jon molitor

👑 Why @travisk should be the next CEO of $OPEN 👑 •The ultimate redemption arc: wrongly forced out of $UBER, now a chance to build something bigger •Friends with @rabois who wrote the original OPEN biz plan → Founder DNA reunited and reinjected into the veins of OPEN •The New $OPEN = asset-lite, AI-driven, marketplace model → the Uber/Airbnb/Google of resi real estate •Hyper-efficient G&A operator (what Travis mastered at Uber) •Mega TAM: $20T U.S. resi housing market ($14T tied to mortgages) → no Uber-equivalent yet (multiples of that internationally) •1.5M sellers request bids every year (which is less than 1% of the market; drive that to a $TSLA - like 10% over time) = built-in demand (it all starts with a search for a bid) •Assumable mortgages + AI → housing affordability revolution (which perfectly ties in with his/Keith’s politics) •CloudKitchens & Pony.ai are thriving and can be left to others, but no category is as ripe for “Uber-fication” as global residential real estate Uber is $200B market cap today. US real estate is a $20T TAM. OPEN could be even bigger than UBER. How would the UBER board like them apples? The road to redemption. The road to $OPEN $500/share. It starts with the return of the King.

At 38, I was debt-free, saving maniacally, grinding my way to early retirement. At (almost) 42, I'm now $17.5m in debt, have loosened spending, and give no thought to retirement. 3 yrs ago, I found the power of leverage. How I've Financed $21.5m in Self-Storage Acquisitions*: *First, some disclaimers: - I spent 16 yrs grinding in a corp career, saving any penny I could, building a pile of cash to do what I do now. - I don't have outside investors - only capital at risk is my own and my lenders'. - I keep a large liquid cushion so I don't become an over-leveraged case study if sh_t hits the fan. - This is not financial advice and I don't recommend most take the risks I've taken. - I'm the recipient of the benefits of good timing, good luck, and hard work. Wouldn't be here without all 3. Let's dive in! I've used 4 types of debt structure: - Conventional Bank Loan - SBA 7a Loan - Seller-Carried Loan - Conventional Bank Loan + Seller-Carried Loan I've bought 10, sold 1. Here's the breakdown of each buy: Property 1: Conventional Bank Loan Purchase Price: $1.1m Down Payment: $275k (25%) Interest Rate: 3.95% Amortization: 20 yrs Adjust: 7 yrs 2023 numbers: Revenue: $221k Net Operating Income: $172k Debt Service: $60k DSCR: 2.9x Closed on this first deal in Feb '21. Had no idea what I was doing at the time, but got lucky with connections. Friend intro'd me to an attorney, attorney was on board of local bank and he intro'd me to the commercial lender at bank. Convinced bank to lend me $825k despite zero prior experience. Presented my biz plan, sold hard, got them on board. Long story, but I refinanced this one in '22 and cashed out $350k at 4% for 10 yrs, thinking it'd be a long hold. Last year I had the opportunity to trade it up for a $12m buy and I did (see #10 below). Sold it for nearly a $1m gain in December '23 and 1031 exchanged into deal #10 for $12m. Property 2: Conventional Bank Loan Purchase Price: $660k Down Payment: $164k (25%) Interest Rate: 3.95% Amortization: 20 yrs Adjust: 7 yrs 2023 numbers: Revenue: $107k Net Operating Income: $75k Debt Service: $36k DSCR: 2.1x Closed on this one in April '21. Went back to the same bank that financed #1 and they were game. Not sure why. I hadn't had time to show them what I would do with #1. But they gave me their money and I took it. Property 3: SBA 7a Loan Purchase Price: $700k Down Payment: $105k (15%) Interest Rate: 3.9% Amortization: 20 yrs Adjust: 5 yrs 2023 numbers: Revenue: $112k Net Operating Income: $82k Debt Service: $43k DSCR: 1.9x This one was bought in Aug '21. At that time, the SBA was offering an incentive to waive their guarantee fee (a percent of loan amount paid at closing) and cover the first three loan payments. Got an intro to a local bank who is a "Preferred Lender" for the SBA, which means they can underwrite SBA 7a loans in-house. An advantage of SBA loans is they allow you to lever up to 90%. My bank wanted 15% down, so that's what I did. Property 4: SBA 7a Loan Purchase Price: $625k Down Payment: $94k (15%) Interest Rate: 3.9% Amortization: 20 yrs Adjust: 5 yrs 2023 numbers: Revenue: $91k Net Operating Income: $61k Debt Service: $38k DSCR (Debt Service Coverage Ratio): 1.6x Bought this one in December '21. Decided to go with the SBA bank again even though the incentives mentioned above had expired. This one is the dog in my portfolio and the only one that has missed targets, but is still doing okay. Property 5: Seller-Carried Loan Purchase Price: $1.85m Down Payment: $450k (24%) Interest Rate: 4.5% Amortization: 26 yrs Balloon: 10 yrs 2023 numbers: Revenue: $277k Net Operating Income: $197k Debt Service: $91k DSCR: 2.2x Bought this one 2 yrs ago this month. Someone else's loss was my gain. I picked this deal up with a well-timed cold call to the owner, just as his contract to sell to another buyer was terminated because they didn't want to agree to the seller's carry terms. The seller was only selling if he could carry the note - no idea why the other buyer didn't like the very nice terms he was offering. This was my first experience with seller-financing, and man, it was smooth. No appraisal, no underwriting, no bank fees. Shared my Personal Financial Statement, gave proof of assets, and that was that. Property 6: SBA 7a Loan Purchase Price: $1.55m Down Payment: $155k (10%) Interest Rate: 4.55% Amortization: 25 yrs Adjust: 10 yrs 2023 numbers: Revenue: $273k Net Operating Income: $205k Debt Service: $94k DSCR: 2.2x Bought this one in June '22, right as rates started to move, and it's prob the best deal I've done. For it, I shopped my two local banks against each other. The one that did the two prior SBA deals came in hot and offered the terms above if I refinanced #1 and #2 with them, so I did. We're besties now. Property 7: SBA 7a Loan Purchase Price: $1m Down Payment: $150k (15%) Interest Rate: 5.75% Amortization: 20 yrs Adjust: 5 yrs 2023 numbers: Revenue: $175k Net Operating Income: $121k Debt Service: $72k DSCR: 1.7x Bought this one in Aug '22. At the time thought 5.75% was an insanely high interest rate. Now it looks great. Went back to my SBA bestie and got it done. At this point, I had a great track record with them. I did what I told them I'd do on previous deals and they trusted me. Numbers on this one are lower in part because of the higher interest rate and in part because my revenue mgmt efforts aren't fully baked into '23 numbers. It did $17k rev last month. Take that across 12 months and it gets to $204k. At 70% NOI margin, it should do $143k NOI, increasing DSCR to 2x. Property 8: Seller-Carried Loan Purchase Price: $590k Down Payment: $100k (17%) Interest Rate: 5% Amortization: 20 yrs Adjust: Never 2023 numbers: Revenue: $97k Net Operating Income: $73k Debt Service: $39k DSCR: 1.9x Bought this one in Jan '23. Educating the seller on the option to carry the loan was key to winning the deal. Seller was getting old, wasn't happy with his property manager, had considered selling, but didn't want to pay a giant tax bill. Seller-carry was the solution. He named the purchase price, I named the loan terms, we agreed. This one's just barely a year held. Numbers are on track and will get better as rev mgmnt continues. Property 9: Conventional Bank Loan Purchase Price: $1.4m Down Payment: $350k (25%) (proceeds from refi of #1) Interest Rate: 7% Amortization: 20 yrs Adjust: 5 yrs 2024 Projections*: Revenue: $216k Net Operating Income: $151k Debt Service: $98k DSCR: 1.5x For this one, I initially went to my SBA bestie, but their offer was crap. Went back to the bank that did #1 and #2 and their offer was slightly less crappy for a conventional loan. Money I had refi'd out of #1 was burning a hole in my pocket, so I threw it into this deal. Numbers don't look as good on this one do they? If it weren't in the same town as #7, I wouldn't have done it. *Bought it in April '23, so I don't have a full year financials, and if even if I did, they're not seasoned enough to be relevant. So I used last few months avg revenue of $18k/mo and applied a standard 70% NOI margin to get the numbers above. Property 10: Conventional Bank Loan + Seller-Carried Loan Purchase Price: $12m Down Payment: $1m (8%) Seller Note: $5m @ 4%, 25 yr amortization, 12mo of I/O, 5 yr balloon Bank Note: $6m at 7.75%, 25 yr amortization, 5 yr balloon Stabilized Projections*: Revenue: $1.68m Net Operating Income: $1.26m Debt Service: $860k DSCR: 1.5x Bought this one in Oct '23, sold #1 in Dec '23, and reverse 1031 exchanged proceeds into this one. Seller was fixated on $12m number and was open to carrying a big note. Went to my bestie bank (the SBA one), got them on board with seller taking second position, then negotiated with seller on his terms. *This one still has a long way to go before it's stabilized. If you've been following me for the last 4 months, you know how much effort has gone into cleaning it up. Currently at $106k/mo revenue at 73% occupied (after cleaning out 100+ abandoned units). New rentals are strong. Should be on the stabilized run-rate above within 6 months or less. Based on the market it's in, there's a lot of upside from there. Pros & Cons of Loan Types: Conventional Bank Loan: Pros: - Bank underwrites in-house, no sending off to a third party for approval like some SBA loans. Also helps with speed of close. - Often lower interest rates than SBA loans. - Fewer extra requirements and restrictions of SBA loans. - Fewer upfront costs as compared to SBA loans. Cons: - Banks typically require 25-35%+ down, requiring less leverage. SBA 7a Loan*: *Note that there are other types of SBA loans including a 504. I only speak to my experience with 7a. Pros: - Enables higher leverage (up to 90%). Cons: - Higher upfront cost for loans greater than $1m. For loans of $1-2m, the SBA charges an upfront guaranty fee of 1.45% of the 75% portion of the loan that they guarantee. (Example: $2m loan. 75% ($1.5m) is guaranteed. $22k fee.) For $2m+ loans, the fee is 3.5% for first $1m + 3.75% for amount above $1m. (Example: $4m loan. 75% ($3m) is guaranteed. $35k fee for first $1m, $75k for additional $2m, total of $110k guaranty fee.) - Typically higher interest rate on $1m+ loans. The SBA charges the lending bank an annual guarantee fee of .55% for loans of $1m-$5m. - Longer underwriting and approval timeline, especially if bank doesn't have in-house SBA underwriting. - More paperwork and restrictions than a conventional loan. Seller-Carried Loan: Pros: - No appraisal, survey, environmental, etc that banks will often require (although usually good practice to do some of these anyway). - No formal underwriting. I've always just shared personal financial statement, business P&Ls, and proof of assets. - Can be as quick as you and seller agree. - Complete flexibility of loan terms. Cons: - None that I can think of. Comment if you know any. What I've Learned: A couple of points of wisdom from my brief experience convincing people to lend me money: - Get Intros to Banks - If you need to find a bank, use your network to get a warm intro to a commercial lender. I was introduced to both banks I've worked with by credible individuals. Not sure they would have taken me seriously if I were a rando off the street. - Sell The Story - Early on, I had to sell myself as a credible borrower and future operator. A strong balance sheet helps, but they also want to know that your past professional experience is relevant. You also need to tell the story of the potential of the asset. Concise, well-though-out business plans help, but how you present them also matters. My bankers make fun of me for how enthusiastic I am about the deals I bring them. It helps. - Know Your Numbers - By the time I've presented a deal to the bank, I've stared at the numbers for hours on hours. I've run countless scenarios. I'm ready for any questions before they're asked. - Be An Amazing Customer - Early on, one of my bankers complained about how hard it is to get other borrowers to provide updated financials. That's prompted me to proactively provide updates before asked. My lenders get updated P&Ls, Balance Sheets, and PFSs every quarter without asking. I send them insurance renewals before asked. Anticipate what they want and give it to them proactively. There's a lot more to this and I've missed a lot, but I'm tired of writing. Comment with your questions (and corrections) and I'll do my best to answer!

I used to go to Sam’s club, buy their bbq sauce In quantity, pour it in a mason jar and sell it as my own recipe from behind the counter. Surely this doesn’t surprise anyone. ***this is not advice on how to make bbq sauce

Everyone uses Upwork to hire cheap virtual assistants. Yawn. Duh. Did you know you can also use Upwork to: - Save 90% on software - Find off market real estate - Save 95% on leads - Get new marketing ideas - Get intel on competitors I’ll show you how in 9 tweets below:

🚨🚨 2nd Car Wash Purchase Complete ✅ We plan to buy 2/year for the next 5 years, we're rollin em up. Here's the plan and why we're so bullish on this ugly business: