How Profit First Can Give You Peace of Mind in Hard Times With Jonathan Tovar

September 26, 2022

Episode 116 : How Profit First Can Give You Peace of Mind in Hard Times With Jonathan Tovar

The Profit First REI Podcast

September 26, 2022

David Richter

Summary:

Profit First is an amazing method for managing your business’ cash flow, but it can be so much more!

In this episode, we’ve got Jonathan Tovar, real estate investor, entrepreneur, and co-owner of Action REI, as he talks about his business journey before and after learning about Profit First.

He and his brother started their company in August 2019, just a few months before the pandemic hit and dealt a major economic blow on everyone. But through the highs and lows of Action REI, implementing Profit First gave them opportunities and options to keep their business going. Jonathan even started applying the method into his personal finances!

Listen in on Jonathan’s thoughts and experiences with the Profit First method, and more!

Key Takeaways:
[0:55] On Jonathan Tovar and His Investment Background

[4:33] Jonathan on Profit First

[8:16] Jonathan’s Situation Before and After Profit First

[14:14] How Profit First Quickly Changed Their Business

[18:16] How Profit First Helps Your Business in Difficult Times

[22:54] Implementing Profit First Into Personal Finances

[27:00] What Jonathan Would Do Differently if Started From Scratch

Quotes:

[5:53 ] “Real estate (is a) roller coaster… You get good months and bad months. And what we’ve found is that the Profit First method really helped us out more so in the bad months.”

[8:36] “Once you start implementing those things, like Profit First especially, then you start really treating it like a business.”

[15:14] “Profit First (gives you) peace of mind in your business and knowing that everything is where it needs to be ”

[26:11] “It doesn’t make you feel guilty for having a little bit of fun because you know everything is already accounted for.”

Links:

Connect with him through his Instagram @jonathan_action

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:

Jonathan Tovar:

Hey, you know, here’s marketing, here’s acquisitions, here’s transaction coordination, here’s disposition, but who’s really talking about finances? And so that was one of the things that he was covering was like, Hey, look like we could talk about marketing all day we could talk about acquisitions and sales and dispositions. But like what happens when you make this money? What happens when you, you hit all these other things and you have these finances, like what are you doing to take care of that?

Intro:

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.

David Richter:

Jonathan Tovar. Man this was a great episode because he’s implemented Profit First for years now but he talks about the years before Profit First and what happened in his business and how he was feeling. How he was feeling, like, what the heck is going on, why is all my money gone, what do I need to do? Thinking about giving up and going back to a W2 job, he downloaded an app to go out and to be able to hunt for, you know, the side hustle and the side income at one point before Profit First. And then he tells about his journey through that and on the other side how he’s been able to build a business with his family and be able to come out and be better and stronger on the other side without it being built on hope and knowing where the money is and ultimate peace of mind. I mean, he tells his whole journey and what was able to get him there. I hope you enjoy this episode. Lots of great nuggets for you to take away and to be encouraged that other people are going through exactly what you’ve gone through or you can avoid some of the stuff that they’ve gone through. Thank you so much!

Hey. Hey, thank you so much for being here, Jonathan! I met Jonathan, it seems like several times over the years now, where I spoke at an event or virtually with James Hodges. And then I met him at a Million Dollar Meeting a few weeks ago, so really excited to get him on here because he’s actually taken Profit First and done something with it in his business. And that’s what I wanted to talk about. He’s a huge believer in that and you know, just wanted to get that out there more, but Jonathan, it’s great to have you on the show. Thanks for being here today.

Jonathan Tovar:

Hey David, I really appreciate it. Yeah, I mean, Profit First have, has really changed. I mean really the, our lives right when it comes to man managing our finances with business. And also, and I know we talked about this at the Million Dollar Meeting. You know, I actually implemented it within my personal finances as well, and it’s really just been a game changer, so yeah, no, we definitely appreciate it and yeah, we love it.

David Richter:

Okay. Well, we’re gonna dig into both of those areas for sure, but just tell a little bit about your background and like what you’re doing now, because you’re, you’re a real estate investor, just like a lot of the people listening to this podcast. So talk about like what you’ve got going on real quick.

Jonathan Tovar:

Yeah. I mean, just a little bit about me. You know I’m, I actually started wholesaling real estate in 2019 with my brother. He’s actually a big, a big part of, of the business we kind of from early on, we kind of established like, Hey look, you know, he’s like the visionary, the one really kind of I’m out there talking to home homeowners, you know, getting contracts. And to be honest with you, he’s the one that’s actually really implemented a lot of the Profit First within the business and the business accounts and managing that stuff. Cuz he’s really the integrator, you know, kind of the brains behind, you know, all the systems and stuff like that. But yeah, I mean we’ve been, we started off in 2019 wholesaling real estate. And then within 2020 we started getting into flipping you know, flipping real estate to 20 to 2021. And then now in the end of 2021 at 2022 we’ve been doing notations. So we are a wholesaling flipping in notations company here in San Antonio, Texas.

David Richter:

Well, there you go. So this is, you know, I’ve had, you know, different people on here and this is Jonathan and he is just like you, he started a real estate company a few years ago or you might be jumping into it. So I just want you to know that this is someone who’s taken the pro first message and really implemented it in his business. I love to that you, you have your brother there as the integrator, basically the implementer of the different systems. So let’s go down this road. What got you excited about the Profit First message?

Jonathan Tovar:

Yeah, I mean to be man, to be honest with you getting started in real estate, not coming from any kind of financial background or, or any, I really didn’t know how to even manage a business. I mean, we, I never owned a business or managed a business or let alone finances. Right. So the Profit First method was a very easy way and simple way for us to help manage those, those big checks. Right? I mean your wholesale property you flip a property, you’re getting, you know, these big checks and it’s like, all right, how do we manage that correctly? Where, you know, I don’t just go spend it all at one place or pay myself too much or whatever it may be. Right. So you know, when you get that check and you get that money, you have to start now putting it, you gotta for taxes you know, one, you know, some for profit, right?

Jonathan Tovar:

You gotta pay yourself marketing. And it was really just for me, it was a simplified way of how to allocate these funds. And so yeah, we, we, we started it we didn’t learn about it until 20, I wanna say 20 late, mid to late 2020. And that’s when things change for us because, you know, if, if you wholesale flip or do any kind of real estate in general, I mean, you know, the real estate rollercoaster as they say, right. I mean, you have your good months and bad months. And where we found the Profit First method really helped us out. More so in those bad months, right. Those months where we maybe didn’t close as many deals. And so, you know, we were able to at least have that profit account still sitting there and have the taxes are already allocated to the side, things like that. So it really helped out, you know, just kind of manage those funds and especially with you know real estate and just kind of ups and downs with it.

David Richter:

Okay. Well then let’s, I’ve got, got tons of questions from there, but let’s focus on the period of time from 2019 to like early 2020 when you hadn’t heard about it, how was business like then with the finances and just that side of the things,

Jonathan Tovar:

Man, I’ll, I’ll be honest. I, I just was, we <laugh>, we get a check and we just kind of put away a like 20 or 30% in, in, in, into the tax account or like just save it into a savings account. You know, we just had a business checking and then a business savings account. Right. I mean, that’s the way we’ve always taught. Right. That’s so we’ve always learned, right. You have your checking account, your savings account. So that’s all we would do, you know, we’d shove all of our, what we thought was profit into our, our savings account. And then we’d put all of our taxes into our savings account and then our regular checking account, our business checking we just kind of had everything else in there, right. Our payroll and our expenses and things coming out.

Jonathan Tovar:

And so it, it was just a headache to manage, I mean, really from 2019 to 2020, I mean yeah, I mean, you didn’t really know if you, you asked me like, Hey, you know, what are you, how, how much are you putting aside for taxes? I couldn’t tell you, you know, how much are you putting? How much are you paying yourself? How much are you really putting aside for yourself is like, I really couldn’t tell you you know Hey, what is, what, what’s your monthly expenses look like? I had no idea. I mean, everything was just all integrated together. I mean, you know what, we paid ourselves lunch monthly expenses like marketing and, and stuff like that. I mean, it was just a mess. So yeah, to answer your question, 20, 19 to 2020 managing the finances. I mean, there really wasn’t much, it was just a business checking and a business savings.

David Richter:

So since you, you know, the management was harder at that time, did you feel like a business owner during that time 2019 and early 2020?

Jonathan Tovar:

Oh no, no, no, we’re just, it was just, you’re just going, you’re just going and, and you know, especially in the very beginning, right. You’re just trying to get checks. You’re just trying to get you’re chasing the money. And then now that once you really start implementing those things, like Profit First, especially into your business, then you start really treating it like a business. Right. I mean, at the, at the end of the day, yeah. It’s called Profit First. Right. So you you’re doing this to actually have something there. And so, yeah, I mean, once we started treating it like a business and using those systems, like it really, it was a game changer for us, for sure.

David Richter:

So I like what you said before about how Profit First has helped you sometimes the most during those hard months, did you have any very low points during the 2019, 2020, before Profit First where it was like, oh shoot, where are we right now? Like, I don’t know if we can spend the money, the account.

Jonathan Tovar:

Oh yeah, yeah. I mean, well, 2020 I mean, we all know COVID right. So COVID hit right? Yeah. Early 2020, we started in August of 2019, right? Yeah. So we had just completed the end of 2019. We, we just got in wholesale real estate with no real estate background, no business background 2020 hits early 20, 20 COVID hits. And you know, everybody is, you know, just it’s, it’s crazy. Right. I mean, you know how it is <laugh> yeah. So yeah, I mean, and honestly, yeah, we were just like everybody else. Right? I mean, the good thing about us is that we didn’t really have a team. It was just myself and my brother. So our backs were already against the wall anyway, you know, we really didn’t have an option, but to keep going, we didn’t have a large team to scale back or fire or, you know a huge marketing channel of PPC and, and cold calling and all this stuff and mail.

Jonathan Tovar:

It was just me cold calling. Right. So you know, before then, I mean, we, we had our, we had no option, but to keep going, keep cold calling, keep hitting the phones and trying to get these deals. And we actually did pretty good during, during COVID. You know, but I mean, yeah, it was, it was tough, you know, I, I, I remember at one point we were, I was looking into I, I got the, what is it? Postmates app. And we were getting ready to start doing Postmates, cuz you know, here in Texas, they were still allowing you guys, you know, if you wear mask and you know, things like that to drop off Postmates, you know, food and groceries and things like that at people’s homes. Right. So yeah, I mean it, it was tough. It was tough. 2019, 2020. It was tough. But yeah, we just pushed through and just kept, kept, kept going.

David Richter:

Yeah. Well I’m glad you did. So you downloaded the Postmates app at one point feeling really rough. So then let’s talk about, you know, during that hard time, did you see, when did you start hearing about Profit First then? Like where did it turn around for you? Like, did you hear it at an event? And then you were like, Hey, maybe this could be the thing that can help us get to where we need to be like, tell me about that journey from downloading Postmates to actually hearing about yeah. Hopefully something that can get you out of that.

Jonathan Tovar:

Yeah. So yeah, I mean, yeah, 2019 2020 was rough, you know, started real estate. You know honestly was you didn’t think we were gonna keep, you know, keep afloat you know, getting, getting signed up for Postmates. But we just stuck stuck through it kept going. We did close a few deals during that whole COVID, you know, April, may, June time. And yeah, I was talking to my brother and business partner and I said, Hey look, you know, we, we have to do something different. Like, you know, I, I, I was in the banking industry for over seven years. And I went all into, you know, entrepreneurship, I guess you can say right in this real estate industry. But it’s at the same time, I’m like, Hey, I, I really, you know, I don’t wanna struggle or keep going through this kind of, you know grind.

Jonathan Tovar:

Right. so what we did is we started looking into mentorship and coaching and we came across REI Game Changers, our very first coaches or mentors we’ve ever paid for in our lives. And within that program. And, and I would say, you know, that’s that, that’s the benefit of, you know, paying for coaching or, or, you know, getting mentorship, right. Is, I mean, a lot of times you can cut the learning curve, you know, in your business or even finances. Right. Cause now we discovered Profit First through that. So we joined, we joined the, the, the coaching program and part of it was like, Hey, you know, there’s marketing, here’s acquisitions here’s transaction coordination, here’s disposition, but who’s really talking about finances. And so that was one of the, one of the things that he was covering was like, Hey, look like we could talk about marketing all day.

Jonathan Tovar:

We could talk about finances all day, or I’m sorry acquisitions and sales and dispositions. But like what happens when you make this money? What happens when you, you hit all these other things and you have these finances, like who’s, how are you doing to take care of that? Or what are you doing to take care of that? I should say. And so that’s when he showed us the Profit First he actually gifted us the book as a gift and, and he’s like, here, here, you guys go. And then he kind of did a presentation on it and just kind of saying, Hey, look you know, this is kind of the basic fundamentals of when you get a check, you separate ’em into these accounts. And yeah, I mean, right after that immediately we went back to the, to our bank and opened up some, some accounts <laugh> started. That’s awesome. Managing this money <laugh>

David Richter:

And James is a good friend. He now sends out, I believe the Profit First version of, or the real estate investing version of Profit First. So he’s been a big believer in that for a long time. Yeah, he was definitely one of the people that helped us at the beginning. Just get that word out, but I love that you did that now. Now I wanna focus on, okay, so now you went from the dark to the light, you know, like now we can see. And so how were the first few months running on Profit First? Like, do you remember when things started to click and change once you started implementing?

Jonathan Tovar:

Yeah, I mean, honestly it really clicks immediately. <Laugh> awesome. You know? Right. I mean once you, cuz what it does is at least for me and, and it helped us is it helped us understand where our business is at. Right? You, you have a ton of money in your business checking and then some money in your savings account. And you’re thinking, oh, I, I got all this money. In reality, it’s like a lot of that is going to your marketing or a lot of that is going to your, you know towards profit, right. Or towards your taxes. You know, what are you paying yourself? So once you kind of divide everything up into these accounts, it’s like, okay, now I see, you know I have everything allocated towards taxes and it’s really a peace of mind, at least, least for me Profit First we can sit here and talk about accounts and taxes and moving things and paying ourselves. And, but really it’s peace of mind in your business knowing that everything is where it needs to be. Right. Mm-hmm, <affirmative>, it’s like organizing or organizing, you know, a closet or whatever. Right. It’s everything is in its proper place. And when you need it, you know exactly where to go you know, you kind of know what’s going on. Right. <laugh>

David Richter:

Yeah, exactly. And so then once you saw that clarity now, did you feel a little bit more like the business owner being able to direct that money?

Jonathan Tovar:

Oh, absolutely. Absolutely. immediately once, once we started implementing it and then we started getting some closing, some flips or whatever it may be. And it’s like, once that check hits the account or the wire hits the account, it’s like, alright, we start moving it in these different, different buckets, right. These different accounts. It’s like, okay, that’s what it really means to be a business or at least for me. Right. It’s like, alright, you know, you’re, you’re not just check, you know, checking account and everything kind of going in and outta that, right. It’s like, no, this is what a, this is what a real business does. Right. You, you move aside for taxes, you move aside for profit, you move aside for your, for your for your pay. You know, for your marketing, you allocate everything where it needs to be at. So AB absolutely.

David Richter:

I love that. And I love hearing this from the visionary cuz your brother’s the integrator. So he probably has a more operational mindset of like, okay, I understand this, like I know how it’s gonna flow. And you’re just like, I want the freaking peace of mind, baby. Like just give me the account, let me know where my money’s going. So I Love that.

Jonathan Tovar:

No, absolutely. And that’s, that’s literally how it was. I mean, I’m, I’m the type where I’m like you know, I’m working through our CRM and I’m saying, Hey, look, I just need this button to do this. And once it does this, I needed to do this. And he’s the one that actually is like, how are we supposed to make that happen? You know <laugh> yeah. And, and, and we end up figuring it out and that’s exactly what happened, right? I’m like, look, I just need to know that, you know, we have our money where they need to be and have the peace of mind that everything is one being covered on our expenses or two, our taxes are being covered at the end of the year. And for him, it’s, it’s also able to help manage those things with our marketing.

Jonathan Tovar:

And also since he does handle the finance side you know, once your CPA or your tax, you know, professional ask for those, for your, you know, all the, the documentation and statements, whatever it may be. It’s like, Hey, here’s exactly what it looks like. This is exactly what is in our income account. This is what we made. You know, these are all the wires we ha you know, once the taxes come around, you know, exactly you have money in that account. So it’s, it’s just sitting there, things like that. So he would, it was able to help him organize those things when it came tax time. For sure.

David Richter:

Awesome. I love that. Cuz so many people on their team usually have the, like the visionary and then the more organized one, you know, who like puts the things where, and you’ve got the visionary with the ideas who wants a peace of mind, then the organization person to be like, is this really gonna help me? Yeah. Is this gonna hurt me? And you know, I like hearing the story of how it helped both of you. I do wanna call back though to where you said you implemented Profit First, but then it helped almost more during the hard times than like yeah. When the good times were rolling in, we had properties closer. Can you just talk a little bit more in depth about that and how you’re feeling during those times,

Jonathan Tovar:

Man, I’ll just be 100% honest with you. The, thank you. We, we, we had, we had a few, we had a few months. And, and I, I only, the reason why I say that is because it’s tough as a business owner to actually say, Hey, look, I’ve had one or two or three hard months where we either a close one deal or zero. Yeah. And, and, and the fact that you had that profit account, although you wanted to be for profit, right. I mean, it, you know, this is the account to take care of you and to take care of, you know to do the, the fun things you wanna do in life. I mean, you wanna reward yourself. Yes. but because we had that profit account it’s like, okay, for us, it really was just a, a safety net during the hard months where Hey look, we, we, weren’t gonna dig into that business to that tax account because the taxes, obviously at the end of the year, right?

Jonathan Tovar:

Yeah. That’s still owed. Right. So we’re like, Hey, at least we know where taxes are, are put away. We had our marketing account that was already allocated. So it’s like, Hey look, we at least need to know that our marketing is going out. Mm-Hmm <affirmative>, you know, we’re not, we can’t stop. Right. I mean, we gotta keep going. You know, we have our, our, our monthly salary that we pay ourselves. Even if we gotta cut that a little bit, it was like, Hey, look, we at least need to make sure we get the bills paid. So yeah, during those hard months you know, it was a safety net for us to say, Hey, look, we didn’t close any, any, any deals, but like, let’s still allocate, you know, towards our marketing or, you know, let’s still pour into these things that we know we still need in our business.

Jonathan Tovar:

Right. We didn’t necessarily have to cut our salary or necessarily have to cut marketing or take out of that tax account. It was like, we were able just to pull it from there and continue to market continue to, to rough what’s the wor weather, the storm, I should say. Right? Yeah. Because that profit account for us, it was somewhere where we were able to move that into these other accounts and keep going. And now because of it, it, it helped us through that dry spell. And, you know, we started getting, you know, six figure months after that, it was like, okay, I’m glad we saved that money. Or we had that profit account and we didn’t just blow it. If it was all in our, in one checking account, we probably would, you know, everything is going everywhere. It’s like, okay. You know, it was able to help us organize and, and kind of dig back in there if we need it.

David Richter:

That’s awesome. Cuz I was, you even stole my next question, cuz I was gonna say in the past, if you would’ve run into a situation like that and you only had the one account or like we’re non Profit First, do you think you would’ve been able to, to weather some of those storms and

Jonathan Tovar:

Some oh no, absolutely not. Because you know, when it, when, when it’s all in one place you know, you, you don’t, you, you just, you’re kind of like a, what’s the word you kind of just, just, just kind of throwing things at the wall, you’re kind of throwing things at the wall. Right. And so if it was in one place, we would’ve kept just like, they just throw money into marketing, let’s just keep going, keep going. Let’s not stop. You kind of put your head in the sand and, and you’re just kind of just spin, spin, spin, spin spend. And or you continue to just, you know, over maybe overpay yourself, right. I mean, you know, especially during those. So with that, it was like, all right, you know, we have our, our, our monthly payer salary, so we’re gonna keep, we keep that going because we have the profit account and we know what we need to continue to put into our marketing, if anything, it’s probably the wrong thing to do.

Jonathan Tovar:

<Laugh> but we actually doubled down. We doubled down, we, we, we had extreme faith that, Hey look, it’s it’s we had one, two months. All right, Hey, you know what, let’s, let’s drop another five grand in this marketing channel. Let’s do something else. Let’s switch things up because we had that there. So we actually able, we actually were able to double down and pour more money into marketing because we knew we are like, all right, even if we still take some here, we like, we’re still good because we have everything move moved, moved where it needs to be.

David Richter:

Well, it sounds like it gave you options during the hard times.

Jonathan Tovar:

And exactly. There you go. Yeah, there you go. It did, it did give us more options during the hard time, you know having the clarity of where all of our funds are at and yeah, just a peace of mind. I mean, it, it, it really was. And, and I think you hit the nail on the head there. It really gave us clarity during the hard times of where we stand.

David Richter:

No, I love that. So we’ve talked a lot about the business, but you’ve mentioned too, that you’ve implemented this in your personal life as well. Like when you saw it working in the business, was that when you started implementing this on the personal side of your

Jonathan Tovar:

Finances as well? Yeah. Well yeah, so I think when the first time you had mentioned it I think was when we were at that at, at a event with REI game changers and he kind of brought you in and you were talking about Profit First and it blew everybody’s mind. I, I think you kind of just threw it out there, like, Hey, you guys could even do this in your personal life. And it always just kind of stuck in my head and yes, absolutely. Once we started implementing it in the business I was like, wow, like, this is the, I, I remember David mentioned, like, this is also a good way to manage your, your personal finances as well. And so I had a, I had to sit down with my wife and I’m like, look, we got our checking account and our, our, our savings account.

Jonathan Tovar:

We need to make sure that we are putting away, you know, for us, we need to make sure that we’re putting, you know, things away where, where they need to be. And, and so, yeah, I mean, it really I, I, I immediately implemented it and it’s awesome. And even now we pay ourselves just a normal salary every single month and right when it, and it hits the income account, I, I already know. And I have the peace of mind knowing that I have all my monthly expense account. So, you know, I have my rent that automatically comes out. You know, we have our, you know, light bills, things like that insurance, whatever may be car insurance, these are things that automat even Netflix, right. I mean, if there, if it’s a monthly expense, like just throw it in that expense account and separate it from your personal account.

Jonathan Tovar:

So now I, I, I get paid, I move it into my monthly expense. I, I move into my savings account and then the rest of it, I pour into into our checking account and I can confidently tell my wife and say, Hey, you know, she’s, you know, Hey, can I get my toes done or can I go buy this? I’m like, look, we everything’s paid you know, or, or, you know, yeah. Everything that needs to be paid for the month is taken care of. So yes, absolutely. Like, you know, this is gonna be for our food and our monthly expense or gas. And, and, and this is for us to have fun with, and you know what, let’s go in a date night, you know, let’s, let’s go have a nice dinner. And I know that for that month, I can, I can treat ourselves because of that Profit First method.

David Richter:

<Laugh> so it sounds like it’s affected the home life as well, too. Does your wife like, oh yeah. Is she a Profit First fan now?

Jonathan Tovar:

Yeah, <laugh> I, I actually told her about what it is because, you know, she she, she stays home and she manages, you know, the, the home. Right. And it’s a lot of work and she does a lot, she does a lot there. Yeah. And so you know, when, when we kind of bring everything over and I’m out here working and trying to bring home the bacon, as they say, it’s like, it helps her know that and give her also the peace of mind. That’s like, okay, everything’s accounting for, everything’s where it needs to be. And I, and I also know, you know, that we can still enjoy life and do certain things that I need to do. Because you know, it, it doesn’t make, or even in business, I guess it doesn’t make you feel guilty. Right. For, for right. Having a little bit of fun or doing something cuz you know, everything’s already accounted for. So even in the business account, right. I mean that Profit First, there you have everything allocated and you know, if we want to do a, a vacation with the team and kind of rent a boat on the lake for, for a day, that’s like, Hey look, you know, we can, we can treat our team as well and ourselves and go out and, and enjoy the a day on the, on the lake, you know? And you don’t, and you, you feel good about it.

David Richter:

<Laugh>, that’s good stuff. You know, it’s just being that peace of mind you’ve talked about in the business at home, you know, being able to do the fun things and not feel guilty about it. I think you’ve touched on a lot of the things that, where, you know, a lot of people, that’s what you’re really looking for from the business. So I love that. I’ve got two final questions here. Yeah. Then we’ll wrap up. So first one is, if you were to start from scratch, what would you do differently in your, your business?

Jonathan Tovar:

Oh man. If, if I were to start from scratch, what would I do differently in my business? I think that definitely I would, I would, I would, early on, I would invest more into coaching and mentorship. Yeah. So that’s, so that’s number one. You know, hearing other stories, a lot of times I hear people say, Hey, I went seven years or 10 years before I got a mentor. So looking back I’m like, we actually were pretty proactive with it, but you know we were maybe a year in before we, we got our first coach and mentor, but Hey, I, if, if I could have started off in the very beginning, maybe I wouldn’t have had those hard times the way we had where I was signing up for Postmates. Right. Because I, I kind of skipped that learning curve there and was able to kind of get some more insight on, on sales and marketing and finances and Profit First where I wouldn’t have maybe had those rough patches. So that’s number one. And then two, I mean, it, it probably would just be simply just, just, just, just, ah, man. I, I think, I, I think that’s probably the best, biggest thing I would say. Everything else. I feel like we did, we did pretty, pretty, pretty well on, you know, we, we kind of, I, I would just, I would just say keep going, right. Just keep going. Yeah. Don’t stop. Don’t give up through, through those hard times and, and that’s exactly what we did. So yeah.

David Richter:

So get a mentor early on that mentor, his mentor specifically got into Profit First, so managing the money once it was coming in. So exactly, absolutely love that. So this has been awesome. I’ve only gotten one final question, but I just wanna recap here, like from the very beginning, going from the journey of starting in real estate in like 20, 19, 20, 20, kinda like running around like chickens with your heads cut off. Yeah. Going to then be business owners. Once we hear about Profit First and getting that in place. And then that what you said there, I think just hits the core with so many people, peace of mind, peace of mind and the business, peace of mind at home, guilt free taking the money out. You know, you came to that point at the, at one point of like, I don’t wanna keep struggling. Like I wanna get out of this, we have to do something.

David Richter:

So I think a lot of things happen right. You know, for you to get there. And, you know, I think that journey though can be very typical of a real estate investor. I think a lot, lot of people feel, you know, feel where they are. And it’s like, where the heck is all this going? And then being able to actually go through those hard times as well, too. So this has been a great one. You’ve provided a ton of value here of like what Profit First has done for you, how other people can get help. So how can our audience bring value to you? Like what, how can they reach out to you? Whether it’s social media or your website or buyers, lenders, whatever, just, yeah. Give a little bit about where they can find you.

Jonathan Tovar:

Yeah. I mean, first off, David, I just, before I answer that. I just wanna say thank you for inviting me on you know, honestly, you know, yeah. We we’ve, we’ve kind of been different working events and we last spoke at the Million Dollar Meeting and I just couldn’t help, but I walk up to you and, and shake your hand and thank you for all the information and, and, and everything you do with the Profit First and sharing the message. And so, and so, yeah, I just, I just wanna thank you and OB obviously create creating this platform to like, kind of hear other people kind of go through it and implement that in their, in their lives too. I think it really helps to hear what other people’s been through and then how it helped them.

Jonathan Tovar:

So thank you for that. But, but yeah, I mean, if you guys have any questions or you need anything, honestly I just wanna see what I can do to help others. So if you need anything or have any questions you can reach me I think the best way would be on Instagram. So it’s Jonathan underscore action. So it’s J O N A T H A N underscore action. That’s really the best way to, to reach out to me. I, I’m gonna start just kind of vlogging my, my day to day journey here and start put, you know, posting content, just kind of vlogging my day to day stuff here. So I think that’d be a good way for people just to follow me and kind of see kind of what’s going on, but also you know, just send me a message and, you know, if, if they, if they want to chat, have any questions you know, I’d love to, I I’d love to answer and kind of help in any way I can.

David Richter:

Awesome. Well, there you go. There, you have it like follow Jonathan. He’s got great. He’s got a great profile. Make sure if you wanna connect there, he wants to help people. He’s like a lot of people that we work with that just have that giving heart. So I want you to make sure that you connect with him. Then if you’re feeling like Jonathan was and his brother in 2019 and 2020, and you are struggling in your business, living deal to deal, paycheck to paycheck, you know, not knowing where the money’s going. You can head over to simplecfo.com, simplecfo.com, and you can schedule a call there, no obligation. We just wanna make sure that you have someone who’s an advocate there listening to where you are. And if we can help you implement Profit First, or if we can connect you with the right pieces in the financial world, that’s what we want to do. So if you’re at that point, let us help you. And we would love to simplecfo.com. Then, Jonathan, thank you so much for being on the show. Again, it was an honor having you and hearing your story, and then if you’re listening, remember to make profit a habit in your business. Thank you so much.

Jonathan Tovar:

Awesome.

Outro:

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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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):

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