Steven “Bo” Belmont is the Founder and Owner of Belwood investments, one of California’s fastest growing fix and flip companies. He is currently residing and operating his business in Folsom, California. Steven comes to the real estate world with an impressive background in the mortgage industry. He started at Ameriquest Mortgage as an Account Executive, then moved on to People’s Choice Mortgage as a Branch Manager, and later he became a partner at US Home Loans. Steven is a graduate of Sierra College where he played football. He also attended and graduated from Coastline Community College and from Adams State University with a degree in Social and Behavioural Sciences.
During his time in the mortgage industry, Steven was a top producer and received many awards and accolades. In 2008, Bo rehabbed his first house sparking his passion in the fix and flip world. Since then, he has gone on to be part of 1200 real estate transactions and counting. Currently, while heading Belwood Investments, he has perfected his B52 model. This model is a proven method for an “average Joe” to be able to partner with Belwood and invest in real estate. Steven is also co-founder of Red Door Theory, a teaching and mentoring program focused around investing. Steven is a strong leader with a large real estate network that has helped him grow his business rapidly. With amazing insight and big goals, Bo is taking his company nationwide with some amazing partners such as Home Depot and PPG paints.
In addition to growing several businesses, Bo enjoys spending time with his son. You can find him on the weekends at one of his son’s many sporting events cheering him on.
What inspired you to make the change from the mortgage industry to real estate?
In 2008 when the mortgage crash occurred, I segued to flipping houses just because all subprime lending had ceased to exist basically, so I started to flip houses. I knew a couple previous builders who had been flipping houses here and there just to supplement income in the downturn. They had been doing new construction and then they had segued to picking up foreclosed homes and remodeling them. I picked up two and did them completely by myself. The third one I got a little bit of help on, but in the meantime, I had learned exactly what it takes to flip a house. I learned how to rewire a house, do plumbing, set toilets, hang windows and everything from Google and YouTube. After I got done with my third, I realized there is something to this. Now, fast forward 12 years, there are now 1,200 properties I have participated in. That is what brought me into the real estate field.
What is the B52 model?
The B52 model was something I created. It is hyper leveraging. The 52 stands for earning 50% of a profit for only 20% of an investment. When we have a project, an investor only comes in with the cost of the project of 20%. If it is $100,000, they only come in with $20,000. Yet, when the project is completed, the profits are not split up 80/20. The profits are split up 50/50. So, it’s 50 for 20.
I have applied that method to real estate which has never ben done before. I’m hyper leveraging my relationships with Wall Street and sharing with the average Joe. Some houses are more affordable than others. In California, the investments tend to be from on the low $20,000+. Your average Joe does not have those type of funds in America. That is more the upper middle class in California and in the wealthier states.
Now they get to participate in flipping a home from the comfort of their own home, for a fraction of the cost, and the money that they invest doesn’t come to the Belwood bank account. It doesn’t go to anybody’s account. It goes as a second deed of trust onto the property. What that means is if anything happens to my organization or Home Depot or anybody, their money is still secured to that property as a deed of trust.
We’ve been just completely setting new records as far as investor return and the acquisition of investors on our portfolio is 10x in the last year. We’re definitely onto something. It’s never been done before. We’re changing lives. We’ve had some people pay for their children’s tuition, pay off debts.
Is the success of it based on the fact that you’re finding homes in markets where the housing is not as expensive then?
We work in 14 different states. Depending on an investor’s criteria, we’ll ask them when they apply what they feel comfortable investing on a house. When they invest, that money goes to the home and is secured to that home. They have a vested interest. It’s a tangible product. They can visit the home.
Everybody has their own Facebook page that they can follow along and watch the progress and make comments, like a friend. It’s super interactive. Someone might say, “Oh, I would love to see gray walls.” We give people options in designing the home. We don’t give too many options, but it’s more participation than you would get when you invest in the stock market.
This is a directed investment targeted at a specific home where they can interact with it. “Okay, wow. I’m going to show my grandmother. We’re going to drive by the house. We’re going to walk through it.” If they’re in a different state, then they follow along on Facebook and get to participate and comment on the contractor’s work.
We never force anybody into a home. We present them with options. Here is this home that we feel matches your criteria.
Do you to get a couple of investors for each home?
No. It is one person, one family, or one entity that can go in on one specific home, or if it’s like a larger lump sum, let’s say, $100,000 or $75,000, then we’ll pair a few investors together.
Moving forward, as we continue to expand our business, we will offer the opportunity to share amongst, let’s say, 100 people. Now, we’ll be able to really lessen the cost for investment, but investor can still receive high returns. Your investment might only be $1,000, but you’re going to get $1,320 back in 122 days. Not bad for an investment model.
Belwood is the first deed of trust because we’re putting up 80% to 90% of the cost. The investors get to be in the second position because of putting in their amounts. We are the first company of this kind in the world. That’s why we got Home Depot to partner with us. That has allowed us to expand in other states where now Home Depot goes in there. They send their contractors. They verify our pricing and then do all the work, so we can handle everything remotely. You can flip a home from your couch or while you’re working at your job. It’s also great because you have accountability.
How does it really work? Is it because you have this so streamlined in your mind how you get this done?
I’ve been doing flipping houses for a long time. At first, I was using all of my own funds. Then I realized I could do more if I borrowed money, so I established a relationship with a lender. That lender also was a broker to a hedge fund. After many years of flipping homes, established my relationship with the hedge fund, rather than the broker, and that really cut financing costs down for me, almost in half. Now, because of this relationship that I’ve built with the hedge fund, I’m allowed to use their funds at an extremely discounted rate, and I have been able to flip many, many homes with them. However, I am able to share this opportunity with others.
It’s my relationship with Wall Street that is now making it available for people to use this process. I had a conversation with the hedge fund, and I said, “Okay, I have been utilizing this program for a long time and it work great. The financial reward is great, but just seeing something go from ugly to beautiful is tremendous and it really gives a sense of fulfillment. People just watch that on HGTV, and they want to be a part of it. I’ve partnered with a few friends that really wanted to flip a house. It’s changing lives.
If it was the normal model, however that works, under the normal model . . . somebody is not making as much money. Is it your company or is it the hedge fund?
It’s my company. The hedge makes a consistent 5% on their money. If I borrow $1 million dollars, they’re going to get 5%. If I borrow $100,000, they’re going to get 5%. It doesn’t matter, they’re getting 5%. That’s a mortgage payment, and it’s amortized over 30 years. It’s a low one compared to others.
But then you say, where are these houses coming from? We have a team of realtors here that are creating relationships with other realtors throughout the United States, and all they simply ask them to do is find a house for us to buy. They get to represent Belwood as the buyer and then when it’s done being remodeled, they get to sell it for us too. All these realtors are jumping onboard because they don’t just get one commission. They get two commissions. They get one to represent us as the buyer and another to represent us as a seller. Now we have inventory coming in because these agents know that if they work with Belwood, they get paid twice. Now we have our inventory.
We don’t have our brand yet. We are building that brand right now. When we do become that brand that is continuously offering an average of 32% on your money, then we will have become the most successful investment company in the world. That is without a doubt. That’s where we’re on track to do.
Do you need to do something to protect your idea or if someone else did the same thing that you’re doing, is that totally okay, is it going to mess up your business?
I’ve thought about: Do I need to patent this process? But there are going to be competitors. You can patent something, but somebody’s going to find a loophole. It’s hyper leveraging. If you have the relationships, you’re going to be able to do that. What I have to do is I have to be above and in front of the curve, so when a competitor comes out and they’re offering 50/50 splits, well that’s when I offer 60/40. I’ve already gotten a head start on them. The upfront cost on this is millions of dollars because you cannot get by facilitating this process by giving away half your money. There is a lot of upfront cost, but because we’ve built it up, we’re able to close and satisfy the depletion of funds.
Red Door Theory, your teaching and mentoring program? Is that how you prepare people to become your investors?
100%. It’s being changed to Belwood University. In there we do two things. We prepare people for becoming an investor, and we also teach people to look for homes for us who do not have a real estate license. If you ever wanted to sell real estate and be in real estate, you can with Belwood Investments. You don’t even have to have a license. You help find us properties, be involved with that process, and we’ll still give you nearly the same amount of commission that you would earn if you were a licensed realtor. Let’s say, you’re walking down the street, walking your dog, you find a home, take a picture of it, upload it into our system, answer some quick questions, if we buy that home you get a check in the mail for $3,000.
But it’s really a referral, not a real estate responsibility?
It’s a referral, yes, because you don’t have a real estate license. But you will be able to, for all intents and purposes, act as a buyer’s agent on our behalf. You can even call and say, “Hey, I work with Belwood Investments. I’m an investment acquisitions manager. I see the property at 123 Fourth Street. I’d like to take a walk through and potentially send over an offer.” You can do that. You don’t need a license to do that. We teach you how you can do that and make an income without a real estate license in the real estate industry.
What is it that has motivated you to do this because you really have come up with something that could help ordinary people? Is that really what you had in mind?
It wasn’t initially. My initial motive was to continue to be in real estate, live a happy life comfortably, put my kids is college, and just continue. Because I was starting to help people and I was seeing the change in them, I was seeing the joy that they were getting from having an opportunity to invest in real estate and earn income that was set aside for the elite. It went from me trying to just live a comfortable life to now leave a legacy and help as many people and share this opportunity with the world. I’ve invested more of my money and put myself in more of a financial bind getting into this because of my faith in the process. The upfront cost was and is extreme, I had to have faith in it. I sat down and did the math. I realized that I need to have one closing a day to be sufficient, and now I’m at four closings a day. Now, I’m able to focus on changing as many lives as possible. The testimonial videos that I’m getting right now make me want to share this with more people, give this opportunity to college students. I want to be the one who has helped hundreds of thousands of people, if not millions. I want to leave a legacy of changing the real estate investing world. We have a plan of action for everybody that gets involved with us. The end game is just to build wealth for people that would not have had the opportunity before.