Cashless Renovations

John Harcar (00:01.087)
Hey guys, welcome back to the show today. I’m John Harcar, your host. We’re here today with Shane Walsh and Shane is the founder of Home Equity Income Agreements. And we’re going to talk today about how we really hold contractors to the fire. Hey guys, at Investor Fuel, you know, we help real estate investors, service providers, and really all real estate professionals, 2 to 5X their business, which allows them and gives them the tools to build the business they wanted to build and live the life they wanted to live. So Shane, welcome to the show.

WealthTradie (00:30.926)
Appreciate it, glad to be here.

John Harcar (00:32.617)
Good, good. I’m super excited to talk about this home equity income agreements. you know, when I, when I got your form that you filled out about being on the show, I went on your site and looked at it and read it and you’re also an author.

WealthTradie (00:45.454)
Yeah, we just recently released our apprentice book. Ignore the not for sale stuff down there. But we’re trying to do same thing as your whole platform. We’re trying to educate more people on home ownership and then more of the advanced structure levels without having to go to communities and whatnot and pay for that knowledge.

John Harcar (00:51.396)
Hahaha

John Harcar (00:59.817)
Sweet.

John Harcar (01:07.145)
Got it, okay. And yeah, like I said, I’m looking forward to diving into it. We dove into it a little bit before that we got on here. But before we do all that, why don’t you share a little bit more about yourself with our audience and how you got here.

WealthTradie (01:21.026)
Yeah, so I’m a third generation contractor. Started when I was seven swinging hammers with my dad. Unfortunately or fortunately, he just paid me with knowledge in the construction industry rather than pay. Afterwards, I joined the Marine Corps, served a contract for five years there, got to go around the country or the world actually in Japan. Then afterwards, I decided to go hop into college or try college out for two years over in Australia.

John Harcar (01:29.727)
Well, like all fathers do.

WealthTradie (01:48.664)
So I got around a little bit around the world, got to see different cultures and different economics and whatnot. Decided to drop out of college and come back to the states and start real estate investing. And jumped straight into fix and flips and Airbnbs. And then just started getting hit and hounded with all the issues in the industry. From homeowners situations, contractor situations, lending situations, title attorney situations. Just getting hit left and right.

John Harcar (02:07.774)
Mm-hmm.

John Harcar (02:17.532)
Yeah.

WealthTradie (02:18.126)
And then from there, we just said, stop, you know, I personally had a continuous process training, a continuous process improvement training in the Marine Corps, CPI training, which, you know, led me to, all right, sit down and restructure this industry. Like, hey, let’s simplify these processes and these transactions to make everything smoother for everyone, especially for investors trying to hold contractors self accountable. And then trying to bridge that gap of, all right, what

John Harcar (02:44.029)
Yeah.

WealthTradie (02:46.284)
What value and pay is this industry between the two?

John Harcar (02:50.2)
I’m glad you brought that up because I did see that CPI on some of the show notes that you did share us. Share with our audience, how did that really, like what specific things like really helped you to incorporate that into restarting your business?

WealthTradie (03:04.066)
Yeah, so continuous process improvement. There’s different levels and ranks in it. There’s green belt, yellow belt, green belt, black belt. And as you work lay up, it’s basically just an entrepreneur kind of business mindset really is you look at a full project of how things run, how things operate, and you just try to test things out. All right, well, if we switch this around, if our quality assurance is this kind of structure, how can we process this to make it smoother, faster, more efficient?

you know, the same thing Elon’s doing right now in the office. know I mean? It’s just making things more efficient.

John Harcar (03:36.56)
of the good old Doge. Yeah, yeah. So I guess it can maybe be kind of like an EOS type of deal where you’re just kind of refining your processes continually.

WealthTradie (03:45.96)
Right, so people that learn that kind of knowledge and structure, and there’s a process to it, they go out to companies and they go to businesses and they actually offer that service. Like they’ll sit down with you and start looking at, right, here’s your current structure, your processes. Let’s work through the brainstorming mechanisms and start brainstorming new processes to make this more efficient. And it applies to every business out there. If you’re a mechanic, if you’re a laundromat, it just…

John Harcar (03:55.427)
okay.

John Harcar (04:10.088)
Sure.

WealthTradie (04:14.572)
it applies to everything because it’s just that kind of mindset that you’re trying to get people into.

John Harcar (04:15.708)
everything.

John Harcar (04:19.046)
Now, did you turn this into a business or was it just you utilize this just to build your business?

WealthTradie (04:24.974)
So I just utilized it for our business. Obviously as an entrepreneur, it’s kind of just that mindset. But after as that entrepreneur, I just kept getting hit left and right for some reason. So then I sat down and I was like, okay, let’s fix the industry rather than just fix my business. And if I could fix the industry, then I can help all these other businesses that are just like me getting hit left and right. And if I can provide that value to the industry, obviously it’s a huge business opportunity.

John Harcar (04:27.624)
Okay.

John Harcar (04:35.261)
John Harcar (04:47.922)
Mm-hmm.

John Harcar (04:54.302)
And that’s an applaud to that’s great abundance mindset, right? Is what’s good for the, you know, for everybody can trickle down into your business or whatever it might be, right? So you got back into real estate. Did you jump right back into fix and flip? Did you do any type of wholesale or anything like that?

WealthTradie (05:09.88)
So I jumped right into fix and flip and then got directly into the hard money side of things and figuring out, all of this is actually an industry. It’s not just an investment, old school where you had to take your own money and go do it yourself. Hey, there’s a whole industry here that you can actually learn the underwriting of processes. There’s an actual process of this. Obviously there’s many different strategies and techniques of processes you can take.

John Harcar (05:26.11)
You

WealthTradie (05:38.83)
But there’s some generic ones out there that are pretty standardized already in the industry. So we just hopped into the money, hard money side of it. And even that at the time, you know what mean, it was a very scary thing. You’re going online and how can you trust this company that still wants the money and it’s well-famed?

John Harcar (05:47.409)
Okay.

John Harcar (05:53.676)
Exactly. Yeah. Yeah. You got you have that barrier that’s just like, know, who is this guy? Yeah.

WealthTradie (05:58.726)
Yeah. Yeah. So that’s where we started Fix and Flips. Not the best time to start, 2019. But then, you know, the timing and everything got us into, you know, it’s, I wouldn’t tell anyone to jump into real estate 2007, knowing what happened in 2008. But the people who did, you know what mean? And then they did, there’s plenty of people that started in 2006, 2007. If they stuck through with it, they could either just gave up.

John Harcar (06:05.191)
Hmm.

John Harcar (06:14.846)
All right.

WealthTradie (06:24.75)
could have just jotted down, hey, here’s all the issues that happened, how do we fix and these issues now? And that’s the same thing we’re seeing this cycle in this season. All right, here’s all these issues again, how do we fix and solve these and make it more efficient so that the next season happens that it’s not as bad?

John Harcar (06:28.946)
Yeah. Yeah.

John Harcar (06:41.294)
And I think that’s important too. It’s like a lot of people really don’t do that, right? They don’t go back and they don’t, they don’t sit and evaluate, you know, cause when the good times are good, who wants to go back and look at all this stuff? mean, who wants to do that? It’s good. Why, why, change it? But then when those things creep up on you and you haven’t adapted with the times, what happens? You know? So I definitely appreciate that. So now are you currently still doing flips?

WealthTradie (07:06.062)
No, so it comes down on a business time kind of scale. Anyone that’s doing startups, they understand the time constraint that that has and just a mental state. I could just take our whole business and a lot of people want me to provide that kind of social proof for people. Like, all right, well, how many of my home equity invoice agreement deals have I done? I tell them, like, look, that’s not my business. My business is, structure-wise, is the NAR, pretty much.

So we’re a licensing company that license home equity invoice liaisons and those liaisons go out there and help contractors and homeowners use that new, not a purchase contract or a listing contract for realtors, but an actual home equity invoice agreement that converts the contractor’s cash invoice into the property’s equity percentage. So we just keep that management of all the licensed liaisons out there. Obviously I could go do this at any time.

with my own personal name and business, but that’s not our time constraint. I mean, it’s a very, very time constraining to get this out there as much as possible. The more we can get it out there, the better. So instead of taking the week or two weeks it may take me to go do this myself individually with a contractor and a homeowner as a liaison, that’s a week I could spend networking and pushing this out to 10 other businesses that can use this.

John Harcar (08:14.333)
Yeah.

John Harcar (08:31.314)
Yeah, no, mean, that’s huge. And I guess I kind of want to reel this back a little bit for a quick second. Explain to the NAR for our audience what that means, people that don’t know.

WealthTradie (08:43.32)
So the NAR is the National Association of Realtors, which is a group of real estate agents that are branded under the National Association of Realtors.

John Harcar (08:53.128)
Got it. Now I’m an investor or I’m a flipper going to buy a property and I know the normal processes that we would use, right? We’d go, we’d get money from a lender, whether it’s hard money or it’s a private money or whatever. How is your process different? Like if I’m approaching a cell, cause if I’m mistaken, this is about JVing kind of with that homeowner, yes?

WealthTradie (09:14.912)
Right, so home equity invoice agreement is just a joint venture slash deed of trust. And the main thing is that deed of trust part of part, because right now as a fixed investor, if I go to those contractors, they don’t want to really work with us. So we’ve figured out, all right, let’s get those contractors to actually work with us. So what a home equity invoice agreement does as a liaison, as a fixed and foot for liaison, there’s many ways you can use, be a liaison and use it.

But if I’m using it as my fix and flip strategy, I would instead of going to the homeowner negotiating a price with them and telling him, hey, you your home’s actually worth this much after repair value, but I have all these costs. I have my hard money costs. have my, or even if I’m not using hard money, I have my capital costs. mean, someone, wherever that money is coming from, you got capital costs on it. I my transaction costs to purchase the property and put it in my name. And then I have my construction costs.

All of those costs, the homeowner has to trust me that I’m telling the truth on those costs because obviously if I just over inflate those costs, you know what mean, I can get the, or try to get the property cheaper than what it is. So we looked at, all right, well, wholesalers and fix and flippers, but we’ll stay more focused on the fix and flippers. The main first step is negotiating that purchase price with that homeowner. So there is our first issue and process that we have to fix.

And then looking at the second process of the fix and flip, my capital, all right. My capital issue.

John Harcar (10:43.902)
Okay, well, let’s stop here real quick. Let’s go back. Talk to me about that offer. what kind of offer am I making to? Am I making a traditional wholesale type of offer? Give me an idea of how this is maybe different.

WealthTradie (10:56.888)
So we’ve simplified it so much that the offer is just you go to the homeowner and say, I can offer you cashless renovations to get this to full market value, and then we all get paid and split those profits. That’s the simple, easy 100%, and then you just start working those numbers out. It’s no longer this wholesaling or fixing, flipping negotiation, going back and forth, needing a realtor in between to take care of everything. It’s as simple as just being honest and ethical in the situation.

John Harcar (11:12.882)
Love it.

WealthTradie (11:25.262)
And more than just being honest and ethical with that homeowner, you have a document that’s structured that, hey, you can’t bullshit them anymore. Like what’s on that document is what’s gonna happen. Yeah.

John Harcar (11:33.01)
Right. It’s plain. Yeah, black and white. It’s right in front of you. Okay, this is awesome. So your company, you guys are liaisons.

WealthTradie (11:43.136)
Right, we licensed the liaisons, so we’re the NAR that license realtors. But yeah, we licensed liaisons that now those liaisons, they can use it as that fix and flip by just going out and offering that home or cashless renovations. And all they’re doing now as a fix and flipper is connecting the homeowner with that cashless contractor. And that cashless contractor is those more business investment minded contractors that are willing to

John Harcar (11:45.992)
K. K.

John Harcar (12:09.086)
Mm-hmm.

WealthTradie (12:10.382)
upfront whatever their estimate is. If it’s a $10,000 estimate, all right, well, I’m pushing that $10,000 to when the property actually sells rather than getting paid cash upfront.

John Harcar (12:21.272)
So basically, you know, pay for what you’ve done. Eat what you kill kind of thing. I guess you could say that’s awesome. So how has this I guess let’s go over a little of the pros and cons of this versus how we would traditionally do a wholesale and or fix and flip.

WealthTradie (12:38.638)
So the pros is obviously the simplicity of it. Hey, I can just go to the homeowner, offers cashless renovations. I don’t have to worry about negotiating all the timeframe. It makes my lead generation costs way, way cheaper. Traditionally, if you’re a wholesaler, fix and flip, or you’re paying anywhere between 40 to $150 per lead of a distressed property homeowner, we’re paying about $7. And it’s the same questionnaire, same property, same motivation as the homeowner. And that gives you the gauge of like, okay,

how appealing is this to homeowners compared to our traditional fix and flip offers to homeowners. So just even on that first interaction, we’re already cutting so much cost. The second thing goes into, all right, when I purchased the property, I have all my capital costs. Well, all your capital costs are gone now because that’s not your business anymore. You no longer have to provide that capital value as a fix and flipper to get that property renovated and fixed. Now I’m having the homeowner.

John Harcar (13:15.112)
Sure.

WealthTradie (13:37.326)
cover the purchase because they already own it. And then I’m having the contractor cover his contracting price that currently is probably overplated in the industry. And even if that’s not capable and there’s some kind of liquidity need, that’s where the liaison can provide the minimum liquidity to that contractor to get that project done. So traditionally in hard money, you’ll pay around 10 to 15 % down of the purchase and the renovation cost.

John Harcar (13:44.626)
until it sells, right, yeah.

John Harcar (13:57.342)
to get it.

WealthTradie (14:04.738)
But now, hey, I’m only paying minimum, probably, material and some labor of the construction cost. So I’m no longer up-fronting purchase prices of construction.

John Harcar (14:13.352)
Man, that’s ingenious. I mean, I’ve known of folks JVing with a homeowner and coming in and I’ll pay for the flip, right? And then we’ll just split the profits when we’re done, that type of thing. How are you finding these cash, what did you say? Cashless renovation guys? How are you finding the ones that are willing to do that?

WealthTradie (14:35.79)
So that’s where it comes into, I’m uniquely qualified to be able to structure this kind of business because I understand I’m a third generation contractor. I know exactly what the issues are in the mentality of a contractor. Yeah, I’m not an investor trying to just, you know, sell it to contractor. Yeah. So the main thing comes down to, hey, contractors.

John Harcar (14:44.926)
Yeah, it’s not like you’re right off the boat like yeah, yeah Say I know how to do that rehab, but yeah

WealthTradie (14:57.398)
Even though they are already technically tied to the property, as soon as they step foot on that and do any work on that property, legally they’re still tied to that property. They can go file a material lien whether they had a good contract with it or not, but they understand the issues with those material liens. Sometimes those material liens don’t happen and they fall short and just never get paid. So we looked at, all right, well how do we make sure that contractors get paid no matter what? So we went all the way to the top. Banks and lenders, they always get paid no matter what.

So we took the same tool that they use, the Dita Trust, and we brought it down to the contractor. And we simplified it. Instead of using all this financial jargon in the industry, we just say, hey, this is an invoice agreement, even though it’s an actual joint venture Dita Trust on the back end as the tool security. And that’s, know, if they start questioning like, well, I’m not gonna get paid. I’d rather get paid. No, you’re getting paid as secured as the bank gets paid.

John Harcar (15:27.795)
Yeah.

John Harcar (15:42.163)
Mm-hmm.

John Harcar (15:52.605)
Yeah.

WealthTradie (15:53.484)
And this is where we provide that security and that knowledge bridge gap for them. And then liaisons can provide that to those contractors. And that’s the extra value the liaison provides for the deal of being able to bridge that gap for those contractors and homeowners to know that, hey, as soon as the contractor starts, he knows he’s getting paid as long as he’s performing on the contract. Now the cons, you know, is the, right, well, what happens if the…

John Harcar (16:04.155)
Mm-hmm.

WealthTradie (16:20.61)
The property doesn’t sell. What happens if the property actually sells less than what we everyone thought it was supposed to sell on? There are certain structures inside of that deed of trust. Same thing with the lien. You have to perfect the lien before you can actually claim the lien on a property. The same structure we put on that deed of trust. Look, there’s this procedure that you gotta do after you’re done with the work. You gotta get signed off from the homeowner and then it perfects the deed. So the cons.

is all right, well, even if I perfect my deed, my home equity invoice agreement, and let’s say the property tanks 5%, 10 % in the market and is less, we have a stop loss on it. we made sure contractors right now, you go to them and say, hey, what’s your material price as a fix and flip rate? know what mean? They don’t want to show you. We forced them to show them of like, look, you have to put your hard cost on there, your material and labor, and then put your business profit separate.

John Harcar (17:05.807)
No, no, heck no.

WealthTradie (17:16.174)
And then that hard cost, that material labor is a floor for them. So even if the markets tank and whatnot, they’re still, yeah, they’re gonna get that hard cost at least paid and be able to track down the homeowner even on their credit side afterwards. But it’s still 100 % asset base is what the agreement is. But that’s where the cons come in. But we structured it, all right, well, let’s protect all these cons in the industry of if it tanks.

John Harcar (17:24.04)
they still know they’re gonna get a little paid.

John Harcar (17:43.454)
Mm-hmm.

WealthTradie (17:44.118)
if the contractor doesn’t perform, if someone’s lending the contractor their capital, their minimum capital, what happens if that lender stops performing? Because even in the fix and flip industry, we’ve had it, you submit a draw request, and I’ve had it where I’ve waited over a month long to get money back to be able to pay my contractors out. So it’s been, even on the lending side, we’ve looked like, all right, let’s look at the cons on the lending side. What happens when the lender doesn’t actually perform their duty?

John Harcar (17:48.915)
Yeah.

John Harcar (17:55.432)
We all know what happens.

WealthTradie (18:12.194)
Well, guess what? That lender’s going to lose out on all of their equity on that agreement if they don’t actually perform. So now we’re even holding not just contractors self-accountable, but lenders self-accountable. Yeah.

John Harcar (18:20.976)
and lenders. I love that. I love that. Do you have a legal background at all or did you have to go like hire a lawyer to rewrite some of this paperwork or change? I mean, how did you come up with all that?

WealthTradie (18:35.694)
So my legal background actually started in the Marine Corps. Obviously it’s a government where it’s self-entity business, but a lot of the policies in the support equipment licensing and training over in Okinawa, wrote, not a good portion, but I wrote some of the policies in there that are still in use today for the equipment and the training and whatnot. So I already knew how to structure things, the semantics with words and language and whatnot, and then just diving into the issues.

on my actual fix and flip investing journey. I got hit with two title attorneys that screwed me over. And you pay them and you’re their client, but they screwed me over and didn’t take any self accountability for checking the documents, making sure the documents are worded and properly corrected. So I was the one left holding the bill, even though I paid them to check everything.

John Harcar (19:05.854)
Mm-hmm.

WealthTradie (19:28.246)
So it came down to, all well, these attorneys and lawyers are also not abiding by anything. You know what mean? They’re not self-accountable or doing anything. They get a paycheck and they’re done.

John Harcar (19:36.446)
Yeah, well, there’s a lot of things that people aren’t really held accountable for much these days, it seems like.

WealthTradie (19:42.958)
So it came down to like, if a lawyer can do it, I can do it. And that’s what it came down to. So I did my, I started drafting and structuring the document and then sent it to the attorneys and lawyers so that I can have their checkbox legally on it and whatnot. But a lot of the intellectual property protection of our contract is the structure of it, not just the legal formalities and the semantics of the words and the language on it. So it it came down.

going back and forth between attorneys and myself to structure this. Even attorneys, what mean? This is just an attorney document. It’s just a legal document. So you’d think any attorney out there, and a lot of them are in real estate, would already do this. But they don’t have the continuous process mindset or structure mindset of seeing what’s fair for every side. Not just the titles aside, or not just for the lender’s side. No, hey, yeah.

John Harcar (20:36.774)
Right, not just for the whole, for everybody, yeah.

WealthTradie (20:39.79)
It’s about playing the game fairly for each side so that everyone starts playing the game more and faster and everything starts moving around. So my legal background is very, very minimum, but my confidence in my risk level is very high.

John Harcar (20:49.886)
Hey

It sounds like you put together a pretty sweet little plan. What does your team look like now? What does your business look like now?

WealthTradie (21:00.878)
You’re looking at them.

John Harcar (21:02.353)
One Man Show.

WealthTradie (21:03.53)
One man show. And more than just a one man show, obviously, you know, I’ve had teams of hired services, but the actual team of this business is just myself. And then obviously hiring third parties and whatnot to structure the documents legally, properly wise. And then we push out, our liaisons are pretty much our partners. know what I mean? So every liaison we license, every new fix and flipper, wholesaler, realtor, lender out there that we license under this to use this.

is pretty much partnering and teaming up with us, just like how every Realtor is part of the NAR. Every home equity and voice liaison is now a part of us. So our team is pretty much all of our liaisons.

John Harcar (21:45.052)
What type of cost is involved in becoming a liaison?

WealthTradie (21:48.366)
So right now we’ve looked at, hey, everyone’s familiar with the NAR lawsuits that are all coming out. we’re not, we’re gonna get hit with the same stuff. Not the same incidents, but someone, there’s always 10 to percent usually. Someone’s gonna bitch mode and complain as that we say in the Marine Corps. And in the Marine Corps, everything has to be 100 % perfect, but there’s always 10%, no matter what. And we know it’s coming.

John Harcar (21:58.163)
You

John Harcar (22:09.416)
Sure, always.

WealthTradie (22:17.422)
So that 10 % that’s eventually gonna come, that’s what we’re gonna have to hit wise. So we looked at, right, well what’s every of the boots on the ground say about that? Because they’re the ones that actually affected, you know what mean? NAR has the lawsuits and they have to do whatever, but the people who affected are the people that have to actually use their agreements and stuff. So we looked at, all right realtors, what did you think about the NAR and their whole lawsuits? And they said, well…

John Harcar (22:29.276)
Right, of course.

WealthTradie (22:41.262)
Hey, a $300 license to do this stuff, to be able to consult and manage properties for people is way too low. So we said, all right, well, we don’t have the testing and all that stuff organized right now. So we said, all right, well, our entry, barrier entry is people that are actually in the industry already. And to prove that you’re in the industry already is simply, hey, a monetary kind of figure. Obviously, you can have plenty of people, monetary already.

have those resources and get into this. But obviously you have to get licensed through me. So I have to sit down with them, make sure that they’ve got some kind of background, understand the state licensing that you will need if you’re gonna use it for this. But if you’re not and you’re using it for this, you can go ahead and use it. Just to make sure. Yeah, this works currently nationally. There are gonna be nuances that even your title attorney that you take it to, they’re gonna…

John Harcar (23:12.542)
Mm-hmm.

John Harcar (23:24.798)
Mm-hmm.

John Harcar (23:29.202)
Does it work in all states?

WealthTradie (23:39.31)
Again, bitch mode and complain. There’s going to be devil’s in the mouth there. At that point, the liaisons and everyone just come back to us and we just negotiate and talk to that title agent. All right, you want this semantic word in there? We’ll put that semantic word in there. But hey, we have to make sure that we’re the referees on this, just like the NAR, the referees of the listing agreements. Hey, you can’t do this because it crosses this person’s structure of protecting the homeowner, protecting the lender, or protecting the contractor.

John Harcar (23:42.35)
Ha ha ha.

WealthTradie (24:07.17)
And then it goes back and forth. Most of those attidual attorneys will wise up and they’re like, OK, I see why that’s in there and why I can’t do this. I can’t over protect myself as the title attorney and put this clause in there. like, no, you can’t because you need to put that risk in there too if you’re hopping on this property. Sorry, I lost track of the question.

John Harcar (24:29.278)
So no, no, it’s okay. Give me a, give me a quick little elevator pitch. How could this help? If I’m a real estate professional, whether it’s an investor, flipper agent, whatever it is, how does it help my business?

WealthTradie (24:42.936)
So if we’re looking at business metrics, we’re looking at, all right, what’s your lead generation cost? Wholesalers, fixers, and realtors, they’re spending 50 to 150 bucks, sometimes even more time-wise if they’re cold calling and not lead generation or paying for leads. That time still adds up too, which costs more than that in the first place. Yeah, so if you’re paying yourself even 10 bucks an hour and you’re spending a month long to secure a lead,

John Harcar (25:05.256)
Yeah

WealthTradie (25:12.11)
You what mean? You’re spending almost $2,000, $3,000 just to secure that lead. So just turning at that, hey, your lead generation is down to seven bucks. So much so that we offer actually the leads for free. So if you’re a liaison with us and we have an overflow of homeowners that need liaisons to help bridge that gap with contractors, we just give them to you for free. Because again, we’re not a liaison business trying to do this ourselves. We’re trying to get more people to do it. So we give the leads out for free or we

John Harcar (25:12.273)
That’s a lot of money.

John Harcar (25:24.414)
Wow, okay.

John Harcar (25:35.974)
Mm-hmm. Yeah, I love it.

WealthTradie (25:40.684)
teach you how to set up the lead generation to get those $7 leads, which is just your current advanced marketing for Facebook, Google, any kind of paid ads. And then you look at, all well, what’s my overhead cost as the business? Well, as an overhead cost, I have my capital expenses, which is, again, purchasing the property and the renovation costs. How do we solve that for the fix and flipper, wholesaler, and the realtor?

John Harcar (25:49.586)
Facebook or SEO type of stuff. Yeah.

WealthTradie (26:06.252)
to do that. Obviously the realtor doesn’t have that issue because they’re just listing the property and the wholesaler doesn’t have that issue because they’re just flipping the contract. So but the fixer and has the issue and that’s the value they bring the market but and everyone knows the fixer and flipper is the one that’s supposed to be making the more the money but it doesn’t usually happen that way. Yeah yeah and that’s the issue issue in the industry is fix and flippers hey even if you’re using our money there’s a 30 %

John Harcar (26:23.902)
But it doesn’t always happen that way. No, not in these times.

WealthTradie (26:33.71)
gap in there that you have to leave in there, but guess what? You have all these other service providers, the realtor, the title agent, the contractors, extra fees, and you’re only left with about five to 10%. And that’s a very unhealthy business. Every business should keep at least a 20 to 30 % business profit margin in there. So we looked at, right, well let’s look at the overhead costs from the highest point, the fixin’ flippers, the capital expenses. Well how do we get?

John Harcar (26:41.544)
Mm-hmm.

John Harcar (26:47.036)
No, you can’t survive that way.

John Harcar (26:52.71)
Sweet.

WealthTradie (27:01.292)
the capital expenses out. And there’s different ways you can do it. There’s different strategies out there with sub two, seller financing and whatnot, which gets into a little bit more complexity of like, gotta, you still hold the deed, but I’m taking over, or I’m taking over the deed, but I’m still paying for your mortgage and whatnot. We just simplified it to like, okay, now you just keep everything the same, the normal, whatever you’re doing right now.

And I’m just gonna come and bridge the gap of, getting this contractor to pay and cover the renovation costs.

John Harcar (27:33.052)
Have you ever had a situation where at the end of that the homeowner is like, no, I love this. I’ll pay the contractor, but I’m not selling it.

WealthTradie (27:39.81)
So this gets brought up a lot, it’s like, okay, well, what about the contract? What if the homeowner doesn’t want to sell in six months, like a normal flip? What if he wants to hold on for three or four years and just wants the renovations to have a new kitchen? Or wants the renovations to have a new deck? And there’s a lot of homeowners out there, that’s any homeowner that wants any renovation out there. So now we’re not just opening into investor mindset homeowners, we’re opening up to all construction out there of hey, cashless renovations for homeowners.

And the biggest issues for contractors, their current strategy to be able to offer that to homeowners is going to, again, third party banks and lenders. Any contractor that offers homeowner financing, they’re not offering it in house because they don’t know how to structure it like the banker lender. And the bank and lender’s doing the same thing. They’re taking their tool, the deed of trust and the promissory note, and they’re doing it for the contractor. So we gave that.

John Harcar (28:15.986)
and then still getting that money,

John Harcar (28:22.654)
They’re getting it through their lenders. Yeah

WealthTradie (28:34.274)
we took that tool from the bank lenders and simplified it for the contractors to use. To where now the contractors position as the equity holder and now the lenders can lend to the contractor directly instead of lending to the homeowner and then the homeowner paying the contractor. Which is already an issue in the lending side because now as soon as I give the cash to the homeowner for their equity, I don’t know what they’re spending it on. They can spend it on anything.

John Harcar (28:39.954)
This is awesome.

John Harcar (28:49.784)
Mmm. Got it.

John Harcar (28:59.795)
Yeah.

WealthTradie (29:00.12)
But if I’m a lender and I’m paying directly the contractor his liquid needs and its minimum liquid needs and it’s tied to the actual hard cost that’s documented and not their business inflated business profit, then I have as a lender a direct 100 % hard money. So I’m not as a hard money lender purchasing a property and have purchase price inflated in there and then also the inflated business construction cost in there. No, I am directly lending.

John Harcar (29:09.309)
Mm-hmm.

John Harcar (29:18.419)
Yeah.

WealthTradie (29:28.524)
directly to the hard material cost of that property. So even if that deed of trust, you know, messes up, and it does in the lending world, a lot of people don’t understand that. Promising notes and deed of trust are two separate assets and documents. And if they’re not tied together 100%, which a lot of lenders and these note sellers in the background are selling and buying notes, they’re messing up because they break that title and that connection to the actual real property, and their whole note can get wiped off. People don’t understand, like, if you have a lender on your property,

John Harcar (29:31.774)
I love it.

John Harcar (29:35.518)
Mm-hmm.

John Harcar (29:50.91)
Right

WealthTradie (29:57.838)
If they did some shady stuff in the background and didn’t publicly make it known through a couple different agencies that they’re legally required to, that’s gone. So if you have a $200, $300 hard money lender on it, note on it, it’s possible that that note is null and void, like gone. And that’s a huge issue on the lending side no one wants to know about. And that’s the 2008 market we’re currently in. Because that’s as the lending business and the finance side.

John Harcar (30:05.064)
Mm-hmm.

John Harcar (30:15.41)
We can go over this stuff forever. Yeah.

WealthTradie (30:25.55)
We have to sell and buy notes to keep our assets and our balance sheets good We have a bad asset that isn’t paying Hey, I’m want to sell that note just like I want to sell the property But I can’t sell the property because the owner owns that but I own the note so can sell the note at least And there’s shady ways people are doing not shady ways I mean some are doing shady, but they’re ignorant to actually learning the actual full business It’s just like any business owner like we just hop into when we learn as we go most of the time

The same thing with all the finance guys out there. They’re business entrepreneurs. They hop into it and they’re learning as they go. But a lot of people don’t.

John Harcar (30:59.87)
Yeah. Well, well, unfortunately we’re running a little bit out of time here. Yeah, I could talk to you about this for a long time, but, and I appreciate you coming on and sharing all this. This is ingenious. mean, I really, I really liked the fact that it’s holding them, holding people to the fire and it’s like, you know, perform and get paid. If anyone wants to learn more about this, about you, what you’re working on, where do they go?

WealthTradie (31:05.548)
Yeah, bye.

WealthTradie (31:21.346)
Just WealthTradee.com. Maybe you’ll be able to take a picture of that. Or just Google Home Equity Invoice Agreement and it should pop right up. We’ve been spending the last six months just straight content, content, content to get that out there so when anyone looks it up or hears about it, they can easily find it. And we’ll send you a copy of our apprentice book, which again goes down through the…

John Harcar (31:26.056)
We’ll put it in the notes.

John Harcar (31:45.36)
Awesome, man, that’d be great.

WealthTradie (31:48.718)
just the different industries and whatnot and the corruptions that are in there. We call it our Jerry Maguire mission statement to the industry, if you’re familiar with the Tom Cruise movie. And then, yeah, so we’ll send you over a copy, the ebook version, and you can give it to your audience and whatnot to learn the full scope of the industry to empower yourself of, all right, well, this is every other person’s objective, and now can gear myself towards a

John Harcar (31:52.415)
Ha ha.

John Harcar (31:56.528)
I love it. I love it.

John Harcar (32:04.126)
Cool. Yeah, we’ll talk off. We’ll talk offline.

WealthTradie (32:17.87)
all right, I’m not gonna let them overplay their objective because now I’m knowledge empowered to go do this. Obviously there’s some home equity invoice agreement put in there to see how it revolutionizes traditional real estate industries, but the main of the apprentice book is just to empower people of the full scope of the business because once you have the full scope of the business, you can personally continue this process improvement mindset the whole thing for yourself.

John Harcar (32:42.952)
Mm hmm. Awesome.

WealthTradie (32:45.026)
But if you’re missing three or four different industries or pieces, you can’t continue this process improvement at, because there’s all these hidden fogs of war and unknowns for you.

John Harcar (32:53.225)
So guys, go out there and get the book. I hope everybody enjoyed the show, man. This was a mind blow. It was really awesome. I appreciate your time once again, Shane. And guys, we’ll see you on the next show.

WealthTradie (33:05.838)
Appreciate it.