Own a Home Without Banks: Slow Flip Owner Financing, Private Money, and 30-Year Contracts

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Show Summary

In this episode of the Real Estate Pros Podcast, Tony Wallace, founder of Slow Flip Coaching, shares his journey into real estate and the innovative Slow Flip method. He discusses how he transitioned from a pest control business to real estate investing, raising significant private funding and acquiring numerous properties. The conversation delves into the mechanics of the Slow Flip method, emphasizing its benefits for both investors and buyers, the importance of patience in real estate investing, and the potential risks involved. Tony also highlights success stories from his coaching program, illustrating how individuals have transformed their lives through real estate investing. He concludes with advice on how to get started in this field and the importance of mentorship.

Resources and Links from this show:

• • • Investor Fuel Real Estate Mastermind
    • Investor Machine Real Estate Lead Generation
    • Mike on Facebook
    • Mike on Instagram
    • Mike on LinkedIn
    • Tony Wallace’s Website
    • Tony Wallace’s Phone Number: (757) 729-2847

  Listen to the Audio Version of this Episode

  Investor Fuel Show Transcript:

  Tony Wallace (00:00)
  A $667 a month payment, is what your $30,000 mortgage payment is, that’s paid off in five years. Now you still have your payment coming in of roughly $800 a month. I get as much as $900. I have some that I get $1,100 for. I actually have one in Virginia that I get $1,695 for. I actually bought a house in Virginia two hours out from me. I bought it for $58,000. It took me two months. I sold it on a contract for deed for $199,000.

  I get a $16.95 a month payment. That’s a $604,000 return on a $58,000 house. It’s crazy the kind of returns we get.

  Kristen Knapp (00:37)
  Wow.

  Kristen Knapp (00:37)

  Welcome back to the Real Estate Pros Podcast. I’m Kristen and I’m here with Tony Wallace, who’s the founder of Slow Flip Coaching. He’s gonna teach us all about the Slow Flip Method, which is a really great win-win opportunity for everybody. So thanks for being here, Tony.

  Tony Wallace (02:25)
  Thank you, Kristen, for having me on here. Love to be here.

  Kristen Knapp (02:31)
  Amazing. Yeah, let’s start at the beginning. So how did you fall in love with the estate? How did you get into it?

  Tony Wallace (02:31)
  What would you like to know?

  Okay.

  it got in real estate back in 2004, I was flipping houses, buying, rehabbing, reselling. did 18 houses in two years. Made a ton of money and then I kept some houses for myself and then the market crashed and we were taught the burr method. know, buy, renovate, rent it out, refinance it, repeat. So I did that and when the market crashed, I had houses that I owed more money than they were worth so I couldn’t sell them.

  I couldn’t refinance them because I had maxed out my financing. So eventually I wound up losing houses and a lot of other people I know lost hundreds of houses during that time. And we started looking for a better way. I just put my head down and continue working in my termite and pest control business. And I had a friend, Scott Jelinek that formed a slowflip.com. He started teaching this method of slow flips and he was like, you got to do this, you got to do this. But I kept working 12, 14 hours a day. And then I started buying my first slow flip, my second one.

  And I realized how much money was in it. And then last year I sold my pest control business to do this full time. I was just, I could no longer in good conscience work a regular job anymore because I was making so much money on the slow flips. So over the course of the year, I raised about $2 million in private funding and I bought 48 houses, some with partners, some that I own my own free and clear. ⁓ It’s just been a wonderful thing and a win-win because

  Kristen Knapp (03:44)
  ⁓

  Wow.

  Tony Wallace (04:06)
  We help people who have money sitting in a savings account or 401k to make 12 to 14 % interest. So they allow us to use their money to fund houses. We never touch anybody’s money. It stays in their account. ⁓ When we buy a house, we send it to the title company. They clear it. Then the title company or the attorney sends a request for funding. So then my investor sends the funds and they get a deed of trust and a promissory note in return. And they start getting a monthly payment.

  Immediately the first of the month following the loan. So in 60 months, we are totally paid off We own the house free and clear but we sell it on a 30-year contract for deed. So we get income for 30 years It’s a win-win for everybody because our buyer is someone who normally wouldn’t qualify for a bank financing They’re able to buy a home instead of renting one and the payments about the same Maybe a few dollars higher than what they would pay for renting

  But the advantage is that payment stays the same for 30 years. So they don’t have a rent increase five, 10 years down the road. We include taxes in our payments. So that way I tell them the only time their payment would ever go up is if the taxes go up significantly. Because we want to make sure that the taxes are paid on the property and we don’t get a surprise that somebody didn’t pay them. So everybody wins all the way around. Our investor makes 12 to 14 % on their money. We make a healthy profit.

  Kristen Knapp (06:03)
  Mm-hmm.

  Tony Wallace (06:16)
  on selling the house

  Kristen Knapp (06:16)
  What?

  Tony Wallace (06:17)
  and our tenant, our buyer gets to own a house without the ⁓ hassles of qualifying for bank financing because one third of America can’t qualify for bank financing. So that’s who our customer is. It works out for everybody all the way around. We have people all over the country that is doing this investing because we buy houses not only in our local area, but all across the country. I have houses in St. Louis, Missouri.

  and multiple cities in Illinois. I have Peoria, Decatur, Galesburg, Jacksonville. They’re just, and I have properties in Virginia. It works anywhere in the country that you can find a property and people don’t believe that you can find a house for $30,000, but we buy average $30,000 houses and turned them into a 79 or $89,000 resale value. Cause we don’t have to worry about appraisers cause we are the bank. So we set the price.

  Kristen Knapp (06:52)
  Wow.

  Wow.

  Tony Wallace (07:11)
  Everybody wins and we have an annual summit for slow flip.com where people come to the Weston town center in Virginia Beach, Virginia. And last year we had over 450 people this year. We already have 550 people signed up for the summit. So we figured out next year, we’re going to need to go to a convention center because we’re at the biggest hotel in town and we’ve outgrown that. So there are people all over.

  Kristen Knapp (07:32)
  That’s, I mean,

  yeah. The whole story is amazing. mean, quitting your pest control company so recently and then doing this and having such success almost immediately. How did, I mean, what did that look like? Like starting your first few slow flips, were you just instantly drawn into the method?

  Tony Wallace (07:54)
  I was instantly drawn in because the first house I bought I paid thirty four thousand nine hundred dollars for it was in Virginia. I sold it a week later for a hundred and thirty nine thousand I got six thousand dollars down and I got a thirteen hundred dollar a month payment ⁓ After two years that young lady Unfortunately had a custody issue and she had the move. So she gave me the house back

  So I recently resold that house and got 10,000 down. I sold it for 159,000 and now I’ll get $1,500 a month. So my 30 year clock started all over again, but I’m already two and a half years paid off on the house.

  Kristen Knapp (08:32)
  Wow. Wow. I mean, it’s very rare to kind of jump into something and get success right away with it too. So I feel like that’s really encouraging for people starting out. What you’ve been able to build with the coaching program is spectacular where you guys are already at 550 people.

  Tony Wallace (08:51)
  Yeah, it’s crazy. It happens so fast. the reason why I do the coaching program, because like with any real estate education, there are a lot of people that will pay for education, but they just don’t know what to do after they’ve got that education. I do a one-on-one mentorship with people with slowflipcoach.com, and I show people how to do private money presentations. I will actually make private money presentations for them on their behalf if they know somebody that might have some money, but they’re not.

  you know, too sure about asking them. I’ll show them the right way to ask them. ⁓ I also will analyze deals. I’ll find them wholesale deals. I will find funding for properties if somebody doesn’t have their own money or somebody that they can talk to. We do provide funding for some of the properties. Obviously there’s an additional fee for that, but ⁓ we can help people get started. We have a program called Freedom Accelerator where we show people how to quit their day job in five years. And we do that by showing them how to buy 10 to 15 houses.

  Kristen Knapp (09:23)
  Yeah.

  Tony Wallace (09:48)
  If you buy 10 houses and you get an $800 a month average net from the house, that’s $8,000 a month. You buy 15, you got $12,000 a month. Well, between $8,000 and $12,000, most people can quit their day job.

  And once you prove to yourself that it’s real and you’ve been getting the payments for five years and you’ve paid your property off, and now you own it free and clear and all that money is yours, less whatever you owe for income taxes. And then there’s also ways to show you how to make that a lower figure too.

  Kristen Knapp (10:35)
  Right?

  Tony Wallace (10:51)
  So there’s all kinds of ways to do this.

  Kristen Knapp (10:52)
  No.

  That’s amazing. And is that the type of person that you see most often in your coaching, people who have full-time jobs wanting to do something in real estate full-time? Or do you get investors? OK, yeah. So it’s people who are really trying to do something in real estate.

  Tony Wallace (11:03)
  Correct. ⁓

  Yes, most people

  that have a day job and they’re just trying to figure out how to quit their day job. They want to get involved in real estate investing. They just don’t know where to start. And sometimes people don’t believe this is real. sometimes they don’t even get it until after they’ve been into it for a year or two. And then they start seeing the returns. That’s what convinced me after a year and a half in it. I said, I couldn’t in good conscience still work the 12, 14 hour days that I was doing. And I called, I actually called my son and my cousin and asked him if they wanted to buy the rest of the business from me.

  Kristen Knapp (11:20)
  Right.

  Tony Wallace (11:39)
  And they did, so I sold it to them. And ⁓ I started traveling around taking different real estate seminars, educating myself. And I realized I took a course out in St. Louis by Sean McCloskey, the guy who wrote Life and Air. And he convinced me that I wasn’t a real estate investor. I was a private money raiser because nothing happens until you raise money. So I made it my mission when I came back home to start talking to people. And I was amazed by how many people had money sitting in an account.

  Kristen Knapp (11:58)
  Right.

  Tony Wallace (12:08)
  that they were making, you know, a point or two points, if that on. And the first person I talked to, I walked out with an offer of a million dollars in funding. Second person I talked to, it was so simple. mean, the gentleman looked back at his wife and said, we could put three hundred thousand in account for Tony, could we? And she said, yes, we can. So they gave me three hundred thousand. They have now been there over a million dollars in funding to me for different deals.

  Kristen Knapp (12:13)
  Yeah.

  What?

  Tony Wallace (12:34)
  I use that to buy some houses for myself. I also loaned it to some of the other people in the group and helped them buy houses. And that makes a good profit for my lenders. I have several people, they do small loans. They might do one. I got one guy that made one loan and I got a guy that’s made 10 loans and now I have one that’s got 20 some loans. You know, it’s just different levels. So people can have any amount of money. We’re talking about a $30,000 house.

  Kristen Knapp (13:00)
  Right.

  Tony Wallace (13:00)
  So

  and even some houses I did a funding deal for a guy a couple months ago. He bought four houses for 20,000 each So he spent 80,000 in funding and he’s got them sold on slow flip contracts

  Kristen Knapp (13:09)
  Wow.

  Yeah, and when you’re talking about fundraising, you obviously know how to communicate with people, you know, communicate what this is and give them the opportunity. What are some of your tricks for talking to potential investors?

  Tony Wallace (13:30)
  Well,

  what I let them know to start off with, I don’t know, you can’t really, I guess the camera is reversed, but I have these shirts. I printed up 12 of these shirts that say, enjoy my residual income by making my lenders 12%. Ask me how. And I get people occasionally ask me, hey, how do I make 12 % on that? And other people, just kind of know through someone else or I do a lot of speaking engagement at local real estate investor groups. And I’ll have people come up to me afterwards and say, hey, I’d like to be a lender or hey, I’d like to be a student. I’d like to learn how to do this.

  Kristen Knapp (13:43)
  Yeah.

  Tony Wallace (13:59)
  I actually had two gentlemen that came up a few weeks ago, or actually a couple of months ago when I did a speaking engagement, and they have now funded one, two, three, they’ve funded six deals between the two of them right now. So the shirts work, the speaking engagements work, and people are able to make 12 to 14 % of their money, and then I can take someone who doesn’t know how to do it and say, hey, I can help you get funding, I’ve got funds available.

  I’ll also make private money presentations on your behalf to some people you might know. But the actual success in it is that I let the potential investor know, I’m never touching your money. You’re not giving me your money. The money stays in your account. And when we identify a property and we send it through title search, the attorney or the title company will then make a request for funding. And you fund that loan, you get a deed of trust securing your money and a promissory note from the borrower.

  Kristen Knapp (14:37)
  right?

  Tony Wallace (14:54)
  that they will pay that back every month on the first and 60 months. an average $30,000 loan pays back $10,040 over 60 months.

  And if they do the hack that I showed them, they can get $50,000 back because all their principal is back in 44 months. If they reloan that back out, now they’re making 50,000. They’re getting double payments for 16 months of that process on the same $30,000.

  Kristen Knapp (15:46)
  Wow.

  Yeah.

  And I think an important part about slow flipping is patience and not being too stressed out about needing a return right away. Can you just talk about the importance of that and just the different mentality?

  Tony Wallace (16:09)
  Yes.

  Well, that’s the whole name says it all slow flip we’re flipping a house slowly instead of being a traditional fix and flip where you go out and you buy a house and you renovate it and you sell it and You might make ten twenty thirty thousand dollars in one pop But then you got to go out and do it again next month to make any money This way you’re not making a whole lot of money over the five years. But after five years The return is tremendous. I mean you you take a

  Kristen Knapp (16:34)
  Right.

  Tony Wallace (16:44)
  A $667 a month payment, is what your $30,000 mortgage payment is, that’s paid off in five years. Now you still have your payment coming in of roughly $800 a month. I get as much as $900. I have some that I get $1,100 for. I actually have one in Virginia that I get $1,695 for. I actually bought a house in Virginia two hours out from me. I bought it for $58,000. It took me two months. I sold it on a contract for deed for $199,000.

  I get a $16.95 a month payment. That’s a $604,000 return on a $58,000 house. It’s crazy the kind of returns we get.

  Kristen Knapp (17:21)
  Wow.

  Tony Wallace (17:24)
  But again, like I said, it’s a win-win for everybody. The buyer that occupies the property, the lender that’s lending the money, the investor that’s doing the slow flip. And all of this can be…

  Kristen Knapp (17:32)
  Right. Are there…

  Tony Wallace (17:36)
  Go ahead.

  Kristen Knapp (17:37)
  I was just gonna say, there any like, what’s the risk involved? What are some downsides or things that can go wrong?

  Tony Wallace (17:45)
  There are downsides sometimes you will get a buyer that doesn’t perform ⁓ I will give you an example. I I had one of my first slow flips that I bought two and a half years I bought it from the city ⁓ Thirty thousand dollar loan on it The gentleman was occupying it to rehab it himself He paid on it for two years put a put a new roof on it and put up a fence and then six months ago He stopped paying me and started ghosting me

  and I tried everything to work it out with him. So this was a slow flip that went bad. So I finally had to go to court. You file a five day pay or quit notice and within a month I had possession of property back and I sold it. I closed on it yesterday and after paying off my mortgage, the balance of it, I walked away with a check for just a few hundred dollars short of $80,000.

  So that’s a downside. My slow flip went bad, but I made almost 80 grand on it. And the only thing I had out of my pocket on that house was five mortgage payments that I made to my lender that I did not get from my buyer.

  Kristen Knapp (18:51)
  Wow, Yeah,

  I would imagine there’s way more success stories.

  Tony Wallace (18:58)
  There’s more success stories than there are losses and generally there’s not even a loss. I mean, we had one house that caught fire and burned up and you know, the guy’s insurance paid off on it. ⁓ I have some houses in Peoria that I thought it was going to be a bad phone call. The guy called me up and said, I got to talk to you about the house and the health, it involves the health department. And I was like, this is not going to be a good call. He tells me his daughter tested positive for lead. ⁓ It has old windows, peeling paint.

  Kristen Knapp (19:25)
  ⁓

  Tony Wallace (19:27)
  on the windows, obviously. have them, they sign about 25 pages of documents. They get the lead disclosure notice. They know, they have all the warnings for everything. But it was not a bad phone call. What he wanted me to do was to sign a paper because we retain the deed to the houses. They’re only a contract for deed. They only get the deed once they’ve paid the obligation that they have. Well, the city had a program because he qualified.

  They put brand new windows in his house, painted the house, and even fixed the deck on his back door. And now I have a house that is a slow flip house that if he walked away from it, I got brand new windows, brand new paint and a brand new painted deck. And I actually had another lady that was in Peoria and she had some maintenance issues that the city sent a violation out for. And I called her up to take care of it. And she was like, I really

  Kristen Knapp (20:09)
  Yeah.

  Tony Wallace (20:22)
  I really can’t afford to could you do it and put it on the back end of my mortgage or I’ll make you a monthly payment or something. And I said, sure. So we did that. And then in the meantime, I said, Hey, why don’t you check with the city about the window program? She did two days later. She called me and said, she’s getting new windows in the house. So the city and HUD had a program to put brand new windows in the house because she qualified through income. So that’s an awesome thing for me. It’s an awesome thing for her. Now she’s got a house with brand new windows.

  There’s all kinds of government programs that people that buy these houses because they are low income and they don’t qualify for traditional bank financing will qualify for government grants to help fix the houses. But normally what we buy is a livable house. Why I don’t buy a house that’s completely trash unless I plan on selling it to an investor to rehab, which I do have some. We have some of the Tom Cruise students that seek us out and they buy houses from us because we own or finance them. And then they do the rest of the rehab.

  and they run them out section eight. So it’s actually great for them because they don’t have to qualify for bank financing for their properties. So there’s all kinds of ways that slow flip properties make money for people of every walk of real estate investing.

  Kristen Knapp (21:33)
  Wow, I mean, this is so, I mean, it’s a very exciting system to use. And I mean, it’s so awesome that you give people the coaching they need to quit their full-time jobs, to do this, you know, have a career in real estate full-time. I bet you have some great examples of people who their lives have changed and you’ve just, you know, added so much fulfillment to it.

  Tony Wallace (21:57)
  It’s it’s incredible. I mean, I I was scared when I first did it because I woke up after selling my business I was like, what did I do? I just sold what I’ve been doing for 42 years Did I make a mistake and then I was just like, well, it’s done now I got to make it work and and within a year I will tell you I ⁓ Sorry, I built the equivalent of a two and a half million dollar ⁓ 401k in less than a year by buying these houses

  Kristen Knapp (22:01)
  Yeah.

  Wow. Wow.

  Tony Wallace (22:25)
  That’s why said within three years, everything will be paid off that I’ve bought and I will have $30,000 a month coming in that I just owe taxes on. No tenants, no toilets, no termites, you know, the occasional thing happens that you got to take care of and occasionally, you know, but I’m able to work with a lot of people who, you know, I had a young lady, her mother passed away. She was away for a couple of months dealing with the family things and…

  Kristen Knapp (22:36)
  Wow.

  Tony Wallace (22:53)
  She wasn’t able to work and she got behind in her payments. I didn’t foreclose on her. just, fortunately I was in a good position that I could carry it until she got back on her feet and she’s paying her payments again now on time and catching up on her back payments. So I always tell people, even if you got $100,000 sitting in the bank, don’t invest it in the real estate. Use the private money funding. Save your money that’s in the bank for emergencies, vacancies, anything that may go wrong.

  Kristen Knapp (23:21)
  Mm-hmm.

  Tony Wallace (23:22)
  But for the most part, there’s more successes. And even if something becomes a failure, like I said, my guy stopped paying, that turned out to be a great thing for me. we’ve had things that happen in all different phases. we can sell anything owner financed for a lot more than what people think it’s worth.

  Kristen Knapp (23:41)
  Wow, that’s incredible. So, you you’ve explained this whole method. It sounds amazing. Tell people where to find you and how to learn more information and how to go to your summit.

  Tony Wallace (23:53)
  ⁓ You can contact me at slow flip coach com Just the three words like it sounds slow flip coach com. My number is seven five seven seven two nine two eight four seven I welcome phone call anytime You can schedule a coaching call and see if it’s for what for you and you know if the money works out for you or if you just need some advice on something or how to get started I’m willing to spend some time talking with me. I’ll do a 30-minute call and go through what you need to do

  And if I can help you and you see it as a value to you, then maybe we do business together. If not, I recommend people always take ⁓ Scott’s course, the slow flip dot com. And they have a lot of modules, a lot of education. But like I said, for one reason or another, a lot of people do. I know people who have invested two hundred thousand dollars in various real estate courses and they’ve yet to buy their first house. ⁓ That particular gentleman did come to slow flip dot com and he now owns five houses. He’s still cautious.

  Kristen Knapp (24:45)
  Yeah.

  Tony Wallace (24:52)
  about buying anything but he’s up to five houses now.

  Kristen Knapp (24:57)
  Wow, well it’s such great work you’re doing. So thank you so much for telling us all about it.

  Tony Wallace (25:04)
  I’m glad for the opportunity and I have to check out your program here and podcast more. I gotta get with the times of technology now. I need to learn how to do more stuff when it comes to podcasts. I watch a lot of podcasts, I need to learn more about it. This is awesome.

  Kristen Knapp (25:05)
  amazing.

  Yeah, no, awesome.

  We’re so happy to have you here and I hope that everybody listening, I hope you learned a lot and please check out Tony and his coaching program because it sounds like you can help a lot of people, you know, get out of their full-time job. So thank you again and thank you to everyone listening. Yes, and we will see you back. We’ll see you back.

  Tony Wallace (25:38)
  Thank you. Thank you for having me. And good

  luck. And I’ll just leave you with something that my mentor says all the time when he ends every show is do something today that your future self will thank you for. That’s from Scott Jelani.

  Kristen Knapp (25:54)
  I love that. That’s a great way to say

  it. Yeah. Wonderful. Well, thank you. We’ll see you guys next time.

  Tony Wallace (26:00)
  Thank you.

  Great. See you next time.