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A Psychologist’s Perspective: The Struggles & Difficulties Investors Face; Why Profit First Can Help With Scott Emsley

Episode 162:  Scott Emsley provides a special perspective on the advantages of Profit First and a psychologist’s viewpoint on some of the difficulties faced by investors.

The Profit First REI Podcast

March 9, 2023

David Richter 

Summary:



Today’s guest is Scott Emsley, a real estate investor with Clear Sky Properties. He has been in the since 2020, first starting with single-family homes before eventually dipping into multifamily properties as he does today.

 

Scott continues to work as a clinical psychologist while starting his venture into investing. Interestingly, he did not have a previous entrepreneurial background like most investors, making the Profit First system an invaluable tool for managing his finances and learning better money management. 

 

With his circumstances and background in psychology, Scott offers a unique insight into the benefit of Profit First and a psychologist’s perspective on some of the struggles of investors. Tune in!

 

Key Takeaways:
[00:47] Introducing Scott Emsley and His Real Estate Investment Journey

[07:28] On Analysis Paralysis About Starting Real Estate Investing

[11:02] On Implementing Profit First and Experiencing Its Benefits

[17:40] Profit First in the Multifamily Space

[22:47] Real Estate Investment Without Initial Entrepreneurial Experience

[26:43] Scott’s Thoughts on His Career Without Profit First

[29:05] Advice for Real Estate Investors: Without a Business Plan, You’re Doing It Wrong

[30:30] Connect With Scott

 

Quotes:

[12:17] “[Profit First] is one of the biggest reasons why I’ve been able to pick up another 300 or so units [in] the remainder of last year.”

[27:52] “I’m not equipped to be a business owner if I hadn’t found profit first.”

[29:46] “If you don’t have a good business plan, you’re doing it wrong…If you don’t have a business plan, a business strategy, the house of cards is going to come toppling down.”

 

Connect with Scott:

 

Instagram: www.instagram.com/stewardscotty
Podcast: The Worst Ever Real Estate Investing Podcast (currently in the works)

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 




Transcription:

 

Scott Emsley:

<affirmative> all of 2021 and probably around January, February of 2022 is when I got exposed to Profit First. It was the kind of book that you pick up and then you don’t put down, you just let through it and then you go back and you reread the stuff that you kind of glazed over.

Outro:

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.

David Richter:

This is David Richter. And we have Scott Emsley on the Profit First REI podcast today. This is an incredible one because he is a multi-family investor, but he has no entrepreneurial background at all and that’s where just a few years ago, he got a hold of real estate investing and it has gotten a hold of him. And he also tells how Profit First has saved his business multiple times and given him financial freedom and what it has afforded him and his wife and also their relationship. I believe that you will want to listen to this one, grab the nuggets and then go and implement some of the things he also tells you as well too. Hey everyone, it is David Richter of the Profit First REI podcast. We have Scott Emsley here. I am super excited about this one because I’ve been on his podcast and it was an interesting experience, to say the least cuz we got to talk about Profit First, but we also talked about psychology and just some deep questions on the back end, which he does with his guests. So he has real estate experience and psychology, you know, psychology experience. So I really excited to have you Scott. Thank you so much for being on the show.

Scott Emsley:

Thank you so much. I’m glad to be here. Glad to uh, reciprocate you were kind enough to come onto our podcast, so I’m glad I get a chance to give back.

David Richter:

Yeah, well I appreciate that because anyone who has a profit First story and how it’s helped them in their business or what it’s helped them through or what different things like that, we just want to get that out there. Message of hope to the people listening to give them hope that doesn’t all have to be doom and gloom living deal to deal. But I guess let’s start off, just give a high level background of where you’ve been, where you are now, like in the real estate world and I already opened the psychology bag so you might as well tell everyone about that as well too. So.

Scott Emsley:

Sure. So, um, I became a psychologist in 2013 and uh, I’ve been working in healthcare as a psychologist, uh, for the Department of Veteran’s Affairs for, um, 10 years now. And so I’ve

David Richter:

Oh wow.

Scott Emsley:

Really enjoyed, um, that experience. I love working with vets. I love what I get to do on a daily basis in that realm. Uh, and in 20 18, 20 19, uh, I was starting to look into real, wanted to learn more about how to grow my wealth and grow my family’s wealth. And so finally after a long, uh, analysis paralysis, I decided to get into real estate investing in October of 2020. I bought my first single family house back then and um, yeah, that was a good experience, but I intended to do the Burr model. So for those of you who are familiar with that, I intended to buy it, rent, renovate it, rent it out, and then refinance it. However, because of market and me kind of over improving the property, uh, I didn’t refinance anything out of it. I couldn’t, um, so I put $40,000 of my own money into it and then I couldn’t refinance out. So I’ve still got that property and it’s still got that original loan on it, but, um, <laugh>, I’m gonna be refinancing hopefully here soon. So, uh, that was my first property in October of 2020. Followed up shortly by a duplex that I bought in November of 2020. Um, and that because of the lack of proceeds from the first property as well as buying the second property, um, that kind of tied up most of my liquid funds and I was like, Hmm, this is not how it’s supposed to go. Um, so I was like, I was still working, I still am working as a psychologist and still, uh, doing uh, very good work there, but saving up that kind of money to buy properties takes a lot of time. And so I started looking into partnerships and how I could, um, how I could effectively grow the business. I partnered with my first partner on the third property, which was in bought in December of 2020. She and I had already been friends, she was a real estate investor at the time and she had some liquid funds to deploy. So we bought two fourplexes together. Um, and that was great, but that was the extent of my first year. Um, so 11 units, I’m not balking at that. I’m saying that’s

David Richter:

yeah

Scott Emsley:

A very good first year especially cuz it was all within three months. But

David Richter:

yeah.

Scott Emsley:

Um, yeah, it was not what I thought would happen

David Richter:

<laugh>. That’s great. So yeah, that’s a, then that is really good. I think a lot of people would be happy if they did 11 units their first year. So then where are you now? Now we’re recording this at the beginning of 2023. How did 2021 and 2022 treat you?

Scott Emsley:

Yeah, so in the middle of, so from October of 2020 to October of 2021, That’s all I got. I got those 11 units

David Richter:

yeah

Scott Emsley:

And that was great. Um, but in July of 2021, I started looking into multi-family, specifically syndications. I wanted to learn more about that process and how to combine a bunch of people’s money together cuz I exhausted my funds on the first three units. I exhausted my partner’s funds on the third property that I bought, the two fourplexes. So we ran outta money, like that’s not how it’s supposed to go. So July of 2021, I, uh, looked into various, uh, different masterminds and I decided on the seven Figure Multi-Family Mastermind. Um, that’s where I met Caroline, my good friend. And so I met her through the seven figure program. And so I joined the seven figure Multi-family mastermind and then took me six months to find my first true multi-family property. And I bought that in December of 2021. Uh, that was a 16 unit property, so

David Richter:

Nice,

Scott Emsley:

Small in the multi-family world, but big for me,

David Richter:

Right.

Scott Emsley:

Uh, and so I bought that, uh, my, again, I did the workload. My partner at the time, uh, he brought the funds. He was a good business partner and still is my business partner today. Um, and then, so that was the first multi-family property that I bought and then that kind of opened the floodgates. So six months after that I bought a 52 unit, then I bought a 64 unit, then I bought a 60 unit, then I bought another 64 unit.

David Richter:

Wow.

Scott Emsley:

And then I bought, uh, two weeks ago I just closed on a 48 unit and we’re currently under contract on a 20 unit. So

David Richter:

There you go.

Scott Emsley:

Um, the first year I got, uh, 11 units to my name, which is good.

David Richter:

Yeah.

Scott Emsley:

Uh, the second year I got 304 units to my name. Um, and so I’m, the grand total is up to 315 units currently with a couple of other, uh, development projects and other things in the wings that we are working on now.

David Richter:

So you mentioned analysis paralysis, which I think a lot of people have. Why do you think you had that analysis paralysis up front? Just scared to pull the trigger or just scared to make a bad investment? What was going through your mind?

Scott Emsley:

Yeah, so, um, that was probably, uh, I can partially attribute to my life as a psychologist, you know,

David Richter:

okay.

Scott Emsley:

Working for the va, the federal government, working for a stable, secure job where I just, I go to my nine to five and I just do the same thing every day. And that stable security was kind of like a safety blanket.

David Richter:

Yeah.

Scott Emsley:

Uh, and <laugh>. So, um, it took me some time to kind of finally pull the trigger, but then once I did, I pulled the trigger in a big way and I took,

David Richter:

Yeah,

Scott Emsley:

No kidding. I grew in a big way. Um, but that’s why, I mean, uh, I stalled out for two years just learning, uh, it wasn’t wasted time, I suppose, but it was like not real estate productive time.

David Richter:

Yeah.

Scott Emsley:

It took me that long to finally say, okay, I’m ready to go into my first deal.

David Richter:

Yeah. Well, no, that’s great. Why do you think a lot of people have analysis paralysis? Could not every real estate investor has a psychology background, so I would love to know from your perspective as a psychologist and just being in the real estate world, why do you think a lot of people have the fear of tr pulling the trigger?

Scott Emsley:

What we do is so unorthodox, so unusual and, uh, you’re getting bad messages. Um, not ill intended messages, but bad messages from every angle. Your

David Richter:

Yeah.

Scott Emsley:

Your parents are probably like, what are you doing? This is not how it’s supposed to go. And, um, and your colleagues, maybe you’ve got a stable nine to five job. Your colleagues that work are saying, what are you doing? That’s, that’s ridiculous. My colleagues say that about me today. Nice. Even though I’ve got 315 units to my name. Um, so they say, you’re gonna go bankrupt, look at the recession coming, look at the interest rate hikes look like you’re gonna lose your entire life savings and all of your family is gonna be jeopardized by it. I had to get my wife on board. I had to convince, you know, her to partner with me in this venture. So,

David Richter:

Yeah.

Scott Emsley:

Um, I think the thing that holds us back, uh, all of us, uh, whether you’re a psychologist or not holds us back is that fear of failure. And fear that you’re, you’re, um, all of those people are gonna be somehow Right. Uh, they risk nothing by saying, yeah, you’re gonna fail. They really, there’s no risk in that. Um, and there’s that piece of yourself that says maybe there’s a grain of truth to that I may fail. And in fact, even in my own experience kind of bringing it full circle to profit first I did kind of fail and I failed on that first purchase. I over improved it and so I didn’t get my money back out.

David Richter:

Sure.

Scott Emsley:

And then even after I had those 11 units, um, I had not been exposed to Profit first yet. I didn’t have that mindset or that background. So, um, yeah, I was not operating my business efficiently from a profit first perspective. And so yeah, there’s a lot of failure in being an entrepreneur and venturing out into real estate, which is expensive items. The most expensive thing that most people will ever buy is their personal residence.

David Richter:

Yeah.

Scott Emsley:

Um, and so to buy another residence on top of that sounds crazy to most people.

David Richter:

Right. Yeah. That’s, those are really good answers. I want to then dive you, you set it up. So let’s dive into the Profit first side. So it sounds, when did the prophet first grab you then? Because it sounds like you had a period of time there where you weren’t with the Prophet First Mindset or hadn’t read the book or anything. So I’d like to know like before and after, like how did that look and what got you excited about Profit First?

Scott Emsley:

Yeah, so I did not implement Profit First until after my first multi-family property. So

David Richter:

Okay.

Scott Emsley:

I wasn’t even aware of this book or this methodology or the mentality. Um, so all of 2020, you know, the three months of 2020 that I owned those properties, picked up those properties, uh, all of 2021 and probably around January, February of 2022 is when I got exposed to Profit First. Uh, I, it was the kind of book that you pick up and then you don’t put down,

David Richter:

okay

Scott Emsley:

You just let’s through it and then you go back and you reread the stuff that you kind of glazed over. So, um, that was my first exposure to Profit First and it fundamentally changed, uh, my trajectory. Um, it allowed me to be, so I had the 11 units from my first year. I had the 16 units under my belt, but I was still not kind of operating from a good business perspective.

David Richter:

Yeah.

Scott Emsley:

It is one of the biggest reasons why I’ve been able to pick up another 300 or so units, um, the remainder of last year. So, um, if I didn’t have the strong foundation of having some profit, um, I wouldn’t have, so another side story here about this February-ish timeframe is when I read Profit First, uh, we implemented that immediately. I went, opened a bunch of bank accounts, um, and my wife, uh, and I were both, um, looking at different career options. She decided she was pregnant with, uh, our daughter who was just born three months ago.

David Richter:

Congratulations.

Scott Emsley:

And so she decided that she was gonna break off and go into private practice. That was a very uncertain financial decision cuz she was also working for the va. She is also a psychologist. Um, and so going into private practice was uncertain territory, but I had set up this Profit First model and so the owner’s compensation that technically was mine, um, that went to her and that paid her all the rest of last year. Um, the owner’s compensation, I had never taken an owner’s compensation. I had never taken any proceeds from my business other than maybe a couple dollars here and there.

David Richter:

Yeah.

Scott Emsley:

I’d never taken any proceeds. So when April rolled around and she decided, yeah, I’m gonna go do my own thing in private practice, um, that the Profit First model gave us the luxury, the freedom for her to do that, to make that decision to break away and, and do her own thing and in the unstable time before she got established

David Richter:

Yeah.

Scott Emsley:

Um, to cover the income that was lost by her leaving the va.

David Richter:

That’s awesome.

Scott Emsley:

Yeah.

David Richter:

So it sounds like she might be a fan of Yes,

Scott Emsley:

She is

David Richter:

<laugh> as well too, so now that’s great. So with the multi-family at that time, how many units were you sitting on back in February when you

Scott Emsley:

Yes.

David Richter:

Implemented it?

Scott Emsley:

So I had the 11 units and I had the 16 unit property.

David Richter:

Okay.

Scott Emsley:

So that was 27 units to

David Richter:

Yeah.

Scott Emsley:

To my name as of when I implemented the strategy.

David Richter:

Okay.

Scott Emsley:

Yeah.

David Richter:

And then you’ve had that and which year was that? That was 2022. You had

Scott Emsley:

Mentioned 2022 February of 2022, but probably around Feb, January or February of 2022. Yeah.

David Richter:

Then you did mention that Profit First helped you get to, was one of the major reasons you got to 300 units. Can you tell me a little bit more about that? Was it having the extra money and you were able to go get more funds or was it like having the funds available? Like how did it actually help you get more properties?

Scott Emsley:

Yes. So, um, I have used very little of my own personal funds to actually fund the acquisitions. So Okay. I have great partners who are capital raisers who bring most of the funds to the table. The one exception to that is that I am often the one putting up the money for earnest money deposits. I am often the one putting up money for the PCA reports or the inspections. I’m often the one putting the down payment with the lender to establish to allow them to do their lending, underwriting and all that. You know, you have to pay that upfront.

David Richter:

yeah

Scott Emsley:

Um, so I’m the one who’s funding most of those things. And so if I had not had the profit account, um, kind of reserves ready to deploy to those future business ventures, and I know there’s some, uh, concern about redeploying money from profit into back into your business, but that’s how I fueled my, that was my reward, so to speak. My right.

David Richter:

Yeah

Scott Emsley:

My payday, uh, my, the thing that fulfills me is buying more units, buying these bigger multi-family properties.

David Richter:

Yeah.

Scott Emsley:

So even though it wasn’t me taking my wife out on a, nice dinner or an extravagant beach vacation Oh, you just with the profit one Yeah.

David Richter:

<laugh>,

Scott Emsley:

um, a

David Richter:

Little bit more,

Scott Emsley:

Yeah.

David Richter:

A little bit more appealing than just one dinner date.

Scott Emsley:

Yeah. And so now we’ve turned what probably was 60 or $70,000 in my profit account into $20 million worth of assets right now, um, that we’re sitting as a, a piece of, we don’t own a hundred percent of 20 million, but

David Richter:

Sure.

Scott Emsley:

Like, um, we are a small piece of the pie and the Profit First model not only paid her for going on maternity leave and switching jobs, but also paid us, uh, down the line. Like it has amplified itself.

David Richter:

Yeah. That’s awesome. I love hearing that for sure. And it also sounds like too there, you know, like it helped to get those units and you were able to put up that money and like you said, this is what you wanted to do. What I don’t like is when people use profit just to cover expenses, you know?

Scott Emsley:

Sure.

David Richter:

They just keep going, spending, spending, spending and just spend themselves into the ground. But like you said, this is what you wanted to use that money for because it’s gonna buy a lot more dinners

Scott Emsley:

<laugh>

David Richter:

Than just going out there and, you know, purchasing that one really nice one or whatever. So that’s, uh, no, I absolutely love that. So it sounds like it gave your wife freedom, but then it’s also, like you said, amplified what you’re able to take either from the business or like from the money that’s coming in and give it, you know, probably give it a better name or a better, you know, separation of what’s yours and what’s not. So would you want to talk about that a little bit in the multi-family world or just real estate in general, money can get confusing. Has it helped you bring any clarity to business and to what is yours versus what you know you want to use to grow or whatever?

Scott Emsley:

Yeah, so, um, it was, it’s before I implemented Profit First it was like money came into a kind of joint account, uh, a semi joinin account. And then, um, that was all kind of business money. Like it was, I treated it more or less as all business money and I didn’t get to, um, I didn’t get to play with it. I certainly was not going out and buying nice things with it, but I was also not, never saw the, the proceeds of it from a business perspective either. So it was kind of, money comes in, money goes out. I didn’t really have any accounting for it or, I mean, I have an accountant and a bookkeeper, but like, I didn’t have, I didn’t have a good mentality for what is profit, what is anything profitable or am I

David Richter:

right

Scott Emsley:

Always just kind of net zero because that’s kind of how it seemed like the money was flowing. It was always roughly equaling after a month or three months or a year.

David Richter:

Right

Scott Emsley:

Um, so it gave me the clarity to say, oh, this is money that my business has generated above and beyond all expenses. Um, this is money that then I can choose to go have a nice dinner with. And I would have no qualms with doing, with doing that whatsoever. I would love to do that.

David Richter:

Yeah.

Scott Emsley:

And we’ve, we have spoiled ourself with a few things.

David Richter:

Awesome.

Scott Emsley:

Um, so that’s some of the profit or the owner’s compensation has been on things that we want, um, to enjoy and uh, have good times with, but at the same time, it’s also fueling our greater growth, our greater business trajectory, our ba our greater, um, direction that we want to take both of our lives in.

David Richter:

No, that’s awesome. I love what it has afforded you and what the clarity that it’s given you. Sounds like it’s given you a lot of freedom too, and just a lot of that clarity to be able to make those decisions. I do have a question. So you’re running a lot of mainly multi-family units.

Scott Emsley:

Yes.

David Richter:

Did you set up profit first any different than you would’ve if there’s single family or you know, like you kept going if you know, if you still had those first few units by themselves, like have you set it up any different than what the book recommends? Or do you have accounts that are specific to you, just out of curiosity?

Scott Emsley:

Yeah, so I have, um, I would call it an operating account. The label on the account is, um, is just the property name. So I have a different account for every single property that I own. Um, but that’s the collective place where, uh, when the property manager, and so I’ve got property managers on every single one of these properties. Uh, the property manager makes a deposit after all expenses are paid to them. Uh, and all those, it comes into that collective account. That’s where I also pay the mortgages, pay the lending from. So it comes into that one collective account. Um, it goes out from that one collective account, but at the end of every, well, it’s not the end of every month, but like after we get the deposits from the property manager, then the funds are dispersed into a centralized account, which is, uh, we’ll call it income. So that’s the income. And then from that income account, I separate out into the three accounts.

David Richter:

yeah

Scott Emsley:

Um, so the taxes, the owner’s compensation and the profit accounts. Uh, and so I do that process. So it goes from all these different places into one.

David Richter:

Awesome.

Scott Emsley:

And then from one into three.

David Richter:

Yeah.

Scott Emsley:

Um, so that’s how I’ve structured it. That’s what, just the way my brain works.

David Richter:

Yeah.

Scott Emsley:

Um, and I think part of the Profit first model is to tailor things really to what works for you and how your brain things and how you operate. So that’s how I best handle things. And then I never have to worry about, oh, am I gonna have enough money for the mortgage payment? Oh, am I gonna have enough enough money for the tenant that moved out this month and needs renovations? Right. Like, I’ve got that one central account where money comes in, money goes out to the income account, um, the extra money that goes out to the income account and then gets divided up from there.

David Richter:

Yeah. I really love that for multi-family. Cuz then you’re almost treating each individual, you know, uh, property as its own business, you know, so it’s like he comes in there and you have it, and then you push it to income and then the rest of it is dispersed around there. You know, it’s like having, it’s almost like having a bunch of mult, you know, multi businesses out there or entities and then it all flows up into some master account. So I really like that setup up. So if you’re on here and you’re thinking like, does this work for multi-family and other types of real estate investing, because we have a lot of single family people on here that come on and tell about their experience, but I love hearing it from, you know, a different angle as well too for the different multi-family people we’ve had on. So that’s awesome. I did wanna dig into one other thing.

Scott Emsley:

Sure.

David Richter:

You said that, you know, like you’ve been a psychologist and you’ve been in like working with the VA for the past 10 years, and I’m wondering, do you have any entrepreneurial background with yourself or your family or like your wife and her family? Like, it sounds like you both work, you know, just normal jobs and had normal, you know, like that w2. So I’m just wondering, did you ever have any of that in your life growing up?

Scott Emsley:

No. And neither has my wife. Not as far as I can recall back,

David Richter:

yes,

Scott Emsley:

As far on my family line, um, as I can recall, everybody has the more traditional nine to five kind of job.

David Richter:

Okay.

Scott Emsley:

They either have a job or a career, but that it’s in a stable, a relatively stable, secure kind of single track. Um, and so, and I’m also very much a penny pincher and so,

David Richter:

Okay.

Scott Emsley:

My wife would accuse me and I, you know, all of my grad school colleagues, like I talked about investing in money in grad school, um, I did presentations on it. And so all of my grad school colleagues who may watch this, uh, or listen to this podcast later, um, they would be very surprised to hear kind of how I’ve ventured off the deep end <laugh>,

David Richter:

Right.

Scott Emsley:

Because I am not the entrepreneurial and, um, getting your psychology degree, and I think this is true also of medical professionals, folks who go into medicine, they get virtually no idea of how to operate a business

David Richter:

yeah

Scott Emsley:

In any of their training. You get plenty of education on how to do things that you’re never going to do again. Um, but the things that really matter, uh, you never taught that in grad school or, um, and the truth is that, uh, how many of us know how to draw a parallelogram, um, but

David Richter:

Right.

Scott Emsley:

Uh, and know how to calculate the angles of a parallelogram but don’t know how to calculate our taxes.

David Richter:

Right.

Scott Emsley:

Um, and so the same thing is true about our whole education system all the way up to including your doctorate. Um, both neither one of my wife or I got any training in how to operate a business. So to answer your question, very

David Richter:

Turn the corner then for you.

Scott Emsley:

Yeah.

David Richter:

Because you said like there was a point where I wanted to have financial freedom for my family. Was there a book or was it a conference? Like what was that turning point to be like, entrepreneur?

Scott Emsley:

Yeah, so I’ve always been invested, I’ve always been interested in investing.

David Richter:

Yeah.

Scott Emsley:

Um, so ever since I was a kid, I was investing in the stock market. Um, but investing meant the stock market. It meant that that was the singular track for investing.

David Richter:

Yeah.

Scott Emsley:

Um, until my brother-in-law in 2018, um, talked about real estate. And

David Richter:

yeah

Scott Emsley:

So I was, that kind of got me interested in real estate. Um, the truth is that the book that everybody says, rich Dad Poor Dad,

David Richter:

yeah

Scott Emsley:

uh, made me shift my focus from stock market investing and doing the, uh, millionaire Next Door. I remember years ago giving everyone in my family and everyone that I liked, um, the book, uh, millionaire Next Door, um,

David Richter:

yeah

Scott Emsley:

For Christmas. And so, uh, when I read Rich Dad Poor Dad and I was like, yeah, this is not, this life that I’m living is not gonna make me the millionaire next door. Uh, I’m not gonna be a millionaire at all. <laugh> even with great income that I’m earning, uh, and all that sort of thing, like I need to go a different track. So Rich Dad Port Ad is the one that turned the corner for me.

David Richter:

Okay. Yeah, there we go. I was like, there has to be something because no background, none of this like you liked investing, but like you said, it was the white collar stock market, you know, it was like, that’s what we were going down. But that catapulted you then into getting the, you know, your first deal done and then you now have 315 units and, you know, becoming an actual business owner, which you didn’t learn <laugh>, it sounds like in your psychology school, you know, like to be a psychologist. So they, you know, you got no training there, but then, you know, then you enter the business world and then, you know, it’s like the self training. That’s really what you have to do on that side. And I’m glad you were glad you read Profit First last year and were able to get that so you could get actual help during, with your business. Because I guess if you hadn’t implemented Profit First, do you think you’d either have as many units or where do you think you would have ended up without, you know, implementing that process?

Scott Emsley:

I mean, uh, in my mind, bankruptcy is never something that I ever plan on doing. I don’t think ever anybody ever plans on doing

David Richter:

Right.

Scott Emsley:

But I think I would’ve been in very dangerous territory. Like,

David Richter:

Okay,

Scott Emsley:

uh, I can see that the catastrophic, and maybe I’m over catastrophizing this, but

David Richter:

nope.

Scott Emsley:

Like I could have seen my business going under at very least. Um, and me turning away from real estate investing altogether and going back and continuing to do the white collar thing, investing in the stock market perhaps in the very slow way, investing in mutual funds only, and only in very safe, secure assets and like realizing, I’m not cut out for this. I can’t handle this because clearly, I’m not equipped even with my doctoral degree, I’m not equipped to be a business owner if I hadn’t found profit first.

David Richter:

Yeah.

Scott Emsley:

Um

David Richter:

Huh. That is, I love that because that’s where I feel like a lot of people get into the real estate world and they don’t have this, you know, the proffers and they are, they’re facing bankruptcy and it’s like they don’t even know it though, you know, like that this is coming. So I love that answer. I don’t think you’re catastrophizing it at all. I think that is a lot of people go down that road and if they don’t have it can definitely, but I’m very biased too. I mean that’s why I run this show. It’s for answers like that, it’s for the, where someone who can literally have a psychology degree and be a psychologist and then jump into real estate, but then they don’t just read Rich Dad, poor Dad, you also read a book that <laugh> helped you stay in real estate as well too. So that’s what I wanna give people hope, it doesn’t matter if it’s single family, multi-family, if you’re, you know, just getting started. That’s where you can build those habits now. And if you wanna stay in real estate investing and build that financial freedom, listen to what Scott is saying. This is not just me saying it, this is Scott and real life examples. So Scott, this has been awesome. I think you’ve given a lot of people hope here. Just two final questions. Do you have any advice for the real estate investing world, especially when it comes to their money?

Scott Emsley:

Yeah, the, um, the thing to realize whether it’s real estate investing or any other kind of investing, um, is that you are a business owner first.

David Richter:

Mm-hmm. <affirmative>,

Scott Emsley:

And you, the vehicle that you drive to get to that destination doesn’t, that could be anything. It could be opening a flower shop, it could be, you know, opening a pharmacy. It could be investing in real estate, it could be stock market, it could be anything you could imagine or whatever vehicle makes sense to you. But you are a business owner first. And if you don’t have a good business plan, um, you’re doing it wrong. So I don’t care how good of a salesman you are, you can make lots of money in a very short period of time, selling, flipping, wholesaling real estate, but there’s going to come a time where you’ve, if you don’t have a business plan, a business strategy, it, the house of cards is gonna come toppling down.

David Richter:

Yeah, man, that’s really good cuz I love what you said. You’re a business owner first. The vehicle doesn’t matter. You’re just, you might, if you’re listening to this, you’re probably in the real estate investing vehicle or want to get into that vehicle and this is how you make sure that there’s always gas in the car,

Scott Emsley:

<laugh>,

David Richter:

Making sure that you can go as far as you possibly want to with that vehicle. So, no, I love that. Then since you provide a ton of value here, is there any way our listeners can provide value back to you? Like do, is there a way to connect with you or a website or podcast or whatever it is that you wanna direct people to?

Scott Emsley:

Yeah, so, uh, I am hopefully going to be publishing a podcast here very shortly. Um, it’s called The Worst Ever Real Estate Investing podcast. Um, but even, even though that’s kind of in the works and in development right now, uh, the best way to connect with me, uh, and I would love to connect with anybody that wants to is find me on Instagram. My Instagram name is Stewart Scotty, that’s Stewart as in stewardship, uh, Scotty and Scotty has an y on the end.

David Richter:

There you go. That’s how to get ahold of him. Make sure to follow him on Instagram. Scott, this has been awesome and I really appreciate your time. I also wanted to say, if you’re listening to this as a real estate investor or business owner and you’re like, what the heck? What has he figured out that I can’t figure out that, where in the world am I going wrong with my money? And you want to make sure that you could either get your wife freedom or your spouse or you know, like whatever it is. If this resonated with you, head over to simplecfo.com. We’ve got our team of CFOs there that if we can help you, we want to, we want to implement profit first with you, make sure we hold you accountable. And if not, we’ve got great people to ping you to as well. If you need a bookkeeper cpa, we just wanna make sure you don’t have financial headaches. So head over there if you want to, to simplecfo.com and book a call. Thank you so much, Scotty. This was, like I said, this was really good stuff. I think you’ve given a lot of people hope here. And remember, make Profit a habit in your business. Thanks again, Scott.

Scott Emsley:

Thank you so much.

Outro:

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 at simplecfo.com right now. We’ll see you next time on the Profit First for REI podcast with David Richter.

 

 

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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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