Podcast Summary: Real Estate Investing School Podcast

Episode 156: REAL DEAL—The Art of Creating Win-Win Deals with Alex Mashburn

Date: May 9, 2024
Host: Brody Fawcett
Guest: Alex Mashburn

Main Theme

This episode centers on the art and strategy of structuring “win-win” real estate deals, with a focus on creative seller financing, how to find and negotiate these opportunities, and how to leverage partnerships where roles and rewards are evenly balanced. Alex Mashburn, both an investor and coach, shares granular details from a recent high-value partnership deal and broad insights on building wealth through creative deal-making rather than conventional routes.

Key Discussion Points & Insights

1. The Power of Creating the Deal (00:00, 20:52)

• Alex opens the episode with:

  “What everyone’s missing out on, I think the biggest miss is creating the deal, because creating the deal is going to create way more cash flow.” (A, 00:00 / 20:52)

• Rather than focusing solely on improving property income or amenities, Alex stresses that structuring the deal itself (e.g., seller financing at favorable terms) offers the biggest impact on cash flow and returns.
• Example: Reducing monthly debt payments from $10,000 to $5,000 by negotiating terms is more powerful than chasing marginal improvements in rental rates.

2. Why Seller Financing? (04:01–08:33)

• Alex’s buy-box:
  • Targets properties owned free and clear (no bank loans), sellers open to <10% down, and interest rates below 4%.
• Benefits:
  • Lowers investor risk (less cash needed upfront).
  • Flexible terms, not dictated by banks or market norms.
  • Seller can achieve a desirable purchase price and often nets more interest, especially in early years (as typical amortization schedules heavily favor interest in initial payments).
• Common misconception:
  • Some believe seller financing only benefits buyers, but with proper structuring, sellers can win too—especially those looking for steady cash flow or those needing tailored payment schedules to, say, cover a current mortgage.
• Memorable quote:

  “Interest rate is just like camouflage, like it’s just kind of... covering up the more important stuff.” (A, 05:16)

3. Example Deal Structure—“Forcing the Deal” (06:55–16:52)

• Creative structuring anecdote:
  • Alex describes buying a Provo, Utah duplex where the seller was stuck on a high interest rate. Instead, Alex negotiated to meet the seller’s actual need—a specific monthly payment—by proposing a custom principal/interest split.
  • Result: Instead of typical bank terms (high initial interest), Alex structured large principal paydown early, massively increasing equity gained over five years.
• Lesson:
  • Find out what really matters to the seller (payment amount, down payment, purchase price, or interest rate), then creatively structure the deal around that.

4. Finding Off-Market and Creative Finance Deals (10:19–15:04)

• Sourcing deals:
  • Majority of Alex’s leads come from Zillow, not just MLS.
  • Use tools like PropStream to pre-filter for free-and-clear properties.
• How to open conversations:
  • Frame initial contact to invite “yes” answers by leading with willingness to put down a decent sum (“Would you be open to seller financing with a larger down payment?”).
  • This fosters openness versus putting sellers on the defensive about minimizing their return.
• Negotiation tactics:
  • If a seller wants a big down payment, Alex offers it, but negotiates price accordingly—demonstrating flexibility and increasing perceived professionalism.

5. Partnership Dynamics—Capital vs. Deal-Maker Roles (16:15–19:16)

• The Real Deal with Blake:
  • Recently completed a $1.4M short-term rental deal:
    • $150K down (~11%), 3% interest for 2 years, then stair-stepping up.
    • Payments at $5K/month; property generates $10–12K/month gross.
    • Multiple interested capital partners lined up for such a deal—deal-maker’s role (finding, structuring, managing) is as valuable as bringing cash.
• Brody on partnerships:

  “So many people hear about partnerships with a capital partner, and they’re like, ‘Oh, well, that’s lame…’ But they get so caught up in what’s in it for the other party instead of what’s in it for them. And I think that hurts people.” (B, 16:52)

6. Repeatable Blueprint for Those With Less Capital (19:16–22:46)

• Alex’s advice:
  • Don’t chase marginal property improvements—instead, “create the deal” via creative financing.
  • Have defined buy-box terms (e.g., “don’t do a deal unless interest is <4% and down is <10–15%”).
  • “Where your focus goes, your energy flows… focus on the things that are the most valuable and therefore you’re going to create the most value for yourself.” (A, 21:47)
• As you become known for structuring strong deals, capital partners will seek you out.

7. How To Learn Creative Deal-Making (22:46–26:13)

• Two options for newer investors:
  1. Dive in directly—make offers, get practice, learn by doing (expect many rejections).
  2. Surround yourself with experienced people—accelerate learning and sidestep common traps.
• Brody’s analogy:

  “It’s like learning how to fish as opposed to going to the supermarket and buying fish. You can feed yourself for life.” (B, 24:47)

• Alex:

  “The whole secret to living is giving. If you can give [the seller] what they need, but it still works for you…and your little buy-box, like, it’s gonna be fun.” (A, 23:55)

Memorable Moments & Quotes

• On deal-making skill outweighing capital:

  “Just creating the deal is probably just as valuable as someone who’s bringing all the money.” (A, 18:10)

• On personal growth and network:

  “I definitely could not have done it without going through some hard stuff and then also being around the right people.” (A, 26:02)

Timestamps for Key Segments

• 00:00, 20:52 – The margin in creating the deal, not just running properties.
• 04:01–08:33 – Why and how seller financing makes deals possible and lucrative.
• 10:19–15:04 – How to find seller finance deals, approach sellers, and creative negotiation.
• 16:15–18:10 – Breakdown of the $1.4M partnership deal with Blake.
• 19:16–22:46 – Repeatable playbook for building a portfolio with little capital.
• 22:46–26:13 – How to actually learn creative deal-structuring (practice & network).
• 26:50 – How to connect with Alex Mashburn.

Connect with Alex Mashburn

• Instagram: alex.mashburn

  “Instagram’s probably the best right now. So: alex.mashburn, just how it sounds.” (A, 26:50)

Final Takeaways

• The true “deal” in real estate investing is often made in the negotiation and structuring, not just in rental rates or market appreciation.
• Partnerships can and should be a win-win—roles and rewards are both important.
• To succeed, get crystal clear on your criteria, master the art of creative deal-making, and surround yourself with others doing the same.