GI307: Creative Real Estate Financing with Morgan Ehrenzeller

GI307: Creative Real Estate Financing with Morgan Ehrenzeller

Morgan Ehrenzeller has mastered the art of creative finance, leveraging strategies such as seller financing, subject-to, and lease options to acquire properties with minimal upfront capital. He has built a portfolio of 339 units across the U.S., starting with the purchase of his first duplex, which was financed with a down payment of $5,000 and seller financing. This initial investment set the stage for a career in real estate investing and deal structuring.

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Transcript:

Charles:
Welcome to another episode of the Global Investors Podcast; I’m your host, Charles Carillo. Today, we have Morgan Ehrenzeller. Morgan has mastered the art of creative finance, leveraging strategies such as seller financing, subject-to, and lease options to acquire properties with minimal upfront capital. He has built a portfolio of 339 units across the U.S., starting with the purchase of his first duplex, which was financed with a down payment of $5,000 and seller financing. This initial investment set the stage for a career in real estate investing and deal structuring. Thank you so much for being on the show!

Morgan:
Charles. Thank you for having me. I appreciate it. So

Charles:
You have a very interesting kind of background prior to getting to real estate at a very young age. Can you give us a little bit about your background before choosing to get into real estate? Yeah,

Morgan:
Yeah, great question. So ever since I was little growing up since I can remember since probably walking my, my dad was a third generation carpenter, obviously back then, I didn’t know what I was gonna be doing today, but fast forward, very, very, very thankful for that. So growing up I had the, the pleasure of holding the flashlight, so to say my entire upcoming. So I’m very, very familiar with construction and it’s, you know, what I do today is very, very thankful for that. You know, I know you know everything from, you know, ripping out footers, pouring new footers, you know, all the way the framing your king studs jack stud, your headers, you know, the holy up to roofing. I know it all. So very, very thankful for that. So that was a lot of, you know, probably from age four to 16.

Morgan:
So a lot of my dad would, you know, make us work with him and at job sites but also to learn for our future ’cause he saw that that was valuable. So no one could rip us off or take advantage of us. So very thankful for that. And then I, at one point when I was 14, I created a software company come from a really, really humble beginning. So I wanted provide more for, for my future family at the, the time and get out of the, the scenarios that we were in. So I created a software company did it with my partner and then we sold that as I think I was 17 right before I went to college. Then I bought my first duplex at 17, kinda then this is made a bit load of money with the software company. And then I had so much money I didn’t know what to do with it. But I knew every richer wealthy person was involved in real estate. So that’s, that’s kinda what got me into real estate. I bought a duplex when I was 17, five grand down seller finance. And then I went to college at 17 and then I graduated college in 2020. Fast forward today, 27 and this is what, what we build in the past four or five years.

Charles:
Wow. Yeah, it’s, it’s awesome. Can you kind of provide a little bit of an overview of your current real estate investment strategy and kind of your criteria, deal criteria?

Morgan:
Yeah, great question. So, mine is going to be much, probably different than people who are older than me. Generally when you’re younger, you take bigger risks than when you get older. To make money in real estate, you have to, you have to be play offense. But to keep money, I mean, this isn’t any investment. You wants to play defense to keep money. So for me, I’m 27. I, I realize my greatest asset is time. I have time on my hands, what a lot of people don’t have. So for me, I only buy creative finance deals, 10% entry or less. One ’cause I have the deal flow to support it. So not a lot of people get that type of deal flow. The way I structured it and set it up was really, really intentional. But two, one of my apartment complex, ’cause it’s commercial stuff, you know, I got a 46 unit for 20 K down, like just last week I closed on another 46 unit, a hundred K down.

Morgan:
So I am very, very particular. I’m putting minimal to no money down, and I’ll pay a little bit of a higher purchase price as long as I can make sure that, you know, I cash flows on A-D-S-C-R basis, and I’ll play the waiting game. Now I do like value add stuff. You know, that’s, that’s better if I can get, you know, value add stuff. But if I can get into something in an apartment complex for less than a hundred k, I can raise that money very easily. I can make one phone call and raise that and then be 50 50 partners where I’m not setting up A-G-P-L-P or a fun scenario where I have to give 70, 80% away to the deal. I also have the SEC breathing down my back, you know, have to make sure every i’s dot every t’s crossed.

Morgan:
Nothing wrong with that, but, you know, if I had the choice of, you know, a $500 set up or a 10 grand set up and the SEC down my back, I’m choosing the $500 set up. So that’s a little bit about my strategy and what I do. Minimal down payment, it has to cash flow. I like secondary and tertiary markets because I’m after high cash on cash return. So that’s really what I’m looking for. You know, a lot of the stuff, the way we structure our capital stacks, if I get below a 30% cash on cash return, there’s something wrong. Like 30 is the base, the baseline minimum just the way when you, when you structure capital stacks the correct way. So that’s what I’m after, you know, cheap price per door, high cash on cash return. And then when I get my cash, my cash flow to a, a certain figure that I want that at then I’m gonna be moving that into more you know, new builds class A assets along the water in the Tampa region, or really high growth corridor areas like the Dallas Fort Worth area or something like that.

Morgan:
So that’s really my strategy. I like multifamily. I like the right retail, very, very specific. It has to be an incredible location. You know, I’m not buying retail in the secondary or tertiary market, so it has to be in a, you know, a great a location to, you know, to go into something like that asset class. And I’m also into warehousing warehousing and mobile home parks and RV parks. I like mobile home in the RV space. You know, your audience is listening to this. They’re probably in real estate and it’s no, it’s no secret that, you know, the, the housing affordability gap is getting bigger and bigger. I think everyone knows that. So I like the RV and RV and mobile home park space for that. And we’re roughly sitting at what, six, 7 million housing shortage.

Morgan:
So we have that the, the housing affordability gap’s getting bigger and bigger. And arguably, you know, I don’t mean to get politics into this, but the last administration, you know, brought 11 million illegal aliens into our country. Could argue probably more like 35, 40 million. But that perfect, that, that big mix of that blend is why I’m really open to RV and mobile home parks as well, because I think in five to 10 years, families aren’t gonna be able to afford to live in apartments or houses. So where’s that gonna force ’em to go? They’re gonna have to move in with friends and family. They’re gonna have to room share, they’re gonna have to house share, or they’re gonna go to RV parks or mobile home parks. So that’s really what I’m focused on right now.

Charles:
Yeah, your thing too with mobile home parks is what I find is kind of a, a silver lining is that people don’t really want them anymore. So there’s not a influx of development. And if they are coming online, they’re very high end and they’re com completely dim. Different demographic. Yeah,

Morgan:
That’s a really good point too, because like around me, I know a lot of, like the cities and stuff, they don’t want any more RV or, or mobile home parks coming in. So I like that that fact that the, you know, the supply is almost in a sense limited. A lot of, you know, around me in St. Petersburg, they, they don’t want them coming in because then it attracts I don’t wanna say bad people, but you know, it comes with higher crime, you know, more poverty that type of thing. So it’s almost a, you know, if you have one now, there are a lot of cities and stuff, they’re not allowing more to come for, for those reasons. So I also like that factor

Charles:
Too. Yeah. It’s one thing many years back, I remember a partner of my dad tried to sell him an auto salvage junkyard, right? My dad’s like, oh, I don’t want, I don’t wanna buy this or anything like this. And, you know, he was like, well, they’re not building anymore of these. They’re not gonna allow this. These things are like environmental, like hazards and all, you know, they’re not gonna get any more. They’re never gonna be like built again. So you have something that is grandfathered in and you know, it’s, it kind of creates that moat around what you’re doing, where there’s gonna be a need for it. And if any type of new inventory comes on the market for mobile home parks, you’re, it’s completely different. You’re selling to someone that’s, you know, got a quarter million dollar camper or something like that, you know what I mean?

Charles:
Like, it’s a completely different, like a second home type thing, you know what I mean? So it’s a, you know, you’re, you’re, you’re dealing with a whole different demographic that will never, ever bleed into it. Like with, with when multifamily comes on, you know, we can talk about class A new class A bleeds into B, which bleeds in the C and it, you know, kind of makes it way down through. You’re not gonna have that, you’re not gonna have anybody that’s like you’re talking about that needs housing is never gonna be like, you know what, maybe I’ll go over here and spend, you know, two, $3,000 for like, you know, this late view <laugh> Yeah. Trailer site. You

Morgan:
Don’t have the absorption too, like in the, the multi-family, like you were saying, you know, the new bill comes one, they gotta give concessions to fill it, and then, then a lot of the tenants are hopping, you know, just to get two, three months free, free your rent and continually hopping and stuff like that.

Charles:
Morgan, one thing you mentioned with is interesting about your deal flow. And I recently was speaking to a friend of mine who’s a hard money lender, and he was telling me that that new hard money lenders, they make the mistake because they do a lot of bad deals because they don’t have enough deal flow. You mentioned that you have a lot of deal flow. So can we talk about how you, how you generate the majority of your deal flow? Obviously it’s time intensive, ’cause you mentioned that offhand competent earlier, but can you break that down a little bit about how you do that?

Morgan:
Yeah, that’s a great question. So a lot of people are probably, you know, familiar with the, the basic generic stuff, driving for dollars, reaching out to realtors, that type of stuff. That’s all outbound. I, I don’t do outbound, I do inbound. So I set up everything, all, you know, my marketing stuff where deals get flooded to me so I don’t have to go out and do the chasing. So every day I, you know, come into my inbox and I have, you know, at least 50, 75, a hundred deals that I get to, you know, go through that, that people are sending me one from that standpoint. But two, once, once you get known and have a reputation, it gets much easier because when you’re known and you can close deals and people know you can close deals, and you have the resources and the capabilities, that’s what every broker, that’s what every wholesaler, that’s what every seller wants.

Morgan:
They want someone who can actually get the job done. So you know, at first it was a lot of that, but now it’s just a lot of referrals and then, you know, networking and stuff like that. And they’ll often, you know, people will take a lower dollar amount with my offer because they’re more confident in, in me being able to get the thing done. So I think that that’s what’s really important. And, you know, building an, an online presence for those critical moments, because I, I could, you know, countless times for people before I’d even hopped on a call with me, oh, I googled you. I seen, you know, who you are, what you’re doing, which made me, you know, comfortable and why we wanna do this with you versus someone else. So I think having, you know, an establishing an online presence helps drastically with this especially in the creative space because a lot of it is, you know, seller, finance, sub two, all that type of stuff. So the seller has to feel comfortable with you. And if you’re a no one or have no presence online versus you have a, you know, a presence or you have a community or something like that, obviously it, it elevates your, your status there a little bit. So I think that’s really important as well with, with what I do and, and how, how it’s all coming together.

Charles:
So there’s no outbound marketing, it’s all inbound, so it’s usually relationships that, you know, other wholesalers you know different, I imagine some of it comes from on on market, some from realtors and stuff like that. Is that correct? Yeah,

Morgan:
Some of it’s, you know, on market too. So I see people all the time saying, oh, you can’t do this on Mark is, and not that it’s, you know, is just as important I think one deal flow, but also negotiation skills negotiation ne knowing how to negotiate and knowing what to say and how to say it to a seller, and knowing the objections before they even come incredibly valuable. So a lot of people are always asking Morgan, how do you do your deal flow? No, it’s not just deal flow, it’s negotiation skills as well. So like, you know, my partner and I, we just bought a, we’re under contract. We’re, we’re going through to close here in a couple weeks on a, a 1.3 million commercial building. It’s been on the market for 60, 90 days. And we talked the seller into, you know, a creative finance scenario. So anyone who says you can only do it with all of market, they, they don’t really know what they’re doing or they lack a huge negotiation aspect of, of the deal. But I just wanted to point that out because I, I think most people overlook that, that that part of it as, as a negotiation aspect,

Charles:
Let’s talk about that with its on market, because if it’s on market, it’s with a broker who’s supposed to have the seller’s best interest in mind. It’s much easier, obviously, if it’s been sitting in the market for two or three months, but not, not only do you have to convince the seller, you have to get to them first, so you have to convince a broker to bring that to ’em. So obviously your online presence you know, past deals, that type of history allows you to kind of make that easier. But how does that pitch go when you’re speaking to a broker to have them trust you enough that they, you know, they’ll bring it to their, to their client?

Morgan:
Yeah, so generally a, a broker in my opinion, they, they wanna deal with someone who can get the job done and they can get their commission check. So generally with me, I’ll, I’ll tell ’em, Hey, Google me, like, you’ll see me. I just hosted an event. I had like Pace Morby there, David Green, there were speakers at our event. And I also let ’em know that I, I run a, a community called the closers table that, that I teach this stuff. So generally when I tell them that, and like I have, you know, my own real estate community that we teach this stuff twice a weekend, they feel a lot more comfortable with me. And then in the mix of that, that one line presence as well too. And then also from, from a standpoint we do that, but if you know, generally in the commercial world, stuff sits a lot longer than than the residential world.

Morgan:
Generally I see, you know, six to nine months, you know, some wiggle room in there in the commercial space, something we’ll sit on the market for. So, you know, finding stuff that’s been sitting for a while and then going to that broker and say, Hey, listen, what if I came with a solution where the, the seller, they could get close to their purchase price or their purchase price? I would make sure your commissions are paid out on the front end and is there any debt on the property? If there’s any debt, can we assume that debt? Can we assume that debt? And will the seller carry a second position? We’ll give her some, some money in her pocket that she can walk with. But then also more, more importantly than this is finding out the why and the what, why they’re selling and why they’re selling, and what their reason for selling is.

Morgan:
So, example that one in Indiana, I just told you about 1.3 million her why was she was in Indiana, her nieces, her nephews, her cousins family moved to Tennessee. That was her why and her what, so that was most important to her. So a lot of this is, you know, negotiation is sales 1 0 1, you find the pain and you tie that back to how your offer is the solution to that pain. So that’s how we did that one is, is, you know, negotiating it through, through that angle in that lens, if that makes sense. Yeah,

Charles:
No, that makes perfect sense. Obviously it becomes trickier when there’s debt on it, but for example, if you’re buying a property and it’s got you know, it’s already got a loan on it, you can assume that you’re covering some of the equity they’ve built in that property as a second mortgage. And then you’re coming in with a minimal down payment, which is gonna put a little bit of money in their pocket, but mainly cover the broker’s commission. I guess it’s kind of how you really structure this when there’s debt. Yeah.

Morgan:
And then too, like I, I’ll ask them, what did, what’s your plans with the money afterwards? Is just sitting in a bank nine times outta chance, all I don’t have any plans with it. Okay, earn one 2% there, I’ll pay you five, 6%. So then breaking that down to them like, Hey, look, if you accept the cash offer, this is what you’re gonna get and here’s what your money’s gonna be. Versus you accept my offer, I’m gonna pay you out in the balloon in three, five years. Look at all this extra interest you’re earning, I’m giving you a higher purchase price too. So when you break that down for them and show them like, Hey, you’re making, you know, an extra two, three, $400,000 by waiting three years, you’re literally making over six figures a year doing nothing, absolutely nothing. So that’s very compelling to a lot of them.

Morgan:
But I’ve had other ones too, like example, a seller, she, was it Medicare, Medicaid, she had an income limit. If she went over that income limit, she couldn’t, her insurance would get messed up. So we had the structure in a way that if she sold it she lost her insurance. So we, you know, that was the, that was the black swan in that one, you know, uncovering that and structuring it in in a way that she could keep her insurance as well as selling the property for, for what she wanted for it. So that’s another example of one, but it’s really, like I said, finding the pain and, and tying really h hovering down on that pain and, and using really good negotiation skills.

Charles:
I just wanna drill down a bit into some of the, a little bit more into the details of how you normally structure a deal. And obviously we know about you know, as we just explained, with having a second mortgage and assuming if that’s possible. Obviously if they own it outright, that makes it even easier. But you said three to five years than a balloon. Like how do you structures, do you try to go out as long as possible, depending on obvious situation is different. I understand that, but like, you know, three years, five years, 10 years, no prepayment penalty gives you enough time. I guess the goal down the road is to refinance them out. Is that correct?

Morgan:
Yep, that’s exactly right. And the way, like I I structure mine is like for my capital partners since these are so, so the capital stack is very, very favorable for the buyer. Most investors, this is a new world to them. They don’t realize how good these returns are in, in my world versus the traditional world. Obviously in the investor world, the more debt you leverage, the higher our rss, our equity multiples, all that good stuff. So the way mine, mine are structured is for me personally, what works for myself and my investors is I’ll find a deal, run head on operations, I’ll do A to Z everything they provide the capital for, for the project, and then they, they get all the cash flow that that project produces. So all the cash flow goes to them. And then I work for free for the first 12, 24, 36 months.

Morgan:
And, you know, most of these are value adds. So we’re going in where, you know, they’re 50, 60, 70% expense ratio, we’re putting operational efficiencies in there, running them, you know, to be 30, 35 to 40% expense ratios. So a lot of these where, you know, we’re creating value add in multiple aspects, one rent increases to that could be utility bill backs or operational efficiency and, you know restructuring contract vendors, stuff like that. So that’s generally how, how and why mine is structured the way it is, because it works for my investors. It keeps their capital prioritized. And then I work for free for the first 12 to 36 months, which is why we do that balloon. ’cause At some point, you know, I’m not, I don’t wanna work for free for five years on this project. And then once that balloon comes and they pay out and has returned all their capital, then we’re 50 50 when the refinance proceeds and all the future cash flow. So that’s why they’re, they’re structured and, you know, three, five year balloons one because I, I wanna refinance to get my investor all their capital back and then also for all the work that I’ve just worked for free for the first couple years for, if that makes sense.

Charles:
Yeah, no, it makes perfect sense. The other thing too is that I’d rather be dealing with a seller that I bought a property with after five years that I’ve been paying monthly. And if we’re getting into ourself into a recession, have to renegotiate with them and maybe extend it a little bit than going to having to negotiate with a, you know, regional bank. You know what I mean? Who’s about to give you a little bit more leverage. And it’s that as I’ve gotten long, further and further into my real estate investing career, I’ve realized that these type of relationships are overlooked by novice investors. However, they’re extremely important when you’re investing in property, the relationship of that, the main investor, the syndicator, the head of, what do you wanna call ’em, GP has with the lender. And that may can make or break a deal down the road if you hit on hard times.

Morgan:
Yep. No, absolutely. And that’s a, that’s a really good point too. And a lot of these, like the, if we’re taking over our first position, the seller’s carrying a second position. Like I have one the 46 unit I closed last week. She’s, she’s carrying her $1.1 million note at 0% interest for six years. So like that one we’ll refinance with Freddy Franny, my contact, they can keep her in as a second position. So we’ll refinance out the first position into her lower rate, keep her in that 0% on the second position and then we’ll ride that out for the next six years at 0%.

Charles:
Interesting. Yeah, I think one of the things too I found with seller financing deals, I think it’s overlooked. Everybody is just getting in with minimal money down, which I understand is, you know, we’re gonna really increase our cash on cash returns. However, the other thing too is when you step away from a traditional lender and you start using the seller as being a lender, there’s a lot of fees that you’re avoiding as the buyer. And that allows you not only to pay more, like you said, so you can get a lower down payment, but also, I mean, it’s not real for three to 5% of your loan amount to be, you know, tacked on as fees between originations between this. And if you’re working through a broker, that goes to 5%, you know what I mean? So it, it adds up, you know, a hundred million dollar property, that’s 50,000, a $2 million property, that’s a hundred, that’s a hundred thousand dollars that you are avoiding, or you can pay, you can sweeten the pot on the seller side because hey, you know, I don’t have to pay this for originations, I can pay more for the deal.

Charles:
Yeah,

Morgan:
Absolutely. And then, yeah, this is slippery swipe up. Like you have, you know, environmental reports, inspections, the, the whole nine and the, I know, you know, at the bank loves to spend other people’s money. They love to spend other people’s money <laugh>.

Charles:
Yeah. You know, when you look at that closing statement and you get it you know, and you’re reviewing it, you see all the people that you’re keeping in business by buying this property. And yeah, what is

Morgan:
That, 20, 21 or 23 people are involved in a real estate transaction?

Charles:
It’s crazy. And two, my, my overnighting with FedEx is getting paid on it, the whole nine yards. So it’s it’s quite, it’s quite the business. But the thing though is that if you’re able to, obviously some things you wanna do anyway, you can, you know, get your phase one and stuff like that at all times. But the thing though is that there’s a lot of junk in there that you don’t need, you know what I mean? The seller that owns the property for decades knows more about that property than anyone probably in the world. Yeah. So if they’re gonna hold paper on it, they don’t need to bring it in an arai up. They know exactly what happens. They know exactly. You know what I mean? It’s just like if you owned a car for 10 years, you pretty much know everything about what’s gonna happen with that car and what’s, what’s ready to go and what’s gone. You know what I mean? Oh,

Morgan:
Yeah. And even as inspections, like since I’m very, very familiar with construction, like I’ll do all these myself and, you know, you hire a third party to do an inspection report on a, you know, a 30 or 40 unit property, you’re gonna spending 20, 30, 40 grand on that limb. Mm-Hmm

Charles:
<Affirmative>. So you talked about building trust with, you know, using all your past deals, your community, your education you know, everything you’ve done over these years as a real estate investor when you’re getting on one-on-one with the actual seller. Because at some point, I imagine this happens, and especially, you know, if you sign something with wholesalers saying you can do it, or the broker allows you to do it or whatever you know, how are you on those phone calls as you’re building rapport? Is that you know, what is the process like? I mean, what is the timeframe on something like this before the first time you speak to someone to maybe when you’re actually buying their property?

Morgan:
I’d say about roughly like 30 minutes. As, as far as like the brokers and the, the wholesalers, yes, you, you do that, but I’m just a very straight and blunt person. Like when I’m talking to them, like, I’ll tell the broker, you know, obviously they wanna, you know, they wanna, they wanna feel important that, that they’re playing middleman. So I mean, I’ll tell the broker straight up, listen, if you want this deal to happen, so you get your commission, listen, we all want this deal to happen. The seller wants the deal to happen. You want it to happen to get paid, and I want it to happen. So I’m the most experienced here with creative finance. Let me talk to the seller directly. You can be on the phone call, but for the sake of all of our interests of getting this done successfully, the highest probability is letting me talk to the seller directly.

Morgan:
And that’s what we all want. We all want the deal to go through. So, you know, let’s quit around, wasting time. I don’t have time to waste. I’m sure you don’t have time to waste. Let me talk to them directly. That’s our highest chance of everyone getting this deal done. And a lot of people, a lot of people in today aren’t very blunt or honest or upfront like that. So they generally respect it a lot because everyone’s beating around the bush and this and that. But I’m just completely upfront, blunt, and honest. One, because I just, just who I am, and two, I don’t got time to waste to be going back and forth, oh, they said this, they said that, or like, I, I don’t have time for the gossip or the drama. Let’s, you know, let’s get to the point here. So just being completely upfront and blunt like that is I find that they, they respect it a lot.

Charles:
Yeah, no, that makes perfect sense. And I think it’s it’s gonna be very difficult for a seller to get into a long-term relationship with someone they don’t know or even spoken to, and you’re just going through the broker and they’re like, oh yeah, everything’s

Morgan:
Fine. Everything’s gonna be fine.

Charles:
And it’s something, you know what I mean? You really need to have that one-on-one or with the broker there, kind of contact with them to really let them know what you’re about, what your goals are, because I think it’s very difficult, especially if you’re a seller. I would see that coming through a salesperson and you’d be like, I just can’t you know, I, I need, you know, I need more before I sign on this. Well,

Morgan:
A lot of them too, like if, if I won’t do this unless they really ask for it, like, but I’ll, I’ll give them references as well of other people I’ve done this with. And I’m like, you can call any of these references. I’m positive they’ll have nothing but great things to say. Like, if you want, I’ll show you my credit report. I never missed a single payment in my entire adult life. Like, I can show you all of this stuff as well. But also if it’s really, really pushing them, I’ll, I’ll say, listen, if this will help, I’ll sign a performance deed. Do you know what a performance deed is by chance, Charles? I’ve

Charles:
Heard of it before. But if I’ve never used line myself.

Morgan:
I have a, a quick refresher here for your audience. Performance de is basically a, a piece of paper that says, listen, if I don’t hold up to my end of the bargain, if I miss a single payment, this title reverts, the Steve reverts back to you automatically. So now you don’t have to go through a foreclosure process, the whole nine, I’m not a licensed attorney, you’re a CPA, so consult with one prior. So doing this and letting them know, like specifically that last deal is we were just talking about that Indiana deal, she’s a little on the edge, and for that deal we were doing it with 80 k, 80 k down, yeah, 80 K down. She was on the edge. I was like, listen, seller, if if I miss a single payment on this, the deed reverts back to you automatically, and then I lose my 80 grand. So I’m highly incentivized not to miss a single payment, otherwise I lose my $80,000 I gave to you and all the improvements I just made to the building. So if I miss my four grand payment, I just lost 80 grand. Now the incentives are in the right place for me because I’m, I’m not losing my 80 grand, I’m not losing my down payment. So usually that’s a, a good way to push them across and, and get them to feel a little bit more comfortable.

Charles:
Yeah. And it’s a perfect, they do it sometimes with business lending too where it’s like a default e they have you sign beforehand, which is for really high risk businesses where lenders do that, where if it happens, you know what I mean? They’ve already like start, they already start the process. You already agree to it. So yeah, that’s, that’s quite the tactic for showing them your trust and showing them kind of what you’re working on and what you’ve done before. So kind of as we’re kind of closing up here a little bit what kind of advice would you offer to investors that are seeking to follow your footsteps and kind of structure creative financing deals?

Morgan:
Get around people who’ve, obviously I, I have my community, we teach this, but I’m not here to promote my community by any means, but we, we do teach that twice a week, but if the quickest way to get and do this stuff is get surrounded by people who are actually doing it, it’s, you know, one of the ones where you’re the average of the five people you, you spend your most time with. You’ll, you, you know, if, if you hang out with five millionaires, you’re gonna be the six, you hang out with five hard drug users, you’re probably gonna be the six. It’s you know, relatively the same, the same speaking. So getting around people who are actually doing it is incredibly, incredibly valuable in my opinion, because they’re gonna help you. And, you know, they’ve already experienced and they, they already fell and tripped their knees and, you know, scraped their elbows, so they’re gonna save you a lot of pain, a lot of time, and a lot of money wasted on things that they’ve already done that didn’t work.

Morgan:
But that would be my, my recommendation, or if you can find someone this is probably gonna be for someone who’s more newer in their career, is find someone who’s doing what you wanna do and go offer to work for free for them. One, don’t think you should ever work for money. You should work for education. But by doing this, so few people are willing to do this, but they’re leaving an incredible education on the table by not doing it. Versus, you know, say example now I’m not looking for anyone to work for free. I already have my team and all that set up. Say someone comes and works for me for 6, 8, 10, 12 months, what do you think they’re gonna learn in that timeframe? They’re gonna learn everything I do and they’re gonna learn how I do it. And then if they just leave and they just execute on what they learn, they can do it for themselves.

Morgan:
So I, I think people overlook that, that drastically, you know, work for education, not for money. And then when, when you get comfortable enough and you put enough reps in, you’re gonna get comfortable that you can go and you can leave and you can start doing that on your own. So I think that’s really, really an important piece that a very few people are willing to deal is that, is that aspect. But that’s what I would recommend for someone, you know, go find, go find someone who’s doing what you want and, and work for free for the education, not the money.

Charles:
On the other hand, what mistakes do you think you see many investors make when they’re trying to structure creative financing deals, maybe kind of on the deal level,

Morgan:
When the deal level? I think that mistakes, I see a lot of mistakes in underwriting. I see people, I see a lot of mistakes in construction. People are generally, they’re, they’re budgeting too low or I see a lot of mistakes in that. I see a lot of mistakes in a lot of hairy areas like assumable loans, non assumable loans, contracts for deeds. They don’t quite understand this fully. And then also, like if you’re talking to a seller in the creative space, you have to be an expert in it. You have to be able to talk to this like a, like, you know, like the back of your hand. Because if a confused mind a confused mind is always no, whether if that’s a seller or if that’s, you know, where you’re raising capital in any scenario, a confused mind is always no. So you wanna be able to talk like an expert and, you know, be able to explain it in a third grader level, explain this to a third grader. So that’s another big mistake. People they go in, they try to do this, but they, they, they themselves don’t really fully understand what they’re doing quite yet, and then they just fumble the, the opportunity. So I see that a lot as well too.

Charles:
Last thing before we get information on how people can reach out to you in investors, you know, you talked about underwriting, but how do your investors, you know, avoid analysis paralysis? Because I feel it’s a big thing when you’re starting off in real estate investing, no matter kind of what your niche

Morgan:
Is. Analysis paralysis. Yeah, I see that a lot. I mean, ultimately I look at it, you can, you know, you can have all the education you want. You can, you can do all the, all the things that, all the right things, but unless you execute, you’re wasting your time, you’re wasting your time and you’re wasting your money unless you execute. So having, having executional skills is incredibly important. And, you know, not just real estate, any business ’cause ultimately if you’re just, you know, learning and not executing, you’re, you’re wasting time and money. But to, to piggyback on that one, how you could get around that, like I mentioned earlier, go work for someone who’s already doing it. So now you’re putting in the reps. So you’re actively doing it just like, you know, you’re in the gym, you’re putting in the reps, you’re actively doing it, but you’re not doing it on your dime so to say.

Morgan:
So this is how you can start getting more familiar with the business while you’re also not taking the, the risk one that, that that operator that, that other investor’s doing. So here you get the practice you get to practice for free here. And you get to learn a lot of the mistakes that that person has made and a lot of the pitfalls and a lot of, a lot of the costly things that happen to them. So that’s what I would, you know, I’d recommend that as well too. ’cause This is how you’re gonna, you know, this is how you’re gonna practice. You’re gonna practice for free this way, or if they’re nice enough, you’re gonna get paid. You’re gonna get paid to practice this way. Awesome,

Charles:
Morgan, well thank you so much for coming on the show today. How can our listeners a little more about you and your business?

Morgan:
Oh, well, thank you for having me. I’m pretty active on social media. If I can help anyone in any way, shape or form you can just reach out to me on like Instagram or something. It’s Morgan Aaron Seller, literally just my name. I have LinkedIn as well. Or you can go to my website, Aaron Seller Capital. Email meMorgan@aaronsellercapital.com orMorgan@theclosurestable.com. Yeah, I’m pretty mostly active though, and really active on social media. If, if anyone has any questions or if I can help ’em in any way just shoot me a direct message and we can take it from there. Morgan,

Charles:
Thank you so much for coming on today. We will put all those links into the show notes and looking forward to connecting with you here in the near future.

Morgan:
Charles, thanks for having me. It as a pleasure and a, a fun conversation.

Links and Contact Information Mentioned In The Episode:

About Morgan Ehrenzeller

Morgan Ehrenzeller is a seasoned real estate investor and entrepreneur with a portfolio of 339 units across the U.S. Specializing in low and no money down deals, Morgan has mastered the art of creative finance, leveraging strategies like seller financing, subject-to, and lease options to acquire properties with little to no upfront capital.
As an entrepreneur at heart, Morgan launched a software company at just 14 years old, scaling it to generate thousands in daily revenue and moved his SaaS profits to Bitcoin at $30 per coin. By 17, Morgan purchased his first duplex with $5,000 on seller finance, setting the stage for a career in real estate investing and deal structuring.
Now, as the Co-Founder of The Closers Table, Morgan helps investors break into real estate without relying on traditional bank financing leveraging low and no money down strategies. Through coaching, networking, and hands-on strategies, they empower others to acquire properties using low to no money down — turning obstacles into opportunities.

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