Thanks Mc John McNelli, was an interesting meeting you gave at those moment and looking it today give me good tips and helpful things. Thank you so much.
17:40 - not enough risk in the deal to warrant a 50/50 deal. I do not follow - if there is less risk for investor why would he take 80-90% then? It should be the opposite - more risk in the deal, money guy gets bigger split. Less risk - money guy gets smaller split. Can someone explain that part? Thanks
tom jens the example he uses is lower risk but because it’s not a true development but just a minor rehab, the profit margins are too small to elicit a 50/50 split e.g. investor puts up $1m and only gets $20k return on that small project
Not enough RELATIVE risk on the developer side. E.g. sweat equity = "execution risk". Finance partner has the same financial risk ($1m) whether it's built from scratch or bought as a completed building, but execution risk is nil when the building is already completed, so RELATIVE risk is much lower on the developer side here and so a 50/50 split doesn't make sense.
He is saying that if there is no risk, then they know they can bully you into getting more of YOUR profit. If you know you can make 500k with very little risk, you are just as likely to accept making only 400k. And you know the money guy has the yes or no on whether anyone makes any money. So the money guy should try to talk you into a paycut, knowing that you will find it hard to walk away from guaranteed money.
I like that line “He Who does with the most toys, still dies” that’s how I think I just need a couple of million net worth and and enough cash flow to pay my bills and leisure
Yep 100%. You can learn alot from books, but you have to actually do it in the field. Only thing about the GC license is some states gatekeep. They set it up to where someone else has to sign off on your application. Your path to success is reliant on someone deciding to sign off for you.
seats in the front guys
John, appreciate all of your insights into the development industry. Your book was fantastic as well!
Making it in Real Estate - Starting out as a Developer
37:40 "soon, interest rates, in 5 or 10 years, are gonna kill you" -2013 writing this in 2024.
Thanks Mc John McNelli, was an interesting meeting you gave at those moment and looking it today give me good tips and helpful things. Thank you so much.
Thank you John! Great tips and love the book!
I'd like to see a video about the sale of Tax Exempt Bonds / Tax Credits as part of the capital stack.
Very informative
Thanks for sharing!
Anyone want to start an accountability and learning group???
I’m in
Same
Thank you 😊
what was the magazine he advised people to sign up to that was upwards of 1k+ subscription
any mentors looking to help an old man get into development?
17:40 - not enough risk in the deal to warrant a 50/50 deal. I do not follow - if there is less risk for investor why would he take 80-90% then? It should be the opposite - more risk in the deal, money guy gets bigger split. Less risk - money guy gets smaller split. Can someone explain that part? Thanks
tom jens the example he uses is lower risk but because it’s not a true development but just a minor rehab, the profit margins are too small to elicit a 50/50 split e.g. investor puts up $1m and only gets $20k return on that small project
Not enough RELATIVE risk on the developer side. E.g. sweat equity = "execution risk". Finance partner has the same financial risk ($1m) whether it's built from scratch or bought as a completed building, but execution risk is nil when the building is already completed, so RELATIVE risk is much lower on the developer side here and so a 50/50 split doesn't make sense.
He is saying that if there is no risk, then they know they can bully you into getting more of YOUR profit. If you know you can make 500k with very little risk, you are just as likely to accept making only 400k. And you know the money guy has the yes or no on whether anyone makes any money. So the money guy should try to talk you into a paycut, knowing that you will find it hard to walk away from guaranteed money.
thank you
Stockton, CA? Nice.
I like that line “He Who does with the most toys, still dies” that’s how I think I just need a couple of million net worth and and enough cash flow to pay my bills and leisure
This guy is a legend
I have the powerrrre--he man!
what was the name of the lender you called out?
+Ryan Cohen george marcus
Nile Niami at 10:50
cool hair has it like he -man
39:29
Vice minister of hisoka and killua abuser2.
But you charge $395-550 for the same current online course
to learn development without a bachelors or masters is get into the trade and get your generals contractors license ...bust your ass
what the hair!!
Yep 100%. You can learn alot from books, but you have to actually do it in the field. Only thing about the GC license is some states gatekeep. They set it up to where someone else has to sign off on your application. Your path to success is reliant on someone deciding to sign off for you.
He is so hot. Damn man