The Art of Private Lending with Mitch Stephen
“As long as you've done your assessment of that real estate that you have as collateral well and so not only do you get to choose what you want to make to a degree, you get to choose your level of risk.”
Mitch Stephen has purchased well over 2,000 houses in and around his hometown of San Antonio, TX. Today he specializes in owner financing properties to individuals left behind by traditional lending institutions and giving new life to properties that scar the neighborhoods.
He has perfected a method of achieving cash flow without having to be a landlord and without having to rehab properties. He’s mastered the art of raising private money and the classic “Nothing Down” deal.
Watch the episode here
Brett:
I’m excited about our next guest. In fact, he's a repeat guest. He's a self-made creative real estate investor entrepreneur who has perfected a method of achieving cash flow, without having to be a landlord and expert in breaking down two-plus decades of experience and explaining the logic behind the art of creative real estate investing and how private money changes everything, and so much more. He has sold and bought, and over 1000 houses, and he's out of the great state of Texas, please welcome show with me, Mitch Stephen. Mitch, how are you doing, sir?
Mitch:
The title of My Life in 1000 Houses was some 2008. It should be like my life in 2500 houses, but who's counting, Brett? Who's counting?
Brett:
When you're in that hall of fame $1,000, 1000 transaction in the above, it's who is counting, because there's not too many that are, that are at that level, Mitch, which is pretty incredible. to have only done it and just over 20 years, it's incredible over 2000 houses flipped, or maybe that's 2500. But you also have a passion for teaching others how to do this as well. They can get some freedom. Would you just maybe give our listeners a little bit about that story, that inspiration, and kind of your current focus right now?
Mitch:
At some point, and I know it sounds cliche, and if you're not there yet, then it sounds ridiculous. But money loses its luster to a degree, and you have to have a higher reason to keep forging forward and to stay engaged, and to make the game worth it. Today, like Dale Ramsey, he does the primal scream, when people get debt-free, we ring the bell around my office when I help someone quit their job, because they've replaced that income with some cash flow, that they've originated somewhere that's going to come in come hell or high water for months, and months and months. The reason why that's important is that it clears up 2600 hours for that individual who does not have to have a job now. That they can become the person that they're supposed to become, and go on and do what they really need to do, no matter what that is, take more time with a family or charity, or whatever it is you want to do whatever you're supposed to be, you can get your 10,000 hours now pretty quick, because you just freed up 2600 hours because you don't need to show up at a job anymore. That's my calling.
Brett:
I love how you connect the transformation from the talent that you've achieved and the experience you've achieved. you're giving back to make a difference. part of what I call the success of the fulfillment formula, which is knowing that unique gift timing it by maximizing the potential of that gift, which part of that is you got to get that 10,000 hours in and how do you do that? Well, you got to figure out a way to get your finances and your money working for you, and as much of a passive way as possible, and then go into impact other people. when you put all those together, it's an absolute transformation for yourself and your fulfillment. I think what I believe is the God-given reason we were put on this earth to make a difference in other people's lives. I want you to help our listeners, Mitch, go back to your high school days. Go back to when you're younger Mitch. I believe we'd been given a couple of gifts, one or two types could be more, but maybe one of those one or two gifts that you believe you were given, and has it helped how you help and bless people today?
Mitch:
Well, the obvious gift was I was given a great set of parents. We weren't rich, but we didn't know it. We didn't know we were poor. We were happy. Then they introduced me, my to my God, and Jesus Christ. that's probably the biggest gift of all, but it came from a set of good parents. then after that, I got a work ethic. I was led into athletics where I learned to get hit hard and get knocked down and get back up. I just had a great compass, from those things, from my coaches to my parents to my Christianity, not by saying any stretch of the imagination that I'm perfect or anywhere close but at least I know right from wrong. It's important to me.
Brett:
It's fantastic. Having great parents having great faith, and having a great work ethic, if you can have those three things, the sky's the limit, which is kind of hard to beat. I kind of have to be right when you've been given those gifts. That's beautiful, Mitch, thanks for sharing that. We're gonna dive right into the topic at hand, which is the art of private lending. Mitch, what's the best secret when it comes to the art of private lending?
Mitch:
I just came out with a new book, The Art of Private Lending. I wrote it with my partner, Mike Powell. I have a podcast as well. The goal of my podcast is to help people find that their financial independence as I described before so that they can free up that 2600 hours. to get to that freedom number is not being wealthy, it has nothing to do with being wealthy. It’s just like what do you make it your job? And if you're making ends meet, and you have a job, what does it take to replace that number, whether it be $3,000 a month, or $4,500 a month, or 8000 a month, whatever it is, what do you get to do, to take control of your own life in your own financial future, and replace that job with something. I think one of the things that you can do is you can lend your own money or begin to lend your own money. because it doesn't matter to me how you get financially free, you want to learn how to buy houses with OPM or other people's money and seller finance on 30-year notes as I do. Then talk to me about that, I'll help you do that. But if you want to do something completely different, maybe you're an Amazon reseller, or I don't care what you do Bitcoin, cryptocurrency, whatever you're good at. Let's just, let's just work to get you financially free. The Art of Private Lending is two-fold, it's a two-fold book. One is, if you want to go out and make 14,15, 16, 17 18% return, then you can study this book, I'll spell it out to you how you loan other real estate investors money.
But do it in such a way that you're protected, that you have a real piece of collateral that's backed up with a real set of documents, that if they don't pay you, you can ultimately end up with the collateral, and save yourself from loss. quite potentially set yourself up for a great game, if, if things go the way they're supposed to, and you've done what you're supposed to do. But in order to make those kinds of returns, you have to roll up your sleeves, and you have to become knowledgeable about your expertise in this department. then you're gonna have to go to work because you have to find clients who are going to have to look at collateral and you have to size it up to decide whether you want to loan X amount of money against this building or against this house because you want to know what that house is worth compared to what you're loaning. Or if you retired, or you already have a full-time business that keeps you occupied, that you're making your extra money with your residual money, then there's a passive way to do it. that way is to loan the money to someone like me so that I can do everything I told you to need to do in this book for you and with you. you can remain passive.
You won't make 16 18% But you can make eight or nine or 10. that's a pretty good premium interest rate or rate of return for a very passive investment that has real collateral in the background as security. That's what the books are about, it's to help people get financially free on their own if they want to start a business or and the cool thing about loaning money is how much money do you need to start a loan Your Money Business, I don't know, if you only have 100 bucks, you can loan out 100 bucks on something and get paid a premium and just start to grow from whatever amount you have. that's quite different than a lot of businesses because a lot of businesses it's going to take some real capital to get up and off the ground. I wish I'd known about loaning money, starting in high school because I'm sure I could loan some money to some kids in high school and have been way ahead by the time I got out.
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