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Show Summary
In this episode of the Investor Fuel Podcast, host Michelle Kesil interviews James DeHart, founder of the DeHeart Investment Group. They discuss the intricacies of creative financing in real estate, focusing on how James structures deals to help sellers and investors alike. James shares insights on networking, the importance of consistency in business, and various strategies for acquiring properties without traditional bank financing. He emphasizes the long-term vision for his investments and the additional services his company offers to support investors.
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Investor Fuel Show Transcript:
James DeHart (00:00)
Well, there’s, mean, can wholesale, you can do innovations. You can, you know, do buy, rehab, rent, refinance. There’s, you know, buy and holds. There’s, I mean, there’s so many different options, but also like with subject to or creative finance, you know, you can get into a property, zero down, zero interest making.payments to the seller, but you’ve run out the property. So you’re creating cashflow for you, but you’re coming no money out of pocket. You’re not going to a bank. You’re not doing down payments. You’re not ruining your credit.
Michelle Kesil (02:13)
everybody, welcome to the Investor Fuel Podcast. I’m your host, Michelle Kesil. Today I’m joined by someone that I’ve been looking forward to chatting with, James DeHart, who’s been making serious moves in the real estate investing and creative financing space. So excited to have you here today, James.James DeHart (02:33)
thank you for having me.Michelle Kesil (02:35)
Yeah, absolutely. I think our listeners are going to take a lot away from how you’re working on structuring deals and providing solutions for people that are looking to invest. So yeah, let’s dive into all of that.James DeHart (02:50)
Sounds great.Michelle Kesil (02:50)
Yeah, so first off for people who are not familiar with you and your world, can you give the short version of what your main focus is?James DeHart (02:59)
Well, I’m the founder of the DeHeart Investment Group based in Chattanooga, Tennessee. We specialize in creative finance and acquisitions. We do a lot of wholesaling, but right now our main focus is acquisitions and structuring of creative deals, mainly subject to, we’ll do wraps, lease options, things like that.but mainly just focusing on trying to acquire multifamily and help rebuild and revitalize our communities.
Michelle Kesil (03:31)
Awesome. And are you only operating in the Tennessee market or are you operating in other states nationwide?James DeHart (03:38)
I do, we do operate in other states. We operate in Georgia, New York, Tennessee, Alabama, Florida, South Carolina, North Carolina. Those are just some of the main markets that we work in.Michelle Kesil (03:51)
Awesome. I would love for you to expand on these creative solutions that you work on. Like what does that look like?James DeHart (03:58)
Well, a lot of times…We find homes on the market that have been on the MLS way too long and are having trouble selling. And usually it’s because sometimes the prices are too high or there’s issues that they don’t want to fix and things like that.
And so a lot of times we come in to be able to give the seller another option rather than just a cash sell. find opportunities to be able to one, present them cash flow and the ability to be able to move out and find another home without ruining their credit or having to take another while or
things like that, we structure deals so we would be able to take in the property, be able to move in a tenant and cash flow while also helping the seller keep their credit and everything.
is I’m sorry.
Michelle Kesil (05:41)
Awesome.No worries. Yeah, sounds like you guys are really doing some good work and finding solutions for people to get those investments that they’re looking for. What is like the key to keeping this business running smoothly?
James DeHart (05:57)
would definitely say just consistency, constantly following up on, on seller leads and, following up with realtors. we get a lot of our leads from realtors just needing to move properties or trying to help the seller move on from a property. a lot of times, you know, we’ll come in and we’ll, we’ll take over, you know, and, we’ll help.We’ll pay the commissions and you know, so realtors like to send us their leads whenever there is possible. But I would say definitely just consistency, showing up every day, making those phone calls, know, and just, you know, networking, getting out there, meeting people, going to the meetups, know, going to coffee shops.
passing your card out, things like that. Just get out there, make a name for yourself, and just be consistent and follow up.
Michelle Kesil (06:50)
Yeah, totally. That stuff is so important, especially the networking when it comes to growing your network and creating those new relationships. What are some things that have made a big difference for you?James DeHart (07:03)
I would definitely say…I guess you could say I used to not really be a very social person before I got into real estate. I was more of a keep your head down to work and push kind of person. But having to force myself out of that shell and get out there and actually network has been a really, you know, big change for me, but also in a positive way. Just being able to get out there and, you know,
talk to people about different scenarios or different options that they may have, you know, letting them know that they’re not just, ⁓ you know, waiting on a realtor waiting on somebody to come and buy their house off on the market. You know, there’s a lot of options, a lot of ways to make money in this industry. And it’s not just, you know, buying a house, selling a house. There’s so many different ways to make money. And
We try to make it so it’s available for everybody. So I try to network and get out as much as possible in different groups and different cities and different areas to talk to people just to, you know, get not only my brand out, but the knowledge that would be able to help people grow not only in their business, but in life period.
Michelle Kesil (08:18)
Yeah, you were mentioning some, there’s like other ways to make money, not just in like the typical ways that people think. Can you expand on what that means and what that looks like?James DeHart (09:03)
Well, there’s, mean, can wholesale, you can do innovations. You can, you know, do buy, rehab, rent, refinance. There’s, you know, buy and holds. There’s, I mean, there’s so many different options, but also like with subject to or creative finance, you know, you can get into a property, zero down, zero interest making.payments to the seller, but you’ve run out the property. So you’re creating cashflow for you, but you’re coming no money out of pocket. You’re not going to a bank. You’re not doing down payments. You’re not ruining your
You don’t have to, you know, go out and pay all your credit card debt and not worry about buying a new car because I have to get this mortgage. Like there’s so many different opportunities throughout real estate.
You you can pick up and like, ⁓ you know, and do lease options where you get a big down payment. Then you’re making passive income throughout the next three years. And then the buyer decides to either, you know, move on or buy the property. You still have, you know, the down payment, plus all the passive income. And if they decide to move on, then you can pretty much rinse and repeat.
You know, and because the down payment would be non-refundable. So then you put it back out there, at least to own, you receive another down payment for say 30,000 plus the rent for the next three years, but they actually decided to buy it. So now, you know, you’re gaining more money on top of the property, actual value.
Michelle Kesil (10:47)
Yeah, I love that. That’s a unique way to look at things and definitely not something that most people are aware of. Thank you for sharing that. So let me ask you this. What are you like most focused on solving or scaling next in your business?James DeHart (11:03)
Right now, I’m mostly focused on acquiring. I would really like to acquire multifamily. I’m looking at a 25 unit townhome complex currently. It’s a new build and it really has great potential and I can see it being a massive cash flow. But the thing is that the cell or thedevelopers actually having trouble moving the property just because of the interest rates. They’re unable to sell each one individually. And the way the current market is in Chattanooga, not a lot of townhomes are being sold. So if I were able to pick that up, you know, with 10 % down interest rates, interest only payments to the seller and be able to secure the balloon for a five year period.
then I would be able to create not only passive income, but I would be able to take care of the seller’s needs to be able to clear inventory, be able to add positive cash flow to their books also, and be able to open up opportunities for them to be able to move on without having to pay realtor fees on 25 units, without having to pay
holding fees and everything else. So it really helps the seller more than anything. And so what I’m doing right now is I’m actually building a real estate fund to be able to finance that and be able to give accredited investors the opportunity to grow passive income through this deal also.
Obviously, on the back end, over the next few years, I’m not personally not going to see a lot of money out of it. But I see this as a long-term play. I’m not looking for the quick buck on that. I’m looking 10, 15, 20 years down the road, when my kids are older and they’re able to get into the business, I want them to be able to scale and keep things going.
With this fund, I focus on 8 % annual returns and with a 15 to 20 % annual profit, which would make great passive income or passive returns for any accredited investor that wanted to get in.
Michelle Kesil (14:10)
Yeah, that’s awesome. I think that’s an exciting and big opportunity and it’s good to look at things for that long-term vision versus yeah, like those little short-term wins that some people are trying to focus on.So what are some of the tools or strategies that you support people with when it comes to, because I know you mentioned you provide solutions for people that want to avoid using the banks. So what are some of those differences between the banks and what you can provide that you support people with?
James DeHart (14:47)
Well, pretty much people can come to me and be like, hey, I’m looking for a property under seller financing or some type of creative financing where they would be able to get in with a low down payment. And this way they’re able to get into a property. A lot of times, most properties that we look forfor sub two, they’re tax delinquent or they’re behind on mortgage payments and they want to get out of a property before it damages their credit or they lose everything. So we’ll come in and we’ll take over those payments and catch up the arrears and things like that. And to where it’s more interesting for
somebody to just come in to take over the payment will assign that contract over to the new family or something like that. This way, they’re able to over the property with a low down payment and the low interest rates versus going to a bank and fighting just to get 6 % interest at the current market.
They’ll be able to get into properties with 2%, 3 % interest rates and things like that, you know, and not have to worry about coming to the table with 20%. We can a lot of times negotiate properties with zero down or just a small 5%, 10 % down, which makes it more affordable for everyday people to be able to get into properties and secure
properties and then later down the road they can refinance and do as needed but it’s mostly about helping other people. I mean there’s a lot of professional people out there that by the end of the year they claim zero, they claim that they bring no money in so it’s hard for them to get mortgages also. So with seller financing, creative financing,
You’re able to open up opportunities for people to get into properties without traditional lending and traditional banks.
Michelle Kesil (16:59)
Yeah, that’s so important and really allows more flexibility. I love that. Are there any like criteria for the type of people that you work with?James DeHart (17:09)
Honestly, I don’t have a criteria as long as they’re able to meet the down payment guidelines and have the income and the ability to pay. Because that’s the main thing is making sure that the sellers are getting their payments. So we structure the deal to, if you mixX amount of payments, obviously the seller is going to take over the property. But we structure it to where if they’re going to miss the payment, I’m going to turn around, make the payment and then you’re going to be paying. They’re going to pay me because now I’m taking up back over the property because I don’t want the seller to default. I don’t want the seller to have to worry about, now I have to
figure out what’s going on with this property. I’ll have to sell it. I have to do this. I will come back in and take ownership and be like, have to structure this a different way or find new tenants or figure something out to where they’re able to be able to make the payments. I don’t want anyone on the streets. I don’t want to hurt people.
I want people to be able to live comfortably and happy and not have to worry about where they’re going to sleep at night.
Michelle Kesil (18:31)
Yeah, absolutely. That’s important is for people to have that like safety and security and just those needs met and to have support through that.So are there any other services that you’re offering within your business besides the financing?
James DeHart (18:49)
Well, we do offer wholesale services. mean, obvious, mainly for investors. If they’re looking for deals, they’re looking for properties. We find properties for investors all the time. We get leads in daily. we honestly, we move quite a bit of wholesale leads.So there’s opportunities there if anyone’s looking or needs a deal, just give me a shout. But other than that, it’s mainly just wholesaling and creative acquisitions that we focus on. We do do some boots on the ground services in cities like Atlanta, Nashville, Knoxville.
Birmingham, just because Chattanooga is a hub and it’s easy to get around, we do services like that for national investors, people who may be in California looking at a deal in Atlanta. We’ll go snap some photos or walk the property, do whatever we need to do to help them out also. So if anyone needs boots on the ground, we’re here for that.
Michelle Kesil (19:50)
Awesome. So before we wrap up here, if someone wants to reach out, connect, collaborate, where can people find you?James DeHart (19:56)
We are on Instagram and on Facebook at the De heart investment group. Also, I’m on Facebook under James Deheart. Or you can reach me at [email protected]. That’s my email. We’re currently rebuilding our website. So thepersonal company emails are currently down. We should have that up in another week or so.
Michelle Kesil (20:25)
Perfect. Well, listen, I really appreciate your time, your story, your perspective. Thank you for being here.James DeHart (20:32)
Thank you. Thank you very much for having me.Michelle Kesil (20:36)
Of course. And for those tuning into the show, if you got value from this, make sure that you’ve subscribed. We have more conversations with operators just like James that are building real businesses. And we’ll see you all on our next episode.
