Leadership, Team Performance, and Trauma Freedom with Annie Yatch

September 12, 2023

Title: “Leadership, Team Performance, and Trauma Freedom with Annie Yatch”

Episode: 197

Want to know more about Profit First and how it works best for business owners and becoming better leaders?

Listen to this Profit First for REI podcast episode as we interview Annie Yatch. She has been an entrepreneur for 15 years but originally started working in the Defense Intelligence Agency.

Annie talks about trauma, trauma freedom, and how it affects potential leaders in the real estate industry!

Enjoy the show!

Key Takeaways:

[00:54] Introducing Annie Yatch

[04:07] What is trauma?

[06:08] Trauma and your calling

[12:41] Good saver, bad spender

[16:54] Where did Annie get knowledge about people’s behavior?

[22:50] Three big gaps in companies

[27:17] Profit First and role in trauma freedom

[31:12] Connect with Annie Yatch

Quotes:

[04:06] “Trauma has to do with any time in your life that there is a perceived lack of control.”

[06:08] “If you figure out what your trauma is, you figure out what your calling is as well.”

[19:38] “Every problem that you experience in business is a behavior problem… a behavior you have to start, a behavior you have to stop, or a behavior you have to modify.”

Connect with Annie:

Website: https://reisalestools.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:

Speaker 1 (00:00):

That’s also why we have Profit First, right? Because I can tell you from my own experience, everything changed for me in business when I started using Profit First. So anyone who is listening, obviously you love David because he’s written this incredible book and because he has so much wealth of knowledge, but if you get this aspect of your finances figured out, everything in life gets easier, everything.

Speaker 2 (00:22):

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 R e I 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 (00:50):

This is by far, I believe my favorite episode of the podcast. I have Annie Yatch on today, and you will learn real things that will help you in your personal life, in your business life, but then also just the psychological effect honestly of Profit First and just some of the things to work through as a business owner and becoming a better leader. I’m super excited for you to listen to this. I’m inviting her back to be on again in just a few weeks. I want you to get as much as you can from Annie because she’s incredible. Listen to this episode. It is going to help you immensely. Thank you for listening. Hey everyone, it’s David Richter here. I’m here with Annie Yatch. I’m super excited about this. We have gone back and forth, I tell you so many times of trying to get that time nailed down. I’ve rescheduled. It’s been nuts. So I’m glad to have her here because I believe she’s going to talk about some of these that’s really going to help you today and on a deep level. So Annie, thank you so much for being a guest on the show.

Speaker 1 (01:45):

Oh, you’re so welcome. I’m glad we got this to happen. This is going to be a lot of fun,

Speaker 3 (01:49):

Right? I mean, you’re a wealth of knowledge leadership, team performance, and one of the things we’re going to talk about, trauma freedom, even saying those words together, it’s like, okay, what does that mean? But it’s also of like, okay, right. But it’s also exciting to me. I think so many people when it comes to their money have trauma around it and it’s emotional and it’s very personal. So we’ll definitely dive into that. But why don’t you give people just a quick background of who you’re, so they could get up to speed and then we could just dive right into it.

Speaker 1 (02:18):

Sure. Well, I mean, I’ve been an entrepreneur now, as crazy as it sounds for about 15 years. But I originally started working in the Defense Intelligence Agency after going to school for counter-terrorism and international security. So quite a far place from where I started off. But what I love about what I do now is about, I would say probably seven years ago, I started to identify that every single entrepreneur that I was running up against, they had all these really incredible teams and they’re trying to build their teams and they’re trying to build more money, more revenue. But what was stopping all of them was the fact that there was something unresolved that was traumatic in their childhoods between age five, typically in age 15. And what crazy about it was you could give a team all these great success principles. You could train them in sales, you could make sure that the team is performing high, but then if the c e O or the entrepreneur jumps back in to disrupt the process, which they always do, if they have unresolved trauma, they will never hit those levels of revenue or success or fulfillment that they’re looking for.

(03:18):

So I got very passionate as an entrepreneur. I’ve seen myself and my partner do this in the past. I was like, how do we make it so these entrepreneurs that are contributing so much to the world don’t end up thwarting their own progress or their team’s progress because of some unresolved and unknown traumatic experience that’s causing more harm than good in their subconscious thought?

Speaker 3 (03:38):

Okay, first thing that comes to mind is this psychology, like a psychiatrist or psychiatry or where does this fall under? I mean, you start talking about kids and when we were back then, and I’m sure that’s the immediate thing that most people think is like, okay, is this that?

Speaker 1 (03:56):

Yeah. Well, most people think, oh, it must be something really intense. Maybe there was a sexual assault or there was a death in the family, or maybe there was something else really intense that occurred. But really trauma has to do with any time in your life that there is a perceived lack of control. So I want to say that one more time. It’s just when there’s a perceived lack of control, it doesn’t mean that something horrifically awful happened, it’s just that you as a child perceived that you didn’t have control in a given experience and you ended up making up a story that you believed was true. And then you play that story out for the next 20, 30 years of your life, whether it’s true or it isn’t. And most times the story we make up as a five-year-old, seven-year-old is not based on reality. It’s just the best that we can do with the information we have. So when a lot of entrepreneurs come to me and they’re like, well, I don’t think I have any trauma. I had a really good childhood, I grew up really well. I always go back to those moments of perceived loss of control because that is the end to figuring out what their subconscious is doing that they’re not aware of.

Speaker 3 (04:54):

Wow. So then that lack of control, that trauma. So this is something, would you say that a hundred percent of people go through at least one point in their lifetime?

Speaker 1 (05:03):

Yes. I mean, you wouldn’t be a human being on earth if you hadn’t gone through some level of little, medium or big trauma in your lifetime. That defines our character, it defines our calling. Even if you choose to go deeper into your trauma learning,

Speaker 3 (05:14):

That makes sense because it can, your trauma for a lot of people have sprained a lot of good things to be able to say, we want to help. Now, this is not, you become Batman and you put on a bat suit and you go out there and fight crime because you want to go and write all the injustices. But I do like this. This is so great. I feel like so many people stop themselves from becoming who the person they were born to be. And it’s a lot of this and it’s like hitting the nail on the head. It’s almost the stuff that we already know subconsciously, but you’re speaking the words. I don’t know if you’ve ever heard that from the people you’re working with.

Speaker 1 (05:50):

I’ve heard it a couple of times, but I think that we’re all, as entrepreneurs, we’re all seeking our calling, right? Because want to create impact in this world. And what I’ve realized from working with probably, gosh, at this point, probably tens of thousands of people to resolve these issues, these traumas that show up, I’ve learned that if you figure out what your trauma is, you figure out what your calling is as well. And so for a lot of people in the real estate space, real estate is the tool to create the life that they want. But there’s a deeper and greater calling for almost everybody in this space. And what’s interesting is so many people in the real estate space have similar trauma patterns, and if they can resolve those, then they end up edging out all the competition. Which is why I think I’ve loved working the real estate space because everybody has, I people make decisions quickly. They take action quickly as long as they know what it is. And that’s really the key. How do we figure out what your subconscious has been hiding from you for the last 20, 30 years of your life so that it doesn’t limit you getting to that penthouse of everything you want?

Speaker 3 (06:51):

That is so interesting. So then since you have me here and for the entrepreneur that’s listening, I’m wondering if we could just do a little mini exercise. I think with what I’m doing today, I can a hundred percent resonate with that. It was the lack of control of money at some point in my life to be able to say, okay, we have to get control of it and know where it’s going and being able to predict a lot better. But I think mine was based probably insecurity, the fear of that loss of, okay, I can’t provide or something like that. And so that’s where it’s like, I want to help people with this, and I do. I feel like this is the calling that I’ve been put on this earth to do, but I can definitely, there’s lot. I would say for me personally, it was lots of trauma even though I had good parents, and it’s not like we were hurting for money.

(07:41):

There was just a lot of middle class mindset and going from that to being business owner where it was like blue collar, you just work a good job and kind of stretching the brain and be like, what the heck is this? I’ve never heard of anything like this before and I can take control where versus maybe I felt a lot of out of control back then. And then you get married and then you’re depending on another person and where’s their trauma coming into play and how are they just the whole money thing? I even write about that in the book. So yeah, I’m sure we could park there for a while too. And I won’t take, this is interviewing you, but I want to make sure that this is valuable to people.

Speaker 1 (08:18):

Well, I think everything you just said is dead on accurate because for any of us who have had money issues as children or who have lived with a single parent or who have felt like there wasn’t ever enough or that they couldn’t control their own money, they’re always going to have some money story that they create in their mind and it’s going to take them some time, energy, and effort to work their way out of it. Now, not everybody like you stepped into your calling so quickly sometimes it’s very confusing and people take a long time to figure it out. But for you, I think you really stepped into that pretty beautifully pretty quickly in your career, at least from what I know of you in comparison to many others out there. But I think when you add on, okay, I’ve got a business that I’m running, I’ve got a relationship that I’m in, I’ve got a family that I’m building, all of that compiles and it forces us sometimes into more of our subconscious thought because our subconscious thought runs 97% of our brain.

(09:10):

So this means that all the stuff that’s in that subconscious, it’s usually about 11 million data points a second. All of that is based on trauma that happened when we were a kid. So that’s the thing that’s so interesting. You might be taking action based on something that happened to you when you were five or six and you might not even be aware that you’re doing it. So this is where your relationships, and I’m glad you brought that up. In relationships, most times we attract a partner that has either a trauma that is similar to ours because we want to heal that trauma together, or we attract a partner with a trauma that’s the exact opposite of ours because we think that we’re going to heal through that. And a lot of that comes from what we experienced with our parents. So I’m just going to give you a real life example here.

(09:56):

When I was a little kid, my mom, she was a great mom. My dad was a great dad, but my mom lost her mom when she was 15. And so she grew up, and it wasn’t that she was neglectful, she had three kids and a dog under the age of five. There’s just a lot to do. But I ended up taking care of my sisters a lot and with my dad, my dad, he was a little bit less, I would say, comfortable with the feminine energy because there’s feminine energy, there’s masculine energy. And so I grew up believing that I would be somewhat neglected because we had so much going on in the family all the time that I probably didn’t get all the attention that I wanted. And I also believe that the feminine side of me was too much. And so I chose someone to be in relationship with who had the same exact dynamic. He was afraid of the feminine, and he was a little bit neglectful. And so you end up seeing how things from your parents that you’re not even aware you’re agreeing with or colluding with or taking from them, become part of your personality, part of that trauma story. And they limit you in your relationships and even in your business life. So everything is linked, even though most people are like, well, how is this linked back to business? How do you find these patterns? But I can see them because I’ve been doing this for so long.

Speaker 3 (11:07):

Oh yeah. Well, here’s a real life story for you. Whenever we get into, I feel like this business was created honestly the most to help me. I created this fractional C F O business. I needed other good people in my life to tell me am I thinking right or wrong when it comes to money and what the heck is going on here? And I have found myself making a lot of decisions out of fear in the past about money of okay. And whenever I do, I know it’s the wrong decision, and then it always comes back to bite me. So I love what you said there that the entrepreneurs stop by their trauma from getting to where they want to be or need to be. And I’ve seen that a lot in my own personal journey, and that’s where I’m like, yeah, this is created for me because I had a lot of money stuff just in my life and in my head, and it would conflict with my wife of because I thought I was better because I was the saver and she’s the spender.

(11:59):

If you had boiled it down to that and I had to work through that, that was a long process. I write about that in the book too, of I open up and be like, here we go. This is what I was thinking. And it’s like all this stuff was, it was not a true story. I love what you said there. The stories I was telling myself weren’t true. It’s like, ah, shoot. I’ve literally had this lens on this whole time and I just needed to take ’em off and they were scratched up. It just wasn’t the right thing that I should have been. It wasn’t the

Speaker 1 (12:27):

Right filter, right? It wasn’t the right filter, right? Yes. And it was like, oh my

Speaker 3 (12:31):

Gosh,

Speaker 1 (12:33):

You can save so many marriages and relationships just from what you wrote in the book about how you thought being a saver was great, and you thought maybe being a spender was bad, but it’s really not about good or bad. It’s about what are the stories that we have that tell us that being a spender is bad, being a saver is good. How do we unravel those that it’s not good or bad, we just have to change the communication around it and what we believe about ourselves. So it can never be condescending. It’s just like, well, we’ve had this story that we’ve been telling ourselves that I’m a great saver and she’s a port or she’s a bad spender, so do we want to change that story so we can have more harmony or do we want to stay in the old story or the old lie? That’s a big question. I always bring that up because I’m like, what do we want to be true? We have to ask yourself that question. What do we want to be true? And then we have to live into that answer, not into the lie that might be thorning us.

Speaker 3 (13:22):

I’m writing that down because I love stuff like this. What do I want to be true?

Speaker 1 (13:28):

What do I want to be true? That is literally the most important thing that anyone could get from this podcast. If they listen and they ask themselves that question because you’re going to get stuck. You’re going to get stuck, and you’re going to be like, well, this is what I’m thinking is going on, and what you’re thinking is going on. It’s a lie if you’re suffering. So most people will say to me, well, how do I know if I’m in a lie or if I’m in my truth, how do I know if I’m moving down the right path? And I’m like, well, if you’re suffering, then you’re living in one aspect of a lie. If you’re living in your truth, what is true for you? Then life feels easy. It feels liked. And so that’s where you really have to be clear on the language you’re using, the thoughts that you have to figure out if I’m in suffering or if I’m in the light.

Speaker 3 (14:08):

Yeah, no, that’s so good because I’ve seen that around, we started using that a little bit ago just because we saw someone else post. I’m like, I really like that. Where they would as a husband wife, sometimes say, preface, this is the story I’m telling myself. And it’s like, ah, that’s such a great framework to be able to say something like you’re telling the other person, this is not necessarily true, but this is what I’m telling myself. Can you correct? And you’re almost open to correction from the very first sentence. And I’m like, oh,

Speaker 1 (14:38):

You’re oh man, as

Speaker 3 (14:38):

Defensive, right? You’re not as defensive and

Speaker 1 (14:41):

You’re asking them to tell you whether it’s true or not so that you can learn and discover from them what they think is true. So it’s all a discovery process. It’s all about being curious with each other to figure out what are these stories that we’re telling ourselves? And then the other person gets to confirm or deny, and that gets you closer. It gets you more connected because suddenly now you have more intelligence on the other person and you have more ability to feel what they’re feeling,

Speaker 3 (15:05):

Right? I feel like a great book, crucial Conversations help me to do that because it likes master Your stories just gave a great framework for asking some of these questions. So I highly recommend that book. Do you recommend that book to people?

Speaker 1 (15:19):

Yep. I think that’s a great book. There are so many good books out there. I tell you, for any person that’s wondering what lies might I be telling myself? What do I think is true? What do I think is not, it’s really helpful. If you can read the book Letting Go, that’s a great one. I think it’s by Ian Hawkins. And then for men who are just questioning themselves in general, I think another fantastic book is way of the Superior Man. So most of the men that I coach in entrepreneurship, they all come to me because they’ve made a lot of money in their businesses, but their relationship might not be what it needs to be. It might be not great on communication. They might not be getting enough sex, they might not be feeling enough intimacy. They might not have that connection level that they want. And the very first book is I’m like, okay, where are the superior man? And I want you to identify what are these things are you not able to do naturally? And let’s talk about why, because those always link back to the lie that they’ve been telling themselves about how they get to show up in this world.

Speaker 3 (16:14):

Man, I love this. This is so good because I’ve only said this a couple times about guests and like, well, this might be the second time where we’re talking about the real stuff. This is the stuff where this is almost like the roots of the tree. You got to take care of the roots, and some of you have broken roots or just tangled up roots, or you have no idea and the tree’s not able to grow, and it’s like this is where she’s helping you do that. I have a question, just personal for me, and it’s my podcast, so here we go. Where did you learn all this? Was this through the past, all the different stuff that you’ve done before? How did you get to where you are today with this knowledge?

Speaker 1 (16:54):

Well, it was actually a very unique process. I think that’s why it’s part of my calling. I went to school for International Law and Counter-Terrorism, right? Yeah. So I went to school and I studied and mentored with people to observe other people’s behavior. And what I didn’t realize was I was obsessed with behavior change. I wanted to figure out how do you change someone’s behavior? Because the biggest problem I saw in business is that almost every problem in business goes back to a behavior that needs to start, stop, or be modified. And if you look through the lens of business as that, then you need to become literally the best behavior change consultant you can because if you can change the behavior of people on your team, then you can grow. So I started getting really into behavior change in neuroscience and things like that.

(17:39):

But to be honest with you, my ex-husband who is a Navy seal, he had a lot of issues with P T S D and other things like that. And so for 15 years I championed taking him from therapist to counselor to healer, anybody I could find to try to help him to get back to who he was. Because when you’re in the SEAL training, it really disassociates you. And so that was my mission for 15 years. So I went and saw every counselor, every therapist, every psychologist, every shrink, everything you can imagine with him and helped him through this process until he could be healed and be a little bit more whole. So when you go in that process, you identify, here’s some things that really work well, here are things that don’t work at all, and you try to almost fit it like a puzzle piece into what things work together well to get people out of their own, excuse my language, but out of their own way, right, out of their own way as quickly as possible.

(18:29):

And I found that therapy and things like that, it takes a long time. And we as entrepreneurs, we don’t have a long time. We have to be as short as sweet as possible to get to the root of the cause so we can change the behavior and make life better. So because I was so obsessed with behavior change and then I was so obsessed with saving my former partner’s life as best I could so that we could have a beautiful family together, that was what led the charge, and that’s what allowed me to take all these different puzzle pieces and put them together into a methodology that gives you basically an hour of therapy or it gives you 30 years of therapy in one hour. So I just like this to be super effective and efficient.

Speaker 3 (19:04):

Yeah, no kidding. That’s quite an effort. Nobody

Speaker 1 (19:07):

Needs to go through 15 years, right?

Speaker 3 (19:10):

Someone No, I’ve heard multiple people that are my friends that have gone through that and have just come out on the other side saying, this is the most life-changing thing I’ve ever been through. So you have testimonial after testimonials. So I want you to say that statement again though, because it was so good. You said, every problem in business is a behavior problem, and here’s the three things. Start, stop, or say that one more time. I just thought that was so powerful.

Speaker 1 (19:37):

Yes. Every problem that you experience in business is a behavior problem. So it’s either a behavior you have to start, a behavior you have to stop or a behavior you have to modify, modify. So this goes back to those six pillars of leadership that my former partner and I wrote a whole book on, and this is something that I think if you think about business with regards to behavior and behavior change, it makes the management of people that much easier because I think all of us, you always hear people say, God, I don’t want to manage a big team. I don’t want to manage all these people because they think it’s almost like a necessary evil to manage the people. But if you can be super curious about these behaviors and you just watch the behaviors, especially in your culture, because a culture is just the observable behaviors of your team. So if you can watch that and learn how to be the best behavior change consultant you can literally, there’s no limit to the growth that you’re able to experience.

Speaker 3 (20:33):

So okay, there’s just gold left. And so culture is the observable behavior of the team, which is so good because everyone and their mother talks about culture, but that’s boiling it down to the this is what the actual culture is, it’s the behavior of the team and how they’re actually behaving and are they doing the things that embody what you say you want to be and what you think your truth is and what you think the truth. Yeah. Okay. This is so good, Annie. I’m so glad you’re here. This is som so glad

Speaker 1 (21:02):

I’m here too.

Speaker 3 (21:03):

This is so fun, man. Thank you for inviting. Were you saying something you

Speaker 1 (21:07):

Said? Oh, I was just going to say there’s another thing that I think you’re going to find as pure gold too. So one of the things I’ve noticed, because I’ve worked with companies, gosh, from about a million upwards of 1.2 billion over the last 15 years, and what I’ve seen is that there are usually three big gaps in every single company, no matter the size. So before

Speaker 3 (21:25):

You get into the gap, yes. Yeah, I want you to go through that, but you said you guys wrote a book, give that book because if someone’s like, oh, she’s mentioned that they have a book, what’s their book?

Speaker 1 (21:34):

So it’s called How Leadership Actually Works, and it’s by my former business partner Larry Yatch, and he and I wrote it together over the past, gosh, from Learnings over the past 15 years. So it goes into the six pillars of leadership and how you can take your team from a lower functioning team to a higher functioning team just by focusing on these six pillars.

Speaker 3 (21:55):

And it’s a great book. I’ve read it, it’s amazing. Pick it up. Is it on Amazon? So

Speaker 1 (22:00):

People, it’s on Amazon and there’s actually a workbook attached to it, and the workbook is phenomenal. So if you get that, it just makes everything so much easier. The book is very dense, it’s got a lot of practical exercises in that workbook.

Speaker 3 (22:10):

If you’re going to lead anyone, I mean if you’re going to lead at home, I don’t care where you are, you lead someone, pick up that book, it will serve you. If this episode has helped you, please for the love of God, get into their mind. That’s what a book is, she said 30 years in one hour. That’s the super efficient course. If you want the one that’s a little less intense, pick up the book. That’s a little bit less intense with that. So that’s where it’s like, get the book, get Inside her mind. But Annie, keep going. I stopped you, but I wanted to at least make sure that you mentioned the book that you’ve got that out there too. You’re

Speaker 1 (22:42):

So wonderful. Well, I just want everyone to know because we’re all entrepreneurs and we’re always like, well, what are these big gaps and how do we fill? So what we identified was that there are really three big gaps in all companies. The first gap is a delegation gap. So almost everyone on every team, there isn’t a system or a process for how to delegate. And we found that if you teach people a system or process on how to delegate, and we took ours from the SEAL teams and we revolutionized it, basically backwards engineered it. If you have a process for that, then everybody holds themselves to a higher level when they hand off projects or when they accept projects. So that’s a big gap that gets to be filled. The second gap is this gap around feedback. All been trying to give or receive feedback, and it always makes us feel defensive.

(23:25):

I know that. And normally when you’re giving someone feedback, they’ve done something wrong and you’re trying to change their behavior. Again, if you do that in a way that’s connecting, they change their behavior and they want to be a part of everything you’re doing moving forward. If you give feedback in a way that’s disconnecting or makes someone defensive, you lost productivity in them for the next three to five days because they’re stuck in their brains around what it was you said. So feedback, that’s the second biggest gap. And then the third gap is around planning. So most organizations do not plan effectively. They plan for the perfect plan, and when that doesn’t work, they waste a lot of time trying to figure out, well, what should we have planned for? Or what are these contingencies plans that we hadn’t thought of before? So there’s a whole process to planning that we distilled from the SEAL teams like, well, if it works for the SEAL teams and they’re the highest functioning in the world, how do we bring this to more companies to save them time, energy, and effort? So that’s where that comes from. But those are the three ones I thought everyone should know.

Speaker 3 (24:21):

Oh man, yeah, you’re right. That was more gold. So that’s huge, the delegation gap, the feedback gap and the planning gap, the three big gaps that most companies go through, and I can definitely see that, and I feel like that’s where most entrepreneurs, especially that first one, it’s just letting go. At some point you have to let go, and then I like how you put it into overdrive a system for letting go. It’s not just about letting go, it’s about making it a real company and then systematizing it. Oh man, this is great. This is really great stuff.

Speaker 1 (24:55):

Speaker 3 (25:21):

Then let’s talk about that. Let’s park there a little bit. So tell me about your life pre-Pro First and post Profit first. How did it feel around money or what was going on

Speaker 1 (25:32):

Before? Well, I mean, I don’t want to say anything negative about anyone, but I think when you’re in a relationship, sometimes one person feels like they’re really good at something and they might tell you that you’re not great at it. So I heard for a long time that I just was not good with money, and it was one of those things where I was like, well, I don’t know. It doesn’t seem like it’s that hard, but maybe I’m not. And so I had this block in my mind that maybe I wasn’t good at it. So the first thing I did when I went through my divorce and I had to rebuild from scratch with business was I went to one of my good friends and she literally gave me your book and she’s like, you’re going to read this book and then we’re going to get it instituted in your company.

(26:08):

And I said, all right, just show me what to do. And I loved it. It’s a simple process. It’s so clear. It makes you feel really good as you’re doing the allocations, as long as you have someone that helps you figure out what are the percentages that you need to set aside for the different aspects of your business, it’s incredibly straightforward. It makes you feel incredibly powerful. So I went from feeling and thinking like, wow, maybe I am really bad with money to being like, Nope, I can save money as long as I’m making money, I can save it. And it’s really more about what you’re able to keep at the end of the day in business, and that’s what Profit First gave me. It gave me a lot of confidence in knowing what I could keep.

Speaker 3 (26:43):

Ooh, I like that. So that’s really good. So thank you for sharing your personal journey with Profit First. I love that. How would you say, since we’ve been talking about Trauma Freedom, all this stuff that we’ve been talking about today, how does Profit First help people overcome some of that with the money? Is it the system or is it like, because for you, it sounds like you felt like you weren’t good at it, then you actually said, Hey, it’s a system and I feel good and empowered. Would you say there’s other things like that, people that go through people’s head when it comes to the money and how Profit First could potentially solve that?

Speaker 1 (27:17):

Well, I think a lot of people, as long as they feel like they’re making money, they tend not to think that the structures that they put in place to keep the money are as important initially. Because when you’re in that survival mode, you’re like, just have to make more money, have to make more money, have to make more money, because you’re thinking about how do I make sure I make payroll? How do I make sure I cover expenses? But I think there’s a part of the brain, and this goes back to polyvagal theory, which is very involved stuff, so I’m not going to go super deep into it, but there’s a part of the brain that when the brain knows there’s a system or a process, it calms itself, and this goes back to the very core of everything, which is the nervous system. So in order for us as entrepreneurs to pull ourselves out of the chaos that we put ourselves in, because being an entrepreneur is somewhat chaotic, right?

(28:02):

There are thousands of variables that we don’t control at any one time, which means we’re putting ourselves into a traumatic environment where we are in moments of lack of control all the time. So when we put ourselves into that environment, our nervous systems can get very out of whack, and if our nervous system is out of whack, then we’re not able to make the best decisions. So I think that Profit First gives the brain almost like a polyvagal response where it allows the brain to calm itself because there’s a system and a process that’s consistent that you’re consistently practicing. When you have that, you’re able to make decisions through a filter that is calm and you’re not chasing the shiny objects. You’re like, wait, this is the amount of money I have. I know this to be a fact. This is the money I’ve saved.

(28:47):

This is the money I have for operating expenses. Everything just seems more simplified, and when things are more simplified, your system can be more calm and your decision-making is then not in fight or flight. So I think that what you do for all the clients that you work with and with the system of Profit First is you help calm an aspect of their nervous system that would, if they didn’t have this, would run rampant on their old stories and their old lies, and it would force them to make decisions from a place of fight or flight or fear instead of from a place of calm, consistent performance.

Speaker 3 (29:22):

Man, I am literally going to download this episode and listen to it again. This is incredible. I feel like, again, I’m saying it the exact same thing I said at the beginning. You’re saying things that it’s like, I feel it in the marketplace and with people that are doing this and the clients that we serve or the people that just come up to me and said, read your book, heard a podcast episode, whatever, and it’s like, I feel better. It’s like, there you go. There’s the scientific, the facts around it. It’s like it’s literally giving you that. I love what you said there. When there is a process, the brain calms itself, and so it’s like most people live in chaos when it comes to their finances because there wasn’t a process. You read Rich Dad, poor Dad, they all say Pay yourself first. I feel like Profit First actually said, here’s a system to do it. Correct. So it’s like, oh man.

Speaker 1 (30:06):

This is not only that. I feel like not only does it calm your nervous system, but it allows you to communicate effectively about your finances, which is the other missing piece. Most people, if they have a financial trauma or story around money, it all goes back to the fact that they weren’t communicated with about money in a way that served them and allowed them to feel confident. So I think Profit First not only gives you the system to calm your nervous system, but it gives you the communication ability and the way to speak about money so that anyone you talk to can understand it. It’s like it’s simplified.

Speaker 3 (30:41):

Oh my gosh, I need more Annie Yatch in my life. This is so good. My goodness, this is great. I’m

Speaker 1 (30:46):

So glad we had this time,

Speaker 3 (30:47):

Right? Yeah, that we finally got together on here, and I believe if you’re listening to You Need More, Annie, this is so good. So at least go pick up the book, get inside of her mind there, know how leadership actually works, but then also from there like, okay, Annie, you’ve dropped so much information, golden Nuggets here. Where can people find you to give value back to you and to become part of your world?

Speaker 1 (31:12):

Sure. Well, there are a couple of different places, David, because I’m always working on cool stuff. So the first place is on Instagram. I’m known under Northstar dot Annie. That’s my handle, and I put out a lot of great content there on everything from team performance, personal work you can do on yourself so you can be more calm, business performance, business leadership, and also that trauma freedom stuff we talked about. And then two different companies. I’ve got one called R e i Sales tools where we do sales training for your team, and we bring in all that leadership and sales training. And then we’ve also got Women Empires, which is about to launch, and that’s for all women who are entrepreneurs who want to uplevel their game financially with their sales and also with how they bring their calling into the world.

Speaker 3 (31:51):

Awesome. Well, there you go. Can you give those sites again, just so people know for I just want it one more time.

Speaker 1 (31:57):

Yes, yes. It’s North Star dot Annie for Instagram. It is r e i sales tools.com for that. Sales and leadership training for your team, and then it’s women empires.com that’s going to be launching in October, and it’s for all women who are entrepreneurs or wouldn’t want to be entrepreneurs who want to do it quicker and faster with a great vetted team.

Speaker 3 (32:20):

Awesome. Well, I can’t recommend Annie enough. She has truly helped so many of my personal friends, and then this was so helpful today, and then it was awesome going through your Profit First Journey and then also hearing about why a lot of people come up and say, Hey, profit First has really helped, not just with the money, but calming me down and not living in chaos as much. So that was awesome. The three gaps, again, delegation gap, the feedback gap, the planning gap, that was priceless there. Going through that and which one do you need to work on right now? I loved what you said. Every problem is a behavior problem in business. It’s a start, stop or modify. So that’s another one. The books that she recommended, she recommended, well, I say Get Hers. That’s number one. Then she recommended the two here, letting go, and then way of the Superior Man pick those books up too.

(33:10):

Then this has been incredible. I love what you said about culture, observable behavior of the team. It’s just been nuggets left and right. So go to her site, go on Instagram, follow her. This is such good stuff. This is what will really help you. I am going to say this. This is going to make no one mad. No one else is going to listen to it, who’s already been on the podcast, but this is my favorite episode so far of the podcast. This is awesome because we’re talking about the real stuff. The stuff that if you take from this podcast can help you as a human being unlock the potential that you really have. And I’m still working through that stuff and it’s like it’s a journey, and that’s where it’s like, but you got to get some clarity around it so you can start that journey and it’s like Annie can do that for you, get around her. This has been awesome, Annie. Thank you so much for being on today. This has been incredible.

Speaker 1 (33:58):

Thank you so much. And David, thank you for everything you’re doing for all the people out there. I was definitely an early adopter of Prop First, and I’ve been cheerleading you on in this entire journey. I think the work you’re doing with your clients is absolutely incredible. So thank you for that. And thank you for changing the game when it comes to how we think about our finances.

Speaker 3 (34:14):

I appreciate that immensely. And if you’re listening to this and you’re like, holy crud, yeah, I need that help with the Profit First system, or just getting that calmness or whatever it is, or you don’t have any clarity around the finances, go to simple cfo.com. We can at least get on a call together. Or if you want the book, all the links are there, just get some financial peace in your life. So that’s simple. cfo.com, remember to make profit a Habit in your business. Annie, once again, thank you for being a terrific guest on the show.

Speaker 1 (34:41):

Thank you, David. Have a great one.

Speaker 2 (34:44):

This episode of the Profit First for R e I 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 R e I podcast with David Richter.

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?

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.