Alex Hormozi: How I Used Hard Money Lending to Make $3,000/day on One Real Estate Investment...

The video is about how Alex Hormozi used hard money lending to make $3,000 per day on a real estate investment and he explains the deal structure and payment terms.

This video by Alex Hormozi was published on Sep 22, 2021.
Video length: 09:54.

In this video, Alex Hormozi talks about how he used hard money lending to make $3,000 per day on a real estate investment.

He outlines the deal structure and the risk factors involved in investing in a 334-unit building in Memphis that was in a war zone and had squatters and drug dealers. He also explains the payment terms, which included a four percent per month interest rate and a two-month minimum carry.

Hormozi shares his experience and the biggest takeaway from the investment.

• Alex Hormozi made an investment that pays him $3,300 per day in profit off of a single deal.
• He likes hard money lending because it allows him to control the deal structure and mitigate downside risk.
• The investment was a $2.5 million note wired in cash to a buyer who went to buy a 334-unit building out of foreclosure in Memphis.
• The payment terms were four percent per month, which equates to $100,000 per month for the last three and a half months.
• Controlling the deal structure and mitigating downside risk is valuable in making fewer mistakes and using time as an asset to get rich.

How I Used Hard Money Lending to Make $3,000/day on One Real Estate Investment... - YouTube

Introduction

• Alex Hormozi made an investment that pays him $3,300 per day in profit off of a single deal.
• He is the CEO of Acquisition.com, a portfolio of companies that's about $85 million a year.
• He likes hard money lending because it allows him to control the deal structure and mitigate downside risk.
• He believes that getting rich is about making fewer mistakes and using time as an asset.

The Deal Structure

• The investment was a $2.5 million note wired in cash to a buyer who went to buy a 334-unit building out of foreclosure in Memphis.
• The building was in a war zone and was condemned with squatters and drug dealers.
• The risk factors were not getting the money back and not knowing the value of the building.
• The first layer of defense was guarantees from both buyers who had net worths in excess of $2.5 million.
• The building had three offers already on it for between $5 million and $5.6 million, and there was earnest money of $300k in the deal.
• The cash was used to pay off the last person who had a lien on the building, and they took over that position as preferred.

Payment Terms

• The payment terms were four percent per month, which equates to $100,000 per month for the last three and a half months.
• If the deal took more than four months, the interest rate would double to $200,000 per month.
• There was a two-month minimum carry, which means a minimum of $200k for just risking the $2.5 million.
• They got eight percent or whatever for doing the deal, no matter what.
• After the deal closed, the individuals who did the deal flew out to see them and had a celebratory dinner.
• They mentioned that the note looked a little light, and they ended up giving Alex an extra $100k.

How I Used Hard Money Lending to Make $3,000/day on One Real Estate Investment... - YouTube

Conclusion

• Alex Hormozi used hard money lending to make $3,000 per day on a real estate investment.
• He believes that controlling the deal structure and mitigating downside risk is valuable.
• The investment was a $2.5 million note wired in cash to a buyer who went to buy a 334-unit building out of foreclosure in Memphis.
• The payment terms were four percent per month, which equates to $100,000 per month for the last three and a half months.

Deal Structure and Payment Terms

• The lawyers messed up when they sent the loan invoice for repayment at the end of the deal.
• The individual who lent the money saw the mistake and decided to send the money anyway.
• The mistake saved them almost $100,000.
• Trust is the most valuable thing in business.
• They got paid back $2.85 million.
• They hope to do bigger deals with partners they can rely on.

The Value of Trusted Partners

• Trust is the most valuable currency in business.
• They earned more trust with this deal.
• They hope to have partners they can rely on for bigger deals.
• They don't sell anything on their channel because they want everyone to win.
• Private lending requires high returns because of taxes.
• Trusted partners are worth their weight in gold.

Watch the video on YouTube:
How I Used Hard Money Lending to Make $3,000/day on One Real Estate Investment... - YouTube