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From India to America: Kapil Singla’s Profit First Journey

Episode 107: From India to America: Kapil Singla’s Profit First Journey

The Profit First REI Podcast

August 25, 2022

David Richter

Summary: 

We have a returning guest on the show today, and that’s none other than Kapil Singla. The young entrepreneur who skyrocketed his way to the top after moving to the US.

In this episode, he’ll be giving us an update of where he’s at in his life and business after a few years of implementing systems and using Profit First as key drivers to his success.

Key Takeaways:

[2:05] Kapil shares his whole real estate story with us.

[9:12] What early financial lessons did he learn, and how do they compare to where he is now?

[13:03] How is Profit First factored into his business?

[15:15] In terms of finances, what does he value the most in his business?

[18:15] What are the lessons around money that he wants to pass on to the next generation?

Quotes:

[8:22] “A lot of people, no matter what level they’re at, find it important to surround and connect with people that share the same goals as you.”

[10:07] “Money was hard, money was everything at some point.”

[10:35] “A persistent action towards a goal and having the faith to back up your ideas makes money come to you.”

Links:

Contact Kapil: 929-413-9332

Kapil’s Facebook-https://m.facebook.com/kapil.singla.756 

Profit First Real Estate Investors FB Group-https://m.facebook.com/groups/ProfitFirstREI/ 

Simple CFO-https://simplecfo.com/ 

Tired of living deal to deal? 

If you are a real estate investor or business owner who is tired of living deal to deal, and want to double your profits, head over here to book your no-obligation discovery call with me. Either myself or someone from my team will hop on a short call with you to get clear on your business goals, remove any obstacles holding you back, and map out a game plan to help you finally start keeping more of the money you work so hard to make. – David 

Transcript:

Kapil Singla:

As a real estate investor, we were all always short on the cash reserves. You know, we were always broke. So with the Profit First model, I think it was a huge go and a huge plus for us in a short amount of period, we were able to add in last six months, closer to 12 single family doors, just using that system and keeping that consistency with Profit First. So it really did help us

Speaker 2:

Welcome to the Profit First REI podcast, where real estate investors, master financial management, eradicate entrepreneurial poverty, and learn to be profitable from day one. Now for your host, David Richter dirt,

David Richter:

Hey, everyone have another exciting guest today. It’s Kapil Singla, and I’ve actually had him on before today and he was episode 23, Michael Jordan. So he was on that episode and it’s amazing going back. And I’ve had a couple of repeat guests now and just where they were and what they’re doing from then to now. And Kapil’s working on some awesome stuff. I’m excited to at least mention that on this podcast here and have that potentially be some value. But also I just wanna hear his story of like, because he was just, he was a 19 year old wholesaler doing deals doing, you know, going through the grind and then actually partnering with people and doing bigger stuff. Now he’s made huge life changes between the last time that we were on the podcast moving and just a whole lot of different stuff. So, Kapil, great to have you on again. Hope you’re doing well today.

Kapil Singla:

Thank you. Thank you so much for having me again. David, it, it’s a pleasure being here and thanks for the great intro, man.

David Richter:

Yeah. Well then let’s get this started. Tell us your story again, but this time talk about the beginning, cuz I know, you know, you started out young at an awesome age to be able to leverage now with the other stuff that you’re doing. So like tell us your journey from the beginning again, and then tell this different stages of your business. And you can even mention what you’re doing now inside of the tech and stuff like that as well.

Kapil Singla:

Sure. Yeah. Again, the story kind of begins came to us three and a half years ago when I was 17 years ago and 17 years old. And just started knocked on someone’s door as, Hey, will you teach me real estate for free and worked for them for eight to nine months? I would say managed a couple of rentals. I was going to high school in the morning managing rentals in the afternoon, in the evening and taking calls with while the lunch break. So it was a good experience. And after a while definitely left them, started my own wholesale real estate company. You know, definitely did some tax liens and lost a lot of money in that as you guys probably heard in the previous podcast. So after that so far my first deal was in later 2018 2019 was very slow, but the wholesale side and the flipping side kind of picked up in 2020.

Kapil Singla:

So from that from then to now, we’ve done closer to 85 transactions in real estate in a span of two and a half years the company’s growing with six to seven employees that are on the payroll, but there’s a lot of other commission agents. Of course, that work. We have expanded to a couple of states. We’re mostly Indiana. Now Michigan, also Idaho as well recently got into a development partnership in Washington. So just it’s a very you know, partnership model that I go with with a strategic partnership with people who already have boots on the ground already have some, and we come in with a deal flow and help ’em scale. And my partner in Northwest Indiana we scaled them up to seven figures this year. So just with our deal flow and our, our partnerships are, are very, you know, it’s a very hand in hand and it’s a very win-win situation for everyone.

Kapil Singla:

And so yeah, we on the tech side you know, definitely wanna talk about that side on this podcast here. The tech side coming up with a lot of flippers, a lot of wholesalers landlords is the analytical part that a lot of businesses don’t really have. So we kind of fill the gap in that space. You know, we came up with house folios.com with Rob fuller. He’s the founder. He flipped more than thousand houses. He was the biggest turnkey guy and was developing the software for himself. But now he’s, he’s finally came out and started giving it out to the public. And we are like closer to 3000 users on that site. And we’re trying to grow that into a platform and try to help as many real estate people out there, man.

David Richter:

So this is all in the span of two and a half years, correct?

Kapil Singla:

Correct. Yeah.

David Richter:

Yeah. So you came to America and you said, I honestly, I connect so much with you worked for free. That’s when I first started, got into real estate, I was working another job, but then I started working for free for another real estate investor in the Northwest Indiana area. Yeah. And started working there. And that was a great experience that was just getting to know what was going on and providing that value there. Then eventually I started working with that team and then helping grow that. So I love what you said that if, if people would listen to that, that is really, I believe a key to success. It might not be your key, your key might be going out there and busting it yourself, getting, you know, doing the things wrong right from the gate or whatnot. But if you get around the other people and just say, how can I help you?

David Richter:

What can I do? And honestly, a lot of these people are want are wanting that help they’ll take any help they get, can get cuz that’s a small business world. And if you can learn from someone, tell them like, here’s what I can do for you as well too. Like here’s what some of the skills that I have. Can you use that in your business? Kind of being able to come to that. So Kapil, I love that that’s huge value there. Then doing the transactions, the partnership model, what you’re doing now with the tech side and really helping people with the analyzing of the deals. I think you’ve, you have, you have just rapidly just grown in the last two and a half years from just now your business, mobile, your tech mogul. You’ve got the, you’ve got a lot of these things under your belt and I absolutely love your journey.

David Richter:

And I just wanted to also say as a side note, I’m talking too much. I should let you talk, but I just so excited for you that if you’re listening to this podcast, you should go back and listen to then and listen today, just in the first few minutes, how, how much more energy there is and just how much like he is just excited and ready to go. And that’s the real estate journey that is, this is the, this is the real estate journey. If you buckle down partner with the right people have the right values, steer stay clear to your vision, your values, what drives you? This is where you can, this is where you can get to. So I’m just, I’m incredibly excited because I believe as a listener and as, as you Capel, you are a huge inspiration to anyone who’s listening.

David Richter:

It doesn’t matter if they’re 20 years old or if they’re, you know, 80 years old, you can get started in real estate. And look what happened in two and a half years because of what he listened to, what he took on and then what he did, the action that he took. So, sorry, I just wanted to, I wanna brag on you just because it’s been an incredible transformation here. Like you were already doing a whole bunch of stuff back then when we talked and now just seeing that, seeing a couple compos circle and where you are now is just super exciting.

Kapil Singla:

No I greatly appreciate the, again, the opportunity David here, and a lot of people probably listening to podcast listening to you know, to YouTubers Warren Buffets and all those people, you know, they always mention being connected with the right people. And our first meeting was a good success mastermind, right. And, and just a huge part that I really wanna mention, especially for my success and my successful partnerships was these masterminds and going out, connecting with these people because you know, everyone in there has paid money to be there plus traveled and wasted there two or three days. Yeah. So they’re not there to joke around they’re there to make deals. They’re there to connect with people. So I think a lot of people, no matter what level they’re at, I’d highly recommend being surrounded with people like you connect with me anytime. I love to connect them with more people. So just, just love that connection side. That’s, that’s my core thing. And that’s how I get introduced to a lot of people because you give first and that you get back. I just love that concept. So,

David Richter:

Oh yeah. Yeah. That is a core tenant of, I, I believe of who we are as human beings. We want to give back and we want to do what’s right. We wanna provide that value and we’ve seen it over and over again with what you’re doing. And so I’m just very excited again here having you on. So let’s talk about then since I talk, I think our podcast has probably upgraded since we last talked to, and I’ve got some good questions around money, which I think is gonna be great because now you can tell on the journey, what early lessons about money did you have maybe even in childhood that has transformed over time where now like, okay, maybe two and a half years ago, another light bulb went off. And then during that transformation of the last two and a half years, just the concepts around money, what are you? Can you gimme some of that, what you’ve learned and then how you’re thinking about it today?

Kapil Singla:

Yeah. So that’s a great question. Very deep question there, see money is, is, is very hard to explain and no one wants to talk about it. It’s a very secluded topic. It’s now, you know, with the keeping, keeping in mind with childhood, I grew, my dad was entrepreneur, but never was like ultra successful or anything. So in my mind, money was hard to make, was hard to get to, but it always had you know, if you had money, you had a different social status. Again, I was in India, America’s different, you know, so childhood talking part money was hard. Money was everything at some point, you know, because even some of the relationships that my dad had would not be there just, you know, or would have been more if you had more money. So I think it’s, it’s been a very, it’s been seen as a very materialistic of course thing.

Kapil Singla:

And, and I think growing up now with having closed three businesses of my own, I think money, I would say still hard to make, but I think a persistent action towards a goal and a focused and having a faith to back up your ideas and having that courage and the, and not being afraid part you know, it makes money come to you. And, and I think now the, I like even you and me, we don’t like run for money. Like when I started whole selling, we were definitely running for dollars. We’re like, Hey, we gotta close this deal. I’m gonna make 10 grand. Now it’s all about what can I provide you in value? And if that has intrinsic value to it, great. If it doesn’t have interesting value to it, then fine. We’ll be friends.

Kapil Singla:

We have a good relationship. It might turn into some value down the road. So now it’s all about making value and money kind of follows to be, to be honest, you know, and of course I’m not, I’m not a billionaire or anything, but, but with my age, I, you know, a lot of people say I’ve done quite a bit good and all that, but, but I think that’s my outlook on money and I love moving money. I’m not afraid of talking about it. You know big, I love the investing side of it. I follow Ray Dalio, Warren buffet very closely. And Kevin OER, of course, you know, so

David Richter:

Awesome now. And I think you’re being modest there. I think a lot of people would say, say, you’ve done very well for where you are right now. And the sky’s the limit from here. I mean, because of the, you’re just, you’re showing us too, those words are manifesting those beliefs that you have. So it’s like, we know that even if times get tough again or whatever, there’s always, you’re going to come out the other side, if you can be persistent and have that attitude of always providing that value because it is, we all, if you’re listening to this right now, we all have that where we’re alway, where we had a point in our time and you might be right there running after the money. You need that money for survival for just the basic necessities. But at some point, if you hang around people like a appeal going to these masterminds, going to these places, you’re going to learn that not only can you make money that money that now isn’t, it’s not about the money.

David Richter:

It’s about that creating value. So exactly huge value here, Capelle, this is amazing. I think this is gonna be very inspirational, I believe to the listeners. So let’s ask a couple more questions here since it’s the Profit First REI podcast. We talked about this a little bit before, but can you gimme your perception and like, how is Profit First factored into your business, your life, your, you know, your everyday, what are you doing in these businesses? Does that help guide any principles from that book and from the, from the concepts of Profit First and now Profit First for real estate investing that’s coming out.

Kapil Singla:

Yeah, for sure. No Profit First did play a crucial role. We recently like second quarter of this year transformed a little from whole selling and flipping and started buying rentals. So at that point I, I, I read Profit First for like five, five months ago that that’s probably when I read it. And, and I, I love the concept of the dividing of the money into different accounts and the different sides of it. So it did play a huge role and I do follow it currently and still have separate accounts for that. So I think that was a huge learning. A lot of people think might be a small one, but for me it was a huge win because as a real estate investor, we were all always short on the cash reserves. Mm-Hmm <affirmative>, you know, we were always broke. So everything with a Profit First model and a great thanks to you for building that. I think it was a huge go and a huge plus for us in a short amount of Peter, we were able to add in last six months closer to travel single family doors just using that system and keeping that consistency with Profit First. So it really did help us that’s that concept?

David Richter:

No, I love that. I love hearing those success stories too, because with the people we work with inside a simple CFO, we see over and over again, just having those reserves where yes, you can jump on opportunities or it helps save for the rainy days or, you know, the bad times or whatnot, but just the, the peace of mind, you know, being able to sleep and be like, okay, you know what? I don’t have to live deal to deal anymore. So yeah, I’m glad you brought that up because not only have you, you moved past that, but now you’re taking advantage of the opportunities and being able to really capitalize on what you want to do and need to do to grow the,

Kapil Singla:

You know, totally, absolutely.

David Richter:

So that just brings me to a couple other questions here now in your business and in, and in the different things that you’re doing now, mm-hmm <affirmative> what role would you say? Like, and what do you measure the most inside your business from the aspect of the finances? Would you say it, is that cash on hand? Would you say it’s like making sure you have a certain amount of net profit now because you’re running Profit First, like percentages are at a certain amount, or what are the key things that you look on, maybe a weekly, monthly basis inside the business?

Kapil Singla:

No, absolutely. See profit does matter to me a lot. You know, I, I’m a big fan of Kevin O Larry, where he says, if the business is not making money in the third year, it’s a dog, it’s, it’s a hobby. It’s not a business. You know, whenever I open up a separate LLC, I check all the balance sheets P and LS every month, making sure which accounts and which companies having me the highest return on my time. Hmm. That’s the biggest thing, because at this point you know, of course I wanna get married here in next two to three years have kids. So for me, the most thing important right now is my time how I use it and which company is giving me the best out of it. So I calculate my ROIs, IRS’s internal rate of returns on, on all the companies, all the LLCs and spend time accordingly.

Kapil Singla:

And of course I take on new opportunities as tech all the time. I connect people. We raise money for startups too. So, so yeah, just for me with the profit side, if a business is not pro producing me, it’s not cashing me or it’s not paying me. And I don’t know if a lot of people have heard about the Eddie, Wilson’s five faces of business. I love the concept, you know, I believe in it, follow it by heart. And I look at all, all the businesses and which phases they are having an operating system behind it.

David Richter:

So awesome. No, I love that because I love that you have a time that you go through and look at that, like, what are the returns on these businesses? Cuz those are the decisions that really matter, knowing those numbers and knowing is this worth my time or not, you know, like, am I wasting my time on this area of the business where it’s not producing anything, should I be over here? You know, like, or doing whatever it is that actually produces that because we know we have a finite it amount of time, we need to make sure that we are producing at the highest level for the things that are gonna produce the most value. Also what you said there, I highly endorse Eddie Wilson and the empire operating system. If you’ve heard of like EOS or if you’ve heard of some of these other ones too, like scaling up, it’s kind of a conglomeration of all those at the different stages of your business, you know, like from startup all the way to when you want to sell it or whatever that might be for you leaving a legacy and he clearly defines those stages.

David Richter:

So that’s what Capel follows. And it’s something that I highly recommend as well too. So that was, that was a great share for the people here as well. So getting down to just the last couple questions since you said, I, I know that right now, you weren’t married, don’t have children, but I want to ask since you brought it up, that if you want that in the future, what are the lessons around money and finances that you want to pass on to the next generation?

Kapil Singla:

So next gen definitely. My dad always gave me this goal of have a certain amount of money till I get married and I’ve surpassed that goal for him. And he said, no matter what, you know, at the end, if you look at the divorce ratio in America or any other country it all ends up being with, with the money side of it. It, it is honest, it’s, it’s, it’s a hurtful thing to say, but it is what it is, you know, you know, so keeping that in mind with the money side, I definitely wanna I don’t know if I’ll pass on if I’m wealthy, I don’t know if I’ll pass on that to my kids or not yet, but, but I, I wanna make sure I teach them about IRAs. I make sure I teach them about how to not think like a normal rat race guys how to have abundance mindset and how to be giving and making the value out of something. So I definitely wanna pass those things on for my personal goals. Before I get married, I wanna have a, have a kind of a nice house. May I don’t care if it’s paid off or not, but and I wanna have a portfolio that kind of pays me monthly, you know, make sure that’s profitable. And so, so those are some of my personal goals. And I honestly, at this point have not thought that what I’ll pass on and not

David Richter:

Awesome. Yeah. But still, those are great things in order to pass on the abundance mindset, making sure that that no matter if it’s your children or other people, because obviously at our age, we’re able to say, okay, there’s a, there’s gonna be entrepreneurs behind us, either taking over our businesses and like what they want, you know, like that next generation of people that might raise up there or whoever it might be. And these are all great concepts to be able to pass down. So this has been amazing. This episode here just char working for free at the beginning, getting that, you know, all the way now to where analyzing the different businesses and what’s the greatest return. So going from there to now, what you’re doing has been, I think that’s been very inspirational. It’s something that I think every, every single person on this podcast, no matter if you are doing at your first deal or you’re done a thousand deals, you can relate to what Kapil has said because you’ve, he’s got multiple businesses looking at those.

David Richter:

And he’s also been at the other side working for free until he learns. So there you go. This was incredible. So now let’s talk about how our listeners can provide value back to you. Appeal, which I know house folios is probably one of the biggest things right now that you’re working on, which let me give a little bit on that before you even do, because I’ll, I’ll tell, I’ll let them know that he walked me through this system and it’s strictly, I believe for analyzing deals. This is not a CRM. This is not a follow up generator. This is for analyzing the properties and it’s links to the MLS on like, and it’s incredible to be able to pull up comparables really quick to me when I saw it, I thought this is a way you could systematize your business, at least the front end of analyzing the deals. So I I’m, I know I’m stealing his thunder a little bit here, but this is where I wanted to, at least after he showed me, I was like, oh, wow, yes, this is something that looks like it’s helps you get that upfront. And I like the data that’s fed into it too, because there’s a lot of these systems out there that use the public data and all that. And it’s like just a very hit or miss type thing, but this is run from the MLS. So capo, how can they provide value back to you?

Kapil Singla:

So, well, first I love to pro you know, thinking with the tech side I got, I got in with Rob fuller because I fell in love with the software, as soon as I heard about it. I fell in love just because if I had that a year ago, I would’ve been probably the twice on the rental side of my growth than now. So, you know what we have focused, definitely we have spent a lot of time on the, an analytical tool of it. You know, a lot of people, no matter if they’re done 50 deals, a hundred deals, or if they haven’t done a deal software perfectly fits them. And a lot of people don’t know their numbers. You know, I, I stress on it. A lot of people know about cap rates. You know, they don’t don’t know about cash and cash return.

Kapil Singla:

They don’t know about internal rate of return. Those things matter a lot. You know we built a system, we built a platform for a beginner to a pro, no matter what stage of business they’re at the platforms has been built as an all in process from sourcing a deal through an MLS, analyzing it, underwriting it. You can also apply for lending from the software. We are gonna have few more partnerships here soon with the lending side of it. Then you can, you can make an offer to close and track every transaction. You can have a renovation, budget, budget, add receipts, and plus a huge plus is we also give people house FOLs power to websites on the selling side of it. So if they’re doing a turnkey side or if they’re flipping houses, if they wanna take that to a lender it’s kind of a, you know, a visiting card or a, or a executive website link. So we’ve made the platform in a way that they can compare, make comparables with what appraisal companies are looking for, make sure they feel confident in their purchase, all the numbers and everything comes up. You can analyze any deal anywhere in us in less than five minutes.

David Richter:

Yeah, that was what was powerful. I literally said, Hey, you know, we’ve got a 15 minute call here. Can you walk me through it? And he walk me through it in five and I’m like, I understand it. It was simple. So, you know, like if I could pick it up, I was like, okay, you know, I want to at least have you talk about, about it. So, and they want to look at this, where would they go? Where, how would they get to it

Kapil Singla:

So they can definitely reach out to me. My can I give my number on the podcast?

David Richter:

Yeah. Anything that you’re comfortable giving?

Kapil Singla:

Okay. My text messages and I don’t care, text me anytime. I’ll try to respond on the earliest convenience. 9 2 9- 4 1 3- 9 3 3 2. So I’ll repeat that again. 9 2 9- 4 1 3 -9 3 3 2. And of course you know, if you don’t find me, find me on Facebook, Instagram by Facebook is my name is a little it’s different handle on Facebook and Instagram. It’s K A P I L the last name’s single with an a on the end. So feel free to reach out to me anyway. And if you guys are interested in a demo of house FOLs, as I’m on the platform here, I’m gonna give everyone an opportunity that anyone who joins me through listening to the podcast, I will love to give them a 10% discount with a profit for lowercase code. So if anyone signs up through me or my team you know, feel free to use that code, then you’re, you know, using the Stripe payment and put Profit First lowercase and you’ll have a 10% discount. It’s a very minimal it’s a, it’s not a super expensive software. You priced it in a way that anyone

David Richter:

Can use it. Yeah. And that’s what I liked about it as well, too. It was powerful, incredible software at a very reasonable, very reasonable price. So just if you want to do that, look it up, see if it fits for your business, if it can fit into your systems and help you analyze deals faster. Or if this could be something that you could hire a VA to analyze your deals now, or something like that, take some of that off of your plate. If you’re a, so entrepreneur and going out there and doing that, or if you have a big team, and this could be another tool in the tool belt to analyze deals faster. So really excited about that. Excited about your journey. This has been incredible feel. Thank you so much for providing that value today about just the whole journey for the last two and a half years, we’re gonna have to have you back probably in like six to 12 months and just see what you’re doing there and what else has gone on, especially now that you’re using this and building your portfolio even more. So I just wanted to thank you so much for being on today.

Kapil Singla:

Thank you. Thank you so much for having me. It’s a pleasure.

David Richter:

Thank you so much for listening to today’s show. If you found this episode valuable, could you do me a quick favor? Could you give us an honest rating within iTunes and be honest, you could say whether you liked it or not. And obviously with iTunes, the more reviews and ratings we have, the better it is for other people that are searching for Profit First and a podcast. So we’d love to be ranked on there and that’s thanks to your help. So we would really appreciate that if you would like to go give us a rating. Also, if you’re looking to connect with us further, I would highly recommend checking out our Facebook group Profit First for Real Estate Investors. And that’s literally what it’s called. So you can type in Profit First for real estate investors, and you’ll be able to find <laugh>, you’ll be able to find our Facebook group right there.

David Richter:

So come join active real estate investors who are supporting each other and growing their businesses and profits together. That’s what that group is all about. The link should be in the description below. And if you’re interested in working with us in implementing Profit First in your real estate business, we offer coaching and guidance. So if you wanna work with someone who’s actually Profit First certified and who works right now, currently with real estate businesses, you can actually go start your application process by going to simpleCFO.com forward slash apply, or just go right to simpleCFO.com. And there’s an apply button right on there. If you wanna actually start your Profit First journey with someone who can actually walk you through those step by step and help, you know, and grow your cash flow. Thanks again for joining us for another episode of the Profit First REI podcast. See you next episode.

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Title: “Profit First Strategies with Jay Conner: The Power of Private Money”

 

Episode: 242


There are 15 reasons to love about borrowing private money over traditional money. One of them is making your own rules for your private money.

 

In this episode of Profit First for REI podcast, Jay Conner, a nationally renowned real estate investor and the king of private money. He talks about how private money works.

 

Jay helps you get your money from private lenders and will share with you the mindset that will get you money in the door without you ever having to worry about it. 

 

Listen and enjoy the show! 

 

Key Takeaways:

 

[01:01] Introducing Jay Conner

[05:00] Introduction to private money

[08:30] The Great News Phone Call

[11:23] Why don’t you use your own money?

[13:18] Maintaining relationships with private lenders

[15:40] Private money vs traditional money

[22:05] Things that make them want to recommend you

[25:18] Advice for real estate investors

[29:01] Connect with Jay Conner

 

Quotes:

 

[07:34] “If you are talking about private money and raising private money with an individual and you got a deal for them to fund, you already sounded desperate.”

 

[12:07] “If you want to scale your business, private money is the way to go.” 

 

[16:05] “In this world of private money, we make the rules. We set the interest rate, we sent the length and all of that.”



Connect with Jay:

 

Website: https://www.jayconner.com/book-details/ 

 

Tired of living deal to deal? 

If you are a real estate investor or business owner who is tired of living deal to deal and want to double your profits, head over here to book your no-obligation discovery call with me. Either myself or someone from my team will hop on a short call with you to get clear on your business goals, remove any obstacles holding you back, and map out a game plan to help you finally start keeping more of the money you work so hard to make. – David

 


Transcript:

Speaker 1 (00:00):

I got 15 reasons I love private money over traditional money. I won’t share all 15, but the biggest one is it puts you in the driver’s seat. The traditional way to borrow money is you go to the bank and get on your hands and knees and you’re begging and chasing. Well, they are making the rules right? Like the lender is making the rules. But in this world of private money, we make the rules, we set the interest rate, we set the length of the note and all that.

Speaker 2 (00:34):

If you’re a real estate investor who’s sick and tired of living deal to deal, then welcome home. Hear from everyday real estate investors just like you, and discover how they’ve completely transformed their business by taking a profit First approach. This is the profit first for REI podcast, where we believe revenue is vanity. Profit is sanity. It’s time to start making profit a habit in your business. So here’s your host, David Richter.

Speaker 3 (01:01):

We have Jay Connor back on the podcast. I love Jay Connor. He helps you get your money, the money from private lenders and that whole framework and process, but he does it from a passion and a place of heart. And servant Teachership. I feel like he goes out there and is a servant teacher of how private money works. Listen to this episode. He gives the magic question he tells about desperation and private lending, and I thought his perspective was so good, and then ultimately the mindset that will get you money in the door without you ever having to worry about it. So listen to this episode. Can’t wait for you to get value from it. Thank you for being a listener of the Profit First. RII podcast. Have a great episode. Hey, here’s the profit first RI podcast. Really excited to have Jay Connor back because he’s the came of private money. And this is where I love to go into this topic because I don’t care what kind of business you’re in, you probably need help with this, but especially if you’re in the real estate world, this comes up all the time at every event I’m at with every conversation I have. So we’re having the cane here talk about private money today. So Jay, thanks for being on the show.

Speaker 1 (02:07):

Hey David, thank you so much for having me come on here to talk about my most favorite topic. Of course, that being private money. And why is that? Because private money’s had a bigger impact on our real estate investing business than any other strategy that we’ve implemented in our business.

Speaker 3 (02:24):

Why did you go down that road though? I mean, you teach this all the time. You’re helping a ton of people, like anyone I’ve ever talked to that works with you is like he taught me how to do and I got money and it actually works. So I mean, how did you even go down that road where it made a difference on you and then you wanted to get it to others?

Speaker 1 (02:43):

Well, I actually backed into it. I didn’t do it on purpose. So here’s what happened. So my wife, Carol, joy and I, we’ve been investing in real estate, single family houses, other real estate full time here in eastern North Carolina since 2003. And here’s what happened. From 2003 until 2009, David, all I knew to do in my real estate investing business was rely on the local banks to fund my deals. I mean, all I knew to do was go to the bank, get on my hands and knees, put my hand underneath my chin, raise my skirt up so they could look at all my personal financial statements and stuff and actually beg to get my deals funded. That’s all I knew to do. And so I had a big wake up call in January of 2009 after being in this business here in Eastern North Carolina. I called up my banker.

(03:38):

I told him about these two deals I had under contract in Newport, these two single family houses. And David, I learned like that over the telephone that my line of credit had been shut down with no notice. My banker, his name was Steve, and the bank was bb and t at the time. I said, Steve, what in the world are you telling me? My line of credit is shut down. I got two deals under contract. You gave me no notice. Why is the bank closing my line of credit? He said, Jay, don’t. There’s a global financial crisis going on right now. I said, no, but now you just gave me a global financial crisis. Financial crisis, yeah, I ain’t got no way to fund my deals. And I got ’em under contract. So I hung up the phone and here’s what happened, David. I sat here and I asked myself a very important question.

(04:27):

And so I’m going to share this question with your audience right now. This question I’m going to share with you will help you solve any problem you’ve got. I don’t care if it’s business, financial, career, health, relationships. I don’t care what your problem is. By the way, David, these people going around and saying, any problem, you got some opportunity I want to throw up. I didn’t have no opportunity. I had a problem of not funding my deal. So here’s the question I asked myself. The question I asked myself was, Jay, who do you know that can help you with your problem? And when I asked myself that question, I immediately thought of my good friend Jeff, who lived in Greensboro, North Carolina at the time, and he was investing in real estate. And so I called him up and I told him what happened. And he said, well, Jay, welcome to the club.

(05:18):

I said, what club? He said, the club of the bank shutting you down and losing amount of credit. They shut me down last week. I said, well, how are you funding your deals, Jeff? He says, well, have you ever heard of private money? And I hadn’t. So Jeff told me about private money. He told me about self-directed IRAs and how people can use their retirement accounts and funds that they currently have and move them over to a self-directed IRA company and then loan that money out to us real estate investors, either tax deferred or tax free depending on the type of account they’ve got. Well, that just opened up my whole world. I’d never heard of that. And so what did I do? How did raise $2,150,000 in less than 90 days after being cut off from the bank? Well, here’s what I did, and here’s the secret sauce I put on my teacher hat.

(06:10):

So I put on my teacher cap, which is my private money teacher cap, and I just started teaching people in my own network what private money is, how they can earn high rates of returns safely and securely. And what’s interesting, Carol, joy and I, we got 47 private lenders right now. Not one of them had ever heard of private money and private lending. Not one of them had ever heard of self-directed IRA companies and what a third party custodian is. That’s important by the way, to establish a relationship with a self-directed IRA company because over half of my private lenders are using their retirement funds. And if I didn’t have that relationship to introduce them to move their retirement funds over, I’d be missing out on over half of my private money. So how did I go about raising all this money when I was cut off from the banks?

(07:02):

I led with a servant’s heart. I led with education. And here’s a really, really important point. I separated the activity. I separated the conversations of telling people what private money is and how they can earn high rates of return safely and securely and having a deal for them to fund. You see, desperation has got a smell to it. And when you talk about is that not true, David? Yeah, very true. So if you’re talking about private money and raising private money with an individual and you got a deal for them to fund, you’re already sounding desperate and you’re not even trying to sound desperate. So we don’t talk about deals and when we’re first exposing somebody to how they can earn high rates of return, we talk about private money. So how do we separate those conversations? Well, when someone has told me that they’ve got, let’s say they’ve got $150,000 they want to invest and get high rates of return conservatively, I’ll say, great, I’ll put your money to work for you just as soon as possible.

(08:11):

I don’t talk about a deal upfront. If they’ve got retirement funds that they want to get higher rates of return on, I’ll introduce ’em to the self-directed IRA company that I recommend. They’ll get their funds moved over. And so here’s what happens and here’s the magic sauce, David, I give ’em and I call ’em up with what I call the great news phone call. What in the world is the great news phone call? Well, the great news phone call is not a pitch. I’ve never pitched a deal in my life ever since I started raising private money in 2009. I pick up my handset with my cord attached to it here in North Carolina and I call some of your, don’t even know what that is. And let’s say, David, let’s say you’re one of my private lenders. So I’ll put my phone right up here and you’ll answer the phone and we’ll have a little chitchat and I’ll say, Dave, I got great news for you.

(09:06):

I can now put your money to work. I got a house in Newport with an after repaired value of $200,000. The funding requires 150. Closing is next Tuesday. You’ll need to have your funds wired to my real estate attorney next Monday. I’m going to have my real estate attorney email you the wiring instructions end of conversation. Notice I didn’t ask If you want to fund the deal, of course you want to fund the deal. You’ve been waiting for the phone call. I’ve told you the program. I’ve taught you the program, you know what kind of rate you get, what the maximum loan to value is, the program that I’ve taught you. And so now you’re waiting for the good news phone call, which I just gave you. And in addition to that, if you as my private lender, if you’ve moved your retirement funds over to a self-directed IRA company, you ain’t earning any money until I put your money to work.

(10:04):

You moved it at my recommendation. Now I’m ethically bound to put your money to work. You ain’t earning any money until you actually put her to work. So again, we separate conversations, we leave with a servant’s heart, we educate, and by the way, David, these people going around saying don’t just get the deal under contract. The money is show up. I want to throw up where is the money going to show up? Is it just going to rain out of clouds or something? No, get the money lined up and you can get it lined up fast. Just like me. There’s always going to be deals.

Speaker 3 (10:38):

Yeah. Oh man, that’s really good stuff. I love how you went down that road and it helped you personally. Now you’re just teaching a lot of people. I love that magic question. Who do you know that can help me with my problem? It’s that who, it’s not always the how. It’s the who did I know, and in that point it really helped you. I also run into a lot of times, I don’t know if you see this, where there’s someone who’s like, I could save a couple interest points if I just use my own money versus a private lender’s funds. What are your thoughts on that of always taking down your own deals versus going out there and putting the work into getting a private lender?

Speaker 1 (11:17):

Sure, I get that question all the time. They say, Jay, you making all that money? Why don’t you use your own money to invest in real estate? Why are you still borrowing private money? Well, here’s the answer. If you’re just going to do one deal, that’s a great use of your money. That’s a fantastic use of your money. But do you want to scale your business? I mean, right now we’ve got seven different projects going on, single family houses simultaneously. Well, I don’t want my money buried in seven houses or projects simultaneously, which here in our local market can easily be over 3 million with the prices of our homes. So if you want to scale and really, I mean most people have got a bottom of the bucket in their checkbook. So if you want to scale your business, then private money is the way to go. Another answer to that question is, do I want to pay myself 8% or do I want to use my money for something else,

Speaker 3 (12:22):

Right? Yep.

Speaker 1 (12:24):

So that’s a couple of answers to why I use private lending and why I’m still using 47 private lenders,

Speaker 3 (12:33):

Which is great. I love what you said. If you want to scale, it can run out of cash real quick. If you just keep using your own money where a lot of people have to choose between, okay, paying some percentage points or sleeping at night, and it’s like, I think I like your option a whole lot better, especially if you’re looking to grow. But I like how you said that one deal. That’s okay, but if you are looking to be a real estate investor, this is something you’re going to have to go down that road. Now, last time I asked you some questions about the private lending process. I don’t think I asked this one though, is how do you maintain a relationship with that many private lenders? You’ve got 47 people in your network that you call up with the good news call. So is it like how do you maintain a relationship with all those people?

Speaker 1 (13:22):

I mail ’em checks.

Speaker 3 (13:25):

I love that. That’s a great answer. Oh man. No better way to keep a relationship there.

Speaker 1 (13:33):

I mean, they love getting money in the mail, right? Yeah. They love mailbox money, so I mail ’em checks.

Speaker 3 (13:41):

So you mail ’em checks. So you’ve built a good enough business where you can keep 47 lenders busy and their money active.

Speaker 1 (13:50):

Well, to be totally transparent, I mean, it is a juggling act to tell you the truth. I mean, there’s more money than there is deals.

Speaker 3 (14:00):

Yep.

Speaker 1 (14:01):

There’s more money than there is deals. And so we got 47 private lenders. Some of them have got $30,000 with us, some of ’em have got a million dollars with us. I can’t buy a house for 30,000, but I can use 30,000 for rehab money. You can use private money, borrow private money in a junior position, you’ve got to disclose that. But I can put private money in a junior lien. But what comes into play there is what we call total loan to value. So I’m not going to be borrowing more than 75% of the after repaired value. I didn’t say the purchase price 75% of the after repaired value. But let’s say back to that example that we just talked about, David, where if I’ve got a after repaired value on a home of 200,000 for easy figuring, I can borrow up to 150,000. That’s 75% of the after repaired value. But if I buy it for a hundred thousand, which I do all the time, 50% of the after repaired value, I can have a private lender in first position at a hundred grand. I could have another private lender in second position at 50 grand. So add a hundred to the 50, now one 50 divided by 200,000 after repaired value, I got a total loan to value of still 75%.

Speaker 3 (15:27):

Yeah, I love that. And it seems like private money gives you flexibility and

Speaker 1 (15:32):

Options. Does that make sense?

Speaker 3 (15:34):

Yeah, that makes sense. A hundred percent.

Speaker 1 (15:37):

Oh, absolutely. Flexibility is where it’s all at. I got 15 reasons. I love private money over traditional money. I won’t share all 15, but the biggest one is it puts you in the driver’s seat. The traditional way to borrow money is you go to the bank and get on your hands and knees and you’re begging and chasing, well, they are making the rules, right? The lender is making the rules. But in this world of private money, we make the rules, we set the interest rate, we set the length of the node and all that.

Speaker 3 (16:14):

I love that. Flexibility is the ultimate play in real estate. You want to have flexibility and you want to be able to have that. So I love what you teach. Who is the person that you’re trying to teach out there? Is it the person that’s done one deal a thousand deals? Who are you trying to help the most with your business?

Speaker 1 (16:33):

Yeah, that’s interesting. At my live events, which is called the private money conference, and my live events, we have about 60% or so have already done deals. They’ve already done deals. They want to scale their business. They are real estate investors wanting to scale their business, and about 40% are looking to get their very first deal. So I’m helping everybody. I mean Stu and Harriet Baldwin from New York State, they enrolled and joined my mastermind membership community and they already had a portfolio of a hundred houses. They’d already raised over $2 million in private money, but they wanted to see how I went about it. Well, just one webinar that I recorded with them brought in 1.2 million in additional private private money. So I’ve worked with real estate investors that are brand new and those that are also seasoned to help them get more private money ready to go for their business.

Speaker 3 (17:33):

I love that. It sounds like a lot of people out there need private money, and even if you’re just getting started, if you don’t have the funds to do that first deal, like you mentioned, you do that first deal, that one deal at a time, it might be okay, but this sounds like a great spot where if you’re getting into it or if you’ve got lots of stuff going on, this could be another way to make sure your company can keep running without what you ran into with the banks back in 2007, eight or oh nine. Would you say that’s true as well?

Speaker 1 (18:04):

Absolutely. Absolutely. I mean, I’ve met very, very few people. In fact, I can’t even think of one. I haven’t met any real estate investor that says, I got enough money.

Speaker 3 (18:20):

Yeah, me either.

Speaker 1 (18:22):

I can’t use any more private money. However, David, you are looking at one right now. I got about almost $2 million right now, what I call sitting on the shelf waiting to be deployed. And I tell you what, I’ve had new private lenders come into my world that want to invest and just to prove to them that I can perform. I’ll take the new private lender’s money and pay off a current private lender, refinance the deal so I can get their money to work for ’em, right?

Speaker 3 (18:53):

Ah, yep, that makes sense. I like that. As you grow and scale, you might run into that issue and you make one lender a little bit happy. I mean, at least they’re getting paid off, but then they probably come back to you and say, I want you to put my money to work again. Do you have that come up a lot?

Speaker 1 (19:12):

Quite frankly, when I pay ’em off, they’re not happy.

Speaker 3 (19:17):

That’s why I said just a little happy, maybe a little bit.

Speaker 1 (19:20):

But when I pay ’em off, they’re not making any money on that money. In fact, with a new private lender, I’ll get ready to pay ’em off cashing out on a deal and I’ll call ’em up and say, Hey, just want you to know that you’re going to have a check coming in the mail from a real estate attorney’s trust account. We’re paying off this house. And they’ll say, Jay, can’t you just keep the money? And I’ll go, no, I can’t keep the money unless I’ve got your money secured by a property because we do not borrow unsecured funds. Now, here’s maybe a little advanced strategy for some folks, but I do substitutions of collateral or loan modifications all the time. If it’s a small amount of money that a private lender’s invested 30, 40, $50,000, and we use it for rehabbing a property. So when I’ve got another property I’m getting ready to start on, I’ll substitute the collateral and keep that 30 or $50,000 note in play. So they keep earning money on that money, but we will substitute the collateral just to a different project that we’re moving to.

Speaker 3 (20:25):

That’s awesome. So then sounds like you have a good problem. It’s like, I want that. Well, I think a lot of real estate investors would rather the problem, I have too much money versus I’ve got these deals and I can’t fund them. So I really like how you teach people that and where it could snowball into this, where it’s like, I’ve got 47 private lenders, I’ve got to go out there and get the deals for ’em. Absolutely. And I really like that. And

Speaker 1 (20:50):

For goodness sakes, you don’t start out with 47 private lenders. I started out with one, right? I started out with one and then that quickly became two and three and four and five because private lenders tell other people what’s going on. So I haven’t actively attracted private money for years because our current private lenders just keep sending us people. In fact, day before yesterday, day before yesterday, I got a phone call from the mother of a good friend of mine, his name’s Craig, lives in Newburg, North Carolina. Craig had told his mother about this investment thing that I got going on and she had never heard of it, which is really funny. I’ve been doing it now private money since 2009. So she calls me up and she says, Hey, my son’s been telling me about this investment thing you got going on. Tell me about it. So word of mouth gets around very, very quickly when you start doing business with private lenders the way I do.

Speaker 3 (21:53):

Yeah, I like that a lot. So in order to get people to talk like that, what are the biggest things that you do for your current private lenders that makes them want to recommend you?

Speaker 1 (22:07):

Well pay ’em on time.

Speaker 3 (22:08):

There you go. That’s a big one. Sounds like that would be a really great place to start.

Speaker 1 (22:12):

Pay ’em on time. But I also have three times a year I put on a party for our private lenders at the Dunes Club. So we have three times a year a VIP reception over at the Dunes Club on the beach, and it’s just an evening of private lenders getting together and we have a good old time and I feed them and give them all the soft shell crabs they want, and I tell ’em to bring their friends with them.

Speaker 3 (22:42):

Yeah, that’s awesome. So number one though, that anyone can do at any stage is pay people on time. So actually pay, would you say, what about communication? I hear that come up sometimes too. How do you do a good job on the communication with your private lenders as well?

Speaker 1 (23:03):

Well, it must be good enough. They never go away,

Speaker 3 (23:06):

Right? Yeah, that’s the big things I hear.

Speaker 1 (23:10):

Here’s one thing I have not delegated as far as communication. I personally, I mean my relationships with my private lenders are very, very important. So I personally pick up the phone, pick up the phone, and call my private lenders when I have got a deal for them to fund. I do not delegate that out. I could

(23:37):

Delegate that out, but I don’t, when I got a deal for them to fund, I’m the person on the phone keeping that relationship When I’m getting ready to pay them off. I don’t have a check just show up in the mail. Of course they got to sign a payoff instruction letter if a different closing agent is closing it for a buyer. But before any of that happens, I personally call ’em up and I tell ’em that we’ve got that property sold. We’re getting ready to pay you off. Or I’ll call ’em up and I’ll say, Hey, we’re getting ready to pay this property off, but I will keep your note open so you can keep earning money. I’m just going to substitute the collateral. We got some documents we’re going to email to you for you to sign and send back the communication. I’m personally involved in putting their money to work and letting them know when we’re cashing out and where they are on the deal.

Speaker 3 (24:31):

That’s awesome. Then since it’s the profit first I podcast here, I love this concept of the private money because you need your cash in your accounts. So to be able to run your business, do those things, and then setting up a separate account just for your private money lenders, so it makes it easier to do what Jay just told you to pay them back, to pay them back on time to be in good communication with them. So now this has been really good. Do you have any other advice before I ask you? How could they work with you? How can they get in touch with, because I know this is something that is needed desperately, that I send people your way all the time. I know I trust you to help people, but any other last minute advice here that you would give to the real estate investors listening to the podcast?

Speaker 1 (25:18):

Sure. I appreciate you asking that question. It’s going to be very hard to own a lot of real estate

(25:26):

Until you own the real estate between your ears. So what do I mean by that? People ask me, how do I start? How do I start raising money? I can tell you how you start raising private money. You get your heart right, you get your mindset right. So what do I mean by that? Well, what do you do? You lead with a servant’s heart, you lead with education, you put your private lender money hat on, you private lender, teacher hat on, and you leave with education, don’t pitch deals, and you really, really are concerned about the other person and realize, part of this mindset is realize you’ve got an opportunity to change people’s lives, right?

Speaker 3 (26:11):

That’s so good.

Speaker 1 (26:13):

We’ve got countless people that are particularly in their retirement years, that have thanked me and Carol Joy for making a difference in their retirement years to where they can, I mean, they don’t want to touch their principal. They want to live off of their principal investment. So they’ve been able to travel, go see grandkids, do all this stuff that they couldn’t do otherwise until they got involved in our program. So just know that you’ve got a way to really make an impact on other people’s lives. And lemme tell you another part of mindset. It ain’t about reaping. It’s not about reaping. It’s all about sowing. It’s all about sowing. I can’t be reaping all that private money and deals until I have sown and given and led with value first. So how you sow is how you’re going to reap.

Speaker 3 (27:08):

Yeah. Oh man, this is so good. I’m glad I asked that question because I hear the passion in your voice and I hear that you really care about the people you work with, the people that have private money lenders out there, you care about that relationship. I love what you said. Get your heart right, get your head right. I also think, like you said too, that if they don’t have that desperation has a smell. So if you’re out there, you’re desperate and you’re just going out there, then you won’t have people like you have that want to keep coming back, that want to continuously invest in you. So that was, I think, the best advice that you could give right there. Get it between your ears and get your heart right. I absolutely love that. And just to recap too, I love your magic question.

(27:55):

Who do you know that can help me with my problem? Then one day you’re going to wake up and you’re going to be like Jay, and you’re going to be helping other people with their problem. I’ve got money. I want to put it somewhere, and you’re the able to get them to where they can be. Desperation has a smell. I love that. And then honestly, I love that pivot. You are like, it’s not about the reaping, it’s not about the interest that I’m making or the profit I’m making for the deal. It’s more about sowing those seeds and ultimately you’re changing lives. That’s why you get private money, and it’s like that interest that you’re paying them is twofold. It’s like you get to sleep at night, you’re not using all your money and you’re getting to help someone else get a return that they wouldn’t be able to get anywhere else or in someone that they trust as well too, and that’s a little bit more tangible than the stock markets or all this other Bitcoin, some of that stuff that’s floating around out there. So this has been awesome. So how do people then, Jay, take that next step with you? Do you have a book? You talked about an event. What can people do?

Speaker 1 (29:01):

Absolutely. Well for your audience, David, I’ve got two gifts. First of all, I finished writing my book Where to Get the Money. Now, this is not a ebook. This is a book book that we actually send in the mail Autographic where to get the money. Now the subtitle is How and Where to Get Money for Your Real Estate Deals Without Relying on Hard Money Lenders or Traditional Lenders. It’ll walk you through step by step how to get all the private money you would want. Very, very easy to read. It’s $20 on Amazon, but you can get it for free. Being David’s audience, just cover shipping. You can go to www dot j Connor, J-A-Y-C-O-N-N-E r.com/book. So I’m an er, not an or. So that’s j Connor, J-A-Y-C-O-N-N-E r.com/book, and we’ll three day priority mail it out to you. Now, in addition to that, I’ve got an upcoming $3,000 per ticket live event right around the corner. But for your audience, Dave, I’m going to let everybody come for free with a measly $97 registration fee. This private money event. You can check it out at www.theprivatemoneyconference.com. The private money conference.com. That’s coming up right around the corner in June. Get on over there. Registrations are open, and I’d love to meet you in person at the private money conference.com.

Speaker 3 (30:31):

Awesome. I’m excited about that too. I love what you’re doing and you’re solving a big need that we hear all the time. Just like all people always needing to sharpen their acts when it comes to private money, you graciously have also invited me there to speak about Profit First. So I’m excited to get to tell people about that so they can get more private money and be more confident and not be desperate when they go and ask for people. So I’m really excited about that as well. So make sure we’re going to put those links there, but make sure either get his book or go to that event. I cannot endorse Jay Moore because I know how many people he helps, but then he also has the heart. You heard it right here. That’s how he wants to help you too. It’s very much a heart and a mission and a passion for him.

(31:13):

So Jay, thank you for coming on, for sharing your wisdom, your knowledge today. If you are listening to this episode and you feel stuck like, what the heck is going on? Where is my money? I don’t know what to do. I’m a little bit nervous to go out there and get private money. I can’t keep my own house in order. That’s where you could go to simple cfo.com where we can help you walk you through that process. We’ll link you up to Jay too. If you need private money or need to learn about private money, this is who we recommend. I recommend Jay to many people, so make sure that if you need that help you go to simple cfo.com. But Jay, again, thank you for being on the show and sharing your wisdom here today.

Speaker 1 (31:51):

David, thank you so much for having me. God bless you.

Speaker 2 (31:54):

This episode of the Profit First for REI podcast is over, but there are plenty more where that came from. Are you ready to learn how David and his team can help implement the Profit First system in your business? Schedule a discovery call@simplecfo.com right now. We’ll see you next time on The Profit First for REI podcast with David Richter.

 

 





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