? So, we got um we're going to add the $24,000 to that.
It comes to 53,000.
Out of the $53,000 my tenants gave me, I got to keep the 24,000.
Yeah, not No, I didn't get to keep the whole 24,000 cuz I got to repairs and maintenance out of that money, correct?
And out of that 24,000 dollars, do you have to pay taxes on that?
So, you're not you're not getting the whole 24,000 dollars, are you?
Okay? But out of the 29,367 dollars, how much of that money went to interest?
Okay? So, if I take If I take my If I take my interest money, 26,140 dollars, 26,000 140 dollars and 59 cents.
That's how much interest was paid out of the money that my tenants gave me.
Then I divide it by the total amount of money that I gave to the bank, which is 29,367, divided by 29,000 367 equals 89%.
Folks, that's practically 90% of the money my tenants gave me to pay the mortgage went to somebody else so they could eat.
Do you call that a deal?
Okay? So, listen, ladies and gentlemen, do you call this a deal that I got my 24,000 dollars over here. I got that, but I got to pay taxes out of it and I got to do I got to do repairs and maintenance out of it. I got my money up front, but what about the money on the back end? What about the money I'm using to pay the mortgage?
My tenants gave me that.
And now 90% of it 90% of what they gave me went to somebody else so they could eat.
I get to keep 10 I get to keep 10% to to pay down to pay on the building.
And somehow somehow we have been sold a bill of goods saying that is the way it should be we should be okay with that.
Why? Because somebody else is paying the bill.
Now if I took you out to dinner and you only got 10% of the food that I bought and 90% of it went somebody went to somebody else. You wouldn't feel good about that at all. Why are we as real estate investors supposed to feel good about this? Can anybody help me here?
Help me to understand why this should be okay. Why I should be okay with that.
When I could do a lot better. Let's break this down to what's really going on behind the scene. My goal is to make sure that real estate investors homeowners home buyers can keep more of the money. How would you if I went to Listen, if we went to dinner and I said listen, they're going to take 90% of your food that I'm paying for.
What if you could What if you could keep 90% of it and give 10% of it away.
You know, help somebody else.
What if you could do that?
Here's what we're talking about ladies and gentlemen.
Here is the goal of this whole thing right here. I need you to focus in on if you if you need to see this go get I need to get If you're watching this online, I need to get the link so people can see this online. I want to focus on the amount of principal or how [snorts] the pay down of the loan or creating equity in this property. I want to focus on the $3,226.41.
Because as a real estate investor on a limited budget this is what I've got to create equity in that property because when I get a loan from the bank, ladies and gentlemen, when I get a loan from the bank they are purchasing my equity.
They're purchasing my equity.
All right? Anybody who want to come to the stage, raise your hand, come to the stage, let's talk about it. Okay? Let's talk about this. Ask whatever questions you want. The $3,226.41, that's what we're focusing on because that is the end goal.
Okay? I have two goals.
My front end cash, my $2,000 a month, and gaining equity in this new property so I can eventually cash out, refi, and do it again. So, okay, let's write him up. Yemil, how you doing, sir?
Hey, how's it going?
It's going well. How are you doing?
Doing well, doing well. Just following along and uh anxiously just kind of trying to figure out how I could apply a lot of this stuff to to my scenarios and everything I got going on. Okay, good.
So, um but does that, you know, that that that scenario I gave in the beginning, where I'm buying dinner and we're going to give and and the the people who invest in the restaurant, they get 90% of the food that I bought.
All right? But you get 10%. You're not You're not okay with that, are you?
Oh, no, it it it makes perfect sense, you know, and I think these numbers often times we get uh we get presented with one number, which is basically the payment, right? Right.
>> And you don't really calculate as a business owner or or even just as as a a property owner, you don't really calculate um all the numbers that are in the background. You just kind of tell yourself, all right, this is what I have to pay on a month-to-month and eventually I'll I'll get there, but seeing all these numbers here on YouTube and breaking down exactly how how little goes to principal and how you're just stuck to this in in debt to like this pattern uh that really just benefits the banks, really. Um it you know, it's it's really eye-opening.
So the yeah, that's what I'm trying to get at today. All right.
Nubia, how are you this morning?
Nubia, if you're talking, we can't hear you.
There you go.
>> Yeah, sorry about that. Sorry about that. I'm actually driving. Okay. I'm on my I'm on my usual route looking for land.
>> [laughter] >> Well, listen, thank you very much for being here, okay? Um I think you're going to like what we're talking about today. I see Black in here. Black, talk to us this morning. How are you?
Hey, good morning. I'm doing very well.
I was, you know, on my morning run and I saw the room and I wanted to join because I've been trying to figure out how to venture into the real estate business. I own a property myself for about 7 years, built about almost 180,000 equity in the property, have some cash stashed, and I'm looking to buy multiple units to start venturing into the market, and I'm just looking for different ways that I can either leverage the equity or the cash I have on hand to get into the market because it might not be enough to qualify me for, say, a million-dollar loan that I can use to buy multiple units. So, I'm just looking for knowledge and information.
All right, good. Listen, there are a bunch of people that can help you with that.
Listen, touch base with me cuz I can get you in touch with Sean Ackerman.
Sean, I kept it real, that's what they call him cuz he he's good at that.
The the guys in BOB, they're on Tuesday, Wednesday's and Thursday Tuesday's, Wednesday's, and Thursday's. They have all kinds of ways to get into real estate with practically no money down. There's so many ideas about how to get in to real estate and I can I can direct you to all those people that can help you to do that and you don't have to really spend a whole lot of time vetting them cuz I know they know what they're talking about, right?
Here is what we're adding to the story, Black.
Even the season investors are giving away millions of dollars when it comes to investing and they're missing this point because it's set up so that the banks make a ton of money. They make a ton.
So, I just pointed out I just pointed out that the our goal here after we are making our front end money after we're making our front end money, our goal here is to get equity in the property just like you did, Black. How to get equity in the property and how to get it faster and cheaper. So, here's my question to everybody. Um if you're looking at this screen, all right? And if you're coming if you're new to the stage, then I have all of this on YouTube. Go to YouTube. You can you can um search for pill method and [snorts] you can see the numbers when you click on the live broadcast, all right? Go ahead and subscribe.
So, after 1 year, this is what it cost to get $3,226.41 in equity. So, have I paid my Listen, ladies and gentlemen, have I paid my loan down by $3,226.41?
Yes or no? Have I paid it down by that much?
Yumil?
Nebi Nebia? This is what I This is what I got, cumulative principal. Yeah?
Uh no. No, that Nope. Nope. Nope. Nope.
And nope.
Yeah, that money went straight to the bank. Okay. So, so now, but but it went to the bank, but did I pay the loan down?
Okay, this is the principal part. I paid it down by No.
I I meant that the bank pocketed that money.
All right. So, and now and I'm not talking about the interest. I'm talking about the principal now.
Okay? I don't want to confuse people.
I'm paying down the loan. Am I paying down the loan here after 1 year?
Yes or no?
Oh, minimally. Right, minimally. But I paid it down, okay?
But what did it cost me to pay it down?
I have $26,140.59 Did I also spend that money?
Did I spend money on interest?
Yes. Okay. Do you believe $26,000 is too much interest to pay to pay this loan down by $3,226.41?
Of course. Okay.
So, do you know the the Do you know the main component in all of this?
is that the bank gets to create the timing.
They get to create the timing, meaning Don, I need you to pay your mortgage on time every month.
And when you pay your mortgage on time every month, this is what's happening.
$259 goes to you.
$2,187.50 goes to me.
>> [laughter] >> And the bank is just clapping their hands because you're satisfied as a real estate investor, you're satisfied with the $2,000 worth of cash flow you're getting every month. You're satisfied with that.
And you don't care about what I'm getting as the bank because you've been taught to disregard it.
You've been taught to disregard it because your tenants are paying the mortgage.
That's what you've been taught.
That could not be further from the truth. Your tenants aren't paying your mortgage. They were paying a mortgage, they'd be in their own place.
They're have a contract with you.
They're paying you rent.
And out of the money they give you, you're paying the mortgage.
And the only reason why you're even in this is so that you can buy your equity back from the bank.
But I need you to look at what is really going on and and to contemplate the cost of borrowing that money.
So, when I pay the bank my that that mortgage payment, 200 I just bought $259.75 of my equity back. But I paid them $2,187.50 for it.
And then the next month is 261.
And the next month is 263. But look at all the interest payments that are over $2,100.
12 months worth.
And as a real estate investor other real estate investors are teaching me to disregard the fact that I'm buying my principal at a little piece at a time bringing it back from the bank. And they're saying that I it's not a real cost. It's not real money. Let me tell you something.
If I borrow this money and I pay it back and I and I pay my loan down by $3,226.41 can the bank say that I did not pay them 3,200 dollars on my loan? Can they say I did not pay it? Anybody?
No. No. No.
Yemil. Not sure if I Yeah, not sure if I understand the question.
>> Okay, here's the question.
If I go to the If I have If I go to the bank, all right, and I paid my loan down by $3,226.41, okay? And I have that statement.
Can the bank say um a year from now, we're going to start you back over at $350,000, Yemil. You didn't pay You didn't pay your loan down by 3226.
Can they do that?
It appears they can and they do. No. No.
No. No. I need you to listen closely.
No. No. No, sir. They can't do that. So, Yemil Yemil Let Let Let Let me Let me Let me make it clear. You're starting out at $350,000.
You Oh, $350,000. A year from now, you paid the loan down by $3,200.
That went to principal.
Can the bank arbitrarily say, "No, you didn't pay us.
We're going to start you back at $350,000."
Can they do that? Wait, all right. So, all right. So, I I think I understand now. You're You're saying that you have your initial loan amount and you end up end up paying $3,200 for the year and you're asking if the bank could come back and say no, you didn't pay off $3,200.
>> Exactly. Can they do that? No. All right. Because it's real money paid, right?
Correct.
>> Exactly.
And out of the money that you gave them, cuz you can add it up, you can add it up, right? You can take the the the the the 244725, that's your payment. $2,447.25.
If you multiply by 12, that comes to exactly $29,367.
Can we say you did not give the bank $29,367?
Can we say that? Can we say that you that didn't happen?
No. Can't say that, either.
Shoot. All right.
So, that means if $3,200 went to principal, $3,226.41, that means $26,000 actual dollars went to the bank in interest.
Yes or no?
Correct. Okay.
So, can we say You know what they say, if A equals B and B equals C, then A equals C.
Then if I say that it cost me, if I do it the bank's way, it cost me $26,000 to get $3,226.41 in equity to move that loan from 350,000 down to where I owe 346,773.59.
It cost $26,000 in interest.
I can't deny that, either, can I?
So, here's my question, ladies and gentlemen.
Is there a cheaper way to get $3,200 in equity?
Is there a cheaper way to get it?
So, do I have to follow the bank's timing?
Because see, if I follow the bank's timing, okay? Uh uh Quadri says Quadri says, "Almost nothing paid." You got that right, Quadri. He's watching us on um on YouTube. Um we've got Serge Albert watching us on YouTube. We got um uh Kasha Johnson watching us on YouTube. Uh Diana Whitley and Strategic Secrets this morning watching us on YouTube. And we have a We have Cassidy, Brenda, um Yamil, Nabia, all right? Um uh and doctor here watching us Oh, we got some We got some red tickets here. We got some new people in this morning watching watching this.
So, here's what I'm saying.
It cost a lot of money if you do it the bank's way.
If we're going to give them If we're going to get $3,226.41 in equity, what if I decide to do this?
I make my regular mortgage payment on line one.
I owe $350,000.
Okay? I owe $350,000.
But I don't want to give them the 322641 they're looking for over 12 months.
Nabeel, I want to give it to them all at one time.
Can I do that?
Okay, you know I'm out here in these streets running around, but you can. I can? [laughter] >> You can.
>> I can? I can give it to them all at one time? You Nabeel, do you agree with that? If I'm If I'm eventually going to give them 322641, do I have to give it to them over 12 months or can I give it to them at one time?
You could pay as much as you want up front, I would imagine. Okay. So, if by looking at this, using the the bank's way of of of doing this, the using the bank's way of understanding this, if I do it their way, it's going to cost me $26,000 to pay it down by that same 322641.
Here's my next question.
If I give them the 322641 on line one, okay?
If you get you Nabeel, if you gave them the 322641 in the first month, and they say, "Yeah, um normally, you Nabeel, to pay us that much money would cost you $26,000.
So, I want you to give us that money.
Yes, you can give me the 322641, but also I want you to give me the $26,000 in interest right now."
What would you say to that?
I'll tell them TO KICK ROCKS.
>> [laughter] >> WHAT DO YOU MEAN, YOU MEAN NORMALLY IT WOULD COST that much to pay it down here. So you're saying you don't want to pay 26 grand?
That's preposterous. Well, tell me why.
Tell me why it's preposterous.
Well, I mean I I understand it from the bank's the bank's perspective. They're essentially trying to recuperate how however much money they they would have lost.
But from a a borrower's perspective, you're paying back whatever you agreed to pay back. So if that means you save money uh along the way in interest, you know, like and then I don't see why you would have to pay that or or rather if I wanted to pay the full amount, like let's say the 350 all up front.
I paid 350 and you wouldn't charge me that that uh 80% interest uh so to speak or 90% interest so to speak, right? That that we're talking about.
Yeah, yeah, yeah. So I could do it that way, but I I can't but they're telling me that I can't make individual payments and save all and save on that money.
It's either full a full payment or or or nothing at all and it just doesn't make sense. You can't have your cake and eat it, too. Okay, so here's what I'm hearing you say.
I get the loan and then I decide yeah, let me just pay off the $350,000.
But you don't want the bank coming back and saying, "You know what? We signed a contract and listen, we were hoping you that you keep this thing for 30 years and then pay us pay us $531,000 in interest on this loan."
Just the interest amount alone.
$531,000.
So you you go ahead and pay off the $350,000 and the bank says, "Yeah, okay.
Thank you very much, but could you also send another check for 531,000.
There's not a real estate investor in here that say, that is impossible. You can't do that.
So ladies and gentlemen, if there is a way to get that equity cheaper, why aren't we doing it?
Brenda, you have come to the stage. What brings you to the stage this morning?
How are you this morning?
I'm good. Good morning everyone. I'm just here for support.
And I appreciate your support. I appreciate it so very much. So Nubia, I know you're out and about, but have you do you have anything to add to this conversation that we've had so far about um um getting that equity and then paying what the bank's fees for that equity?
Yeah, Nubia busy. All right.
So ladies, so here's what we Okay, there she is.
Okay, I'm sorry guys. I'm navigating between cuz I have I'm trying to I'm going to a land to see land that I haven't seen before, but um so I'm navigating, but >> Oh, okay.
>> say this.
I will say this guys. Um hopefully you guys can hear me clearly.
Um I was in a real estate meeting last night for Jacksonville, Florida just trying to you know, lay out some um some information.
Get things started for them over there.
And one of the women and I'm I I sent her to the YouTube.
One of her name is Jennifer Harris.
She's the newbie investor.
And she told me, she was like, wait a minute. I just want to say that that Don Daniel I saw him on your program. I saw you interviewing him.
I saw you interviewing and when he before he finished talking, I just want to throw all of my stuff. I'm getting ready to go look at my mortgage, go look at the conditions and I'm I'm going to do exactly what he said. As a matter of fact, I'm starting to make my other payments tomorrow, my next two payments tomorrow.
And I said, that's how we do it.
So, you should be hearing from her shortly. I first I want or wanted to invite her to the room, but as you know, it's always better to see the numbers.
The link is in the chat, everyone. If you are not watching, um this is absolutely amazing. It is a game changer. As Don always says, "Listen, we're not trying to force you to do anything. We're just trying to show you a better way um to look at it. And what I love about it is that he's pulling the curtain back to let you see exactly what the banks are doing and what we have I I'm just going to say it ignorantly signed up for cuz we didn't know.
We was just happy to get a house.
And we agreed to overpay for it. So, after today, now we know we don't have to overpay. As a matter of fact, we can pay only what we want to pay as far as interest and interest rates and late fees and and and we know now we have a choice. I don't want to do late fees. I don't want to do these crazy interests. All I want to do is pay for my house and I want to do it before their deadline. So, with that said, I'm I'm Nabia. I am a realtor and investor here in South Florida. My company is called Mish Kon Solutions, where we offer you resources such as this man right here for you to get in front, not behind, but get get in front of what's going on in the market. So, with that said, I'm I'm done. Hey Steve, thanks for coming in the room, and I'm going to turn it back over to you for the Iceman cometh.
>> [laughter] >> Thank you so much, Jamila. So, if you want to do some investing, listen, folks.
By using the bank's timing, here's what I have for you today Here's what I have for you today.
Okay?
This is a situation where cost money just to spend your money.
Can you imagine that?
It's costing me money to spend my money.
I'm spending my money to buy equity in this property.
All right?
But, it cost me money to spend my money.
In 1 year, it cost to to spend my money on equity, $3,200, it cost me $26,000 to do it. In 2 years, I bought I bought $6,700 of my property back from the bank, but it cost me $52,000 to do it.
Oh, in 3 years, I just paid $10,450 buying my property back. Okay? I got $10,450 worth of equity, but it cost me $77,000 in interest to do it.
This is the money other professionals are trying to tell you to ignore.
Okay? In In 4 years, I bought this property down by $14,487.
I had just bought it back. I bought it back.
Okay? I now own $14,487 of that of that property. I own it now because I paid it.
But the bank charged me 102,980.22 cents so that I can own 14,487 dollars of my building.
Ladies and gentlemen, if that is not absurd, if that is not ridiculous, that mortgage professionals, real estate professionals, investors have been long-term investors that have been investing for for decades are telling me that this is cheap money, that I shouldn't care about this because the renters are the tenants are paying the rent. I shouldn't care that it cost 102,000 dollars of the money that they gave me just so that I can buy 14,000 dollars of my building back.
Wow. Wow. Wow.
So, I got doctor that came up to the stage. Doctor, what's up?
Doctor Will Hawkins.
>> What's going on, my man?
Hey, listen. If if I could say anything to the people in here, you know, listen. You better listen while you can because [snorts] the brother's giving you some real information. I mean, I'm dead serious and you know, um the bank attempted to do the same thing with my group a few years ago, right before the lockdown started. So, to keep this short and and sweet, well, we were looking to purchase a former elementary school in Atlanta.
Now, the the facility was owned by the bank.
So, my business partner, he set up a meeting and and basically the bank representatives were attempting to um give us a loan to purchase the building the the elementary school that they possessed.
And my business partner thought that was the best idea since sliced bread.
But I already knew what the trap was.
So I let him do all the talking you know at at this particular time because I knew there would be uh you know a second and third meeting.
So anyway, uh when we left the the representatives felt good about themselves and that we would be foolish enough to accept the loan on their terms.
Now I um I told my business partner and I'm going to speak this in code but uh I pray that you can hear me.
Since the bank is essentially using the uh what the the programming that the masses of people have received to basically uh for a lack of a better uh uh word financially implode us.
Dr. Dr. Will, I appreciate you. We have a two We only have a two-hour show. I need your point. Oh.
Yeah. Well, the the the point is this.
We we ended up leveraging the uh minerals the gold that we had access to via a placer claim or um mining rights if you will, as leverage to talk the bank way down on the price of the facility.
And so, initially they wanted 1.7 million for the facility.
We talked them all the way down to 700k and purchased the facility outright without a damn loan.
So, yeah.
Don't let them um don't let them catch you up in in their system of of doing things because uh you'll end up broke >> [laughter] >> in the long run. Dr. Will, Dr. Will, listen, I appreciate your perspective on this. Let me tell you how Can I tell you how I might have gone about that?
You bet. Okay, great. Of course, negotiate your best price.
Of course, negotiate your best price on the building.
Okay?
But, I would never pay cash for a building.
And the reason why is I want to be able to invest my cash.
You see, Dr. Dr. Will, let me ask you something. Have you ever gone to Have you ever been to a class where they taught you how amortization actually works, how the bank makes their money through amortized interest? Have you ever been to a class like that?
Yes, I have. Okay. Have you ever had a class on what to do about it?
Yes, and I didn't agree with all of the principles >> Okay.
>> or some of the concepts.
>> All right, so here's what we're talking about, ladies and gentlemen.
What if What if, Dr. uh uh um Dr. Will, what if you could find out that by borrowing the money and controlling how much interest is actually paid, you can get an effective interest rate of around 1% or even less.
If you could borrow that money for less than 1%, would you ever pay cash for the building?
Or would you take that money, that $700,000, and put it into something whereby it would make way more money than the 1% you would save if you bought it straight out? You tell me. What would you prefer?
Well, well, essentially um we took a different I understand [clears throat] that, but I'm not I'm not We've already talked about that. I'm Now I'm giving you a a new perspective.
If the If you could borrow the money at less than 1%, is there any reason ever to pay cash for anything?
Well, for us it was. And And like I said, I only told part of the story.
Uh-huh. But um yeah, it it behooved us to just purchase the building outright because we had it like that. So, Okay.
But But you can borrow it for less than one.
Why would you do that if you could take that cash and invest it and make and make 10 or 20 with it?
10 or 20% with it.
Well, think in terms of the um the purchase of the the place of claim. Mhm. I'm not talking about that right now. I'm just talking about borrowing the cost of borrowing money.
What is the real reason why you don't want to borrow money? You tell me that.
What is the reason why you don't want to borrow money?
>> Well, Yeah, because I And that was the question that the bank asked me. Yeah.
>> [laughter] >> So, They asked me the exact same question.
>> Why don't people want to borrow money?
Well, well, I it's just something that I never had.
I've never borrowed money.
You know, um it's it's it's just we we would talk differently.
You know, and >> So, you have So, So, your reason is philosophical. It is not it is not monetary.
No, actually it's a combination of both.
Okay. All right. asking I'm so sorry. I didn't Go ahead, Nabeel.
When you're a moderator, you can do that. Yes.
>> [laughter] >> I I think that what Don is doing, he's just asking in general, why do people not want to borrow money? In general, I would say, well, I as I I don't know if I'm going to be able to pay it back. I don't want to pay those interest rates.
Okay. That's in general. That's in in general. Everybody's going to have it at their own individual uh answer. But in general, this is why people don't want to borrow cuz they it's the interest rate that's going to kill them. So, if I could borrow money if I could borrow money at 0% interest 0% interest is there any reason for me not to borrow that money?
Anybody?
If I could borrow it at 0% interest.
>> [laughter] >> There we go, folks.
It is the cost of the money. Help us, sir. Help us. That cost of the money that is getting in our way. The cost of the money that's getting in our way.
So, when we're talking about how can I borrow the money from the bank and beat them at their own game because we understand the timing that's involved. Let's do a little bit more math on this thing. So, let's take a look at that very first payment. We're going to take a look at that very first payment. And if I make the first payment in the first month, my principal payment for month two is $261.37.
That's what I'm looking at here.
The interest for next month is $2,185.88.
If I make my very first payment on this loan, all right, everybody.
But, I prepay, I'm going to in my own timing.
I'm not going to wait for the bank's timing to give them the $2261.
I'm going to pay it when I want to.
I'm going to choose the timing. So, if I do that, I pay them $261.37 before the next month.
Do you realize I knock off one whole payment off this loan, and I save $2,185.88.
In other words, if my saving $2,185 and $0.88. I'm talking to investors now because investors like a return on their money, okay?
I'm going to take 261 of my dollars, and I'm going to prepay it, and not pay that interest. So, I'm going to divide it by 261 of my dollars, well, and $0.37.
That is And I move the decimal place two places to the right. That's an 836% return on my money.
Can anybody tell me where else can I take $261 and create 836% ROI?
Where else can I do it?
Does this make sense, everybody?
Uh here's what I'm saying.
The worst thing you could do, okay?
The worst thing you could do is overpay the bank for money.
That's the worst thing you could do.
Is overpay them for the money by not knowing how an amortization schedule actually works. We're in the business We're in this business, all right?
You're You're a real estate investor, and the backbone of the whole thing is money.
It's all about the money.
So, in the So, you can't You can't to get into real estate and not talk about money.
And you can't get into real estate without talking about borrowed money.
It's got to be a part of the conversation whether you use borrowed money or not. It's part of the conversation.
And if you're not using borrowed money, you got to ask yourself, why am I not using borrowed money?
And when you break it all down, it comes down to the fact that we've never been taught how the bank makes its money through interest and what we can do about it not to pay that interest.
The very best loan to get from a bank is a loan where you pay absolutely no interest. That's the best loan you could get.
You know what the second best loan you could get?
Is paying mathematically absolutely the lowest amount of interest that's mathematically possible for you.
Where you can actually get that money at an effective interest rate of under 1%.
I've shown real estate investors of $2 million properties how to borrow money at.67%.67 And if you can borrow it at.67 and you can take your other you can take your cash and invest it somewhere else.
>> [laughter] >> There's no absolute there's no reason to pay cash for a building when you can borrow the money that cheap.
It is that's as close as you're going to get it to 0% interest.
That's what we're talking about today, ladies and gentlemen. We're talking about making money on top of money.
Well, well, I I I got to beg to differ on that because >> Yes, sir.
Well, and look, the thing is when we purchased the facility we understood we were in a race against time, guys.
Because we had a contract with the space agency to manufacture a certain technology.
Now, we've already more than 10x our investment.
And we understood I just how slick the bank was. And it's it's like I said, there's a lot that I'm leaving out. But this is something that I've always done.
You know, instead of borrowing money regardless of the interest rate, >> [snorts] >> I've always had it where we had the capital up front.
We could purchase the facility, you know, we recently purchased an entire hotel in Ohio.
And we we renovate the facilities, and then we make our money from there. Now, I understand where you're coming from.
So, where am I Then where am I Now, where about to So, Dr., where am I coming from?
Well, basically Well, basically borrowed money that has, you know, no interest rate. I mean, damn, it's uh on the surface anyway, you know, free money. Okay, so on the surface On the surface?
>> Yeah, and I say that because a lot of folk don't read the fine print.
And we're not talking about Sir, we're not talking about fine print.
We're not talking about This is Listen, in a perfect world, and all things are equal, everything is is is gorgeous. Is there anything wrong with borrowing money at 0%?
No, I I I I would say no, especially for your average investor. So, is that would Would that be the same as paying cash?
It depends on the situation.
>> No, I I said in a perfect world, sir.
I'm not talking about any any small print, fine print, or anything. Is paying 0% interest the same as paying cash?
It if it's your cash, >> Exactly.
>> haven't actually borrowed that cash. I'm just saying, if I borrowed the cash >> make that argument. Okay, let me Let me Let me put it this way. You set the terms. You set the terms. No You write up the contract. This is a contract you wrote, Dr. You follow me?
You wrote the contract. Is there any difference between paying cash and borrowing at 0% interest?
Uh I mean it's there's a lot more to it than that as far as I'm concerned. No, you wrote the you wrote the contract, sir. It's no more to it than what you put in it.
Well, well let's just take my situation.
>> No, I can't do that because I'm this is a class I'm teaching.
>> [laughter] >> Okay?
I'm asking a question here about borrowing money and paying cash.
So, if I could pay cash, is there any interest on that?
Okay? I bought I bought a building for $1,000.
Okay? I paid cash for it.
Good. Did I pay any interest?
All right? Or I borrowed the money at 0% interest. I borrowed $1,000.
All right? And I paid it back at no interest.
What is the difference between the two?
Have I lost any money here?
That's a yes or a no.
Actually, it's not, man, because I've seen those kind of situations again where the people didn't read the fine print. Lord have mercy.
>> And they will come back >> Doctor, you're not listening to me at all, are you?
>> consider. Now, you're saying in a perfect world And and and and and that's all I'm asking.
Look, Doctor, I'm not talking about Doctor, I'm not talking about anything.
>> Don't don't don't overthink it.
>> Don't overthink it. I'm just asking a question about math here. This is a math question. This is not a personality question.
>> world, that's the key. And that's all I'm asking.
>> it in a perfect >> In a perfect world, in a perfect world, is there any difference between the two?
It's not a trap. It's just a question.
It's a math question.
>> No, I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I All right, brother, then >> That's why all I've said I I Listen, that's okay. That's okay, doctor. You're not You're not You're You're You're not helping me here. Okay?
>> [laughter and gasps] >> All right, I'm just asking a question, and it's a yes or no question. And you're trying to complicate it, and that's not what I need today.
Yeah, I'm not complicated. I'm just stating the fact, brother. That's not a fact.
>> Wait a wait, man. Look, y'all got it, man. Hey, but remember there's more than one road to the same success, guys. That's what I And I'm just talking about math here, sir.
All right, I'm just talking about math and understanding what you're really going about in this life.
>> I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I Okay, and that's all I was asking the about the math.
All right, 0% interest versus cash.
What's the difference?
Yeah, we're not going to We're not going to have that one.
Okay.
Uh let's see here. Invite to speak. All right, Siandra, how are you doing today?
Siandra, I'm trying to invite you up to the stage.
There you go. How are you doing today?
Good morning. I'm doing I'm doing fine.
I'm okay. And yourself? I'm doing well.
Thank you so much. What's going on with you?
Nothing much. Just getting ready for work, and I'm listening in to, you know, the real estate part of it. Instead of slowly getting my house paid off, so I want to invest.
Exactly. Exactly. So, ladies and gentlemen, what we're talking about here today, and and and if you're ever a moderator of a room, and you you're going in a different direction, don't let anybody ever derail your room, okay?
Just you know, if they're trying to take it in a different direction and you're trying to be as nice as possible and tell them, "I'm not talking about that right now. I'm talking about this." And if they're not willing to cooperate, just get them off your stage, okay?
>> [laughter] >> That's what we do here, okay? So, he didn't come in to learn. He came in to teach.
And that's not what we're about, okay?
So, anyway, Ciandra, we're glad that you're here this morning. Now, here's what we're here's where we are, ladies and gentlemen.
This is where we are today.
Right now, right now.
We are being sold a bill of goods.
Listen, I heard mortgage professionals yesterday talking about clients balking at 7 and 1/2%.
Okay?
But, that same mortgage professional was saying, "These people the same people that do not want to pay 7 and 1/2%. Do you realize that they have credit cards with balances of 22 to 26%?"
So, let me ask you, ladies and gentlemen, anybody, if I have a mortgage at 7 and 1/2% and credit cards at 22 or let's say 26% is the interest I pay on the credit card at 26% is that worse than the interest I pay on a 7 and 1/2% mortgage? You guys tell me. You, Mel?
I think it depends on the math.
How much you owe and how much you borrowed, but I would say over time, even though the interest on the credit card is higher, um you would still make out better if you pay down your uh your mortgage just because of how much interest you would be saving over time.
Ow, wow, wow. So, here's what I'm here's what here's what we keep hearing from professionals.
That if I have 7 and 1/2, okay, then my credit card interest is three times as much. Three times as much.
A seasoned professional is trying to make it sound like the the amount of money I have on my credit card, the interest on that is worse than a 7 and 1/2% mortgage. The only way you can say that is if you have not done the math, just like Yemi said.
You've got to do the math.
You've got to do the math.
All right? So, let me put something on this on the screen here to to show my point.
Does anybody here Does anybody here want to have a 20 thousand dollar balance on a credit card at 27%?
ANYBODY?
>> [laughter] >> UH NO.
SO, HERE'S WHAT I'M SAYING, OKAY? SO, I'm going to put this on the screen, Yemi, all right? And I'm going to tell you what I've got if you can't see it.
So, if you want to see it, please go to YouTube so you can see this.
So, I'm putting All right, great. I'm putting in 20 thousand dollars.
All right?
At 27%.
All credit cards are amortized over 240 payments, okay?
There we go.
And my first interest payment on this is 450 dollars. 450 dollars.
So, Yemi, if I have this credit card, the bank wants me to pay them $450 interest on this credit card this month at 27%.
Now, you said you don't want a $20,000 loan. The person I was talking to that that was listening to yesterday said this situation is worse than the mortgage we have here, about a $350,000 mortgage at 7%. Let me show you the very first interest payment on the mortgage.
It's $2,187.50.
How does a seasoned professional not see this?
Ladies and gentlemen, I need you to hear me.
And I'm focusing right here on you.
Most of the information you get from financial professionals is information that they've heard over and over and over again. And because it's been heard over and over again, it is accepted as truth.
And so, they feel safe in relaying that information to you.
But if that same financial professional had actually looked at the numbers and did the math, they would stop giving that advice today.
When you get information from a financial professional, make them make them show you the math.
You know, some of us some of us weren't good at math, all right? Some of us weren't good at math, but we could figure things out, okay?
Like when I was in school, I could figure things out and I could come up with the right answer. You know what my teacher showed me?
Tell me. You know what a teacher told me? Yeah, I need to see the work. I need to see the work. I need to see how you got there.
I don't know how to do the work.
I can't prove I can't prove it.
Folks, don't accept this information from people who do not show you the math.
They're giving you information that is generally accepted as true without doing the math. So, let me ask you this.
So, Yamil, in this case, would it feel good to pay off this $20,000 on a credit card that's 27%? Would it feel good?
It would feel great.
>> IT WOULD FEEL GREAT. [laughter] OKAY. SO, UM but um but if I showed you if I if I if I owe $350,000 and I put $20,000 on my my mortgage, I still owe $330,000.
Does that make you feel great?
>> [laughter] >> NOT AT ALL.
>> SO, THAT'S WHAT WE'RE THAT'S what we're up against. We're up against looking at how understanding how it feels, but not understanding the math.
So, Yamil, if I put if if I pay off this $20,000 credit card, then I don't have to give the bank $450,000 $450 in interest that month, do I? That interest goes away. I don't have to pay them.
And I feel good about that.
But if I put this $20,000 on this same mortgage, I want to show you something here. We're going to go down the cumulative principle. $20,000 on this mortgage knocks off almost 5 and 1/2 years off the mortgage and saves me $134,000 in interest.
Now does it make a difference?
Yemil.
Huge difference. Huge difference. And why does it make a difference now?
Yemil, why?
Well, because you're seeing the numbers and you're seeing how much you're actually saving as opposed to just a feeling that you get.
Folks, we got to get out of that. The reason why teachers are teaching this is based on how they feel about what they're talking about, not the numbers themselves.
Not the numbers themselves. It's how they feel about it. So, when they're talking to their when they're they're talking with I've got real estate agents, I've got um real estate investors, we've got um uh lenders, um MLOs, people who make their living lending money, and you're getting advice from them. Let me tell you something.
The worst person you can get advice from on borrowing money is someone who's selling you the money.
>> [snorts] >> Not that they're trying to be shady.
It's just that their knowledge is limited because they're not taught how the bank makes their money through interest. They're not taught that.
So, how can they give you good advice on how to put yourself in a better financial position as a real estate investor if you pay if you pay all of this interest.
Okay, if you pay all of this interest Yumale, does that mean I can't also invest that interest?
Sir?
Wait, I'm not sure I understand. You said if you pay off this interest you said >> If I pay If I pay all of that interest, if I pay $134,000 in interest to the bank, that means I have $134,000 less to invest, doesn't it?
Uh correct.
>> Okay.
So, have you Have you ever done Have you ever done um um some math on compounding interest for a certain period of time, Yumale?
Uh I have back in a business school, but it's been a while. Okay. All right. But, you know how powerful that is, right?
I do. Okay, so if I had a If I had $134,000 um and that I could uh start out and then 20 years from now with compound interest, that's a whole bunch of money, isn't it?
It is. Okay.
So, it's not the extra interest that we're paying that's the real problem here, isn't it? Is it?
Is the real problem the money that that $134,000 will never make for you because you gave it to the bank so that they can invest it.
Isn't that the real problem here?
Facts.
Ladies and gentlemen, real estate investors are leaving millions of dollars on the table because they're paying way more interest than they need to, and when you do that, you can't also you can't also invest that money.
Day Tripper says, "Great point."
Watching us on YouTube. You can't You can't invest it if you've paid it.
And we're talking about millions upon millions of dollars lost because of opportunity cost.
There's an opportunity cost. You don't have the opportunity to invest it because you paid it in interest, and therefore, you lose the ability to gain compound interest on that money.
Ladies and gentlemen, I'm talking about millions upon millions of dollars, even though, okay, on the front end of a deal.
On the front end of end of a deal, you can become a millionaire.
By in By following all of the rules, by doing what you could you should be doing to invest, okay?
You could You could do whatever you need to do to invest. You're You're buying it right. You're rehabbing it right. You're renting it right. You're even selling it right when you sell it.
But the one thing we're not paying attention to We're not paying attention to the cost of borrowing the money.
We're not.
We've been We've been We've We've been taught to totally ignore that.
And there's a term for that.
It's called inattentional blindness. I need you to look it up.
It's It's It's It's It's a made-up word, but it's it's I think it It might have made it into the lexicon. Um but it It's Let Let Let me put that in here. Um um let me put it over here on this screen here and I'll I'll bring it up for you. Inattentional blindness.
Go ahead, Nubia.
Uh you had to say Hey, can you hear me?
>> Yes, I can.
>> Yeah, um just wanted to say real quick and I use that word inattentional, that term inattentional blindness, all the time. So it it's a real term. It really is.
>> Okay. And so, um but I'm going to say that for everyone listening that this is under the heading of when you know better, you do better.
>> [laughter] >> As you said, even if you're selling it right, listing it right, flipping it right, and you're doing all of that, and you and you're still making money, but you still do not realize the cost.
What did you lose? I and I say this all the time to the Nubian vestors around me, don't leave money on the table.
Just don't. Don't do it. Pay attention.
So yeah, you're right. It's inattentive blindness. That means you see it, but you don't see it. You see >> It's right there. Yep. But you don't see it. You don't You don't There's no revelation. There's no revealing. So yeah, it's a real term. So uh yeah.
>> [laughter] >> Listen.
>> that I healed my mind.
You know, what if you know, what if we could save on this on this deal here, I can I can have the entire building I can have the entire building, but I don't have to pay $500,000 in interest.
What if I could get it for um for $200,000 in in in in interest? That is $330,000 I did not have to pay in interest to acquire this building.
Okay, I now have the building. I did not pay $330,000.
What could I now do with my $330,000, Yemi, that I didn't pay for this building?
Could I invest that somewhere else?
Uh yeah, I mean, it's your money. You could invest as you see fit. Okay.
But, if I give it to the bank, I can't invest it because I have been focusing only on my cash flow on the building and my sale of the building. I have not been focusing on the cost of borrowing the money for the building.
Ladies and gentlemen, here's my next question.
I bought this building for $350,000.
I sold it for $550,000.
One more time.
I bought it for $350,000.
I sold it for $550,000.
How much money did I make?
Anybody?
Depends how much you paid in interest for the for the time you had it on your loan.
>> [laughter] >> Yemi, what are you doing, man?
What are you doing? I was hoping someone I was hoping Yemi said it. I'm learning quick. I'm learning quick. [laughter] Li- listen.
>> We going to have to download it to him like Neo in the Matrix.
>> [laughter] >> In the chair.
>> [snorts] >> Just sit in the chair. So, so, so, Yemi, are you telling me you Are you telling me I didn't make $200,000 on that?
That I should be subtracting out the amount of interest I paid?
You got to deduct all your costs, your interests, uh any anything you haven't already deducted from maintenance, construction, any of that. Wow.
Isn't that something, ladies and gentlemen?
Once you get it, you cannot unsee it anymore. Isn't it Once you see it, you cannot unsee it.
But the bank has been successful, folks, in putting us in a mortgage matrix.
We are doing it their way and not seeing what's really happening in the world around us.
Because we have been taught to be inattentionally inattentionally blind. Meaning, you're blind to what you don't pay attention to. I pay attention to cash flow. I pay attention to purchasing the property right. I pay attention to rehabbing it correctly. I pay attention to renting it properly. I pay attention to um um selling it properly. I pay attention to trying to get the lowest interest rate possible.
But I don't pay attention to how much interest I paid during the time I own the building.
It's about time we stopped doing that.
If you're a real estate investor on a limited budget, start thinking like a bank.
Stop thinking like a consumer because we have all been led astray like sheep to the slaughter on this deal.
The banks are making Listen, do what you need to do on the front end. You get your You get your cash flow. You make your money and you pay taxes on it.
But let me tell you, please don't pay attention to what I'm getting ready to show you right here. Please don't pay attention to this because I'm going to lend you $350,000 and because you've been told, don't worry about how much interest you pay me.
Your true cost on purchasing this building is $881,000.
That's $350,000 that you borrowed that you have to pay back plus $530,000 in interest that you have to pay because you borrowed the money.
So, that 7 and 1/2% actually becomes 151.717%.
It wasn't 7% in the first place.
What anyone else would tell you or or label that as operating costs? There you go.
Ladies and gentlemen, interest paid needs to become part of operating costs. It needs to become part of the conversation just like any other part of the deal.
How much interest will you pay on this deal needs to be part of the deal.
You need to talk about it. You need to understand it.
And you need to mitigate it.
You need to cut the interest cost.
Now, can I Here's the big question.
Can I do everything I need to do with my income from these from my real estate portfolio to invest?
Can I continue to invest all that I intend to invest and save a ton of money in interest simultaneously?
What do you think, Yamil?
You think I could do that?
I think you're about to give us a solution.
>> [laughter] >> But, you know, here's the thing.
When real estate investors hear me, the first thing they hear is "You want to take my investment money and save interest with it."
That couldn't be further from the truth.
I don't want to touch any of your investment money.
Go ahead and invest everything you need to invest.
I don't want to touch that at all.
Let me give you an example of how you could do this thing.
And before we get out of here, how you can make a ton of money on both ends. You can make money Watch this now. You can make money through growing income.
You can make money through growing income.
Do you know how corporations also make money?
They make money by lowering expenses. Do they count that as made money, you meal?
I mean by lowering expenses, does that count?
Uh yes, cuz you're technically increasing revenue. Am I Or or profits rather. I'm increasing profits by lowering my expenses. I could Listen, I can increase profits by raising prices. I can you know, I can do a lot of things on the front end to increase profits, but am I also increasing profits by lowering expenses?
And the one expense that investors ignore is how much interest they pay. They're looking at the interest rate. Don't get me wrong. They look at the interest rate.
They look at the payments.
But, they're not looking at the total interest cost for the time that they're going to be in the deal.
If I intend to be in this deal just for 5 years, just for 5 years, and I do it the traditional way, If I do it the traditional way, after 60 months, I've paid out $127,000, almost $128,000 in interest just to pay this loan down by 18, almost $19,000. Not even quite $19,000. I have not paid This is how much equity I've been able to create with the tenants' money that they gave me. 19 Not even $19,000, but I've given away $120, almost $128,000 of the money that they gave me to accomplish this goal.
How can I do it better?
Every real estate investor I know that is that is good at this puts money aside for maintenance and repairs. Maintenance and repairs, you got to take care of your stuff.
You want to put cash aside to make a certain percentage of the rents you get so that you can take care of your building.
So, let's just say that that that this is just one of the buildings that this real estate investor has and it's cash flowing. They're They're making money on it.
And they have $50,000 in a reserve account that they take care of their buildings with. $50,000 in that reserve account.
Doesn't take long to add up, ladies and gentlemen, when you do it that way. You know, you you put a certain percentage away and you don't touch it because it's for a certain purpose.
It doesn't take long to to get it where you're where you need it to go. Okay?
Um you know, um if you take that money and say, "Okay, now how much am I putting in there per month?"
Out of my out of my uh out of my uh income, how much on average am I putting into that account every month? Let's just say I'm putting in $3,000 every month into that.
Okay? I'm putting it in there, $3,000 every month, and it's building up.
So, I'm going to give you a situation here on this loan, Yemi. I'm looking at this and I'm saying, "So, that because you're taking a certain amount of your rents and investing it in growing your portfolio.
All right, 10%, 20%, even 30% return on your money. Oh my goodness, you're you're you're making a killing over here on the front end.
Okay?
But on the back end, you're paying all all this interest. So, I'm going to point out to you, don't stop doing what you're doing over here on the front end, Yemi.
Don't stop doing that.
But also do this, add to it.
Increase your profits.
Okay? Increase your profits.
So, borrow some money from your reserve fund.
Let's just say I don't know.
Let's say $12,000.
Okay? I'll do $12,000, Yemi. $12,000.
And we're going to put it on this mortgage. I make my first payment, and then I'm going to take $12,000 from my bank account that's making 1/10 of 1% in interest.
Woohoo!
Have mercy, that's what I'm getting.
1/10 of 1%. I'm going to take $12,000 out and I'm going to apply it to principal on this loan. $12,000 knocks off this much.
I've just I'm now down I was at payment number one on my amortization schedule, Yamil. Now I'm down to payment number 41.
I've knocked off 40 payments I never have to make with that $12,000.
And I've saved over $86,000 in interest by doing that. Okay? So, do I Now, can I keep Do I want to keep depleting my reserve account, Yamil? Do I want to just keep taking money out of the reserve account and throwing it at the mortgage? Do I want to keep doing that?
No, you don't I mean, it's reserved for a reason, so you don't have some reserves.
>> Okay, got to have some reserves, okay?
So, if I took $12,000 out, then does it make sense Yeah, but I don't want to keep depleting it. Should I just build it back up again?
Uh this one I'm not sure about.
>> Okay, my reserve account. I want to build it back up again, don't I?
Yes.
>> sure, yes.
>> Okay. So, Brenda says yes. So, how much am I putting in every I'm putting $3,000 in every month. How long is it going to take me How long is it going to take me to build my account back up to 50 grand at $3,000 a month?
4 months. 4 months. So, in the next 4 months, I'm just going to pay minimum payments on this loan.
Okay? That's month 42, month 43, 44, 45. Okay? So, I'm down to 41. That's 1 2 3 4. Now, now that I'm here, I built my my um account back up to 50 grand.
Could I take another $12,000 out and apply it to this loan?
>> [snorts] >> Yes. Brenda says yes. You mail, what do you say? Meow, meow, meow. Meow says listen, he says now you're on fire. I can tell So if I do that, if I do that, I can knock off un- about another three and a half years.
Okay? So that'd be four Let's see.
Um that's four from the bottom. That's one, two, three and a half years. Now I'm way down here, you mail.
Okay? Now how long did it take me to get there? Okay? How long did it take me to get here on this on on this loan?
It took me so where I could oh, $32,000.
I paid one month and then I put $12,000 on.
Okay? And then I paid four more months, right? Paid four more months. So that's five months total. Got five months total.
And then I put another 12,000 on to bring me down to here.
I got $32,000 paid on this loan, but it didn't cost me anywhere near the $192,000 the bank would have charged me to get here.
Ladies and gentlemen, does this make sense to you?
Okay?
I've just paid I've just paid like let's see here. Okay?
A to to get to get here, it cost me less than $10,000 interest to get here.
Are you hearing me?
Normally it would cost me $192,000 interest to get here, but I got here for less than $10,000 in interest.
L- ladies and gentlemen, that's $180,000 in interest saved already to get to the same point in this amortization schedule.
Why aren't real estate investors seeing this? Why aren't bankers seeing this?
Why aren't real estate in uh real estate agents seeing this? Why doesn't the world see this? Because we're taught to ignore it. I could get here with less than $10,000 interest.
But the real estate investors, the seasoned real estate investors say, "Don't worry about that, Don.
Keep giving the money to the bank cuz it's cheap money."
Give them $192,000 to get here over 70-some months.
Okay? That's 84 I'm sorry, 84 months.
That's 7 years.
So, over 7 and 1/2 years it would take me to get here and I did it in 6 months.
I'm compressing 7 and 1/2 years to 6 months time.
I'm taking less than $10,000 of the rents that I've I've been given to save $180,000 in interest I don't have to spend.
If you're investing on a limited budget, you need to pay attention to what we just talked about.
And take your limited budget and learn how to gain equity faster and cheaper by using your spare change.
So, this folks, just give me the spare change.
Take your major money and keep investing it.
But don't sleep on this.
Don't sleep on the amount of interest you're paying. So, if I can save in this amount of time, if I don't do anything else, if I don't do anything else, if I just make the minimum payment on this loan, I have just reduced my interest cost on this loan by a hundred and eighty thousand dollars.
If I don't do anything else, that's a hundred eighty thousand dollars I don't have to spend over here, give to the bank, that I could invest somewhere else long-term and make compound interest on that for the next ten, twenty, or even thirty years.
We're talking about millions of dollars for you because you didn't spend it in interest.
I can't Listen, I will not give up until everybody can see this and understand it for what is really going on in borrowing this money.
Borrow it cheaper, gain equity faster, cash out refi ten to fifteen years sooner, and start the process all over again.
Because of money you're not spending on interest. I will not quit until all until everybody understands this. See, here's what I need you all to do. I need you all to share this information. Today, today, all right?
I'm I'm putting a link I'm putting a link into the chat right now.
Okay? I'm putting a link in the chat.
Hold on. Let me get to my notes. Do do do da. All right. I'm putting at the top of the screen. Putting at the top of the screen. Copy.
And we're putting at the top of the screen. Here we go.
Pin the link.
There we are.
All right. If you're not an affiliate with The Pill Method, become an affiliate now. We're doing our very first affiliate training this Tuesday.
Okay? Our very first affiliate training this Tuesday, and here's the link. If you're already an affiliate with us, these emails are going to start today.
They're starting today.
Um and if you miss the email, click this link and sign up for Tuesday night's affiliate training. The affiliate training Tuesday night. Okay? Get it?
Okay?
So, Daytripper says, "What a blessing this info is." I'm also going to take and put it in here in the comments section. Okay?
This is the the the pill method affiliate masterclass.
This is our very first masterclass on helping people to understand what's going on so that it's the affiliate training so that you can get people help people to save this kind of money.
And also make this kind of money. You can make anywhere from $300 to $3,000 by becoming an affiliate.
Become an affiliate for free.
Okay, question? Somebody got something to say?
Um I'm just going to jump in here real quick. First of all, um boom as usual. But I am already an affiliate email. Um just a quick shout-out to email. I like him. That's why I followed him because he's a listener and a learner. And he's didn't come up here to try to be a boss. So, I like him. That's why I followed him. But um I am an affiliate. Everyone that is in the room, everyone that's in the listening lounge, everyone under the sound under the sound of his voice, please take the time. It is interesting interesting how when Moses was in the desert, he saw something burning. He saw something burning. It It a burning bush.
it didn't make sense to him. And then he said, "I will turn aside to go see this great sight. Let me Let me look a little closer. Let me see what this is. I I don't I don't really understand it. This isn't supposed to be happening. I learned that when you set a bush on fire, it's completely consumed, but this bush is not burning. Let me get in here and see why it's not being consumed. So, I want to encourage everyone to go turn aside, take a look, take a little closer look. It's not going to cost you anything to look closer. It's not going to cost you anything to inquire. If you have a question, whether you agree or you don't agree, the floor is open.
Come up to the stage, open your mic if you're thinking, if you're lingering, if you're on the fence.
The Listen, there are a lot of things that we learned just growing up in our household, as children, within our culture. And then one day, click, the light came on, and we found out there's no Santa Claus.
There's no Easter Bunny. There's no, you know, whatever it was.
You shall know the truth, and the truth shall make you free. So, turn aside, check this out, and I promise you, your the trajectory of your life will change. The way that you do business will change. The way that you see numbers will change. The one thing about numbers, it does not lie. When you open your eyes, again, we talked about inattentive blindness. It's like you see it, but you don't see it.
You cannot unsqueeze toothpaste.
You saw it.
So, get a little closer, get some more information, especially become an affiliate, so that when you tell your friends and them, then you can be handsomely rewarded. So, with that, I am going to yield. And thank you, Emil, for your humility. Um thank you, Brenda.
Thank you, everyone who's who's on the stage. And And that is down in the listening lounge. But if you want to come up and ask your question, I believe the room is going to close soon. Um click the link um while you have the opportunity. And uh And let's see why this why this boost is not being consumed. I'm good. [laughter] And with that, I yield. Thank you so much. Listen, if you want to become if you want to become um a an affiliate, it's free. To become an affiliate, it's free, okay? Go to ice10k.com, i c e the number 10 the letter k dot com, and you can sign up for free. I'm going to put it on the screen here. I'm actually Kurt, I'm just going to share this on the screen. So, I'm going to go through the process right now. Um ice10k dot com, I'm putting it on my screen to share.
Okay? There it is, ladies and gentlemen.
All right? If you go here and you can see um become an affiliate is right here. All right? When you go to ice10k.com, you become an affiliate, you click here, and then you put in your name, your phone number, and your email, and how you want to get paid. It is just that simple, and you are a pill method affiliate. ice10k.com to become a pill method affiliate. And um I'm I'm telling you because we can't get you into the system soon enough so that you can get the emails if you're not already an affiliate, okay? Then you can go to the link that I've put in the chat in the comment section, and you can actually sign up for the training Tuesday night. And it's going to be recorded, and all of you who register will be able to get the recording. All of you that register will be able to get the recording.
And the affiliate training is only $24.95.
That's it. $24.95.
But when you And And listen, you don't have to sell anything. We're not going to teach you how to sell it. All I'm going to do is teach you the various ways to find How to find interested individuals, get them over to the YouTube channel, let them watch those YouTube videos for 2 days, and then after that you follow up with them and if they're still interested, then you come over here to the same card re- uh icedink.com and click on refer a friend.
And you fill this information out. When you're putting their information in, their their name, their phone number, their email address, their zip code, and your phone your name and your phone number as the one who referred them, and you can give me a little bit more information if you want to about the situation, and then submit it.
Once that's been submitted, then once that person, if they make over if they have over $100,000 $100,000 in debt or more, we will pay you $300 when they become a client.
Send us a second one in the same month, we'll pay you $400 for that one. That's a total of $700.
You send us a third one, we'll pay you $500 for that one. If you send us a fourth one in the same month, we'll pay you $600 for that one.
And you send us a fifth one in the same month, we'll send we'll pay you $1,200 for that one.
That's a total of $3,000 a month for learning how to find individuals re- then direct them to the YouTube channel and then follow up with them and see if they want to know more information and then filling this card out and sending it in.
Don't sell anything. Don't answer any questions. We're going to go over all of the details on how this can get done because I can't get the information out by myself. I need your help. So, become an affiliate.
Get this link.
Now, some people ask me, "What about sales training, Don?" Well, if you get into sales training then you could you can make a a much much larger commission.
Okay? A much larger commission.
But, sales training costs $1,500.
Sales training costs $1,500 and it takes and it takes months to graduate because you want to you want to be able to explain it >> [laughter] >> like I'm explaining the pill method.
Okay? But, an affiliate is only $24.95.
And all you have to do is direct people to a YouTube channel and follow up with them.
Simple.
Simple.
And it doesn't cost 1,500 bucks for training.
Okay? So, do this and you will do well.
All right? So, get become an affiliate and take this link so that you can now sign up for Tuesday night program. All right? We're going to Listen, this isn't going to be right now. We're going to see how many affiliates we already have.
We're going to see how many show up and uh depending on how many show up will will when we'll do the next affiliate training, okay? So, don't count on don't count on it. Listen, even if Now, I would prefer that if you sign up you would be there.
But for some reason if you can't because if you're cuz this is going to be a Zoom meeting.
We'll be able to interact. You'll be able to ask questions if you're there.
But even if you can't be there sign up anyway. You can get the recording.
If you can't be there, sign up to get the recording. So, ladies and gentlemen, we're coming to the end of our show. I hope that this has been beneficial to you. That we've showed you how to save thousands of dollars in just a few months on how to invest in your real estate and get a great ROI, all right? But if you feel that there's something else going on here, that there's something that people need and they they need become an affiliate with us and help them to find it as well.
But if you are a homeowner or a home buyer or an investor and you want to know the month, day, and year you could be debt free or how soon you can cash out refi, how you can benefit from the pill method, then go to ice10k.com, ice10k.com and get a savings and earnings report.
Okay? I'm putting it in the chat. ice that's i c e the number 10 and the letter k.com All right? I'm putting it in the chat.
Boom.
Is that savings and earnings report still free? The savings and earnings report is still free.
It's still free. You can know the month, day, and year. Yep.
You can know the month >> y'all. Free 99.
>> [laughter] >> Free 99. You can get You can learn the month, day, and year. You could be debt free. How much interest you could save.
And if you're real estate investor, how much interest you can save while getting to cash out refi 10 to 15 years sooner, so you can get your money out of the deal and start the process all over again.
And we can do it with your spare change.
We don't want to touch a dime of the money that you've already earmarked for investing immediately. We don't want to touch that at all. So, So, get your savings and earnings report, and then get a And then my staff My staff will then take that information and then set you up with a consultation.
Now, here's the thing.
When you're putting in your cell phone number to confirm, make sure that there's no spaces. We're supplying you with the plus one. Put your cell phone number right up against that plus one.
No dots, no dashes. Hit the confirm button. We're going to confirm that information, okay?
And then once you do that, we're going to send you a code as a text message.
Go to your text messages, get that code, put it back into the website, all right?
And then um you'll see that your number has been verified. You are not a robot.
You're a real person. And then click on yes, I want to save. That will let you into the financial form. Fill it out.
Fill it out. And get your savings and earnings report for free.
All right? Get your savings and earnings report for free. My staff will give you a call to confirm the information.
If your information is not confirmed, you will not get a savings and earnings report. Okay? We have to confirm that the information is correct before we can send it out. All right? So, you're going to get a phone call.
Just let us know what time was best to call you. We'll call you to confirm that information, and you can know the month, day, and year you could be debt free.
And we'll send you the um your your savings and earnings report.
Now, if you want, you could also get a consultation to see how you can have our program long-term.
You can become a lifetime member of the Pill Method family. We'll talk to you about that as well, if that's something that you want. But if all you want is the free um savings report, you can do that.
There's no strings attached. All right, ladies and gentlemen, the next thing the last thing we're going to talk about is um the book.
Get the book today. Start If you want If you want to become If you want to become a great great great um uh an affiliate or an advocate, get the book.
Go to Go to ice10k.com today and order the book.
This will help you in understanding what's happening with everything. Not only that, but when you have confidence from reading and watching the videos, when you have confidence, people know that you're confident in what you're talking about.
So, confidence in an affiliate is important.
To understand this. Now, do you need to explain it? No.
But do you need to understand it? Do you need to believe in it to help people to become part of our um Pill Method family? Yeah.
It'll be very helpful. You'll be able to bless a lot of people this way.
So, get the savings and earnings report, get the book, become an affiliate, and sign up for Tuesday's training. Get the link right now and sign up for Tuesday's training. So, ladies and gentlemen, that's it for today. All right, we're out of here. Thank you so very much for watching this. Let's hear from Dr. Eric Thomas and we'll say goodbye until Sunday. We're going to be going over a Biden's um uh student loan forgiveness program on Sunday. See you Sunday. Bye-bye.
Listen to me, y'all. But one of his mentees took us through one of their programs and I paid off my mortgage. But guess what happened?
My marriage went to a whole 'nother level. And you know why? Cuz my wife is a security freak. And even when I blew up, my wife would be like, "Oh, you blew up, but how long is you going to keep making this kind of money?" I was like, "I don't know, forever."
She like, "You sure?"
Cuz I'mma keep my licenses in merch just in case you don't.
So, when I paid the house off, my boy was like, "You ain't got to do that. You can do this." But when I paid the house off using that program, it took the stress level all the way down from my wife cuz we no longer had a mortgage.
Does that make sense? That thing that was coming every month that was getting on our nerves, we didn't have that no more. And so, she was at rest.
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