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Principles of Successful Marketing and Common Mistakes People Make in Marketing with Bryan Driscoll

Episode 125: Principles of Successful Marketing and Common Mistakes People Make in Marketing with Bryan Driscoll

The Profit First REI Podcast

October 31, 2022

David Richter

Summary:

Today we’ve got real estate investor and expert marketer Bryan Driscoll on the show. He is the CEO of Motivated Leads, a digital marketing agency dedicated to helping real estate investors handle their online marketing efforts to generate leads.

 

Bryan’s expertise gives us a unique, marketing perspective on real estate. He talks about how to improve your marketing efforts in both methods and documentation, and the lessons and mistakes he’s encountered both in marketing and money. Check out the full discussion here!

 

Key Takeaways:
[00:51] Bryan Driscoll on Real Estate and Marketing

[03:46] From Digital Marketing to Lead Generation

[05:07] Getting Consistent With Your Digital Marketing

[06:45] On Tracking Expenses

[09:25] Lessons Learned on Money

[11:05] Knowledge to Share With the Next Generation of People Going Into Real Estate 

[12:07] The Principles of Successful Marketing

[14:31] Common Mistakes People Make in Marketing

[16:24] Advice and Actionable Marketing Decisions for the People in the Real Estate World

[18:01] How to Connect with Bryan

 

Quotes:

[07:12] “Make sure your messaging is extremely direct.”

[12:48] “Track data sources so you can tell which sources give you good traffic, [and] which sources are giving you bad traffic.”

[17:17] “Get outside of your head, don’t don’t overthink it–set up a [marketing] campaign. Even if it’s two bucks, or five bucks, go in and set it up.”

 

Connect with Bryan: 

Website: motivated-leads.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: 

Bryan Driscoll:

Say you have money, you wanna invest and there’s somebody over here that’s crushing it in a space and they’re really educated in that space. I find that’s really good cuz it’s like, okay, I can take the money, they can take their knowledge and we can do good things versus Hey, we got someone over here pitching me that they never did real estate before and they want me to lend a hundred grand to do something that’s very high likelihood we’re gonna fail. Right? You know, So different things like that on the money side,

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 :

Everyone. It’s David Richter here again with the Profit First. R i podcast have Brian Driscoll here today and he is, he’s got some interesting background because he’s been in the marketing space, but he also does real estate investing as well too. Buy and selling and a lot of cool stuff. And they’re pretty heavy hitters in the real estate space. Got to meet them officially at a mastermind that we’re a part of, which was awesome. I love meeting people at like-minded meetings like that. Chose the, the level that people want to be at and want to grow and be around those type of people. So Brian, great to have you on today.

Bryan Driscoll:

Hey man. Thanks. Thanks for having me. It’s gonna be fun.

David Richter :

Yeah, yeah, for sure. So why don’t we just let people into your background, like what you’re doing now and how you got started in real estate and you know, kind of just telling your journey.

Bryan Driscoll:

Yeah, sure thing. So as it’s a open ended question there, so get into, Yeah. So getting into, I do two different things. I do marketing and then also I do real estate. I do a lot of buying, not a lot of buy and hold, but I buy places around where I live and rent ’em out, right? Yep. So on the marketing side, I got involved in that back probably like 15 years ago. I was hanging with a buddy of mine. He sold, uh, tool blades and he was selling ’em on eBay. I’m like, Hey dude, let’s, let’s stick up a like a little WordPress website for you. We stuck it up. People started buying him. We were doing Google Paper per click and he’s like, Hey man, you need to start doing this for other people. So that’s how I got involved with, uh, marketing. Like way years ago I was doing, uh, I hopped on Upwork Freelance Channel, started doing that, and then it evolved into dealing with like Fortune 500 and like big international companies. And then, uh, about eight years ago I got involved with real estate. I was, uh, I was looking for a house to buy. So I, I lived in a house. I was having another kid. I’m like, I need to buy another house. So I went on Craigslist and found a wholesaler.

Hmm. I didn’t know as a wholesaler at the time. I go looking at the house and he is like, Well I got this property. It’s like, you can buy it, but you gotta pay me $10,000 and this and that. I’m like, Okay, cool. And I started learning about that. I’m like, Dude, there’s a huge spread on these types of things. So I started looking at doing my own marketing to get those types of deals, fixing them and then running ’em out. So, and that’s kind of the short version.

David Richter :

Awesome. So you also, you’re still buying properties today. So you are also doing that because you, the marketing that you do. Can you explain more about how that ties in with your real estate and with real estate investors right now?

Bryan Driscoll:

Yeah, sure. So, so I do digital marketing specifically for real estate investors. So, and what we’re targeting is we’re not targeting just people that wanna sell their house. We’re targeting people that are motivated selling, usually a distressed property, like they inherited a home, might be a hoarder’s house. Usually it needs more work than they want to put into it. So they’re just, they’re saying, Hey, you know what, if you can make this convenience, I’ll sell it for a fair price. We get a good deal on it. They get the convenience and everyone wins. Um, we do the marketing, we, we do that targeting through like Facebook, Google, Paper, click, uh, seo. It’s all digital stuff that we do on this side.

David Richter :

Awesome. So where was that progression, uh, from selling those tools and stuff to now, you know, helping get the motivated seller leads into in the door?

Bryan Driscoll:

Yeah, so, so that progression was, um, we were dealing with like the large, large tech comp, large e-commerce companies, all that kind of stuff. And I got the wholesale, I got the deal off the wholesale. I’m like, Dude, there’s like 10, $15,000 spread on each of these. And I stuck up a carrot website. I just stuck one up, just throw some stuff against the wall. I’m like, I’m gonna see what happens. Started putting some traffic to it and people were hitting us up wanting to sell their properties. So I’m like, okay, this is cool and I only wanna invest. I’m a little bit different than most investors. I only wanna invest in a one zip code just cause I don’t wanna drive real far. So all of my properties are within one mile of where I live. So we got an overflow of leads, like cuz there’s a, it’s a whole city at Pittsburgh. So what I did is I started finding different wholesalers and I send them leads, like I’ll just send them the overflow. I’m like, Hey, I’m gonna shoot you leads, Let’s just split it 50 if you wholesale it. And most of them burned me and then I hooked up with one guy and he didn’t. So now we, I just send him all of our leads. We do splits and then I get the cherry pick, the ones that come in our area.

David Richter :

Wow, that’s awesome. And know that you do this for a lot of investors and that’s what, that is the number one most requested thing because everyone needs the leads. I mean we talk about keeping the money on the other side, you know, like with profit first, but you have to have the leads, you have to have consistent leads and you have to have that keep coming in. So I guess with your, with your expertise, what would you say is some of the things that, you know, to get that consist lead flowing, especially with what you’re doing? Is it the long game, the short game? Like is it, well you know, like seo, ppc, like a lot of people might not even know that terminology if they’re just starting out. So can you just explain that a little bit in the mindset behind it?

Bryan Driscoll:

Yeah, sure. So it really depends on where you’re at and what your goals are. Yeah, so Facebook, just to break it down, for people that don’t know much in the digital side, Facebook, you’re paying to put an ad on Facebook in the feed you’re paying Facebook, it might per impression. So you might pay $20 per thousand people that see your ad, Google paper click, you’re paying every time to put your ads at the top of Google. Say for example, in a keyword, sell my house fast. Every time someone clicks that you might spend 20 or 30 bucks. Facebook and Google paper click give you quick result. I look at it like Facebook and Google paper click are like renting a house. SEO’s like owning the house. Hmm. So once you pull the ad spend from Google and Facebook, your traffic immediately dies. Uh, seo on the other hand, you’re organically and optimizing your website to rank in a free section of Google. You may not see leads for six months, but once you rank, you’re not paying for those leads. So even when you quit doing a marketing campaign, you’re gonna hold those and you’re getting free leads all the time. So there’s multiple different ways there. And it depends on everyone’s goals. Like it’s, it’s usually good to do a hybrid and then even add like mailers and texting on top too. Like it’s good to have a presence everywhere if you can afford it.

David Richter :

Awesome. So I love this because this is, this is exactly what people are always looking for. You know, they’re always looking for how do we get that, how do we get that consistent deal flow? Then what would you say on the back end, cuz we talked about this a little bit beforehand about tracking, you know, like tracking and making sure that you’re spending the money in the right place and you know, like you might market it now, but not, it doesn’t close for three months or you know, like things just pop all the time. So how do you help track or how do you track those types of things to make sure people are spending the best money in the best area?

Bryan Driscoll:

Yeah, sure. So, and actually to answer to your product question first a little bit better too, when you’re doing it, if you guys wanna do this yourself, make sure your messaging is extremely direct. Mm. So cuz because you’re gonna wanna look at the numbers, it’s like don’t app tell people, Hey, um, we’re gonna give you a value on your house. We’re gonna tell you how much your house is worth. Tell them, Hey, we buy houses, we pay cash, we close fast. Things like that. Be extremely direct with the messaging. But then once, the one thing that I see more of the guys newer in the space, they’ll do marketing for like a month or two and be like, ah, this didn’t work. So what, what, what you need to do is you need to attribute, So say you get a deal, you need to keep track of when people, when leads come in, which source they come from.

And then also whenever your deals close, you need to look back. Say you’re spending three grand a month for six months, you need to look and if you close a deal on the fourth month, don’t credit that profit to the fourth month. Look when the lead came in and attribute that to the ad spend. So you can look back and say, okay, this specific ad is converting, it’s making us money, but our li it it, it takes us four months to even see it so that we know the money we spend today. If we wanna double our income, we need to double our marketing now, but we won’t see the results for say four months or whatever the timeframe is. You’ll know your numbers, then you can make educated decision on if you wanna scale things like that.

 

David Richter :

Yeah. Well we’re all about knowing numbers here. That’s why. Yeah,

Bryan Driscoll:

In order to,

David Richter :

In order to know where you can go and what you can spend and what you can do, like we have, you have to know those numbers. And I think that’s paramount. And I love, I, you know, I like the principles of marketing, you know, just the learning about those and where every marketing person out there says you have to know those numbers so that way you can track exactly what’s going on. And I think that might get lost in a lot of the real estate world because it’s like, hey, we’re just buying the house. You know, a seller called in and I, I love what you said there, track where it came from. Track exactly. Like from every lead that comes in, especially every deal that you close, where is it coming from? So we know what to spend, where to spend it. And then being able to scale intelligently.

Not just throwing money at the next marketing campaign, but saying where did the bulk of our deals come from and what sources do we actually need to reinvest back in to get to double or triple or whatever you want to go. So can’t, can’t uh, endorse that enough. I love that mindset. Awesome. So as far as this goes too, like I wanna talk a little bit about the money side of things since this is a first I podcast and just a general money question. So this is kind of one of those open ended questions too, but lessons that you’ve learned about money, maybe past lessons that you’ve learned compared to how you think about money now, like being in real estate and having success in, you know, doing those types of things.

Bryan Driscoll:

Yeah, sure. So a couple of the most important things I’ve learned, always pay yourself first. Hmm. So you bring money in, at least pull 10% up. Like pay yourself first, take it off the table, put it wherever you want, buy real estate with it that you’re keeping, put it in the market, whatever you wanna do. Uh, just because I see a lot of times and me even, it’s like, hey, we wanna keep spending and doing this. What happens if like I’m in a digital marketing space, what happens if something happens with Facebook and they turn into my space? Right. Or you know what I mean? Like anything or what happens when covid happens and you’re a contractor and you can’t leave the house for six months and you need to live.

David Richter :

Yeah. So

Bryan Driscoll:

I always say pay myself first and then, uh, another thing is I’m always looking, which I don’t know if you know about the five laws of gold, uh, but I’m always looking like, don’t get with this, the tricksters. You know what I mean? Like yeah. If something looks too good to be true, it usually is. Um, so, so like I’m always hesitant on that but I do like partnering up with if you have, say you have money you wanna invest and there’s somebody over here that’s crushing it in a space and they’re really educated in that space, I find that’s really good cuz it’s like okay, I can take the money, they can take their knowledge and we can do good things versus hey, we got someone over here pitching me that they never did real estate before and they want me to lend a hundred grand to do something that’s very high likelihood we’re gonna fail. Right. You know, so different things like that on the money side.

David Richter :

Awesome. No, I like that a lot. So how about this with where you are right now, like what lessons would you wanna pass on to that next generation about around money and like, you know, especially like people that are coming up now just getting into real estate, like you said new people. What would you want to give as far as like making sure that they understand and can take from

Bryan Driscoll:

That’s, that’s a good one. So number one. Yeah, like save and even on the money side too, it’s weird. Like I like to, I like to give, I like to give back. So, and it’s weird, it’s like if you give money out there, it’s like the universe kind of repays you back or something. Like no one even knows what you did. But there’s one thing on money because you get more from that. You actually get more from giving money than the people that get it a lot of times cuz you get the gratification or whatever you want to call it. Yeah. Um, so I would say do that save and then also, um, invest in yourself. Like take that money and invest in yourself. Don’t make, don’t make a couple bucks and just spend it like invest like even in knowledge, things like that.

David Richter :

Awesome. Nah, I love that. Love, I love the principles there. So speaking on principles since you’re, well, let’s switch back to the marketing, marketing conversation and would you say that there are principles of success in marketing? You, you mentioned one big one I think is that messaging, being direct, telling them exactly what you’re doing. But would you say that there’s other principles as you’ve been in the marketing space for quite a while now that you know these are some of the just foundational things no matter if you’re doing seo, PPC or whatever, that you need to have, you know, some core elements?

Bryan Driscoll:

Yeah, so you have to have like, especially if you’re gonna do this on yourself too, number one, you gotta tracking, like you’re tracking your numbers. You also have to have their scripts like Facebook pixels, Google, Google Analytics, stuff like that. You need those on your website. So you can track the data, track data sources so you can tell which, which source is giving you good traffic, which source has given you bad traffic, Things like that in the housing industry, especially on Facebook, you need to opt into the housing category else you’re gonna get your accounts banned. Um, so there, there’s one thing that’s uh, that’s a tip if you guys are doing it on your own, uh, obviously the messaging and I’ve found two, whenever you’re gener trying to generate leads, like motivated leads or different type of leads. So I’m more focused on the deals I want to pre, I wanna disqualify people.

So like what I’ll do is I’ll have a direct message, I’ll send ’em to a lander, ask ’em for their name, phone number, email, that kind of stuff. Then I want to ask ’em like 10 questions, like how fast do you wanna sell? How much work do you, does your property need? Things like that. And what I wanna do, I’m not, I want to weed the people out that aren’t qualified so that I don’t have to talk to ’em. Yeah. And then I’d like to take it to one step further there is after I get the lead, send them a text or give them an option to book an appointment for you to come visit their house and give ’em an offer. And what that does, that’s also gauging their motivation. If you have somebody that gave you 10 or 15 pieces of information, then book the appointment for you to come see them without even talking to you. They’re highly motivated. Well you would assume they’re motivated and wanna, wanna make something happen quickly.

David Richter :

Yeah, no that’s really good advice. I’ve heard a couple people doing that and that’s, you know, drastically improved like closing ratio and like the people that are ready right away that, especially if they’re filling out a form, instead of them waiting on that next step, they’ve already gotta like, here I’ll just book that appointment and now you’ve got your acquisitions people running out there to those warm release. I really, really like that. That’s really good. So what would you say, especially in the marketing world, I’m sure, I’m sure you could go on and on about this, is some of the mistakes that people make if they’re trying to either do it on their own or like as they go through and are starting to market, you know, maybe online with some of the stuff that you do.

Bryan Driscoll:

Yeah, so some of the mistakes are uh, not u not understanding and using the algorithms. So say on Facebook, Facebook will give you different options to market. You can say you want link clicks, you want people to watch videos, you want to get reach or you want conversions, different things like that. Facebook’s algorithm knows what people will do specific things. So if you say, Hey I want link clicks, you’re gonna get a whole bunch of people clicking your link for really cheap, but they do nothing else or video views unless you’re trying to brain yourself video views. People will watch your video but they’ll do nothing else. Right. So, uh, my tip on that is if you have the proper tracking on your website, like a lead event pixel, uh, so let me even take a step back on that. When you send someone to a website, you have a form after the form, you have a thank you page, you want to snippet a code on there, it’s called an event pixel that tells Google or Facebook, hey this specific person converted into a lead. Hmm. So, and uh, I see people, what you want do is when you’re running the campaign optimize for that specific event, tell them, hey, we want leads because then their algorithm will try to put your ads in front of those specific people that are highly likely to convert versus clicking links, things like that.

David Richter :

Okay. Now that’s really good advice because you <laugh> that’s I think where I think just the marketing messages that we hear depending on who’s doing what. It’s like, oh the branding and getting the videos in. It’s like, well no that’s not what it’s about. Do you want these people to buy your, you know, do you wanna buy their house or do you wanna sell a house? Whatever that you’re looking to do like with what you’re doing in real estate investing. So no, I love that. That’s great advice. Just got a couple last questions here. Number one, what general advice do you have for the real estate investing world that’s listening to this audio? You know, this podcast right now?

Bryan Driscoll:

Yeah, general advice is keep failing. Like I, I’m a big believer in keep pushing yourself and then like I always look at it, you don’t have to try like a whole bunch of more times, just try one more time. Yeah. So every time you’re getting punched in a face, just all you gotta do is try one more time and eventually if you keep trying you’re gonna get it. But like I’ve failed a lot of times and that’s why I just told myself I gotta do this one more time. Cause that’s, that’s bite size. I can do that. You know, so that’s my advice there.

David Richter :

Would you have any one action item that people can take on the marketing side? You know, obviously they need to connect with you, but is there something that they could do? Like is it one post or like what, what would you say is something actionable they could take like just to start doing so that way they can get another deal or another lead or something?

Bryan Driscoll:

Yeah, what I would recommend is get outside your head. Don’t, don’t ever think it set up a campaign, even if it’s two bucks or five bucks, go in and set it up even if it fails, even if it flops. Because once you start and once you get that going you’re gonna figure out, okay, that didn’t work but let me try this and your wheels will start spinning. So get out of the books and actually just go set something up. Even if it’s only for a dollar a day, set it up and then look at the data and posi and tweak.

David Richter :

That’s awesome to go out there and do something. Don’t just listen right. Take that action, get out there and then so you’re just gonna get better from there and then you’re gonna find people like Brian that can help you as well too and get it even more refined as you get up and running. So this has been awesome. So then how Brian, I always ask at the very end is you provide a lot of value here. How can people provide value back to you? Meaning like you’ve got the motivated leads, like how can they connect on that? Is there other connections that you need or anything else that we could help you with?

Bryan Driscoll:

Yeah, mainly if anyone needs any help, just go to our website, it’s motivated-leads.com, hit us up, we’re here to answer questions if you need help running it or different things like that. Yeah just reach out.

David Richter :

Awesome. There you go. So motivated-leads.com. So it’s an actual dash in between there. There’s motivated-leads.com. I love that. I love the simple, simple websites. These are very simple so I love it very much. So if this has been incredible, this has been an education in marketing, something actionable that you could go do, go to Facebook, run some ads, you know, just, just getting in that habit of being able to go out there, take that action. Then also just uh, making sure you’re tracking everything, track everything so that way you are a data master so you know what to invest in. If you wanna work with Brian, that’s motivated-leads.com and they’re doing a lot of cool things out there, so make sure to follow them. And thank you so much Brian for being on ton of value here.

Bryan Driscoll:

Hey, thanks man. We’ll do it again sometime.

Intro:

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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