Real Estate Investing Strategies by Graham Parham

Graham Parham (00:00)
Marry the property and date the rate. Well, that’s still true. You know, you may buy this property today. It may only have a $150 cash flow this month, but guess what? Next year, when those rates come down and we’re going to drop that rate, let’s call it a point, a point and half. Now you’re going to prove that 150 to 250 or 300. But guess what? That’s the name of the game. So, and people, once they figure that out.

Then they’re going to start, you know, continuing to buy assets today and not having to wait for tomorrow. And that’s just what I educate my people. And when I tell them what I’m doing, they appreciate that as well.

Michelle Kesil (02:01)
Hey everyone, welcome to the Investor Fuel podcast. I’m your host, Michelle Kesil. And today I’m joined by someone I’m looking forward to chatting with, Graham Parham, who’s been making serious moves in the mortgage lending and investing space. So really glad to have you on the show today, Graham. I think our listeners are really going to take something away.

from how you’re approaching educating people on the best loans and rates in their business, as well as supporting people getting started on their investment journey. So let’s dive in.

Graham Parham (02:42)
Thank you, Michelle. I appreciate that. Yeah, it’s been a fun journey. I bought my first property, Sight Unseen, by an investor. I actually did a couple loans for him about 25 years ago and started looking at his inventory and I was looking at his tax return and his schedule real estate. He had close to 400 properties and they were all in the Dallas and Fort Worth area. And I was just kind of going, you what does this guy know that I don’t know? Nothing. He’s just doing it.

So he eventually convinced me to go ahead and jump in. And I did, I bought my first property from him. And I hey, that was easy. And so I bought eight the rest of the year. And I just kept buying and my wife eventually said, don’t you think you need to slow down? And that was right around September. I said, okay, fine, well, I’ll slow down. And then another opportunity came my way that ⁓ same year. There was a duplex in Dallas that I couldn’t pass up.

Michelle Kesil (03:20)
Hehehe.

Graham Parham (03:31)
And as you know, in the lending world, the acquisition world of buying investment properties, you don’t necessarily have to have your wife on it like you do when you buy a homestead. And so I kind of snuck that one in. So I went ahead and bought the property and then about a year and a half later, I came clean and told the wife. And of course she uses that trump card against me from time to time. But yeah, I’ve been buying properties for around 20 years now because I’ve seen all of my investors, what they’re doing. And I’ve been piggybacking their, their successes and

Obviously recognizing their failures and I’ve been going through successes and failures for 20 years myself. And so being in the real estate game, being able to provide loans for my clients, you know, I get to learn along the way, which has been a great ride.

Michelle Kesil (04:10)
Amazing. Yeah, that is such a cool story. So for people who aren’t familiar with your world, can you just give the short version of like what you’re focusing on these days?

Graham Parham (04:24)
Well, focusing these days to continue to educate my clients. I do a lot of podcasting as well on other media platforms, but really right now I’m trying to look at the opportunities of where the inventory is. Me personally, I’m still buying and I’m doing a lot of exchanges right now, 1031 exchanges. I’m trying to realign my inventory over the, I’ve got roughly 50 properties.

And some are doing great. I’m leaving those alone and some obviously need some help. If they’re not performing like they should, then we know we’re going through the, the buy sell game. So I just, as matter of I just got an email just right before we got on the show here.

I just got one sold down in Florida, which I plan to, you know, sell one and buy two and look forward to taking that up to the Midwest is where I’m focusing on. of my efforts are right now. So, you know, that’s been going on all year. So that’s been exciting for me.

as far as my clientele, know, they keep calling me up saying, of the rates going down, one of the rates going down. I keep saying, you know, they are, you know, stay tuned your nearest channel. the feds are probably all going to do something in September and probably in one probably later on in December. But, ⁓ we saw some really good numbers last week and actually today is probably one of the better days we’ve seen rates probably since April of this year. So, you know, there’s a lot of factors that are involved, especially on the job pieces.

The jobs report came out last week, which was good. That helped rates. So a lot of people that are still newbies or novice, they keep saying, you know, we should buy anything with these rates like that. Well, rates have always been, you know, in the sevens, I was buying in the seven years ago, you know, it’s even with the DSCR products, they’ve been, they’re getting very narrow to where Fannie Mae products are. So people are utilizing those products as well to buy investment properties, which are much easier to use. So it’s really not a game of.

Let’s hold on and wait for the race to come down. Recognize those assets today. Recognize the fact that, hey, you know, we’ve heard this terminology before, you know,

marry the property and date the rate. Well, that’s still true. You know, you may buy this property today. It may only have a $150 cash flow this month, but guess what? Next year, when those rates come down and we’re going to drop that rate, let’s call it a point, a point and half. Now you’re going to prove that 150 to 250 or 300. But guess what? That’s the name of the game. So, and people, once they figure that out.

then they’re going to start, you know, continuing to buy assets today and not having to wait for tomorrow. And that’s just what I educate my people. And when I tell them what I’m doing, they appreciate that as well. So yeah.

Michelle Kesil (07:36)
Yeah, I love that. And are you operating like in specific markets or where do you operate?

Graham Parham (07:43)
I can lend nationally, so I lend all over the US, mainly focusing on those areas and those cities that are high performing cashflow areas. Mid-south, mid-west, typical candidates, Memphis, Little Rock, KC, St. Louis, Sensei, Detroit, Alabama, still parts of Florida.

Still a few parts in Texas, but yeah, mainly those areas, not necessarily California. Of course, a lot of people that I do business with live in California. There’s no cash flowing properties in California. So yeah, mainly those cash flowing areas. And I work a lot with the turnkey providers that are already in those areas that do provide those cash flowing properties. So yeah, that’s pretty much where I work. I work with people all over the world. I mean, with the DSCR products, I mean, we work with foreign nationals.

but we also work with people that live abroad for whatever reasons. And we try to make it as easy as possible. Everything is virtually paperless. We don’t have to have them there. We do Zoom calls. We do Zoom closings. So it’s real easy these days to buy properties for people that are international. But most of our closings are done with either a Zoom closing or and or like a mobile notary. So nobody ever shows up at the closing table because they’re buying out of state. So yeah.

Michelle Kesil (08:56)
Yeah, that’s great. So much potential and opportunities for people. That’s awesome. So a lot of people that listen to this show are either earlier on in their investing journey or they’re looking to learn more. And I know you mentioned that you support a lot of people in those early stages. So maybe you can share some advice for that crowd.

Graham Parham (09:20)
Well, I’ve been working with newbies for 25 years and they all ask the same questions over and over. Okay. And at the end of this clip, I’m sure you’ll probably provide them some information on how to get in touch with me. So say, I’ll ask the same questions over and over. I decided to write a book or a guide, if you will, to address all those questions. And what do I do if I have this?

Can I qualify for more than one property?

the typical questions. Those are the things they don’t want. What kind of reserves do I have to have? Do I have to put my wife on the loan? mean, the easy questions that can be answered really quickly, I could just send them this guide and they’ll answer all those questions very quickly. But for the newbies, know, those are just very common questions. Can I really afford to buy a property? Yeah, well, if we can’t go the Fannie Mae route, we can certainly go the DSCR, the non-QM route, because we can underwrite the property, not necessarily yourself.

And that’s becoming very popular these days.

Michelle Kesil (10:48)
Yeah, amazing. That is helpful for people. So let me ask you this. What are you most focused on solving next?

Graham Parham (10:58)
focus on solving next.

trying to find more inventory and trying to get those investors connected with those providers. We’re starting to see a little bit more releasing of some of these foreclosures that we have not in the past. They’re starting to finally surface, whether we like it or not. Those foreclosures have been waiting to jump out of the cage, and I think they’re finally starting to jump out of the cage. And these turnkey providers, obviously, and some of the flippers, they’re right there.

in the front of the line, ready to go, ready to take them over and flip them. So, you know, we’re, doing a lot of burr opportunities. If you’re not familiar with that concept, you buy rehab, refinance, rent, and then rents. And we’re doing a lot of those right now. And that’s where a lot of people are taking advantage of trying to the end result to have some built in equity. So that’s a very good opportunity for a lot of folks, but you got to know what you’re doing. You got to get with the right folks that have the right contractors.

that have the right skills to do this and to make sure that you’re not losing money. I’ve seen people try to do this on their own and they fall right on their face. But if you work with the right people, there’s a lot of companies out there that are sponsoring these burp properties in certain markets. I would definitely take a look at those. And if you need some people that you want to talk to about these burp programs, give me call. There’s several ⁓ scattered all over the US.

Michelle Kesil (12:16)
Yeah, maybe you can expand a little bit on those.

Graham Parham (12:19)
On the Burr Properties

What it is, basically you’re looking at the people will find that distress property, let’s call it 100,000. It needs, you know, 50,000 of rehab. Okay. So they’ll leave it. have typically a hard money, which I’m not, I don’t do hard money. do end result, long-term financing. We do have some fix and flip properties that it doesn’t work as well as the hard money. So they’ll sponsor a hard money lender that’ll come in and we’ll usually take care of the acquisition plus the rehab. Once the rehab is done.

I’ll come behind them and I’ll do a refinance and take out the hard money. And that typically once we do the appraisal and if the flipper or the guy’s doing the, the burr program, they automatically know they’re going to have built in equity at the end. Okay. So, ⁓ it’s a very simple program. All you gotta do is say, okay, raise your hand. I’m willing to do the program. Typically you’ll give them a deposit upfront or earnest money upfront to start the transaction either to the, to them or the, to the hard money lender.

And at the end, you get your money back and like I say, you do it all over again. Just keep repeating yourself and you automatically walk away with instant equity. It’s a great program. And with the, you know, the inventory not being available just to buy straight up like a turnkey ⁓ company would do, this is some of the alternative measures a lot of people are taking.

Michelle Kesil (13:36)
Yeah, that is great and a good opportunity for people to get it on. every operator I know in business has a moment where things got real, maybe a deal went sideways or you had to make a fast pivot. Would you mind sharing one of those moments for you?

Graham Parham (13:57)
Where I had to make a fast pivot. Yeah, I ended up buying a property where I didn’t find out at the last minute until it was in a flood zone. Be sure when you’re buying these properties that you make sure that these things are not in a flood zone or they don’t have any unnecessary lanes. Make sure you have clear tide on these properties because if you don’t and if you’re doing like a 1031 exchange like I was doing, I had no choice but to buy the property. So I really couldn’t pivot.

But if I had done it differently up front, would have had make sure somebody would have ran that flood certificate search up front and also make sure that the title search was done up front because I couldn’t do my own loan. had to have an outside company do my own loan on this particular property and they didn’t do their loan properly. So they run all these certificates at the end here. I am stuck with a flood zone and I held on to that property for three years and the flood insurance started off around 1200 or 1300 and then

By the time I sold it five years later, it was up to about 6,000. So that kills your cash flow.

So all I can say is when you’re buying these properties, make sure you do your due diligence properly. And if you’re buying from a turnkey property, they pretty much will guarantee those things will clear it up front because they wouldn’t have acquired the property with those items in place.

Michelle Kesil (15:51)
Yeah, that is important advice that, yeah, not enough people talk about.

Awesome. So what is your next big goal that you’re focusing on?

Graham Parham (16:03)
Right now, it’s an ongoing goal for the next, well, I thought I could accomplish a lot of this year, but the market’s not really ⁓ responding like I’d like, which means that I’m trying to get rid of some of my dogs in my inventory and reallocate those to other markets. But I’m having to wait on the tenants to, you know, end their lease. Once they do, then I have to put a sign in the yard and typically those sales will go to

⁓ the, like a primary residence or a first time home buyer, because when I bought the property, the price points was here. Now with all the appreciation that’s built up, now the price point is here. So it’s not as attractive for an investor to buy that property because the rents have not caught up with the price points. So it has to go on the open market and to MLS for, you know, for primary residents to buy it. So you put it on the MLS for primary registered buy it. And so now we’re in the sellers or buyers market and these guys are coming in.

low-balling the price, asking for monster concessions. So it’s just been a longer process than I’d like to go through, but I’d love to get rid of, I’ve got about another 20 properties that I’m trying to flush out and reallocate to other markets, but it’s just been a lot slower than I’d like for it to see. But I got plenty of time. I’m not going anywhere.

Michelle Kesil (17:18)
Yeah, absolutely. That is so important. Yeah, maybe you can expand a little bit about some of your knowledge on how people can really grow their cash flow when it comes to investing in properties.

Graham Parham (17:34)
Well, a lot of times, give you good example, in my situation, I had a choice to do either one of two things on most particular properties that we were talking about, that I’m trying to spin off. I bought these properties that I’m trying to get rid of in a good market that had really good appreciation. And I don’t mind saying it was in Florida. So I bought them, let’s just call it, 10 to 240 range. And now they’re valued at about

Michelle Kesil (17:52)
Mm-hmm.

Graham Parham (17:58)
375 to 400. So I could do one of two things. If I like the property, it’s cash flowing. I could go in and do a cash out refinance, grab some of that equity and go buy another property. Or I could sell it, which means if you sell it, you sell one and go buy two. So there’s equity buildup in a lot of the properties that current investors have that are trying to make use of that.

And they should be doing more of that, going and grabbing that equity and taking it to another property because it’s right there. And they’re saying, well, I’ll go grab it when the rates come back down. No, the assets are out there now. If you wait, those assets will be gone. Grab that money now and go buy those assets. Then you can always refinance down the road. yeah, mean, grab the existing equity that’s in those properties that you have now. The other thing is if you don’t have a HELOC on your primary residence, go get one.

They’re great to have. Okay. And you can use them for, as a working tool. But let’s say, ⁓ opportunity comes along and I was a little short of coin that month, but this really good duplex came up on the market. I want to buy this and I’m going to buy it. Well, I didn’t have enough of the down payment. I just reach over to my HELOC, grab, you know, 30, 40, 50,000, whatever the case may be. Put it down on the property, buy it.

And I just pay my HELOC back in the next couple of months or so. So if anybody does not have a HELOC on a particular property, mainly the primary residence, go get them. You don’t have to use it. Just go get it and then use it when you need it. Okay? It’s a working tool. Okay?

Michelle Kesil (19:24)
Yeah, thank you for sharing that. That is so valuable. So when it comes to growing your network and building relationships, what do you feel has made the biggest difference for you?

Graham Parham (19:26)
Okay.

everybody says, you know, get on a zoom call that helps, but I like to press pumps. I’m old school. I just got through going to a ⁓ show down in Dallas last weekend where a lot of the major hitters, Robert Kiyosaki, McElroy, all the big names were down there. And I spent all weekend visiting with a lot of the referral partners that I work with getting to meet some of the top hitters in the industry. And networking is the key. mean,

You can spit out as many emails and do as many podcasts and post on the social media. But when they get the face to face you and get to know you, then it’s amazing the things that come out of that. It’s amazing the opportunities that come out of that. I’m starting to ⁓ gain momentum with a lot of those guys who are at the show in regards to how they’re educating their clients. And they want me to be a part of that education process. Okay. And when it comes to lending. yeah, I mean, it’s.

It’s fun. I like this game.

Michelle Kesil (20:31)
Amazing. Thank you for sharing that. All right. So before we wrap up here, if someone wanted to reach out, connect, collaborate, or just learn from you, what’s the best way for them to reach you?

Graham Parham (20:44)
You can just call me direct. My number is 214-679-3396 and my website is investorloans.ai.com.

Michelle Kesil (20:58)
Perfect. Well, I appreciate your time, your story and perspective. We need more people in this space who are doing things in this right way. So thank you again for being here.

Graham Parham (21:09)
You’re welcome, take care.

Michelle Kesil (21:10)
Yeah, and for those of you tuning in, if you got value from this, make sure you’ve subscribed. We have more conversations coming with operators just like Graham, who are out here building real businesses. And we’ll see you all on the next episode.