I Like Debt
Hey Team,
It’s been a hot minute, I know.
Yes, I’m still here.
Yes, I’m still ten-ten-tening.
But you guys know me, and you know I keep a lot of irons in the fire.
And I’m easily distracted.
They call me “The Squirrel,” and I can’t much argue.
Anyway, I met with a banker last week. One of many - I don’t know why, lately, there's a bunch of them chasing me.
That’s not a bad problem, though, since buckets of other people's cash always lead to buckets of my own cash.
I’m sure not complaining.
I like debt.
A lot of people, especially new investors, are afraid of it, but that’s a huge mistake.
Most days, I’m somewhere between $3M and $4M in debt. And, still, I sleep like a baby.
Why?
Because even though I’m paying money on that debt, I’m making more than I’m paying.
Here’s a recent example.
On April 25, 2024, I borrowed $24,210 at 10% interest, paying 2 points to purchase some land.
In July of last year, I started building a house on the land I bought with that money. Over the next six months, I borrowed 100% of the money I needed to build the house, and I made no payments.
When we sold it last week, I paid the investor his principal plus his interest.
He’s stoked.
And so am I, because I put $75,000 in the bank.
Now, mind you, that’s not all profit. While I borrowed the money to build the house, I still had to payroll, overhead, insurance, office space - all of that.
But it was a great deal.
And I did 4 others just like it during the same timeframe.
Without debt, I could have done just one.
With debt, I did 5X.
Granted, this is our established construction company that’s been in business for many years.
But the same logic applies to new guys.
I see so many would-be successful investors who never get started because they are scared of debt.
I got my start with private lenders, and you can too.
Somebody you know - or somebody who knows somebody you know - has money to lend.
Find them.
Partner with them.
Use their idle bucket of cash to start filling your own bucket.
They win.
You win.
Got questions on how that works or how to find the person with the idle bucket?