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Show Summary
In this episode of the Investor Fuel Podcast, host Leo Prada speaks with Kip Adkins, a private money lender specializing in financing real estate investors. Kip shares insights into the lending process, the importance of understanding customer needs, and the challenges faced in real estate investments. He discusses a personal experience with a challenging fix-and-flip project, emphasizing the importance of perseverance and strategic planning. The conversation also covers Kip’s goals for scaling his business and the significance of integrity and networking in building relationships within the industry.
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Investor Fuel Show Transcript:
Kip Adkins (00:00)
I would say every real estate deal, whether I’m providing the financing for the borrower or whether I’m the entrepreneur, the sponsor on the deal and turning that property over to a better product, every deal has a little bit of sweat. Every deal has a small degree of risk. I’ll tell a story about my last fix and flip deal I did. I bought a property formy first seven figure real estate transaction. I bought a property for 1.7 million. I put $700,000 into this deal and I got financing and the financing came back. The appraisal came back a little low on the after repaired value. So I started to sweat a little bit.
Leo Prada (02:10)
everyone, welcome to investor fuel podcast. I’m your host Leo Prada and today I am joined with someone I’ve been looking forward to chatting with Kip who’s been making serious move in the real estate industry. Kip, I’m glad to have you over here, man. I think our listeners are really going to take something away from how you’re approaching your real estate investment. Now let’s dive in. And so.Kip Adkins (02:23)
youLeo Prada (02:37)
For people who may not be familiar with your world, can you give us a short version on what’s your main focus these days?Kip Adkins (02:44)
Absolutely, and thanks for having me, Leo. It’s a pleasure to be here. I’m Kip Adkins with Diversified Financing Solutions. We are a private money lender, for lack of better terms, synonymous with hard money lending, investment purpose finance. So what we do is we finance real estate investors for short-term fix and flip loan products.a real estate investor that’s buying a property to improve that property and resell that property or improve that property, refinance that property into a long term rental product. We have the full suite of loan products from fix and flip to DSCR long term 30 year rental loans, all with zero income documentation, no tax returns, no W-2s, two months bank statements, entity docs and the property address. And we’re off to the races.
Leo Prada (03:33)
Alright, that sounds good. Kip, what markets are you operating in? Is it nationwide?Kip Adkins (03:38)
It is nationwide. It’s hand-picked. 32 states, I believe we lend in right now, Leo. There’s a few states that I exclude, but I know you’re coming to us from Florida today. We do lend in Florida, Georgia, Tennessee, Alabama, Mississippi, Texas, Louisiana, Utah, Colorado, California, Washington.Yeah, there’s 32 in total. But we can drop a link to my website and it a map of all the areas we cover.
Leo Prada (04:07)
All right, all right. Love it. Love it. Keep something that actually caught my attention about you was the way ⁓ that you’ve been able to scale up your business and finance, you know, real estate investors for flipping houses. All right. Some of them you flip them, you sell them. And you told me that also some of them are for long term rentals. Right now. Now, canKip Adkins (04:31)
Yes, sir. Yep.Leo Prada (05:21)
You know, that’s actually not easy this type of, you know, these on this climate, you know, can you actually give us, know, the recipe to keep your business running smoothly?Kip Adkins (05:32)
Yeah, honestly, think it’s attentive to the customer and the customer’s needs. And what makes us unique is I’m a real estate investor myself. The staff, everybody, all our senior staff are real estate investors. We have over 100 years of real estate finance, real estate investing, incumulative between all of us. I’m not obviously 100 years old.That is what makes us, that’s where we’ve been able to be attentive to real estate investor needs. Real estate investors come to us and say, hey, we’re buying this property, we’re gonna fix it up, we’re gonna resell it, I have the capital for the down payment, I’m not gonna show my income. We understand that and that’s what this loan product is about. It’s about how much risk are we taking financing that deal? And we’re gonna take…
majority of the risk for that real estate investor based on credit score, based on experience, based on the project. We take the majority of the risk. They take a minority of the risk. They’ve got some protective equity in the deal. We’ve underwritten the deal. We think the borrower will be successful and we vet that deal out and we say, okay, we’re going to fund this deal. The whole process as long as it took me to explain it, I would put that in days. If a borrower is fast about getting us what we need, then we’re
Leo Prada (06:40)
Mm-hmm.Kip Adkins (06:45)
just as fast, if not faster, about turning this property out, turning this loan out. So a borrower can get cracking, swinging the hammers, and get that project back to a condition commensurate to the rest of the homes in the neighborhood, sell that property for profit. So it’s being attentive to the understanding real estate investor needs, because we are real estate investors ourselves, and getting their finance in place, and getting them to that level of success that they want to be at.Leo Prada (07:10)
Hey cool cool now keep I know that every operator you know has a moment where things got real all right maybe a deal that went sideways or maybe a flip home that didn’t give you as much profit as you wanted to do you mind sharing one of those momentsKip Adkins (07:29)
I would say every real estate deal, whether I’m providing the financing for the borrower or whether I’m the entrepreneur, the sponsor on the deal and turning that property over to a better product, every deal has a little bit of sweat. Every deal has a small degree of risk. I’ll tell a story about my last fix and flip deal I did. I bought a property formy first seven figure real estate transaction. I bought a property for 1.7 million. I put $700,000 into this deal and I got financing and the financing came back. The appraisal came back a little low on the after repaired value. So I started to sweat a little bit.
Yeah. I stuck with the course. I knew what the problem was. The problem was there were no comps to support this after repaired value and
I would tell borrowers not to do this, but this is within two blocks of my home. So I said, okay, I know this neighborhood. I know the demand. I’m going to keep working the problem. I’m going to fix this property up. I’m going to stay the course and I’m going to just have faith that this project is going to sell for what I need it to sell for. It went longer than expected. It became basically a ground up transaction, a ground up
project. We took it all the way down to the foundation. We expanded the foundation and then we went vertical. So the scope increased, the cost increased, the market seemingly for an appraiser’s opinion of value wasn’t there and we just kept the faith, kept working the problem. All along the way, this deal took 18 months. All along the way,
Leo Prada (08:49)
YouWow.
Kip Adkins (09:38)
I thinking, what are my exit plans? Right? You got to keep working the problem. If I can’t get out of this deal, if I can’t get an end user buyer to pay what I want them to pay for this project, how do I get out of this deal? And this is what, this is a good takeaway for all of my, all of my clients. Yeah. So I went, okay, what can I rent this property for? How do I refinance this deal? You get some of my cash back out, put that cash back to work in other projects and, um,Leo Prada (09:53)
Exactly.Kip Adkins (10:04)
and come out unscathed. So I stayed the course, finished the project. I didn’t start trying to save money. I had an idea in mind. I had a design. I had a level of finishes. I finished the product. I put it on the market. And I laid this all out for the real estate agent who listed the property for us and said, we don’t have anything like this in this area. We don’t have single level.roundup construction homes less than a mile to the beach at this level of finish. So I’m expecting nothing less than this list price. If don’t get this list price, I’m going to turn around and refinance this deal. I’m going to hang on to it and it’ll become a high luxury rental property. Yeah, yeah. So, but we won actually. I put the property on the market and someone recognized that avatar of that
Leo Prada (10:43)
Luxury rental property exactly. All right. All right. All rightKip Adkins (10:53)
buyer, that end user that I had in mind was somebody that was retired, sold their business, wealthy, kids are out of the house. They wanted that single level home. They didn’t want to go up three stairs, you three levels of stairs to be in a brand new home. This was the unicorn. And two buyers recognized that this was the unicorn in the area. And they both came in and competed against each other. And we got over list price, full cash.Leo Prada (11:09)
Exactly.Kip Adkins (11:19)
close in 10 days. Thank you. Yeah, I thank my lucky stars on that one that I didn’t have to pivot to a different strategy.Leo Prada (11:21)
Wow, wow, congratulations, man. Congratulations.Exactly
and you know what Kip that’s the kind of stuff that people don’t talk about enough you know you spending 18 months to finish a property you know that actually you were not finishing the property you were finishing your idea the idea that you had in your head you know because you said I’m not I’m not I’m not gonna worry about expenses right now you know I’m just want to finish the problem because it was becoming a problem right
but at the end it was not a problem. Exactly, you had a problem in my head. The property was not a problem. You had a problem in your head. But at the end, the adversity turned into you. The adversity that you had at the beginning, actually it ended up working for you because you were able to find not one, but two clients competing against
Kip Adkins (11:54)
It was becoming a problem in my head. Yeah, yeah.Leo Prada (12:17)
them not against your price they were competing against them all right so actually you know that that i think that’s what separates the folks who just dabble from the ones who stay in the game long term which is what you’ve been doing staying in the game for long term all right now let me ask you something kip what are you most focused on solving or scaling next what’s the next real goal for youKip Adkins (12:43)
Yeah, the next real goal for us is to scale the finance business. So we want to finance, we want to capture more of the market share for financing real estate investors. And we were doing so by delivering a cheaper cost of capital, an easier process, a faster process to fund those deals. And we’re working vigorously on scaling the business.and achieving all those goals right now. financing for real estate investors like myself, their projects, bringing their dream, their idea to fruition, getting their exit plan, making sure they’re going to be profitable. That’s what we’re working on right now.
Leo Prada (13:20)
Wow, that’s big, especially when you already got the experience in place, you know, so You’re trusted in your community. So people, know people eventually will will Will like that now I know that a lot of people listening are eitherEarly in their journey or looking to level up and I think they will benefit, you know
from hearing this coming from a person like you, when it comes about building relationships and growing your network, what’s made the biggest difference for you?
Kip Adkins (14:33)
Honestly, it’s been, you know, part of our foundation is integrity. And I think it’s being able to give someone a quick answer, say yes or no, yes, we can do this, no, we can’t do this. And people recognize that. And we’ve grown, we do a lot for marketing this business and we’re working on, that’s part of what we’re working on in scaling the business is marketing, but it’s been word of mouth. It’s been…those organic referrals from someone that says they’re working in their network and they’ve got a mastermind group and they’re working with other real estate investors and somebody says, hey, I need a hard money lender for a deal in Texas or Florida or Tennessee or Wisconsin or Louisiana. And they say, hey, know what, Kip did my last deal. This was very easy. He did what he said.
He was going to do and he performed and we got our deal and we got funded and and it was easy and We it’s you can see our Google reviews. We’ve got all five-star Google reviews I try and get every client to give us a Google review, but not everybody does but they’re all happy to refer people in because We’ve been delivering so that’s my network I do a little bit of networking with other real estate investors wholesalers
real estate agents and just letting them know that we’re here and this is what we do and what sets us apart is the integrity I think. So that’s where we’ve been able to.
Leo Prada (15:57)
Alright and actually integrity that’s something that you cannot fake you know someone is referring you and If your word of mouth, it’s actually increasing by day That’s actually because you’re doing something good Kip So you have to have to be actually you have to be actually be proud of what you have built. Alright ⁓ OkayKip Adkins (16:12)
Thank you. Yeah, I think so.Thank you, I appreciate that.
Leo Prada (16:21)
Listen kid before we wrap up if someone wanted to reach out to you connect with you maybe collaborate or learn more about what you’re doing what’s the best way for them to reach youKip Adkins (16:32)
Leo, we’ve tried to make it as easy as possible. We have several different ways, but I would say calling. We have a toll-free number. I don’t even know if toll-free matters anymore.Leo Prada (16:42)
YouKip Adkins (16:42)
I thinkany long distance call is free nowadays. So it’s 800-228-8180 and I’m an extension 100 and people can book a call with me on our website as well, which is ⁓ diversifiedfinancingsolutions.com. And there’s a link there where people can book an appointment with me, a 15 minute free call or longer if need be. take the time to educate people. Our mission is to…
educate, evaluate, and execute. teaching people what we do, how they can win at this, how they can win and become a real estate investor for that novice that’s doing his first deal, or how we compete with our competition. That’s part of the education. Evaluating their project, making sure they’re going to be profitable and how fast we can close that deal. And then executing is actually closing the deal and where the rubber hits the road.
The toll free number 800-228-8180 or diversifiedfinancingsolutions.com our website. We’re also, if you look up diversified financing solutions, we’re on Instagram. We have a YouTube channel with lots of content and lots of videos. Facebook. We’re all over the place. So if you just Google our name, I think it’s pretty easy to find us.
Leo Prada (17:50)
Perfect, perfect, perfect. Well, listen, Kip, I really appreciate your time, your story, and your perspective. We need more people in this space who are actually doing it the right way. All right? So thanks again for being here on the show. And for those of you tuning in, if you got value from this, make sure you’re subscribed. All right? We’ve got more conversations coming with operators, like Kip, who are out there building real businesses. All right?Kip Adkins (18:05)
Thanks for having me.Leo Prada (18:19)
So see you next episode.Kip Adkins (18:20)
Thanks, Leo. Appreciate it.
