Perspective on Why Investors Often Live Deal to Deal with Mike Hambright

December 1, 2022

Episode 134: Perspective on Why Investors Often Live Deal to Deal with Mike Hambrigh

The Profit First REI Podcast

December 1, 2022

David Richter

Summary:

Joining us for today’s episode is Mike Hambright, the CEO of Investor Machine, a real estate investor, mentor, and coach. He is also the Founder of the Real Estate Investor VIP Show and Investor Fuel, the top Real Estate Investor Mastermind in the country.

Mike is a prominent figure in the real estate investing world due to his passion for using his platform to provide value to the real estate investing community, dedicated to helping every investor find personal success. He joins us in this discussion to do exactly that.

Catch the full discussion on this episode of the Profit First for REI podcast!

Key Takeaways:

[00:42] Mike Hambright and Real Estate Investing

[05:25] Mike’s Money Struggles

[08:14] Why Should You Set Up a Financial Management System?

[11:47] Why Should You Have Someone Who Knows Your Business’s Numbers on Your Team?

[12:48] Mike’s Perspective on Why Investors Often Live Deal to Deal

[15:57] Advice for the Next Generation of Real Estate Investors

[18:30] On Tenacity and Confidence: Mike Hambright’s One Key to Success

[23:47] On Giving Up Control: The Lesson Mike Learned the Hardest

[26:51] Surround Yourself With the Right People: Mike’s Advice

[28:26] Connect With Mike

Quotes:

[19:19] “Failure needs to be a stepping stone.

[27:02] “Surrounding yourself with the right people.”

[27:57] “You can invest your way up that learning curve.”

Connect with Mike:

Investor Fuel Website: https://www.theinvestormachine.com/front

Investor Machine: https://investorfuel.com/

Mike’s Facebook: https://www.facebook.com/mlhambright

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

Transcription:

Mike Hambright :

Surrounding yourself with the right people and the right knowledge. You can buy your way, you can invest your way up that learning curve. And I think a lot of people back to the frugality of the average real estate investor, a lot of people don’t quite understand that yet.

Outro:

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:

Hey everyone. Welcome back to the Profit First r I podcast. I’m your host, David Richter. Have another great guest today who’s a personal friend of mine, Mike Hambright, which he has investor fuel investor machine. And in this episode he talks about some of pretty awesome stuff, like why he thinks a lot of people would deal to deal, what about some of his keys to success, which I believe Mike has had a lot of great success in helping a lot of other people. And it kind of talks about his background and some of the things that have helped him along his journey. Make sure that he’s paying himself, make sure that he’s doing the things that he needs to do in order to not go out of business and the one key to being a real business owner. So I’m really excited about this episode. So let’s dive in.

Mike, here we are again. So I know that we’ve done several podcasts together over the years and it’s always a pleasure to have you on. And I’m a part of Investor Fuel and Love Investor Machine as well too, and how that’s providing quite a few of our clients use Investor Machine already. So I know that they love that and love that service. So I wanted to first ask you right outta the gate, what excites you the most about real estate investing, number one and number two, what you’re working on right now that excites you the most.

Mike Hambright :

So what real estate investing specifically? It, it’s about the, the freedom that it provides, right? And it, it’s that, that’s changed for me. I’ve been a real estate investor for 14 years now, so that the details behind what I just said there have changed a little bit over 14 years, but it’s effectively kind of paved the way for me to do other things that I want. Like, you know, our buddy Matt Andrews once said this quote that I’ve used, I’ve used it so much that people are quoting me saying it. I’m like, no, that’s Matt Andrews. Like you gotta give him credit for it. It’s that real estate investing isn’t the thing, it’s the thing that gets you the thing. Mm. And for me it’s gotten me the thing. And it still continues to get me the thing. But it’s, I think for, for most people, and I’ve talked to several, you know, I obviously have podcasts and talked to a lot of professional investors and I, and I hear this pretty commonly, that they’re not excited about real estate anymore, but they’re not as excited about what it does for them as they are about the widget. Right?

David Richter:

Yeah.

Mike Hambright :

And there’s nothing wrong with this. Sometimes people say it with a little bit of, and the concern in their voice that you’re gonna think differently about them. And I think, you know, I think we would agree it’s if it’s a means to an end, then there’s nothing wrong with that. Right?

David Richter:

Right. Exactly. Yeah, I’m, that’s so good cuz it’s a thing that gets you to the thing and not necessarily where you are right now. And I think that’s, a lot of investors come to that realization at one point or the other. Yeah,

Mike Hambright :

It’s sexy for a while. Yeah.

David Richter:

Yeah.

Mike Hambright :

But then it’s just, it’s getting you the thing that you want. And I think people fall out of love ultimately with the, a lot of the transactional nature of it. The fact that every time you sell a house, you’re dealing with a different seller, that you’re never a buyer that you’re never gonna work with again, most likely unless you’re a wholesaler, maybe some repeat customers. And so it’s very much a very transactional business and it’s been a great business for me and it’s great for a lot of people, but I don’t do it for the real estate. I do it for the freedom that it provides, ultimately the stability, the financial freedom, I guess.

David Richter:

Yeah. So what excites you about what else you’ve got going on now too? Because I know you do real estate investing, you do multi-family, you’ve got investor machine, you’ve got a lot of things going on.

Mike Hambright :

Yeah. Yeah. I would say that it’s the ability to take on new challenges. Like I like to solve problems.

David Richter:

Yeah.

Mike Hambright :

And the businesses that I have now and, and the things that I kind of do are challenges for me to see if I can create something that adds value for the community, our customers, the industry type thing. And so for me it’s, it’s a point now where I have I have a re I have rental portfolios to single a family, a multi-family. And the real estate gives me that flexibility to go kind of play a little bit with other things that you know, maybe some of these things didn’t start off as like a, as a core business or maybe not even a profitable business, something I’m trying to build. But it gives me the flexibility to do what I enjoy, which is actually help other people and try to, you know, for me, sometimes starting a new business or some of the businesses I have or like, that’s like my Sudoku puzzle. Like I don’t do class crosswords, I don’t do Sudoku puzzles, but I like to build businesses or try to fix businesses.

David Richter:

Yeah. No, that’s awesome. And I think a lot of businesses need that as well too and need that help and people that have been there before and I’ve seen it at different levels. So I love that. Let’s go into the profit first part here and talk about money. Let’s talk about money. And maybe the first question I usually like to ask around this is, have you ever had money struggles in your life or business and you know, like are you one of the ones that just have never had, you know, the ups and downs of money?

Mike Hambright :

No, for sure. I mean, I don’t know how far back you want to go, but I grew up in very much a very blue collar working-class family. And there were a lot of struggles over the years just from being like my dad being laid off of a job or my mom being between jobs. I mean, my mom, I remember my mom, my parents got divorced when I was about nine or 10. And I remember my mom, you know, getting her first job because she had me when she was very young. And at some point working, you know, two, three jobs and going to school to try to better herself. And so there were lots of early struggles for sure, early in my childhood. Now when I look back in hindsight, at the time it didn’t feel like a struggle cuz everybody was happy. We never, you know, every, I’m sure it was a struggle for my parents, but as kids we didn’t really see it. Okay. And I didn’t have anything to compare it to, right. So I didn’t know that things were a struggle, but they were, in hindsight, I look back now, I’m like, holy cow. You know, how did how did they, how did my mom pull this off, for example? But and then for sure I even in when I started as a real estate investor after leaving corporate America in that, you know, there are definitely early times really for the first several years where I, I would even say like real estate investing is not only an emotional rollercoaster, but a financial rollercoaster. You have these like months that are like, you just absolutely crush it and then the next month you don’t even do a deal. You know? And so there’s always kind of ups and downs like that along the way. And so, and truthfully, even after people, I know people that have tons of money, like what ends up happening is a lot of us are real estate rich and cash poor, right? So

David Richter:

Mm-Hmm. <Affirmative>,

Mike Hambright :

Like I’m way wealthier on paper than I am if you look at my bank account. And I think most real estate investors will resonate with that, right? To some extent. In fact, you probably don’t really want a lot of money sitting in a bank account that’s just sitting there doing nothing. But, you know there’s all sorts of struggles to different levels and the seriousness of them are, have changed over time. But I think it’s always a struggle because a lot of us are not, like, my intention isn’t to get to some point and then quote, retire and I just have this pile of cash that I have to work through. It’s to set things up in a way to where I have businesses that will cash flow forever even after I’m gone, right? Yeah. And so those things aren’t easy. It might mean, you know, we’re not living on a van in a van down by the river

David Richter:

<Laugh>.

And no, and no real concern for that happening, you know, anymore. But there are always struggles of how to structure things properly and kind of optimize your cash and cash flow.

So then along the years with those struggles or whatnot, did you ever, once you started creating businesses, did you ever struggle to pay yourself in those businesses or have tough times around, you know, bringing home what you needed?

Mike Hambright :

Yeah, I would say, you know, up until you know because you know, my wife as well, we kind of used in early version before, way before profit first came along and we always had three bank accounts. We had like an operating account, a property account where we borrow money for properties or whatever, and we never co-mingled that with our other funds, right? Yeah. And then we had like a reserve account, so whatever we don’t need that’s not like, you know, gonna cover our expenses for the next like 90 days or so, kind of plow it into this reserve account. So she was, you know wise enough to kind of create early versions of that. But I would say all the way up until just a few years ago, we would pay ourselves a very low salary and whatever happens, to be left at the end of the year, we would pay ourselves bonuses and put money into self-directed accounts. And so we, we, we’ve only since gotten to the point to where we pay ourselves a little bit nicer salaries and stuff like that. Cuz we, we kind of know that well we can afford to do that now. Yeah. Yeah.

David Richter:

No, that’s awesome. But I love that your wife set that up because at the beginning a lot of people don’t even have that clarity. Yeah. Like it’s just what we have. Can I take some money out or can’t I, you know, and it’s like they don’t even separate it out at that large.

Mike Hambright :

Yeah. I remember early on very vividly I had a conversation with a guy and this was our first six months in business and I was talking to another investor, this is like way back 2008 how old were you in 2008, David?

David Richter:

I was 17.

Mike Hambright :

Yeah. <laugh>. So dating myself a little bit there, but, and we were talking about advertising and he said, I can’t advertise this month cuz I need the money to finish a rehab. And it just, even then I knew like, that’s stupid. Like why is that even a thing? You know?

David Richter:

Mm-Hmm. <affirmative>

Mike Hambright :

And, but he could, he clearly had all of his money co-mingled, right?

David Richter:

Yeah. <laugh> as so many real estate investors do and business owners in general. You know, it’s just like that’s where that’s where I wanna get this message out here of I know

Mike Hambright :

Making

David Richter:

Sure what you got right. That you set it up like Mike did and his wife did, which your wife is awesome and she’s got that financial background. So it was like that definitely saved your bacon. I think probably a few more than a few times over the years of, you know, like having her on

Mike Hambright :

The team as well too. Yeah. You know, I don’t know if I told you this, but my, so my wife used to be an investment banker in New York.

David Richter:

Mm-Hmm. <affirmative>

Mike Hambright :

On Wall Street. And, and then her last kind of professional job was as she worked for a consulting firm and she was kind of referred to as a bankruptcy and turnaround consultant that went into businesses that were failing. The truth is I think 99% of the time they helped liquidate the companies. So it really, there was very few turning around, but that left such a scar on her of like lots of family businesses that had grown to like huge businesses and it was always cash and financial mismanagement that was the end of all these businesses is it was complete mismanagement of, of resources and capital. And those lessons learned from seeing other family businesses or sometimes large retailers, whatever, seeing what happened there.

David Richter:

Yeah.

Mike Hambright:

Had such an impact on her that she has always been our guardian, you know, to say this is, this will never happen to us. And those were some of the early influences that kind of impacted us in the early years in our business and still today.

David Richter:

Oh wow. So <laugh>, would you say that it’s pretty important then to have someone on your team that understands?

Mike Hambright:

Oh, there’s No doubt, no doubt. We’ve talked and we’ve talked about this before, like you have to have that person on your team. And, you know, one of the great things about obviously what you do is you don’t necessarily have to be married to one or even related to one because you don’t necessarily, most people that are listening to this show or that are in our industry don’t even necessarily need a full-time person. They need

David Richter:

Mm-Hmm. <Affirmative>,

Mike Hambright :

You know, somebody that can do this a quarter of the time or maybe not even that. Right. And some, some, a fraction of a person. Right. Which obviously is the service that you provide.

David Richter:

Yep. No, I, that’s what we’ve seen obviously with the people that we’re working with. And then I think you’re a testament there with, you know, with your wife send some of that stuff up early on and seen with her background of like, we have to protect this at all costs. Cuz I know it sounds like she, she was scared and she had a lot of those horror stories of, you know, why when people didn’t manage the money correctly. So Yeah, no doubt. I don’t even imagine. Okay. So, let’s talk then about if you were able to, you know, like even out to pay yourself and you were able to get through some of those money struggles, what do you think is the most prevalent reason that a real estate investor lives deal to deal? Why do they live deal to deal?

Mike Hambright :

So I think some, some of it is just not running their business like a business, right? It’s a job. And I think if they’re if you’re going deal to deal, this is, so I have, as you know, I have a ton of experience coaching new investors and now I really don’t work with new investors. I work with highly experienced investors, but still to this day I see people that, a lot of people that operate in the, doing a couple deals here and there, or even a couple deals a month. And in this business, until you get over, it depends on the market, right? But kind of two to three deals a month, it’s a job at that level because you don’t, you don’t have the resources to hire an acquisitions person and a office manager and an admin of some sort and a finance person or bookkeeper to help you with the finance side of the business. You have to do it all because there’s just not enough in your gross profit to allow you to offset those expenses. So until you get above that, say two to three deal a year, mark, at best it’s a business at best it’s a job, not a business, right? And so it’s, it’s like, it’s almost the equivalent of if you see somebody that’s living somebody, it’s the equivalent of I guess a W2 person trying to string it together with a minimum wage job, right? You just, there’s nothing left over to pay for something better. You’re just getting by at best, right? And you might have a good deal in there, it gives you some hope, but the truth is, is your business gets better when you start to scale it up above, let’s say kind of two or three deals a month. Because a lot of your fixed costs, like some of the people you have on your team your marketing to some extent some of the, you know, core marketing that you have, at least if you have an office and things like that, those are fixed costs. You’re paying that, whether you do zero deals a month or, or whether you’re doing 10 deals a month, right?

David Richter:

Yeah.

Mike Hambright :

And so there’s, there’s a little bit in there, like if you’re doing 10 deals a month, you might need two admins instead of one. But it’s basically to try to sweat those fixed assets, those fixed expenses as much as possible. And the profit that you bring home or that you’re able to keep will be bigger and bigger as your business grows from each deal.

David Richter:

That is, I love that what you said there. It’s treating it like a business, you know, at the end of the day it is treating it like a business and if you’re wanting to be that business owner. So I think that’ll resonate with a lot of people because that’s what I see on a lot of the calls that we have is people are tired of not feeling like a business owner, you know, they want that clarity, they want that. Yeah, exactly. It’s a job. They, they don’t, they’re feeling burned out cuz they don’t see the light at the end of the tunnel. So now that’s, that’s really, really good. Okay. So that helps me with the cash flow side and like why people live deal to deal. Let’s dive in just a little bit with you on the, you know, early you talked about some of the money lessons you’ve learned just from osmosis or learning and seeing what your family was doing there. What lessons do you wanna pass on to your kids, you know, like to the next generation of either real estate investor or your actual children?

Mike Hambright :

Yeah, I think it’s along the same lines to that there’s a lot of ways to make money. I feel like entrepreneurs are, are what this country needs right now. Like, we’re gonna solve our government’s not solving problems like it’s entrepreneurs and business owners that are solving problems and first and foremost to solve our own problems, right? Like I, it’s so easy to get kind of downtrodden from what’s going on in the country these days are watching the news like you think the world’s coming to an end, but part of it is just turning that off and focusing on what you can control. And you know, you can, if you’re not to take anything away from anybody, but the average person has a W2 has no control over their financial future, it’s tied to the company and, you know, you can go ask for raises and stuff, but with entrepreneurs we can find other levers to increase our compensation, right? So kind of teaching those messages of the power of financial freedom. I don’t know how you could have financial freedom in America these days without being a business owner because I’m, I’m perfect, I’m a perfect case of that. I had a couple of two jobs that I loved. One of ’em I got fired from because my boss got fired and I was part of the package. And then the other one was a company that was flying high and then filed for bankruptcy. And I just realized I had no control. And so, you know, as an entrepreneur there’s a lot of things that feel like they’re out of our control sometimes, but I can promise you we’re way more in control than if you’re if your check is coming from somebody else,

David Richter:

Oh yeah, that’s good stuff because most people that have that mindset, putting that into practice, then how do I actually make this a prior you know, I can be that business owner and Right. Think we’ve think we’ve covered that for sure. Cuz I love getting that message out is you wanna be a business owner, time to act like a business owner, that you’re gonna actually, that you’re gonna actually be the leader. And honestly, that’s a different set of skills than the jobs that they’ve ever had. You know, like most people have had that W2 in the past or they’ve had that mindset or school bakes in that mindset into us, you know, like conform and whatnot. And it’s like, as an entrepreneur, you’re pulling back all those onion layers, you know, of like, here I am, that’s who I’m supposed to be, that’s how I’m supposed to help. You know, and it’s like getting past a lot of what’s built into us when we step out away from that. It’s like you have to, you have to break down some of those mental barriers and rebuild, you know, Yoda on learn what you have learned there, you know, and like move forward. So, okay. I’ve got some more questions here. Another question is, I would, I would classify you as a success, you know, like you’ve built some awesome businesses, you’ve had a great run, you’ve got lots of people that you influence and you help them as well too with your masterminds and with investor machine up to this point. Can you give me like one bullet point, like what’s a key to your success so far? What would you, if you could, can you boil it down to one, you know, one action or what, what is that one thing?

Mike Hambright :

Yeah, I’d say tenacity. Like tenacity because you say that I, you viewed me as a success then. And I’m not saying that to brag. We’ve had some successes, but what you don’t see is all the failures. We’ve had a ton of failures and I do talk about this a fair bit on social media or other areas of failure needs to be a stepping stone. And I think there’s a lot of people that try to get started as an entrepreneur or certainly a real estate investor and they have an early failure and they quit. And so I like to say that, you know, failure isn’t final unless you quit it. And so if you use it as a lesson to say, that sucks, don’t do that again, that sucks. Don’t do that again. Oops, that was a mistake. Why did he ever think that would work? And you kind of pile these things up, you get this knowledge that kind of makes you more and more confident, more and more, you know, not invincible, but I’ll just kind of lean on confidence that

David Richter:

Yeah,

Mike Hambright :

Whatever challenge comes my way, I can figure out a solution to and move forward. So, you know, there’s, there’s, I think I have it out on a canvas out in my office. It’s like, don’t, don’t wish you were, don’t wish it was easier, wish you were better. And, and, and I think, I don’t know, I don’t know who the quote is there, I’m quoting somebody that other than myself, but for sure I think what happens as an entrepreneur if you get enough failures under your belt, you just have a high level of confidence that like things aren’t gonna get easier. I just am. It’s easier for me to deal with the problems. I can solve problems faster than I used to. I used to have to sit around and it’s like, what should we do this or that? And I was like, that one sounds a little better, let’s go. You know, and just, I might fail, but I’m gonna pivot again. And we just are, we just make decisions faster. We’re confident that if I get hit with a failure, it’s not gonna, it’s not gonna blow me outta the water and I can just keep moving forward.

David Richter:

There is nothing like that confidence to Yeah. Because even if you’re wrong, at least you’re confidently moving forward to say, okay, I was wrong. And then being humble enough to be able to say, okay, we gotta pivot now, you know, and go a different direction. That’s a big, I think that’s a that’s another big part of what you’re talking about right there. And it just makes me think of like, I don’t know if you’re an office watcher or if you’re listening to this and you’ve ever watched the office and like Andy who’s one of the just, he’s, he’s just a silly guy on the office where he says it’s really something stupid and small. Like someone took something of his and he’s like, this is the hardest thing I’ve ever had to go through in my life. I haven’t had a very hard life. You know, like just that, that concept of the harder, the things that you’ve gone through and those failures, it builds that confidence in yourself to be able to go out and be that leader that you need to be. I think about in college, like I was doing, like doing college during the day, working 10 or 12 hours at night, getting four hours of sleep at the end of that I’m like, I could do anything. Like there’s what, what can’t I do now that I survived? You know, this death trap for the last four years of like this grueling hell torture of doing that. And I was doing like things on the weekend too. So it’s like I totally get that confidence boost. It’s like, if I did that, what else? Throw it at me, bring it my way. Yeah, right. Yeah, exactly. So, no, I love that. That’s a great answer. And I think that’s something that, that you don’t have, that’s not a skill, that is something that is learned through failure. Like you have to go through it with experience and you know, like the only way you get it as a skill is as you go through failure and you go to that next level. So it’s like that’s where, so I absolutely love that cuz anyone, you don’t have to,

Mike Hambright :

It takes time, right? Like I’ve been an investor for 14 years now. I didn’t feel that way when I first started. Like I was scared to death.

David Richter:

Yeah,

Mike Hambright :

Right? And, and then over time you start to realize like, this decision I have to make isn’t like life changing. Like should I convert the garage or should I on convert the garage or should I leave it as a conversion? It’s like, and you would ask people, 50% of ’em would say one or the other. It ultimately doesn’t matter, like what color should I use in a house? I just got to the point where I used to like pick ’em all out, right? And then I would just ask my contractor, what do you want to do? What do you like, oh I like this and this, cool, let’s do that. Like, I literally don’t care. It’s not gonna impact anything. Like things that I used to think were a big deal are not even an issue. Right,

David Richter:

<Laugh>. Exactly. Yeah, that’s good stuff. It’s just keep it rolling. Things aren’t as big of a deal as you think they are. That’s until, you know, like then you get in those situations and you’re able to keep your cool. So yeah,

Mike Hambright :

You make it, if you make a failure, you just like, okay, that was a bad, I clearly have made lots of bad decisions too, so, but you just deal with it. It’s like, okay, I shouldn’t have done that or we shouldn’t have said that, or we shouldn’t have taken on this project, whatever. Here’s how we’re gonna unwind it and let’s just move on to the next one tomorrow. You know?

David Richter:

Yeah. That’s so good. So kind of around that same thing, so that was like one of the keys to your success. What’s the hardest lesson you’ve learned over the years of being a business owner?

Mike Hambright :

You know, I think, and I still struggle with this, is just giving up control cuz I think a lot of us as real estate investors, you know, early on especially, we’re very frugal, right? We’re doing everything ourselves, rolling up our sleeves. If it’s gonna happen, it’s, it’s because I made it happen. Yeah. And you know, we’re trying to find cheap contractors, cheap materials and just doing everything ourselves. So I think inevitably a lot of real estate investors get this kind of frugal mentality up front because that’s how they make deals work is they just, if I could save a little money here and save a little money there, and if I buy this right and all this comes together, then I’ll do okay. And I think that transcends over into outsourcing stuff or giving away you know delegating responsibility is like I’ll do it, I’ll just do it.

I’ll just do it. I’ll just do it. So I still struggle with that. I mean, in one of our companies now, we have almost 80 employees, so we’ve found ways to delegate a lot of things, but I still struggle with a lot of things that I feel like I can do a better job. But the truth is I just don’t have, there’s no more time in my day to do things that I don’t, you know, absolutely have to do. I really need to focus on what I enjoy doing and the things that I can add the most value instead of every little thing, right? So that’s probably one of my bigger things is delegating. And it’s hard to find great people. I mean, if I’m being honest, I’m not, I’m probably a better like leader of people like for investor fuel and I master myself then I am a manager, if you will. And so I’m not necessarily the most patient manager, if you will. And so we all have, we all have plenty of flaws. You just have to find ways to know who you are and work inside those bounds and figure out a way to outsource the rest.

David Richter:

Yeah, man, if you’re listening to this right now, that’s key. That is something as you, the ceo, if you’re the CEO of your company, you have to think like that. The CEO of most companies doesn’t sit in all the seats. So that’s where you have to give up that control, find those right people and eventually be able to say 80% of what I do is good, but I love what someone said that I’ve heard in the past is like, but if you hire two people and they both do 80%, they’re doing 160% of your output, you know, like they’re doing, you know, double what you were doing. So it’s like even sometimes, even if they’re doing a little bit less perfect than what you could have done, they’re still doing more overall than what you could have done. No doubt.

Mike Hambright :

So, and what’s the value to you of having that off your plate? Right,

David Richter:

Exactly. That is, there’s in my <laugh> for me now, that is absolutely priceless. Like, I will pay, if I’m involved specifically in a task, I will pay a much higher premium than, you know, like to get that off my plate than if it’s just a random other task in the business. You know, it’s like if anything’s tied to me, like get that off my plate cuz I know what I’m good at in the business and what I need to do for it. So totally understand that. So here we go. Just a couple last questions here. One, what general advice would you give the real estate investing community here before we’re about to wrap up?

Mike Hambright :

Yeah, I would say, you know, make sure that you’re surrounding yourself with the right people. I think back to being cheap, there’s a lot of people that avoid masterminds and things like that because they say, well, it’s a lot of money. And it’s like in the grand scheme of things, like what if it helps you do, you know, the cost of amazing mastermind, like investor fuel you’re a part of here for example, is like, like you make more profit than that on one deal. And what if, you know, we have plenty of people that have come in that have tripled five x their business, right? And, and it, and it wasn’t, and it’s not from me even though I’m the leader, it’s from the peer to peer community of people just to get around and learn and grow from. And so really kind of surrounding yourself with the right people and the right knowledge. You can buy your way, you can invest your way up that learning curve. And I think a lot of people back to the frugality of the average real estate investor a lot of people don’t quite understand that yet,

David Richter:

Right? That is so good. That’s what that’s how once I went to a mastermind the first time years ago, that opened my eyes to a whole nother world of like, oh wow, I could have learned from all these people and their mistakes and I don’t have to make ’em, you know, like, this is great, you know, so, and getting to be able to listen to them. Then what was cool was when I started be able to give back to them like, here’s what we did, this didn’t work. Like please don’t do this. Like save yourself some heartache here. So, you know, being able to give back as well. So that’s good stuff. Last question, is there any way our listeners can provide value back to you? What do you have going on? How can they connect? Got I see your investor machine shirt on, you know, like what do you, you know, like what are you working on right now? Because you just helped I think a whole lot of people that listen to this episode.

Mike Hambright :

Yeah, I think look, here’s what I tell people when people join Investor Fuel sometimes and they ask like, how can I add value? Or they ask me like, Hey, you helped me a lot, how can I add value? I say, look, just be a good member of the community. Like help each other out. Like be cool to each other, right? I think this, this industry I think has actually seen a pretty significant transformation over the last five or six years of kind of dog eat dog to like very collaborative and it’s a pretty cool thing to see. And there’s lots of people like you that provide services for folks that help them out. And like we do, I mean, we have investor fuel and investor machine is kind of a done for you lead generation service for professional real estate investors. And that all spurred from being out, you know, in the foxholes of the world listening to what people’s biggest problems are, how do we help people? And for us it was, you know, building a better mouse trap for lead generation. For you it’s providing fractional CFO services. And so I think for people listening, just, you know, find people that can help you grow your business faster and when your time gets freed up, use some of that to go back and help other people with what their needs are.

David Richter:

Awesome. So how do people get ahold of you? Or like where do you wanna point to? Like investor machine or like investor fuel or like what do you want them to Yeah,

Mike Hambright :

Yeah. Hey, if you just wanna connect and follow along on social media, I probably use Facebook the most. So you could just look for my cam right on Facebook for investor fuel and I wanted to make sure that we know that some folks came from you as your listeners Davis, so we take good care of ‘them. So if you wanna learn more about Investor Fuel, it’s a mastermind for single family and multifamily investors. In fact, our next event is coming up here pretty soon. You can go to investorfuel.com/profitfirst. So we’ve got a specific link there that we know you came from David, so we can take good care of you. And if you wanna learn more about our kind of data company and lead generation service, it’s kind of a done for you solution. We do some pretty unique things with data and identifying who the most motivated sellers in your market are. That is the investor machine, the investormachine.com/profit first. And both of those links you can just schedule a call with us, actually the investor machine one. We have a about a 15 minute video there to kinda explain a little bit more about how our system works and then there’s an opportunity to schedule a call with us if you wanna learn a little bit more about it and see if we’re a fit for one another. So those are the best ways.

David Richter:

Awesome. Can’t recommend Mike Moore and the services he provides in the communities and what they’re doing. And like I said, a lot of our clients, the high level real estate investors are, you know, going there and you know, using investor machine and there’s just good stuff all around there. So wanted to make sure I put that in there. And then if you are a real estate investor or business owner or want to be a business owner, like we were talking about, move from real estate investor over to that side and stop living deal to deal, you can head over to simplecfosolutions.com, click the schedule call button and we’ve got a team member there that’s gonna talk with you. Are we the best fit? Are we not? Is there a relationship that we have for you? Like what’s blocking you from getting you true financial freedom? Is it an introduction to Mike and his group? You know, like, where can we provide the most value for you? Cuz we want you to keep more of the money that you’re actually making. That’s why this whole podcast is here for you to hear people like Mike, the struggles that he’s had or the people that he’s put in place to help him. So that’s where I wanted to make sure you’ve got that outlet as well too. Thank you for Wing. See you on the next episode. Remember, start making profit a habit in your business.

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 at 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):

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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