Getting Your Time Back and Profit First Basics With Oscar “The Closer” Setiawan

September 12, 2022

Episode 112: Getting Your Time Back and Profit First Basics With Oscar “The Closer” Setiawan

The Profit First REI Podcast

September 12, 2022

David Richter

Summary:

“Start making profit a habit in your business.”

Wise words from today’s guest, Oscar “the closer” Setiawan. Oscar is a man with great achievements—a real estate owner, investor, private lender, and serial entrepreneur who aims to achieve legacy wealth with the systems and processes that he has been cultivating. Through determination, he turned his side hustle into a full-time business. He now helps distressed property owners solve their real estate problems.

Let’s learn about his story entering the real estate investing arena and how he chose real estate to build generational wealth. Listen in and find out how Oscar can help you win in this fast-paced industry.

Key Takeaways:

[2:30] What’s the story behind his nickname “Oscar the closer”?

[4:20] What excites him the most about real estate investing?

[8:02] Know your numbers, calculate them, and do all the things in between.

[16:11] How does the Profit First system help investors?

[18:34] His story about transitioning from real estate investor to real estate owner

[22:24] Defining “generational wealth” in accordance with his personal experiences

[24:27] What are some “core concepts” about money that he wants to pass on to his children?

[27:17] What is one key to his success?

Quotes:

[4:59] “Real estate is something that will change people’s lives when you do it correctly.”

[5:23] “It is good to have a goal. It is good to have a drive in real estate, but if you don’t do your homework, you can get into a lot of trouble.”

Links:

Oscar on Instagram- https://instagram.com/oscarthecloser?igshid=NmNmNjAwNzg=

Oscar’s Linktree-https://linktr.ee/oscarthecloser

Quickbooks-https://quickbooks.intuit.com/ph/

Profit First Real Estate Investors FB Group-https://m.facebook.com/groups/ProfitFirstREI/

Simple CFO-https://simplecfo.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:

Oscar Setiawan:

The clarity level of their Profit First is what people need to know. Especially if they’re in real estate, you can’t skip that.

Intro:

Welcome to the Profit First REI podcast, where real estate investors, master financial management, eradicate entrepreneurial poverty, and learn to be profitable from day one. Now for your host David Richter.

David Richter:

Oh man, I have a good episode for you here with Oscar Setiawan. And he is an incredible investor. He’s called Oscar the closer by those who know him, that was not a self coin term, but in this episode, we talk about how he has closed deals live for himself for other people. But he’s also talked about, we talk about generational wealth. We talk about how Profit First has helped him in his business personally, and become more of a business owner than just the real estate investor. How it’s freed up his time, giving him clarity, put people in the right place, helped him close more deals. I mean, there’s a lot of things that we talk about here. Talk about a little bit of the emotional side, too, of like how this has helped him with his family. Spend more time with his daughters, what he’s telling his daughters like how he’s helping them teach him how money works.

David Richter:

And like some of those concepts, he also gives trouble indicators. Like if you’re going through deals, like these are some of the things that you should be looking out for as well too, which I thought was just absolute gold. There’s a lot of good stuff here for you to take actionable advice from. This is a great episode for you. If you want to learn more about how Profit First has affected people, specific people in specific real estate investing situations. And also if you’re just wanting some good, solid, real estate investing advice as well too, hope you enjoy the episode. Hey everyone. Welcome to the Profit First REI podcast. We have Oscar, “the closer” Oscar Setiawan here. I am super excited to have him on our podcast and he is by his own admission, hit the number one fan, a Profit First for real estate investing and the advocate for us. So I’m really excited to have him all Oscar. Thanks for being here today, man.

Oscar Setiawan:

No, thank you. I’m more excited to meet you and it’s, you know, it’s, it’s my pleasure.

David Richter:

Yeah, well, you have this tagline and all of your stuff. I see it in the emails coming through. I see it on like your link tree. Tell me why you’re called Oscar “the closer.”

Oscar Setiawan:

You know, it’s, it’s, it’s a nickname that someone gave me because a couple years ago, maybe two, three years ago, I start calling people. I start calling sellers life and I start closing deals life and I help people close deals too. And people, no one can spell my last name. No one can say my last name. And so people just say, Hey, why do I just call you Oscar to closer? And that name kind of stick. Ah, okay. To be honest, it’s, it’s someone in my circle that actually nicknamed me that. So which is kind of good. Yeah. I, I use, I had a different Instagram and you know, just by luck, that name wasn’t taken yet. So I go, well, you know, maybe I’ll take it and it just sticks with me until

David Richter:

Now. Awesome. Well, that’s good. I know you run in some pretty awesome groups. You’re you’re a big part of pace. Morrie’s group. You mm-hmm <affirmative> you’ve done a lot of stuff. Private lending, real estate investor. You’re a restaurant owner as well too.

Oscar Setiawan:

I, I used to own a restaurant used own a restaurants from 2012 to 2020, and we close up during COVID. Okay. so yeah, so I’ve done a lot of different things.

David Richter:

I was gonna say when, you know, like just digging into who Oscar is, like, you’ve done quite a, a bit of things. And are you still in the Chicago area?

Oscar Setiawan:

I am. I’m still in Chicagoland area, but we do deals in a few states now.

David Richter:

Okay. Well I’m gonna be in Chicago several times in July. Maybe we can, maybe we can meet up, but that’s my hometown. I originally come from the Chicagoland area. So love that area. Yeah. If you’re listening right now, make sure to get it, get up to Chicago at some point and see all the, the cool sites in the city and all the good food, man. I love Chicago town food. So let’s get into this. What you’ve been in a lot of different things, restaurant, owner ownership, you know, like you’re becoming the business owner, real estate investor. What excites you the most about real estate investing?

Oscar Setiawan:

What excites me most about real estate investing is the ability to create wealth, generational wealth, and also to help people while you are help while you’re rehabbing houses, while you’re providing housing for people. And there’s a lot of people that you can help, whether it’s seller, whether it’s its renters, anyone in between everyone that’s connected to real estate, somehow, you know, you, we help each other, you know, and the, the network just grow from there. The people that you meet, the people that you impacted as we both know, real estate is something that will change people’s life when you do it correctly.

David Richter:

Yeah. <laugh> keyword there is doing it correctly, correct phrase, right? Otherwise it can get you into a lot of trouble, but if you did,

Oscar Setiawan:

And it did, it did for me

David Richter:

<Laugh> oh, well then let’s go there. How did it get you in trouble?

Oscar Setiawan:

Well, number one is you have to know what you’re buying first, right? So yes, it is good to have a goal. It is good to have that passion and drive to start buying real estate. But if you don’t do your homework, you can get into a lot of trouble. My first deal, I actually bought auction site on scene in neighbor that I shouldn’t bought. And it got me to a lot of trouble. I was going to flip that and then I changed my mind and I was going to hold that and I changed my mind and I ended up just wholeselling it. And the whole process was a lesson run that took me about eight months to solve. Wow. <laugh> so imagine that my first deal bought dancing in auction cash, and I couldn’t do anything for eight to nine months.

David Richter:

Wow. That’s crazy. And is, while you were doing that first deal for eight or nine months, were you working on other deals or was this the like, was you just stretched this one out? And it was that whole process with this?

Oscar Setiawan:

I was, I was, I was learning on the go. Right. Okay, good. So, but I was, I was the, one of the person that, you know, what, I gotta take action. So I took actions, I bought that one property. And then I was when, while I was looking at other properties too. So the good thing is the other properties worked out.

David Richter:

Yeah.

Oscar Setiawan:

Right. But there’s always that one property, the first one that, you know, and people say, you always remember your first one. And in this case, I never forget this lessons learned. Now the good thing is it, it came to a good end where I was able to meet some money. But it, it, it was without nine months off, very, very, I would say frustration and fear, you know, I wasn’t even, you know, I wasn’t even able to visit the property because of the location and neighborhood <laugh> oh, wow. You said it. Yeah. <laugh>

David Richter:

So you said when you were, you know, for this first property, number one was know what you’re buying, what do you have other points too, like, to help people avoid trouble maybe on their first deal or on the deals that they’re doing. So know your, know, what you’re buying and do that due diligence. What other points would you say there?

Oscar Setiawan:

I, I would say also know your numbers and don’t take rehab more than what you’re capable of. Okay. That was probably one of the biggest caveat, because you know, when you are just wanting to take actions, you forgot that you actually have to involve other people <laugh> in real estate. Yes. You think you can do everything yourself, right? Yep. So mm-hmm, <affirmative> you started buying property and, and again, sight unseen. And you think that you can just hire a GC without looking at the correct numbers without looking at, can you even make money and can you even take that size of rehab? Right. So what I would say, if it’s your first deal, you know, be conservative, right. Know your numbers calculate those numbers, calculate those rehab numbers, calculate those owner’s profit, you know, and, and all in between. Right. That’s what we talked about in Profit First. Yes,

David Richter:

Exactly.

Oscar Setiawan:

Those pass through revenue, right? Yeah,

David Richter:

Exactly. So that’s good stuff. So if you were listing right there, those three points, know what you’re buying, know your numbers, know the rehab limit of where you are starting. That’s such good info for someone just starting, or even if they’re still in real estate, been doing a lot of deals. That’s just a good reminder of yeah. You know, like how to stay out of that trouble, which this was a good segue, riding a Profit First because of what you just brought up here. What got you excited about the Profit First message. So you mentioned a little bit over there, but like what got you excited about it?

Oscar Setiawan:

So like most people, when I started, I didn’t have a good accounting or I didn’t have a good books, even though I own a restaurant, the real estate books are very different than restaurant. Right. So, so it’s not that I haven’t heard about QuickBooks. I’ve used QuickBooks. I’ve used accounting softwares, but I never used accounting software for real estate. And as you know back in 2016 your book didn’t come out yet. No, <laugh> not, not that. So, yeah. So I, and I didn’t even know about Profit First, the original book by Mike. Okay. So I was, I was doing deals and I believe it or not, I didn’t even have any bookkeeping. Right. I just thought, Hey, we need to just keep all the receipts and give it to the accountant. And lo and behold, the first year I was submitting this to accountant and the accountant was like, well, it’s not enough.

Oscar Setiawan:

You know, you can’t just gimme receipts. Where’s your hus. Whereas what is your PTI? What is, you know, how much do your Capax? And I’m like, what are all those? I mean, those are foreign to me. I thought you can just buy real estate and just submit expenses. Right. So those are the hard lessons learned from the very first year. And that’s when I really look into accounting and bookkeeping. And I found the Profit First by Mike and I read it and you know, I, I, then I had a, a decent books, even though I’m still struggling, then I had your book in 2020, and I was so excited. And I remember I pre-order it in 2020 when he came out. And that’s when my mind was really blown because that’s your book talks directly to me, right? Your, your book talks directly about, Hey, if you are real estate, this is how you should do it. And even though I know QuickBooks, it doesn’t mean that I know Profit First bookkeeping. Yeah. Right. Or profits for accounting. So, you know, it, it just blows my mind to how to separate those accounts into, you know, owner’s profit operating income and OPM and all those, all those things that I didn’t have before. <Laugh> right. So, so,

David Richter:

So that’s interesting. So you read the Profit First book, but then you read my, and then you got some more nuance to what you opened up, but what, so what were some of those accounts that like, after reading mind that you focused in on and that did help you the most

Oscar Setiawan:

Mm-Hmm, <affirmative> the, it, it’s really just the examples.

David Richter:

Okay. The examples

Oscar Setiawan:

It’s really what the, what I love about your book is there are real stories of real real estate investor. It’s not just theory, right? It’s not just, okay, well, this is the account that you need to create, that’s it? Right. Or this is the percentage that said, but the stories that you have in the book really speaks to me. Right. One of ’em I think is his name is Joey, right. That speaks to me like, I’m like a Joey, right. I come home and, and suddenly like my first year I thought I made some money and then suddenly I lost $70,000. Right. And so, and my, and I didn’t know that until 20, 21 or no, 20 16, 20 17, 20 18, I didn’t know, until 2018 that I’m actually losing money and I’ve been doing active deals. Yeah. Right. And then 2020 comes in and I read your book and now I’m, you know, trying to implement it even more correctly. And now I can see, man, I’m, I’m so blessed to have read your book because now I can see, I have a bookkeeper now, and I can, I can see how much I’m really making right. In each, in each flip in each project and in each class. And, and if people don’t know class that’s for QuickBooks to lingo, right. Where you put the class for your rentals. Right. So that’s, what’s my most, I’m most excited about now every week I get a report.

David Richter:

Awesome. I love hearing that because that’s what we wanna do. We wanna give people clarity. So it sounds like you gained a lot of clarity then during this process was that one of the biggest light bulbs was just the, the clarity that you got of where things are going.

Oscar Setiawan:

It is. Yeah, it is. It’s, it’s not about the gross profit anymore. I mean, people are going left and right. And show, oh man, I just made $150,000. I just made $200,000. But to me, you know, I used to be the guy that says, show me the huts, right. To an inspir experience. Now as a Profit First investor, I’m always say, show me your P L mm. Show me your P L, show me from this script, your project PNL. And I’ll I’ll believe you.

David Richter:

Wow. That’s really good. Yeah. Forget the hus. Right? The

Oscar Setiawan:

Huss, just a, a, a cover of a magazine.

David Richter:

Hmm. That’s really good. No, I, I like that a lot because mm-hmm, <affirmative> we see that all the time. Don’t we in the real estate space, like, show me this. Or like, what are you doing over here? Mm-Hmm <affirmative> I like what you’re saying, honestly. That’s how a lot of people like in the business world, you know, like they show me your P and L you know, like they, especially if you’re trying to buy, sell, acquire, you know, like different things. So, yep. Yeah. Gross profit is just another one of those vanity vanity metrics, right? It is.

Oscar Setiawan:

So it is yeah. To that’s. Okay. That just, yeah, it just means that you’re doing business. It just means that you are, you are trying, and you know, you are taking action, which is great. We’re not saying it’s, it’s not good, but the end of the day, you know, you need to know if you’re making any profit. If you are actually compensating yourself, if your business is scalable or is it going downhill and you don’t know until two years later when you file your text.

David Richter:

Yeah. Yeah. No, that, that makes a lot of sense because a lot of people are in that, that position. So mm-hmm, <affirmative> let me ask you this, cuz before Profit First, it kind of sounds like you were at this point and didn’t even know it for a couple years, but why do you think a lot of investors either don’t make bottom line profit don’t know about it or a living deal to deal, you know, like why, why is that whole mindset kind of just a part of who we are in the industry?

Oscar Setiawan:

I think part of it is because we are all high level people and a lot of times the numbers are kind of the devils in the details, you know? Like, so, you know, when people just look at those high level numbers, they think they’re making money, right. They they’re not, well, number one is they don’t have a bookkeeper, a lot of, of them, right? A lot of ’em, they don’t have a bookkeeper. They think that there’s our spouse can do it. Our partners can do it. And at the end, everything just falls all over. Right. So that’s, I think that’s the biggest roadblock for people. They, they know that, you know, this is just gross profit, but they don’t realize how much more of their expenses are involved in a project. You know, they, they don’t know. I, I often talk about people getting other people’s money, right?

Oscar Setiawan:

Private lending or hard money lending. And they’re, they’re not putting that as part of their expenses. And sometimes those account for 5, 6, 8 to 10% of the expenses. And they didn’t realize that they just think they just made 20%. And all of a sudden they realized they made maybe less than 5% after they put in holding costs. So that’s, that’s something that’s a lot of missing in there. And that’s why I was, I was at one point I was, I remember I bought a lot of your books, digital copies, and I, I just gave them, gave him to people for free. I, I literally just gave them for, for free because I want them to learn this and not make the same mistakes.

David Richter:

Oh, that makes sense. So why do you think then that Profit First is a solution to that? You know, like cuz if a lot of people are in the higher level, you know, versus the devils in the details, why do you think that Profit First can help a lot of people like that

Oscar Setiawan:

Because Profit First actually breaks it down to a level of detail that you would understand easily.

David Richter:

Hmm. I

Oscar Setiawan:

Like that. If you just follow, even if you don’t have different accounts as what we’re talking about in Profit First, but at least if you can just tag or label, right. What we talked about in, in terms of expenses, your bank statement, even if you just start with marking those as expenses, profit, and try to reconcile your bank account, just to see that already helps. Right? That’s what the clarity level of that Profit First is, is what people need to know. Especially if they’re in real estate, that’s, you know, that’s, you can’t skip that. You know, some people just think of, I have a lot of people that ask, Hey Oscar, I know you advocate Profit First, but I’m just starting. I don’t think I need that. And I’m saying no, no, no, no, no. You may not need to be fully 100% in immerse in the Profit First accounting. But number one, you need to read it. And number two is you need to do your best to just understand what profit is and how to pay yourself first and to see what percentage of your business are actually revenue. Right? It, it doesn’t matter if you just do one deal a month because you might say I made 25,000 whole selling, but that, that 25,000 might have a $10,000 marketing that you don’t realize. Right.

David Richter:

<Laugh> exactly. <Laugh> oh man. No, that that’s really good stuff. And I love, love that you brought up, even if someone’s new, you know, like, oh, do I need this or not? Cuz it’s more about the habit. It’s more about the habit like that you’re instilling. So you

Oscar Setiawan:

Have to start a good foundation.

David Richter:

Yep, exactly. And the sooner to the better. So that way you can have more profit your entire lifetime in the real estate. Yeah. You know, career mm-hmm. <Affirmative> so awesome. There was one thing you mentioned before we even got on. I believe it was like the, in the book talk about going from real estate investor to business owner. Yeah. Can you tell your journey about that since you’ve started, you know, like you’ve been in real estate for a while and like what that journey’s been like for you trying to transition from just investor to owner.

Oscar Setiawan:

Yeah. You know, like most of us, we used to be a one man team. Right. We, we have to play a lot of different instrument. We have to play a lot of different hats. Right. We all, I think most of us starts that way. Right. So I was in the beginning, I started investing real estate in probably 20, 15, 20 16 and I did everything right. I have to, I have to be the acquisition guy. I have to be the lead manager. I have to be the dispo. I had to be the transition coordinator. Right. And you know, basically my laugh is 24 hours, you know, 24, 7 real estate. And, and it’s not, it’s not in a good way. It just means that people always contacting me for every single thing, right. From the sellers to the title company, to the lawyer, everything. Right. So, you know, what, what I, I struggle number one is once you have a consistent deal flow, it’s very hard to scale because the number of the number of deals that you have to handle, right?

Oscar Setiawan:

The more sellers that you talk to, the more follow up you need to do, right. And the more follow up needs to do, the more deals you’re gonna get and the more deals you’re gonna get, the more time sections you’re gonna get at. And then the more transit you’re gonna get, the more closings you’re gonna get. Right. So, so now you’re stuck in this red race and you know, basically you are just working without knowing how much your time’s really worth. Right? That’s the, that’s the typical real estate investor journey. And that that’s okay for the first six months to a year while you’re building your business. Right. But you know, in 2016 when I was building my business, it’s okay. But now 20 18, 20 19, I found myself stuck and getting very, very frustrated because number one, I can scale. There’s no time in the world that can help me scale because I’m doing it for my, by myself.

Oscar Setiawan:

So I start, you know, doing it by one by one. But not until 2020 when I read your book. And I saw that the table was like, oh my God, he broke it down exactly how I’m supposed to do it. Right. So, so that was my journey from 2020 until now, you know, every single month or every single quarter, I’m trying to remove myself from those tasks, right. From a real estate investor to become a business owner. Right. So now I’m happy to say that I have a team that actually call sellers for me. I have a, a person that actually is an acquisition manager. I have a person that I just hired, you know, a month ago that is actually dispo my deal. So now I’m becoming more and more of a business owner. I’m not one over there a hundred percent yet. Right. I have a bookkeeper, which is the most important thing. Some people think that in real estate, your first hire is like, say a VA, a cold caller or a, an acquisition or an executive assistant. But I always say your first hires probably needs to be a bookkeeper because you need to know a financial in order for you to grow. And to, if you see, if you see, you can hire more people. So now you can become a business owner.

David Richter:

Right? Exactly. No, that’s, that’s really good stuff. I liked what you said. You know, the more that you’re doing, the busier you get and you’re in that rat race, you know, just now you’re in real estate doing it, but then starting to hire people. Now you’re Oscar the closer and you’re helping, you’re closing people to be on the team. Yeah. Now, and they’re helping you close. So yeah.

Oscar Setiawan:

That’s awesome.

David Richter:

Yeah. Not, I love that. That’s good stuff. Let’s transition a little bit because you, a lot of the talks that you talk about now deals with generational wealth mm-hmm <affirmative> and like building wealth, you know, through the generations, which I absolutely love mm-hmm <affirmative> I think that’s, I think that’s a big part of Profit First as well too, is like, this is a habit that you create for a lifetime. When you speak on generational wealth, like you talk about helping people, helping families, but like what does generational wealth mean to you?

Oscar Setiawan:

To me, well, it, it evolves in the beginning. Generational wealth mean just being able to make sure that my daughter can go to college, for example, and I don’t have to worry about my income. Right. And I don’t have to worry about my daughter’s not being able to get enough income, right. Or, or even a good school to go to. Right. It now involves to be generator wealth. To me, it’s not about the money. It’s about the time. Freedom to me, it’s about relationship with my family and being able to get that time, to create that relationship and growing together as a family, better than anyone else. And it’s not bound by the lack of money or the need to find more money. Right. So, because at that point you should be able to have active income and passive income and that passive income is going to support your lifestyle. You know, the things that you want. And at this point is I’m paying for people to do the stuff that I don’t wanna do anymore, or I’d rather not do so that I can spend time with my family and I can teach my daughter and I can have fun with my family going wherever we wanna go. Right. For me, time is, is what I wanna have right now with my family. Yeah. And also with people rounding me.

David Richter:

No, I, I love that. And it sounds like how old are your kids right now?

Oscar Setiawan:

I have a 13 and 15 years old.

David Richter:

Oh, wow. Two daughters, 13 and 15 years old. Mm-Hmm <affirmative> yeah. So you’re probably having some more in-depth conversations with them. I have a five year old. So like at this point it’s like, not as in depth as 13 and 15. Yeah. But so it sounds like you’re teaching them actively, like what are some core concepts you want them to grasp around the concept of money too? Cuz it sounds like you’ve been on your journey. You know, mm-hmm, <affirmative> like for the last few years and it’s like, how has that translated to them? And what do you want? What’s one big takeaway. You want them to get from what you’re doing?

Oscar Setiawan:

So I always tell my daughters that they need to understand the basic, the basic, how money works, right? What is, what is income when it is expense? Right? So that’s, that’s what I’ve been talking to them. And then I’ve introduced them to real estate. I’ve had them read, you know, the classic reach that poor debt. You know, we read them together and we had some questions. So Nate now understand what our income assets liability, good debt and bad debt. Right? So, but what my, what I’m trying to really hammer down to my daughters are you need to start creating a way to get passive income, whatever you do in life, you need to start creating businesses. You need to start creating ways that you can make money through business while you’re the business owner and that money can support your lifestyle and that money can support whatever that you wanna do in life.

Oscar Setiawan:

Right. I grew up as an Asian and typical Asian. My father’s a doctor. My mom is entrepreneur and I’m expected to become an engineer, lawyer or doctor, right? No one expected to, for me to become a real estate, an arrested investor, or even on my multiple business, they want me to work for people, right? And I’m, I’m here to tell my daughters that you know, that generational mindset has to be broken because you know, regardless what you wanna be, if you wanna be an artist, if you wanna be a psychiatrist, if you wanna be an accountant, if you can be anything you want in your life. But the key is this, you need to have an income, an active income, or even a passive income to support that lifestyle. That’s, that’s the key that I wanna teach them so they can be anything they want. They don’t need to be a lawyer. They don’t need you to be a doctor. They don’t need to be an engineer anymore. Not like me, you know, but you have to have, if you wanna be an artist that loves to draw or, or figure skating, which my youngest daughter loves to do, you can, you can, you can do figure skating. However you need to know how to support that lifestyle.

David Richter:

Right.

Oscar Setiawan:

<Laugh> so yeah, that’s what I’ve been hammering down to my daughters.

David Richter:

No, that’s really good. No, that’s good stuff. And if you’re listening to this, just listen to Oscar. What he’s telling his children, what he’s gotten from his businesses. This is, this is really good info. Just a few last questions here I ask you. You’ve been successful in real estate. You’ve been, you know, helping a lot of people. There’s a lot of good stuff here today. What would you say is one key to the success you’ve had over the last few years here?

Oscar Setiawan:

I would say consistency and being in the right circle of people. So I, I always try to expand my circle to meet new people. And I always want to learn something new. It doesn’t mean that I’m going to be stretched in learning everything and trying to implement, but I keep focused on the things that I do best. And I, I just keep going, you know, I, I think in your book you also talk about people who are overly stretched in different businesses. Right. And you know, I just stick with, you know, what I know best, you know, and this point people ask me why I don’t do like say commercial or why do I don’t do you know, only apartment complex? Yeah. I, I could, I could re I could learn to do it, but I I’m sticking with single families because that’s what I do best, you know? And that’s what I, that’s why I don’t, I wanna pursue. Right. So it’s just consistency and going through it day by day and being attached to the right people with the right mindset. That’s really what encouraged me to keep going, you know, every single day.

David Richter:

Yeah, no, that’s really good. It is that circle of, of people around you that can pull you up or pull or tear you down. So it’s really important. That is huge. And consistency is key that’s for sure. I mm-hmm <affirmative> I think those are definitely, definitely big reasons why you’re successful and a lot of other people as well too, then, you know, get those right people around you and be consistent. Then what advice would you give to real estate investors on this podcast looking to adopt Profit First? What would you say to them?

Oscar Setiawan:

Well, I would say first you can actually contact me because I have free books. <Laugh> I still have a few, few copies. So contact me, I’ll give you free books and then follow, you know, follow David there. He has a, a free Facebook group, I believe. And you know, and then contact David follow his podcast. But the first things first sit down and look at your bank statements, look at your past deal. Look at your past the latest, hot day you did, right. If you haven’t done any deals, it actually is a, you, you actually have an advantage kind of, because, because you haven’t really screwed up your quote unquote profit yet, you know, or, or, you know, you haven’t gotten that expense that you think you make money, suddenly you lose money, right? So if you haven’t done any deals, read the book because that will actually give you clarity on what is involved in a deal.

Oscar Setiawan:

For example, if you are trying to do a flip and you think that you can make 50, $60,000 profit, but now you read the book and you realize there’s gonna be holding costs. There’s gonna be borrowers costs. There’s gonna be other expenses that you don’t know about. Now, you’re gonna be more careful. And now you’re gonna, you’re gonna be thankful because you’re not gonna gonna make the mistake that, that most people do you, you know, so if you’ve done your first deal and you think you make money, go to your, go to your hu and try to look at your statements and your expenses for the last three, four months or whatever that project was, right. And start marking them. And you, you, you, in your book, you had, you had that chapter where you, you were able to mark, you know your income statement or your statement, your bank statement as profit expenses, right. Or the things that you need, or the things that you don’t need. Right. Those are the things that you need to, to find out early in the game.

David Richter:

Yeah.

Oscar Setiawan:

Right.

David Richter:

So I like how you said that if you haven’t started yet, you know, like you’re at an advantage just because they haven’t built bad habits in the business yet, you know, like, right. That is, it’s like start with the good habits. So, man, that was really good stuff. I really appreciate that this whole thing has been great. Just like closing deals live with others. You know, like this is Oscar, the closer here we’ve got him with generational wealth and talking about what that means to him now and to his family, what he’s telling his daughters, like go back and listen to that portion also about how money works, you know, just how it goes in and out and like what he is, teaching them about that consistency in your circle, the trouble indicators at the beginning, like, know what you’re buying, know your numbers, know your rehab limit.

David Richter:

Like there’s been a lot of great stuff on this podcast. So that way you could go and take action and make sure that you are putting in place either Profit First or making sure that when you go and do that next deal, like following his guidelines to not lose out on a lot of money on that first deal. But now this has been, this has been awesome. So Oscar you’ve provided a ton of value here. How can our, our audience, our listeners provide value back? Like, what are you working on? How can they connect with you? Tell us about what we can do for you.

Oscar Setiawan:

Yeah. So first thing first, I, I love to network. I love to connect with, with new people. I, cuz I know, you know each of us has a value to give and, and through those conversation we know what our values are. Right. So perfect to reach out. I’m very active on Instagram at Oscar to closer, that would be the best way to connect with me, cuz again, no one can spell my last name. So <laugh> so, you know, just Oscar the closer, that’s really where I can be found on Instagram and you know, just go from there. You know, I, I love to help people. I love to help people get clarity to get started. And I’m sure once people receive values from me, you know, I, they, in, when, when they grow to become an investor, I’m sure there’s a value that you, that we can, we can exchange.

David Richter:

There you go. So find him on Instagram. He’s got a good link tree too, of like a couple of things that he’s, that he’s posted about. One of them is doing a podcast on one of the podcasts that he’s hosted before the, the intentional investor. Right. That was the yep. Correct. Yep. So we did a podcast there, but make sure to find him, get that. If you want a free book. I mean he’s given away a free book as well, too. Exactly. He’s still got a couple left over. So make sure to reach out to him if you want a free Profit First for real estate investing book. Also, if you’re like Oscar and you’re like, where the heck has my money gone? Like I need a system and you need to implement Profit First. And you are, you felt like what he’s talked about.

David Richter:

Living deal to deal and being in your rat race, head over to simple cfo.com. We’ve got a call button there, right there where you can schedule a call with us. We’d have to help you. See if we can help you implement Profit First or connect you at least to the right people in our space. If you need a good bookkeeper like you was talking about or need a CPA. And that knows real estate and real estate investing mm-hmm <affirmative>. And if you’re tired of like losing money and feeling broke and you feel like what Oscars felt or what Joey or other people like losing out on that money, reach out. We’d love to help you, but I wanna make sure that everyone remembers the statement. Start making profit a habit in your business. Oscar, thank you so much for being here today. It was an honor to have you.

Oscar Setiawan:

Thank you. It’s my pleasure.

David Richter:

Thank you so much for listening to today’s show. If you found this episode valuable, could you do me a quick favor? Could you give us an honest rating within iTunes and be honest, you could say whether you liked it or not. And obviously with iTunes, the more reviews and ratings we have, the better it is for other people that are searching for Profit First and a podcast. So we’d love to be ranked on there and that’s thanks to your help. So we would really appreciate that if you would like to go give us a rating. Also, if you’re looking to connect with us further, I would highly recommend checking out our Facebook group Profit First for real estate investors. And that’s literally what it’s called. So you can type in Profit First for real estate investors and you’ll be able to find <laugh>, you’ll be able to find our Facebook group right there.

David Richter:

So come join active real estate investors who are supporting each other and growing their businesses and profits together. That’s what that group is all about. The link should be in the description below. And if you’re interested in working with us and implementing Profit First in your real estate business, we offer coaching and guidance. So if you wanna work with someone who’s actually Profit First certified and who works right now currently with real estate businesses, you can actually go start your application process by going to simpleCFO.com/apply, or just go right to simpleCFO.com. And there’s an apply button right on there. If you wanna actually start your Profit First journey with someone who can actually walk you through those step by step and help, you know, and grow your cash flow. Thanks again for joining us for another episode of the Profit First REI podcast. See you next episode

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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?

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 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):

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 (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.

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