Unlock Real Estate Success: 7 Strategies Every Investor Must Know

John Harcar (00:00.94)
All right, hey guys, welcome back to our show. I’m your host, John Harcar, and I’m here today with Alex Buriak. And what we’re gonna talk about besides his journey in real estate is really how investors can position themselves in today’s market, right? Whether it’s using hard money or things like that. We’re gonna kind of dive into that part. Remember guys, here at Investor Fuel, we help real estate investors, service providers, I mean, really all real estate entrepreneurs, two to five X their business.

by providing tools and resources to grow the business they want to grow and in turn live the life that they’ve always dreamed of. So Alex, welcome to our show,

Alex Buriak (00:36.12)
Thank you so much for having me.

John Harcar (00:37.998)
Yeah, I’m glad you took the time out today and I’m excited to talk about, know, our topic of, you know, how to position today’s market. I know it’s been a rough type of market for the last couple of years. But before we get into all that type of stuff, tell our audience about you, you know, your background, how you got into real estate, kind of what you’re doing now.

Alex Buriak (00:57.784)
Sure.

Well, I mean, like you said, I’m the senior vice president here over at JET Lending. And but that wasn’t always the case. About 11 years ago, I actually started here at JET November 18th of 2014. But how I started was I was actually a doctor and I ran multiple clinics in the Houston area. I was the director of biomechanics and functional medicine. I was tired of seeing my patients knowing what they wanted, knowing what they needed.

But couldn’t give it to them because nothing paid for it. So was like, you know what? I’m tired of working for these shops. I’m tired of this I’m tired of people getting kind of screwed over kind of thing. I need open my own practice But I didn’t have any money. I had plenty of debt, but I have any money so I had a buddy of mine that worked at jetlending and he said you’ve always been good with creating businesses and scaling because I’ve created two colleges when I was an undergrad I taught at universities as undergrad. I’ve done a lot of those kind of things

John Harcar (01:57.123)
Okay.

Alex Buriak (01:57.802)
So I applied a gent lending and in walks my patient.

and he’s asked, are you doing here? I’m like, I guess I want to be a loan officer. And I told him, he’s like, well, make your money and go. I was still a designated doctor for the state of Texas. I still consulted and I was walking up to do a talk and all I saw to the left and right of me were briefcases and scrubs of men and women in their 50s and 60s feverishly trying to figure out this investment real estate thing. That was me in 20 or 30 years. And I said, you’re not paying attention.

John Harcar (02:24.835)
Mmm.

Alex Buriak (02:30.978)
So was walking up, I did my talk, and I went all in on investment real estate and lending. And that was years ago, and then I eventually became the senior vice president, and I run a lot of the operations and sales management and product development here at JET. And that’s how I started.

John Harcar (02:47.47)
Okay, well, I mean, it sounds like you started off with a great career, I mean, as a doctor. So do I call you Dr. Bureac?

Alex Buriak (02:54.252)
You can call me Susan if you like.

John Harcar (02:56.472)
There we go. You probably been called worse. okay. So then was lending your introduction to real estate, was there anything that maybe was an influence earlier in your life? Maybe a family member, a friend who was flipping houses, dad’s rentals, stuff like that.

Alex Buriak (03:14.638)
Not at all. This is how I looked at it and this is looked at any kind of investment. In the 1849 gold rush, people went out to California and mined for gold.

But the people that made the money all the time sold axes and shovels. I wanted to sell axes and shovels. So that’s why I found lending more appealing eventually, initially. Also, I didn’t have enough money to even open up a practice. It’s like buy a property. I was still renting some place because I couldn’t afford anything, even in practice. So that’s where I kind of stayed in lending and the analysis side of things because I wanted to be able to be the provider of the opportunity to find the gold.

John Harcar (03:55.762)
it. Okay. Did you ever get into holding properties, flipping properties, fixing things? I mean, did you ever dabble in any of that or started any of that?

Alex Buriak (04:05.646)
I still, I’m more focused on investing and acquiring businesses.

John Harcar (04:12.265)
okay.

Alex Buriak (04:12.878)
I do the majority of distressed analysis here at JET. Every property that comes across our table is analyzed by myself, by our owner Eddie Gantt, Johnny Hayes, and our loan officers. So before we order appraisal, you actually get a full analysis of what the comparable market looks like within the last 12 months. And it’s an out of analysis of our last 21 years of projections and areas. It says, hey, before you order appraisal,

With the information you gave us, we’re projecting your after repair value to be this. With pictures, your repairs to be this. And if it does come out like this, this is what your loan would look like and here’s your profit margins. Does this equate for the revenue you need to make for your business to stay in business? Do you want to move to appraisal because we close in three days from clear to close from title? So we don’t have a lot of time for error. So we do a lot of analysis and that’s where I my time because I analyze the financials of businesses quite a bit. So I look at any investor coming to me,

as their property as analyzed in a potential business maneuver and profit moves.

John Harcar (05:14.638)
Got it. Got it. Okay. Is there anything, let’s say someone brought to you a business versus a property. Like is there any specific things you look for of businesses versus properties?

Alex Buriak (05:25.144)
Well yeah, mean, so I’ll look at the top line, you know, revenue, and then I look at, you know, the EBITDA, and I look at, you know, any kind of structured add-backs and things like that. Just basically, you look at their P &Ls, but you really want look at the tax returns, because unless, you know, just not to divert, but like their cash basis or accrual basis accounting and finding out, you know, what’s the real bottom line, really what is it worth, and what can be done to scale this, to sell this business maybe in three, four, five years.

John Harcar (05:53.518)
Okay, so is this like a service every type of lender offers or is this something that just kind of you guys are unique in that respect?

Alex Buriak (06:02.146)
So far, in my 11 years doing this, I have not met any other lender that performs this analysis prior to appraisal within 24 hours and getting a term sheet same day.

So no, have not. mean, hopefully, if there’s somebody out there listening to them speak up because your borrowers do not know that. And we work feverishly to try to make sure our borrowers are protected. For 21 years, jet lending has had less than a 2 % default rate. And so we take our borrowers and their wealth generation quite seriously because we are not one of what you would consider an acquisition lender. We don’t want it. So we want to make sure that our borrowers, we make far more money as a lender

make our borrowers successful because then they buy more properties.

John Harcar (06:49.836)
What are you seeing some of the investors or folks bring any properties? What mistakes are they making? What are things that they’re not looking at? What’s kind of the common theme of like, see this all the time.

Alex Buriak (07:00.974)
One of the most common themes right now is even in the flip market because the flippers aren’t used to looking at this and this is something that’s very, very impactful to you right now. It always was impactful for the renters that were using even DSCR lending, but they’re not paying attention to insurance costs and property taxes.

with the consumer market today, call it with the 10 year treasury rising, call it that you are going to be, and this is what, April 18th, just in case the 10 year treasury falls when you listen to it. because it will, you are, looking at, call it six and a half on a conventional loan. Okay. Well, what is noticeable in the flip market today is that there is interest in the property. They actually may contract it.

John Harcar (07:36.162)
Ha ha.

Alex Buriak (07:51.5)
And then as the buyer actually tries to get a loan, it’s the interest and, not the interest, the insurance and the taxes that are rising, the mortgage payments, that are actually being able to then they have to kind of renegotiate price during the transaction.

John Harcar (08:03.383)
Right.

Alex Buriak (08:09.93)
So, I mean, there’s still a pretty good balanced market of the actives and pennies and solds in most markets, especially in Houston and Dallas and things like that. But what the sellers are noticing is that they didn’t equate for that, especially if your property has flood insurance. I mean, you can get a flood quote right now that’s four grand or more, especially like in coastal regions like Galveston. Galveston was covered up with like

John Harcar (08:31.502)
Yeah.

Alex Buriak (08:39.985)
short-term rentals and they’re being dumped because of the insurance costs.

And even as a flipper, you have to kind of sometimes put your consumer hat on when you’re making your purchase because we all know, and it’s not the first time I’ve shown you guys been hearing, that the only variable you can control in any real estate acquisition is purchase price. Purchase price is where you make your money, not the sale. It’s the only variable you can control. So if you’re not buying with those two variables in mind, property taxes, insurance for your consumer,

John Harcar (09:02.104)
Bye.

Alex Buriak (09:15.308)
to deal with at closing, then you’re doing yourself a disadvantage on your initial evaluation.

John Harcar (09:20.93)
How do you propose that if people adjust their numbers to take those into account for rising costs, those rising costs?

Alex Buriak (09:26.68)
Well, so when you’re structuring debt, when you’re doing hard money, the first thing that you’re going to have to notice at closing, because when you’re dealing with jet lending or lenders like us that are regional lenders,

you can get 100 % financing, depending on, and I’ll go through the math on how you can do that. But you’re out of pocket, have to put your, your flood has to be paid outside of closing, and then your insurance hazard binder can be put on the settlement statement. So you’re already getting kind of an idea of what things are being done, but you’re already closed. So how you can look at it is trying to deduct your purchase prices on the cost of that to give you an extra little

bit of yield spread on margins. So if you do have to play around with the numbers, you can. The second thing you should consider is this. When you’re analyzing, I like to what Boone’s called slotting. Okay? I don’t just go through just blindly price per square foot. I’ll slot the market on the type of finishes you’re doing, but not for the souls. In this current market, when it’s more balanced, but balance shifting towards the seller,

John Harcar (10:30.456)
Mm-hmm.

Alex Buriak (10:38.432)
Look at your current actives and if you had to sell that property today, what is your average days on market? But what is your middle price that allows you to be very competitive in that market?

John Harcar (10:50.446)
Mmm.

Alex Buriak (10:54.87)
Okay, you don’t have, most likely do not have enough capital and liquidity to kind of be like a REIT or a hedge fund or someone who can start breaking markets. You have to kind of slot your price in between there, all right, to be very competitive and sell quickly because you make money quicker, lower your holding costs. So that’s another thing that in this market you have to really pay. Don’t just look for your prices per square foot on your comparable solds and we can define what compare.

variable is, but also if you had to sell it today, what makes you in the mid-range competitive within the current actus projecting that trend continues?

John Harcar (11:36.674)
Make sense. Okay. Very cool. In your, before we got to start talking about our topic of, you know, positioning and whatnot, what do you think of as some of your keys to success in your growth in the business?

Alex Buriak (11:50.4)
Okay, well, they’re going to sound simplistic, but sometimes the most simple action that you do and take it as a massive action is going to gain you the most revenue. First thing you need to do is be able to act quickly. All right? So whether you’re seasoned or you are going to be a new investor, spend time structuring your organization. Day one, you’re going to be the janitor and the CEO.

but you have to run this like a business. You’re going to meet every month with your board. It just may be you. You’re going to meet every quarter on organizational structuring. You’re going to have a CRM. You’re going to have an Excel sheet on follow-ups. You’re going to have all these operations in place like you have 10 employees, but it’s just you. But as your business grows, you can put those operations in place with VAs and things like that. So first, have an operation how your business runs. The second thing you do is have all your paperwork ready, updated bank statements, photos,

of your IDs, your LLC documents, everything’s in line. So when you’re ready to move, everything’s ready to go. You can do pre-approval letters so you can start locking down properties. You work on structured math and negotiations. So when you’re at the kitchen table with somebody, you lock that contract down. You have your contracts with you. All these things, the more you take massive action immediately,

the more successful you can become. The last thing I would tell people to do is become very seasoned in the psychology of people because you will contract more properties by doing one thing and that’s solving the seller’s problem. You have to understand in this business, nobody wants to sell real estate. They have to.

I’m moving to Jersey, I’m getting a divorce, grandma died, I got this problem, somebody happened, an event happened. The moment you can actually create an emotional relationship with the seller and solve their problem, you will contract properties for far less than you would. And you have to understand there’s a 10, 80, 10 rule. 10 people will say yes right away because they’re excited.

Alex Buriak (14:03.638)
Ten people will say no right away because they’re scared. Eighty percent of people don’t know. It takes eight to twelve pushes in either direction to make a decision. So it’s whoever gets to that person last also. When they’re ready to go gets the deal.

John Harcar (14:21.454)
Great information. Great information. All right, let’s jump into our topic here, positioning. Well, what is positioning? Just for folks that might not know, what is positioning?

Alex Buriak (14:30.818)
So how I kind of define positioning for you guys is this. You look at the market and you’ll hear, it’s time to buy. Let me break the suspense for you. It’s always time to buy. The question you have to ask yourself as an analyst or an investor is in which market and am I buying in? And that dictates how you’re buying.

If we had this show in 2020, in the summer of 20, when it was COVID, but it was getting silly out there with prices and you couldn’t hold on to anything, my advice to you would be different than today. So first analyze the trend in the market in which direction you’re going. And be prepared to pivot.

All right, there is a risk in speculation. All right, so if you are speculating that in quarter four, the rates are going to go drop below six, then you have higher risk if it doesn’t. And I’ll tell you, I mean, we can go over the economics of what is going to happen if it goes to five and a half consumer rates. But when you position yourself, you’re looking at the current market today.

and not speculating into the future and how does this market work today on cost, days on market, holding costs, all these things and then analyze that and buy within the current market you sit. Okay? People get in trouble when they speculate a trending market upward, ride that train, but when the market dips and you bought here, that’s where you get bit.

John Harcar (16:17.992)
and prepared.

Alex Buriak (16:19.142)
then you either got to rent it out for the next two or three years till the market upswings and you’ll make money but it’s going to take you two or three years but that’s what I’m saying buy within today don’t speculate with the trend.

John Harcar (16:30.466)
Okay. Okay. Are you finding a lot more people starting to use hard money and private money and those types of things? I mean, I know we talked about earlier, but how does using hard money work in today’s market?

Alex Buriak (16:43.342)
So the use of it’s exactly the same. You may find that the cost of capital is a little bit different. Let me explain why. So in general math, if you guys had a tiger by the tail, because in our website we actually have a calculator you can use, just plug it in and tell you where you stand so you can make your negotiations. But if you didn’t have that,

So, your lender, a loan to value lender should lend up to 70 % loan to value, okay? Your loan to cost, guys, will go up to 75, but there’s an out-of-pocket rider. But if you’re just a loan to value lender, if you had, for simple math purposes, if you had an after repaired value worth $100,000, okay? That means I can lend you 70%. That means I can lend you $70,000.

Yeah, but you said it needed 30 grand in repairs to make it worth 100,000. So I’ll take 30 out of the total loan and I’ll hold it in escrow for you do the work and I reimburse you on draws. So that means I can close with 40,000. But if you bought it for 30,000, I have $10,000 to roll in your costs. So you’re not coming out of pocket at closing. You’ll hear people buy real estate with no money down. That’s how you do it. You bought it for less than what your lender is paying.

If you bought it for $50,000, and I’m closing with $40,000, you’re out of pocket $10,000 plus your closing costs. So it’s against that spread on how it works. In today’s market, most of your lenders are getting their money from either private individuals or local regional bank lines.

That money is structured usually at prime plus one. Okay. So call it eight and a half or nine, depending on if it’s prime plus one or prime plus one and a half. So call it eight and a half or nine. Private capital today with the S &P going crazy, they are looking for yields about nine or 10. So call it a blended rate of 10. All right. So our cost of capital is at 10.

Alex Buriak (18:47.072)
So most of our paper goes out 11-9.

So we’re making a 1.9 % spread there and that you’ll make your points of originations. Your loan to value lenders are going to be higher in originations, probably at three. Your loan to cost paper, which we do have a loan to cost option, but your loan to cost paper is going to be at two and most likely 10 and a half because that’s structured debts from different securitized banks. A little bit cheaper, but other than that, I mean, it is the same type of products.

same type of what you’re used to, it’s the lender who’s actually making less of a spread during these times when prime is going haywire.

John Harcar (19:31.052)
What type of, you know, for someone that might be going out there looking for lending, you know, what type of programs do you offer? Maybe things that might be unique that you can provide to investors looking for money.

Alex Buriak (19:42.542)
Yeah, no worries. In the state of Texas, my regional banks would allow me to do the loan to value in my private guy. So I can do loan to value 100 % type financing in the state of Texas. Outside of Texas with my bank lines, I’m up to 90 % loan to cost, 100 % loan to value, 75 % you know, I’m sorry, 100 % repairs, 75 % loan to value. We offer 30 year DSCR paper. One thing that you should know as an investor.

is when you are shopping lenders, when most lenders, if not all, nobody holds 30-year paper on their balance sheet. We all get our money from about five or six major banks that lend to everybody for this paper. They’re securitizing them. It’s almost like the old subprime stuff. And so when you are shopping that,

and you’re shopping 30-year paper. It’s most likely coming from the same five or six banks. So my advice to you is get with a lender that is in line with your business plan, is in line with the type of service you’re looking for, it gets the type of deal done. The loan officer and the underwriter, you guys are jiving the way you guys do business because if you do, your deal is going to close much, much faster.

As you try to shop 30-year paper, you’re going to notice that there’s a lot of similarities with everybody’s paper because most of the capital is the same. Get with the lender that you want to go to, that you trust to get it done efficiently. Get with a loan officer that is aggressive and actually drives you to do things. And what do I mean by that? Sometimes as an investor, your life gets in the way, you know?

John Harcar (21:32.782)
you think?

Alex Buriak (21:35.55)
So what do I mean by that? Well, it’s, you you woke up at six, you made the kids breakfast, you dropped them off at school. You were at work. Eleven o’clock, your loan officer emails you something like, I’ll do that when I get home. You get home at five or six, you make dinner, you say hi to the kids, you hang out. Apparently you’re married and you want to see that person too. You blink your eyes, it’s 10 p.m. Like, oh, I’ll do it tomorrow. Until two weeks from now.

and then you’re like, why aren’t we closing? So if you are that type of person, you need to find a team behind you that is going to be on you, making you move out of your way to become wealthy. I’ve seen more investors get in their own way and stagnate their wealth by inaction. And so that’s my advice to you on the 30 year stuff. On the short term stuff,

It really depends on what the type of lines that your lender is getting. I am a way of doing business. I’m not the way.

I have a lot of great products for short term. have stabilized bridges if you guys need to refinance and lower your rate for 24 month programs. I have, of course, the 30 year DSCR stuff. I have abilities for small balance commercial, land in Texas. But we’ve also made a relationship with some private equity firms that if anybody’s doing anything that’s you just want to do like 10, 20, $50 million development projects, we just kind of turf it over to them and we broke.

But we’ve made the relationship. Other than that, mean, that’s my advice on lenders. Read your sheet, okay? Understand it and really, really know what you’re paying for. Don’t fall for the, I’m giving you two points, but the processing fee is five grand. Okay, so just…

John Harcar (23:04.993)
Awesome.

John Harcar (23:23.375)
Right. You basically have to you two points in hiding the rest over here.

Alex Buriak (23:27.47)
Right. We do so much business here at JET, we don’t have time for that nonsense. So just make sure you understand where the money’s going. It’s very clear. Real estate investing is math. That is all this is. X plus Y equals Z. And if Z is in the black and in the black for the money it keeps you in business, then you buy the property. If it’s in the black, you don’t buy the property. So look at the math of your debt and your term sheet and make sure you’re profitable.

John Harcar (23:45.987)
Yep.

John Harcar (23:53.834)
Awesome, awesome, awesome information. If folks want to get with you, they want to use your money, how do they get in touch?

Alex Buriak (24:00.43)
Well, one, you can to JetLending.com. We have about 110 educational videos that you can watch all about even negotiations, structuring math, structuring offers, everything from underwriting to LLC docs, whatever you want to learn about. So check out the education page and our events page if you ever want to come meet us. Use our calculators to calculate your margins. So your website’s great. You can give us a call or a text at 281-872-711-711.

You can email at info at jetlending.com. I actually get all the info at jetlending.com emails anyway so my email is alexatjetlending.com. Whatever you need for a team to get behind you and actually be successful that’s what we’re interested in.

John Harcar (24:37.346)
Okay, cool.

John Harcar (24:49.794)
Awesome. Guys, I hope you took some good notes here. He dropped some great nuggets. Alex, thank you again for coming on and sharing all that information with me and our audience. Guys, I hope you had a good show. I know I did, and I look forward to seeing you on the next one. Cheers. Thanks, Alex.

Alex Buriak (25:05.538)
Thanks.