Unlock Passive Income: The Evolution of Real Estate Lending

Mike Hambright (00:00.917)
Hey everybody, welcome back to the show. Today we’re going to be talking about how to be the bank, how to be a lender. That’s usually the people that make all the money or sometimes they do, but they not necessarily, there’s no guarantees in life, but we’re going to be talking with my buddy, Neil Timmins, who has a lot of experience as a real estate investor, veteran real estate investor. We’ve been friends for quite a while now and has primarily focused on lending now. So Neil, welcome to the show.

Neil Timmins (00:24.742)
Mike, it’s good to see you, man. It’s been too long since we’ve…

Mike Hambright (00:27.763)
We were just talking about dates. was like, gosh dang, has it been that long? and it doesn’t feel like it, but I guess the days start moving faster when you start getting older, I guess. I don’t know. Yeah. So, so you’re out of the Des Moines area and Des Moines, Iowa that is, for those that don’t know that Des Moines is in Iowa, I guess. And I grew up, it’s kind of, have, and I have a little bit of a common thread here in that I grew up about, I guess about three hours from there, I guess, right on the Illinois side of the, right on the border of Iowa.

Neil Timmins (00:35.852)
That is the truth. Yes. Yeah.

Neil Timmins (00:44.49)
That’s Yeah.

Mike Hambright (00:57.917)
So it’s a small world up there. I feel like we’re basically neighbors. We were neighbors.

Neil Timmins (01:02.51)
You’re totally right. Yeah, just a stone’s throw from here, right? In Iowa world, that’s just down the road, Yeah.

Mike Hambright (01:08.565)
That’s right. That’s right. So and now I’m kind of just down the road in Dallas, but it’s one road. It’s 35. We could just go all the way down. It’s just about 10 or 12 hours down the road. Yeah. So I want to learn a little bit about your background and have you share that with folks. And you’ve kind of evolved to basically kind of be in the bank now. And, know, they always use this analogy of like, well,

Neil Timmins (01:14.958)
It is one road, yes, you’re totally right.

Neil Timmins (01:22.026)
Yeah, I was gonna say, yes, exactly, right.

Mike Hambright (01:35.625)
The biggest and prettiest and most expensive buildings in town are the banks, right? And so I think a lot of folks, you’ve done a lot of things and then ultimately you just said, well, why not be the bank? Because they’re the ones at the top of the food pyramid, if you will. I think you said that a minute ago. But tell us your background and kind of how you got to this point, I guess.

Neil Timmins (01:54.446)
Yeah, 21 years ago, you talk about time flying, 20 or 100 years ago, I started as an agent, as a realtor, hawking houses, selling houses in 2004. So unbelievable when I think back to it, because I can still, I still remember the first, very first few days there, getting into the world, coming out of banking, actually, I worked for Wells Fargo for a couple of years and then got into real estate.

My mom had her real estate ahead of me. She did so well her first year. She made twice what I made when I was working at Wells Fargo. I thought, well, darn, if mom could do that, I can do better. So got into real estate. If you’ve been a, I’m sure you’ve experienced it over your lifetime. You get to a place, you’re like, this place just fits, right? This is home. And that’s what real estate was for me. Killed it rookie of the year. And then, within five years as a number one remax agent in Iowa.

Mike Hambright (02:37.653)
Yep. Yep.

Neil Timmins (02:44.118)
So I brokered a few thousand of those in Central Iowa over my career there. And then at some point you make some dollars and it’s kind of got to work in real estate for me was the obvious answer. And so started fixing and flipping. Had to learn that, right? Because all I did was observe it from the outside. So they don’t teach you a lot in realtor schools, right?

Mike Hambright (03:07.443)
Right. They don’t teach you that in realtor school.

Neil Timmins (03:13.898)
And so yeah, had to learn that. So go through it, make some mistakes, then figure I can shortcut it and pay to learn some things and not have to learn it on the street, join fuel. And that’s how we got to know each other over the years. Maybe the best, arguably the best group that exists out there for somebody. And so, no, I know I’m indebted to you and then so many friends that have come out of that over the years. So, know.

Mike Hambright (03:33.621)
Hey, I didn’t even pay you to say that.

Neil Timmins (03:40.906)
You don’t have to ask me to say it, I’d say it behind your back, because I think it’s, yeah, absolutely. It’s just a fantastic place. And so went on and learned a ton, right? So fixing flipped hundreds over the years and I’ve done everything in that world. Assignments, double closes, novations, I mean, the whole nine, and then eventually morphed into the commercial side. So again, it was like, just like monopoly, right? Get all the houses and the houses turn into the hotels, right? And so.

Mike Hambright (03:43.837)
I appreciate that man. Yeah.

Mike Hambright (04:06.933)
There you go.

Neil Timmins (04:09.262)
For me that ended up, I love Des Moines, so ended up with a whole bunch of various asset classes here in town, industrial retail, way on self storage in another city, mobile home parks, mean office, which the small office has been fantastic here for us, just love that little segment for what we’ve got. And then off and on with the earth, so I’d wholesale the guys and you can go pull the archives of fuel because

Mike Hambright (04:27.669)
That’s great.

Neil Timmins (04:38.798)
this is where I started doing this back in that era. So we’re talking about 2019, maybe 2020, somewhere in that range. I’d wholesale stuff and I’d sell it guys on contract. Guys would go, cool, I’ll buy it, but I need money. And so that’s what I would do. Sell it to them on contract, be the bank in that regards. And so I’d always lend money to guys off and on over a period of, I don’t know, three, four, five years. And then about 18 months ago or so, we were sitting on the office and I was going, you know what?

Mike Hambright (04:57.161)
Yep.

Neil Timmins (05:07.982)
Let’s go lend some more money. So let’s create a brand, Little Guy Loans, which tongue in cheek, I’m almost six and a half feet tall, so it’s always funny coming out of Yeah, yeah, it’s always funny coming out of my mouth. You better believe it, man. Yeah, hey, we’re not Wall Street. We’re the guys who are competing against that, trying to get, just trying to stack dollars for all of us to win in this game. And so,

Mike Hambright (05:16.757)
Right. I didn’t say anything about that, I was like, little guy, that’s not you. Which you’re supporting the little guy, Yeah.

Mike Hambright (05:33.033)
Yeah. Yeah.

Neil Timmins (05:37.81)
have done that, built a business around it and it has been absolutely fantastic and we continue to grow. So now we’re expanding down to Kansas City and so really looking forward to the growth and trajectory that we’ve got inside that business really to help support the local investor.

Mike Hambright (05:54.015)
Yeah. So let’s let’s talk about you just the kind of evolution like and I think you know you’re what is Des Moines like maybe half a million or four hundred thousand.

Neil Timmins (06:04.395)
They call, yeah, I think Des Moines, I think it’s fair at about 450 to 500. They call the MSA 700, but you’re stretching like 40 miles to start picking up, yeah, that’s a stretch. So 450, 500, yeah.

Mike Hambright (06:12.167)
All right. Yeah. Do you think I mean, honestly, almost every real estate investor I know has not stayed focused and they start doing other things and dabbling and other things. Your market is not super small. I mean, we I know plenty of people in smaller markets. But do you think that the size of that market caused you to have to kind of like change into other things and be a little more broad in your approach to kind of real estate because

Neil Timmins (06:26.668)
Yeah.

Neil Timmins (06:35.829)
Yeah. Dude, it was like 2018, 2019, Yeah, I got a few, right? And you can echo this. You talk about it, you’re in a major market. You’d be going, hey, you got to make 20 offers to get a deal. I mean, that’s what it’s going to take, right? You got to go out there, you got to turn release, you got to get 21 offers. And I’d still review my numbers. You know what my numbers were? I got to make three offers to get a deal. And the deals were great. It wasn’t like I was razor thin.

Mike Hambright (06:59.431)
wow.

Neil Timmins (07:03.618)
But I run out of people real quick on who to talk to because there just wasn’t that many. In a month, I couldn’t make 20 offers because 20 people didn’t exist. So at some point, especially coming from the world as being a real estate agent, was 2010. I had a small team. We sold 210 homes. I was accustomed to doing series volume. And so when you come on the investor side flipping homes, which we did a whole bunch, we could always take more.

Mike Hambright (07:06.474)
Yeah.

Mike Hambright (07:12.873)
Yeah.

Mike Hambright (07:32.893)
Yeah, yeah, yeah, yeah. So you.

Neil Timmins (07:35.532)
That probably led to that to go, cool, what else can we do? Can you stack additional rentals? Can we buy an apartment? Can we buy a warehouse? Whatever it may be.

Mike Hambright (07:39.166)
Right.

Mike Hambright (07:47.133)
Yeah. Yeah. And I was just telling you like, you know, just

that we’ve kind of broadened real investor fuel out to not just be so single family based, be more of the real estate entrepreneur, because there’s a lot of real estate investors that dabble in other things or are testing other things or trying other things. Or maybe it’s a part of their business there. And obviously, more and more common is they’re an agent and an investor, because in more and more states, you have to be or it’s coming. So why not do that as well? And with all the inflation and stuff like that, I mean, even a lot of listing commissions are

Neil Timmins (07:54.765)
Sure.

Mike Hambright (08:21.047)
are not too far off from a traditional wholesale fee, Yeah, yeah. Yeah, yeah.

Neil Timmins (08:24.718)
Yeah, they’re getting they’re squeezed dramatically that that that landscape has changed forever

Mike Hambright (08:30.153)
Yeah, yeah, for sure. So if you talk about kind of being being the bank, like, let’s talk a little about the, I guess.

Part of you doing it is it was just an evolutionary thing of like, I’ve done all these other things and I’m kind of already doing this. So why not lean into it because it’s an opportunity. You’re very well connected because it’s a relatively smaller market. And so you’ve already, I told you that we’re thinking about starting a hard money business and I don’t want to, could I go be one of the major players in DFW? Probably, but I don’t really wanna do that. I just want to keep some money busy and.

you know, do it in a way to where it’s a nice side hustle, but it’s not like, the problem is, I don’t need any more like major hustles because I’ve got too much going on. But it’s a good business. Ultimately, it’s an evolutionary thing, I think, where you get to the point where you’re like, hey, I’ve got some money. And so why not put it to work this way?

Neil Timmins (09:14.574)
You gotta, yeah.

Neil Timmins (09:23.63)
I’ve got some money, where’s it gonna go? I mean, I would buy, I’d buy the next commercial deal all day long, but I’m, you know, we still have like our underwriting standards from three years ago, five years ago, they didn’t change. And then so, what we’ve seen over a period of time is that, you know, interest rates have gone up dramatically and cap rates have gone up, but not at the same, not at a step lock fashion. And so oftentimes you can go buy, you can go borrow it, make up a number, borrow it seven and I can invest it at seven.

Mike Hambright (09:30.483)
Yeah.

Neil Timmins (09:52.766)
on a seven cap basis. Well, that doesn’t make any sense to me. I’ve got to take on risk and I don’t get any yield over what I have to borrow at. And so there’s other places to put capital. Yeah.

Mike Hambright (09:58.931)
Right. Yep.

Yeah, yeah, for sure. And with a from a lending standpoint, that is actually my exact situation. I have a lot of money out in multifamily deals and they’re starting to come back and there’s there’s no other deals to put it into. I’m like, I could put it in the stock market. I don’t really like that. But, you know, it’s a thing. is a thing. Or I could lend it, you know, or, you know, that’s

legitimately realistic opportunity for us. So but there’s also a lifestyle component of that too, right? I mean, the lending business is a little bit easier lifestyle was I think, then then certainly then rehabbing and probably even then wholesaling. Would you say that? Yeah. Yeah, yeah. Talk about that. Talk about the importance of that in your kind of career of like, because at some point you just get tired of hustling to right.

Neil Timmins (10:27.726)
do this. Sure.

Neil Timmins (10:34.446)
Correct.

Neil Timmins (10:38.606)
100 % yes. There’s no way around it. Yes. Yeah, you’re not kidding.

Neil Timmins (10:49.334)
Yeah, well for us, yeah, yeah. Yeah, from the grind of flipping, if that world managing the contractors, I that’s a different space. To the spot where, for us it’s a different hustle because if you know me, there’s no retirement that’s ever gonna take place in my world. It’s just we’re gonna do something else and get it to match. It may look a little different from a nine to five standpoint, right? During the working hours, but for us it’s

Mike Hambright (11:15.849)
Right.

Neil Timmins (11:18.144)
It’s going cool, let’s build this business and let’s continue to, you we’ve served investors here locally tremendously, can we go to another place? And that’s where we’re headed to Kansas City. But yes, what you know, what you don’t get is you’re not getting a call. I mean, how many calls have I’ve had everything happen in the, the, you know, management of property for the stuff we’ve owned to the stuff we flip.

people breaking in, people stealing stuff, people vandalizing stuff, had a house lit on fire. I’ve had tenants die in properties. I’ve had a tenant murdered in a property. I’m not in the hood here. That’s a random one. First one in the suburb, first murder ever took place in the suburb in 28 years. I’ve had insane stuff happen through the ownership of property. You’re not getting those phone calls, right?

Mike Hambright (12:08.703)
Yeah, it might be happening in houses that you’re a lender on, but you don’t even know about it, nor do you need to know. I mean, you might want to know if it burns down, but there’s insurance for that.

Neil Timmins (12:10.008)
The end. The end.

Neil Timmins (12:14.346)
Don’t need to know, don’t wanna know. Yeah, yeah, yeah. File that insurance claim, make sure we’ve got it. Make sure that the check’s in the mail, correct. Yeah, but it’s somebody else’s burden to be able to do that. And it’s just the difference between the debt and the equity. All those types of things that I just described from an ownership standpoint. My banker doesn’t know any of that stuff, right? When we leverage that, that’s not their role in the transaction, right? Their role.

Mike Hambright (12:41.471)
Yeah, yeah, I didn’t, I just thought about it. Cause I’ve had a couple of houses burned down. And one of them, one of them was a private lender that was behind it. I think we told her, but like we just built it back up and put a tenant back in it, you know? And yeah, like my lenders typically, unless they need to sign a check or whatever, you know, they typically don’t know. Cause I mean, I’m not hiding it from them, but.

Neil Timmins (12:55.416)
Yeah.

Mike Hambright (13:05.225)
They don’t want to know and don’t ask, don’t tell. Like we’re just going to keep they did. The payments didn’t skip a beat for them. You know, that’s what you really care about. Yeah.

Neil Timmins (13:11.31)
Sure, yeah, yeah. Correct, yeah. You’re doing your thing. You’re a highly accountable investor doing your thing, and it just keeps moving on.

Mike Hambright (13:20.949)
Yeah, one of the things that I think is, you’ve done all these things and now you’re lending to people and you kind of know their business, right? There’s also a lot of lenders that are, you know, they might be national and they don’t know you or your market very well. They’re kind of faceless. Or there’s the local lender or regional lender that’s just the finance person, but they’ve never actually done this business before. I mean, so I think one of the benefits that you have is you really very much are a partner with the people you lend to, right?

Neil Timmins (13:47.054)
it’s a significant value proposition to be able to come in and when they open up that wall, literally or figuratively, right? And they run into that problem that they feel like they can call, because I want to be part of that solution for them, it’s anything, contractors, squatters, whatever that problem may be. Even to the spot, we’ve talked about

You know, I’ve got a couple of clients who’ve got a couple dozen rentals and cost segregation came up one day. I started uncovering their taxes. We pulled tax returns from them and it’s going, hey, why don’t you have greater depreciation on these things? And they’re like, well, tell me about that. know, a cost segregation is I have no idea. Okay, well, let me change your world forever, right? So there’s ways to add value that extend just way past giving somebody dollars and cents. And then,

Because we’re local and because of the world in which it came from, we’ve got a database full of, there’s probably 20,000 people in there. We still market, we do a handful of flips a year still. But I wholesale off just as many. And so, you know who I’m calling, you borrow from us, you’re the first guy, I know exactly what your buy box is. You’re the first call that I’m making when it’s time to wholesale something.

Mike Hambright (14:58.257)
Right? Yeah. Yeah. Early on in my career, I used to think of like heart money lenders as like, you know, the loan shark, the necessary evil, right? Maybe. But over time, you kind of realize like, hey, especially guys like you.

It’s like, well, you know who to call, you know, contractors, you know how to navigate certain crap in certain cities. Like you just know stuff that very much. And you, what you want is that person to be successful because A, you want your money back and two, you want them to borrow from you again. And that’s how you differentiate yourself from maybe other lending opportunities out there is like, you’re the all knowing person that’s on speed dial.

Neil Timmins (15:36.844)
I do. Yeah. Well, again and again and again, and I hear what you’re saying. Hard money is not the best solution for everybody all the time. It’s an avenue and for some people it is the perfect solution and for others they’ll never borrow hard money in their life and that’s A-OK because it’s just not for them. That’s perfectly fine. For us, we got a lot of people who have to move very quickly and when we can close in, you know, five days, eight days, because they’ve negotiated a heck of a deal, we can close

Mike Hambright (15:52.243)
Right? Right.

Neil Timmins (16:06.862)
that quickly and for a lot of traditional banks where the money is much less expensive, they cannot execute in that kind of fashion. You one of the things we’ve committed to is we’re never gonna do an appraisal. An appraisal slow things down and they add cost to it. I’ve been inside of, ready for this, Mike? Drum roll. I’ve been inside of over 10,000 homes in Central Iowa. I don’t need the bar where it is pay an appraisal to get an opinion of what they think it’s gonna be worth. I should be able to be able to.

to dial that in and get a really good sense real quick based on that condition and the location of whatever that asset is.

Mike Hambright (16:43.222)
And so they probably tell you what they think it’s worth and then you just maybe do a desktop appraisal just run the comps yourself and say, yeah, that’s cooler.

Neil Timmins (16:45.378)
Sure. Yeah.

You got it. And you know, that’s, I’ll comment on this. The best investors know their numbers. And so you’re right. And we spot check, we’re checking everybody, course, running our own comps, if you’re able to do this. But the amount of people which we have declined, this is a key takeaway, how to get declined for a hard money loan forever. When we get people come to us and they have their own numbers and they are.

really ludicrous. mean, it’s black and white that it’s just not right. It’s going, cool, this person is not for us. And I’m not dying on this deal. They’re not for us ever. Yeah.

Mike Hambright (17:22.579)
Wow, yeah. You think those people are, they just don’t know what they’re doing and there’s no teaching them or they are trying to be sneaky?

Neil Timmins (17:31.518)
No, I think they just don’t know what they’re doing. I mean, we’ve had experiences where they’ll, and I’ll track this, because they have experiences where they’ll come and say, I think it’s worth this. I’ll give you a real life example. We had an agent who’s also investor, so they’re a realtor, who’s got a threeplex, and they came and said, hey, I think it’s worth this, I wanted to cash out refi, we’re gonna go buy another property, et cetera, et cetera. I’m going, the number’s so far off, man. It’s just not the case. Well, they listed it for sale and,

four months later, they are at a number that I told them I thought it was worth. Still for sale, not sold. So you’re going, you’re now at my number, which is 30 % less than your number. Yeah, the market will show you what it’s worth at the end of the day.

Mike Hambright (18:12.095)
Yeah.

Yep, so Neil, you’ve got a lot of experience in commercial too on the investing side. I you own a bunch of commercial properties. Do you lend on the commercial side as well? I mean, that’s a little bit of a different animal, but do you lend on that side as well?

Neil Timmins (18:21.869)
Yeah.

Neil Timmins (18:29.581)
We’ve stepped our toe in it here in Des Moines on a very small commercial deal. It really has to line up. Hard money for us really makes sense for people who are repositioned at a property. Because most of our money is either out for six months on a house in a commercial, we’d stretch it to a year. But that’s it. So it’s not long term money. So somebody really needs to be repositioned in that. so it’s given the size of the market, we’re just not.

It’s not particularly material. Our bread and butter is that house investor is going to fix and flip it, or they’re going to execute on a burst strategy.

Mike Hambright (19:04.319)
So let’s talk about what it would be like to kind of be a few people. mean, you’re not alone in that. Obviously, you’ve been lending for a long time, but I’m thinking about moving in. I know a bunch of people that have moved into lending lately. It’s just it’s just, you know, when you have an economy that’s been the way it is for a couple of years, people start to look at other things that are out there. Right. And so if folks want, there’s a lot of ways to benefit from they could co-lend with you, which let’s come back to that. But they could also just start a lending company themselves. Right. I you could.

Neil Timmins (19:14.082)
Yeah.

Neil Timmins (19:21.507)
Right?

Neil Timmins (19:31.458)
Well, they don’t even have to start, yeah. You’re totally right, but they don’t have to go that far. They could just lend, meaning you don’t even need a company. I think the idea of a company is you’re gonna do what you or I would probably do. But if you had a few hundred grand laying around, you have a self-directed IRA or 401k, those are fantastic vehicles to be able to go lend, just on a one-off basis. It’s an alternative to…

Mike Hambright (19:32.147)
You can also start a hamburger shop or you could just invest in a hamburger shop.

Neil Timmins (20:00.206)
put it in the stock market, put it in someplace else. Just go out, connect with somebody. These REAs, the meetups are fantastic places to connect with other people, to be able to go out and just tell them what you’re doing. Hey, I’ve got a little money, I lend to people on a one-off basis, we do one or two projects at a time type thing. To do it that way, you don’t need a full-form company to be able to do it. Connect with an attorney, right? Make sure you got your documents tightened up in terms of

how got to put together that mortgage and that note. Seasoned real estate attorney guides you through that whole process to be able to do it.

Mike Hambright (20:37.669)
Here’s a little thing that I’m to say something profound, but I am. If you have a savings account, you’re a co lender. You put money into a bank and then at nothing by the way, like a fraction of 1 % maybe, and then they relended out at 6 to 10 % to somebody else.

Neil Timmins (20:49.293)
You’re right!

Neil Timmins (20:53.848)
Yeah.

Mike Hambright (21:00.361)
That’s really co lending. mean, you don’t, most people don’t look at it that way, but I know you do that. You have people that will come in and say, Hey, they’re going to lend to you at a certain rate. And then you lend at a higher rate and you make a spread on that. Now you’re doing all the sales and marketing and you’re talking to all the folks and dealing with legal issues and dealing with, you know, God forbid a foreclosure. If you have to foreclose on somebody, you’re dealing with all that, but their money is safe because they’re the underlying kind of, I guess, co lender, right?

Neil Timmins (21:13.048)
Yep. Yep.

Neil Timmins (21:25.24)
Yeah, no, you’re absolutely right. Yeah, we started a co-lending fund. So folks come in and invest alongside us into any deals. And then we’ve got some liquidity options there. mean, start, somebody could invest 50 grand all the way up to as much as you want. But we’ve got some liquidity options there. It’s 18 months is as short a timeframe as we can get it. So as long as somebody’s in for 18 months, great. You can get your money back and move along. So if you think about that kind of that,

co-lending model, somebody can earn, it depends on what one invests. know, anywhere from seven to 11%, the more you invest, the higher that number gets. But call it 11 % for, you know, a couple of years, you can’t get 11 % with this level of risk, which is, you know, we’re in first mortgage position on everything we do. You go to a bank, a bank CD is what? Three and a half, four and a half percent? Right.

Mike Hambright (22:19.113)
Yeah. Yeah, I just did. I might have done a CD when I was like little and my parents got us into something. I don’t know. We actually invested in a CD for the first because we had a long story, but we had it actually was a retirement account and we moved it into the money into an LLC. So the money was with Wells Fargo.

not not traditional retirement account stuff. But we had some money sitting there like I don’t think we’re to be using this for like a year. I mean, I don’t see anything. It was a low enough amount that it was like 80 grand or something. So it wasn’t like big money to put into a deal. But it was like it’s just sitting there right now. And they had some sort of teaser CD. And I think it was like five percent for like six months. And of course, if you do nothing, they automatically roll it over into something like one percent. And that’s how they get you is like they just automatically roll it over. And we just ended up pulling it

Neil Timmins (23:02.35)
Correct. Correct.

Mike Hambright (23:07.927)
were like, okay, I can’t, I can’t go, it would physically go to the bank. I’m like, who does that? Like, I can’t, I can’t do that. You know, it was, it was built for them. But, but yeah, it’s the problem is, is like, I want to keep the money busy. And they didn’t allow me to do that. So I guess maybe we should talk about code. Yeah, that’s interesting. But you know what a lot of folks

don’t know and a lot of people that are listening to this might know this, especially if they’re active real estate investors, but that you can borrow from your retirement accounts. Like not a lot of folks know that there’s this whole self-directed world out there of folks that are.

Neil Timmins (23:44.398)
Correct?

Mike Hambright (23:48.603)
able to use their retirement accounts and instead of having it in Fidelity or E-Trade or somewhere else, they can actually self direct and either, you know, they could flip houses with it if they want to. There’s some asterisks next to these things. So don’t go do that without talking to somebody. Those are they’re doing, or they could lend it, right?

Neil Timmins (24:02.104)
Yeah, right Yeah, and Lenny’s I mean you want to talk about ever you know This gets talked about a lot in this industry is I want passive income, right? I’m gonna get into this business because I want passive income and you know what I found out the Long and the hard way and the single-family rental space is that is that thing is anything but passive They’d be right but happy we’ve done it happy we own them, but it’s anything but passive lending is as passive as it possibly gets

Mike Hambright (24:23.059)
Yeah, for sure.

Neil Timmins (24:32.534)
And in a code-lending model, it’s probably the truest, it is truly passive.

Mike Hambright (24:37.459)
Right, they’re writing a check or wiring money in and that’s that.

Neil Timmins (24:40.482)
Correct, we keep everybody apprised. You get two to four emails from us a month. We over communicate on a monthly basis, quarterly financials. Yeah, we overly communicate to keep everybody apprised. We want total transparency in what we do, because at the end of the day, it’s our name on the line. I got my own, we’re co-lending. I got money right there, pretty big dollars out there. And so we want to dial it in and make sure we do this really well. And you talked about this early on. Repeat borrowers.

Repeat bars, we’ve drawn on our business model that we’ll target 50 % repeat bars. Today, it’s actually 70 % is what we’re achieving. 70 % repeat bar rate. And so when we make it so easy, I’m going to liken this to your Wells Fargo story. For us, we make it so easy to just keep come back and do this and do this and do this again. Wells Fargo, your example was, you actually got to go do something. They make it easy for somebody not to do anything. And then ultimately, Wells Fargo benefits from their ones not wanting to go in.

Mike Hambright (25:16.836)
wow.

Yeah.

Mike Hambright (25:36.021)
All right.

Neil Timmins (25:38.946)
roll out your thing. For us, we just make it so easy for them that they don’t go out, they don’t shop again, they don’t want to go. It is simple. They just get a rock and roll in their business.

Mike Hambright (25:40.116)
Yeah.

Mike Hambright (25:49.375)
That’s 70%, you said 70 % of the people that you lend to are repeat customers. That’s amazing, yeah. That says a lot, mean, because you have to earn that every single time, right? And I’m guessing, we don’t talk about rates, but I’m guessing you’re not the cheapest guy in the world. mean, you’re the local guy, like you could always go, the national guys are always the cheapest, but they don’t really know, it might take them three or four weeks to close and they don’t really know you, they can’t connect you with anybody that’s in the market there.

Neil Timmins (25:55.0)
Correct.

Neil Timmins (25:59.736)
Correct.

Neil Timmins (26:08.728)
Correct.

Mike Hambright (26:17.831)
Right? mean, it’s a very different animal for sure. Yeah.

Neil Timmins (26:19.79)
Yeah, I mean, then yes, it is less expensive, but it is slightly faceless. know, if they pull the rug on you at the end of the day, you know, it’s, they’re just gonna go lend to somebody else some other place. For us, it’s prop, correct. Yeah, yeah, for us, it’s real problematic. We wanna make sure that if we’re gonna say yes, a yes actually means yes. You know, there’s no loan committee past us that somehow,

Mike Hambright (26:25.717)
Right.

Mike Hambright (26:32.349)
Yeah, yeah, there’s a place there’s a place for that. But that’s not that’s not what you want for right.

Mike Hambright (26:43.881)
Yeah.

Neil Timmins (26:47.906)
You know, the law officer says yes and that the loan committee, somebody else says no, and it really means no. A yes is a yes.

Mike Hambright (26:52.039)
Right, yeah, I’ve got a lot of, you I’ve got definitely other friends like you that are hard money lenders and they’ll stay right up front. There’s cheaper options. I’m not trying to be the cheapest guy in town, but I’m trying to provide the best service.

Neil Timmins (26:58.691)
Yeah.

Neil Timmins (27:04.216)
Correct. Yeah, we want to be a solution and deliver values in ways that extend past dollars, right? That ultimately, hopefully, we can add some value that really works super well for folks.

Mike Hambright (27:10.675)
Yeah.

Mike Hambright (27:17.661)
Yeah, and if 70 % of your customers were previously customers and they came back, that speaks for itself that, it’s working well for them too.

Neil Timmins (27:24.686)
Yeah, yeah, they like it, they refer it, and you’re right. It’s not all about dollars and cents. When we talk about the ability to close fast, and you know this from all the years of buying properties, right? Sometimes when you can go into the seller’s place and you can provide certainty to a seller in the form of purchase agreement and certainty to close, and if you can close in seven days, odds have it can negotiate a better deal than if you can close in 37 days. And when your choice is,

Mike Hambright (27:51.807)
Right.

Neil Timmins (27:54.456)
How do I get money in seven days to go close this deal? Well, although we charge a higher rate, at the end of the day, it may be a better deal that you’ve cut with that seller, that our higher rate makes total sense. what I was gonna say, I love being a plan B lender, because if we get an at-bat on a plan B basis, odds have it we can earn our position in there for more repeat business from somebody. We’ve picked up a number of clients.

Mike Hambright (28:02.819)
for sure.

Mike Hambright (28:07.411)
Yep. Yep.

Neil Timmins (28:23.278)
A lot of times from realtors, because realtors are on the hook, they’re closing a deal. The plan A lender for whatever reason, it’s generally somebody who’s not from Iowa. You know, it bails. We’re an abstract date. I don’t know if you recall this from our earlier conversations years ago, but we don’t use title insurance in Iowa. It’s the only state in the country that does not use title insurance. We are different here. We use abstracts, we use attorneys to do title opinions.

Mike Hambright (28:44.615)
I didn’t know that. Yeah, that’s interesting. Yeah.

Neil Timmins (28:51.734)
who then make up the bulk of closings. The attorneys do these. And so if you’re not from Iowa or don’t, you’re not built like a real national built out version of this, it’s just a different world. They don’t understand this. And so we picked up, we’ve been a plan B several times where we picked that up because the plan A has gone to pot just days before closing and we swoop in and close the deal and really the intent is earn a customer for life.

Mike Hambright (29:15.455)
Yeah, awesome. Well, Neil, if folks want to learn more about you, I know you’ve got a podcast, you’ve got a bunch of stuff going on, and of course you got your lending company as well, and also you have people kind of co-lend with you that are looking to keep some money busy. How can they connect with you?

Neil Timmins (29:29.262)
I’m gonna give everybody a choice, right? The podcast you mentioned, the Investing in Iowa Show, it’s just as it sounds, right? We talked to all bunch of Iowa folks about investing in Iowa. Our lending business, littleguyloans.com. And then, really our co-lending and all of our syndication that we do on our commercial side, Legacy Impact Investors, legacyimpactinvestors.com.

Mike Hambright (29:53.665)
Awesome Neil well hey, thanks so much for joining us joining me on the show today. It’s good to see you my friend Awesome, and everybody there’s a lot of ways to make money

Neil Timmins (29:55.448)
Yeah, cool.

Neil Timmins (30:02.606)
It’s always a pleasure. Thanks for having me, buddy.

Mike Hambright (30:06.337)
in real estate, you can be active or you can be passive. I think ultimately everybody wants to be passive. I mean, there’s nobody that’s like, want to have to work hard for my money. nobody, everybody wants to be the bank and ultimately and, and or everybody wants to be passive. And so if you, if you’re, if you’re active now and you want to be more passive, well, hopefully you got some good lessons from today. If you’re not even investing right now, why not just go straight to passive? mean, that’s where you’re going to want to get anyway.

Neil Timmins (30:16.366)
You

Neil Timmins (30:33.038)
Yeah, right. Yeah, well, listen, I know a lot of people who are excellent at what they do. Doctors, lawyers, engineers, a whole bunch of professionals who make tremendous amounts of money doing what they do best. They should never leave that profession. They should just figure out how to get some exposure to real estate in one fashion or another.

Mike Hambright (30:49.427)
Yeah, that’s that’s the other thing that I I talked about this yesterday on another show is like everybody wants to be passive, but you have to have active active income. So whether you’re a fix and flipper or wholesaler and you’re making money, you got to put that money to work passively because that’s what helps you build long term wealth. Or if you’re a doctor or a lawyer or somebody else and that’s your active income, here’s a way for you to get into real estate passively is either colon or you know.

or buy real estate and let it rent it out. I mean, that’s not as passive, but it does help you build wealth over time. So anyway, one way or another, get in the game. Yeah. Good to see you, buddy. Everybody hope you got some good value from today. Appreciate you a bunch for following along. We’ll see you on the next show.

Neil Timmins (31:21.608)
It’s good to be here. I appreciate you.