96 Carolina Hard Money – Wonky Deals

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96 Carolina Hard Money – Wonky Deals

In today’s episode of Active Wealth, Passive Income Show of Carolina Hard Money Bill, Wendy, and Jonathan will talk about their “Wonky Stories” or mistakes that they made in the past.

“When life gives you lemons, make sweet, not sour lemonade.”

Watch this episode to learn from these three that not all mistakes turn into failures

Bill Fairman (00:00):


Wendy Sweet (00:00):


Bill Fairman (00:00):

Welcome to Passive Income, Active Wealth Show. I am Bill Fairman, this is Wendy sweet, that’s Jonathan Davis laughing at me in the corner. He always loves it cause I can string these things together. I’m a wordsmith.

Jonathan Davis (00:32):


Wendy Sweet (00:32):

Yes, you are.

Jonathan Davis (00:32):

You were seamless with how you stream things along.

Wendy Sweet (00:34):

That’s exactly what I was going to say.

Bill Fairman (00:36):

So we are Carolina Capital Management. We lend the money.

Wendy Sweet (00:40):

Tell all your friends.

Bill Fairman (00:40):

So go to our website at CarolinaHardMoney.com. If you’re a borrower, click on the borrower tab. If you’re an investor looking for passive returns then click on the investor tab. Don’t forget to subscribe, share, and like our show and if you have any questions or comments for us, you can have access to that chat box to the right or to the bottom of the screen, depending on the platform you’re on. So we normally have a guest at this time but we have stuff too

Wendy Sweet (01:14):

That’s right. Well, we have had a cancellation, which is cool, we’re all good with that.

Bill Fairman (01:19):


Jonathan Davis (01:20):


Wendy Sweet (01:21):

But we think on our feet so we can always add something else in. And,

Jonathan Davis (01:26):

And the best thing that we think of as all the mistakes that we made and all the cool stuff that we found.

Wendy Sweet (01:30):

Wonky deals because we got lots of them, right? They’re all kind of a little wonky,

Bill Fairman (01:36):

You know, not all of them are mistakes that that’s turned into bounced stuff. I mean, we have stuff that turns into lemonade from lemons.

Wendy Sweet (01:45):

Well, I’d say quite a bit of it does. The point of it does.

Jonathan Davis (01:47):

You do hard money long enough, everything has hair on it. I mean,

Wendy Sweet (01:51):

That’s the truth.

Bill Fairman (01:53):

I’ll tell you one story that reminds me is one that Larry Goings did.

Wendy Sweet (01:58):

Which one would that be?

Bill Fairman (02:00):

He did one where he bought this single-wide mobile home on land somewhere in the middle of nowhere and he realized I got in a single wide mobile home on land in the middle of nowhere, the hell am I going to do with it? And then the person that was living in it set it on fire.

Jonathan Davis (02:22):

He got insurance, right?

Bill Fairman (02:24):

And burned it to the ground. Well, the insurance came in and paid him a big chunk of change and then he sold the land for even more.

Wendy Sweet (02:31):

Yeah. That actually happened to him twice.

Bill Fairman (02:35):

Paid off his deal and no, he’s not hiring people to do that.

Wendy Sweet (02:38):

Yeah. Caused it happened twice on purpose.

Wendy Sweet (02:42):

One of them, we, I was working with Larry at the time and there was a mobile home there, we had had it for maybe 45 days. Finally had it sold. It was too close. This was on a Monday, it was supposed to close. On a Friday or over the weekend, no, when was the election? So it had to be a Tuesday. So it was supposed to close that Wednesday. So on the Tuesday, this is when Obama was elected. The second time Obama was elected into office. Some kids in the neighborhood, were excited about it and started throwing fire, you know, the bottles with fire in them.

Jonathan Davis (03:24):

Oh, the bottle rockets?

Bill Fairman (03:24):

Molotov cocktails?

Wendy Sweet (03:30):

That’s it and they’re throwing those.

Jonathan Davis (03:30):

This wasn’t in the seventies?

Wendy Sweet (03:34):


Jonathan Davis (03:37):


Wendy Sweet (03:37):

So anyway, it hit there and it burned the trailer. Burned it to where, you know, of course we lost the buyer on it but he ended up earning enough to cover the deal to begin with so now we’re in it totally empty, I have another story to that. He walked through it himself to look at, it was down at Myrtle beach and he and his wife walked through it and he’s going, there was somebody that was a squatter in there with like half of it burned down and no roof and stuff and they had already kicked him out and gotten the guy out but he left all his clothes. The guy had a really nice Hawaiian shirt and, you know, Larry likes white shirt, he take it home and washed it and started wearing the shirt. He’ll tell you this story. It’s pretty funny. But, you know, he ended up being able to sell it in that state, burned up to somebody else. He made pretty good money off of it and it was a total mistake. Total mistake on that. We did have a house in Gastonia that we didn’t remodel but our borrower did and the contractor, I think I might even told you guys this story. The contractor was testing the burners and accidentally did not turn the burner off all the way. You know, everything was complete. He didn’t turn the burner off all the way, there was paper near it and that house burned to the ground and after it was completely rehabbed and the lot that it was sitting on was two feet too short on the street,

Bill Fairman (05:12):

For the variance.

Wendy Sweet (05:12):

Access for the variance and the house could not be rebuilt so the lender on that ended up with an $80,000 piece of dirt that couldn’t, there was nothing that could be done about it. Now there was insurance on it so that paid off, but that was kind of stinky.

Bill Fairman (05:33):

But the insurance only pays for the sticks.

Wendy Sweet (05:37):

That’s that’s exactly right.

Bill Fairman (05:40):

Then pay for the value of the land as a part of your appraisal.

Wendy Sweet (05:40):

That’s exactly right. So he didn’t get his full,

Jonathan Davis (05:43):

Do the borrower make enough to pay the loan off?

Wendy Sweet (05:46):

The borrower didn’t make anything.

Jonathan Davis (05:49):

I guess the borrower get enough from the insurance company to pay it off.

Wendy Sweet (05:51):

Well, the lender is the one who actually got the pay off because the lender is shown to have the lien on it. So it went straight to the lender on that, which was good. So he ended up, you know, becoming whole on it but you know, the rehab guy got here on the property, walked away with zero. In fact, many zeros.

Bill Fairman (06:11):

This is why we say that, you know, the rehabber is always taking the risk on these stats and he should have known that this thing couldn’t be rebuilt. This happens a lot when you have a single family home that has been changed over into a commercial office and then someone tries to turn it back into a house. Once they’ve changed it and then you have to, again, it depends on the municipality, but if you’ve changed it to a commercial property and it burns down, you can’t build it back to a house. If it was a commercial property and then you converted it back to a house and someone’s living in it and the house burns down, the only thing you can make it is a commercial property. Again, you got to watch out for that

Wendy Sweet (06:56):

You gotta know the zoning and it’s different in every county

Bill Fairman (07:02):

Yeah. You just have to be vigilant and make sure that you look up and what’s allowed within the zoning and unfortunately, you have to look at all the denims and everything else. Now you can certainly hire someone to do that but if they miss it, they don’t usually have ENO insurance to,

Wendy Sweet (07:23):

To cover all that.

Bill Fairman (07:23):

To cover any mistakes because they’re not writing anything, they’re just translating it for you.

Wendy Sweet (07:28):

Right. That’s exactly right. So we actually just kind of made a list of some of the wonky deals that we’ve been involved in and Jonathan, you brought one up in Charlotte. A house that we did a loan on that the property got demolished by the city. Do you remember that one?

Jonathan Davis (07:51):

Yeah, I do.

Wendy Sweet (07:52):

Hook her.

Jonathan Davis (07:52):

Well, it got demolished by the city after the borrower had put a brand new roof on the building and they didn’t bother to get the foundation inspected and the foundation was, it had to be torn down. It couldn’t pass, you know, engineering reports that he couldn’t, probably, barely,

Bill Fairman (08:15):

Support the new roof, the shingles are too heavy at this point.

Jonathan Davis (08:17):

Yeah. So those guys have been like, ah, gosh, like eight grand, maybe eight grand on a brand new roof and he had to tear it down.

Wendy Sweet (08:30):

I did get a really nice clawfoot tub out of that deal.

Jonathan Davis (08:33):

Did you?

Wendy Sweet (08:33):

I did.

Jonathan Davis (08:33):


Wendy Sweet (08:33):

It was inside. So I’ve got that before

Jonathan Davis (08:37):

That’s interesting that [Inaudible] because I remember that house. There was a roof, there was a foundation and then it was all open. You could see through the house to the other side.

Wendy Sweet (08:48):

It was like sticks holding the roof up but that was after I got that tub out of there.

Bill Fairman (08:53):

We call those park shelters.

Jonathan Davis (08:55):

That’s exactly what it looked like. It was a really nice roof on that park shelter.

Wendy Sweet (08:59):

Yeah. So as a lender, I mean, we had the loan on there. We had to turn around and sell the deal as a lot that didn’t have a house on it.

Jonathan Davis (09:08):

Well, we had to take the deal back and, you know, we had to, you know, there was way more to the story, we had to, you know, take it back and,

Wendy Sweet (09:15):

The borrower has issues anyway.

Jonathan Davis (09:15):

The borrower has issues but that’s why we don’t want to lend to borrowers who have issues. We want to lend to borrowers who can take care of what they have and know what they have before they get it cause we don’t want property.

Wendy Sweet (09:31):

That’s right. And you know, most of the loans, most of the people that we lend to are good, fine upstanding citizens that have every intention,

Jonathan Davis (09:41):

It’s most people, yea.

Wendy Sweet (09:41):

Of paying us back but every once in a while, and this was one of those people, you’ll get somebody who’s answering life as well. If it doesn’t work out, I’ll just walk away and do something different and that’s exactly what that attitude was on that one and I’ve taken great lengths to make sure that everybody I know that’s about to do business with this person knows who it is. So they don’t run into the same thing that we did and we actually had two properties with this person, didn’t we?

Jonathan Davis (10:13):

Took back both. Reputations are an important thing. I mean, that’s why Wendy, bill and any in myself, like when you build more so, been working for 20 years to create a great reputation. I know this is our show, so, you know, we could feed the propaganda that we want but I really don’t hear too many people say anything bad about us. I mean, you know, I really don’t. I mean, if anything, I hear people recommending us but that’s the thing like, reputations are so important and this guy just.

Wendy Sweet (10:50):

Blew his.

Jonathan Davis (10:51):

Blew his reputation, especially in Charlotte. I mean that’s

Wendy Sweet (10:54):

Yeah. It’s a tough one. In fact, the second one that we took back, that one had been completely rehabbed, was finished.

Jonathan Davis (11:01):

Yeah, there was a tenant in that.

Wendy Sweet (11:04):

Yeah, had a tenant in it and had been finished and he ended up stopped paying on that too so we took that back, went through the foreclosure process and just got it back, actually.

Jonathan Davis (11:17):

Not sure yet, there was a five day.

Wendy Sweet (11:20):

Yeah. Well, it’s been three. Yeah. There’s five day added upset bill.

Jonathan Davis (11:25):

Yeah. Five day because of COVID.

Wendy Sweet (11:27):

Yeah. But we’re past it.

Jonathan Davis (11:28):

I think we’re good.

Wendy Sweet (11:28):

We’re past the timeframe so we’re good. But anyway, went to look at the house, changed the locks on it and some of the rehab had been stripped. No more appliances, some of the kitchen cabinets are gone, HVAC is gone, which I absolutely expected.

Jonathan Davis (11:48):

Again, showing us what kind of person that is.

Wendy Sweet (11:50):

Yeah. So that was kind of a wonky deal.

Bill Fairman (11:56):

So if you’re lending money in the what? Three state area? And you want any references, call us before you lend too.

Wendy Sweet (12:06):

Yeah. We know a lot of people.

Jonathan Davis (12:08):

Also, just to throw it, you know, that’s why we do personal guarantees as well and most people do, you can pursue them via civil route if you don’t get your money back. They’re not out of the woods they just, you know, walk away and strip the building and take all the stuff, they’re still not out of the woods. You can lock them up. You can file a suit in every County that they operate in.

Wendy Sweet (12:31):

Yeah. There’s all kinds of things you can do to go after somebody like that.

Bill Fairman (12:34):

I got a quick story if that’s okay.

Wendy Sweet (12:36):

Okay. Is it on our list?

Jonathan Davis (12:37):

Is that quick?

Bill Fairman (12:37):


Wendy Sweet (12:39):

Okay go.

Jonathan Davis (12:39):

Is it really quick?

Bill Fairman (12:40):

It will be. So I was looking at a refinance, this is before this company but back in the day. I was going to do a refinance on a brand new, modular home and it was not a mobile home, It was a true modular and I met this modular group. They actually had a, they built one of these homes inside the Metrolina, whatever that park thing, I don’t know, they had to do indoor shows in there.

Wendy Sweet (13:15):

Yeah, well, they do the Southern Living Show and yeah,

Bill Fairman (13:17):

Right down on 74. So they had like three inches space at the top of the house to the top of the building and they built that house inside the building.

Wendy Sweet (13:25):

Wow. That’s pretty cool.

Bill Fairman (13:26):

As a show house. Anyway, so they wanted me to refinance one of their properties near Raleigh.

Jonathan Davis (13:35):

How could they refine?

Wendy Sweet (13:35):

Very carefully.

Bill Fairman (13:35):

It was a cape cod. It was a decent size two-story house.

Jonathan Davis (13:39):

Wow they like build it and then just like put it together? Cause how do you get on top if there’s like three inch clearance?

Bill Fairman (13:45):

Well, in that building, they had little crane things that went across the top because they built it in an area where they usually put shows for, you know, heavy equipment and stuff anyway.

Jonathan Davis (13:56):

Peek back curiosity, sorry.

Bill Fairman (13:59):

So anyhow, that said, they wanted me to take a look at this property so we did, they had already put the home in place. This was, you know, the permanent financing, we have a survey done, houses sitting three feet on somebody else’s launch and they’re living in it, waiting for the refinance. So usually, probably not a big deal if the neighbor next to you is willing to sell you that at least.

Wendy Sweet (14:32):

We’ll let you sell a strip of land.

Bill Fairman (14:36):

The problem was, the land was owned by the university of North Carolina College System, not any particular university, the entire system and they have a board that meets once a year and board met about three weeks earlier. So I said, we’ll pass. Good luck.

Wendy Sweet (15:04):

Well, that’s a shame.

Bill Fairman (15:04):

I said, why did you put that house on there?

Wendy Sweet (15:09):

What we’re you thinking?

Bill Fairman (15:09):

Did you not order a survey? And they said, well, the owner said, here’s the survey stakes, cause it was out there. I said, so,

Jonathan Davis (15:18):

They just went out and put out steaks?

Bill Fairman (15:19):

You believed the owners survey and not your own? Then this was your fault.

Wendy Sweet (15:24):

Yeah, that’s a shame. That costs a lot of money to not spend 500 dollars on survey

Bill Fairman (15:29):

Well, I don’t know what happened in the end. All I know is that it was going to be at least a year before they were going to get it worked out.

Wendy Sweet (15:38):

So we were talking about Larry a little bit earlier. I remember he bought a house that had been foreclosed on and when he went to sell it, the title search showed that he only really bought half a house cause they only foreclosed on half the house. The house was sitting on two lots so the foreclosure only happened on half the house.

Jonathan Davis (16:05):

On one parcel, not on the other parcel.

Wendy Sweet (16:05):

And then yeah. So they had to go through the foreclosure on the other side too. That was really interesting. He also bought a house one time, I thought this was funny. That had like, 12 people that had to sign off on it, it was, you know, an estate.

Jonathan Davis (16:20):

I’ve done 27.

Wendy Sweet (16:22):

You do win on that, there’s no doubt. I remember he drove all over the place, looking for these people and getting them to sign off on their part and the last one that he had to sign had to get signed was living in Georgia. Found out where she lived she didn’t have a phone so he pulls up into the driveway and it’s a ramshackled place in this woman sitting out on her front porch with her hands in her head and her hands like this, just all depressed and sad and she said her power just got cut off and she was really in need of money. He said, well, our timing is perfect because I have $500 here if you’ll sign this piece of paper right here so he was able to give her money. So she can, all her power and everything turned back on and he got his last signature on that.

Jonathan Davis (17:16):

Man, that worked out, that was perfect.

Wendy Sweet (17:17):

He had to go to prison to get one of them to sign in prison, that was interesting too.

Jonathan Davis (17:23):

To visit. Not to, you know.

Wendy Sweet (17:24):

Yeah, that’s right. He didn’t go to prison. He found the person in prison. That pretty interesting.

Bill Fairman (17:32):

Wasn’t that hard to find, that mister there

Wendy Sweet (17:34):

That’s right. How’d you get the 27 people track down?

Jonathan Davis (17:37):

I used a wholesaler so I did not do it but it took six months? Maybe longer. I think it was closer to a year.

Wendy Sweet (17:45):

And who tracked him down, an attorney?

Jonathan Davis (17:46):

An attorney and the wholesaler, they tracked them down and it took a, yeah, I think it was closer to a year because we were going to close and then there was only like 17 errors or something like that. It’s 17 to 20 and then one of them passed away.

Wendy Sweet (18:02):

Oh That’s right, I remember you telling.

Jonathan Davis (18:03):

And they were like, Oh, are you kidding me? You know? So now they had to go to,

Bill Fairman (18:06):

Their errors.

Jonathan Davis (18:06):

Well, their errors added like almost, it was like 10 more. Close to 10 more.

Wendy Sweet (18:11):

That’s a lot of people.

Bill Fairman (18:12):

Frank Cava made a great comment yesterday during some CD training about if you’re in that niche where you’re going after properties specifically that have clouded title issues, then find a good collections attorney and a collection attorney has all those people. The investigators, all those people that can track down folks because they’re always trying to track down deadbeats so they have all those tools in place and you’re not trying to track down and deadbeat, you’re trying to give them an opportunity to make a little money by signing off of this thing.

Wendy Sweet (18:51):

That’s right. And clouded title properties don’t have a lot of people clamoring for them because they’re too hairy and it takes way too long but those are the deals that you make the most money on.

Jonathan Davis (19:01):

I mean, I don’t mind to.

Bill Fairman (19:01):

And paying an attorney a $3,000 flat fee to go find all these people and get them set.

Jonathan Davis (19:06):

I don’t mind to share the details of it. That that one was 27, purchased the property for a hundred thousand dollars. Putting probably 50 to $60,000 in it, it’s going to be worth, I mean, the appraisal came in at 285.

Wendy Sweet (19:19):

That doesn’t sell.

Jonathan Davis (19:20):

But the reason I got the deal at a hundred was because there was.

Wendy Sweet (19:23):

All that trouble.

Jonathan Davis (19:25):

It took a year to close.

Wendy Sweet (19:26):

So you didn’t actually take possession until all of that stuff was signed off on.

Jonathan Davis (19:30):


Wendy Sweet (19:31):

But they knew they couldn’t do anything else with it so maybe wouldn’t you get $500 in the deal?

Jonathan Davis (19:36):

Zero. I didn’t put any money in.

Wendy Sweet (19:38):

That’s amazing. That’s amazing to keep it under contract that long.

Bill Fairman (19:43):

Well, one way to do it though is to pay a little bit of money to become an owner, right?

Wendy Sweet (19:53):

Who do you pay then?

Bill Fairman (19:53):

Well, if you have people, you have errors that are spread out everywhere.

Wendy Sweet (19:58):

So they just sell that portion?

Bill Fairman (19:58):

You have, one person is going to sell their portion so at least you’re on title and then that way,

Wendy Sweet (20:06):

I don’t know if you can do that.

Bill Fairman (20:06):

Yeah you can, why not? You’re just buying their portion. Well, I guess part of it, that way you can’t lose the deal. If it,

Jonathan Davis (20:17):

Well, I’m not an attorney, so is it looked at, you know, rabbit hole here that we don’t know the answer to, but is it looked at as like, let’s just say the 10 different people own it. Is it undivided interest that they can, they have the ability to assign? Or is it, do they all have to sign off on each other?

Bill Fairman (20:37):

If there are two people that own the property, then it’s 50-50. And if that person dies and they have 10 errors, those 10 errors only have the right to have that property so you’re buying half of it from the one person that’s still alive and now you’re trying to get,

Jonathan Davis (20:53):

But that’s assuming that they are alive but this went through probate probate court. So the person who owned the property died and it got sent to probate and then from there, it had to have all these air sign off. So at that point, probate court is really in control and I don’t know if, can you do it like that?

Wendy Sweet (21:15):

Yeah, just buy a portion of it.

Bill Fairman (21:15):

You can.

Jonathan Davis (21:15):


Wendy Sweet (21:16):

That’s interesting.

Bill Fairman (21:18):

You have to go through probate is what I’m saying. In this case, one of them died, but the other one,

Jonathan Davis (21:25):

Was alive.

Bill Fairman (21:25):

That owned it was alive. And you can do that.

Wendy Sweet (21:29):

That’s very interesting. How about where houses are moved into while you still have a loan on it but you’re trying to take it back, now you’ve got tenants in there. That’s happened before, right?

Bill Fairman (21:49):

Well, if there’s a lease agreement as a lender, you have to deal with the lease agreement. You have to honor the lease

Wendy Sweet (21:56):

Yeah. Depending on what state you’re in. North Carolina, yes. South Carolina, no.

Bill Fairman (22:01):

Really? All right. Attorneys, you have to have attorneys for the lease. But I know during 2008, when all these people that had investment properties were getting foreclosed on, the tenants were paying their rent all the time and then all of a sudden their owners are getting foreclosed on because here’s the problem with a lot of people, they were buying investment properties not for the cashflow. They were buying assuming they’re going to go up in value and they weren’t interested in cashflow, they just wanted somebody to pay the mortgage payment and when they couldn’t sell the house at the higher value, guess what? Maintenance comes up, taxes and insurance and anyway, so there was a big deal on making sure that when you foreclosed, you still had to honor the lease that was in place.

Wendy Sweet (22:53):

Right. I remember we did one, it was probably seven or eight years ago in a Fayetteville and the person who was the borrower actually moved in and we knew he was going to, because the last time I went to inspect it for the rehab part that he was doing, he put a steam shower in the house and I saw him planting tomato plants in the yard and then I saw some nice fruit trees being planted and I said, Oh, this guy’s got his eyes on intentions moving into this house.

Jonathan Davis (23:30):

And there’s nothing wrong with,

Wendy Sweet (23:33):

Yes, there is.

Jonathan Davis (23:33):

Wanting to move into the house. There’s nothing wrong with that but doing it after you get out of the loan?

Wendy Sweet (23:39):

Of the hard money loan.

Jonathan Davis (23:39):

Yeah. Because you signed, not only have you signed the mortgage or the deed of you signed not one, but probably to a business purpose affidavit stating that you and none of your family will live in the property. I mean, you shouldn’t have a leg to stand on.

Wendy Sweet (23:58):

Right. But that guy, we ended up having to foreclose on him and what was really good, that he had moved into the property and he was loving the property and his wife loved the property and his kids loved the property.

Bill Fairman (24:13):

His dog liked it.

Wendy Sweet (24:13):

Because after it foreclosed, yes, his dog liked it. After it foreclose, we ended up selling him the house for way more than he owed us on it. It worked up good.

Jonathan Davis (24:24):

So you foreclosed on it. You didn’t get a foreclosure bid that upsets. You got the property back and then he paid you?

Wendy Sweet (24:34):

That’s right. And then he bought it from us for more than what he owed on it to begin with.

Bill Fairman (24:41):

Yeah. But it wasn’t because we charged him more, it was because he owed more because we had all the approved interest on it.

Wendy Sweet (24:49):

The attorney’s fees, oh yeah.

Bill Fairman (24:50):

Attorney fees, all that stuff and we were still charging him interest the whole time.

Jonathan Davis (24:53):

The foreclosure just gave him time to get pre-approved with his bank.

Wendy Sweet (24:57):

Well, now he got some other sucker to lend him money. He, I think it was a friend of his or a business partner or something that,

Bill Fairman (25:04):

For his business partner.

Wendy Sweet (25:04):

Yeah, probably no. No doubt about it but that one worked out. That one worked out really well. How about the deal that we’re doing right now? Just weird things that people buy. It was a school that they’re turning into the multifamily.

Jonathan Davis (25:22):

Well, so it’s a school that’s already converted into multi-family

Wendy Sweet (25:27):

Like what year was the school built? How old do you think it is?

Jonathan Davis (25:30):

I mean, twenties?

Wendy Sweet (25:31):

Does it look like an old school?

Jonathan Davis (25:33):

If you look at the outside of it, it looks like an old brick school.

Wendy Sweet (25:36):

I think that’s cool. I’ve seen old buildings like that. I thought, man, that’d be cool.

Jonathan Davis (25:41):

So yeah, they converted the classrooms into one bedroom, one bath.

Wendy Sweet (25:47):

Wow. And going down the hall, it still looks like?

Jonathan Davis (25:50):

Yeah. You have to go single file, it’s the only way they allow it.

Wendy Sweet (25:55):

Are there lockers up and down the hallway?

Jonathan Davis (25:58):

No. I mean, why not? Right? You know, put a little coin, insert on them, they can make some money. Extra storage.

Wendy Sweet (26:05):

Wow and so it still looks like that and the loan we’re doing and I think they’re they’re upgrading it, right? They’re gonna add value?

Jonathan Davis (26:13):

Yeah. They’re going to add value, it’d be a repositioning loan but yeah, I mean, it’s an odd property. I mean it cashflows, I mean, it’s a great cash flow but it’s like beautiful thing. It’s this big brick school that has 40 some units in it and then all behind it is just this giant green space that I guess used to be the playground school. It’s just huge and I mean, if you have a dog or a kid, like.

Wendy Sweet (26:40):

Plus, it’s room for them to build another building, if they wanted to, I don’t know if it’s town would enable to do that but,

Jonathan Davis (26:45):

Maybe, but yeah. I’ve never seen a school converted. I’ve seen hotels, I’ve seen motels converted into multifamily. I’ve never seen a school.

Wendy Sweet (26:56):

What a great idea.

Bill Fairman (26:57):

Well, you’re going to see a lot of conversions because there’s going to be a lot of commercial properties that aren’t viable any longer for their current use and we still have a big need for affordable housing so there’s going to be, just like the big box stores, they figured out you can do a lot of good self storage stuff with them, right?

Wendy Sweet (27:16):

Like a Kmart. That Kmart that closed down.

Jonathan Davis (27:20):

Still kicking yourself on that one, aren’t you?

Wendy Sweet (27:23):

I know! I looked at it and I said, that would be a great self-storage that we just sat through across.

Jonathan Davis (27:28):

And they just build a golden corral that you can’t eat at.

Wendy Sweet (27:31):

That’s right. Right beside it.

Bill Fairman (27:34):

You’re saying, I know Monroe has a lot of their services pieces that are inside of former big box stores so security offices, unemployment, they got that in Monroe too.

Wendy Sweet (27:47):

That’s here on North Carolina. They got that in Rock Hill. They took the old strip centers. They were big stores but they took the old, the coroner’s office is in there so they’ve got social services, the coroner’s office, a lot of different city services are taken over that.

Jonathan Davis (28:04):

Does the more go with the coroner’s office or is there two separate things?

Wendy Sweet (28:07):

I don’t know, but I would imagine they take dead people on there.

Bill Fairman (28:12):

So I have another story from the days when we were in Larry’s office. We had a borrower that had had several loans with us previously and he went to the HUD home store and bought this foreclosure in Charlotte and the first thing that when he wanted us to finance it and the first thing we noticed when we got the appraisal was that it was in a flood zone and you know, obviously red flag. We’re not going to want to lend on this and you’re not going to want this property either and he says, why not? I said, because this is Charlotte. Nobody pays flood insurance in Charlotte. This is not like we’re at the beach.

Jonathan Davis (28:56):

You’re not going to sell this.

Bill Fairman (28:57):

Basically, you’re adding an additional tax to the cost of this house.

Wendy Sweet (29:01):

And it’s huge flood insurance.

Bill Fairman (29:03):

By having to, you know, they’re going to have to require flood insurance and he went, Oh, well, then I need to get an elevation survey to at least see how much the flood insurance is going to be. I said, yeah, you are. So he calls the city of Charlotte to find out if they have one that’s already been recorded, otherwise he’s gonna have to pay to have one done and he didn’t get anywhere, they didn’t know. But a couple of hours later, he gets a phone call from the city of Charlotte. And he says, you own this house? And he goes, well, yeah, that’s why I’m asking. It’s apparently one of the supervisors there and he said, well, the reason I’m asking is because we’ve been trying to buy this house from HUD for the last two years, because this is a flood zone that we’re buying all the houses, we’re knocking them all down, we’re making just a big old green space at it because we’re tired of paying out for all the flood insurance so we’re clearing all these out big park and he goes, well, how much are you asking? Or how much were you willing to pay? Anyway, he ended up selling that house for, I think it was $10,000 more than he paid for it to the city of Charlotte and since the house was in it’s last flood, which was not too long ago, they had completely rehabbed the house and all new appliances,

Wendy Sweet (30:28):

Yeah. It was an incredible day.

Bill Fairman (30:28):

All new HVHC. I think we bought because we were ringing up the house.

Wendy Sweet (30:36):

So he stripped it, sold everything that was in it. Make money off of all that. We got the canned bits out of it too.

Bill Fairman (30:38):

We got a refrigerator, really nice gas stove, kitchen cabinets, like for 750 bucks and then he sold the HPAC separately. It was a good deal for us and he made 10 grand. So even though you think it’s a bad thing, it can turn out to be pretty good.

Wendy Sweet (30:57):

Sometimes it can come through. I forgot about that. That was a really neat, that worked out really neat for them. We’ve had people buy properties before, you know, they’re rehabbing the house and when they go to sell it, they realize that they’ve got a second parcel that came along with it that they didn’t know was there so they had another that’s happened to us a couple of times where they’re, they realized that at the closing, when they bought it from us, not from us but with our loan that they found out they had an additional parcel on there that they didn’t know they’d have so they have a free and clear piece of property.

Jonathan Davis (31:35):

I have to say this one, I got a call yesterday from a lender I’m doing the refinance on two of my properties in Kannapolis and the two properties are two separate houses but they sit on the same parcel. So as insurance goes, I have two houses. As appraisals go, I have a duplex so, you know, I’m telling these guys many times like, Hey, here’s the appraisal it’s praised duplex. It’s actually two separate houses. Here are the two separate insurance policies, this house and this house and they’re like, okay, yeah, we got it. We’re going to get an appraisal done and we’ll take care of it. I get a call yesterday, Hey, the appraisers out there and did you know that there’s two houses? Yeah, I do. He’s like, do you own the other one? Yeah, yeah, I sure do, I sure do, it’s on the same parcel, you know? Well, we talked about, I was like, Oh my gosh, these people,

Wendy Sweet (32:35):

What language was I speaking when I said that?

Jonathan Davis (32:38):

My overhear, you know, she’s like, how much do you love those guys?

Wendy Sweet (32:44):

It’s kind of scary. We did another loan, I think that was pretty cool. We do churches where people are taking churches and they’re turning them into other stuff. So it’s a friend of mine and he’s a borrower. He bought a church and the church had a house that came along with it as the parsonage so when he bought it, he redid that parsonage into an Airbnb and his intention on the church was to eventually put condos in there but he was going to start out fives.

Jonathan Davis (33:19):


Wendy Sweet (33:19):

Right. But he was going to start out by turning it into an event center for awhile.

Jonathan Davis (33:27):

Until it get secure the,

Wendy Sweet (33:27):

Until we get sure of plumbing and, yeah so he could get a bigger loan and then COVID hit. So the event idea kind of blew through the window and now I talked to him about it last night and he’s actually now putting townhomes inside the church.

Jonathan Davis (33:46):

Yeah. I think if I remember correctly, like the in the city is required him to keep the front facade of the church but he could change everything else.

Bill Fairman (33:54):

It is a historical building.

Wendy Sweet (33:55):

Yeah. And I think it it’ll be cool.

Jonathan Davis (33:58):

Well, it’s great, like right across the street, they just built town homes. I think they were gone for like six, $700,000. No, it’s a great spot.

Wendy Sweet (34:08):

He’s sitting on a good one.

Bill Fairman (34:08):

Here’s another one that,

Wendy Sweet (34:10):

Is it a church? Cause we’re on churches.

Bill Fairman (34:11):

Alright, go ahead.

Wendy Sweet (34:12):

Let’s finish that and hold that thought though. Write it down if you remember. How about this?

Bill Fairman (34:16):

If I remember it? I’ve already forgotten.

Wendy Sweet (34:20):

How about the church care of the church that’s turning into a daycare center?

Jonathan Davis (34:23):

I love it. It’s odd, it’s weird. In the times that we are in, I mean, what made this daycare, what made it different is it’s also a learning center where they’re going to take children and, you know, do the daycare but also help them through their online virtual learning, which is a great help to a lot of parents. I mean if you’re going to pay for daycare, I mean, you might as well get the learning help as well too, but we love that. I mean, but, you know, just like, I’m a fan of subsidized housing, not only because it helps people in need but also it’s more or less guaranteed income for the owner of the property. This daycare specializes in basically, I guess, subsidize daycare, which the government pay. I think it makes up like 30% of their income, which, you know, in my mind makes it a safer bet but I love the overall theme is, you know, helping kids and helping parents. I mean, cause I don’t know, in our school system, I think 70% of the children are doing virtual learning.

Wendy Sweet (35:38):

And especially for the younger ones, talk about boring. So sad.

Jonathan Davis (35:41):

I mean, we tried it, my daughter, she just couldn’t, it wasn’t for her. So we opted for homeschool but yeah, I mean, I think it’s a great thing. Like, you know, so they’re taking a church that the community, the congregation wanted to move somewhere else, they got a great deal on it and you know, most of their income is out air quoted but guaranteed and you know, it’s odd. I mean, if you would have brought this deal to me five years ago, I’d be like, this is the weirdest thing, I’m not sure. I wouldn’t even touch that.

Bill Fairman (36:18):

See, as a commercial lender, you’re never going to want to do single purpose buildings because they’re so hard to sell gas stations, convenience stores,

Wendy Sweet (36:29):

Gas stations have the environmental issue to numerous [Inaudible]

Bill Fairman (36:32):

Restaurants, Yeah, absolutely.

Jonathan Davis (36:34):

Dry cleaners.

Bill Fairman (36:34):

So you’re talking about like a Wendy’s kind of a drive through, you know, restaurant, churches, bowling alleys. Those are all single purpose buildings, but because of the cost of land now and the cost of construction, people are finding more and more innovative ways to use what’s already there and because it is a single purpose facility, you can’t sell it for that much so you’re going to get a really good, deal

Jonathan Davis (37:03):

They got a great deal. Yeah.

Bill Fairman (37:05):

Are we still we’re done with the churches?

Wendy Sweet (37:08):

That’s awesome.

Jonathan Davis (37:08):

No, Billy.

Wendy Sweet (37:08):

I think we’re done with the churches if you’d like to.

Bill Fairman (37:09):

We had one where a guy, he had bought this house to rehab. It was, I want to say it’s near Raleigh but it’s really a good 50 minutes on an interstate to get to Raleigh.

Jonathan Davis (37:27):

That’s not near.

Bill Fairman (37:27):

So it’s not a bedroom community of Raleigh, okay? So it was a beautiful house, kind of in the country. He had it for sale for quite some time and he was really depressed that he’s not getting offers close to what he needed for this thing and this comes down to reading what you have.

Jonathan Davis (37:50):

He didn’t burn it down, did he?

Bill Fairman (37:51):


Jonathan Davis (37:51):


Bill Fairman (37:55):

So he switched realtors. Realtor, all this depression, the realtor said to him, well, I see you want to sell this house and the two acres is sitting on, what do you want to do with the other 17 acres? What? Yeah, you own that other land right next to it. Really? I think you can get more for it now.

Wendy Sweet (38:25):

Yeah. That’s for sure. I forgot about that too.

Bill Fairman (38:27):

So that was a nice surprise.

Jonathan Davis (38:31):

I want one of those surprises, I want one of those surprises.

Wendy Sweet (38:34):

Yeah. That would be really nice. I remember that deal, I forgot about that one. Jonathan, talk about some of the houses that you’ve gotten lately that come with bonuses.

Jonathan Davis (38:47):

Yeah. We talked about, I want, you know, surprise like that. I got a house in Charlotte and so I’m pretty sure the guy who lived there was a hoarder. I’m not pretty sure, I know I was in the house. But it seemed like for the last three years, I think from 2008 to 2011, he was just buying collectibles and buying things off of eBay. There was a whole corner of the living room that was filled with boxes, unopened boxes of stuff that he had bought off of eBay.

Bill Fairman (39:32):

So he didn’t even check to see if he received what he bought?

Jonathan Davis (39:34):

I’m not sure what happened there.

Bill Fairman (39:38):

Couldn’t get them in the box with a paper.

Jonathan Davis (39:38):

I’m not sure what happened there. I know too much about his life now, which is, you know, but I found collector pipes, like, you know?

Wendy Sweet (39:50):

Smoking pipes?

Jonathan Davis (39:51):

Yeah. Smoking pipes like tobacco smoking pipes from Holland, porcelain ones.

Wendy Sweet (39:57):

No crack pipes?

Jonathan Davis (40:01):

Not enough that I saw. There was a raccoon in there raccoon. The raccoon could have brought it in.

Bill Fairman (40:08):

Maybe a conversion.

Jonathan Davis (40:09):

But yeah, I got the raccoon now, that was scary. I walked up into the attic and it’s just sitting there staring at me and I just slowly go back down but I also found in one of the other corners was this giant, I guess, probably two foot by one and a half foot metal briefcase. The kind that you see in the movies where people I haven’t gained to their hand, I’m like, Oh, that looks cool. You know, I was thinking, Oh, that’s just a cool looking briefcase. Let me just grab that. So I grab it, I open it up and it’s fulfilled with thousands of stamps and some dating, actually a lot dating as far back as 1863 that are hand stamped from them. There’s `some that are definitely older than 1863. but they don’t have a hand stamp. I’ve done a little bit of research on it, but yeah, there are thousands of them. One has been certified by the American Philanthropic Society, which is the stamps society. I want to get him a praise, I have no idea what they’re worth, but I mean, there’s several that, you know, it says like some company Chicago, 1864.

Wendy Sweet (41:28):

Wow. That’s amazing.

Bill Fairman (41:30):

Don’t put them in the mail.

Wendy Sweet (41:32):

Yeah, don’t use them.

Jonathan Davis (41:34):

That’s what I figured out that this guy was buying stuff off of eBay, you know, people who were selling mail, like just parses the mail that looked old, but he wasn’t buying it for that, `he was buying it for the stamp was on it. So he was a stamp collector. So he was extracting the stamp from the envelopes.

Wendy Sweet (41:52):

So smart. Wow.

Jonathan Davis (41:52):


Wendy Sweet (41:53):

So what else did you find in there?

Jonathan Davis (41:55):

Found a couple collector truck clocks. Melanie here in our office,

Wendy Sweet (42:02):

He was a truck driver of a company.

Jonathan Davis (42:03):

He was, yeah, he was a truck driver and there was all kinds of stuff in there that was truck related but Melanie here in the office, she sold two of the clocks on eBay for over $300 each. I mean, it was, I had no clue. I found an 1846, not 18. 1946 singer sewing machine in perfect condition. The lights still worked, everything’s still work. The house was just full of just so much stuff and another house, I mean, I got, you know a lead China, you know, kind of like that lead glass China.

Bill Fairman (42:44):

So how long had it has been?

Jonathan Davis (42:48):

I guess the one in Charlotte was,

Bill Fairman (42:52):

The hoarder house.

Jonathan Davis (42:53):

Yeah. Eight or nine. I would say between seven and nine years, I’ve been vacant. I bought another house that the neighbor said that it’s been vacant for over 10 years. I’ve got a rental, I guess a little storage unit up in Concord. That’s just full of, I mean, really nice furniture and stuff that just pulled out of that house. I mean, the things that I found, like actually giving it to my mother, it’s a one in the dining room. It had an old oil lamp that hung from the ceiling, that was solid brass and it was, you know, it was just, they hung it there and it was an oil lamp with a giant, it was like porcelain kind of cover over it that, you know, it was decorated flowers or whatever they, you know, they did. There’s all kinds of treasure.

Wendy Sweet (43:49):

That it’s pretty cool. There’s all kinds of treasure.

Bill Fairman (43:53):

So I have an idea since we were talking about all these wonky deals, you folks that are in the real estate business, if you have any wonky deals, do a little video of yourself with your phone, telling us about your wonky deal and we’ll put it on the air for you.

Wendy Sweet (44:10):

Oh yeah, go and do that.

Bill Fairman (44:10):

So think about some wonky deals. Do a little video.

Wendy Sweet (44:16):

We’ll put that up in the website too.

Bill Fairman (44:16):

Shoot us an email at info at info@carolinahardmoney.com. info@carolinahardmoney.com

Jonathan Davis (44:24):

I also forgot that the Waterhouse I found, he was the penny collector. So I have the, you know, 1895 and up pennies.

Wendy Sweet (44:31):

Wow. You might have the only change left in the USA.

Jonathan Davis (44:35):

I was going to get to that. I have two boxes that I barely lifted out of there that are full of pennies.

Wendy Sweet (44:44):

Wow. So now we know why we are in a penny short, they’re up in your house and all.

Jonathan Davis (44:49):

Who knows how many, probably thousands of pennies that I had seen there. I talked to my bank and I said, Hey, I’m going to bring these over here and they’re like, please don’t. Like, we need the pennies, but please don’t do that to us.

Bill Fairman (45:03):

Pay your taxes with them.

Jonathan Davis (45:05):

I mean, I would probably have. I mean, there’s probably several hundred dollars worth of, you know, just face value paintings.

Wendy Sweet (45:09):


Bill Fairman (45:11):

It’s amazing.

Jonathan Davis (45:11):

Yeah. I mean, I remember trying to pull it out. It was just stuck in the back of a closet. I had to slide it and push it across the floor.

Wendy Sweet (45:18):

Gosh, the only thing I’ve found in houses that are really good, other than a couple of cloth at tubs is somebody hiding in the closet when I was going and I was like, ahhh!

Jonathan Davis (45:27):

I prefer what I find

Wendy Sweet (45:30):

That’s happened. Roaches I’ve found a lot of roaches before, but,

Bill Fairman (45:34):

Don’t forget about the fleas.

Wendy Sweet (45:35):

Yeah, fleas. I’ve walked out of a house before that my ankles looked like I had socks on, Oh my God because I had, there were so many fleas in that house. Yeah. That was kind of eecky.

Bill Fairman (45:45):

Yeah. But that’s a house you want to buy it right there.

Wendy Sweet (45:48):

Yeah. We’ve taken people on a bus tour before where we actually told they had to buy a shoe covers for them and hats on them because the house was so infested with fleas and roaches and that we want them to get stuffed.

Bill Fairman (46:02):

This is the house you’re looking for, right here! Get used to it.

Wendy Sweet (46:07):

This is a deal.

Bill Fairman (46:08):

If you have to hold your breath when you’re going through, this is a deal for you.

Jonathan Davis (46:11):

If anyone is a stamp collector or knows about stamps, hit me up. I know just enough to be dangerous enough to know if you’re trying to rip me off, probably not. Probably, I don’t know anything,

Wendy Sweet (46:24):

But you’ve got some for sale. Is that what you’re saying?

Jonathan Davis (46:28):

I don’t know, I mean, I’ve got a giant briefcase full of stamps that, you know, I’m not a stamp collector. I don’t, I don’t know. I know they’re cool!

Bill Fairman (46:37):

You know, pardon me if I’m wrong or not but if they’ve already gone through the mail or they’re obviously not worth as much as they would be if they haven’t.

Jonathan Davis (46:46):

It depends, the research that I’ve done is, you know yeah, if they are original, never been used, of course. Yeah. They’re valuable but if you have a clear hand stamp on it as well, even if it’s used, because it has to be used to have a hand stamp on it, like a return cancellation stamp and it has a clear date and like whatever company was it was, I’ve seen some of those that I was looking at and again, I don’t know, there’s like all kinds of like, what is the gum look like? I don’t even know exactly what the gum is. But there’s all kinds of stuff and it’s like, I’ve seen those sell for like tens of thousands of dollars on like auction sites or several houses.

Wendy Sweet (47:27):


Jonathan Davis (47:27):


Wendy Sweet (47:27):

I might come into your house and invade your stamp collection, when you’re not there.

Bill Fairman (47:32):

He leaves it handcuffed to him.

Jonathan Davis (47:34):

I guess, you know, we’re getting ready to move into a new office. I’m trying to make it look as old as possible. I was like, maybe I can just frame some of my stamps.

Wendy Sweet (47:44):

That’s a good idea. Awesome.

Jonathan Davis (47:46):

And just put them up there.

Bill Fairman (47:48):

Well, listen again, if you have any wonky stories you want to say or tell us about, take a video, what is it? info@carolinahardmoney.com. We’ll try and get it on the air for you. So we are Carolina Capital Management. We do make loans to individuals? No, we make them to,

Jonathan Davis (48:09):

Nice save.

Wendy Sweet (48:09):


Bill Fairman (48:09):

Entities. Not. If you’re interested in borrowing money, go to CarolinaHardMoney.com. Click on the Apply Now tab. If you’re interested in passive returns, click on the Investor Tab. Don’t forget to share like, and subscribe and we’ll see you guys next week.

Wendy Sweet (48:34):

Thanks for listening.

Bill Fairman (48:36):

Take care.

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