Make $3000 A Day With Hard Money Lending Ep 342

Summary Notes


Alex Hormozi, the owner of, shares a lucrative investment experience on his channel, highlighting the strategic approach to hard money lending and the importance of deal structure, risk mitigation, and trust in business. Hormozi outlines a $2.5 million deal for a 334-unit building in Memphis, emphasizing the significance of personal guarantees, property valuation, and title control for securing investments. Despite a legal oversight which could have resulted in a financial loss, the integrity of the parties involved led to a correction and reinforced the value of ethical conduct and trustworthiness over mere profit. Hormozi uses this narrative to underscore that building reliable partnerships is a critical asset in business, potentially more valuable than the financial gains themselves.

Summary Notes

Investment Success Story

  • Alex Hormozi made a profitable investment that yields $300 per day.
  • The investment was made a hundred days prior to sharing the story.
  • Alex Hormozi is the owner of, a portfolio of companies generating $85 million annually.

I made an investment that pays me three $300 per day in profit off of a single deal that was struck. A hundred days ago, I made an investment that pays me three $300 per day in profit off of a single deal that was struck.

These quotes indicate Alex Hormozi's successful investment that provides a steady profit of $300 daily, showcasing a lucrative financial decision made a hundred days before the discussion.

Introduction to the Podcast

  • The podcast is about customer acquisition, maximizing customer value, customer retention, and learning from failures.
  • The host encourages the audience to subscribe for valuable insights.

Welcome to the game, where we talk about how to get more customers, how to make more per customer, and how to keep them longer, and the many failures and lessons we have learned along the way. I hope you enjoy and subscribe.

This quote serves as an introduction to the podcast's content, focusing on business growth strategies and learning from past mistakes, while inviting listeners to subscribe for more information.

Alex Hormozi's Background

  • Alex Hormozi introduces himself and explains the purpose of his channel.
  • He aims to prevent listeners from being financially unsuccessful.
  • He owns a company with significant annual revenue.

For those of you who don't know me, my name is Alex Ramosi. I own It's a portfolio of companies that's about $85 million a year. The reason for this channel is because I know a lot of people are broke, and I don't want you to be one of them.

This quote introduces Alex Hormozi and his business,, while establishing his motivation for sharing knowledge through his channel—to help others achieve financial success.

Hard Money Lending

  • Alex Hormozi expresses his preference for hard money lending.
  • He explains the benefits of being able to structure deals and control variables to mitigate risks.
  • He contrasts the mindset of the wealthy, who focus on minimizing mistakes and using time as an asset, with those who gamble on high-risk, high-reward opportunities.

So one of the things that I like a lot is hard money lending. I'm a big fan of it. It's private lending, which is basically like, you are the bank.

...if you can control a lot of the variables and you can mitigate downside risk, which, if you've heard any of my stuff, the ultra wealthy out there, it's not about trying to hit their upside.

These quotes explain Alex Hormozi's preference for hard money lending, where he can act as the bank and structure deals to control outcomes and reduce risks, aligning with the wealth-building strategy of minimizing mistakes over time.

Deal Structure and Outcome

  • Alex Hormozi outlines the structure of a $2.5 million note investment.
  • The investment involved wiring money to a buyer to purchase a building out of foreclosure.
  • The property was a 334-unit building in a high-risk area of Memphis.
  • Hormozi discusses the risk factors and his strategies to ensure a return on investment, including personal guarantees from buyers with a net worth exceeding the loan amount.

Big picture here, this was a two and a half million dollar note, all right? So I wired two and a half million dollars in cash to a buyer, all right? And the buyer went to buy a building out of foreclosure, all right?

It was also in a war zone. Like, the police officer don't even go here. This is a deal in Memphis.

...both of the buyers, there's two people personally guaranteed the money, all right? And they had net worth in excess of two and a half million, all right?

These quotes detail the investment deal, describing the property's condition and location, the risk factors involved, and the measures taken to secure the investment, such as personal guarantees from the buyers to protect against potential losses.

Valuation of the Building

  • Alex Hormozi discusses the value of a building they are interested in, which was previously condemned.
  • They had three offers on the building ranging from $5 million to $5.6 million.
  • An offer of $5.6 million included earnest money of $300,000, indicating serious buyer interest.

"So we had three offers already on the building for between 5,000,005.6 million." "Earnest money of 300,000 in the deal, saying that as soon as you guys can transfer the title over to us, then great."

These quotes indicate that the building had significant market interest, with multiple offers and earnest money put down, suggesting a potentially lucrative deal for Alex Hormozi and their team.

Title and Ownership

  • Ensuring they were on the title was crucial for securing their investment.
  • They needed to confirm no other liens against the property to ensure they would be the first to receive the property in case of default.
  • Cash was used to clear the last lien, positioning them as the preferred lien holder.

"And the last thing was to make sure that we were actually on the title, right?" "So that there's no other liens against the property, that we are the only ones who are going to be receiving the property if something went in default."

These quotes highlight the importance of securing the title to protect their investment and the steps taken to ensure they had the primary claim on the property.

Payment Terms and Interest

  • The deal had a payment term of 4% per month on the $2.5 million investment, amounting to $100,000 per month.
  • If the deal took longer than four months, the interest rate would double to reflect the increased risk.
  • A two-month minimum carry was established, guaranteeing a minimum return of $200,000 regardless of how quickly the deal was concluded.

"So it was 4% per month, all right?" "So if it took four plus months, the interest rate would double." "On top of that, what we did was a two month minimum carry."

These quotes outline the specific financial terms of the deal, including the monthly interest rate, the conditions for an increased rate, and the minimum guaranteed return.

Promotion of "100 Million Dollar Offers"

  • Alex Hormozi takes a moment to promote their book, "100 Million Dollar Offers."
  • They mention adding a previously unreleased chapter to build hype for the upcoming release of "100 Million Dollar Leads."

"I added in a lost chapter that has never been released. I'm releasing it now transparently. I'm doing that to build hype for." "100 million dollar leads."

The quotes show Alex Hormozi using the opportunity to engage with their audience and promote their work by offering new content and building anticipation for their next release.

Unreleased Chapter and Customer Segmentation

  • The unreleased chapter discusses the first avatar and how to segment customers for increased profitability.
  • The chapter is available for free in exchange for an email address.
  • The purpose of collecting emails is to notify people about the launch of "100 million dollar leads" and ensure they don't miss out.

"It talks about your first avatar and how to segment customers to make more money. You can get it by going to leads."

This quote explains the content of the unreleased chapter and how to obtain it.

"Email so that I can email you when we launch 100 million dollar leads and so that you cannot miss out on it."

Alex Hormozi explains the reason for collecting email addresses – to notify potential customers about an upcoming product launch.

Trust in Business Dealings

  • Alex Hormozi shares an anecdote about a post-deal incident that highlighted the importance of trust in business.
  • A celebratory dinner revealed a mistake made by lawyers in a financial transaction.
  • The error involved a loan repayment invoice that was less than the agreed amount.
  • The individual who noticed the mistake, an ultra high net worth individual, opted to correct it rather than benefit from it.
  • This incident served to strengthen the trust between the parties involved.

"So the individuals who did the deal, they flew out to see us and have a kind of like a celebratory dinner."

Alex Hormozi narrates the setting in which the incident regarding the loan repayment mistake was revealed.

"So our lawyers messed up, for lack of better term, they just messed up when they sent the loan invoice for repayment at the end of this."

Alex Hormozi acknowledges the error made by his legal team in the financial documentation.

"The more deals you do with someone, there's a big five letter word that starts to occur, which is trust."

Alex Hormozi emphasizes the development of trust through repeated honest transactions in business.

"And so anyways, he caught it. His lawyer caught it. His lawyer said to go forward with it anyways, chose not to and to bring it to our attention."

Alex Hormozi appreciates the ethical decision made by the other party to correct the mistake rather than exploiting it.

Professional Competence and Ethics

  • The incident led to the realization that Alex Hormozi's lawyers lacked skill, while the other party's lawyer displayed a lapse in ethics.
  • Alex Hormozi distinguishes between a mistake in skill and an ethical error.
  • He references a previous video on selecting mentors and vendors, where he discusses the importance of skill, ethics, and hard work.

"And so we obviously are not going to use our lawyer anymore. He is not going to use his lawyer anymore because our guys made a stupid, boneheaded mistake."

Alex Hormozi indicates that both parties have decided to cease working with their respective lawyers due to the mistakes made.

"And his made an ethical error. Right? So mine was an error on skill. His was an error on ethics."

Alex Hormozi differentiates between the types of errors made by the lawyers, categorizing them as either skill-related or ethical.

"I talk about the three circles, right? You have the skill, you have the ethical component, and then you have the hardworking component."

Alex Hormozi refers to his framework for evaluating mentors and vendors, emphasizing the need for skill, ethical behavior, and a strong work ethic.

Financial Deal and Returns

  • Alex Hormozi discussed a financial deal where the initial agreement was for $275,000.
  • The deal was modified to $300,000 plus $33.33 per day until closure.
  • The eventual payout included the daily increments plus a $2.5 million sum.
  • Total received was $2.85 million, reflecting the financial terms of the deal.

So 275 was the deal. Instead, it was 100 and something days or whatever. So we had 300k plus 33. 33, 33 per day until the deal was closed. And so it ended up being like something like that with decimals, right. That we got paid back, plus the 2.5 million. So we got a check back for 2.85 million.

The quotes detail the specifics of the financial deal, highlighting the initial agreement, the daily rate, and the final payout received by Alex Hormozi.

The Value of Trust in Business

  • Trust is emphasized as a critical and valuable currency in business.
  • Alex Hormozi shares his belief in the uniqueness and importance of one's reputation.
  • The experience with the deal reinforced the importance of trust and reliable partnerships.
  • Trust is seen as foundational for the potential of more significant future deals.

And we have trust, which was the most valuable thing that you can have, right. You only get one name. You only get one reputation. And we're obviously hoping to do bigger and bigger deals with you guys as we earn more and more trust.

Alex Hormozi stresses the importance of trust in business dealings, equating it to a form of currency that underpins the potential for future collaborations and larger transactions.

Business Transparency and Educational Intent

  • Alex Hormozi explains his reasons for not running a mastermind group.
  • He shares that the financial return from the deal is more lucrative than running a paid program.
  • Hormozi highlights that the resources on his website and his book are free or available for purchase as he aims for everyone to succeed.

That's why I don't sell anything on this channel. That's why the trainings we have on are free for all entrepreneurs. And the book is can get it on Amazon because I just want everyone to win.

The quote provides insight into Hormozi's philosophy regarding sharing knowledge and resources, demonstrating a commitment to transparency and the success of others in the entrepreneurial community.

Tax Implications and Investment Strategy

  • Alex Hormozi discusses the tax implications of the deal, noting a 50% tax rate on the earnings.
  • He explains the need for high returns on private lending due to the tax rate.
  • Hormozi mentions that after taxes, his net gain from the deal is $175,000.
  • He emphasizes the importance of a high return on investment to justify the financial risk and tax liability.

I do have to pay 50% in taxes on this. And so that's why you need, for me, I have to have really high returns on any kind of private lending because I have to realize those gains, right.

This quote reveals the significant impact of taxes on Hormozi's investment earnings and underscores the necessity for high returns on investment to make financial sense of such deals.

Investment Philosophy and Growth Aspirations

  • Alex Hormozi expresses his desire to cultivate trust with his audience and engage in business with them.
  • He encourages viewers to grow their businesses, allowing for potential investment partnerships.
  • Hormozi's message is one of mutual growth and success within the entrepreneurial community.

My hope is that from this channel that you are one of them in terms of yourself. And then also maybe you grow your business to three or five or 10 million a year, and then you let us invest with you so we can help you grow it more.

The quote captures Hormozi's investment philosophy, which is based on trust and the idea of fostering growth within his community, suggesting a future where mutual success is achieved through partnership investments.

Conclusion and Engagement with Audience

  • Alex Hormozi expresses affection for his audience, referring to them as "Mosey Nation."
  • He invites viewers to subscribe if they enjoyed the video and offers goodwill regardless of their opinion.
  • Hormozi signs off with a message of encouragement and announces his anticipation for the next video.

Love you. If you enjoyed this video, hit the subscribe button. If you didn't enjoy the video. Love you anyways and I'll see you guys in the next vid. Keep being awesome. Lots of love. Bye.

The quote concludes the video with a call to action for viewers to subscribe and a positive farewell, reinforcing Hormozi's friendly and inclusive approach to his audience.

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