Balancing Business and Family: Lindsay Sharma’s Path to Financial Clarity

February 27, 2024

Title: “Balancing Business and Family: Lindsay Sharma’s Path to Financial Clarity”

Episode: 221

This episode of Profit First for REI podcast will give you more hope. Wherever you are now, there is a way out of it!

Lindsay Sharma, a mom and wife, has been in real estate for a year, but she is doing a great job! In this episode, she tells her journey in the real estate world and the money struggles she has gone through.

Listen as she shares how Profit First has helped her in this real estate journey. Enjoy the show!

Key Takeaways:

[00:55] Introducing Lindsay Sharma

[02:30] Being a real estate investor and a parent at the same time

[05:48] Money struggles

[09:05] Burn out as a real estate investor

[11:12] Transition from working for a real estate investor to becoming your boss

[13:40] Introducing Profit First

[21:01] Being strategic and proactive about finances

[24:34] Her advice for people starting their real estate journey

[26:46] Connect with Lindsay Sharma

Quotes:

[03:14] “You have to be extremely organized and efficient as a business owner and mom, so I’ve learned to delegate, communicate my needs, and be very organized and prepared. Always thinking one step ahead.”

[13:00] “Starting a business or jumping full time as a real estate investor, you wouldn’t believe how fast you can spend your money on everything to operate a business.”

[24:40] “Be patient, and don’t try to scale too quickly.”

Connect with Lindsay:

Website: https://www.lspropertybuyers.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):

I think the implementation and the accountability piece is what I was having a hard time doing on my own. Like many CEOs and entrepreneurs, I don’t know if I’m necessarily strong on the implementation side, I’m more of the visionary. And so I wanted somebody to help me take this system system and put it into place. And so simple, CFO, having a fractional CFO really helps me do that.

Speaker 2 (00:28):

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 (00:55):

Hey, we have Lindsay Sharma here today on the Profit first, RII podcast. She is a mom and wife and she has three kids at home. Got you even, I don’t know if we edited out, but one of ’em walks in, but she’s honestly doing a great job. She’s only been in real estate for a year, but kicking butt and taking names. And she also tells her journey in the real estate world, but then also her money struggles that she’s gone through and how profit versus helped her. And just if anything, I want this episode to give you more hope wherever you are now that there is a way out of it and she really walks you through some of those steps of that helped her as well. Thank you for listing and enjoy the episode. Enjoy. Hey Lindsay, I’m super excited to have you on here. We have Lindsay Sharma here and she is a client of Simple CFO, so disclaimer there, but that’s where we get to go into her as a real estate investor, also as a true crime addict on the social and on Netflix and all that stuff. Just kidding. We don’t have to go there unless you want to. But Lindsay, thanks for being on the podcast today.

Speaker 1 (01:54):

Thanks, David. I’m excited to be here. Really love your content.

Speaker 3 (01:57):

Well, I appreciate that. Well, one of the things that popped up, and it popped up several times when you sent me your bio, I never read anyone’s bios. I feel like bios are boring and I have to read it and sound robotic, but I love that in two places, two things popped up, you being a mom and then also you are also a true crime lover like the show. So I’m like, how does that play into it? I do want to know, okay, on the serious side, maybe we’ll be serious. And then funny first, but serious, how is being a real estate investor and being a parent at the same time, has that affected your journey as you’ve been a real estate investor?

Speaker 1 (02:36):

Yeah, you know what? I think there’s definitely some carryover from being a mom and also running a business because as a mom a lot of times you’re running your household, you’re managing all these personalities. I have three kids, four and under, so they’re learning emotional regulation. And me as mom, I have to teach them things. I have to teach them how to communicate, to name their feelings, to manage the meltdowns. And sometimes you see that in business too, just dealing with tough personalities, dealing with a lot of people, managing expectations. Also, you have to be extremely organized and efficient, I think as a business owner and mom. So I’ve learned to really delegate to communicate my needs and just be very organized and prepared, always thinking one step ahead.

Speaker 3 (03:29):

Okay. Well that’s awesome. I love hearing that and how that’s translated. I feel like that does give you a leg up if you’re the one doing that and teaching that emotional regulation at home. So right. There are so many personality types that you run into, especially in the real estate world. So I did want to ask what brought you down the real estate road? Was it the same thing? Was it the purple Bible that everyone has, rich Dad port had, or did you get into it by some different gateway drug?

Speaker 1 (03:56):

So I would say the purple Bible, I love that you call it that. That’s hilarious. That’s true. For me, that was a mind shift and paradigm shift for me just to learn about assets and liabilities and what the difference is. So that did get me started on the path, but really what kind of fueled it more is, so I’ll kind of give you a little bit of a backstory. I grew up in the Midwest, so northwest Ohio, kind of what you would call the rust belt. And I was growing up in a time of sort of economic downturn. The auto industry was very important in my area and it provided a lot of great jobs for families. Well, as we know, a lot of the factories shut down in the nineties, two thousands, that sort of thing. So I saw a lot of decline around me and I was fortunate enough to go to college.

(04:51):

I graduated with a degree in graphic design and I graduated in 2007, and of course financial crisis happened in 2008, so I was kind of living in an area where there was a lot of economic difficulty, and it really took me a long time to get a job in my field. I mean, it was probably six, seven years before I got hired as a graphic designer. And it wasn’t for lack of effort because I applied to hundreds and hundreds of jobs, but I started freelancing on the side just to get some clients some money and get some practice as a designer because I loved it. And eventually I had my own business where it was more, I use the term business loosely because I didn’t know much about running a business at the time, and I was kind of just having a job for myself and then just working with all these different clients.

(05:45):

So when I was doing that, I struggled a lot financially, but fortunately I was single at the time, so I only had to take care of myself, and I just didn’t know what I didn’t know. And I starting to learn about passive income and about financial literacy and how do you get ahead, how do you build wealth, that sort of thing. While I was working for myself, because I was like, there’s got to be something easier than what I’m doing here or something’s not working. And so that’s how I got on the path to real estate. And interestingly enough, when I was a designer, I would create digital products. For example, I had an Etsy shop where I sold resume templates and I would create the template once and then just sell it over and over again. And I was like, this is great. And that’s how I kind of got turned onto the idea of passive income, which we all know in business that nothing’s truly passive, but it’s that idea of investing in something, whether it’s time, money, and then reaping income from it or whatever over time, once you’ve kind of front loaded that work.

(06:52):

So I loved that idea. I knew that you could build that through real estate as well. So I started learning about real estate. I think BiggerPockets was getting really popular at the time that I was kind of learning all of this. So I listened to a lot of BiggerPockets, but I was still at the point that I’m like, okay, I’m learning this stuff, but how do I get started? Because I was scared, scared and I didn’t have any money either. So I thought, well, what if I switch careers and try to find a job working in real estate so that I can just get my foot in the door somewhere? And I actually found a job for a real estate investor, and I worked for him for three years. I was his executive assistant and I was involved in every part of his business, which was such a great learning experience for me. And I actually bought my first investment property while I was working with him and kind of under his mentorship and guidance. And then from there I started my own real estate investing company.

Speaker 3 (07:47):

Okay. Okay. Good grief. This is pretty cool. That took a lot of courage. You went to college for graphic design. You were doing that on the side, you had your Etsy shop, but then you were like, you had a job and then you said, no, maybe I should find something in the real estate space. This is what I want to do. That’s what I heard. That was like, yes. Were you married at that point? Were you married at that point when that

Speaker 1 (08:07):

Happened? Yeah, I was.

Speaker 3 (08:09):

Okay. How did that go down at home? Hey, I want to do real estate investing. I’m thinking we’re going to go work for this guy over here. Was that a good conversation and yes, let’s do this, or are you sure? Because it’s like a lot of us have those people in our life.

Speaker 1 (08:24):

Yeah, my husband was very supportive. He just wants me to be happy and to pursue the things that I want. And he saw as a person who was freelancing for a long time and in the design industry, I really burnt myself out and I wasn’t enjoying it anymore. And so I was kind of looking, what’s the next thing? And so yeah, he was very supportive.

Speaker 3 (08:45):

Well, good. I’m glad this was not the beat down for your husband, but I’m glad he was there supporting you. Sounds like too, you were ready to take that plunge to something else you were getting burnt out, which I don’t know any real estate investors that ever burn out. Have you ever felt on the edge of burnout as a real estate investor up until this point?

Speaker 1 (09:06):

So I’ve only been in business around, I’m coming up close to a year, but I haven’t felt burnout because I’m very intentional about self-care, balance, managing stress. And I also, I have a very limited amount of time that I can work on the business because I have three little kids, they go to daycare during the day, but I still have to pick them up. I have to take them to appointments and then when they’re home in the evening, can’t, a lot of business owners sometimes when they’re starting their business, they work those really long hours and I just don’t, it’s not available to me nor do I want it to be. That’s not how I’m designing my life. So I’m very intentional about managing all of those things. So I’m happy to say I have not reached burnout yet. However, I have reached, I’ve gone through some really difficult moments and one thing I do have a coach that I work with and having kind of a support system and somebody who’s also been in the trenches has been where you have been, makes a huge difference. And I didn’t have that in my graphic design business because again, I didn’t really know, I didn’t invest in myself the way that I have this time around. So I was kind of alone and I didn’t have a network. I didn’t have anyone to help me out with these things. I didn’t have a model to look up to either, which I experienced a lot. I received a lot kind of a blueprint when I was working for the other investor to see how he ran his business. And that’s exactly how I structure Martin now.

Speaker 3 (10:35):

Well, that’s awesome. So it sounds like you were able to learn while you earned, you learned while you earned with him, and then learned, sounds like you learned a lot during that time. And then were able to make connections and build this network and be able to step into the real estate. Well, man, there’s so many ways I could take this. There were so many good things there. You set a mentor, you set the people in your life. You said you were working with him. Okay. I do have a bigger question. How was the transition working for a real estate investor to becoming your own boss and your own company and yourself as a real estate investor?

Speaker 1 (11:12):

So I feel like I had a lot of advantages in the sense that my learning curve was maybe reduced somewhat just because I already spent time in that industry. But on the flip side of that, I expected all these things to happen so quickly in my business that I forgot the guy I was working for spent 10 years building his business. He had 10 years of experience and I’m trying to, I’m shooting for certain revenue goals and things like that, and I’m like, why isn’t this happening? So I sort of forgot that it takes a long time, even though maybe I have the knowledge, you still need the experience, you need to put in the work, you need to put in the time. And some of it’s just time.

Speaker 3 (11:57):

Yeah. So that’s a great sentiment. It’s like, oh man, this seemed like I was just going to get the short path. But it’s like you still got to get through some of that stuff, but you did have that advantage of working with someone. So would you suggest that to people like that, if they’re looking to get into the real estate journey and on their own path, would you suggest for them to link up with someone maybe in their market like you did or sounds like it helped a lot? Absolutely. But I’d love to hear your feedback on that. Yeah,

Speaker 1 (12:22):

I would highly recommend it. And even if you can’t work directly for an investor, if you’re trying to make a career shift and you don’t have real estate experience, even if you’re working in something adjacent, maybe the mortgage lending or for a title company, whatever, even if it’s taking a step back in your career, maybe doing administrative work or something, you will learn so much just from being in the industry that’s going to help you, especially if you want to start your own business. And it’s also beneficial if you need an income because starting a business or jumping full time as a real estate investor, you wouldn’t believe how fast you can spend your money on all the things to operate a business or just accumulating and purchasing properties. There’s a lot of money involved with that as well. Closing costs and renovations, all of the things.

Speaker 3 (13:17):

Okay. Yeah, for sure. So it sounds like you’re endorsed working for someone else, seeing all that it goes on there and then jumping into it, then it gives you a much greater advantage. But then you were talking about the money too. Okay. What got you first excited about profit first or where did that even enter your sphere in this real estate journey?

Speaker 1 (13:40):

So going back to, I had this experience, I worked, the guy I worked for, the other investor, his name was Justin. I worked for him for three years. And like I said, I was involved in everything. So I learned about acquisitions, I learned about marketing. I was even involved in some of the bookkeeping and financial tasks, things like that. So I had a pretty good picture of the different parts of the business and what needs to be done. And so again, kind of going back to my ignorance of, oh, this is going to be easy. I know all the things. Of course that didn’t happen. And I started scaling my business too quickly. So I was spending all this money on marketing. I was getting all these leads in the door, and I had a team in place. I had two acquisition managers working for me, but I didn’t train them very well, and they were leaving a lot of opportunities on the table.

(14:33):

And I also wasn’t, I was doing all of these different things in my business that I wasn’t really focused on the most important thing, which would be getting them really highly trained, really tightening up the acquisition side of my business. And I just started spending too much on money. We were leaving leads on the table and I started looking at my finances and I’m like, oh, I’m not really making much of a profit here. Where’s all the money going? I’m not able to really measure my marketing results because my business was new, and this was probably around six months in business that I started to see this sort of crunch. And I did have a little bit of money saved up to get my business going to spend on marketing. In the beginning, that money went very quickly, and then I kept saying to myself, oh, I’m spending all this money on marketing.

(15:23):

I’ll just get more deals, more deals will come in, even I’ll start to be profitable. And after a few months of that, I’m like, well, this isn’t really materializing. What’s going on here? And I started to get a little nervous, stressed and fearful, and then I came across your book, David Profit First for Real Estate Investors that I read that book and I was like, it just really resonated with me because a lot of us, we read books, we listen to podcasts, but people aren’t really talking about how difficult managing your cashflow can be and how problematic it can be. And so that really helped me and your stories in the book just made it so relatable and real. And so I was kind of hooked at that point, and I started listening to your podcast, and then of course I heard the ads for Simple CFO, and I thought, well, I would love to have somebody that can help me make sense of these numbers and get financial clarity so that I can better make decisions in my business.

Speaker 3 (16:23):

Awesome. Well, I appreciate that, but I wanted to go back a little bit. You said that before all this, it was like, okay, where’s all the money going? We’re not making a profit. A lot of the stuff that I write about in the book that probably resonated with you probably saw that, and I want to commend you, thank you, number one for saying that, because sometimes it’s difficult for people to admit that. But then number two, I think it’s very interesting you started to say, okay, this sounds like something that I need to grasp onto. So then you sought out the other ways of information like podcast or whatever, because that’s where I feel like a lot of people, if they’re in the real estate space, you find the book or something and it’s like, hopefully they have something else. I need more of this. So then talk about that then you’re less than a year into your business and then you’re like, okay, you have to call with simple CFO and then you come on board. What’s the difference between reading the book and having someone simple CFO working with you, if you don’t mind going into that?

Speaker 1 (17:24):

Yeah, I think the implementation and the accountability piece is what I was having a hard time doing on my own. Many CEOs and entrepreneurs. I don’t know if I’m necessarily strong on the implementation side, I’m more of the visionary, and so I wanted somebody to help me take this system and put it into place. And so simple C, having a fractional CFO really helps me do that as well as holds me accountable. Because what some people do is they’ll set up their profit first account, they get it all organized, they open all the accounts, they put the money where it needs to go, and then two weeks later they’re stealing money from not stealing, but they’re transferring money from accounts where, where it sort of defeats the purpose of the system. So if you don’t have anyone looking at this with you looking over your shoulder coaching you, then it’s easier to lose that discipline, I guess.

Speaker 3 (18:27):

Yeah. Okay. Well, I love hearing that for sure. So then before it was like, gosh, where was it going? What did it look like after in your business? Now that you have it set up, what does it, I guess, is night and day difference or is it more like, okay, this is what I know in my business, I’m just trying to paint the picture. Here’s where it was before, here’s what it looks like after.

Speaker 1 (18:50):

So I’m not out of the woods yet, because sometimes it can take a year, two years, three years, just depending on what your business looks like for sure. But I’ve been working my fractional CFO, his name is Tony, he’s awesome. Been working with him. I would say probably, I want to say we started working together in October, so it’s maybe even five, six months now. So he helped me get a new bookkeeper, a new CPA, really clean up my books so I can see how things are categorized clearly, see my properties were not coded correctly from my previous bookkeeper. So a lot of things like that. We use this dashboard that just has all these different metrics so that again, I can easily see where things are. It just keeps me a lot more organized. And then we just talk about a lot of different things.

(19:44):

Whenever I’m struggling with something financially in my business, I’ll bring it up with Tony and we’ll go over it and we’ll kind of walk through some different options. One also thing he set up for me, which has been really, really helpful is it’s basically like a cashflow tracker. So you can see if you’re working on a flip or you have some wholesale deals, you can kind of see what money you expect to come in and what money’s going out the door. And that was really hard for me to try and manage that on my own, but this dashboard that he created, it’s just really easy to use. So that’s been super helpful.

Speaker 3 (20:22):

Awesome. So then going through this process, I guess, did you see, this was one of the things where you were like, oh, I thought this would be easier, right? Because you had even mentioned that upfront like, oh, I was in the real estate world and knew all this stuff. So then do you think that this helped, I guess at home, maybe not even, it could be with your husband or whatever, but do you think having a system for the finances, how does that improve the relationships or the time? Does this help you with time at home too, just knowing and stuff or financial peace of mind? I’m just looking for how it affects you when it comes to the home life as well.

Speaker 1 (21:01):

Yeah, it definitely provides a lot of peace of mind just knowing that I’m being strategic and I’m being proactive about my finances. It just kind of takes the burden off. And then I do actually manage our personal household finances as well, just because, yeah, I’m more of a spreadsheet person and I’m the one who learns about investing and wealth building and all those things. So I’ve just kind of taken on that task in the household. Yeah.

Speaker 3 (21:38):

Have you transferred any of that from the private first? I don’t know. Or did you already have the envelope method set up on the personal side?

Speaker 1 (21:47):

Yeah. No, we don’t really use that because we really just have an automatic amount of money that just gets pulled out of our checking and thrown into our savings. And we use what’s called a CMA cash management account, which is kind of like a high yield savings account. It’s pretty much the same thing, and we put our savings in there that way. Ours is making about 5% right now instead of the 0.5 or 1%. Yeah. So yeah, I mean, we try to keep it pretty simple. We try to live below our means, always save money every single month, and I’m starting to learn about infinite banking and I’m thinking about getting some insurance policies for my kids so that they can start having this account as they get older. Yeah,

Speaker 3 (22:44):

No, that’s great. Well, I love that. So we could do a whole episode on that. I set it up with my family and all that stuff, and I like that being liquid. But I like what you were saying. It sounds like you have some of the core concept already baked into you as a person. Just don’t spend more than you’re making. It’s at home. And then in the business feel like it’s a lot easier to spend more than you’re making. A lot of times, especially in the real estate world, are these deals going to close or not? So it’s good. I like that you not only have read about it, but you’ve actually taken action and done something with it and getting that peace of mind. Okay. Well then what would be your advice be to someone who might want to set a profit first in their business then?

Speaker 1 (23:33):

Yeah, I would say definitely read the book. There’s a lot of really practical things in there that’ll help you get started. You can definitely do it on your own, but again, if you have weaknesses in implementation or you need some accountability, I would definitely recommend working with a company like Simple CFO. It’s just really, I think finances can be the most confusing, but it’s also the most important part of your business. And to invest in having someone help you manage and sort all that stuff out, it’s just really going to pay back tenfold in your business.

Speaker 3 (24:13):

Yeah. Well, I appreciate that. I did not pay Lindsay to say that, so thank you Lindsay for saying that. That was good stuff. And then to end, and what’s one piece of advice or maybe the hardest lesson or whatever that you’ve learned and that you’re either overcoming or have overcome in the last year in the real estate investing world?

Speaker 1 (24:34):

Gosh, I think there’s so many of ’em. I would say the biggest one is just being patient and not trying to scale too quickly because I think we all get a little, we listen to podcasts. We’re looking at all of these really successful investors, and people are talking about how much money’s in their portfolio or how much it’s worth and how many doors they have. And so we all feel like that’s what we should be doing. I need to grow my portfolio. I need a hundred doors in two years because those are the stories we hear. But what you don’t hear is when you’re over-leverage and your tenants aren’t paying and now you negative cash cashflow, those sort of situations can happen very, very quickly. So I think you just have to be careful and scale at a level that you’re comfortable with. You need to make sure you have a solid foundation for your business. You need a solid team. You need solid financial understanding before you start expanding and growing. You need to kind of start at step one. And that’s a big lesson I learned. I was trying to go to 100 really quickly and it proved to be very stressful and challenging. So now I’m taking it slower and I’m okay with that.

Speaker 3 (25:53):

Yeah. Well, that’s really good. I think that’s great advice. So many people are out there hustling and then they’re hustling themselves right into the dirt, so it’s like, please don’t do that. So I like that a lot, being patient and not going against the mainstream a little bit where you just have to grow, grow at all costs. That’s very much the mindset we try to pass on. So this is really good stuff. Okay, so this has been awesome. You’ve helped people in a lot of different ways. I love your journey. I think they could just get, if they’re looking to get into real estate, you gave great lessons there of okay, find someone who’s in it and get help, and then now you have a mentor and a financial coach. It’s like you have these people in your life for the things that you need that help on. So I think this was really good, just giving some very practical steps. Is there any way you want people to connect with you, I don’t know, social media or email or website or if someone wants to reach out?

Speaker 1 (26:46):

Sure. I love when people reach out to me. I love to talk to other investors and I love to answer questions for people, especially busy moms who want to make career changes. I get a lot of questions from people in those situations. So yeah, you can find me on Facebook. It’s a Lindsay Sharma. I spell my name with an A, so it’s LIN dsa y. You can just look me up, should find me there. My company is Lindsay Sharma, property buyers, and my website is, it’s ls property buyers.com.

Speaker 3 (27:19):

Awesome. So there you go. There’s her website. That’s how you could find her on the socials. And if you have ever felt like, Lindsay, where the heck is my money going? We’re making this money, but I don’t know what’s happening. Or like she said, if you need help with implementation, someone holding you by the hand, helping you down this road can reach out to simple cfo.com. We can get on a call there, see if we’re the right fit or if we can at least point you in the right direction. But we want to help you as well too. If at the very least, go by the book, listen to it, start to implement it like she had mentioned as well too. And then make sure you follow Lindsay and just especially if you’re in that situation where she was talking about if you’re a mom and trying to go through and do all the stuff that you’re doing and adding business to it, it’s like that’s a great community to be a part of and other people that are on that road with you. So if you can do that, that’d be great. I know that she would love to help you. If there’s anything else, thank you so much, Lindsey, for being on this podcast and for providing a lot of value here and for being a great guest today.

Speaker 1 (28:18):

Thanks, David. Thank you for all you do. I know you’re helping a lot of people with the book and simple CFO, so it’s great.

Speaker 3 (28:25):

I appreciate that. And if you’re listening, thank you for listening and for sticking with us and have a great rest of your day.

Speaker 2 (28:32):

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.