Why The Wealthy Never Follow The 4% Rule | Zach Richards

The MORE Show - Justin Colby, Bleav, Justin Colby

The podcast discusses why the traditional 4% retirement rule is outdated, highlighting private lending as a superior alternative. Zach Richards from REI Capital explains how his firm offers stable, flexible financing in

Key takeaways

• Private lending provides stability during market volatility

Transcript preview

A lot of people don't even know that private lending is a thing. Everybody's told, yeah, take your 401k invested in the stock market and do that till you retire and then live off 4% of your portfolio, you know, follow the 4% rule and then hope you don't outlive your money. And that's really what it's come down to for a lot of people and we're just trying to show people that there's a better way to do it. What is up the Moore Show family? We are excited to have this guest as in real estate. It's a little uncertain right now, but his business is actually picked up in the recent times. Now as always these episodes are brought to you by the Moore Club. The Moore Club is where you can get access to these type of guests, experienced entrepreneurs with great opportunities. Make sure you go to Time for Moore. Get a part of this club. All right, so our guest today is with REI Capital Guys. he's one of the co-founders and like I said he's business has been increasing as a private lender we all want money so this guy is gonna be a good guy to talk to. Zach Richards is here how are you bud? Hey Justin good how are you? Thanks for having me on. Well let's jump into this with all the uncertainty in the markets with all the uncertainty in politics and in life but also in the financial markets how is your business as a private lender to real estate started increase? right because we have we have two sides of our business we have the side where people come to us to borrow money real estate investors and then we have our investors on the other side that are looking for a place to put put their money so it's picked up on the borrower side because with rates increasing and Wall Street kind of tightening some of their guidelines we found that a lot of people going to hard money lenders are getting yanked around a little bit for lack of a better word where they get close to closing and terms on them at the last minute and so on and so because we control the capital we lend we've been able to keep all that steady because we don't have to answer to you know Wall Street anything like that we dictate our terms and so we don't have to change them on people and then on the investor side with the volatility in the stock market we've had a lot of people that want a consistent return and a place to put their money back by real estate so it's been attractive for them to place money with us as well. invest your own capital as a lender. Yeah, we lend our own money. That's how it all started. Started with our own money and then from there we had friends and families say, hey I've got some money sitting in an old 401k and a savings account and a CD whatever can you lend it out for me. Then it went there and then it became okay let's actually create an investor community to fund and take on more capital to give this opportunity to other people. What are you seeing right now as the desire for people? to come to you as you guys kind of be a resource for them to invest money right so they'll give you their money you invest it their desires what just the pure uncertainty in the in the stock market uncertainty in the financial market in general or just a lack of knowledge of opportunities out there I think it's all three really like yeah a lot of people don't even know that private lending is a thing everybody's told yeah take your 401k invested in the stock market and and do that till you retire and then live off four percent of your portfolio, you know, for all the 4% rule and then hope you don't outlive your money and that's really what it's come down to for a lot of people and we're just trying to show people that there's a better way to do it. Yeah, well listen I think Axi I've been talking a lot about Access right the More Club gives you access to ZACs to the incredible operators but Access creates opportunity I was literally just with Grant Cardone and Brandon Dawson for private mastermind for two days and the whole I'm kind of thinking to myself like it's access to these kind of guys that create opportunities for me and always has. Sure. Yeah. That I think transitions into what we're talking about. Your investors are looking to you like hey I need access to opportunities that are good deals not just S&P 500 right I need a better return on my money. Exactly better return on your money and then we have a lot of people that have tried to lend on their own which you totally can do I mean that's how I started but people have gotten burned. they don't have the right processes in place to vet a deal and vet the borrower and all that and so yeah it's the opportunity and it's also knowing how to do it the right way. You're Now let's talk about your borrowers. What kind of opportunities are you seeing come to you right now? Sure. So a lot of it's fix and flip. I mean we've done that's like the bread and butter of loans we've done single family fix and flips they're easy to do right easy to value easy to paper up but we've also been doing more recently a lot more commercial deals. We just closed out the sale of a self-storage facility. borrowers built a self-storage facility ground up in Maine. We funded that and they sold that in mid-April. And so we've been doing more commercial deals like that, bridge loans on industrial buildings. So still fix and flips, but we've had the opportunity to do a lot more commercial transactions recently and those are always a lot of fun. Are you open to seeing more of those style opportunities versus just the fix and flip? I'm being a part of this, you know, founding this club I just yesterday I get messages right like hey do you know anyone who would lend on this you know deal in Delaware hey do you know and there's I see all these opportunities I'm not saying they're good opportunities sure right I'm just saying I see it as the founder of this club I see a lot of those opportunities are you guys opened a more of a diverse commercial storage industrial I mean of course fix and flips apartments are you guys going open are you trying to really hold that circle of is a loan. No, we're totally open to more commercial projects and for a few reasons. They're larger loans typically so a larger loan alone is the same amount of work depending on if it's a hundred thousand dollar loan or two million dollar loan. I mean within reason sometimes there's more complexities on the big the bigger deals but it's much easier for us to just do a larger loan. It tends to be with more experienced real estate investors because they're not the ones doing fix and flips that you can buy for a hundred thousand dollars so Yeah, we love doing the commercial deals. As I'm literally doing this interview with you, I'm thinking of the guy that sent me this deal. I'm like, I'll put you two together and just see if that deal actually makes sense. Yeah, happy to talk about it. So talk to, you know, you and I and your partner, Mike, who, if no one knows Mike, get to know Mike, really funny guy. I, you know, we've leaned into understanding some brand recognition. Getting a little bit more out there on to some media, some features on some podcast. You, you got yourselves starting your own podcast. And before I go all the things, how has that helped you grow awareness of you? What would you maybe point at to say, hey, we're getting more opportunities now because of X? It could just, by the way, I'll lead you into wherever you want to go, but it could just be a function of like people want easier terms and you guys are easier to work with than everyone else. Maybe it's just, a mouth. Maybe it's this actual leaning into putting a brand together, creating a podcast, creating some social media content. Maybe it's, you know, you're just sitting in the right rooms, you're networking in the right people. Could you pinpoint a little bit of the direction of why you guys have seen this increase in business? I think it's solely because of the way we've, or not solely, it's majorly because of the way we've positioned our brand. Like we called ourselves REI capital guys for a You know we're not wearing suits when we do loans right? We're just a couple guys that that fund real estate projects so yeah we structured the name of the business around it the attitude about it all the types of posts that we do on social media we try to make them really educational and conversational and that spilled over into the podcast and how we how we do everything. Yeah so talk about the podcast a little bit you guys started a podcast. Yeah we did. What's the name of the podcast? What's the subject? How is it how's it going? Sure so the podcast is called Save to Zero we just released our 14th episode I believe