Partnering for Success

Mike Hambright (00:02.51)
Hey everybody, welcome back to the show. Today I’m here with Amy Pratt, local real estate investor and investor fuel master. Remember, we’re talking about partnering for success. There’s a lot of ways to partner. I think as a lot of us mature in our business, we kind of find ways to collaborate and work with other people, and what we’re to be talking about today. So Amy, welcome to the show. Hi, thank you.

Yeah, glad to have you here. I’m glad to be So you’re just up the road, McKinney, Texas. Yes. And you said you have been there most of your life, which is, I said you must be the first person to McKinney because it’s blown up, right? One of the first. Yeah. It’s funny. There’s so many people that I know. I’ve been in Dallas, the Dallas area, for 26 years. And most people are not from here. They just found their way here. Correct. Now that’s the case at McKinney. Yeah.

Especially McKinney. Yeah. Yes. I mean, not especially, but I know it was super small when you were growing up. So it was very small town. Yeah. So we’re going talk about partnering. That’s a lot of what you do is you find different ways to partner with people and kind of partner on different deals. And maybe they bring the deal. Maybe they bring the money. Maybe they’re doing different things for you. And so before we jump into that, like, tell us a bit about your background, how you found your way into real estate investing. So I started in 2019 and I started with owner financing.

So I had basically cashed out my retirement. I had actually just gone through a divorce and I was like, now I have no retirement because we grew his. So I did owner finance still with one of my neighbors and I got my first four properties. like a year later, his granddaughter wanted to sell me her property that she inherited. I sold, I got hers owner financed with a blue note that had a.

cash out, refinance, or I just had to refinance it within a year. They owner financed it to you. But they did owner finance it me, yes. And then from there, the neighbor saw me rehabbing the properties. So he saw me at the mailbox one time and he said, hey, I you’re rehabbing these properties. And I said, yes. And I thought he was going to critique me. But he said, well, I have a property down at the bottom and it just makes sense for you to buy it and I’m going to sell it soon. So I’ll reach out to you. And said, sure. Yeah, that’d be great. Let me know when you’re ready to sell it. And then he left and I got in my car and I thought.

Mike Hambright (02:10.094)
I do this because I’m just figuring things out as I go. that particular one. all are. Yes. And then with that particular one, I went through a bank and built a relationship with the banker and the president of the bank. And I went and chose to go to Durant, Oklahoma because that was a referral. And the small town bank, they actually are more personal with you. So he actually, by the time it came to closing, which took way too long, but because it was a bank.

I didn’t even have enough money for the down payment, but he just gave me a line of credit to make up the difference and said she’ll do a few more highlights. Just give her the line of credit. The seller did? No, the banker did. Oh, okay, okay. Because I had built that relationship during that long process that it took. Yeah. And they got to know me. They even came and meet me for lunch, you know, just to get to know who they work with. Talk about the, I mean, we’re talking about partnering here, but let’s just talk high level about the importance of…

relationships in your life and your business because nobody knows this. almost an hour before we started the show we’ve sat here and talked about things and I know just partnerships and relationships are very important to you. They are very important. yeah I do think it’s very important to build a good relationship with everybody on your team and I think it’s important to build a team. So but that’s how you get further in life is by partnering with people and building those relationships.

I know that some of your, you talked a lot about the importance of the funding for you to get started with a lot of your deals, they own or finance to you, and then now you do lending as well. So it’s really not a mistake that you kind of gravitated towards the power of having access to capital to do deals, Yes, yes. And I had to figure out how to do the balloon note because regular, traditional mortgage guys do not do investment properties, they did not. And so everybody would pull my credit and say, absolutely, we can help you.

only to find out they could not and they would never give me a good reason why. So I had to find the right people and I reached out to other investors who led me on the right track. Yeah, a lot of people don’t realize, like even like the Chases of the World, the Wells Fargo, we do a lot of our banking there but not for lending. I mean they don’t understand our business at all and with Chase, like…

Mike Hambright (04:22.4)
Literally every three four or maybe six months. Maybe we get a note. Hey, I’m your new business banker Can we come in and spend time talking? We’re like, no, we don’t have time for that But for years they were always like well, yeah, we want to get your business We want to get your we want to do your loans on your rentals and we’re like you’re not gonna do this Like we know you’re not no, no, trust me. We can do this in the you know, next thing we know a week later like I’m sorry Yeah, we can’t you know, that’s risky. We’re like

So, speaking of building relationships, I met for coffee. I met one guy because I a refinance on his three of his condos and he wanted me to meet his best friend, so we all went for coffee. He’s doing a nine unit build on townhomes right now. He’s building nine townhomes. But he’s always gone through commercial banking and it takes way too long. So he wanted to see what I could do for him. So even though it costs more money, he’s realized the value in getting it done more quickly. Yeah, yeah. So let’s talk about partnering.

about just kind of getting creative. I know that a lot of your business so far has been finding ways to get creative. Like it’s not necessarily as cut and dry as what some people think. talk about like I guess your your maybe maybe it’s because you like that. You like solving creative problems. I do. And I helping people strategize how to do that and strategize how to find more money to create more so they can do more projects. Yeah. So it’s exciting to me even if I don’t make anything out of the deal because

I just get so excited when I find a way and then they’re excited. I’m excited off their excitement. So yeah Yeah, so when you partner with people there’s a lot of different ways this works. So sometimes people May bring the deal right? That’s I mean I’ve done a lot of coaching and that’s a lot of what I position myself as is that we can partner on deals and I bring the money and I bring the knowledge and I have the contractors and I have everything just bring your deals to me that’s one way right so talk about what that looks like for you when people kind of find deals and they so if they bring a deal to me and

I evaluate the deal to make sure it’s good and the numbers are correct then I will partner with them and I can bring a hundred percent funding to the table. So they’re zero out of pocket. Yeah. So how do they know how to find a deal? Like how do they know how to evaluate deals? Like how do you are these are people that are essentially new to the business right and they want to get in and they see you as being able to provide some of the things that they think are hard the financing side. Everybody before they get started thinks that the money is the hard part and it’s I mean it all comes down to what you have to pay but the money

Mike Hambright (06:51.99)
is always there if you find a good deal. But how do you teach people to find deals and what you’re looking for and what the requirements are? So I have to sit down and teach them about the after repair value and teach them that the deal is going to cost money and remind them that they’ll be out of pocket for their monthly payments and a lot of people don’t realize the money that goes in there. They think that there’s hundred thousand dollars spread but you have to keep in mind you’ll be paying your realtor about six percent possibly and then you’re going to pay the funding fee.

So you need to have a good spread so I teach them to have I want the whole deal at 70 % of the ARV and in our area like in McKinney that is harder to do yeah, but I just like it is important to do and then I just kind of teach them the numbers and show them that There’s not as big of a spread there as they think there is yeah It’s not like HGTV where they bought it for this and sold it for that and all everything in the middle is profit Yes, in fact I teach them not to do HGTV because that I’ve made that mistake. Yeah, and so it looks great

And everybody loved the house, but I put too much money into it and made less money. just, you know, depending on what the situation is, if you’re going to hold on to it as an Airbnb, you might want to do that. So how do you find people? How do you like network with people? How do you find people and how do you find more of them, I guess, to bring you deals? So I actually just do a lot of networking. I show up to events. I show up to RIA meetings. I actually would like to start my own meetup group for real estate investors. But I just go to Facebook groups and it kind of

myself out there. Not very often either, but people are hungry for this. So they reach out to me on messenger and we start talking and a lot of times it works out. Yeah, that’s great. And it’s typically always new people that are looking to find a way to get started, right? Yes, it usually is. Yeah. But there are sometimes that I have experienced investors, they just have all their, they just have everything too much out or there’s a situation they just need a little extra help to get. So sometimes it’s a credit thing because they have too much credit out.

They don’t have derogatory marks, they just have too much out. So their credit score is a little bit lower, so then I can come in and help. Yep, yep. So let’s talk about…

Mike Hambright (09:02.254)
The other side of that is people could, I guess when you have a deal, when you find your own deal, you just have access to capital. So sometimes in the partnership model, people are bringing money. Typically in your relationships, that’s typically you, And I choose, if I find a deal, I’ll pick an investor that I’ve worked with in the past that has gone well. I choose a partner even if I can do it on my own because I have too many irons in the fire and I don’t want to not do that deal because I don’t have time. So I’ll find a partner who can do a lot of the legwork for me.

And we both get to make money on it. Yeah, I’ve been thinking about this in the relationship in relation to coaching. We talked about this a little bit is like our whole business is partnerships. It is. You have the acquisition side, Dispo, money, who your contractors are. I mean, I’ve had a contractor that’s rehabbed hundreds of houses for me. He’s one of my best friends in the world now. And for early on, I just saw him as a necessary evil. Like I need to pay this guy. Yes. Overcharging me and whatever.

Like he was always a partner. I didn’t always see him that way. Yeah, but he always had my best interest in mind I mean not every contractor has whoever they’re working for his best interest in mind But my guy is is special in that way, but when I look back it’s like without those relationships I couldn’t have done I couldn’t have done nearly as much as I have done for sure right right and I do think that there’s so much value in partnering with other people like It blows my mind when people are just greedy and I just

want to they just want to make all the money by themselves because you’re going to be able to do more deals when you partner. Yeah. And you’re going to have better ideas when you collaborate your ideas and you can just get so much further in life with partnerships. Yeah. I would say that I’ve been talking in another vein here about just the value of real relationships because you got social media. You got all these things that are not really real like they’re kind of quasi real. But they’re not. It’s not the same. People really crave real relationships. And I think especially if you think of a contract

like they’re just out there doing a job. They probably generally feel like nobody appreciates the work I do. And they think they’re working their tail off and all those things, right? And I think just showing some grace and some kindness of like, hey, we’re gonna build this thing. this isn’t transactional. I don’t want to just work with you one time and then we’re out. Like I wanna work with you forever. And so just know that.

Mike Hambright (11:26.99)
you i may not be able to pay more cuz i can’t but in some instances uh… i might be able to or we can figure out a way to get creative here one of the things i found with uh… kevin who’s uh… my good friend contractor here is

He would often tell me like, well, here’s the bid. And he’s like, but you know, if you wanted to like save four grand, like, why don’t you do this, this and this? Like he would tell me shortcuts. It wasn’t about him making money. It was about and it didn’t necessarily cost him money to tell me that it’s just it was ultimately a lot less labor probably to like not move a wall or something that I wanted to do is like, don’t do that. It’s not going to add any value or whatever. There is so much value in building that relationship with your contractors. And I do like in the beginning when I did not have the money, I literally had a contractor that said, I want

to help you. just want to help you because I know you’re going to be good and you’re going to make it big and I want to be your contractor on all your jobs. Of course now he’s so busy but he and you’re right he has that eye. He said you don’t have to do new shoot. Let me just do this matter. Whatever it may be you know but they can get creative and save you money. But also if you are if you want to like offer them a bonus if they dedicate their time to your flip because you want to get it on the market quick and only make one payment if that you know if you can sell it quickly so you can

just offer them a bonus and or you just negotiate how you pay them like when I sell the house if I mean that’s harder to do but once you’ve built that relationship sometimes if it’s a bigger job and more costs they would be willing to do that yeah well we’re on the topic one of the things that I’ve shared with people before with contractors because there’s like I’ve always said I don’t really want to give away my general contractor because that’s like giving away your best babysitter when you have kids you’re like I need to make sure they’re available when I need them yeah like my window guy or my age-back guy or my roofer that I I’m very

small portion of their business, just this kind of sending connections their way, like to keep them busy. And they appreciate that because they all want more. A lot of contractors spend half their time looking for the next job, lot of time. And they’re jumping from job job very transactional. And so I found with kind of more of the niche contractors, if I do a good job of sending them business, then whenever I need something, they put me at the front of the line.

Mike Hambright (13:39.174)
because they appreciate that I’m always like looking out for them and they’re going to look out for me. And I’ve had them say that, whatever you need, like I’ll do it like right away. Yes. Yeah. So be that person. So if you’re if you don’t have a huge business, it’s and you can’t keep a contractor busy, then find ways to kind of feed them. Absolutely. karma’s alive and well. Yes, absolutely. They do. Yeah. So on the lending side for deals, you can bring money and sometimes it’s your money and sometimes you I mean, you’re a lender as well. So you can kind of broker money or find other ways.

to bring money into deals, right? Yes, I can. And then I also will help investors see that they have, or even new investors, don’t realize they have money that they do have. I just help them find it. Like what are some examples of that? So the one that I’m doing, the nine unit townhome build on with right now, he bought me his portfolio. He had no idea he had access to $3 million. So now that just opened up his mind to a whole new world. Like, OK, my next venture I can actually do. And he doesn’t need $3 million. Yeah. But you know. So it’s like equity.

It’s an equity line of credit, I guess, from his rental portfolio or something like that. Or cash out refi. It just depends on what’s better. It depends on what the interest rates already are. But in Texas, he’s in Texas. You cannot do a line of credit on Healock on investment properties. OK. But some banks will give you a second mortgage. Some banks will do a line of credit based on your rentals. know my bank used to offer that, because I had a lot of equity. they’re like, why don’t we give you a line of credit towards your? They were just pledging it as collateral, I think. Yes. You can use that as collateral, yes. And they just give you

me checkbook access and but yes there’s fees associated with that but it’s not bad if you have the credit a lot of people have I’m guilty of this have a lot of equity that’s just trapped mm-hmm yes so that’s that’s why I like to show them that they have yeah and or you know there’s other ways like if you have a retirement and you can just send 31 into a property or you know there’s there’s like other ways too and if you just need money in your account so you can have enough money for the lender to be happy for you to

closed and that can help them get access to money as well. Yep. Yep. So let’s talk about sometimes people bring services. So you I know you said you’ve had contractors bring you deals before you kind of teach them what you’re looking for and they’re like well if you actually do the work here here’s how we could partner maybe talk a little bit about that. Yeah. So if the contractors bring me a house flip to do that I can.

Mike Hambright (16:03.38)
I’ll do the funding for them and they’ll do the work for me so they get to make money on GC in the deal. I make money on brokering. I’m very honest and transparent that we both, that I will be making money on it too along the way but they make money along the way. And then they get to actually have 50 % of the profit. So a lot of contractors, they only do the GC and they do it for a lot of investors but they don’t get to make that extra bulk of money so they’re excited to do that. And then they’re gonna really pay attention to that project because their hearts in it more. And then they really want to be good and they’ll pay attention

in the detail that needs to be paid attention to. Yeah. I know a lot of contractors that work for investors ultimately want to become the investor. they see, and they don’t know the whole story typically. They’re like, well, they’re making all this money. It’s like, well, just like you said, there’s a lot of expenses there And there’s some risk, and there’s sleepless nights and all that. But I think a lot of folks that dabble with real estate investors see this opportunity out there that they’re not a part of and ultimately want to become a part of it. Absolutely, yes.

the same people you’re looking for in partnerships, I guess is. love getting contractors to be my partners. Yes. Yeah. I mean, just people that are looking, they just they’re like on the cusp, but they need a little hand holding. yeah. Yeah. I like to just be that person to help lead them along, get them over that fear. Yeah. Sometimes it’s just a little bit of fear. They’re just unsure. And so when you talk to them and you can build their confidence up and they see that like I made it as a single woman doing it very creatively, you know, then they

are more prone to listen to me and then they realize they too can do it. Really anybody can invest but we just had to the right mindset. Yeah and sometimes having the right mindset means having the right partner. That’s true. Right because you, I know like not a lot of people, a lot of people know this because I’ve talked about it so much but my wife and I have been partners the whole time over 17 years, flipped lots of houses and she was just more behind the…

She likes to call herself the woman behind the curtain. She’s like the Wizard of Oz behind the curtain, pulling the levers, right? But we always kind of joke that she’s the financial side, even though I have a finance degree, but she’s the financial side. I would have run out of cash or something a long time ago. And she’s very risk-averse. She never would have pulled the trigger on a single house, probably, because she would have found reasons why it was too risky. So sometimes you need to have that. That’s one of the other benefits of partnerships is like you, especially if you go into a partnership with

Mike Hambright (18:27.086)
somebody that’s not exactly like you is you have a different mindset, a different background. There’s like a yin and a yang situation, It is, yes. It’s good to help balance each other out. Yeah. When you’re looking for partners, do you ever, do you kind of look at their person? I mean, you have to kind of look at their personality and like, do I want to work with this person? Oh, absolutely. Yeah. What do you do? Like tell us a story about somebody that you’ve turned away. You’re like, ah, we’re not going to work well together. Or maybe somebody that.

You had it in your gut and you did it anyway and then you regret doing it. I’m sure you got a few of those. I have a couple of You don’t have to say any names. Yes. Yeah, there are some that I might regret. But that’s OK because anything that you learn. Yes, you learn from that experience. But as far as.

If I partner with someone, if I turn away from them, it’s just because it might be, well, I do want to know what they’ve done in the past and how they’ve handled their own finances and follow through. Do they follow through on things that they’ve done? if they haven’t followed through on anything in the past ever in their life, why would they follow through on this? You know, so I like look at that. And then I just kind of talk to them and get a vibe off of them, you know, and just I pray for discernment as well before I meet with anybody. So yes.

And I know one of things that you said is that you really have a goal to help women. So talk about the importance of that. That’s on my heart. Yeah. So I just like for women to know that they can be financially independent. I’m not saying that I’m not a man hater. just at all. Well, there’s two men here. So we’ve got you. I’m not at all. In fact, I believe in marriage and sticking through the marriage and working through issues. But there are sometimes I come across with me women, they’re in a bad situation and they’re stuck there. And so I just want to show them that you can.

be financially independent and let me show you how you can be you know and then or there’s a woman who wants to be a stay-at-home mom she hates to leave her baby at daycare or she she does not she just hates that she has to go to work just only for mom like I was there before and I I did get to stay home for a year I was fortunate enough for that but I did not want to go back to work and I had to you know so that if I can provide a way for a woman to be able to stay at home with her kids and just work a few hours a day then I would love to do that.

Mike Hambright (20:44.298)
Yeah, and you do that through the lending side of your business? I do if they can help me with with they can help the processing loans for me or just yeah teaching them how to Bring in the business because it’s just a little bit of networking if they could do that for me and bring me the deal Then they can get paid on it. Yeah. Yeah that on the lending so you I’m not a lender actually, but I know a lot of people that are but on the lending side You know, most people are agnostic to lenders. I mean people care about rates, but they care about the relationships more

Absolutely agree. In fact, that’s why I meet them for coffee or do a zoom call with them and kind of get to know them. And then I have have investors all over the nation really that will come to me and they call me and even if they didn’t use me because it was just a unique situation that I did not learn how to get through yet. Now I know how based on who they went through. They would teach me they come back and tell me because they want to use me the next time. But they’ll call me and tell me, hey, Amy, I’m doing I’m almost on this deal. I can’t wait to be done with this. I can do my next project. And they just like to tell me how they’re doing along the way.

Yeah, yeah, that’s that’s that’s a sign they’re going to use you again. Yes. And if it’s radio silence, that might be a bad sign. Right. Right. So but I do I do build that relationship. I just teach them that I will get you the best deal for you. And when I have investors, I do charge them less because they come to me every time. So I’d rather do. I don’t like it when people overcharge.

because I would never go back to you again. I don’t understand why people do that because they’re gonna get fewer deals because if I build that relationship with them, they come to me every time, but I also handle everything for them. they don’t have to worry. And if I may have the permission to keep certain things on file so I don’t have to come after them every single time, most of the borrowers want me to do that. Yeah, that’s the difference between being very transactional. You’re just thinking about this one thing, I’ll probably never see you again.

and upfront, like, I don’t care if I ever work with you again, but I’m to make as much money on you as possible. I mean, that’s.

Mike Hambright (22:44.75)
If you care about relationships, that’s not a way to run your business. But I think that’s probably how most people run their businesses. They’re only worried about today. And I don’t want to kill the deal for them based on the fees. Because you can absolutely kill the deal with the fees. yes. Well, tell us a little more about your lending business. You’re lending to real estate investors. And that just keeps growing. So it is investors. But I started just doing your basic one to four units. And then I kind of went to the multifamily. And then like this new nine

unit at the nine construction, know, ground up construction for the townhomes that was like, I don’t want to pass. It was, it came from a Lend, like that investor who’s bringing me deals. So let me see how I can help you. And so, yeah, it just keeps growing. And I don’t, if I, if something’s brought to me that I haven’t done before, I’m going to research it and see how I can help them. So that just helps me. So, and then it turns and it evolved into business funding because I want all my investors to have a line of credit or have access to cash.

be. yeah. So if folks want to connect with you and learn more about your lending or partnering with you, you’re in the McKinney area. How far out do you go? I know you said you had properties even in Broken Bow, Oklahoma, but how far out do you typically go on your deal partnerships from kind of north? What is that Northeast DFW? I guess. Yes, yes. I’ll go just about all over the states as long as it’s a good place. I don’t mind going out of town. So I depending on how much we build our relationship and I get to

know you and trust you and you know so and then I also lend mostly nationwide there’s a few states that are a little bit harder but yeah. Okay how do folks connect with you if you want to learn more? So I have a Facebook business page it’s Pratt Private Funding and they can just message me on there. I also have another business page which is Pratt Property Rentals so that’s for my Airbnb’s short terminals. Awesome well we’ll add a link down below for folks that can make sure they can find you so thanks for spending some time with us today. Absolutely thank you.

to see you. You as well, it’s great to be here. absolutely. Everybody, partnerships are really where it’s at. I there’s not much that I do anymore that’s not some sort of collaboration or partnership. just helps hold you accountable. If you find the right partners, they can add some seasoning that you don’t have basically at the end of the day. So if they’re exactly like you and you think alike, those are some of the partnerships that are hard to make work because you both are terrible at the same things too, unfortunately. So partnerships are where it’s at. If you want to learn more about Amy, make sure you check her

Mike Hambright (25:14.376)
out. Appreciate you guys for joining us today and we’ll see you on the next show.