Adapting to Change: Anderson Advisors’ Ongoing Evolution in Tax and Real Estate

December 12, 2023

Title: “Adapting to Change: Anderson Advisors’ Ongoing Evolution in Tax and Real Estate”

Episode: 210

In this episode of Profit First for REI, we have Toby Mathis. He is a speaker, author, investor, and one of the founding partners of Anderson Advisers.

Toby talks about the best ways to get the most from your rentals. He also gives breakdowns of processes for different mindsets and team members he had.

How to become an actual real estate investor with the right mindset? Find out on this episode.

Enjoy the show!

Key Takeaways:

[01:10] Introducing Toby Mathis

[03:05] Establishing Anderson Partners

[10:37] The hard part of scaling up

[15:15] Why do investors live deal to deal?

[24:24] Maximizing your properties

[30:18] Toby’s advice for first-time real estate investors

[31:49] Connect with Toby Mathis

Quotes:

[13:04] “You have to have a good team, it is non-negotiable.”

[18:00] “You might want to buy things that are highly profitable, generating income, and use that income to continue to buy more assets.”

[30:20] “Don’t own things in your name.”

Connect with Toby:

Website: https://tobymathis.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):

Don’t own things in your name. There you go,

Speaker 2 (00:03):

There you go.

Speaker 1 (00:03):

Make it simple. Use land, trust and LLCs and isolate the risks. So I’ve had three houses burned down. We have hundreds of properties. Had a tree fall right on. Thank God nobody’s been killed, right? Yeah, no kidding. At the same token, you don’t want to lose your portfolio because of one event, so you just don’t own it in your name. From an estate planning standpoint too, don’t own things in your name because if you die, you don’t want to force your kids into a situation where they have to go to court and go through that whole probate or whoever your loved ones are, and maybe it’s organizations, maybe it’s family members, but make sure that you’re keeping things isolated in out of your name.

Speaker 3 (00:42):

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 2 (01:09):

We have the one and only Toby Mathis on the Profit First. Rre I podcast today. He’s the founder, one of the founders of Anderson Advisors. He’s a very down to earth guy. In this podcast, he talks about some of the best ways to get the most from your rentals, how to become an actual real estate investor and what the mindset is. And if you’re from zero to 1 million, from a million to 10 million, he gives certain breakdowns and processes for the different mindset and the different team members that he had. It was, I cannot wait for you to listen to this episode, get that information. Then he ends with just a very practical step to be able to protect yourself. So if you’re doing this thing that he talks about and you go through that process and you’re like, oh shoot, I’m doing that right now, he could probably save your behind just with that one practical step, thank you for being a listener and enjoy this episode and get all the value you can out of it.

(02:00):

Hey, welcome back to the Profit first RI podcast. I’m your host, David Richter. I’m super excited about today have Toby Mathis, who is the CEO of Anderson Advisors, which you might be using them. You might’ve heard of them. They are, they’re incredible. They do a lot of great things, estate planning, tax planning, everything you need to make sure you’re keeping more of what you’re making too. So we handle the cashflow side, but they handle making sure you don’t lose your shirt and that you’ve got more money in your pocket. So Toby, super excited to have you on the podcast today.

Speaker 1 (02:29):

Hey David, excited to be here. One quick correction, I’m just one of the founding partners. I have a CEO because I don’t want to do all that work.

Speaker 2 (02:37):

Nice. So even better. He’s the founder and he’s one of the top dogs there at Anderson Advisor. Honestly, I’ve had great interaction with Toby. He really caress. He knows a lot about the real estate investing community too, like the marketplace. He’s got some cool things to share today. So excited to dive into that with you, but since you’re one of the founding partners, let’s dive into that. What made you even establish Anderson advisors and go down this road?

Speaker 1 (03:04):

It was back in the nineties, so if anybody wants to go for a little future trip, it was when trading came out where you could actually start trading your own account. Sounds really weird when we talk about stocks, people don’t realize that there wasn’t always a Robinhood, there wasn’t always Schwab, there wasn’t always TD Ameritrade. You used to have to go to a broker and a hundred bucks to enter a trade and a hundred bucks to get out of it and it was painful and you couldn’t just trade quickly. You had to call somebody and then they had to call somebody. They used pagers back then when a stock moved and you would actually look at the New York Times to kind of do your picks. So as things as technology took over, there was a lot of issues from a tax compliance. They’re treated horribly by the way, like stock market investors can get, if you’re treating it as a business, you can’t write off your expenses.

(03:56):

So unless you meet this thing called a trader status, which is facts and circumstances, IE, you get to be audited and go to court and try to articulate why you should be treated as a business and decisions are all over the place. But that’s where we started back in those days. Real estate investing is something that the founding partner, Clint Coons and I, we’ve been investing a little over. I think we’re either over just around 400 unique properties. We have apartment buildings, single family residences all over the place, commercial buildings, manufactured housing, mobile home parks, you name it. We probably own a part of it in our portfolio just because we’re complete real estate addicts and we can’t help ourselves. But we deal in that realm too. And what our firm does is really, it’s three things. It’s preserve, protect, and prosper. It’s been our mission and we take it really seriously.

(04:53):

We want to help you preserve your assets, protect it from lawyers, snoop’s Uncle Sam and pass it on in the right way. So we do a lot of work with real estate investors all over the country. So we’re 500 of us at our firm that are CPAs, EAs, bookkeepers, admin and attorneys, and we all work together to make sure our clients keep the fruits of their labors and don’t needlessly give it away and also don’t put a big old bullseye on your back. As you’re probably aware, in real estate investing there’s a degree of risk.

Speaker 2 (05:24):

Oh yeah, a hundred percent. That’s fascinating. So what it started out more like a modern day, Charles Schwab or that’s how it started From what I was hearing you say, it

Speaker 1 (05:37):

Was the compliance. The compliance we did, they’ll put it in a nutshell, if you or I decided we wanted to be a plumber and we went and we got some low cut Levis and some tools, and I say that with Jes, right? You could go out and you could start operating as a business and write everything off under the sun that’s related to your business. That’s helping you make profit in the world of investors, they don’t let you write anything off. And so people started filing as something called trader status and as the technology increased and people could trade faster and more and more people that were not brokers started entering the market, they realized it was unfair that they could actually have an office they couldn’t even deduct. They could have expenses like computers and equipment and subscriptions, go to trade shows, go to conventions, go to workshops, couldn’t write any of it off, and so they started doing this thing called trader status where they would write on their return, I’m a trader, it’s not in the code.

(06:37):

So they would just say, Hey, I’m going to write off my expenses on Schedule C and I’m going to show my income on Schedule D, sorry to get techno speak on you, but they would just get this lightning audit at ’em. There was a workaround and it still exists today, which is basically operating like a family office where you set up a corporation or an LLC tax as a corporation to act as your main management company and that’s where your family members may sit on the board. You may sit there as a family and say, this is going to be our operating entity. A lot of people have heard the term family offices, this is kind what they do, and then you have your investments in sub LLCs that are usually taxed as partnerships. So in the case of a trading account, you may put it in an LLC that’s owned 80% you and 20% to your corporation.

(07:26):

You may even agree to pay your corporation a monthly amount and magically I can write that stuff off. I don’t even have to worry about writing off the 20% that goes to the corp because it earned it because it’s getting that profit interest and then it uses it and writes off all the expenses that are associated with running the enterprise and it just works really, really well. It’s so much simpler, but that’s where we came from and so we were constantly working with people that were really working in the stock market, trying to keep them from being audited, trying to take away that uncertainty and putting ’em in a structure that mostly affluent, this is how they do it. If you heard the term family office, and I know you have because you probably work for a bunch of family offices with your fractional CFO work and people should be treating themselves like that. We were doing that again back in the nineties, early two thousands, and we were kind of ahead of the curve and as a result you fast forward whatever it is, 25 years, 24 years, and you have quite the enterprise and you have quite the clientele and you learn a lot from them and they learn a lot from us and it works really, really, really great. It’s a fun business to be in.

Speaker 2 (08:38):

So let’s talk about that journey. When you started, you probably didn’t have 500 team members and thousands of clients, so what was that journey like going from when you started to what it is today?

Speaker 1 (08:49):

Yeah, scaling up is always the issue. I kind of look at it like tranches, right? I think of it as if you’re under a million in revenue per year, you can operate pretty much shoestring. You can probably get by with spreadsheets and things like that. You get between 1,000,010 million and you need a totally, it’s another skillset. You got to start working out of the business and you start working on the business and you’re starting to behave differently. You get up to the a hundred million and it’s another ball game altogether and then probably a hundred million to a billion, you better make sure you have a really good board and you better make sure you have really good executives so you can get by with a lot of not the greatest team members as you’re growing and then you realize that you’re hitting a ceiling because of it and you have to shift your thinking and they’re very, very different approaches. To me, those are all different businesses and some people are really good at that zero to million growing it, handing it off to somebody else or maybe you’re really good at that larger business and you know how to pick good executives. It was like, I think it was old Henry Ford that said, I don’t have to be the smartest person in the room, I just need to be surrounded by the smartest people in the room. You just got to have good team members and it’s completely different skillset.

Speaker 2 (10:09):

Yeah, so that’s very interesting. So then on that journey, you went from probably the zero to a million, one to 10 or maybe 10 to a hundred, would you say the hardest part of scaling up is finding those people along the way? Like you said at the beginning, doesn’t have to be the rock stars, but as you get bigger it definitely matters a whole lot more and that’s the thing that I kept hearing. So would you say it’s a warning how to hire those right people that takes you to the different levels?

Speaker 1 (10:37):

Yeah, I would say that that’s definitely last year we did a transaction with private equity and we did a roll up into a global entity where we have a whole bunch of sister companies now and you realize all they care about are KPIs, which I’m sure that’s probably your language.

(10:56):

You have to be able to monitor how everything’s doing. The way I look at it is if you’re getting to a car, you want to have a dashboard that tells you the health of the car and if there’s a warning light comes on, then you’ll go focus on that area. A lot of people don’t have a dashboard and they don’t have warning lights. And I’d say the biggest difference between a company that’s zero to a million in a company that’s a hundred million and above is warning lights and the ability to, and then having the right technicians to make sure the vehicle never has issues. You try to get to the issue before the warning light goes off. In other words, you want to have these failsafe redundancies of is there going to be an issue? We want to know about it ahead of time.

(11:36):

Here’s all the KPIs we use to make sure that we get out ahead of it so that we never have the warning light show up in the first place. Most small companies even they don’t have any of that. You’re doing it by your intuition, your business, you’ve got your 10 employees, your 20 employees, your 30 employees, whatever it is, everybody by their name, and you have an intuition of whether things are going well in your business until you get embezzled. And then everybody that’s in that size it seems has an embezzlement story where somebody takes advantage of ’em because they realize they don’t have systems. There’s no warning lights, so somebody just does some things they shouldn’t. It’s like it’s a reoccurring story. Everybody’s heard it, right? Everybody knows somebody. If you’re around business owner that’s had that and then they say, oh, I need to be serious about this.

(12:21):

I need to have the bean counters, shouldn’t be the check writer type thing and we need to have checks and balances put in place, and you could do that throughout your entire business and it’s just a matter of scale, zero to a million, it’s probably not worth it to bring those people in. They’re going to cost too much. You’re going to lose all your profit, you’re not going to make any money between 1,000,010 million. You probably are going to need one or two and a really good CEO would really help. Otherwise you’re going to smash that 10 million and it’s going to be like hitting a bouncing back off it. You’re just going to keep hitting it. And I see clients do this all the time. They can’t get out of their own way. They refuse to give up the reins and bring in people to help scale ’em, and then it’s absolutely a necessity when you get over that 10 million to a hundred million range.

(13:04):

You have to have a good team and then once you go over, we just saw WeWork do a spectacular failure. I would say the spectacular failure is because they didn’t have serious management. The folks that I knew in that industry, actually there’s a video with a guy named Frank Coddle on my YouTube channel, go watch it because we predicted this thing years ago. He just said, there’s no way. Nope, not the way they’re running. Nope. Makes zero sense. And they didn’t have serious people and they were ricocheting all over the place. It was very predictable. When you see a company that’s going to fail, same thing’s true is if you operate right and you have good people, chances are you’re going to succeed. And so you can kind of see these things. I know that’s not the topic you necessarily wanted to go into all day, but here I am, I’m a tax attorney, I have really good executives.

(13:54):

I do not do that work right? I do not do CFO work, David, that’s your job, right? You need to do CFO work. You hire someone who’s really good. I don’t go change light bulbs in my units. It’s not a good use of my time. And there’s some people that that’s what they love to do and I’m just saying that’s perfect. You’re going to bounce off the ceiling at a million. You’re never going to get bigger. Or maybe if you’re in San Francisco or New York where everything’s a gajillion dollars, maybe your ceiling is 5 million or 10 million or something like that, but there’s going to come a point where there’s not enough time for you to be able to do everything and as a result, your growth is going to be a throttle.

Speaker 2 (14:34):

Okay, I love this topic. I think it applies to anyone who’s listing it depends on where they are in their journey. They can put themselves in those shoes if they’re zero to 1 million or one to 10. What I keep hearing is you have to put those right people in place. I love what you said too, giving up the reins. They have to be willing to give that up and I see a lot of people that don’t. So this is the PR first RI podcast. Do you see that A lot of people that are real estate investors, why do they live deal to deal? Why are they just spinning their wheels and really not getting anywhere or they’re doing a lot of transactions but they’re really not gaining any ground?

Speaker 1 (15:15):

Yeah, they’re focusing on the wrong things over and over again. So I always equate this to the things that we can all relate to. So think of it like Monopoly and you play Monopoly. You go around that board the first few times, what do you do whenever you land on a property that first time around the board? What do you do?

Speaker 2 (15:34):

Buy it.

Speaker 1 (15:35):

You buy it because I’m buying an asset that’s going to create revenue in the future. We go around the board when we’re young people and we don’t buy anything. We just try to stay out of jail and then pass, go and get 200 bucks.

Speaker 2 (15:50):

Yeah,

Speaker 1 (15:51):

That’s like, hey, until you’re about 24, you’re just like just trying not to do damage. But what we should be doing is buying assets. If you focused on assets, then the pressure would be off because you would’ve been doing it when you were 16, 17. Some people, when they’re 12, their parents have the foresight to get them involved in their business. They pay ’em something, they put it in a Roth. By the time they’re in college, they have 25, 30,000 bucks sitting in a Roth that’s growing by the time they’re 35, that thing’s hundreds of thousands of dollars and they’re realizing the power of compounding and they learned it just by watching, right? Yeah. Not all of us have folks or anybody that’s doing that for us or they’d realize that power. Until you see it, it’s really tough to understand that that’s where true wealth comes from is buying assets and real estate’s no different. So we will snooker ourselves to think, Hey, I’m going to be a house flipper. That’s how I’m going to make my money. And you don’t realize the house flipping is me working.

(16:52):

What I need to do is take that money and buy assets with it, and assets are things that put money in your account every quarter, every year, every month I can buy groceries with it and continue to buy lots and lots of assets. So you think of it, again, this is monopoly. I need to buy things that are going to pay me. I don’t want to land on things that cost me and real estate could be either. You just have to figure out is it an asset or is it a liability? Here’s an easy test. Is it putting money in your pocket every month? If you use that test, you stay away from deals that are going to cost you money every month hoping that they appreciate or that somehow you’re going to transform the property into something that it’s never going to be like.

(17:31):

We chase these things thinking, oh, real estate’s a great investment. It depends. In 50 years, anything you buy is probably a good investment, but for the first 10 years it could just kick your teeth in. I got this T-shirt bought in Baltimore thought, oh, this would be great. And you get beat up because the city sucks and you’re trying to do all this stuff. You end up those first few years can be pretty aggravating and then you’re okay, right? But you really want to be okay from the get go, which means you want to buy things that are highly profitable, that are generating income, and then you use that income to continue to buy more assets. Chances are if you’re a real estate investor, either you have a specialty or if you just want to have good cashflow properties, you’re probably buying in the Midwest, right?

(18:17):

You’re probably buying North Carolina, Indianapolis, Ohio, Kansas City, Missouri, maybe Idaho. You’re buying places that are not on the coast. You’re not going to Miami. You might get a quick hit here or there and you get lucky, but you could also just have the snot kicked daddy over those places. But if you are a cashflow investor, there’s very particular markets that you want to be in, and that’s what I’ve seen. The most successful people figure that out. And they do it in the stock market too. They buy dividend producing companies that they can write calls on, and they do covered calls and they make income constantly. The income never stops. It’s just always shooting out. It’s Warren Buffet 1 0 1, he buys Coca-Cola in the eighties and everybody’s making fun of him. And then you realize 20 years later, shoot, the dividends alone are monstrous. He buys Apple and everybody’s like, oh, apple went up.

(19:12):

That’s why he’s so rich. No, he gets like 700 million a year off of dividends at Apple. There’s just so much cash that’s being generated. Go look at Berkshire Hathaway right now. They probably made more money on interest last year than on anything else. They just have money that is constantly making more money. And I think that’s the big difference if you really want to be successful, is figuring that one out. I’m going to buy assets, I’m going to avoid liabilities, and I’m going to keep filling myself up with assets, even if they’re little a hundred dollars assets. It doesn’t have to be, I’m trying to shoot for the stars, but I’m buying things that are putting money in my pocket month after month, year after year, and magically you become really, really wealthy.

Speaker 2 (19:56):

Yeah. Well, that’s great. I love hearing that and I love hearing that from you where you’ve been in the real estate world, you’ve seen the other side and seen the backend and okay, why do people go down? Or like you said, embezzlement or they don’t have the KPIs or they don’t have this in place, and I love how you just put on the bottom shelf, why am I buying the assets that put money in my pocket? If you do, you’re going to beat out most market investors like that. Just like you said, the flippers, the one-off hit who go off and get it, but then don’t actually build the wealth there. So I think that’s great because then a lot more real estate investors would be actual investors and having those properties that they hold for a long time that put money in their pocket.

Speaker 1 (20:36):

David, during 2008, nine and 10, here in Vegas where I live, the value of the property dropped by about 75%, and I was involved in hundreds of flips. I had a neighbor that did over 500 flips, and his average return on a flip was 15%, took him 90 days and he was buying ’em at auction. He was doing all that. And I look at him and now he’s still playing the real estate game. He’s still trying to do the same thing, but guess what? He makes decent money because he has an expertise. But if he had just kept 50 of those properties,

(21:13):

I accidentally kept some of my flips because the roof caved in on one Thanksgiving year. It was it storming and we had just put in new floors and it was like, oh, we’re not going to sell that one. It’s going to cost too much, so we’re going to keep it. Nothing’s tripled in value and it’s paid me more in rent since that time that I, it’s paid for itself now. I just look at it going, well, shoot, it’s just a cashflow machine pays me 1300 bucks net every month, month after month. Thank God I didn’t sell it. So I’m looking at him and I’m always thinking, you would’ve been so much better off if you hadn’t sold all those properties. You should have kept some, right? And I don’t know anybody who flips, who doesn’t say, dang, dang, I should kept,

Speaker 2 (22:00):

Oh man, I love that. There’s the tale of two investors right there. I mean, if you’re listening to this and you’re like, okay, which road should I go down or should I transfer some of these profits into long-term assets? It’s like, here’s living Toby’s lived through 2008, nine and it’s still investing in real estate and still has some of those assets. I love how you said that too. Accidental rentals from some of those ones, and then it’s like didn’t mean to

Speaker 1 (22:24):

Keep them, didn’t mean to keep them. I thought I was going to sell ’em and make some money, but it would’ve made money. But it’s just working. You don’t get rich working. You get rich taking the money that you make when you’re working. So I’m not saying don’t flip. What I’m saying is take the money that you make when you flip and buy assets, and if you just did it, simple rule of thumb, here’s a silly one, right? Hey, for every four that I flip, I’m going to keep one. And that was your goal and you did it long enough, you’re going to be really, really wealthy. There was a realtor that I knew in Seattle, and he would always say, you should be buying a house a year. If you’re selling real estate, you should own real estate. And I still remember it was like 1988, I was really young and here’s this guy and he’s got hundreds of properties. I remember his spreadsheet was like dot matrix. It was all these properties in Seattle and Denver, and I was like, boy, he’s rich. And all I could think of is what’s the value of those? He didn’t care.

(23:24):

He was like, I don’t care. I don’t care what the value is. And what he cared about was the rents that came in nice. He was like, because it’s just going to keep compounding itself. It took me about 15 years from that meeting before I figured it out and I was like, holy crap. He had ATM machines. Each one of those things was an ATM machine just spitting cash out. Why would I sell the ATM machine that’s spitting cash out, so I should be investing in the ATM machine that’s just going to keep making cash so I can flip, but I should be buying the ATM machines.

Speaker 2 (23:55):

Yeah, no, that’s awesome. I love that. This is such great information. I mean, if you’re listed to this, he’s giving you a masterclass of playing the long game in the real estate world and how to survive markets and how to make sure you stay in for a long time and you get what you want from it. Now, one thing we had talked about before that you said you could talk on is how to squeeze the most out without hurting your tenants. And since we’re on the topic of long-term investments, you want to talk about that squeezing the most from your properties?

Speaker 1 (24:23):

Yeah. I’ll give you guys something that I found, and I’ll give you a real life example too. So I buy properties all over the place. I’ve been buying properties in Indianapolis for a long, long time, and I have some crappy properties, some properties that I probably shouldn’t have bought, and sometimes I donate them. I have a related charity that does affordable housing and things like that. So I donated a house and I was like, ah, what am I going to do with this thing? It’s the annoying property. It’s like my worst property. It’s always every year I get to do a turn and it would cost me two or three grand to fix it up again so I could rent it. I think I was renting it for like seven 50. It was hard to get families in the neighborhood. It was a very busy neighborhood and things like that.

(25:05):

So I did something different with it. I did something called a pad split with it. Have you ever heard of pad split? Great company, by the way, but they basically rent rooms. It’s like Airbnb for long-term rentals. You’re a month at a minimum, and then it goes weekly. So I convert this property, it costs me about 20 grand to convert it. And just to give you an idea, I think I bought this property for less than 30,000 bucks. So I converted it, I put furniture in it, and I made it into a pad split. Atticus LeBlanc is the CEO over there, a really great guy too. You should get him on your show sometime. He’s really, really bright. But just think boarding houses, Europe, they’re all over the place. United States for some reason, we don’t embrace it, even though we have probably we’re 7 million units behind as far as housing, and there’s no affordable housing as a result. So here’s an interesting way to fix that. So I took this house, made it into a three bedroom, one bath, and rented them out. I actually added, I took the living room and made it into a bedroom so that we didn’t have as many common spaces. So I ended up with four. I am getting right now, $225 per week on each of those, and they’re almost always full,

(26:18):

Which means I’m getting about a thousand bucks. If you can do the math, you’re getting about a thousand bucks a week. Let’s just say one of them’s vacant all the time, which is not true. The average tenancy with pad splits, it’s just about two years, but I’m making way more. I’m making what I used to make in a month in a week,

(26:37):

And I’m servicing people that are so excited to get to live in a house. This isn’t like, oh, crappy crap box. No, they don’t have utilities. They don’t have these huge deposits that they have to do. People are always worried, well, what kind of folks? I’m getting people that want to work in that busy area, and it’s really expensive to get an apartment and nobody really wants to be in the house down there because that’s not where you’re going to raise your family. So what it did is it artificially drove down the cost of housing like a house, but when you broke it into its components and says, how about a room, a secure room, and a nice house, fix it. It’s already got bed in it. Don’t, all you got to do is bring your sheets. And it was easy. It’s been full ever since.

(27:24):

And so my net operating income’s way up 200%, 300%, whatever it is. It’s funny. I look at it, well, I have a client that did that with a thousand units. Whoa. And so I know the numbers over 200% increase. Wow. For years. I have a builder that I work with and he builds a seven bedroom, seven bath down in Houston because everything went there. I have a huge portfolio in Houston, and it’s tripled in value in the last five years. It’s just gone bonkers. Some of these places, and I’m just looking at it going, all right, it’s really tough to find affordable housing. Well, here’s affordable housing. You can live in a nice house. You could build a house that’s specifically almost like an apartment building, but in a house in a nice neighborhood, and it’s, oh, they’re just great. And so I look at people going, why the heck aren’t you doing that?

(28:14):

Or the other one is manufactured housing cost 200 bucks to build a stick bill right now. So trying to build a 1500 square foot home, you’re probably talking about just to build it 300 grand. How are you going to make money as a landlord doing that? Oh, just I’ll rent it to a new family and hire rents and all that stuff. It doesn’t work, right? It might work for five years and then all the deferred maintenance comes and kicks your butt. So maybe you do manufactured homes. I can get a manufactured house instead of 300,000. It’s going to cost me about 80 grand with a little deck and get it dressed. And so now all of a sudden, I can probably put two or three of those on a property. I have one where I put 30 and it’s for veterans only. We call it Warrior Park.

(29:02):

Nice. We just had bought the little empty park. It’s just the little pads, if you know mobile home parks or manufactured housing. And it just took me a while to fill it up because there was such a backlog on these things. But you end up buying these manufactured homes and it was less than a hundred thousand dollars per unit, and they rent for 1500 to 2000 a month. Well, that’s called cashflow. That’s called, it’s really tough to lose money when you do that. And these are brand new units. So it’s, it’s just using some common sense and not doing what everybody else is doing.

Speaker 2 (29:33):

That’s great info. Like I said, if you’re listening to this, this is a masterclass. Number one, he was teaching you how to play the long term game and then also here with pad split, how to maximize the dollars that are coming in and maximize your property. And I love that you’re doing it. You’ve seen so many different, you’ve seen the different cycles. You’ve had the different types of rentals, you’ve had the accidental rentals, and now you’re open to this new newer concept, new-ish concept with a pad split and then taking advantage of that. So this has been awesome. We’re going to have to have you back to dive into more, but what’s the one last question here? Just the last minute advice, because you work a lot on defending people and making sure that they can keep the money. What’s one of the best ways that they can protect themselves?

Speaker 1 (30:19):

Oh, easy. Don’t own things in your name. There you

Speaker 2 (30:22):

Go. There you go. Make

Speaker 1 (30:23):

It simple. Use land trucks and LLCs and isolate the risks. So I’ve had three houses burned down. We have hundreds of properties. Had a tree fall right on. Thank God nobody’s been killed, right? Yeah,

Speaker 2 (30:36):

Speaker 1 (30:36):

Kidding. At the same token, you don’t want to lose your portfolio because of one event, so you just don’t own it in your name. From an estate planning standpoint too, don’t own things in your name because if you die, you don’t want to force your kids into a situation where they have to go to court and go through that whole probate or whoever your loved ones are. Maybe it’s organizations, maybe it’s family members, but make sure that you’re keeping things isolated in out of your name. Do not do that whole, it was so easy for me and my accountant said I could just get insurance. No, unless they’re willing to sign on the dotted line and say they’ll take over the liability. Don’t listen to that garbage. It is garbage. Eventually you’re going to have a liability occurrence, and the last thing you want is somebody to be looking at your entire portfolio going, I could get that

Speaker 2 (31:22):

Right. See, so practical and just like don’t own things in your name, and Anderson can help you. I love working with Anderson. They take care of our clients. They take care of the people in that space. So check them out and we’ll make sure we have the link in the show notes if you want to check out Anderson, but you can search them. Anderson advisors, just tell ’em you heard ’em here on the Profit first. RII podcast. But this has been awesome. Toby’s been incredible here. Do you have any last minute things you wanted to say, Toby?

Speaker 1 (31:49):

Yeah. There’s asset protection, tax planning, and business planning and legacy planning. They all kind of go together. If you’re interested in learning more, you can always go to the website, but just type in Toby Mathis in Google, and you’ll see, I think I have an interview with you, David, that’s sitting there on my YouTube channel absolutely free. You can go in there always just trying to share, because guess what? The pie is really big. There’s no such thing as if I get wealthy, somebody else is losing money. You can create wealth and you create wealth by buying assets and by being a decent person and as a landlord to another landlord, I’m just going to say there needs to be more like us, not these big institutions that are buying everything up where their duty is to their shareholders. We need to actually act like human beings and solving some of this housing issue. The affordable housing will help itself if there’s more people like you and me out there being landlords. So please become one.

Speaker 2 (32:43):

Yeah, no, I love that and I love that Toby, that here has been on this podcast sharing. I mean, he’s one of the founders of Anderson. If you’ve heard of them before, if you’re in the real estate space, I’ve heard them for years and years and just very honored to have him here. And if you are looking for cashflow help and that C ffo help head over to simple cfo.com. And then I love working with Anderson because we work very synergistically because they do the bookkeeping, they do the estate planning, the tax planning, asset protection. It’s like we’re working together to make sure you keep what you make and that you’re not either going in an orange jumpsuit or that you’re not just spending all the money out the door, maybe setting up those KPIs, getting the things in place that real business owners do. And this is a pair here that we can help get you to where you want to be. Remember to make profit a habit in your business. And then, Toby, thank you so much again for being a great guest here and providing so much value to the audience

Speaker 1 (33:36):

Anytime.

Speaker 3 (33:38):

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.

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):

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.