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

Summary

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Podcast Summary: The MORE Show

Episode: Why The Wealthy Never Follow the 4% Rule | Zach Richards
Host: Justin Colby
Guest: Zach Richards, Co-founder of REI Capital Guys
Release Date: June 26, 2026

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Episode Overview

This episode explores alternative approaches to wealth building outside the traditional "4% rule," focusing on private lending, real estate investment, and the importance of access to better opportunities. Host Justin Colby and guest Zach Richards, co-founder of REI Capital Guys, discuss how real estate private lending not only provides borrowers with more reliable terms but also offers investors consistent returns backed by tangible assets. The duo dive into current market uncertainties, shifts in investor behavior, and the real-life mechanics behind successful real estate lending and investing.

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Key Discussion Points and Insights

1. The Problem with the 4% Rule (01:15, 04:32)

• Zach critiques the standard financial advice given to most Americans—put your 401k in the stock market, rely on growth, and live off 4% in retirement, hoping not to outlive your money.
• He advocates for more proactive and secure methods: private lending, direct real estate investment, and taking control of your own capital.
• Quote:

  “Everybody’s told, yeah, take your 401k, invest it in the stock market and do that till you retire and then live off 4% of your portfolio… 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.” – Zach Richards (01:14, repeated at 04:32)

2. The Appeal and Structure of Private Lending (02:43–04:10)

• Business for REI Capital Guys is up on both the lending and investing side:
  • Borrowers prefer reliable, non-Wall Street capital.
  • Investors want steady, asset-backed returns; they’re tired of stock volatility.
• Zach explains their funds started with personal/family money and grew into a broader investor community.

3. The Power of Access and Community (05:22–06:49)

• Justin emphasizes that access to the right people and deals is what differentiates wealthy investors and entrepreneurs from everyone else.
• The More Club is highlighted as a network for such access, paralleling curated mastermind experiences.

4. Lending Opportunities and Expanding Loan Types (06:49–08:48)

• Bread-and-butter loans remain fix-and-flip, but there’s a move toward larger commercial projects—e.g., self-storage facilities, bridge loans for industrial assets.
• Larger loans are often less work (per dollar) and tend to attract more experienced investors.

5. Branding and Positioning in a Competitive Market (10:04–11:11)

• REI Capital Guys deliberately brand as approachable, educational, and informal (“we’re not wearing suits”).
• Social media, podcasts, and a conversational, educational tone are key brand elements.

6. The Podcast "Safe to Zero"—Philosophy of Wealth Building (10:50–12:03)

• The premise: You can only save your way to zero, but there’s no cap on how much you can earn through entrepreneurship and investing.
• Quote:

  “If you’re solely focused on saving money in life… you can only save down to nothing.… But if instead you focus on growing… the amount that you can earn is infinite. And that’s what we want people to focus on.” – Zach Richards (11:11)

7. Inflation, Patience, and the Reality of Building Wealth (12:27–16:04)

• Saving alone doesn’t beat inflation; investing and business-building are necessary.
• Both agree: modern wealth requires earning/growing, not just saving.
• Building a business/system is “easy” in the sense that the steps are clear, but it takes significant patience and perseverance.
• Memorable exchange:

  Justin: “You can’t… save yourself to getting rich.… That doesn’t exist. I mean, it just can’t.” (12:03)

8. Realistic Expectations and Flip Math (16:06–19:12)

• New investors need runway and manage expectations: you probably won’t make $1 million your first year.
• Many flip deals are simply not worth the hassle when factoring time, holding costs, and commissions.
• Lenders often make more than the high-risk operator or flipper.

9. Scaling and Risk Management at REI Capital Guys (19:31–21:43)

• Growth strategy: expand the fund, systematize underwriting and deal flow, raise more capital—but always monitor risk carefully.
• “If someone gave me $100 million, I could lend it all out tomorrow. Doesn’t mean I’m going to get any of it back.” – Zach Richards (19:31)

10. Defining Opportunities and Avoiding “Shiny Objects” (23:20–24:41)

• Clear benchmarks for deals they’ll avoid (e.g., states requiring licenses, disorganized borrowers).
• Importance of process: they ignore deals not aligning with risk profile or those outside their operational expertise.

11. Systems for Borrowers—Streamlining Applications (25:17–26:01)

• Online loan application, document checklists, efficient pre-screening.
• Relationship-building remains key—they value proactive calls/relationships as much as deal flow.

12. Preferred Asset Types and Lending Preferences (26:27–27:51)

• Excitement for ground-up construction (especially self-storage), major rehabs, and multifamily turnarounds.
• Emotional investment in seeing projects transform communities.

13. Market Observations and Future Outlook (28:17–35:48)

• Discussion of macro trends, political incentives to keep real estate values high, and forecast for rate cuts.
• Importance of capital independence—being private (not Wall Street-dependent) offers a unique edge, especially in market shocks (e.g., COVID-19 lending freeze).
• Noted pain points: multifamily syndication struggles, overleverage; single-family flips have normalized with fewer multiple-offer frenzies.

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Notable Quotes and Memorable Moments

• On real estate lending:

  “The way we position ourselves is, yeah, being easy to work with and being able to fund quickly because we’re the ones that are controlling the capital that we’re lending.” – Zach Richards (21:43)

• On lending risk:

  “We’ve looked at a lot of deals and it’s like, ‘Guys, we as the lender are going to make more money on this than you. Is that really what you want to do?’” – Zach Richards (18:13)

• On the power of access:

  “Access creates opportunity.” – Justin Colby (05:04)

• On flipping for quick profits:

  “Everyone thought 3% interest rates were like the normal now and you’re like [thinking it’s] gonna last forever. Just have some reasonability.” – Justin Colby (35:48)

• On realistic budgeting in flips:

  “There has never been a flip ever done that the budget… is exactly what you thought it was gonna be when you started.” – Zach Richards (33:34)

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Key Timestamps for Segments

• [01:14] – The myth and limits of the 4% Rule
• [02:43] – Private lending business model & current market behavior
• [05:04] – The critical role of access in opportunity creation
• [06:49] – Trends in lending: fix-and-flip vs commercial
• [10:50] – REI Capital Guys’ podcast and brand positioning
• [11:11] – “Safe to Zero”: Focusing on earning, not just saving
• [17:49] – Risks and rewards of flips: a real-world example
• [19:31] – Scaling the loan business and risk management
• [23:20] – Underwriting philosophy and reasons to say “no”
• [25:17] – Borrowing process and application streamlining
• [26:49] – Preferred asset types for lending
• [28:17 & 29:15] – Market outlook: Rates, lending, and macro trends
• [34:40] – Regional pain points and syndication stress

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Practical Takeaways

• For Investors: Look beyond the 4% rule; private lending and real estate provide higher returns if you know how to access and evaluate deals.
• For Borrowers: Organization, clarity, and relationship-building are crucial in securing private loans.
• For Entrepreneurs: Consistency, patience, and the right community are key to scaling in real estate and lending.
• For Everyone: Savvy investing is about access, relationships, and understanding that not all “opportunities” align with your expertise or risk tolerance.

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Connect with REI Capital Guys & Zach Richards

• Website: ricapitalguys.com
• Podcast: “Safe to Zero”
• Social: Facebook, Instagram ([search: REI Capital Guys / Zach Richards])

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For deeper discussion, actionable tips, and to access real network opportunities, join The More Club via time4more.com.

Transcript

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[Justin (Host of The More Show)]

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[Zach Richards (Guest, Co-founder of REI Capital Guys)]

Cup 2026 a lot of people don't even know that private lending is a thing. Everybody's told, yeah, take your 401k, invest it 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 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.

[Justin (Host of The More Show)]

What is up the More show family? We are excited to have this guest. As in real estate, it's a little uncertain right now, but his business has actually picked up in the recent times. Now as always, these episodes are brought to you by the More Club. The More Club is where you can get access to these type of guests. Experienced entrepreneurs with great opportunities. Make sure you go to time4more.com 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, his business has been increasing. As a private lender, we all want money. So this guy is going to be a good guy to talk to. Zach Richards is here. How are you bud?

[Zach Richards (Guest, Co-founder of REI Capital Guys)]

Hey Justin. Good, how are you? Thanks for having me on.

[Justin (Host of The More Show)]

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 to increase?

[Zach Richards (Guest, Co-founder of REI Capital Guys)]

So it's picked up on both sides, 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 are changing 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 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 backed by real estate. So it's been attractive for them to place money with us as well.

[Justin (Host of The More Show)]

Now, what makes you guys private? Like, you guys invest your own capital as a lender?

[Zach Richards (Guest, Co-founder of REI Capital Guys)]

Yeah, 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 family 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, start a fund and take on more capital to give this opportunity to other people.

[Justin (Host of The More Show)]

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?

[Zach Richards (Guest, Co-founder of REI Capital Guys)]

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, invest it 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.

[Justin (Host of The More Show)]

Yeah, well, listen, I think access. I've been talking a lot about access. Right. The more club gives you access to Zach, the more club gives you access to incredible operators. But access creates opportunity. I was, I was literally just with Grant Cardone and Brandon Dawson for Private Mastermind for two days. And the whole time I'm kind of thinking to myself, like, it's access to these kind of guys that create opportunities for me and always has.

[Zach Richards (Guest, Co-founder of REI Capital Guys)]

Sure, yeah.

[Justin (Host of The More Show)]

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.

[Zach Richards (Guest, Co-founder of REI Capital Guys)]

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 attorney, 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.

[Justin (Host of The More Show)]

Now let's talk about your borrowers. What kind of opportunities are you seeing come to you right now?

[Zach Richards (Guest, Co-founder of REI Capital Guys)]

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. 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. So our borrowers built a self storage facility ground up in Maine. We funded that and they sold that in, 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.

[Justin (Host of The More Show)]

Are you open to seeing more of those style opportunities versus just the fix and flip? I 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, I see all these opportunities. I'm not saying they're good opportunities.

[Zach Richards (Guest, Co-founder of REI Capital Guys)]

Sure. Right.

[Justin (Host of The More Show)]

I'm just saying I see it as the. As the founder of this club, I see a lot of those opportunities. Are you guys open to more of a diverse commercial storage, industrial? I mean, of course, fix and flips apartments? Are you guys going open, or are you trying to really hold that circle of genius tight?

[Zach Richards (Guest, Co-founder of REI Capital Guys)]

No, we're totally open to more commercial projects and for a few reasons. They're larger loans, typically. So a larger loan. A loan's the same amount of work depending on if it's a $100,000 loan or a $2 million loan. I mean, within reason. Sometimes there's more complexities on 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 $100,000. So, yeah, we love doing the commercial deals.

[Justin (Host of The More Show)]

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.

[Zach Richards (Guest, Co-founder of REI Capital Guys)]

Yeah, happy to talk about it.

[Justin (Host of The More Show)]

So talk to you and I and your partner, Mike, who if no one knows Mike, get to know Mike. Really funny guy. You know, we've leaned into understanding some brand recognition, getting a little bit more out there onto some social media, some features on some podcast.

[State Farm Advertiser]

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[Justin (Host of The More Show)]

You got yourselves started 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 word of mouth. Maybe it's the. 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 the right people. Could you pinpoint a little bit of the direction of why you guys have seen this increase in business?

[Zach Richards (Guest, Co-founder of REI Capital Guys)]

I think it's. 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 reason. You know, we're not wearing suits when we, you know, do loans. Right. We're just a couple of 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.

[Justin (Host of The More Show)]

Yeah, so talk about the podcast a little bit. You guys started a podcast?

[Zach Richards (Guest, Co-founder of REI Capital Guys)]

Yeah, we did.

[Justin (Host of The More Show)]

What's the name of the podcast? What's the subject? How does it, how's it going?

[Zach Richards (Guest, Co-founder of REI Capital Guys)]

Sure. So the podcast is called safe to zero. We just released our 14th episode, I believe, this morning. Oh, yeah. So we're, we're chugging along. We've got, I don't know, eight or 10 more that have recorded and more scheduled. So we're really trying to do a good job of keeping it, keeping ahead of, you know, get it, staying consistent with it.

[Justin (Host of The More Show)]

Save to zero. What's the premise?

[Zach Richards (Guest, Co-founder of REI Capital Guys)]

Yes, so the premise is if you're solely focused on saving money in life, and I mean, you're going to drive around and save 5 cents a gallon on gas or you're going to take the flight that's got five layovers so that you can save 100 bucks, you can only save down to nothing, Right. The least amount of money you can spend on something is getting it for free. Right. But if you instead focus on growing your. You start a business, you invest in yourself, you join various communities like yours, for example, that gets you in the room with people to get opportunities. The amount that you can earn is infinite. And that's what we want people to focus on.

[Justin (Host of The More Show)]

You can't, you can't save yourself to getting rich. I mean, that's, you know.

[Zach Richards (Guest, Co-founder of REI Capital Guys)]

No, you can't.

[Justin (Host of The More Show)]

I think the old. And by the way, you and I aren't old, but, you know, old enough to have some life experience. I just think that the days of our grandfather's generation, right, and the, the Scrooges, right? That whole classic, you know, Christmas story. And he's the great, you know, he's rich because he's just as a penny pincher, right. And it's just like that doesn't exist. I mean, it just can't.

[Zach Richards (Guest, Co-founder of REI Capital Guys)]

Doesn't work anymore.

[Justin (Host of The More Show)]

No, not just conceptually. Like literally, financially, it doesn't work. You will not. You will go out of money if you just sit around.

[Zach Richards (Guest, Co-founder of REI Capital Guys)]

You can't even put money in a savings account today and break even with inflation.

[Justin (Host of The More Show)]

Well, I was just going to say the easiest answer is inflation. Like, yeah, where are we at right now? 7% or. I don't even know, you might know

[Zach Richards (Guest, Co-founder of REI Capital Guys)]

what it was over the last few years. I think it's come down a bit now. But they play with the game with the numbers, too.

[Justin (Host of The More Show)]

Yeah.

[Zach Richards (Guest, Co-founder of REI Capital Guys)]

Like they say, oh, beef's gotten more expensive, so let's take that out and put in chicken. So it makes the numbers look better. But it's like, that's not what people want to buy. So if you really dig into the numbers, it's a lot worse than they say. And I think most people feel that. Data side.

[Justin (Host of The More Show)]

Yeah, listen, look at gas. I mean, I understand everything is going on with the war and all this stuff. Okay, fine. But at the end of the day, like, I'm in Miami to get premium gas for my car, which most cars now minimum need the middle of the line. Yeah, right. I don't know what's called, like, low, medium, high, whatever pricing. Most cars now need at least the minimum. Here it's $434, and 30 for the premium is just under 5 bucks.

[Zach Richards (Guest, Co-founder of REI Capital Guys)]

And that affects everything.

[McDonald's Advertiser]

Everything.

[Zach Richards (Guest, Co-founder of REI Capital Guys)]

Yeah.

[Justin (Host of The More Show)]

Like, what, are you just not going to drive now? So you're going to be a recluse and you're going to sit in your home because you want to save, so you're going to stop driving, so then you can stop your car insurance, so you can stop having a car? Like, where does. Where's the line end? Like, now what do you do? You just literally don't talk to people. You do nothing. You sit at home. I. I just. I'm with you guys. I love the. The subject matter because I'm an earner. Just go make money. Right. Like, life is expensive. Make more money.

[McDonald's Advertiser]

Yep.

[Zach Richards (Guest, Co-founder of REI Capital Guys)]

Yep. And I think once you figure out how to do it, especially if you have your own business. I mean, this may sound a little flippant, but I don't mean it to. But it's. It's easy.

[Justin (Host of The More Show)]

Sure.

[Zach Richards (Guest, Co-founder of REI Capital Guys)]

You know, in the grand scheme of things, you build the system, you build a business, and things start working. Just focus on that.

[Justin (Host of The More Show)]

You know, people don't do that is because it also takes patience.

[Zach Richards (Guest, Co-founder of REI Capital Guys)]

Yes, it does. Right.

[Justin (Host of The More Show)]

I mean, you just got to have enough Runway to see that flip go over into, like, oh, money's actually. Okay. Here we go.

[Zach Richards (Guest, Co-founder of REI Capital Guys)]

Yeah.

[Justin (Host of The More Show)]

Right? Yeah. And that's for all of us. You, me, everybody. I just think people, like, okay, I want to make more money. And it's May 19th as we're doing this, and so by the end of the year, I want to go make, you know, $200,000 more. Well, you could probably get there, but you're going to go put some random date on it. Like, why don't you just give yourself some Runway to go do it?

[Zach Richards (Guest, Co-founder of REI Capital Guys)]

To give up way too, too easily with everything. Like, if you're going to start, you know, posting more on social media, I know, like, when you started your original podcast, how long it took you to really blow up. It takes a while. You got just only 10 years. Right. 10 years to become an overnight success. Right. Like, you got to be willing to stick with it for more. For longer than other people.

[Justin (Host of The More Show)]

Yeah.

[Zach Richards (Guest, Co-founder of REI Capital Guys)]

And a lot of people aren't.

[Justin (Host of The More Show)]

That's right. And then. But those are the same people that end up complaining, Right? Exactly. You know, we live in a space of transactional real estate. Right. So I literally started. The original version of this podcast was called the Science of Flipping, because, like you, I really just lived in the transactional, wholesaling, flipping world. I wanted. The point of my podcast is I wanted the truth to come out about what flipping really is versus all these TV shows that make it look so glamorous and easy. And you just make hundreds of thousands of dollars on everything you do. And so I started it that way. Now we have transitioned in the more show because I actually believe there is so much great opportunity, as you and I are even talking about in real estate in general. Land flipping, development, you know, storage, entitlements. Like, there's just opportunity everywhere.

[Zach Richards (Guest, Co-founder of REI Capital Guys)]

So there is everywhere.

[Justin (Host of The More Show)]

I say that because even when people are like, okay, I'm going to go flip to make money, which in my opinion is the right route, you should be always making money.

[McDonald's Advertiser]

Yep.

[Justin (Host of The More Show)]

Then you need to give yourself a Runway of, like, you're probably not going to go out and make a million bucks in the first year or maybe in the second. So you got to start to understand what is your trajectory. How long do you need to give yourself? Because otherwise you start to give up, too. Or you make silly decisions and start buying assets that you call Mike and say, hey, I want to go buy this flip. And Mike and Zach are like, that's not a good deal. Why are you doing that? Something in nine months.

[Zach Richards (Guest, Co-founder of REI Capital Guys)]

Exactly. That's what it is. Yep. People get desperate. They like, oh, the numbers kind of work. If I massage the spreadsheet this way and don't do that, you're going to regret it.

[Justin (Host of The More Show)]

I'll give you a great example. I. I'm out of the flipping game. I'm not building a bit, but there's a home in my neighborhood. My neighbor is a realtor. The guy who has the listing, which is Not a yellow listing. Calls my neighbor first because I guess they owe each other favors. My neighbor calls me, he was like, I know you flip homes. This could be a great one. It's in our neighborhood. Like, let's go. So I'm like, all right, it's in my neighborhood. Let me go walk it.

[Zach Richards (Guest, Co-founder of REI Capital Guys)]

Look it, why not?

[Justin (Host of The More Show)]

Yeah, it's a classic Miami original build. Like, it's gonna need a full, you know, three hundred thousand dollar rehab, which is normal in my neighborhood. That's like the normal. Yesterday I had to just say I'm out. Like, I just, it was going to take, I don't know, nine months probably. And to make, maybe we're going to make 100 grand. I just don't. And I know to some people you're like, Justin, that's a hundred grand. It's a lot of money.

[Zach Richards (Guest, Co-founder of REI Capital Guys)]

Yeah.

[Justin (Host of The More Show)]

But for nine months of dealing with it and contractors and then the city and then the things that go wrong, because they always go wrong.

[Zach Richards (Guest, Co-founder of REI Capital Guys)]

They always.

[Justin (Host of The More Show)]

The, the you go, I bring this to Zach and Zach goes like, are you just, are you just forcing this, Justin? Like, are you, are you just forcing this buy? Because if you just looked at the energy effort and the whatever, it's going to cost me nine to eleven grand a month just in holding costs.

[McDonald's Advertiser]

Right?

[Zach Richards (Guest, Co-founder of REI Capital Guys)]

We've looked at a lot of deals and it's like, guys, we as the lender are going to make more money on this than you. Is that, is that really what you want to do?

[Justin (Host of The More Show)]

Right.

[Zach Richards (Guest, Co-founder of REI Capital Guys)]

Like, you know, it just doesn't make sense.

[Justin (Host of The More Show)]

But people are desperate.

[Zach Richards (Guest, Co-founder of REI Capital Guys)]

Yeah, they are. Yeah. And it makes me like feel bad, right? Like, you're the one doing the flip and doing the work. Like, let's find a better deal that just works for everybody and makes everybody money.

[Justin (Host of The More Show)]

What really set me over the top in respectfully, because it's not their problem. But like if I paid a 6% commission when I went to go sell it, they, the agents themselves, the agent commissions between the two of them will be more money than I make. And I'm just like, this doesn't. I'm just gonna go be a realtor. Like, I don't know. But it's also why I'm out of the flip game. Like, I'm not desperate to go do that flip. I'm not running the model. It's because it was convenient. But to your point, like, the lender would likely make about as much money. The agents were going to make more money. And I'm, I'm the guy, like with all the risk. With all the stress. With all the risk.

[Zach Richards (Guest, Co-founder of REI Capital Guys)]

Exactly. Yeah. You're the one taking the burden of all that.

[Justin (Host of The More Show)]

Yeah. Yeah. So where do we see, you know, your business going here now? You know, obviously we've talked about over the last little while, your business is increasing on both sides of the ticket. Where do you want to go? Where do you want to take REI capital, guys?

[Zach Richards (Guest, Co-founder of REI Capital Guys)]

So we want to grow. We want to just continue to grow what we're doing. And the cool thing is, like, what we're doing is working. Right. We just need to do more of it. We need to take on more capital, more investors, and then we need to continue to lend it out to great people and do great loans. So, you know, we can say we have a goal of getting to 100 million in our fund, which, yeah, that sounds great, but it's not really about the dollar amount. It's really about, like, if you're going to do, say, $10 million worth of loans to get to 100 or to really increase, you have to start systematizing things. You can't really get away with just doing one off loans. And you have to build systems around raising capital, systems around finding good opportunities. And that, to me, is an exciting challenge because all along your goal is to manage risk. And it's, if someone gave me 100 million bucks, I could lend it all out tomorrow. Doesn't mean I'm going to get any of it back. And that's the key. And that's like that.

[Justin (Host of The More Show)]

That's a good point. You could immediately lend it out, but doesn't mean you're going to get it back. That's. That's a really good point. So let's talk about that because again, the more show that this podcast is maximizing opportunities in real estate, and there's a lot of them. To your point, I could lend it all out tomorrow. By the end of the week, I'll be 100 million short. I brought it in today. Tomorrow it's gone, it's gone, and it's gone for good. You're right. And so not everything is an opportunity. This is. It's also why I created the club. The club is there because it gives you access and it gives you people like Zach and. And all of our members to Billy, really refine what is a real, actual, genuine opportunity. We do Friday calls where people get to present the opportunity they're looking at. And whether it's a Zach that comes in and says, hey, I might be a lender on this, I like these numbers. Maybe it's someone who's a private lender who's looking to just privately lend money, or maybe it's a contractor. Point is, with this growth that you're looking at, how are you going to start defining where are the opportunities for you? How are you going to be the brand, the REI capital guys that everyone brings? Opportunity. What is your business model to go become those guys?

[Zach Richards (Guest, Co-founder of REI Capital Guys)]

Yeah, our business model is to just be as easy to work with as we can. And we're not. We're not the cheapest. I'll be the first to tell you that. We're not. But we've done, I have had, we've done so many deals where somebody has come to us and we've had. They've had a hard money lender that changed the terms on them at the last minute. I mean, one that we did a few years ago. I'd spoken to the long story short, I spoke to this borrower beginning in November about a flip. She was going to go get pricing from a hard money lender because it'd probably be cheaper. And I said, you know what goes, that's totally fine, go ahead and do it. No problem at all. She comes back to me the Wednesday before Thanksgiving at 5 o' clock saying that that hard money lender wants an appraisal and she's supposed to close the following Monday. That's just not happening right through Thanksgiving. All that. I'd already looked at the deal, I knew the numbers, I was comfortable with her, and so I said, yeah, we can do it. Here's the terms I quoted you originally and we closed it. So the way we position ourselves is, yeah, being easy to work with and being able to fund quickly because we're the ones that are controlling the capital that we're lending. So we're not subject to a lot of those rules and stipulations that Wall street has. So that's what we want to do. And for repeat people, we have people that they text us and say, hey, here's a flip I'm looking at. Do these numbers work? We can look at it in 30 seconds and say, yeah, this works, let's go ahead. Obviously we do due diligence and stuff where necessary, but point is, building a relationship makes it just easier for everybody.

[Justin (Host of The More Show)]

Where do you say no, where are the opportunities that you two are basically saying, this isn't going to be our right opportunity? Whether it's a deal, whether it's a mastermind, whether it's a club, whether it's something that you're like, I just don't believe this is in alignment with what we're trying to do where less is more.

[Zach Richards (Guest, Co-founder of REI Capital Guys)]

Yeah, less is more. And I think that's such a big challenge in businesses. Is this an opportunity or is this a shiny object? And that is something that's hard to answer. I struggle with it. I don't know if you feel the same way, but.

[Justin (Host of The More Show)]

Oh my God.

[Zach Richards (Guest, Co-founder of REI Capital Guys)]

Yeah, it's so hard. Right. So really, to answer your question, I mean there's more technical things, like if a flip's in California. Okay, no, we're not. Probably not. We're not going to do a loan in California. Right.

[Justin (Host of The More Show)]

That's. I mean these are quite little benchmarks.

[Zach Richards (Guest, Co-founder of REI Capital Guys)]

Yeah. Like if it, if we requires a license to do the loan, which I think it's only 11 states that do, we're just going to not do that. It's just too much work on our side. So there's things like that. And then also as far as on the borrower side, like somebody reaches out to us for a deal and we ask them for five documents and they send us one and then they send us something else and it's not what we asked for. And then they say, hey, are we ready to move forward? Like, no, you haven't sent me what I asked for. So it's also what type of level of organization does somebody have that we're working with? And so it's all those things that we look at and the numbers, of course, but it's not just the numbers.

[Justin (Host of The More Show)]

Yeah. And so what would help you guys refine this meaning? Is there a way that you can go to market and just say, here's the 10 things everyone needs? Because I think for us as a borrower, when I'm a borrower, if I'm already clear on what I need to deliver you, that's the easiest thing in the world.

[Zach Richards (Guest, Co-founder of REI Capital Guys)]

Yeah, right, yeah.

[Justin (Host of The More Show)]

Is is just having that almost checklist, hey, give me this, you know, whatever bank statement, whatever the five things are, if that is known, you guys start to create a big ecosystem for yourself.

[Zach Richards (Guest, Co-founder of REI Capital Guys)]

Yeah, I agree. And that's why one of the things we've built out, like for example, on our website, we've got a loan application that people can enter. Somebody can enter the basic numbers of their deal. We can do some really quick math and saying, hey, based on what you told us, this works. If you want to proceed, click here and then here's the documents we're going to need. And that, that's it.

[Justin (Host of The More Show)]

The website is just what ricapital guys.com.

[Zach Richards (Guest, Co-founder of REI Capital Guys)]

yeah, yeah.

[Justin (Host of The More Show)]

Well, if you are looking for money, make sure to get to RI Capital guys dot com. I mean can they just start to fill out the application right then and right there?

[Zach Richards (Guest, Co-founder of REI Capital Guys)]

Yeah, yeah.

[Justin (Host of The More Show)]

What's the easiest way? Like is that the easiest way or how can they get a hold of you if they're listening to this right now and they're like, God, I would love just an easy lender. You guys are. Where do they go?

[Zach Richards (Guest, Co-founder of REI Capital Guys)]

Yeah, so obviously like we just talked about, you can fill out a loan up on our website, that's fine. But we are more than happy to speak with somebody if they want to just build that relationship. Maybe don't have a deal right now, but you want to build that relationship. We love when people do that. We have, you know, on our website people can send us an email, book a call to chat with us and then, you know, same on social media, Facebook, Instagram, we're all over.

[Justin (Host of The More Show)]

Yeah, I think you guys have done a great job starting to get out there in social media. What are, what are the type of assets? If someone's listening or watching this right now, what are the type of assets you want to do more of? I understand flipping is your bread and butter, but let's say people are out there seeing different opportunities. What do you want them to present you with? What do you look for?

[Zach Richards (Guest, Co-founder of REI Capital Guys)]

We really like doing the new construction like that self storage facility. I told you it's not like I want to focus only on that, but seeing a project start from just a piece of dirt and then getting pictures and updates as things go on. And then we see all this construction equipment come in and they dig all the, they clean up the site, pour all the cement and then these, these storage buildings go up and the whole thing got done in, I don't know, seven months. They did all the construction. Like that's exciting. It's fun. It's fun for us on the lender side because we get like emotionally involved in deals like that. It's exciting. It's exciting to watch this stuff come together. So like that kind of stuff is really cool. Or when somebody gets a multi family that is just in a horrible condition, it's the worst house in the neighborhood. And then we watch them bring it back and that makes everybody's property values in the whole neighborhood go up like that. That stuff is really, really fun to be a part of.

[Justin (Host of The More Show)]

I was just at Grant's wealth con. He actually had Bill Pulte, Fannie and Freddie speak at it, which was really cool. Right back to the back. Like I Don't get access to just sit there and talk to Bill Potley. But his whole point was they are going to do everything they can in government and he's in charge of Fannie and Freddie to keep valuations high.

[Zach Richards (Guest, Co-founder of REI Capital Guys)]

Okay.

[Justin (Host of The More Show)]

Trump wants them high. Yep, they want them high. Which means there's only one other level or lever to pull interest rates.

[Zach Richards (Guest, Co-founder of REI Capital Guys)]

Yeah.

[Justin (Host of The More Show)]

And so they're very, very bullish on Trump and this current government really leaning into keeping the value of homes incredibly high, but creating an affordability through lending.

[Zach Richards (Guest, Co-founder of REI Capital Guys)]

Okay.

[Justin (Host of The More Show)]

You, you likely because of your space, do a lot of research on kind of all this and the treasury bonds and all this kind of stuff. What is your take from everything at least you're seeing now I got to talk directly to Bill Potley about this. That's what I mean, he obviously is in politics now, so he has to be very tight lipped and he has to frame in a way that looks in a certain way, which respect. But what are you seeing like in the game but also as you're studying the treasury bonds and in everything that's going on in the financial world.

[Zach Richards (Guest, Co-founder of REI Capital Guys)]

Yeah. Obviously I don't have a crystal ball. So I mean my opinion, it seems like the Federal Reserve, they're looking for an excuse to start cutting rates and it seems like they've been tipping on that, on the edge of that for some months now. And I haven't checked the forecasts and stuff recently, but last I saw it seems like they're getting close to wanting to do that now. I don't know if all the stuff in Iran and everything going on has changed that with gas prices and all that, but you know, gas prices tend to push, make things less affordable too, so. Right. Does that make them want to, want to cut rates more aggressively? Maybe. I don't know. We'll have to see what, what happens.

[Justin (Host of The More Show)]

Yeah. Well, the nice part about you guys, I mean, you know, kind of being true private lenders, you're not as pigeon held by needing to go find and borrow money. You are private lenders that make decisions independently and like you said, easily you can. Today's Tuesday. If you, if I needed money by Friday and I gave you all the documents and all the things you probably could fund by Friday.

[Home Depot Advertiser]

Right.

[Justin (Host of The More Show)]

And so those are the uniquenesses of you and what REI Capital guys have done.

[McDonald's Advertiser]

Yeah.

[Justin (Host of The More Show)]

Is you're not reliant on that and I think that's a great place to be.

[McDonald's Advertiser]

Yeah.

[Zach Richards (Guest, Co-founder of REI Capital Guys)]

If you remember like back in Covid, what happened right at the beginning was all the wall street money. They were spooked about real estate or about the whole economy. So they shut off the tap for a lot of lending. And a lot these larger hard money lenders just stopped. They stopped doing loans because they couldn't get the capital on the other end. And so it left their borrowers in a jam. I've heard stories of people getting left at the closing table because they're like, yep, sorry, money's gone, we can't do it. And so it just, yeah, the. If you're dependent on other people like that, it really can, can cause you, you know, trouble on the deal side. And then also if that's your business

[Justin (Host of The More Show)]

too, what are the, you know, handful of things that you want to borrow to bring to you? Like if they're listening to this right now and they're like, okay, what do I need to do? I'm going to submit a deal today. Is it two things, five things, 10 things? What do you need to go see in our.

[Zach Richards (Guest, Co-founder of REI Capital Guys)]

Yep. So we want to see information about the property, we want to see photos, the purchase contract. You got the scope of work that gives us a great understanding of what the property looks like and what you're trying to do. We've done enough flips now, seen enough deals where we typically don't need to get inspectors out to the property and order an appraisal and all that. So if people can give us that information up front, then we can. That saves us a lot of time and it saves our borrowers on those fees because we don't need to do all that. And then as far as the borrower goes too, we also want to get comps and that we pull our own, of course, but that also tells us what our borrower thinks about the deal. Right. If the Property is a 2, 1, 900 square foot house and all the comps they send us for what they think it's worth are five, four to three thousand square foot houses. It's like, okay, do you, do you really understand the market and flipping and all that? So it gives us like a good check on our borrower and then that, I mean, that's a lot of it. For the document wise, we try to keep things pretty simple. And then we like to have a zoom call or a face to face meeting if it works with everybody that we lend to, because we really depend heavily on that relationship and that's super important to us.

[Justin (Host of The More Show)]

Yeah, and, and you know, listen, borrowers, if you're out there, these are simple things that you know. Now the downside, Zach, I Mean, obviously we're beholden to contractors, you know, getting the bid back in time.

[Zach Richards (Guest, Co-founder of REI Capital Guys)]

Yep.

[Justin (Host of The More Show)]

But not terribly difficult. And if it's a real deal, then just get that done, submit it to Zach and the team.

[Zach Richards (Guest, Co-founder of REI Capital Guys)]

Yeah, yeah. And a lot of times we're not looking for like signed contracts with your, you know, I don't, I don't need a signed contract that you're gonna spend 10 grand on countertops, you know, for example, I don't care. Just tell me this is what I want to do and we can look at and say, yeah, that, that sounds like it's probably about what it's gonna cost. We totally understand that. There has never been a flip ever done that the budget has, you know, the ending budget is exactly what you thought it was gonna be when you started.

[Home Depot Advertiser]

Right.

[Zach Richards (Guest, Co-founder of REI Capital Guys)]

That's never happened.

[Justin (Host of The More Show)]

Yeah. Yeah. So you guys are. Do you guys have a downsign protection though? Like if they give you an $80,000 rehab bid, you approve 80 grand, and if it goes to 90, then they're just out of pocket for the remaining 10.

[Zach Richards (Guest, Co-founder of REI Capital Guys)]

Yep, for the most part, we have done a couple times where there's been so much equity in the property that we've been able to do a modification on the loan and advance some of the extra money or maybe they've got another property that we can use as collateral. But by and large, that's. That's why we want to look at a scope of work and make sure that, hey, going into this is what we're agreeing to fund. And if you go over budget, it's going to be on you to. To fund the difference.

[Justin (Host of The More Show)]

Now, you and I are part of some high level masterminds, some serious investors, you know, let's call it what it is. There's a lot of people still in pain. Right. They're making, whether it's bad decisions, the market changed on them. They thought it was going to be, how do you guys protect yourself the best you can? Or, or I'll ask you a better question. Are you seeing in any specific region or price point more pain than others?

[Zach Richards (Guest, Co-founder of REI Capital Guys)]

So from. So we not as we haven't seen as much directly because we're more on the finance side, but I've heard from a lot of multifamily people and even like some of our borrowers buying properties from other multifamily investors that some of these people that have overpaid for these big multis are feeling some pain. Like people that have done syndications or you. And now they underwrote it at a certain Level of vacancy and now the vacancy is higher, for example. So they're having more trouble covering their debt service. So some investors in some syndications have stopped paying their investors, for example. So that seems to me where the bulk of the actual pain is. I mean, yeah, we've seen single family flips sit on the market for a little bit longer, but I would think that's more of like returning to normal and not necessarily painful. It's the, some of the days of putting a property on the market and by the end of the weekend you've got 10 offers and they're all over asking. Like a lot of people got used to that, but that, that's kind of gone away in, in a lot of markets.

[Justin (Host of The More Show)]

Yeah, I mean it was the same thing with the code effect. Right. Like everyone thought 3% interest rates were like the normal now and you're like gonna last forever.

[Zach Richards (Guest, Co-founder of REI Capital Guys)]

Yeah.

[Justin (Host of The More Show)]

Just have some reasonability.

[McDonald's Advertiser]

Zach.

[Justin (Host of The More Show)]

I have. I love this. I appreciate your time. Zach is in the More club. By the way, as access to Zach R e I capital guys.com, you can find Zach Richards all over social media. Get in the More club, be a part of his world. And he is a very easy lender to deal with. And so, dude, I appreciate you spending some time here.

[Zach Richards (Guest, Co-founder of REI Capital Guys)]

Yeah, thanks, Justin. Thanks for having me on.

[Justin (Host of The More Show)]

Right on. All right. If this was good or you think someone needs to talk to Zach, make sure you share this with at least two of your friends. We'll see you on the next episode of the More show. Talk to you later.

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[Justin (Host of The More Show)]

a limited time while supplies last.

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All rights reserved. 20:26 McDonald's at FIFA World Cup 20:26

[Home Depot Advertiser]

if you like the show, please take a moment to rate, review and subscribe. It really does help the show to grow.

[Zach Richards (Guest, Co-founder of REI Capital Guys)]

Thank you for listening.