Private Money Wins Real Estate Deals: How to Secure Faster Funding and Build Lender Relationships

George Aplicano (00:00)
The reality of it is don’t be scared. You know, investing has been… investing in real estate is one of those things that people have done for a long time. This is not new, it’s not rocket science. Most people have a fear of doing, and people don’t do it, right? My first deal, and I’ll I’ll tell you, my first deal, I came in at a hundred percent, a hundred percent financing. I came no money out of my own pocket. And yeah, it’s the connections that I made, yeah, it’s a network that I did. But the reality of it is is that once I made that network, I didn’t have any fear to go into a deal.

Scott Bursey (02:05)
Welcome back to the Real Estate Pros podcast powered by Investor Fuel. I’m your host, Scott Bursey. And today we’re sitting down with George Aplicano. George is the founder and CEO of Applied Capital Ventures in the Phoenix Metro area. He is an active investor and private lender who understands the game from both sides of the table. Whether it’s fix and flip acquisitions, bridge loans, or complex commercial deals, George provides the speed and strategic leverage investors need to win. Pros today, you can expect to learn how to unlock maximum enterprise value in your portfolio and how to effectively use private capital to scale your business. George, welcome to the show.

George Aplicano (02:49)
Scott, I appreciate it… appreciate being on here.

Scott Bursey (02:51)
It’s awesome having you on here, my friend. And to help our listeners get up to speed, please give us the ninety-second highlight reel of how your career ignited and where you’re pouring your fuel now.

George Aplicano (03:03)
Gotcha. I love that. I love that. Yeah. Where am I pouring my fuel? Love it. So, long story short, I worked with two of the major banks. I was a manager there for 15-plus years. And in learning that business, I I knew that I started looking at some of the wealthy clients that were that were trying to do business with those banks, right? And I always noticed that none of them… none of them closed transactions with them, right? They always went to small mom-and-pop private lenders or private private individuals that they knew because the wealthy have their circle, right? And so from their circle they they use… they use that circle. So after I finished my my career with with the big… with the the big… two of the big banks, I ended up going to become a broker. From there, I started doing hard money loans and I I f— I I explored a couple of things and I found some niches that work well here. I’m in the Arizona market, I can do deals nationwide, so that’s not a problem. But but I did find some niches here in Arizona that that that ex— that that that help people out, especially new investors and people that are that that want to make some some gains and build some reputations.

Scott Bursey (04:17)
That is incredible, George. Thank you for sharing that journey. It’s always inspiring to hear how someone builds from the ground up. And you know what really caught my attention about you was the way you’ve been able to manage capital allocation while at the same time scaling profitable businesses in such a competitive market like Phoenix. Now, taking that a step further, we’re fascinated by your start. What was the pivotal moment that convinced you to transition from standard investing to into founding Applied Capital Ventures?

George Aplicano (04:48)
Yeah. So what happened was is that I noticed… I saw… so I do wholesale… I done… I’ve done wholesaling. I do my own fix and flips. I fix and flip multi multi-units, these mom-and-pop like these three-to-three-to-ten unit properties. And so what I noticed was is that a lot of the private money lenders or the hard money lenders that were out there, they would only focus on one thing, right? And if they weren’t comfortable with that one thing, then you’re you’re SOL and you now all of a sudden that deal that you need to lock up right away, you now have to go out and find another lender to do it. And and somebody that has to be comfortable in doing those things, right? So here in Arizona, right, we have manufactured homes, we have we have duplexes, we have we have commercial properties. And so with that combination, I noticed that all of these lenders, they all have their buy box. They all have their lending box. And that’s it. And they’re not comfortable going outside of that comfort zone, right? So what I did is I I just grabbed a bunch of them. I I got all their information: “What do you lend on?” And then from there, as soon as as soon as somebody comes to me and asks me, “Hey, I have this deal that I want to go ahead and get funded,” perfect. I know who… I know the perfect lender that would go ahead and do that.

Scott Bursey (06:57)
Curious to know, George, regarding your strengths, what do you see as the biggest internal asset when evaluating a complex deal that others may miss?

George Aplicano (07:06)
That others may miss… well, there’s all kinds of things. So over here, so the ARV for any property is always subjective, right? Yeah, there’s market conditions. Yeah, there’s comps. Yeah, yes, and yeah, there’s there’s there’s things that that that could impact that, right? The reality of it is is that there’s a coup— there’s the history of the individual of who’s actually performing on the on the transaction, right? So if you have a fix-and-flip guy and he’s already done 10 deals, 15 deals, right? And he does he, you know, he does 20 deals a year or whatever, that guy’s experienced, right? So what ends up happening is that most of our… most of my private guys, they’re like, “Okay, well, you know, he’s done 20 deals inside of a year. He knows what he’s doing, so I’m willing to take a little bit more of a risk,” right? But these guys are not… private money lenders are not dumb either, right? So they’ll be like, “I’ll take a risk, but you’re gonna have to come in with a little bit more money on your end,” right? Those types of things. Or, “What makes you think that your rehab funds are are X, right? We think that your rehab funds are this. Please explain,” right? “Okay, well, here you go. Here’s our most recent receipt,” or whatever, right? Those are those little tiny things that that that make deals work. But at the end of the day, this this whole business is all relationship-based. You know, so if you’re able to build a relationship with a with a hard money lender or even, you know, several hard money lenders, you’re gonna be… you’re gonna be… your team is stronger. And now you have an ability to do more deals.

Scott Bursey (08:35)
And George, thinking about the weaknesses in the current lending landscape, what is one common area in the process that investors consistently get wrong, and how do you help them fix it?

George Aplicano (08:46)
They… so yeah, so ARV and then their rehab funds, right? So those are the two things that I I’ve seen, right? If you’re a newbie, if you’re a newbie coming in and doing this, right, we’re… we’ll walk you through it and we’ll we’ll tell you where it is. Nine times out of ten, they’ll be like, “Yeah, you know what, you’re right. It wasn’t profitable.” But at the same time, you know, some people want to get into a deal and they they they force themselves into a deal while other… while the the investors are… while the private money lenders are telling them, “You better watch out for this, you better watch out for that.” I’d rather avoid having that. I don’t want people losing on their transactions. I would rather have… I would rather put them in a better position and and then put them in a position to succeed.

Scott Bursey (09:29)
George, looking at the opportunities in the current market, where do you see the biggest untapped area for investors who have capital sitting on the sidelines right now? Parked capital.

George Aplicano (09:39)
Yeah, parked capital. So I would tell you it’s just that multi-units, right? 10 units and 10 units and below. Right now, we both… you and I know inside of the market right now, all these 75, 100, you know, 200-unit properties, their loans are coming due because they were overleveraged. We know that, right? There’s gonna be opportunities there for syndication. There will be within the next couple of years. But for right now, these small little… you know, you can you become become become an easy millionaire just doing, you know, the ten units. Ten units times times ten, all of a sudden, you know, you got yourself a good… pretty good chunk of rental income, and then all of a sudden you don’t have to work a job anymore.

Scott Bursey (10:59)
Just brainstorming here, what is the biggest external factor in the current real estate environment that you’re most focused on as a lender?

George Aplicano (11:07)
External… the external… well, you know, so politics are playing a role, right? So wholesaling… wholesaling here in Arizona, right? So I would… I would… just that’s a big… that’s a big change, right? Now we have to disclose… like wholesalers have to disclose that they’re gonna go and and sell the property to somebody else, right? That’s gonna be the… one of the major changes, right? Real estate agents right now are also getting pushed to a position where they have to make a choice whether you’re you’re either either going to help the seller and complete your fiduciary obligation, and or you’re gonna be an investor, one of the two. You can’t mingle both, right? But once again, I’m not a licensed real estate agent, so I don’t know all the ins and outs in regards to it, but I I I I feel the pressure coming down, right? Arizona is a hotbed for all of all of the first legalities to to to come into place, right. So that’s where we’re at right now. And so those are the things that are impacting. The reality of it is, is that no one’s gonna stop investing. Nobody’s gonna stop investing, and everybody always needs money at some point.

Scott Bursey (12:14)
And that’s a fair concern. Thank you for keeping it real with the pros on that one. And George, how do you balance the need for speed with the absolute necessity of asset protection on a commercial deal?

George Aplicano (12:27)
With asset… on a commercial deal, the guys that fund those commercial deals, they will have you sign a personal guarantee, right? For those ones, they will ask for more information, right? They are gonna ask for for your bank’s names, they are gonna ask for assets, right? They are gonna ask you what your credit score is. Now, based off of… based off of that, will some of them pull them? Maybe, maybe not, but it depends on how big the deal is, right? If, you know, if it’s a commercial deal for under a million, you know, they’re a little more flexible. Anything over a million to five million, they’re gonna be… they’re gonna be really keying in on a lot of a lot of information, right? So that’s that’s basically what it is. So, you know, that’s the best that I can… the best answer that I can come up with right now.

Scott Bursey (13:13)
I love that approach. And George, please walk us through: what does your professional network look like right now?

George Aplicano (13:19)
So I’m in Arizona, and I’ve grown around a lot of a lot of major, major producers, right? So, you know, Sean Terry lives out here. Pace Morby used to do his business out here. Jamil Damji, I think he just sold his business as well with the AstroFlipping community, and then Subject-To community, like those guys, right? And so here in Arizona, it’s just been a big… like all of the big heavy hitters are here. And we used to have meetups here all the time. I don’t know if you know, there’s a Steve Trang and there was a Disruptors podcast—and I know we’re on a podcast, and I don’t want to, you know, go over to, you know, promote another podcast—but he started off a lot of these network meetings. And so, you know, now at this point, there’s a whole… there’s a void, and I’m hoping to fill that void with some more networking.

Scott Bursey (14:15)
That is a powerful network, and it sounds like you’ve been very intentional about building it. George, this is the money question that all of our pros would like to hear from you: what is the most undervalued trait in a borrower that makes you lean in and want to fund them over everyone else?

George Aplicano (15:15)
You know, it it is an eye on detail. So that is… that is what it is: an eye on detail. Like if they already know exactly what kind of fixtures they’re gonna put on their cabinets, you’re more likely to lend to them. If they… they already know like, “Hey, I got a plumbing inspection, I got… you know, we already ran the camera through the through the the pipes and we’re in good shape,” like that’s… that’s amazing, right? Like if they’re doing their due diligence at the very beginning of all of… right when they’re under contract, then you know that these guys… these guys are money. And then what ends up happening is that once you build that relationship, then they’ll lend you money all the time, all the time, without any problem and less… less complications for the next deal.

Scott Bursey (16:02)
That’s a great answer. I think our listeners are going to take that one to heart when they’re prepping for their next deal. And George, you really have given us some great advice here today, but is there any additional words of wisdom, any golden nuggets or final thoughts you could leave for our pros?

George Aplicano (16:19)
Sure, words of wisdom. I don’t even know. I don’t know if I’m that that guy, but the reality of it is don’t be scared. You know, investing has been… investing in real estate is one of those things that people have done for a long time. This is not new, it’s not rocket science. Most people have a fear of doing, and people don’t do it, right? My first deal, and I’ll I’ll tell you, my first deal, I came in at a hundred percent, a hundred percent financing. I came no money out of my own pocket. And yeah, it’s the connections that I made, yeah, it’s a network that I did that I did. But the reality of it is is that once I made that network, I didn’t have any fear to go into a deal. And that’s… that’s what it is. If you… if you understand the numbers and you understand the metrics and you understand what the outcome is, it’s just a matter of executing on it.

Scott Bursey (17:10)
Take the plunge. Absolutely. Take the plunge. And George, for those of our listeners that would like to keep this conversation moving, stay in your lane, or collaborate with you, what is the best way for them to reach out to you?

George Aplicano (17:23)
Sure. I’m on all social medias. If you look up George Aplicano, I’m that guy. That’s the best way to get a hold of me. My cell phone number is also on all of my socials as well, so you can definitely call, reach out, send me a text. I respond faster to texts than phone calls. And then, you know, by all means, I would love to to give my information to anybody and I’d love to share my knowledge, right? That’s my giveback to to the world because I’ve been in in lending for such a long time that there’s pretty much no loan that I have not done at this point in in in in my career.

Scott Bursey (18:00)
George, thank you so much for joining us today on the Real Estate Pros podcast.

George Aplicano (18:04)
Sure. Thanks, Scott. I appreciate it, man. Look forward to… look forward to talking to you again.

Scott Bursey (18:08)
And to our listeners, we appreciate you. If you receive value from today’s episode, please subscribe. We’ll be filling your tanks with a lineup of elite guests just like George Aplicano, who are accelerating and setting the pace for the rest of the industry. Until next time, keep your standards high and your vision clear. We’ll see you on the next episode, everyone.