Do Less to Earn More – The Smarter Way to Profit

This is short, sweet, and straight to the point—but it packs a powerful punch and a valuable lesson I had to learn. This is something that comes with experience, but it’s helped me a lot as a hard money lender.

So, I had a potential borrower call me this week. He was based out of Alabama and newer to the game. That is totally fine—we work with a lot of new borrowers. He had a property that was almost under contract and was just trying to get his financing squared away ahead of time.

The deal he told me about involved a pretty rough property, which, again, is fine—we handle a lot of rough properties. The purchase price was $70,000, with around $60,000 needed for rehab, and the ARV was around $210,000.

Here’s the thing that was transformational for me when I became a hard money lender: realizing that you’re more than just a lender. You’re someone who gives borrowers a second validation—a second check. You’re making sure everything makes sense because, as a lender, you’ve done this a lot more frequently than they have. Until you’ve done multiple deals as a borrower, you just don’t know what you don’t know.

Here’s the thing that was transformational for me… realizing that you’re more than just a lender.

I said to him, “Okay, $70,000 purchase price, $60,000 rehab, and $210,000 ARV. After subtracting out realtor costs, holding costs, and assuming everything goes well with no delays or issues, you should make around $60,000 in profit. That is a very healthy, profitable deal.”

But I asked him: “Instead of going through all the rehab, dealing with contractors, delays, and holding costs, what if you just bought the property for $70,000 and listed it as-is for $130,000 on the market?” This strategy is known as a wholetail, and his mind was blown. He was like, “Wow, I’d never thought of that.”

When you’re a borrower and you want to get into real estate, especially flipping houses, you often feel like you have a hammer and everything looks like a nail. You’re looking for a house to flip, but you never stop to think about the end goal. What’s the fastest and most profitable way to get in and out of the deal? Sometimes, it’s not about the most money—it’s about the easiest and quickest solution.

For example, with our background, we’ve done it all: single-family rentals, duplexes, triplexes, larger commercial deals, wholetails, fix and flips, lending, short-term rentals, and midterm rentals. The key takeaway? It’s like having a toolbelt full of different tools, and you need to pick and choose the best one for each deal.

When you’re starting out, though, all you have is a hammer and you see houses to flip everywhere. The thing is, flipping houses may not always be the best option. I don’t always ask, “What’s going to make me the most money?” Instead, I think, “What’s the easiest, fastest, and most profitable solution?”

Let’s say I can flip a property and make $50,000. But if I wholetail it and make $40,000, I’ll take that deal every time. Why? Because flipping introduces many risks, such as unpredictable market conditions and higher-than-budgeted costs. You may also face permit or contractor issues. So, money in your pocket now is far better than potential future profits.

Now, imagine this: you have a project, and if you wholetail it, you’ll make $30,000. But if you take the time and effort to flip it, you could potentially make $70,000. In this case, I’d take the flip, even if I end up with $55,000 to $60,000 after expenses. I’d still choose that over the $30,000 from wholesaling.

It’s not always about making the most money—it’s about making the best decision for that specific opportunity. When you look at all the different tools in your toolbelt, you can weigh the pros and cons of each deal and make the right choice.

When you look at all the different tools in your toolbelt, you can weigh the pros and cons of each deal and make the right choice.

Coming back to this particular borrower, his mind was blown when I suggested listing the property as-is. I tell you all this because, as a lender, your job is to guide borrowers and be that second sounding board for them. Help them explore different options—have you thought about this? or have you tried that?

It takes experience to think through all the scenarios. We’ve done over 100 fix-and-flip projects before we started lending. Our goal was to get out of the flipping game, but our experience allows us to guide borrowers more effectively. Sometimes, borrowers need to step back and evaluate the full range of opportunities. They often don’t have enough experience to do that until they’ve done five to ten deals.

I hope this is helpful for you.

In the end, we decided to help this borrower. We’ll still provide the funds for him to purchase the property. Instead of flipping it, he’ll list it as-is. I’m excited to see what happens with this deal, but I almost guarantee it’s going to make nearly the same amount of money and be significantly easier for them.

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