Building a Thriving Real Estate Business with Supercharged Offers

February 6, 2024

Title: “Building a Thriving Real Estate Business with Supercharged Offers”

Episode: 218

In this episode of Profit First for REI podcast, we have Alicia Jarrett. She is the co-founder at Supercharged Offers and has been in real estate for eight years.

Listen as she gives you practical advice on marketing in the real estate investing world. Alicia will also teach you how to get the leads so you can make more money to keep.

There’s a lot of value in this episode. Listen and enjoy!

Key Takeaways:

[00:55] Introducing Alicia Jarrett

[02:40] How she started in the real estate industry

[05:59] What makes Supercharged Offers different from other marketing companies?

[12:09] Best Channels for Marketing

[17:30] 20% of your profit needs to go back into your business

[24:27] Alicia’s advice for real estate investors

[26:31] Connect with Alicia Jarrett

Quotes:

[08:06] “Marketing needs to cover all demographics, all people, all ways of doing business.”

[19:03] “Marketing is an investment if done right.”

[25:35] “To be successful in real estate investing, you’ve got to move past the fear of the unknown.”

Connect with Alicia:

Website: https://superchargedoffers.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):

Eight years ago, it was a real estate business. I often say now that it’s a relationship business, it’s not a real estate business. We’re in the business of building relationships, rapport, and trust with these property owners who are probably getting conversations from 10 different people. So what do you do as a real estate investor to stand out from all of your competition, have different conversations with your prospects that might then lead to a deal?

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’ve got Jarret here today on the Profit First RI podcast. She works with supercharged offers. She gave some great practical advice on marketing in the real estate investing world and how to get the leads in the door so you can make more money so you actually have money to keep. So I absolutely love getting this advice from people like this who are seeing so many trends in the real estate space. I know this can help you. Thank you for listening. Hey everyone, to another episode of the Profit First RI podcast. Super excited to have Alicia ER from Supercharged offers. She’s got a great community, but honestly, lots of people need the help that she provides and getting leads in the door, that’s really all you care about. Let’s get the money in the door. We help you keep it on the backend, and that’s what a lot of this is about. But I can’t wait to dive in here. So Alicia, how are you today,

Speaker 1 (01:46):

David? I’m fantastic. Thank you. And I love what you just said in your intro. You got to get the leads in the door and then you help them to keep the money. So I think you and I, we make the perfect partnership, right? Because we’re all about acquisitions, marketing, you’re all about keeping the cash,

Speaker 3 (02:02):

Right? Exactly. Tell people you work soane hard to get the deals in the door. You need a system to keep it on the back end.

Speaker 1 (02:09):

Exactly. Not only a system to keep it, but I think one of the topics I’d love to make sure we talk about today, I see this so often with so many real estate investors, is they’ll do deals and then they forget that part of that profit needs to go back into their marketing and that whole cycle of money and how we see things go around. So we, we’ll talk about that today as well.

Speaker 3 (02:31):

Yeah, no, that sounds great. So I guess how did you even start? Have you been in the real estate community a long time? You get started in the real estate side?

Speaker 1 (02:39):

Yeah, so for those that have never heard of me before, because I’ve been on quite a few podcasts, so in the real estate space, sometimes I find that people are like, oh, that Aussie chick. Yeah, I’ve heard from her before. So I’ve been doing deals in the US now for just over eight years. And it’s funny, I have to stop there and my has to go, how many years has it been? Because at some point it’s going to click over from eight to nine, but it’s about eight years, somewhere between there. And I used to do fix and flipping in houses and myself and my business partner, Matt, we started fixing and flipping in Jacksonville, Florida. Not far from you David, hence when you said this morning you were in Orlando. I’m like, yep, I know Orlando. I’ve been there a few times. So we started doing houses, loved it. It was so much fun, fabulous. Had some great deals that we did, but honestly, it then got pretty hard and it got hard for a couple of reasons. It got hard because number one, where the other side of the world. So yes, for those that can hear my accent, I’m an Aussie and I am doing deals in the US based from the other side of the world. So for anyone listening, if you think that it’s impossible to do a deal in another state in the us I’m telling you it’s not

(03:53):

If you can do this from anyway. Yeah, exactly. So we did houses for a while and then as I said, it got really difficult, David, and it got difficult to not only find a really good off market deal because this was at the stage that everybody wanted to get into fixing and flipping houses. No thanks to HGTV and everyone was trying to get those off market deals and they were getting a lot harder to get, but contractors were getting harder to keep all of that. So we switched about seven years ago to doing vacant land. So we now do a lot. And you were on with some of my community just last week. We do a lot in the vacant land space. We’ve gone from doing infill lots to larger acreage to subdivisions, and now that’s what we do in the real estate space. Secondary to that though is supercharged offers that you mentioned, and that’s a real estate marketing company.

(04:43):

So we saw very early on, we saw the opportunity to really streamline our own business, David, because if we think about how most people do real estate, if they’re anything like us, when we started, we had somewhere between five and six different companies that we were working with to do our marketing. One company for our data, another one for our cold calling, another one for our direct mail. And it was all over the place. It was really disjointed and that meant that we had inefficiencies in how we were running our business. So we then thought, you know what, maybe we can do this a little bit better. So we came up with our own system as to how we do acquisitions. Marketing didn’t actually think at the time, David, that would turn into its own company, but here we are nearly five years on with supercharged offers and got hundreds of customers in nine countries all doing deals in the us and we help them out on that front end as you mentioned, getting that consistency with their pipeline, getting leads in the door, helping them to manage those leads and making sure that they have a true omnichannel presence with their marketing and then you help in the backend.

(05:49):

So we make a good team, right?

Speaker 3 (05:51):

Yeah, exactly. So talk more about that. So what makes supercharge offers different than most other marketing companies?

Speaker 1 (05:58):

Yeah, a couple of things I think that make us different. Number one is built by real estate investors for real estate investors. So we understand the whole process of doing deals, we understand the data and what’s required in the data. The other thing too is we are an all-in-one. So a lot of other marketing companies out there will do your data and your direct mail for you, or they might do your cold calling for you or they might just run pay per click ads for you and things like that. We do it all. So we call it like the five Ds. It’s first of all business designs, they helping you out with your strategy. We then do all of your data, your direct mail, your digital marketing, which is building out sales funnels, email automation, socials, running all ads on your socials as well, doing retargeting, all of that stuff as well as a dashboard that shows you all of your results.

(06:50):

And we have regular calls with you throughout that. So we don’t just set up a system and walk away. We are literally there with you the entire time. And I think the main difference in that, David, is a couple of things. Number one, omnichannel presence. A lot of people think that marketing is just doing one thing. It’s not Because if we just pause there for a second and think about our target audience these days in the vacant land space, we can be dealing with anyone from their eighties and nineties that’s sitting on intergenerational properties that they’ve had for decades and decades and decades, and it’s just sitting in the family. No one’s using it all the way through to people in their twenties and thirties that maybe they bought a property to build on and it hasn’t worked out. Or maybe they’re going through a divorce or maybe they inherited property and they didn’t even know it existed, so they don’t even know what to do with it and everyone in between.

(07:43):

Now I’m in my late forties, I would say that my typical way of doing business is digitally. So I’m not the kind of person that responds to a direct mail or a cold call, but I will click on an ad any day of the week and go through to someone’s website and check them out and do my research before I pick up the phone. So we need to realize these days that marketing needs to cover all demographics, all people, all ways of doing business. And if we’re just doing one avenue, we are leaving money on the table. So hence we have a true omni-channel presence to how we do marketing. And the thing that I think not only stands this apart, but how we add value to that is, let’s face it, if you’re a real estate investor, where you make your money is doing deals, speaking with sellers, speaking with buyers and doing deals, that’s where your specialization should be and where your skillset lies and where your time should be spent. If you are then trying to do everything like pulling data, building websites, running ads, knowing how to do retargeting, it just takes the time away from doing the deals. And for me, that’s a big thing in business these days. What’s that saying, David? You can be a jack of all trades or a master of none. And I think as a real estate investor, what I encourage our customers to do is to ask themselves, where is your time best spent?

(09:12):

Where is that time best spent that’s going to get that income in? And it’s in doing the deal itself.

Speaker 3 (09:18):

So then you help them with myriad different ways of getting the leads in the door. Correct. And then they need to close it. They need to get it across the finish line, which is great. Yeah, okay. No, I like that a lot. So then is this someone, okay, for the people out there that are listening now, is this someone that’s new in real estate, been in there years and years, it’s like this sounds like great for someone who’s just starting out or if someone wants to add needs help on the backend? I love

Speaker 1 (09:46):

That question, David. Yeah, I love that question. We cover anything and everything. So from someone just getting a proof of concept that needs to get some mailing out and they just want to see can they get some phone calls through and can they then know that they’re going to do this business all the way through to people that are super experienced, but now they want to have a fractional marketing team, they want to go from these five or six different suppliers that is taking up a lot of time and energy and bringing it all together into one. So we’ve had a lot of experience real estate investors come to us and say, I like that you guys are an all-in-one, and I have an account manager that manages everything for me. Can you take over the marketing for my business? It’s like, yep, we sure.

(10:28):

We also, we have a number of people that come to us that may be, and for a lot of people listening when they’re starting out, they’ll resonate with this, right? When you’re starting a business, you know that you need to get a website up that you need to get some marketing done that you need to maybe implement a CRM and do all this stuff. But a lot of times when people are starting out their businesses, they’ve got so much to do that they do what I would call the quick and dirty of it. They’ll just get a landing page up and whatever. They’ll get a logo done on Fiverr or Upwork or they’ll design one themselves and it’s terrible. They do all these things to tick the boxes and get stuff done, but then they realize later on that it maybe isn’t fit for purpose and maybe it is time for a rebrand or a redo of setting things up to really function in their business. So often we get those people that are a couple of years in David and they’re like, look, my business is good, but it’s not great. Can you help me polish it just like a piece of coal into a diamond? Can you help me polish it up and make it look great and make sure that I’ve got that omnichannel presence? Yep, no problems. So yeah, to answer your question, anyone from beginner to advanced or anything in the middle, we cover it all.

Speaker 3 (11:43):

Awesome. So that way you can get them up and running, doing deals or just taking over their marketing that one guy came to you and was like, help just put it all one roof.

Speaker 1 (11:53):

Yeah.

Speaker 3 (11:55):

Okay. No, that’s pretty cool. I like how you do that and that it’s so spread out. I guess as the owner or someone that works with a lot of real estate investors here in this space, what would you say are some of the best channels for marketing that you’re seeing right now?

Speaker 1 (12:10):

Yeah, yeah, really great question. Look, all the channels work, it just depends on your list. So let me give you an example here. I’ll give you an example of two of our customers. And again, for anyone listening, you might see yourself in this as well. Got one customer at the moment that their data criteria for the properties they’re going after is people that have owned the properties for 10 plus years, they’re an older demographic, they want them to be in a family trust, had zero improvements on the property. The data criteria is then typically meaning that the list that we are pulling and the data that we are working with a lot of an older generation, so that older generation, they tend to respond well to direct mail and cold calling if the cold calling is done right, because cold calling can be pretty intrusive.

(13:00):

So there’s an art to doing cold calling really, really well because these people just want to have a conversation with someone. So those two channels work really well with that list. We’ve got someone else that their list is they want to specifically go after probate deals. People that have owned their property for less than three years and it’s been done with a quick claim deed or a hundred dollars transaction, they’re looking for people that have maybe inherited properties. Typically, that data list is people like you and I, David, now I don’t know how old you are, and I’ve said I’m late forties and I don’t want to put you in the same category as me, but typically they’re going to be people that are a bit younger, the older generation has passed on, deeded the property to a younger generation, or it’s now in a family trust.

(13:48):

So they will respond to all mediums and they also tend to respond really, really well to the online marketing too. So different data will actually respond to different marketing. And I think the thing that stands us apart, David, is we’re often segmenting that marketing out based upon the data. What do I mean by that? So let’s say that we’re pulling a data list and in that list is a number of avatars we’ve got in that list. We’ve got people that own multi properties, so portfolio owners that maybe own more than three. We’ve got people with larger acreage that might have different needs to someone who has an infill lot. So we can alter that marketing story and that marketing message in the direct mail and even online as well to make sure that we’re speaking to the right people and meeting them where they’re at.

Speaker 3 (14:37):

Okay, that’s awesome. So the better question is what data do you have and what demographics are you looking to market to? And then that’s where the corresponding channel is going to be the best to line up with.

Speaker 1 (14:49):

Correct? Yeah, and when I said before, we have those five Ds, and I said, the first one is business design, where we’re working with you on your strategy. That’s that where we’re going through and looking at, well, what is your demographic? What’s your data telling us? What are the key messages that the people in that data need to hear? And how do we then craft the right, because everything we do is customized. It’s not an off the shelf thing. We don’t have a templated website. We’re going to give you, we’re going to build one specifically for you, your business, your values, your demographic. We’ve got one customer who only does Texas, so his entire marketing and everything that we’re doing and the keywords that we’re using, the cold calls that we’re doing, the letter that’s being sent out all talks about a local doing business locally, and he is got a cowboy hat on and all of that stuff. We’ve got a plate to the avatar, and I think what stands us a part is that we’re not just a one size fits all. We’re really customizing that. And the reason why we’re doing that, David as well, if I go back eight years ago when we started, and you’ve been in real estate a long time too. You’ve done hundreds and hundreds of deals eight years ago, you could send a generic piece of mail out to a list and get a deal,

Speaker 3 (16:02):

Right?

Speaker 1 (16:03):

Yeah. No problems easy. Okay. Times have changed. You can no longer just send out a generic piece of mail to the same list and expect to get the same results. You need to segment, you need to differentiate, you need to be more personalized. And these days, I always say as well that eight years ago it was a real estate business. I often say now that it’s a relationship business, it’s not a real estate business. We’re in the business of building relationships, rapport and trust with these property owners who are probably getting conversations from 10 different people. So what do you do as a real estate investor to stand out from all of your competition, have different conversations with your prospects that might then lead to a deal?

Speaker 3 (16:49):

Yeah, that’s good stuff. You’re tailoring it more to the market and the actual people that they’re sending the marketing to.

Speaker 1 (16:58):

Market message match, market message match.

Speaker 3 (17:02):

Good stuff. You had mentioned, going back to what we talked about at the beginning, using some of the profits to go back into marketing. So since you run, it sounds like you run it by data numbers, you got the KPIs, you got a dashboard. What do you suggest goes into marketing? Is that also dependent on avatar area and the business design, or is it something that you see across the board, just very curious about?

Speaker 1 (17:27):

Yeah, yeah, good question. Look, typically what I would say to people is, 20% of your profits need to go back into your business. Okay, 20%. Now, that 20% could be all marketing, or it could be like 15% marketing, 5% for your CRM, your systems, your processes, et cetera, et cetera. But for me, that rule of sum is around discipline. It’s not so much about the strategy of what you’re doing. The discipline is every time you do a deal, 20% back in. Because if you’re starting to say, well, I only want to do 10%, and then you’re in a stage that you want to grow your business or you want to implement a different system or hire a new team member, all of a sudden you don’t have enough cash to do that. So I like that rule of thumb of 20% back in. And the other rule of thumb for me around that is that’s what we also typically see is when we reverse engineer the numbers with our customers. So if someone’s done a campaign that they’ve made $200,000 profit, we often see that the investment for that campaign was somewhere between that 30 to 40,000 to get the 200.

Speaker 3 (18:34):

That makes sense. So then you’re looking at their actual data and seeing how much is

Speaker 1 (18:38):

Coming back. Yeah, correct. Yeah. And for me, this is pretty typical across most industries, and this is where I think people need to look at marketing as a, it’s not a cost. Well, yes, it is a cost, but it’s an investment because marketing should be, you put a dollar in, you get X amount of dollars back as opposed to paying for things like a CRM or team members, what have you. They’re a cost, but marketing really is an investment if it’s done right,

Speaker 3 (19:07):

Which it sounds like you handhold people and go through all their different stages of where they’re at

Speaker 1 (19:13):

And what’s the best,

Speaker 3 (19:14):

Yeah. What’s the thing to get out there, which is really cool because that way you don’t have to spend as much money to hopefully not spend as much money to bring the money in

Speaker 1 (19:23):

Because you being much more, do you want to make that more efficient? Yeah, more efficient, more targeted, more consistent. Can we talk about consistency for a second here, David? Because this is the number one killer for me, and this is also why a lot of people come to us is because they’ve been trying to do everything themselves. So they’ll do some marketing, maybe they’ll send out some direct mail and follow up with some cold calls, and then they might get some deals in, and so they stop marketing

(19:51):

And then they realize that two or three months later, their pipeline’s dried up. There’s no more leads in the pipeline and they got to start again. So I feel that a lot of the reasons why people come to us and lean on us is we are doing everything for them. So we are keeping them consistent. We are marketing either every week or every second week or every month, depending upon that customized approach. We’re marketing for them all the time, which means that their job in managing their lead pipeline never dries up. Because the number one thing I see with people that are trying to do it all themselves is they end up saying things like, this business doesn’t work. It’s all too hard. It’s very hit and miss. There’s not enough leads coming through. But when I hear all of those things, my question back to people every time is, tell me about your marketing and how consistent are you? And invariably, David, this is the response I get. Well, aj, I did some marketing. I marketed three times last year, and I’m like three times, how about every week? If you’re really serious about this business, you’ve got to keep that consistency going. That consistency leads to lead pipeline, and that lead pipeline leads to deals and profit. You can’t just do this business and expect miracles,

Speaker 3 (21:08):

Right? Yeah. That consistency is key also how you have consistent profits. Yeah. Yeah, it is. A lot of people need that help just to make sure that they’re consistent in where they’re going, which that’s what I wanted to ask too. It sounds like most, or does everyone who come in get access to an account manager, someone that’s taking them through these processes, the design and just all the different things?

Speaker 1 (21:31):

Correct? Yeah, we literally build it with them. Well, we build it for them, but they have a say in it all, right, because their business. Yeah, for sure. So throughout that first month when we’re building out all of their content, their marketing assets, their design, their development, all of that stuff that we’re building, we do all the heavy lifting. They just simply give us input. Once we then turn the marketing engine on, they basically meet with me. I’m the account manager, I’ll be honest, because I’m also the real estate investor, so I’m the best one to be able to give them coaching and advice and stuff. So every month they meet with me and we’re talking about things like response rates, conversion rates, bottlenecks in their business, where are they struggling, how can I help them through that? And even outside of supercharged offers, like you, David, you and I really connected in the real estate space.

(22:17):

We know lots of people and different systems and processes and VA providers and all of these things. So what I find with customers who work with us is not only are we doing the marketing side, I’m actually helping them out with their total end-to-end business. When you came along and spoke at my group the other week, I had some people reach back out to me afterwards and say, aj, thank you so much for introducing us to David, because without you, we wouldn’t have had that connection. So I think one of the benefits of working with somebody like you or like me, is that we have those connections that our customers invariably dunno where to get. And I think that’s a really good thing.

Speaker 3 (22:54):

Yeah. Yeah. It is it real estate, right? That statement or your network is your net worth. So it’s like making sure you get out there and get around the right people and making sure that you have them in your sphere. But I like that. I like that they have someone on the team, they get to talk to you at this point and going through and really building that plan and holding accountable, it seems like too,

Speaker 1 (23:17):

What’s correct? Correct. And throughout that, they’ve got a dedicated project manager and data concierge, so two other points of contact that are specifically helping them out with things. The reason why we designed it that way, David, and I don’t want to poo poo on any of the educators out there. I know some amazing educators, but I also know some that provide all this knowledge and information, and then they do nothing more. There’s no implementation. I always say we’re not an educator. We’re an implementer. And that’s one of the things that I think some of the education space lets themselves down with is they give people all this knowledge and information, but then they fail to provide that support to implement. Where are people at three months, six months, 12 months? What do they need at that point in time? Those needs change as they evolve and their business evolves. So that’s what we’re really there to provide.

Speaker 3 (24:14):

Awesome. Well, this has been very good. So just a couple final questions here. Do you have any last minute advice here or anything that you would want to give the real estate invested, community marketing or otherwise?

Speaker 1 (24:27):

Yeah, A couple of things I think I’d want to say, and that is don’t ever feel like you need to do this business alone. Because one thing that I noticed early on is being a real estate investor can be pretty lonely. And here’s why. Because most people set out to be a real estate investor for three specific goals, and they all start with, or they all end with freedom. Most people want time freedom, money freedom, location freedom. That location freedom might mean that you’re working from home by yourself. And that can be pretty isolating, especially when your family and friends don’t understand what you’re doing, don’t get it, perhaps don’t support you with it. And so don’t ever feel like you need to do this business alone because there’s lots of people that you can reach out to, myself included in the communities that a lot of these businesses, you’ve got a great community, David, I’ve got a great community.

(25:17):

You can be a part of something that makes you feel like you’re less alone on this real estate investing journey. The other thing I would say is, and this is going to be some tough love for people out there, get over yourself and keep moving forward. And the reason why I say that to be successful as a real estate investor, you’ve got to move past the fear of the unknown. The fear of, can I do this? The fear of is this going to work? And you’ve just got to give it a go. So go all in, because I notice a lot of people that when they have those fears in place, and those fears are real for a lot of people, but then what they tend to do is play on the outside. And that is that they’re doing a little bit here and a little bit there, and they’re trying a little bit here, but then they end up with the bright shiny syndrome, which is, oh, maybe that thing will work. Maybe that thing will work. And I think sometimes when we just put the noise aside and just focus on doing the basics and doing them well and going all in, that’s when I start to see people getting success.

Speaker 3 (26:19):

Awesome. So surround yourself with good people and then get out of your own way and really take action and go to that next level, which means me too. Okay, this sounds amazing. How do people get in touch with you? Where do they go?

Speaker 1 (26:31):

Easy. They can just go to supercharged offers.com. They can check us out on Facebook at supercharged offers as well. They can just email me direct at alicia@superchargedoffers.com, and we’d be more than happy to help. I’ll put them in touch with my team, we’ll get on a call, we’ll see if we’re right for them and if they are right for us as well. And I say that with love because we often get people coming to us and they’re like, I don’t want to spend any money on marketing. I’m only willing to put in two hours a week to my business, et cetera. And I’m like, you’re probably not right for us. So it is about a partnership. We don’t say yes to everyone. And I think that’s really important to note that you are probably the same, right? It’s like we have people that come to you and they’re not the right fit, and that’s okay. So we do want to get on a call with people, get to know each other a little bit, find out if we’re right for you and you’re right for us, and then we go from there.

Speaker 3 (27:21):

Awesome. So supercharge offers.com where you can find that, which they’re going to help you make the money. It sounds like this is the end to end fractional marketing company to be able to go out there and really figure out how to get the money in the door, which is amazing. So supercharge offers.com. Now, if you start making money and you don’t know where you’re going with it and what the heck to do with it, you can head over to simple cfo.com. We can help you on the keep side. They’re going to help you make it. We’re going to help you keep it, which is why this is such a good fit here. And I’m glad you were on here. Gave a lot of great information, a lot of good practical tips today. I think this was a great episode. Thank you so much for being here, aj, for

Speaker 1 (27:58):

Providing that. Thank you, David. Thanks for giving me the space to hopefully help some of your community and to talk a little bit more about what we do. I do get super passionate about it, so for anyone listening, if you hear me getting a bit rah about it, it’s because I really care. And I care about the fact that so many people go and spend all this money on education and then they just don’t implement. And that for me is, and you would know, right? When you see people’s balance sheets and you go, oh, they’ve spent $50,000 on education and they haven’t done a deal yet, that gets me, and I want to change those numbers. I’m really passionate about changing that for people.

Speaker 3 (28:35):

Well, there you go. Well, this has been a great episode. And remember, if you’re listening to this Make Profit a Habit in Your Business,

Speaker 2 (28:44):

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):