From Intent to Impact: Strategies for Successful Real Estate Transactions

January 30, 2024

Title: “From Intent to Impact: Strategies for Successful Real Estate Transactions”

Episode: 217

Are you having trouble connecting with people? Do you have sellers ghosting you?

Our guests for today are Jeremy Beland and Dan Toback. They will give you incredible information about connecting with people. It is one of the best episodes if you want to bring a deal in the door.

Be intentional with every conversation. They give practical steps where there is one text message in this episode that you can send to your database, and you will surely get a deal.

Listen and enjoy the show!

Key Takeaways:

[00:47] Introducing Dan Toback and Jeremy Beland

[02:58] Jeremy and Dan join together to help real estate investors

[06:59] Helping people in real estate investing

[11:02] Heart game vs telling game

[15:54] The person vs the house

[21:13] Verbal commitment

[26:33] The text message

[30:28] Moving the pressure off of the situation

[33:00] Connect with Dan and Jeremy

Quotes:

[08:35] “It wasn’t even about becoming a salesperson. It was about becoming a servant… and being able to identify and be honest with the sellers that didn’t need my help.”

[11:02] “I think that this business, real estate investment, and serving sellers is more of a heart game and internal game versus a telling game.”

[17:33] “Don’t make it about the numbers. As soon as you make it about the numbers, you lose because… there’s no value there.”

Connect with Dan and Jeremy:

Website: https://reifreedom.com/

Tired of living deal to deal?

If you are a real estate investor or business owner who is tired of living deal to deal and want to double your profits, head over here to book your no-obligation discovery call with me. Either myself or someone from my team will hop on a short call with you to get clear on your business goals, remove any obstacles holding you back, and map out a game plan to help you finally start keeping more of the money you work so hard to make. – David

Transcript:

Speaker 1 (00:00):

I’m going to know what type of transportation, how we’re getting there, the time, and I’m going to ask you to book it in your calendar too. I’m going to book it in mine and I’m going to make sure that space is clear. So it’s an intentionality behind the very next step. There’s intentionality, there’s specifics, and there’s a commitment by both parties. Okay?

Speaker 2 (00:19):

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 (00:46):

If you listen to this episode, you will lock up a deal this week. If you are actively in the real estate game and you are having trouble with sellers ghosting you, if you’re having trouble connecting with people on the other end of the line, if you have a bunch of other investors that are vying for the deals that you’re trying to get to. The guys on here today, Jeremy Beland and Dan Toback give incredible information. This is probably one of the best episodes if you want to actually bring a deal in the door. So I can’t wait for you to hear that being intentional with every conversation and they gave practical steps where there’s one text message in here that you could send right now to your database, and I bet you you’ll get a deal, you’ll get a response and you’ll get a deal in there because of the information here.

(01:30):

Thank you so much for listening and enjoy this episode. Hey, welcome to another episode of the Profit First, REI podcast. Have a special guest here, Dan Toback and Jeremy Beland, which we’ve had Jeremy on before. He provided a ton of value. Now we’ve got the dynamic duo here, Dan and his family, they actually just have me on their podcast, so you need to check theirs out. I’ll make sure they give the name of it. Make sure you go over and listen there. They’ve got incredible stuff. But Dan and I are pretty linked up. I am working with Tom Kroll, which is his brother Todd Toback made a big difference in my life back in the real estate days. We were just talking about this, helping us with our follow-up game. I’ve worked with his dad before, so I’m excited to have both of you guys on. Are you excited to be here today? Heck yeah,

Speaker 1 (02:17):

Absolutely. Absolutely.

Speaker 3 (02:19):

Good stuff. Well, I’m excited because you guys are providing a lot of value to the marketplace and I know that you guys actually get results with the people that you’re working with. Just so you know, if you’re listening to this, we work with Jeremy, he’s one of our clients, simple CFO, so we know his business inside and out, so we know that he’s the real deal. If you’re working with us, there’s no hiding anything from us. So that’s where I’m like, these guys are legitimate. So today they actually have a topic too that’s really exciting. I’m going to let them introduce that. But first I wanted to ask, just because I’m curious, how did you guys link up together? How did you guys join forces to help the real estate investing

Speaker 4 (02:58):

World? Yeah, Dan, can I tell the story real quick? I’d love to share the story. So I work with Tom as a coach in my life now, but Tom k crawl, Dan’s brother was my original coach when I came into wholesaling the business. So I started my wholesaling business journey in 2017. I sold my condo, moved my kids into a tiny little apartment, took this little bit of money that I had invested into the wholesaling coaching program with Tom and took whatever little money we had for marketing and went out and got going. We did 10 deals our first year, but after that I was trying to find more, and that led me to Todd Toback. And then I started learning about Todd, and Todd was very instrumental about my growth from year two to three with his sales skills and stuff like that. And then Dan was working as an acquisition person.

(03:45):

So we knew of Dan. We weren’t more social media friends, weren’t really super close, but I ended up growing two businesses, one in Western New York and one in New Hampshire where I had two rockstar acquisition guys that did over a hundred deals. And I coached them up as far as I could with all my acquisition skills, but at this point, there’s nothing else I could do to provide them to get them better. I’m very passionate about coaching, coaching for myself, but coaching for my team, I feel like if you’re not working on getting better, you’re regressing. So how do I get my guys better? Well, I started going on this nationwide search and I couldn’t find anybody out there that had coaching programs specific to off-market acquisitions that could train guys that have done a hundred plus deals and how to get them better. And then I happened to just talk to Tom because I knew Tom was well connected and he is like, Hey, have you talked to my brother?

(04:38):

And I started talking to Dan and all of a sudden Dan’s like, at this time, well, I’ve done well over 500 deals. And Dan was the only guy that I could find that was still actively doing acquisitions, but did that amount of volume in acquisitions. Now there’s companies out there that have done hundreds of deals and thousands of deals, but there’s nobody that’s been in thousands and thousands of thousands of living rooms. There’s just nobody. So we hired him as a coach. He came on my guy sawed, my guy in New York went from like 45 deals a year to 78 in one calendar a year under Dan’s coaching. I mean, he just took off. Both of our guys just went to another level and it was just amazing. And then we decided to come into business together. We ended up closing our New York location because New York’s a very tough state.

(05:24):

We decided to go into business with Florida, but then we decided that Dan has the skillset that very few people have out there, and there’s a need for people who start doing deals that want to get better because the money’s made at the buy, right? We know that about real estate. So when you’re dealing with the stress sellers, there’s a certain sale skills that’s required to buy, right? But also to provide value in exchange for equity in their homes. And Dan is a master at this. I am talking, I’m really good, and I don’t want to sound really pompous or arrogant, but Dan’s at a whole nother level. So that’s how we came together to put our coaching program together. Dan still actively works as an acquisition guy. He locked up four deals last week. I mean, he is a stud among studs. He is the goat when it comes to acquisitions. He’s the, sorry, Dan, he’s a Jeff fan. He’s the Tom Brady of off market acquisitions.

Speaker 3 (06:20):

Oh, that’s great. And you just offended him. And I think we just dropped Dan. I’m just kidding. Dan’s still here. Okay. Now I’ve got to ask Dan, before you get into, I know you’ve got an amazing topic, I want to jump into that. How did you get to be the ninja of the off market deals and doing it love to know that because is this something that anyone can become or is this a special talent? What would you say has gotten you to the point where, I mean, that was crazy what Jeremy just said, like 45 deals, like 78 deals, you’re helping people at a whole nother level. How did you get to that to where you’re able to help that people on that such a high level?

Speaker 1 (06:59):

Absolutely. So first of all, it’s a big blessing. It’s a big blessing to have the history that I have with a lot of the people that I have in my life that have helped me. So my brother, Todd Toback, obviously when I was even still in college, he used to preach to me, Hey, there’s no way you’re going to work a regular job, right? There’s no way you’re actually going to, I ended up going to a regular job, but I wish I went this earlier. I would’ve been successful, but I had to take a few lumps. I went into the shipping and transportation business for three years in the food and beverage sector. Brutal, brutal, brutal, brutal. I wasn’t very good at it. I’m still friends a little bit with my boss on Facebook, so he’s a very awesome guy. But three years I did that, and then I had the opportunity to help Tom Kroll with starting the Florida real estate investment business that he was building. So fast forward, I always had Todd there helping me, coaching me, pushing me to do that. And then I had the opportunity to work with Tom and that side. But I realized, and this is why I always tell y’all out there who are listening, if I can do, if Dan Toback can do this business coming out of the supply chain distribution sector with no sales skills, you can do it. You can do it. Because I went and worked with Tom, and Tom used to say this, you couldn’t close the front door. I would.

Speaker 3 (08:20):

That’s

Speaker 4 (08:20):

Great.

Speaker 3 (08:22):

No,

Speaker 1 (08:23):

I was terrible. And honestly, if he wasn’t my brother, I don’t know if he would’ve let me go that first year. But my first year I met with a lot of sellers. I heard a lot of nos. And it wasn’t until I realized that it wasn’t even about becoming a salesperson. It was about becoming a servant, a servant leader to these sellers that really could use my help and being able to identify and be honest with the sellers that didn’t need my help so that I can get to the right people who wanted to work with me. So back when I first started, similar to the book we were talking about offline, David Rich, dad, poor Dad, if you say the rich Dad versus the poor dad, I almost had to look at myself and say, the worst version of Dan and the best version of Dan, what are the differences? And it wasn’t until I started really dissecting some of those underneath issues I was having in these appointments that I was able to actually turn this around, become very successful by truly serving sellers, being able to become more of a consultant versus a salesperson, being able to walk away from deals that aren’t a good fit and maybe point sellers in a better direction for ones that didn’t really need by service.

Speaker 3 (09:29):

Okay, well, that’s incredible. So what I heard was you had good people in your life, you had good coaches, good mentors, good people around you, which is always paramount and like, okay, do you guys still have coaches in your life or have you stopped? It’s now you guys are coaches?

Speaker 4 (09:45):

No, we have coaches. We have coaches. Well, we have your company financial coach is that we have Tom Kroll as our coach for the coaching company, and we also have Steve Richards, who’s our CFO coach, who helps us run things at a business level and high level acquisition management and things of that nature. So we have three coaches.

Speaker 3 (10:04):

That’s where I wanted to, if you’re listening to this, if you’re going to go to the next level, you need to find the people that are there ahead of you. So it sounds like you guys have had that for your whole career, from Jeremy, from even your first year finding Tom. And then obviously with you, Danny, you’ve got Todd, you got Tom. Tom gave you a chance when you couldn’t close the front door. That was great. And then I wanted to say something else there that I kind of heard was you put a lot of reps in, you put a lot of reps in that first year, getting in front of people, what works, what doesn’t work, and then you figured out, okay, I don’t need to sell. I need to be a consultant and really point them in the right direction. So it sounds like you became a master of that and now you’re helping other people with that skillset, becoming that more consulted type person of like, is this really a fit or not? Is that where you say you ended up in, that’s what you’re trying to transfer or pass on to other people?

Speaker 1 (10:59):

Absolutely. I think that this business, real estate investment and serving sellers is more of a heart game, an internal game versus a selling game. And I feel like you’re not in the right playing field if you come into this trying to be slick or trying to use really fancy, fancy sales skills. Anything I coach or that I put out there, I help people with that are trying to work with sellers, real estate investment, buying homes, it always translates to one or two things, okay? Building rapport and trust with the person across from you, the seller, to actually truly help them and their best interest. And then second, like Tom likes to say, being a truth teller and also being a truth seeker. So always building commitments, always finding out what the true situation is. So serving honesty, serving in honesty. And most the time, if you go to any of, we have a lot of our sales calls recorded, if you were to go through all those sales and coaching calls, typically it translates. Anything we talk about translates to either one, building greater rapport and trust with sellers, or number two, being able to try to seek the truth and also be a truth teller.

Speaker 3 (12:12):

That’s so good. I love that. The

Speaker 4 (12:14):

Way I’ll add this with our coaching program, and it is really because of how we’ve been taught by Todd and Tom and those things, and Dan has taken it and put his own twist and spin on it and because of all his reps and experience, but it really gets just comes down to being a consultant and being a friend. So one of the things that Dan loves, and he told me about this early on, it just stuck with me. Every time he goes on appointment, he’s there to just go make a friend. So he’s going to go in there, he is going to be a consultant, he’s going to consult them. What’s on the best option. That may be us buying their home, maybe us not buying the home, right? He’s going to consult them on that. But he’s also going to be a true genuine friend.

(12:54):

And I don’t know about you guys, but when you have a friend, you want them to be honest, right? You don’t want them deceiving you and selling you, right? You want to have an open, honest dialogue. So Dan goes in the approach where was like, Hey, I’m here to be your friend. I’m going to consult you, but I’m going to be a friend and let’s see if we can do something together. If not, I’m going to lead you in the right direction. So we never sell anybody. If you sell, especially in this industry, you end up chasing a dog. And if you chase a dog, the dog runs away. We want to stop runaway, have the dog chase us because they feel that we are the best option for them. We can provide them the surety that we’re going to be able to help them through the issues. We have the true, genuine, best interest at heart, and we are their friend. And when you do that stuff, you don’t have to sell. They do the selling for you.

Speaker 3 (13:40):

Yeah, I love how Dan, you put that what Tom says, truth tellers, truth seekers, and what you said, Jeremy, of being a friend of really, because you really have to make them feel like your friend for them to tell you the truth, I feel like a lot of the times. So it’s like you got to get them to be truthful because then you’re truthful with them. We really can’t help you, and this is a freaking breath of fresh air in the coaching industry.

Speaker 4 (14:04):

The other thing is David, too. You got to understand, I went through a point in my life where I almost lost everything in foreclosure and bankruptcy, and I was bailed out by a real estate investor that really got me to, I wouldn’t be here today without him back during the recession, right? Story for another day. But that’s really the situation. But it really just comes down to these people are distressed and they have a lot of issues that are going on in their lives, and a lot of ’em are just good people on hard times, but it makes them feel like uncomfortable sharing that information with somebody. They may be embarrassed, ashamed, disappointed in themselves. I went through a great depression during that time. I didn’t want to tell anybody about what was going, I felt like a failure in life. But as somebody who’s trying to be a friend and a consultant, we need to pull that information out of them so we can truly the situation. We don’t know how to provide value without really understanding what the true motivation and true situation is. So being a friend and being a consultant, being a true seeker and a truth teller, allows us to have that open, honest dialogue with a complete stranger and have them open up to us

Speaker 3 (15:09):

Delicate. And this is how you’re cutting that time where a lot of people where Dan, you were out there for a year, Jeremy out there for a year. It’s like you can give them a lot of that knowledge of where you’ve been and what to really get to. I did want, okay, I know we’ve got a main topic, but I have one question that I have to ask for everyone listening. I want to ask you guys, because I’ve asked other people that are in this industry and stuff, and I’m very curious to see your answer. What would you say percentage wise, when you go for a deal, is it the person versus the actual house that you care about and to get a deal or not? What would you say the percentage is? Is it weighted more towards the person or is it weighted more towards the house? What would you put that percentage at?

Speaker 1 (15:54):

Yeah, I would say, well, first of all, that’s an awesome question. Second, I would say 99% the person, 1% the house. Yeah, I would say it’s very little to do with the house. And the reason I say that is because times where it is about the house, if it’s truly just about the house, can mean one or two things. One, you aren’t really truly there to build a rapport relationship with the seller, getting to know them as people because you can’t help someone if you don’t know someone. There’s that. And then second, there’s simply times where you’re just offer number one. And what do I mean by that? So Tom actually talked to me a little bit about this, and you never want to step into a house and be the a hundred grand guy and there’s 150,000 guy, and then the 1 25 guy, he used to say this, you’re the number guy, and that’s just like when your wife, she’s complained to you about fixing the AC and she finally bugs you enough for you to get three people over to give you a quote.

(16:49):

Oh, yeah, honey, there’s the $5,000 guy, 3000, 2000. You don’t truly know them. So what you’re doing is either one, you’re not caring enough, there’s not enough care and concern to nurture relationship with a real person to try to help them. Or number two, you’re so concerned about the number, you’re just really giving a number, talking business, and you’re just going to become the number guy. There’s no relationship there. There’s no helping there serving there. So that’s what you have to be really careful about. So instead, make it about the person, and then you’re going to figure out if you’re the right fit or the wrong fit, and you’re going to be at a deep enough rapport and relationship point to be able to determine one quickly and then move on to the next.

Speaker 4 (17:25):

I couldn’t agree more. Dan is a hundred percent right on that. And to piggyback on that, in our coaching program, when we tell people all the time, don’t make it about the numbers, as soon as you make it about the numbers, you lose. Because what happens, you become, as soon as you like that person, that house needs a new roof, it needs this and this. It’s going to be 150,000. Everybody just draws the line in. The sand gets defensive, and I’m not breaking down, not going to, nobody wins. It becomes a battle about numbers and there’s no value there. Everybody loses, right? So to answer your question, as Dan said, I agree. I mean, it’s real estate. So houses are involved, and no matter what exit strategy is, whether you want to keep them or not, this house is still just a commodity when you’re working with distressed sellers.

(18:09):

We are a people first business. The house is just a commodity that we deal with. So a lot of times when we’re talking to a seller in our even pre-qualifying script, we’re getting information about the house, but it doesn’t freaking matter. We don’t care if it needs a new kitchen, we don’t care about the roof, we don’t care about any of that. We’re asking that to just get some ideas of where they’re going. But the reality is we truly care about what’s going on with them. Why are they calling us? What is going on in their lives? How we can provide value. So it’s all about providing value. Dan is a master at teaching people how to go and provide value and not make it about the numbers. And that’s why Dan has done over 600 deals in 10 years. Personally, he didn’t make remote numbers because if he did, it’d probably be 10 deals in six years.

Speaker 3 (18:51):

Man, I love this. I’ve heard it high before one side or the other, but this is the highest, I’ve heard it like 99% to the person, 1% of the house. I actually love that because it is, it’s about that person. If you’re listening to this, you’re getting gold. This is what they’re teaching you. It doesn’t really matter. The house is there, but it’s arbitrary. It’s like you’re talking to that person, their situation, and does it fit for what you’re providing? And it’s like, then you’re really, really talking to that person. Man, I wish I had this. I wish I had this back in the real estate days. We could have done so many more deals than more profitable deals back then. This is why you should have a coach. This is why you should have someone who’s been there. And honestly, I love this. You’re focused on the person.

(19:33):

So we’ll get to the main topic. This is something that you guys provide, but we’ve had so much gold here already being a truth seeker and a truth teller, making sure that you get the reps in, but with the right reps and the right people in your life. I heard that a bunch of times here becoming the seller’s friend of really caring about them, putting that care and attention on them, only caring about them. 99% waited towards them versus 1% of the house already got gold nuggets, but they came prepared. They want to teach you. When a seller ghost you, what the freak do you do? So tell us what happens. What do you do? Dan has a way to help you get back those people back if sellers are ghost to you. So honestly, I’m very interested in this too, Dan,

Speaker 4 (20:18):

What are the top three ways, brother? What are they?

Speaker 3 (20:22):

Yes, please tell us.

Speaker 1 (20:24):

Well, yeah, no, that’s a fair question. And the biggest thing in this business that I faced when I was starting, and it’s still an epidemic in this business to this day, is a lot of times people will have one conversation with the seller and they can’t get ’em back on the phone. So obviously the first way I’m going to provide is actually going to be a preliminary way to avoid the situation in the first place. The first women provide is going to be almost, I don’t know if I should use the word vaccine, but it’s, it’s going to be a vaccine to prevent it. And then the next two ways are going to be ways that we can get the seller back in our corner to really tell us the truth about what’s going on. And one of those ways just help one of my students close a big deal.

(21:07):

So I’m really, yeah, he did. He’s going to close it, hopefully. So the first way is verbal commitments. And this is something that Todd Toback, I have to thank my older brother on. This one got me really good at, because he always used to preach this to me. He used to always tell me that I’m paddling on the surface. I wasn’t going deep enough. So what a verbal commitment. Sometimes you’ll say verbal contract, if talking to different coaches or mentors out there is simply the very next step with any relationship that you have. So I’m going to give one outside of our industry example, and then I’ll give one in industry. So David, I’m up in Orlando and we have this really casual conversation today. We should grab lunch sometime. I go to Orlando actually next week. We should grab lunch sometime at a place.

(21:52):

Okay, yeah, that sounds good. We get off the phone that lunch is not going to happen. Never. I was never going to happen trying to do small talk with David, so he likes me. I didn’t really mean to go to lunch with him though. We all do that, right? We get to these, yes, a hundred percent. Yeah. If I really want to go to lunch with David Richter though, what I’m going to do is I’m going to say, Hey, David, I’m going to be in Orlando on Friday of next week, and it’s going to be between the hours of 12:00 PM and 1:00 PM I would really, it’s really important to be that we grab lunch. I haven’t seen you in a while, and I’d like to meet you. So does that time, is there some time between 12 and one that would work for you, David?

(22:26):

And then you’re going to either tell me, no, I can’t. Well, if you can’t do it, I suppose I could drop my daughter off at school at this time. We can push it out a little bit. Would later work potentially. Well, yeah, probably two 30. We can grab a real late lunch if that’s still okay. That’d be great. It’s really important that we meet that. I want to see you. So I’m going to put on my calendar 2:30 PM that I’m going to, am I picking you up or are you going to meet me at the restaurant? How are we doing this? I’m going to know what type of transportation, how we’re getting there. The time that I’m going to ask you to book it in your calendar too, I’m going to book it in mine and I’m going to make sure that space is clear.

(22:58):

So it’s an intentionality behind the very next step. There’s intentionality, there’s specifics, and there’s a commitment by both parties. So a lot of times when you’re speaking with sellers or even outsider industry and different businesses, we’re not truly talking with the seller in a way to where we establish a very next commit. We do something just very wishy-washy, very non. We’re afraid. We’re afraid to get that commit be. Why are we afraid this is important to diagnose yourself? Well, I suppose we’re afraid because we may get that they don’t really want to meet us. Well, I’m not ready. I’m not ready to meet. Oh, that’s too early for commitments. Or maybe we’re afraid, right? Because we don’t really know what that meeting is going to look like. We’re actually afraid to meet. We’re afraid to be. We’re good over the phone, but we’re not good in person.

(23:44):

Sometimes it’s vice versa. We’re good in person, not good on the phone, but maybe we’re afraid to get in person at this point. If you’re new, maybe we’re just unsure of the next step. So it’s really important on the phone to be able to build the rapport over the phone, build trust, but also build the next commitment if they’re not ready to meet in person. Why? What’s preventing you, Mr. Seller, from meeting me in person at this point? Would you mind if I asked, is it me? Is it our conversation today? Are you talking with somebody else? It’s really important to know why, and then make another commitment. Maybe the commitments they have to talk to a significant other. Okay, great. Maybe it’s another phone call. Maybe it’s more research. Well, what does research look like to you though? So you always want to define the next step and get a why behind it and then make the next commitment. So that’s almost, like I said, it’s an antidote that’s a vaccine to prevent that next step from ever happening. But the two other ways, unless you guys had questions on the first thing, I want to

Speaker 3 (24:37):

Slow down. Oh, no, that was good. I loved it. Especially once you said intentional because okay, this is the profit first for real estate investing podcast. So we talk about making and keeping money, and it’s the same thing with your dollars. You got to be intentional with those dollars. It’s the same thing with, in order to get the dollars to flow in, you have to be intentional with the conversations that you’re having. I just saw good parallels there, and I like how you said that, the verbal commitments, but you were very specific. That’s another word I picked up on, and I love you put it back to truth. It’s like you’re just getting the truth. Because even if they say they don’t want to commit, they’re at least telling you the truth. Now, you might have to go a little bit deeper of why, of like, okay, is it me? Is it someone else or something? Getting to that, but the truth. So no, I thought that was really good stuff. The antidote, giving them a little bit of that stuff upfront before you get into it.

Speaker 4 (25:24):

It’s funny, I know all this stuff. I’ve heard it many times, but still, when Dan talks, I’m just like,

Speaker 3 (25:28):

Wow. Yes, right?

Speaker 4 (25:29):

Wow. I’m just like, listen, I’m kind of in awe of the greatness. And one of the things that Dan’s really great about when he teaches our students, it teaches our team internally, is really just preventing things before they happen. He’s so experienced with common objections that happen that are notorious in this industry. He knows all the ways to prevent those things from even happening. So calling this a vaccine in just this situation, I mean, Dan knows 20 other ways of vaccines to use another objections that throughout the sales cycle, so to speak. He’s just amazing at preventing things from happening in a negative way. It’s amazing. But Dan, what do we do? If for some reason they still ghost us, even though you’ve done all the right stuff ahead of time,

Speaker 3 (26:11):

Next steps.

Speaker 1 (26:12):

Yeah. The second one I’m going to get again, right to the meat and potatoes is the way that one of my students just saved the deal. And now he has a very, very strong deal under contract because of this method. This one way is usually a text message, but you can also verbalize it if you can get them on the phone. What I like to text though, if you have a seller that hasn’t gotten back to you after you may try to make a verbal commitment as, Hey, Mr. And Mrs. Seller, we’ll just say David’s the seller. I’ll say, Hey, David. Usually when sellers don’t get back to me, usually when, or you say, usually when folks don’t get back to me, it means they’ve changed their mind on selling and are afraid to hurt my feelings. Have you changed yours? So typically, and I’m going to use another outside of industry example, if you don’t mind, to get stuck in people’s head. When I was younger, this happened twice to me. So I’m going to really myself back when in high school I had these dates with these two girls and they ghosted me

Speaker 3 (27:08):

At the same time. No, I’m just kidding. Okay.

Speaker 1 (27:12):

Not at the same time.

Speaker 3 (27:13):

That’s why they ghosted you. Just kidding.

Speaker 1 (27:14):

No, this was within a couple. That’s a great point too. Within a couple of months of each other or something. And I just never heard from ’em. They didn’t go to my school. They were actually at another campus or whatever, and I just never heard back from ’em. Absolutely never heard back. So I’d be like, oh, hey, I hope you’re doing well. Hope everything’s okay. These really weak type of statements just to play. Be naive. I knew it was going on, but I was afraid of actually getting the response that I wanted. Well, no, I didn’t like you, so I’m not going to respond back. So what you do is you always want to ask the question you’re most afraid of. You always want to encourage the boogeyman to come out from underneath the bed. And a lot of times in life, and this is a life thing, I always tell, I used to tell Eddie this.

(27:58):

I told one of our other sales guys this all the time. These are life things. These are not just business related things. These are life things. And when you’re afraid of something, the best thing you can do is ask the question direct to the person, not aggressively, not in a way where you’re being pushy, but in a way to where they truly know it’s okay to tell you the truth. They know they’re in a safe place to tell you the truth. So I usually go with that question, Hey, usually when this happens, it means this. Did you change your mind? Usually when this happens, it means that you’ve changed or you’re afraid to hurt my feelings. Is this what you’re feeling right now? And you could do something along that line. Yeah,

Speaker 3 (28:33):

That’s so good.

Speaker 4 (28:34):

And what’s amazing about that technique is somebody that you probably called a bunch of times and sent a bunch of text messages, all of a sudden response. That happens a lot. And as Dan said with one of our students who were able to pull that deal out of the woodwork again and then put it under contract, this happens a lot in this industry because these people are habitual procrastinators and they have, like Dan said, life events happening to them and they don’t know, or they may not have the courage or confidence or whatever the case may be to handle these things head on, and they just want to hide on the rock and hope it all goes away, which we know it doesn’t. But sometimes that’s the type of person you may be dealing with. So this is a good way to pull that out of them. And Dan does this a lot with great, great success.

Speaker 3 (29:18):

That’s good stuff. No, that’s a great way. Okay, now it’s just us talking here, right? Just kidding. This the podcast. So we work with real estate investors, so we talk to a lot of the real estate investors, and I will say our ghost rate percent is not that high because they like to tell the truth, which is such a breath of fresh air. If you don’t need us, it’s fine. And they’re fine telling that, but you are so right. The seller psychology is a lot different than a real estate investor. They’re like procrastinators or they’re embarrassed. Like you had even said, Jay, back in the day, you’re trying to pull this out of them. They might just not want to tell you this stuff. And I think that’s great. This is the psychology of really getting into what’s going on in their life and how can I make it comfortable for them to say, I don’t like you. I didn’t like the date that we went on together and I don’t want to move forward. So that was good stuff. So what’s number three? What’s the third point?

Speaker 1 (30:13):

Yeah, the third one is actually very, very short little. And this is a way to where you can put the heat back on you versus the seller. And again, the whole purpose of number three is the same purpose for number two is it’s to move the pressure off of the situation to truly let the seller know that it’s not on them if they’ve changed their mind. And I simply put, I got this from Todd Toback again, was it something I said? And that’s all you. And this would be on probably one of the last resorts I would say, and you just leave it right there. Was it something I said? And that’s a way to where you can have the seller open up to text. It’s extremely open because that can mean a lot of things, but it also invites them to critique you in a way where you might not want to hear it, but you need to hear it, right? The truth will set you free. So if you put that, it allows the situation, the conversation to open up tremendously. And oftentimes you can get answers on that. I know I recently had a student in the northeast in New England, he was saying he got some really good success and answers back that way.

Speaker 4 (31:19):

You know why this is genius, David? David, do you like hurting people’s feelings?

Speaker 3 (31:23):

No, I don’t like hurting people’s feelings.

Speaker 4 (31:25):

Most people don’t. And that includes somebody who’s trying to buy their house. They may not want to move forward for some reason, but they’re afraid to tell you because they don’t want to hurt your feelings. Because let’s face it, Dan’s a really nice guy. You may not want to do business for him, maybe because you don’t like the number, or maybe your situation’s changed, but you’re afraid to let people down. And a lot of people, you don’t want to hurt their feelings or let them down. You just avoid it and ghost it. And this allows them off the hook, as Dan says, takes the pressure off the situation, puts it on Dan. And a lot of times they come back and say, no, Dan, you didn’t hurt my feelings. No, no, no. A life event happened. I wasn’t expecting. I’d just been dealing with that or something. Right? So it’s genius.

Speaker 3 (32:03):

And I love what you said, Dan, in point number two, ask the question you’re most afraid of. And that’s a question where if you heard it and you’re listening to this podcast and you heard Dan ask that question and you got a little bit pit in your stomach, you probably know a seller right now, you should be asking that question to that you’ve been putting off and you need to go ask it. So this is probably one of the best podcasts we record to anyone listening to this. I think in lock up a deal, right from this podcast episode, they could literally send that text message out to their base, to their base of past deals or whatever, to other people like that are in their pipeline.

Speaker 4 (32:38):

Well, if they do, David, we want to hear about it,

Speaker 3 (32:41):

Right? Yeah, exactly. Well, and that’s where I wanted to say this is just one section. You took the top three things. If someone goes to you and gave incredible knowledge, so how do people get more of you guys? How do they get, is there a site to go to or if they want to learn more and take that next step?

Speaker 4 (32:57):

Yeah, a hundred percent. Thank you. Yeah, we’d love them. If you guys want to get higher level coaching so you can get more deals, bigger deals, and less cancellations and learn from the best, and I’m talking the best in the industry with off market seals and not somebody who just coaches it, somebody who actively does it every single day with Mr. Dan Toback, come join our small group coaching in the REI Freedom, get us@reifreedom.com. You can get us at the REI Freedom Facebook group. But I’ll tell you what, if you guys come to r ei freedom.com and you guys tell us you heard about us on Profit First and Simple, well, let’s do simple cfo, right? If you come to us and say, Hey, we heard you on David’s podcast, so you go to r ei freedom.com/simple cfo, you come there, we’ll give you a 20% discount to join our coaching program and give you guys, I’ll tell you, even without the discount, it’s the deal of the century.

(33:50):

Dan is going to make you such a big times ROI y, like 10 x, 20 x, a hundred x infinity X on the knowledge that you can learn to get off market deals that you’d be a no brainer. But with the 20%, I mean, we’re almost giving it away. It’s such a no brainer. We hope you guys, if you have interest, you come look at it and listen, if you don’t believe me, just go to our Facebook group and hear all of our students talking praise and his coaching and his success as a result of it.

Speaker 3 (34:15):

So if you have a coach in your life and you’re not satisfied with them, I believe in these guys. And if you don’t have a coach in your life, you need someone. And these are people that, one of the best things I said that I don’t hear a lot of people say, but I absolutely love what Dan said. This is life stuff. This is not sales tricks. Those questions he could have asked those two ladies back in the college days. This is not just for real estate, like, oh, I’m just going to learn this. You are. You’re going to learn how to lock up deals, but you’re going to learn to be a better communicator. You’re going to learn how to communicate better just as a person. So I’ve seen people go through this like what you’re doing right here in your program, and they become better husbands, better wives, better spouses to their people or to the people in their life or leaders on their team being able to handle that. So it’s like there’s so many things that this covers. So that was REI freedom.com/simple cfo.

Speaker 4 (35:10):

You got it buddy. You got it. And then you would come in, you would talk with Dan every single week for a whole year, and imagine what you could learn. Think about what you just learned on this podcast. Imagine listening to that every single week for a year. I mean, just mind blowing, mind blowing. And you’re right. And even other aspects. We’ve had real estate agents that are learning from this stuff. It’s not just we specialize in off market acquisitions, but anybody can benefit. Dan is truly gifted at what he does. We’re really, really lucky to have him. And the more people that can be taught by him, the more good we can do in the world by providing value to sellers in our community and improving our community and helping people like me back in the recession when I lost everything, have somebody to come in to give me a reset button in life so I can then build my life and give a better life for my family. It all happened because of real estate investor. So now not only do we do that in our businesses every single day right now, we can teach people to do that. What’s the compound effect of goodness and value we can provide going forward? It makes me emotional. It’s awesome.

Speaker 3 (36:09):

Yeah. Oh, this is good stuff. Dan. I want to thank you for what you provided here today. Jeremy, thank you as well. There’s so many golden nuggets throughout this whole thing. I did want to say, if you’re listening to this and you’re going to go make money, because if you listen to them just from this podcast, you’re going to make money. Good grief. They gave some awesome information here. Go out, make that money. If you are scared, this question you’re asking yourself that you’re scared to ask, you’re not keeping it. You don’t know how to keep the money, you’re not sure what to do with it when it comes in, how do you be intentional with every dollar head over to simple CFO com. We’ll put a financial coach on your team, A CFO there to help you get to where you need to be as well.

(36:46):

So I’m really excited. So if we could work together, but I want you working with these guys as well. You need to be in there getting the deals done, and they are going to teach you the real way to do it, to connect with a person, with an actual person. And I love what they said, 99% the person. It’s like 1% the actual house. So this is good stuff. So go to rei freedom.com/simple CFO if you want to get linked up with them. And then if you need anything else, Hugh, we are just trying to pump up and these people and the people in the real estate industry that want to help you, thank you so much for listening. Remember to make profit a habit in your business. Dan, Jeremy, thank you so much again, and it was an honor having you guys on here.

Speaker 4 (37:27):

Thanks, man. Really appreciate it. Thanks, David.

Speaker 2 (37:30):

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.