Building Wealth through Real Estate: Mathew Pezon’s Buy and Hold Strategy

December 5, 2023

Title: “Building Wealth through Real Estate: Mathew Pezon’s Buy and Hold Strategy”

Episode: 209

In this episode of Profit First for REI podcast, we have Mathew Pezon. He is a real estate investor turned business owner and owns hundreds of units.

Mathew tells his story from having to live deal-to-deal to now having over a year’s worth of cash reserves in the bank. He also shares how the whole process of mental shift helped him on his journey. You have a lot of stories and knowledge to learn from Mathew.

Listen and enjoy the show!

Key Takeaways:

[00:59] Introducing Mathew Pezon

[03:18] How he got into real estate investing

[08:45] His first investment

[12:53] Importance of a system to manage finances

[21:30] Plans for the next ten years

[23:49] The mental shift

[26:55] Mathew’s advice for investors living deal to deal

[33:00] Connect with Mathew Pezon

Quotes:

[08:26] “Make sure that you are going for a purpose at the end of the day.”

[12:59] “Before when I was a solopreneur, I was very familiar with all the details but it wasn’t scalable because everything was in my head.”

[27:00] “Slow down and be intentional about what they want and why.”

Connect with Mathew:

Website: https://pezonproperties.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):

So about a year and a half ago, I really started getting serious about honing in on my finances, building systems, building processes, and especially getting that financial clarity. I’ve read your book twice and I’ve really dug in this year. So I rolled out left main Salesforce to really get all of our data in one place, and there’s the simple CFO dashboard in there that I use all the time. So it’s, but really, really digging in over the last 12 months.

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 (00:56):

Man, this episode is going to rock your world. Matthew Peon, who is a real estate investor, turned business owner, has hundreds of units, but it’s only him and his family and it’s incredible. He’s gone from living deal to deal to now having over a year’s worth of cash reserves in the bank and just the whole process of his mental shift from going to W2 full-time in real estate to business owner mindset to how the conversations with his wife went and implementing the Profit First system. I know there’s a ton of value here and he tells his personal story of living deal to deal. And on the other side of that now I’m excited for you to be able to listen and to glean wisdom from this episode. Thank you so much for listening. Hey everyone, it is David Richter here, PR first, REI podcast here with Matthew peon.

(01:48):

I’m super excited about this because he was introduced to me via someone in a mastermind that I attend. And Matthew, are you part of that one as well too with Anna? Yes. Okay. I just wanted to make sure, I wasn’t sure if we met there, but this is exciting because he’s actually implemented Profit First, so we can talk about what that meant to him. We were even talking before the show and why he did it, and I want to dive into that as well too because it’s not just all about the dollars and cents, but what the dollars and cents represent. So Matthew, first of all, thank you for coming on the show.

Speaker 1 (02:20):

David, thanks so much for having me. I’m excited for this.

Speaker 3 (02:22):

Yeah, I’m excited for this too. So for people that don’t know you have, you’ve built a pretty sizable buy and hold portfolio, correct?

Speaker 1 (02:32):

That’s right, yes. My wife and I, small family business and we own hundreds of units actually that are rentals. We don’t really flip or wholesale. We’re pretty much buying and hold investors.

Speaker 3 (02:43):

Okay, so you’re buying and hold, you say hundreds of units. Is that a bunch of multifamily with multiple units or is that a lot of single family? How’d you build it?

Speaker 1 (02:52):

Yeah, it’s a lot of accumulated single families, which we’ve started to sell and buy more multifamilies at this point.

Speaker 3 (02:59):

Okay, so you’re rolling them up, you’re playing Monopoly in real life sounds like?

Speaker 1 (03:03):

That’s

Speaker 3 (03:03):

Right. Trading into single deals and going for the hotels. Okay. So then you got into real estate, you’re buy and hold, now you’re going forward of getting more units in the multifamily space. What even got you started on the real estate investing journey?

Speaker 1 (03:19):

Yeah, that’s a great question. And so I graduated in 2010 from Chemical engineering school and it was the depths of the financial crisis and I went into an IT role. There were a few jobs and my boss at the time, there were no procedures, no, there was little documentation, little explanation. It was kind of sink or swim and I wasn’t doing so great. My boss told me I was the worst employee he ever had and the company should fire me. So yeah, it was harsh. I had 50 grand of debt, I had less than nothing, and I thought to myself, how am I ever going to make this work? There’s got to be another way. And so I paid off my loans. I kept on the track. I live very frugally and I was looking for a way where I didn’t need to depend upon one boss not to like me or one round of layoffs and to separate me from ruin. And then I did a Fulbright scholarship, went to Spain, did my MBA and learned about debt. I learned about investing and I knew from that time that was 2013 and when I got back to the states in 2014, I knew I wanted to invest in real estate.

Speaker 3 (04:23):

Okay, okay. I’ve got some questions there. This boss says that to you. So how long did you stay there? After that boss said that

Speaker 1 (04:31):

It was a rotational program. It was like a career development program. So I went on to the next rotation and then I completed that rotation and then I found out I had the Fulbright scholarship. So it was about a year and a half after he made that comment was, and I had a new boss later. It was rotating that

Speaker 3 (04:49):

Year and a half. Was it pretty miserable under that guy?

Speaker 1 (04:53):

It was not pleasant, but look, I mean the bills the student loans had to get paid. I was just trying look, trying to pay my student loans and get started in life and job. It wasn’t like today, I mean this was 2010. I was lucky to have a job,

Speaker 3 (05:10):

Right? Yeah, no kidding.

Speaker 1 (05:12):

I was 22 years old. Youth unemployment was so high at the time, I had to do what I had to do.

Speaker 3 (05:18):

Yeah, no, I love that. Okay, let me ask this then. When you were in that position and you weren’t loving it, but you had to get what needed to be done, did you have thoughts of entrepreneurship at that time? I don’t know, at the Matthew at 22, it sounds like when you went to Spain, that’s when the wheels got turned for dead and maybe starting you on that other path, but what about when you’re in the thick of it? I know when I started I was at a machinist job and I was like, oh my gosh, I can’t do this the rest of my life type thing. I’m just wondering if you ever had those thoughts.

Speaker 1 (05:52):

So I wasn’t really turned on to entrepreneurship until my MBA, because I am from the fourth generation of engineers, I just assumed, look, I want to get another engineering job or do something more in alignment with chemical engineering, which was my specialty. And so I was looking to the next job, not entrepreneurship at that time.

Speaker 3 (06:16):

I like that. That helps me get the frame of reference from where you were and where you went. Okay. So you got your MBA and that’s what turned you on to entrepreneurship. Is that when you were like, what? Okay, so explain from there you went, got your MBA, what got you in real estate?

Speaker 1 (06:34):

Yeah, well, that’s right. So we were studying everything from finance to investing to just corporate strategy, all the curriculum accounting, all that stuff. And it’s an entrepreneurial-minded institution. So we did courses on entrepreneurship and we did courses on startups. There’s a startup lab. So I would go on Thursday evenings and watch these pitches and startup investors that had built a product and they were pitching it to investors and I thought, wow, this is cool. This is really, before Shark Tank was a big thing on TV and stuff like that. A lot of it was done in Spanish too, and I did my MBA in Spanish, so I was just going to learn business, pick up some business lingo. That’s when I really got turned onto it. And then when I learned about debt and I learned about leverage, I thought, wow, this could really be something. And just from being from the states and knowing what rents can be and what properties could be worth, I saw the business case and I thought that’s what I’m doing when I get back to the us.

Speaker 3 (07:36):

So when you hear a lot of the entrepreneur market out there saying, oh, schools a waste of time, blah, blah, blah. Do you say, ah, wait a second. It sounds like you learned a lot of great foundational things to be an entrepreneur.

Speaker 1 (07:51):

Well, right. I mean it depends what type of school, so broad. I mean, there are a lot of degrees that aren’t worth the return on investment. And I found my, and ironically because I did a Fulbright scholarship, it was covered and so the ROI didn’t have to pay, and yet it was the most valuable education. So I don’t think the education, now, that’s a specific example, but I don’t think the education in the traditional sense, even if you have to pay for it, is not worth it. But if you can get educated for free and in an area that you want to get educated in where there’s that higher return, go for that. Right? I mean, make sure that you’re going for a purpose at the end of the day.

Speaker 3 (08:30):

Okay. There’s so many questions I want to dig into, but I want to keep it to the profit first, but let’s go from there. When did you start investing in real estate? Was it soon after that and you got into, because you were warning about that sounds like, so is that what got you into it?

Speaker 1 (08:45):

That’s right. I knew from one of the first trimesters that I wanted to do real estate investing, so I got started in 2014 back to the US March, 2014. I spent nine months learning. I met a group of investors that would go around and look at properties on Saturday mornings. We’d run the numbers at the end, and I probably saw 150 properties before I bought one. And that got me connected with a group of people that I could lean on that could educate me, could ask questions to. I did my own self-education as well. And then I started in October, 2014, I bought my first single family home.

Speaker 3 (09:24):

How many did you buy the first year?

Speaker 1 (09:27):

The first year I bought I think nine units the first year,

Speaker 3 (09:33):

Nine units the first year. Were you still working a W2 job at that point too?

Speaker 1 (09:36):

Yes, yes. And up until earlier this year, 2023, I was working a full-time job, so I double had it for almost 10 years.

Speaker 3 (09:43):

Wow. So you were double dipping for a long time. What did you were at the engineering space that you were in

Speaker 1 (09:49):

For that time? Yes. Yep. I was a mid-level manager at a large chemical company. So I had been doing the chemical engineering thing in a managerial leadership type role, which perfectly dovetails with starting up a company using the systems and processes and really applying what I learned from my own company. But yeah, I was double dipping when I started.

Speaker 3 (10:11):

Okay. Nine units your first year. Was there a year where you were like, oh my gosh, you went from nine to 50 or you went from nine to nine 18 and then it was, I don’t know, did you have a snowball year? Sometimes people get into this, then they’re just like, oh, it clicks even while they’re doing a W2 job. Did you ever have that experience doing this or was it slow and steady and you

Speaker 1 (10:29):

Built it? I did. So the first ramp up in that year one was the biggest learning curve, I have to say. I went from zero to nine, but then in 2020 was kind of a more quiet year. I think I closed 30 units or something, which by many respects isn’t quiet, but to our current pace, 2022 was a big year. I think we did maybe 80 units that we purchased now we sold some, but yeah, and we’re looking to, I’ve spent a lot of time this year really honing in on our processes, our finances, which we can get into, but I backed up a little bit this year to really get things so we can hit the next level. I didn’t have much in terms of processes and systems 2021 into 2022.

Speaker 3 (11:23):

So you’ve been buying ’em for a while, but then the last few years you’ve been more systematized and making it more business focused than just the one-off. You’re buying the properties, you’re getting the management in place, all that. The

Speaker 1 (11:33):

Weird thing, and I’ve done a lot of introspection about this, I closed more units 2021 into 2022 by myself, no team than now with a team. However, it’s not sustainable, and it was a bunch of deals that lined up that got lucky, I’d been cultivating for years and just not, I was getting burned out and I was going deal to deal and I was working a full-time job. We had our first son and it wasn’t going to be sustainable. So I’ve spent the last year really, really digging in and which is why I love your book.

Speaker 3 (12:11):

Okay. Well then let’s dive into that. When did that turning point come of when you read Profit First and then started thinking about, okay, getting a system around the financial end of the business?

Speaker 1 (12:22):

So about a year and a half ago, I really started getting serious about honing in on my finances, building systems, building processes, and especially getting that financial clarity. I’ve read your book twice and I’ve really dug in this year. So I rolled out Left Main Salesforce to really get all of our data in one place, and there’s the simple CFO dashboard in there that I use all the time. So it’s really, but really, really digging in over the last 12 months.

Speaker 3 (12:49):

Okay. So you dug into there. Why did you think you needed a system like that for your finances?

Speaker 1 (12:56):

Because before, when I was a solopreneur, I was very familiar with all the details, but it was on, it wasn’t scalable because everything was in my head. I had to do everything in order to have it in my head, and it wasn’t clear I had hunches. I thought, well, yes, we’re spending about this much in direct mail and it’s leading to about this many deals. But then once I started adding websites and digital ads, Facebook ads, Google Ads, and our SEO spend that I’ve been investing in and other lead sources, it was too much to track. I couldn’t keep it all in my head, and I needed clarity because I wanted to do more deals. I wanted to know where I was investing the money and were we being profitable with those deals that we were doing for that lead source. So I knew that I needed a sophisticated tool, and that’s when I invested in Left Main and really started drilling into the principles and profit first.

Speaker 3 (13:56):

So when we were talking before, you had mentioned that one of the big reasons you did it was for your family and talk about that. What was that thought process? Was it more like, Hey, I need something around this so that we actually can eat and not live deal to deal, or, I would love to hear your thoughts on that.

Speaker 1 (14:12):

So as I was transitioning to a full-Time entrepreneur, I quickly realized, well, look, hey, the W2 job is going away. That consistent income is going away, so I need to replace some of that consistency with some consistent profitability that we are going to be living on. So I kind of thought, well, I used to have that really consistent thing that’s not there, so I need some consistency. How can I do this? So we had our first son and we actually had twins a month and a half ago, and so there’s more on the line, we don’t want to live deal to deal. We’ve been building our cash reserves, focusing on what properties are, which ones aren’t as profitable, let’s liquidate those and build up our reserves and let’s make sure we have a really tight p and l for each of these properties. We know what our ROE is and we can sell the ones we need to sell and build up our reserves and put that profit first. So just wanted to, our family grew fast and we want to be prepared.

Speaker 3 (15:14):

So it sounds like you were able to build reserves, put yourself on payroll, give yourself some consistency, that type of stuff that the system helped

Speaker 1 (15:22):

On the financial. Yes, and I did that. So about 12 months ago, even when I was working full time, I did set up, I’m on payroll, we save for taxes, we have our tax bucket, and we’re planning for our, it’s not as rigid or not as detailed for each of the LLCs, but we do have certain buckets for, okay, we know this amount and this checking accounts allocated for CapEx. It’s like a capital stack within the accounts. We know our opex, we know what our owner’s profit needs to be, but we have separate savings and checking accounts for each LLC and just trying to keep that profit first focus as primaries so that we don’t, we have the cash in our accounts, and that’s the key. It’s not fake profitability. It’s real.

Speaker 3 (16:08):

I’ve got a couple questions around this. What was the thought? Okay, you’re W2. I was going to ask what was the thought process about leaving, but they didn’t tell you you were the worst employee they’ve ever had, right? At this?

Speaker 1 (16:19):

Oh, no, not this employer. Oh, no, I was crushing it for this employer. Yeah. Yeah, once I sounded like it. You worked while? Yeah, no, I had been getting fours. It was out of five scale and no one gets a five because no one does. But I was getting fours for three years in a row, and I pretty much took them by surprise. They were very happy with my performance, but just the opportunity cost was too high at that point.

Speaker 3 (16:42):

Okay. See, that’s what I was getting at. So it was your decision to walk away. Yes. Talk me through that. Had you read Profit First when you wanted to walk away? It seems like a year and a half, and then you stopped this year in your W2. You had read Profit First before you officially moved out of

Speaker 1 (16:59):

There. Yes, and that was a part of the planning process. I knew that I needed to have a certain level of cashflow, but not just the vanity number. You talk about in your book, like, oh yeah, here’s what my revenue is. So I had been planning for, okay, what’s the replacement strategy for that income? Because I didn’t want to be living deal to deal flip to flip. So I just really ironed it out. My wife and I talked about it. We said, what are our expenses? We have our personal budgets, then we have our budgets for the business, the deal finding arm, each property, and we said, what do we need to survive? And appreciation had been good to us. There was a lot of appreciation, and we just said, look, a couple months before we listed some properties and we said, let’s sell these in advance. Let’s be ready. Let’s have the cash when we’re ready to make the jump.

Speaker 3 (17:54):

Okay, so it sounds like it prepared you for that. You said something interesting there. It sounds like you and your wife are on the same page when it comes to finances too. You said your personal budget and you built the business budget it sounds like together. Is that true? At least on the personal side?

Speaker 1 (18:09):

Yeah, that’s right. I mean, it’s very busy with our three kids and stuff like that, so it’s not like we’re talking about every transaction, but at high level making sure like, Hey, here’s our housing expenses, our medical expenses for insurance, gas, food, all this stuff. What do we need? And then how do we provide more on top of that so that we’re not living deal to deal? Right.

Speaker 3 (18:37):

When you were going through this process over the last year and a half, did you figure that it was a certain amount of rentals that was an average dollar amount, or was it like, well, no, just from all these, I need at least this much, and I don’t know, did you sell some off that weren’t performing? I’m just wondering the dollars and cents side, how did you figure out you had enough to walk away from your W2?

Speaker 1 (18:59):

Yeah, so I’m an engineer by trade, so I like safety factors on safety factors. We said, okay, well, the cashflow, let’s look at the stabilized assets we have, let’s call it. I think at the time, it might’ve been, I think it was 150 doors or something like that. If it’s a hundred dollars a door, some properties are very profitable, but then other ones you have a full roof replacement and it’s not profitable for two years. Yeah, exactly. So been there, okay, let’s assume it’s average a hundred dollars, and we saw that over seven years of really tracking our year over year, just our tax returns and looking at everything. So, okay, a hundred dollars, the rents should cover our month to month expenses, but that doesn’t give us marketing dollars. That doesn’t give us the cash to close on deals. That’s just our baseline. So our rentals sustain us, but then we liquidated additional properties to really invest in that marketing, and then we needed the capital to, I mean, the lenders don’t just say, oh, you bought a property.

(20:03):

Here’s 50 grand. Go fix it. You have to do the work and then get paid back. So we had to factor all that in and how many deals do we want to do per year and how much capital do we need to do those deals? And it just became a math problem. We put it on a spreadsheet, we looked at it and we said, okay, if we’re going to do 50 units, sure we’re going to be refinancing. We might sell some, but we have a Google Doc that we just update. What’s our cash position? What properties are we closing on? What renos do we have coming up? What cash to close do we need? What are we selling and what’s our net liquidity position? How many months of oxygen do we have? Right. We look at that at least every two weeks.

Speaker 3 (20:47):

Yeah, sounds like this has given you a lot of that financial peace of mind for today of where you are now. I am very curious. It sounds like you’re probably in your thirties. Well, probably,

Speaker 1 (20:58):

Yeah. 36.

Speaker 3 (20:58):

Oh, there you go. And that’s where, okay. What does the next 10 years look like? It sounds like you’re getting into multifamily, I don’t know, a big exit. Do you want to sell or is this something that you’re passing on to your three little ones in the future and giving them assets? Have you thought about that? It sounds like you’ve built this massive portfolio. You’re trading into the bigger multifamily. I just wondered if you thought of that and how this factors into profit first and making sure you’re profitable and where you’re going too.

Speaker 1 (21:29):

Yeah, I mean, that’s a great question. I don’t see us stopping the purchases of single and small multifamily properties just because we have the infrastructure in place, and it’s very liquid. You could have a rental for 18 months and then decide to sell. Or as turnovers happen, there’s a very liquid market for first time home buyers. So we probably won’t stop the one to four family rental business just because it’s, we we’re experts at it. In our market, we are adding a new business line, which is the larger multifamilies to date. We don’t own anything more than 12 units, but we’re looking to add bigger apartment communities and sell off some of the 1, 2, 3 unit properties and buy the bigger ones and really build that long-term business plan. And you mentioned succession planning and family planning and that type of thing, and the larger assets are a little bit more geared toward the long-term for us.

Speaker 3 (22:35):

Yeah. Awesome. I just wondered, it sounds like you’ve leveraged the system to give you what you really want, because you were talking about not only the monthly cashflow, but what do we need to sell in order to get to how many deals we need to do, and just a lot of great long-term plan. This is great. I love this stuff. But

Speaker 1 (22:50):

Yeah. Well, the other thing too is that when I was working my full-time job, I mean, we were almost living deal to deal because we didn’t sell anything. That was my mentality for a long time. Don’t sell, don’t sell, don’t sell, just do a cash out refi. But that in a way held us back because there was, we’d hold properties for seven, eight years, nine years, and we’re just now starting to sell, and we didn’t take those profits. I understand what it feels like to go deal to deal and wait, is the bank going to approve this because my liquidity is so low and we just don’t want to go back to that place? Yeah.

Speaker 3 (23:28):

Okay. So then what was the turning point to be able to actually sell the deals? Because that is a big mindset shift from going from I’m just holding everything to what I’m going to hall loosen the reins a little bit, that entrepreneur spirit let go of control a little bit and sell some of these things and for a different cause.

Speaker 1 (23:48):

Yeah. Well, it’s two. It’s my family that just having extra cushion, not recognizing that I didn’t want to be in a position where there aren’t options and now I’m forced to sell, or I wanted to just be able to take time off and not do deals or not have to worry about things for a while, and having liquidity helps with that. But the other thing too, and a little bit of a similar push was just macro economics and where rates were going. I saw rates ticking up last year and I thought, well, first of all, maybe values could drop, and they really didn’t. In the one to four family space, at least in my area, they actually continued to go up. But maybe there’s opportunities to buy these larger multifamily assets that I told you about a few minutes ago for the long-term plan. As rates go up, cap rates go up, prices go down, and so we could maybe take advantage of some of these rate resets that are going to be happening. So it was both, I want freedom, not have to worry, take the profits, not live deal to deal. We have a family, but also opportunistically.

Speaker 3 (24:59):

Yeah, I love that. I love the word options, so it’s like it gives you those options. I don’t know if you know any real estate investors that just live deal to deal and just stay that way for a very long time and never get out of their own rat race. Why do you think most people stay there for the long term? It seems like you were able to break out of that mentality and sitting in a better position now.

Speaker 1 (25:21):

I think people get hungry to do the next deal, and I only say this because I’ve lived this way. I was so hungry to do the next deal and to grow that I didn’t understand the opportunity cost, that if I just would’ve passed on a deal to build up more reserves, take that profit, maybe reinvested more in my education maybe, or if I was reinvesting to reinvest in the right opportunity, not just one to get the next 10%, but waiting for that 30% deal, waiting an extra month or two to really get those deeply profitable deals instead of trying to do volume at such a thin margin. I just think that people are trying to grow, or I want to do more deals, or I want to get out of the rat race faster, and they sacrifice profitability for speed. And I know because I’ve been there and it’s much, I’d rather do one really profitable deal than three average deals that equal the same profit of the one because the opportunity cost.

Speaker 3 (26:21):

I love that the opportunity cost and being more the sacrifice, profit for speed. I really like how you put that. Would you then say too that for a lot of those investors that are doing that, how do they get off that wheel the first time? Because you built a portfolio, so you had some rentals to sell to give you a cash buffer. How would you do that as an investor if you were giving someone advice like, Hey, you have no cash reserves. You’re literally doing a ton of deals, but not giving yourself any profitability or any cushion. What advice would you give them?

Speaker 1 (26:57):

I would give them the advice to slow down and be intentional about what they want and why. Because what changed for me was when I decided, after reading your book that I was tired of being a real estate investor. I wanted to be a business owner, and I think you talk about that. I think it’s chapter two, but I wanted to set up systems and processes and a business that would allow me to scale even if I took a step back temporarily in the deal flow. And by doing that, I was able to see the business owner perspective, and instead of taking the profits and plowing them into the next deal and just continuing over and over and over, I took a step back, said, what do I want? And how do I set up a system that will give me what I want so that there’s people that can help me? There’s employees. We have procedures, we have all these things. We have an onboarding plan, we have HR policies, and that was the game changer for me. Instead of just plowing the money into the next deal, I wanted to set up a business that could grow and scale.

Speaker 3 (28:02):

Right. Well, I love hearing that, just the business owner mentality versus just the deal to deal real estate investor. Now, this is great stuff. I think this has been great for a lot of people to hear, and especially on your journey because you’ve taken those steps. You’ve worked W2 for a long time, and then both sides of the fence and then knowing the numbers in order to get you out of there. But then also the mentality of selling properties and having reserves and having options and not just the speed and it’s just all about more units. It’s about profitability. I’m going to ask you a question. You do not have to answer if you don’t want to, but how many months of runway do you have right now that if a deal didn’t close or if you didn’t get more in that you would be able to live off your reserves? Do you

Speaker 1 (28:47):

Have Yeah, right now, 12 months.

Speaker 3 (28:50):

How I love this. Yeah. What does that do for you and your wife’s peace of mind?

Speaker 1 (28:55):

Well, I would say we’d sleep better at night, but we have twins, so

Speaker 3 (29:01):

They don’t help that factor,

Speaker 1 (29:03):

That’s

Speaker 3 (29:03):

For sure. And they’re under a year old. They’re only a couple months

Speaker 1 (29:05):

Old. Yeah, they’re like 45 days old, brand new. Welcome to the world.

Speaker 3 (29:10):

Yes. You’re not sleeping for other reasons.

Speaker 1 (29:14):

No, but it’s nice to have. So of course, anything could happen out there. There’s lots of scary things. But coming back to options and the liquidity and what that brings, we don’t need to do a deal. That’s the thing. For so long, I was pushing myself, I need to do this deal. I need to get to the next level so I can leave my job. And now it’s refreshing because I don’t need to do any deals. I don’t have to. And so I can be very selective. I’ve turned down probably 40 units this year that I had under contract and I didn’t close. Wow. Yeah, because I didn’t like them. They didn’t meet my threshold. The sellers either rates went up during the process and I had to retrade them because the interest rate shot up or the condition was much worse than what was depicted in the pictures. And we just have options. So it comes back to not being forced to do the next deal, being intentional about what we want to do, and just having that runway. It’s peace of mind. We have enough things going on right now. We don’t need other stress. Right.

Speaker 3 (30:23):

Oh man, this is so great. I just hope if you’re listening to this, this is why this podcast is here, the book’s out there, I want you to have the peace of mind that Matthew has and not being living deal to deal. And I love hearing you say the runway and helping you focus on the things that matter today with your twins, and you’re not getting much sleep. So getting as much stress other places out of your life as much as possible. So now this has been incredible. I hope this has given you hope as a listener, you can get to this place because Matthew’s always also been in the deal to deal space too.

Speaker 1 (30:58):

Well, and I was in the negative $50,000 no money student loan space. I don’t come from really, it’s very humble means that we come from,

Speaker 3 (31:10):

And you took action, you listened, you’ve gotten the skills required to be a business owner. I think that was one of the biggest takeaways from this one is that mentality of being a business owner and really setting it up and honing your business owner skills versus just real estate and investing skills and going after the next deal. So just a couple last questions. If someone was going to implement Profit First, what advice would you give them?

Speaker 1 (31:33):

Well, I would definitely recommend that they go to your website to get some coaching, and I think you provide a fantastic service. But I mean, outside of that, I think I mentioned intentionality, getting clear on what you want. It takes effort and it takes energy to implement the system. In my opinion, it takes more effort and energy not to implement the system. I would say get educated, be intentional about what you want, and find solutions for your financial life.

Speaker 3 (32:10):

Yeah, I appreciate that. I did not pay him to say that.

Speaker 1 (32:14):

No, no. I’m just saying what works for me. I just have to be honest.

Speaker 3 (32:18):

No, that was great, and I appreciate that, and I love how you put that. It’s more work not to put it in place, and it is to put it in, and the results are worse if you don’t put

Speaker 1 (32:28):

It in well, right. And just the stress of not knowing I was supposed to make $50,000 on this flip, but I have a hundred bucks in my account where to go. Right? I mean, that’s stressful. It’s a lot more stressful. Or you get a big tax bill and you weren’t ready for it. It’s just more stress than the effort and time it takes. To be clear,

Speaker 3 (32:46):

I need Matthew back on the podcast. This is great stuff. I have so many more questions just of where he’s gone down, but Matthew, this has been awesome. Where can people find you if you want to get in touch or what you’re looking for, wherever you want to point them to?

Speaker 1 (33:00):

Yeah, sure. You can reach out to me on our website. It’s peon properties.com. I don’t have a book or anything like that to sell, but just to build connections. And so you can visit our website. I’d love to meet with any investor who wants to talk about their implementation or provide any coaching. And yeah, reach out there, submit the form. It’s actually for Sell Your House Fast, but just put 1, 2, 3 Main Street and say you want to talk to me and you heard me here and we’ll talk.

Speaker 3 (33:26):

Awesome. Well, good stuff. You could go to his website then. If you’re listening to this and you’re like, what website was he referring to for yours? And how do we get Profit First implemented? That’s simple. cfo.com, simple cfo.com. Just schedule a call there and we can at least point you in the right direction. If you need Profit First implemented, we can definitely help you with that too. But I want to give you the peace of mind that Matthew has. This is awesome. I love hearing these stories and seeing people actually get away from the deal to deal space and get into the option space, having the options to make the decisions, and giving them time to make decisions too. Whether it’s a good time or a bad time in the marketplace, it’s always a good time to have money. So simple cfo.com, head over there. Remember to make profit a habit in your business. And Matthew, thank you so much for the great insight you gave today on this episode.

Speaker 1 (34:15):

It’s been a pleasure, David. Thanks for having me.

Speaker 2 (34:18):

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.