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One sign of a great investor is that they have a buy box. And you might have heard me say the word "buy box" multiple times on the YouTube channel, but I've never done a YouTube video breaking that all the way down. In fact, I've got a room of a bunch of badasses. Do you guys all have buy boxes? >> They all have buy boxes. So, let's break down what a buy box is, why you should know what a buy box does, and how it will benefit you even if you're a brand new person.
I get people that send me stuff all the time in my Instagram DMs or even my email. They'll Google "What's Pace Morby's email?" and they'll email me random things in Nantucket. I don't even know if that's a real part of the country. I think it's a made-up name. Definitely not in my buy box. So, if you go to pacesbybox.com, you'll see that I actually have a buy box for multiple things.
Now, what does a buy box do? Well, it essentially keeps me safe from being inundated from people that want to do deals with me. So, one of my buy boxes is fixing and flipping properties in Phoenix, Arizona. So, immediately when somebody sends me something in Atlanta that's a fix and flip opportunity, my team will not even reply to the email because we have clearly stated what our buy box is.
Now, if you're new, you will realize, "Hey, I've sent Pace's team emails before and nobody replies to me." The reason being is because you sent me Atlanta fix and flips when I do not do Atlanta fix and flips. In fact, one of my good friends, Abraham Gray, here does do fix and flips. >> Yep. And if you send me a fix and flip in Arizona, I delete it and don't respond. >> Is that true? >> I 100%. I only look at Atlanta. >> Okay. Who deletes non-buy box emails in your inbox? Okay. So, I'm not rude. I know that you were already in the comments saying, "Pace, you're so rude to new people." No, I'm not the one even looking at them. It's my team. And so my team has a limited amount of time to look at deals. And if you send something outside of my buy box, you're not even going to get a reply.
Okay. So, let's talk about what a good buy box has. And then what we're going to do at the end of this video is we're going to break down a handful of their buy boxes because everybody has a different one. This dude lives in San Fr. Why do you live in San Francisco? >> You've been there. >> It's I know. It's the best place ever. I love it. We love San Francisco. We have people that are here in California. One of my favorite people on the planet. I don't want to buy deals in California. Yet, you will buy deals in California. Who's buying deals in California? >> Wow. That many crazy people.
Okay. So, the first thing that you're going to want to see on a buy box is you're going to want to see a geography, right? Where, where are you looking, right? For example, do I buy deals in Canada? Do I buy deals in New Jersey? >> No. >> Okay. So, immediately people know that when they're networking with each other and they find somebody has a deal and they say, "Oh, I have a Jersey deal." They're not going to think about Pace. You want to market yourself by the geography that you're looking for. Because your friends in the real estate business are going to be looking for deals for themselves. And when that deal doesn't fit their buy box, they're going to want to bring it over to you, if they knew yours. Chances are you probably don't even have one. If you don't have one, please go down in the comments and go, "Pace, you're right. You caught me red-handed. I do not have a buy box." Number one, geography.
Okay. Number two, Ingred, my friend. Do you remember what our number two is? >> Who does number two work for? >> Who does number two work for? >> Type. >> Okay. Type. Asset type. Okay. So, we are looking for asset type. Okay. So >> you want to look for asset type and what would that be? Who's RV parks in here? Who is single family homes in here? Who is mobile home parks in here? Who is multifamily in here? Land. Anybody looking for land? Okay. So you see that asset type will differentiate between who you're talking to and who you're not talking to. So not every real estate investor buys every type of deal. So you want to say, "I, Pace, buy deals in Arizona that I want to fix and flip." So I'm Arizona. Fix and flip is actually the asset type would be single family.
Number three, what else do I got? Ingred, help me out here. You can cut this part out of her thinking. >> I I can't remember what else I asked for. >> Purchase price. Yeah. >> No, we didn't do purchase price, but uh that wasn't a part of the the video that we did. >> So purchase price is number three. My good friend Abraham Gray in Atlanta, Georgia. If I sent you a $4 million house to fix and flip, is that something that you want to look at? >> Yeah, I'll buy any price. >> Wrong answer. >> Anything in Okay, so that's his buy box. Definitely not my buy box. I want to stay away from luxury houses. I don't have the crews. I don't have the intelligence or the patience to do ultra luxury because an ultra luxury will sit on the market longer or shorter than an affordable house. Yeah, there's less buyers, but if you're buying at the right price, >> then you pick yourself as. >> So there you go. Every real estate investor is a little bit different. This is why it's fun to have all these friends that are so diverse because as deals come to me, I could go to Abraham and wholesale that deal to him that didn't fit my buy box. So purchase price and um what that price range is for us, I want to say an affordable housing area. I have one house on the market right now. It's a million-dollar home and it's been sitting for 120 days. I don't love the feeling of that. I like the houses that you get offers on day number one and you pump the price up $20, $30,000. I like that feeling. Maybe I'm a dopamine addict. I don't know.
Number four, >> NOI. >> Okay. I would say cash on cash return or NOI. Here's a good example. Arizona fix and flip. I want my ARV max to be about $600,000 and I want to make sure that I'm getting a 10% return on that house. So, if I sell it for $600,000, I want a 10% return in my pocket. $60,000 is my minimum. So, if you send me something that you and you go, "Pace, you can make 20 grand on this $600,000 house," you immediately are in or outside of my buy box. >> Outside. >> There you go. Buy boxes are important. It helps you understand how to collaborate with people that are busy.
Now, have you got do you guys have people that send you opportunities you immediately open up their text message because you know they know what the heck they're doing? >> Yeah. >> Okay. And you're like, in fact, I think uh Casey, you just got you have somebody that's newer to the Sub2 community. You guys are working on a couple RV parks. >> He's incredibly good at underwriting, right? >> Phenomenal. >> Is okay. So, how do I know this? I was on a Zoom with him the other morning. We were talking about you and he said, "Oh my gosh, I'm partnering with Casey Savage. We've got a couple of parks out there that we're working on. I'm submitting deals to him." And Casey gave me the compliment that I actually was submitting things to him that made sense. On the other side, do we also have people that send us stuff that we're like, "Bro, not >> a lot of times a headache >> hourly." Okay. >> So, what do we say in our minds is we say, "Not you again. Dang, I wish I could block you without being rude." And so, this YouTube video is meant to help you communicate with people instead of them on the other side looking at their phone going, "Gosh dang it, not this person again." You want them to go, "Gosh dang, this freaking person again." Yes. And you want them to communicate with you. If you're being ghosted by sending deals to people, type down "ghosted" in the comments. Or "guilty." You can say, "I'm guilty for sending crap deals to people without looking at their buy box."
Okay. What's another one that we want to look at when we're structuring our buy box team? >> Size. >> Ingred, I was told by my wife that size does not matter. Is that something we really want to put up here? Size definitely matters. >> Okay, Ingred says size does matter. >> Okay, size. Um, what else? Okay, so we want to look at details of um the units, right? So, six details. Now, if I'm in RV parks, for example, and we want to break down some people here, who's buying RV parks here? Okay, you know, I don't get to pick on Tyler that much. He's like a silent giant. Tyler, you do you're doing a lot of mobile home parks. You've got this amazing cash flow. You're netting somewhere between $50, $60,000 a month. You're freaking rich as heck, bro. You're like, you could buy a Duramax diesel every month if you wanted to. Like, that's how rich you are. If I send you a 4-unit mobile home park, are you going to buy that? >> No. >> No. Okay. But I thought you liked Georgia mobile home parks, seller finance, I hit all your other criteria. You're telling me that the amount of units is important to you? >> Yeah. It's not worth our time anymore. >> Not worth your time anymore. Now, when you were brand new, you probably would have done a four-unit deal, right? >> First thing I bought was a 4-unit deal. >> Okay. First thing he bought was a four-unit deal. Now, what is your minimum you won't even look at? >> Uh, nothing less than 40 beds. >> Okay. So, he won't even look at something unless it's 40 beds. Anybody else have something that's a minimum in your guys' asset type that you want to share? Casey, what about RV parks? >> 50 pads. >> 50 pads. Now, why is that important? >> Uh, the risk and the cash flow on >> the risk and the cash flow. Now, that doesn't mean that 50 pads is a bad deal. It just means Casey Savage has been in RV parks for a long time and he's upgraded his desire level. When I first started out, man alive, if somebody would have let me do a fix and flip that I knew I could break even on, I would have done that deal all day long because I would have learned and gotten forward momentum. But now, I'm like, I'm not it's not worth my time if I'm not going to make 10% of the sales price. You start getting a little bit pickier and pickier as you get a little bit more advanced. So, details or size are very, very important.
Now, I'd love to break down because Abraham does a lot. He does lending. He also does single family. Him and I own I don't know how many units do we own together? Like 25 >> more. Yeah, >> more >> in the 30s. >> Dang, bro. Size does matter, Ingred. So, there you go. >> Um, I would love to hear not about your buy box of any real estate stuff. >> Yep. >> Where could I go to figure that out? By the way, >> you can go to my social media. You can go to my email. You could. Yeah. >> What's your email? >> My email is abrahammma like mixed martial arts atl like Atlanta.com. >> Are you going to do any jiu-jitsu while you're here? >> Good. Yeah. Anybody does jiu-jitsu again? >> Nobody. >> I'm not joking. I'm think I'm really thinking about starting after you and I had a conversation. >> Okay. So, I want you to break down your lending buy box. Like what you will >> It's not even called a buy box when it's a lending. It's a lend box. >> Lend box. Okay. So, I want you to break that down. Who else wants to break down their buy box today on the whiteboard? Uncle Lonza. Okay. We got we got a couple. Okay, so my buy boxes are at pacesbybox.com. I will not do deals with people outside of our community. And the reason being is because I already have enough people to do deals with. However, these people here, all of my friends, they will do deals with you and so you should know what their buy boxes are. Did you already break yours down? >> ing hernandez.com. >> Ingred Hernandez.com. Okay, let's bring you up. Let's talk about your lend box.
All right, so everyone should have a buy box or lend box. Obviously, if you're buying stuff, you're going to have a buy box. If you're doing loans, you should have a lend box. As Pace said, the reason why it's so important to do it. How many people here have bought properties and lost money on them? >> All of us. >> All of us. Why? The reason why is because you probably bought them outside your buy box. You might not have had a buy box at the time. And that's probably why you guys all have buy boxes. >> Miguel, is that how you lost money? >> You will lose money 100% of the time. >> You will lose money if you buy stuff that's not in your buy box. So, same thing with when you're doing lending, right? We're all in Gator here. We all do lending. If you lend outside of your lend box, you are going to lose money because you don't know what you're doing and you have to know what you're doing. So my lend box is for PML, which is private money lending for fix and flips. I only loan in Georgia. So the reason why I only loan in Georgia is because I know the market very well. I do tons of fix and flips myself. And on top of that, I know all the laws. It's important to know all the laws. So, in Georgia, if someone doesn't pay you, I know I could foreclose on them and take the property in 30 days. I have a foreclosure attorney ready, and I know the whole process of foreclosures. I know that it's the first Tuesday of every month, and I know what the stuff is worth. I know how to dispose of it. If you're lending in every single state or multiple states, and you have to foreclose, you might be in a state that takes six months to foreclose, a year, three months. You have to know that stuff because you are going to loan a different amount based on how much um or how long it's going to take you to foreclose because you're going to lose money for the time. Plus, if you loan in 10 different states and you end up foreclosing and you get the property back, how are you going to sell that property? A lot of times at a foreclosure, it doesn't go for as much as you owe on it. So, you end up owning it yourself and now you have to find somebody to buy it. So if you don't have a good dispo team or have good dispo wholesalers in that town, it's going to be hard to sell that property. So everyone should focus on the cities that they know the laws in or the states they know the laws in and also where they could dispose of it and where they are comfortable knowing how to tell the ARV and what the AS IS values are. So my loan box lend box is in Georgia. Uh on top of that, this is for PML. So we all do different types of lending. How many people here do PML lending for fix and flips? >> Oh, fix and flips. >> How many people here do lending for EMD? How many people here do lending for double closes or for seller carrybacks? >> Not a lot of people do lending in here. We're going to get you into doing more lending. There's so much money lending. But the point is is that everyone lends on different things. So, if you are not lending on EMD and someone asks you for an EMD loan, you probably don't know how to do the paperwork, right? If you didn't go through the Gator method with PACE, there's no way you're going to do EMD loans and do it correctly. Like, there's so much to it and I don't know anyone else that knows it besides PACE as well and it's safe to do it. So, if you haven't gone through that program, you definitely should not have EMD lending in your lend box. Uh, double closes, same thing. There's a lot of details to it. If you know how to do it, it's it's a great tool. You can make a lot of money on EMD lending. You can make a lot of money on uh double closes, but if you don't know what you're doing, you're gonna lose money. So, once you know how to do it, you put in your lend box. So, I do double closes all over the country and I do EMD all over the country as well.
>> Do you do you have a percentage of ARV that you will lend on in Georgia? So, like you're Georgia, but what about percentage of loan? >> That's a great question. So, how much will I loan in Georgia? So, there's a few factors. First off, the other thing that's really important is will you loan in first position or other positions. I only loan in first position. Uh once in a blue moon I loan in second position, but you have to really know. So how much will I loan? I pretty much loan somewhere between 70 and 80% of the AS IS value, right? How how come sometimes 70 and how how come sometimes 80? Well, people that I know very well, that I've done lots of deals with that I know are good for it, I can loan them as high as 80% of the AS IS value. That could be 50 or 60% of ARV because there's rehab that's needed. But of the AS IS value, I feel comfortable loaning people that are really good. I've done lots of deals with, I know they're going to pay me up to 80%. People that I I are their first deals or I don't know them that well, I'm going to go closer to the 70% and then people that somewhere in between 75%. So somewhere between 70 and 75 and 80% of AS IS value is what I will lend. And that's going to be based on >> Abraham, if I came to you in Georgia and I am buying a property, AS IS value is 200K. >> You're going to give me a loan for about $140,000, right? 70% of AS IS value. >> And I that means I need to come up with $60,000 for the gap money. Do you also supply gap money in a second lean or at a higher rate? >> So gap money is going to be the second position. I I don't do the segmentation, but that's not necessarily true that you have to come up with 60,000 because the AS IS value is 200, but maybe you're buying it for 140,000. If you're buying it for 140,000, I'll loan you the full 100%. >> Okay, >> so the point is is that you just got to be a better negotiator. You just didn't negotiate that deal good if you're paying 200 for it. >> Dang, bro. Don't be attacking me. Dang. >> Hey, don't don't pay 100% of AS IS value. Don't pay his buy box. He does not pay 100% of AS IS value. So, he probably pays 70% AS IS value. So, I would loan him 100% of what he's paying for it, which is the 70. And actually, if it was Pace, I'd probably loan him a lot more than uh than that because I know Pace is solid and you could probably loan him 100% and not have a problem.
>> What about percentage? >> Percentage of >> like what what percentage are you charging? >> So, I have a couple different uh rates that I charge. I either charge a half a point at closing and then 1.5% a month interest only or I match what like most hard money lenders do which actually ends up being more money for somebody. So very few people do this but it ends up being about three points at closing and then 1% a month. And I give people the option to do either one of these. And um 90 some% always picked a half a point and 1.5% because if I drew it all out on this whiteboard, you would see that this is actually cheaper uh over the first six months. If you have a a loan that takes longer than 6 months, then sometimes this could be less. But usually after 6 months, there's a uh a renewal charge to uh extend the loan anyway. >> Plus, that three points is really diabolical. Like three points on a $300,000 loan, they're paying $9,000 upfront. front. Now, a lot of people would rather have more cash up front, so they'd rather do this one because now they have more cash up front. Now, if you're buying something super cheap, I could even overfund you. If you're buying this property that's AS IS value for 200,000 and you're paying 120,000 for it, I would potentially loan you more than what you're paying for it because I know that, see, that's why I do Georgia and 90 95 to 98% within an hour of Atlanta, which is where I buy where my buy box is. So, if you don't pay me, I'm more than happy to take the property because I I know it's going to take me 30 days to take the property, and then I know that I would pay that or more for it, and now I'll take it, fix and flip it, and make more money on it. So, if uh if it goes to a for the way the foreclosures work, you uh tell the foreclosure attorney how much money you're owed on it with all the fees, and they auction it. And if it goes for that or more, they sell it, and you just get your money. But if it goes for less than that, you end up buying it and you end up owning the property. So, um I use a couple smaller attorneys and most of the properties they foreclose I actually want to own. So, I end up owning most of the properties after I foreclose on them. But, um if for some reason someone pays more, which does happen sometimes, I'll just get paid off. But, the point is is that I like I like foreclosing on deals that people don't pay me if they have a lot of equity because I'll make more money. I really don't like foreclosing because I like just getting that steady income. But if someone doesn't pay me, they ghost me or do some some stuff, then I'm very happy to foreclose because they should have like been in contact with me and done what they said they're going to do.
Give it up for Abraham Gray. All right, so obviously there are different types of buy boxes and lend boxes. And if you don't know these things, then what's going to happen is you're going to think Abraham's rude when you send him an email and say, "I need a a New York loan." And he doesn't reply. You got to understand the buy box or the lend box of the people that you're communicating with. Eric, you want to come up here and talk about your buy box? >> Okay. Is that Does it have to be um like a an Amish buggy or what? What's the deal? >> Listen, one Clyde and all of a sudden I'm a bad guy. >> My name is Eric Richards. I own a company called Rich Investments Group. I'm currently stationed out of Eastern Ohio and western West Virginia. It's kind of right there in a big river that I buy everything up and down the river. So my buy box is very, very specific. It's very, very direct because I buy things that complement my universe. I've built multiple companies based off of Rich Investments Group and I basically learned from Pace to create a little umbrella. And I'm a horrible drawer, but under that umbrella, under that umbrella, I have rentals, I have a flip company, I have a property management company, I have a wholesale company, and then Ingred Hernandez and I are starting a state-of-the-art rent to own division in the Ohio Valley. So everything that I get in my buy box, I get because I know that I'm going to plug those things into one of these avenues and I'm going to be able to make money off of it. I like to think that I put the ethics in wholesaling because I don't put anything under contract that if I can't find an end buyer for, I don't buy myself and put it in one of these other outlets. So my buy box is very, very specific because it has to fit in this universe or it doesn't work for me. So number one is geography. We buy in Belmont County, Ohio, Stark, Summit, and Kyhoga. Between those four counties, there's about 2.5 million population. So there's plenty of deals for people to find, plenty of end buyers for us to locate, plenty of opportunities. Asset types. We typically look at one to four unit properties specifically because new investors coming in for the wholesale, and I keep going back because that's our first thing we look at. Um, new people getting into real estate are not looking at RV parks. They're not looking at big multifamily. They're looking at getting into a one to four unit and either house hacking it, living in one of the unit and running out the other three or they'll do a flip on a one single family, that sort of thing. So, one to four units is kind of where we're at with it. Our purchase price is anything below 300K. We do that because Ohio is not as expensive as Arizona. So, $300,000 house is a really nice house. So, anything underneath of that we like to have because we can make sure that we have qualifying people to come in if we have to flip it, wholesale it, or whatever. There's plenty of meat left on the bone for anything under 300,000. Um, cash on cash return. I am greedier than Pace. He's at 10%. I'm at 20%. Because properties are cheaper. We get into them cheaper. Therefore, we can make more money off of them. I make 20 to 30% return when we do flips. um wholesaling, rentals, everything's 20% across the board for us. So if it doesn't meet at least a 20% return for us to get into it, it's not worth me looking at. I have too many opportunities to look at for me to look at something less than that. Um, so >> if it does if it doesn't fit your buy box, would you wholesale it to somebody else around your local area or is that not even worth your time? >> Depends on the location. So, if it's in Kyhoga County, that's Cleveland area and subdivision. Um, I would probably look at what buyers list we have built out up there. Um, I have a full-time dispositions manager that his job is to add 10 to 15 buyers a week onto our buyers list. So, I would if it doesn't fit my specific buy box, I would have to have at least six buyers on our buyer list that it does match. So, that way I would feel comfortable with us putting it under contract. So, but that's only in certain situations. >> That was a mental note for me. Thank you. That I I just Did anybody learn something from Eric today? >> Give it up for Eric.
One last person. Who wants to come up here? Who wants to come? I need one more buy box. >> I do. >> Okay. Uncle Lonza. >> Well, hey, my name is Vincent Lonza, aka Uncle Lonza. And uh my buy my buy box is completely different than these guys buy box. So, let's erase this real quick. >> California. California. Pace's favorite state to buy real estate in. Hey, I'll be totally honest. Pace, our laws suck. California. So, I'm pretty much >> But your food and your people are awesome. >> Yeah. But it's a beautiful place. Um, so pretty much the only thing I do in California is fix and flips. I don't really have a desire to own, but it can be really lucrative because our price points are higher. So, I've done multiple six-figure flips in California. Uh so my my geography where I buy is California >> anywhere >> like you NorCal SoCal. >> Yeah. NorCal SoCal um has to have at least 50,000 plus people in that area. So I'm not buying rural um in any of these states. We also buy in Florida and Texas. I really need to work on my penmanship. And we're buying only pretty much single family homes, which includes up to a fourplex. So, anything above that we kind of classify as multifamily. So, we'll buy single, dual, uh, triplex, fourplex. Our purchase price is kind of interesting, right? Because we're in like three different markets. So, we look at the median home price. We want plus or minus 10%. Told you my handwriting is terrible. of the median. >> Bro, if you make six figures on a flip, who cares what your handwriting looks like? You're you're rich. >> Uh cash on cash return, I'm pretty much right in the wheelhouse. You're at probably 15 to 20%. And size about thousand square feet. Um prefer not to have homes in HOAs. And so if you want to send me a property, send it to unclelonza.com. >> Are you serious? Do you have that? >> Yeah. >> I'd love to work with you. >> Okay, Uncle Lonzo, real quick. Do you have >> This is I think this is the final part to the buy box. Is there a point with you and your team? I know you partner with a lot of smart people. Is there a point where you're like, I can't buy anymore because I have a constraint, meaning I have too many projects actively going on right now. Do you ever run into that? >> Yeah, I run into that. But I mean, the thing is is we also have a huge disposition team. So we can dispose of it to other buyers and we actually add 50 buyers to our buyers list every week.
Here's the population. Pennsylvania have >> I got I got a bigger geographical area than you. So >> are you a bird dog trying to find deals for buyers out there? Well, your number one job is to go find their buy boxes. And what do they mean? Everybody has a different buy box. Let's ask these four cute boys in Sub2 what they want. We're going to talk to Bobby, Casey, Chris, and Tyler. Hey, boys. >> Hey, >> what geography are you looking for your deal in? >> Anywhere in the US? >> Same thing. All across this beautiful country. >> West half of the US and the smile states. >> Sunbelt states, not California. >> What type of deal are you looking for? >> Mobile home parks. >> I do mobile and RV parks. >> Strictly RV parks. Mobile home parks. >> And size matters. What size? At least 50 pads. >> Yeah, we're doing 50 on up. >> 50 pads up. >> 40 plus Florida, 80 plus sunbelt states. >> Although your mama loves cash. You looking for cash or creative? >> We'll do cash or creative. >> We do cash creative. Preferably seller finance. >> Creative is amazing. Cash works too. >> Yep. Cash and creative. >> Anything special about it? >> We're looking for value-add opportunities and uh no waste treatment plants. No lagoons. I'm looking for people that want to partner with me so I can teach you this industry and help you get your first park. >> Something close to a destination because I want to make some core memories for families and everyone who comes. >> Yeah, just no wastewater treatment plants, no lagoons, send them to easymovepark.com. >> Right on. So, if you're a bird dog out there trying to help these buyers get what they need, make sure you understand their buy boxes. So, if you haven't learned already, every single investor that you'll talk to will have a different buy box, and they'll tell you how to do business with them. And the cool thing is, even if the deal doesn't fit their buy box, you'll learn that you've got Eric and Uncle Lonza and other people. Even all the way over there, Justin Tumanowski, you can see him way over there, almost like he's in Massachusetts in the room. He is actually on the East Coast. That's where he lives. And so, do if a deal doesn't fit his buy box or Uncle Lonza's or even Ingrid's or anybody else's in here, ask them, "Do you know a buyer?" And can you help me find the buyer that might be the right fit for you? Even if the deal doesn't fit their buy box. I hope this was helpful for you. If it was, say something down below. Say, "Trevon is handsome." Travon, show us your the camera for you. Freshly fa shaved face. Here you go. This is Travon. Travon, are you single? >> I am single, actually. >> There you go. Okay, guys. Hit up Travon in the side in the chat. Yes. >> Yes. There you go. And we'll see you guys in another video.