Sam Wegert’s Entrepreneurial Journey: From Martial Arts to Co-Living Real Estate

December 19, 2023

Title: “Sam Wegert’s Entrepreneurial Journey: From Martial Arts to Co-Living Real Estate”

Episode: 211

Do you want to know how to get into real estate in a way where you have fewer properties to obtain financial freedom?

Listen as we interview Sam Wegert in this episode of Profit First for REI podcast. He talks about co-living and making more money from the properties you already have.

Things like spending, keeping, and making more money, and lots of golden nuggets here. Enjoy the show!

Key Takeaways:

[01:05] Introducing Sam Wegert

[07:57] Getting into the real estate realms

[10:47] The co-living space

[16:25] Squeezing cash flow out of a property more than it would normally produce

[21:05] Two ways to start co-living space

[25:58] Co-living space as a legitimate business

[30:10] Connect with Sam Wegert

Quotes:

[10:05] “I got to be successful, and successful people are saying real estate.”

[10:52] “It is [Co-living] the fastest way to achieve financial freedom for the average person in real estate today.”

[29:11] “If they want to scale big, they need the right systems to manage the tenants.”

Connect with Sam:

Website: https://www.scaleyourrealestate.com/

Tired of living deal to deal?

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

Transcript:

Speaker 1 (00:00):

We’re talking way less setup than what I would consider the main competitor for the average person to achieve financial freedom, which is going to be like an Airbnb that can produce a lot of cashflow, way less setup, simpler to do more stable longer term, and not nearly as competitive as this multifamily space that people are getting into, or the self storage space that’s very, very competitive. Or the industrial space. All these are maybe longer term appreciation based plays, but we’re getting back to a straight cashflow play where in four years or three years, you could retire.

Speaker 2 (00:38):

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 (01:05):

We have Sam Wegert on today. He’s going to talk about co-living and making more money from the properties you already have or getting into real estate in a way where you have to have less properties to obtain financial freedom. So I absolutely love this because we’re all about making sure you make, spend and keep what you need to from your business. You’re making what you want to, you’re spending it in the right place and keeping what you want to. So he really helps you on making more money side. So please listen to him, listen to all the good stuff he has here, and you will walk away with a lot of gold nuggets and maybe a way to make more money for yourself. Sam, thank you for being on the Profit first. RI podcast. Excited for this episode. If you’re listening to this, you’re going to learn some things today. I’m excited to interview Sam as well, too. Sam Wegert here on the podcast. Sam, how are you today,

Speaker 1 (01:56):

Man? I’m doing good. Thanks for the honor to be on. This is a really cool opportunity and just excited to dive into a couple of really great topics around real estate investing and profit first. So I’m excited, man.

Speaker 3 (02:05):

I want to know you’re background. If someone doesn’t know you from Adam, give them the kit caboodle from, I don’t know, just whenever you started entrepreneurship to where you are now to that high level overview so they can get a little bit knowing and then going into the co-living and what you’re doing today.

Speaker 1 (02:22):

The real estate stuff. Yeah. Yeah, man. So I could take the whole episode on my background as I’m sure any of your guests could. Yes, exactly. But in short, I built, started when I was 15 years old. I had this unique upbringing. I was homeschooled. My parents wanted us to not be educated by the government, and so they decided to homeschool us. They were like hippies before being a hippie was cool. And I had this opportunity to buy a martial arts school when I was 15 years old, and my parents loan me 15 grand, and my parents were not wealthy by any stretch of the imagination. They just believed in me. They a ton. They wanted their kids to be around other mentors and role models, which was so humble of them to be able to do. So. I ended up buying martial arts school cause I was training martial arts, and I built from that point on over the next 10 years, 10 to 15 years, I built and scaled. And then as of four to five weeks ago now, I just exited a chain of martial arts schools that I built that had brick and mortar locations, but also had an online program that was teaching students in 25 states and Canada. And we just exited that completely. How old are you? I’m 32.

Speaker 3 (03:21):

Yeah. Ah, we’re the same age. Very cool. Yeah. That’s awesome. So 15, you bought it at 15 and then you just exited at 32. Very cool. Do you mind sharing the name of that chain?

Speaker 1 (03:32):

Yeah, it’s Uplevel

Speaker 3 (03:33):

Uplevel, Uplevel

Speaker 1 (03:34):

Martial Arts.

Speaker 3 (03:35):

Yeah, very cool.

Speaker 1 (03:36):

Yeah, we probably had in total, close to over the span, we’ve taught tens and tens and tens of thousands of students, but our active count was probably close to 25, 3000 students in the programs in the brick and mortar students. And so just, yeah, it was a really unique experience. Do you mind

Speaker 3 (03:52):

If I ask, I’ve got more questions there. What type of martial arts just

Speaker 1 (03:55):

Dive in? So I mean, it was TaeKwonDo based, but we mixed, we were a blended martial arts. So imagine TaeKwonDo is a lot of standup stuff. So you’re kicking, you’re punching, you’re trying to not go to the ground. But then a bunch of people were asking us, what if the fight goes to the ground? How do we handle that? So then we blended in Juujitsu and then we blended in a style that I am all about for any real estate investors. It teaches you so many lessons. It’s called Kav maga. It’s a very aggressive, I’m not saying you have to be aggressive in real estate investing, but you kind of do sometimes. It’s a very aggressive style. It’s a lot about, a lot about just neutralizing the threat as quickly as possible. There’s a lot of really cool lessons. I was a mama’s boy growing up. I was a little softer, wanted to please everybody. So taking this type of martial arch really gave me the, oh, it helped me be strong. It helped me be powerful. And so for any kids, I mean, martial arts is like everybody should do martial arts, in my opinion. And it was an amazing opportunity, man. It was an amazing experience. I don’t train as much as I want to right now, but I trained for 17 years, 18 years pretty much.

Speaker 3 (05:05):

Yeah, that’s probably baked into at this point. I did two years of Kung fu and I a hundred percent agree with you. Everyone should take martial arts at some point in their life. The mental, the toughness, getting hit and hitting something, it’s like you never know the feeling until you really do it because, okay, like you said, you grew up a mom. Well, I’m like, I grew up in the same environment. I’m not getting hit and I’m not hitting anyone else. That’s just not where I grew up. And when some people come from that background, which is totally different, but for me it’s like, okay, how do I actually, and it was great being a part of that environment and getting the physical and the mental, because someone, while I was going through that in real estate, someone asked me, what do I do for like, one of the things is martial arts. I feel like that’s one of the best self-development courses out there. Not just about the mentality and that, but it’s also physical and it’s also just all the different things. So yes,

Speaker 1 (06:02):

Imagine getting a workout without knowing you’re getting a workout. You’re actually learning a really cool skill. You’re enjoying it, you’re interacting with people. Funny man, we’re talking about this, I know this is a little bit of a tangent, but I had a call yesterday. I’ve been going through a very challenging time in my life right now, just with some relationships and some really more personal stuff going on with my family. And I was complaining to this, not complaining, I was just sharing with this friend. This was last night, literally this call was last night. I was like, man, I just feel like I’m at a nine out of 10. I feel like I’m a freaking about to explode. I need outlets, I need healthier outlets. He goes, Hey, are you doing martial arts? And he just started laughing. He’s like, I can just imagine you, I can get very intense sometimes.

(06:41):

And he said, I can just imagine you going into the, he’s like, I don’t know what it’s called because he’s not a martial arts. He’s like, it’s a mannequin. You hit the mannequin. I’m like the dummy. And he’s like, you just need to go tear that up and have an outlet for that. And I was like, I have a couple of injuries right now. So a lot of times I’ll go to weightlifting to try to get that intensity. I can’t really do that right now. Like I’ve got a wrist injury and a freaking shoulder injury and a back injury. So yeah, martial arts for anybody listening to this, martial arts is an amazing way to just be an outlet for life, to go to have some intensity. You’re not going to hurt anybody. You can yell at the pad as much as you want. You can freaking hit the pad as hard as you can, and it’s fun and you’re learning the skill too, and you feel more confident in being able to protect yourself and stand in yourself and be in your own skin. So that’s cool. I didn’t know you took a couple of years of kung fu, man. That’s awesome.

Speaker 3 (07:26):

Yeah. And yeah, I resonate with what you’re saying. It is. It’s such a great, how, so this is not the martial arts for real estate investing, but we both highly recommend if you’re listening to this and you’re wanting to get out of a funk or you want to uplevel your life and learn a great skill like you said, and work out at the same time. It’s just so many good advantages and benefits. Okay. So then you sold that earlier this year or during the course of this year. So what got you into the real estate realm?

Speaker 1 (07:57):

So when I was 18 years old, somebody told me I got introduced to Tony Robbins. So I started going to Tony Robbins seminars. I started being in that environment and someone was just like, Hey, you should buy real estate the right thing to do. There was a guy in my town and he was the, I’m from a very small town, it’s called Amherst, Virginia. Average income was like $25,000 a year, 2000 people, one stoplight, very small town. And not only was it small town, I did not go to public school. I was raised on a mini farm with eight brothers and sisters. So imagine I grew up until I was 15, 14 years old. I only knew my siblings pretty much a very sheltered environment. That’s not totally true. We had friends and the people we don’t hang with, but not a lot. And so one day I remember thinking, somehow I got it in me that I wanted to be successful.

(08:44):

That was my way to prove to the world, to my parents, to my siblings, that I could be somebody. And I went out and I just said, who’s the richest person in my town? And everybody knew the richest person in town. And I took him out for lunch. I said, I was going to take you out for lunch. And he owned this, he sold modular homes. So he had a couple of these places that sold modular homes, and I think it was really him who just instilled that idea in me of buying real estate. Like, oh, you buy the real estate. So his wife was a realtor and his wife at the time helped me buy this foreclosure that was a three bedroom, three bath condo. And I lived in one room and I rented out the other two rooms. I was single. I didn’t need the extra space.

(09:19):

And it was an apartment that was kind of set up for what we now call co-living. But back then it was just shared housing or room rentals. Each room had its own bathroom. Each room had a little desk built into it. It was honestly built for cottage kits. And so I just thought, oh, this is perfect. And I was making a little bit of money and I was living for free. It was just this really great way to live. And so that’s kind of how this whole thing got started. And then I just kept doing that. I just kept buying a property. All of these were with primary residence loan, so I’m not putting 20% down or 25% down, I’m putting 3% down, I’m putting 5% down. And so it wasn’t a big deal. I was making decent money building my martial arts chain, and it was just something that really was kind of part of my journey. And that’s how I got into it. And I can go down that road even further if you want, and kind of how it evolved. But that was the initial kind of thing was like, okay, got to be successful. And successful people are saying real estates. Lemme just go start there.

Speaker 3 (10:10):

How old were you then when you started in real estate? I think I bought

Speaker 1 (10:13):

My first property in 2011, so I would’ve been 20. I was born in 91. So

Speaker 3 (10:20):

You were doing both at the same time. You’re doing real estate. Hundred percent. And also, yeah. Okay. So very cool. Then. You’ve been in it for a while and in the real estate market, and you’ve seen the ups and downs since 2011, which was definitely downmarket back then. And starting on the rise to the next few years, what got you into what you’re doing today and what you’re promoting? I want you to have the four to talk about that for a while. The co-living

Speaker 1 (10:46):

Space. Yeah. Yeah, man. What I’m promoting today, and I know this might sound crazy, even a little exaggerated, but I believe it is the fastest way to achieve financial freedom for the average person in real estate today. I want to say that again because I think it’s really powerful, the fastest way to achieve financial freedom stably with stability in the real estate market that the average person can start doing tomorrow. And it is shared housing is what I got into. And I did not choose to get into it. I fell into it. And the story basically about how I fell into it was I started these homes and keep in mind, I’m from eight kids, so big family used to four boys, four girls. I always say the fights were even, and my parents had to break ’em all up. But I have this big family and I’m used to living with a lot of people.

(11:27):

We grew up in a 1900 square foot house, so imagine eight kids, two parents, 1900 square feet, you get the picture. So space was never a thing for me. And so what I ended up doing is I would buy these houses. I would buy this house, even the three bedroom condo I referenced earlier, and I would just rent out the rooms because I didn’t need them. And then I moved to Charlotte, North Carolina, which is where I reside now. And I bought a house and it was just too quiet. I wasn’t trying to make, it wasn’t really a big investment play. I was making decent money at the time for me in the martial arts space. And so I just bought this. But then I remember moving in just being like, it’s too quiet. I want to have some people that are home when I come home.

(12:05):

I don’t want to live in a house all by myself. I was dating a girl at the time, but she lived eight hours away. She was in Washington dc. So I was like, okay, this isn’t, so I started just renting out rooms. I put an ad up on Craigslist, had a guy move in. He was from Mexico. He was here for a year long contract at Bank of America. Him and I became best friends. We’re doing all these things. So anyway, I start having fun. I’m like renting out rooms in my home, start having fun. And then I had this big living room that none of us ever used. We’d go to our room or we’d be in the kitchen and I ended up splitting this living room up, adding a wall, adding a little bathroom and a closet, cost me a couple thousand bucks, didn’t get a permit or anything, just cost me a couple thousand dollars.

(12:40):

And I rented that out as a room too. And I remember one day, the one friend, my first friend, his name is Jason. Jason was my first friend here in Charlotte when I moved down to this new city, and he kind of took me under his wing. He was a really, really good friend to me. But he was a high powered banker for SunTrust that now merged with Truist, and he’s making six figures plus maybe even multiple six figures at this time in his career. And he basically asked me casually on a run one day, we’re going for a run, we’re out in the woods. And he says, Hey, how much are you renting that house for? And I did some quick math and I’m like, Hey, man, if I count myself as a renter, I’m renting this house for about 2,850 bucks, I think was the number.

(13:18):

And he kind of get this puzzled look, and he’s a big numbers guy. He’s just like, wow, man, I know the house you live in that would rent for 1300 bucks to a single family. It was just that. And then we had this conversation about it, and it just clicked with me. And I said, wow. Imagine what I could do if I could find a house and I could do five rooms. I was only doing four rooms in this house and the journey without me taking 30 minutes to tell a story. The journey went from four rooms to five rooms, to six to seven, to eight to nine, to the last two houses I just launched. Were both 10 rooms each. And I know some people on here that are listening to this, that sounds crazy. Can you even do that? What about legalities? What about all these things?

(13:56):

There is a legal way to operate this. But you got to keep in mind, I was raised with 10 people. This didn’t seem abnormal to me. I was just like, why is this weird? Everybody’s thinking, this is weird. 10 people sharing a house, then 10 people shared a freaking 1900 square foot house when I was growing up, and now these are 32, 34, 3500 square foot houses. I’m like, there’s more than enough space. But really this is a way to solve affordable housing because as we know, there’s, there’s 7.3 million affordable housing units short in the United States, affordable housing, homelessness is on the rise in all major cities, and affordability in general is drastically decreasing. And so we’re seeing this movement, truly a movement like companies like Pad Split or Bungalow or Homeroom or Common that are these tech platforms trying to push, even Airbnb is trying to get into it.

(14:49):

Now, Airbnb has a big weight. They’re going to have a tough time rebranding to We room rentals. That’s not their thing, but they’re trying to get more into the room rental space because when affordability decreases, we’re moving to where Europe has been for a decade or two. When my BiggerPockets episode first came out about co-living, I started talking about it, and this guy from Berlin, Germany calls me and says, Sam, you’re talking about this as this is this new concept. It’s not new. And he kind of got on me and I was like, okay, well, what’s your point? He’s like, we’ve been living like this for decades, and you’re at, man. He’s like, I build these room rentals from the ground up. We’ve whole codes just to manage room rentals, what they call. And so I was just like, well, dude, we’re headed your way. America’s headed your way. We’re printing money too. So anyway, I can go any direction you want with that, but that’s in essence how I got into it.

Speaker 3 (15:44):

Yeah, I like that a lot because if they’re a list, you’re like this first RI podcast, so I want them making more money, spending less, or spending the right place or keeping more of it. And it seems like this is a great way to take a rental and squeeze more juice out of it. We’re all trying to do that, right? You go from wholesaling, but then you’re like, oh, I could squeeze more juice out of it if I flipped it. And the rental side, it’s almost like instead of doing a single family, just straight rental, oh, well, maybe we’ll do Airbnb and we’ll do short-term, but then we could squeeze even more juice to do, okay, let’s do more of a pad split or room by the room rental, and that’s squeezing the most juice out of it. Is that the right line of thinking that I have?

Speaker 1 (16:25):

Yeah. And David Green from BiggerPockets, he’s one of the hosts of BiggerPockets. He calls that forced cashflow. He goes, you got to find real estate assets, which if you’re in the multifamily space, we know this, right? Because we look for assets in the multifamily space, you look for assets that you can increase rent. That’s one of the biggest ways to add value to a multifamily. So this is another way, exactly. You’re trying to squeeze cashflow out of a property more than it would normally produce. And you’re doing, obviously you’re trying to do that in an ethical way, in a legal way, in a way that makes sense. But this is one of the best ways, I think right now that fits the market. Now, Airbnbs are arguably another way to force cashflow on a property, but the challenge with Airbnbs is that I think it really depends, David, on what your listeners think is going to happen over the next five to 10 years.

(17:13):

If you think the next five years for the American economy are going to be amazing, amazing, amazing, and everybody’s going to have even more disposable income, then maybe you should be all in on Airbnbs because people are going to want to take bigger vacations with bigger homes with higher average rental incomes. But I personally believe the next five years is going to be, let’s call it a season of winter, a season of challenge. And I think we’re going to go through a tough season. And if we’re going to go through a tough season economically, I want to be in an asset class that’s needed, not an asset class that’s just like I want to do it. So we’ve been selling off the Airbnbs that I do have. I’ll keep a couple of the ones that are just in prime locations because I think there’ll always be a market for that.

(17:57):

But I like the stability of the cashflow of knowing I’ve got tenants. I’m not beholden to any big platform. We had an Airbnb the other day. We had a party, one of our Airbnbs in national’s, a million dollar property. It’s beautiful View sleeps 26 people. And we had this party, and we don’t allow parties, we stated very specifically, but the neighbors called the cops, cops showed up, gets reported to Airbnb, and Airbnb comes back to us and says, Hey, we don’t allow parties. You allowed a party and we are de-listing you from our platform for a month and a half.

(18:31):

And I was like, right. And so you’re beholden. So in the month of January, it’s probably a 25, $30,000 month boom, you’re off the platform. Nothing we could do about it. We appealed it a million times. We talked to you. You can’t get ahold of somebody on the phone, can’t get a hold the right person on the phone. It’s like, okay, is that what I want to put my financial stability and future in? No. And I’m not saying that there’s a place for Airbnbs, I’m just saying. But yeah, in terms of making more, we’ve got to look for things that have forced cashflow.

Speaker 3 (19:01):

So then I’d like, yeah. Oh, go ahead.

Speaker 1 (19:04):

I’d like to say one thing on the keeping more money part though. Yeah, for sure. And that is a lot of people will say, wow, the maintenance on that must be insane. Oh, you have all these people sharing a home. The maintenance must be insane. Well, here’s what I tell people. I think I really want to pit this. Let’s just say I have seven people sharing a home and I’m renting it out to seven people or seven people on a master lease. There’s all kind of legal ways to do it, but seven people, if I compare that to a seven unit apartment building, seven people having in a living apartment, I’m going to have way less expenses than that person. They’re going to have seven refrigerators, seven HVAC units, seven dishwashers, seven stoves, seven everything. I’m going to have one HVAC unit, maybe two. If it’s got two in the house, I’m going to have one, maybe two refrigerators. I’m going to have a lot less stuff that’s going to break. It’s the truth. And so there are some ways now it is more management from a tenant perspective, but it is less cost in management from an asset perspective makes I think that’s important for people to realize.

Speaker 3 (20:11):

So then do you rent these out weekly, monthly, annually? How often do you rent out on these leases?

Speaker 1 (20:17):

Yes. It’s paid for monthly and it’s a membership. The way that we legally do this is it’s a membership. They pay the membership dues and it’s a monthly membership dues. And part of their membership includes having access to a room in the house. And the main reason we do that is for legality purposes, so that we’re more like a fraternity club, or you see these places that serve alcohol, but they don’t have an A, b, C license, so you have to buy the $1 membership. That’s kind of the model that we’re following with people in the home.

Speaker 3 (20:48):

How easy is this to set up? You said this was one of the best ways for someone that’s the average person to get into real estate or So would you suggest this be one of the first exit strategies that someone’s new into real estate gets into?

Speaker 1 (21:03):

Yeah, there’s really two ways to do it. This is what I love about this strategy. If you’re going to go buy an Airbnb and you go to the bank and you say, this is going to be my primary residence, and you get a primary residence loan with three or 5% down, and then you’re lying to the bank basically because you’re not going to live in, you’re going to Airbnb it. But with this, you can authentically, legally, honestly go to a bank and say, this is going to be my primary residence and I’m going to live in one room. Or if you have a family, you can rent out the whole basement or you live in the top house and if it has a basement or if it’s got a room that’s like house hacking. But then you can just do that once a year. And these homes produce anywhere from $1,500 a month to $3,000 a month in steady cashflow.

(21:45):

So you do the math, you want to create a hundred thousand dollars a year lifestyle. If the home produces two grand a month, then you need four homes to retire. Four homes at two grand a month is eight grand a month for round figures. That’s about a hundred grand a year. So my point in saying that is most people when they think about retiring off of real estate, they’re talking like, well, I need a hundred units. I need 200 units. My multifamily guys, my multifamily friends are like, yeah, when I get to a thousand units, I’m like a thousand units. Damn man, that’s a long way away Versus what about four humps with steady cash flow with a model that’s needed and you’re solving a problem, now you have to do it right. So the setup of them, this is one way that I differ from pad split.

(22:28):

Pad split is a weekly rental. That to me seems a little bit more like short-term rentals. Now I’m friends with the guys at Pad splits pad split. I love them. I think they’re great. I think they’re out there trying to solve affordable housing. But I differ in a couple of ways. Number one, you don’t need to do weekly rentals. You can do more stable rentals, monthly rentals. Number two, they furnish every single bedroom that they do. I don’t furnish any of my bedrooms that the saying that I want people to take away from this is that. And I know I’m going to get some hate for this because all my ads online and all my talks get hate for this. They say then the new economy is coming where we’re going to own nothing and rent everything. And this is so terrible, and this is the worst situation.

(23:09):

People have to rent rooms. They can’t afford their own house now. And in some ways, I agree with them, this is terrible to some extent that the most wealthy nation on the face of the earth, the United States, people can’t afford a house. But it is what it is. And we’re, as entrepreneurs, we’re solving a problem because people do need housing. And so I want people to think of the room, a room in a house as the new apartment. So where I used to be able to go out and boom, well, okay, I can rent a room. We’re going to have to share a little bit more. We have to create community. And so if the room is the new apartment, I want you moving all your own stuff into your own. I want you moving your own stuff into your own room. And so for that standpoint, I want you to feel like it’s yours.

(23:51):

I want you stay. I’ve had people stay as long as 10 years from the first 2011, 2000, yeah, 10 years, maybe nine, nine. But year after year, after year after year, I want them to think of this as home. So we set up, we turn extra space into rooms. Of course if there’s a dining room, we’re going to turn that into a bedroom. But we keep a common space. It’s another thing that pad split doesn’t want. They don’t want you to have common space. I want you to have common space. We’re going to keep a common space so that people can connect. There can be some desks, there can be some co-working, be some community, and then we’re going to furnish only the common area. And that’s it. And that’s the setup. And that is a three to $4,000 setup. And if anybody listening on this, just to contrast, if anybody listening to this has actually done a real furnishing job on an Airbnb, that’s a 40, 50, $60,000 project.

(24:40):

So we’re talking way less setup than what I would consider the main competitor for the average person to achieve financial freedom, which is going to be an Airbnb that can produce a lot of cashflow. So way less setup, simpler to do, more stable longer term, and not nearly as competitive as this multifamily space that people are getting into, or the self storage space that’s very, very competitive or the industrial space. All these are maybe longer term appreciation based plays, but we’re getting back to a straight cashflow play where in four years or three years you could retire.

Speaker 3 (25:18):

So then let me ask this time involvement, is this something where someone could have one or two properties and they could still have a W2 job and still do something else? Or is this like, no, I’m going to go into this. I’m going to need to focus on because it’s seven people living in that house and I’m like, I’m going to have to do stuff for them or whatever. And then my other question paired with that is, do you also see this being a legitimate business that someone could be like, I do. I want to get 10 rentals and do this and build an empire of these types of houses. So I’m wondering, those two big questions are in my mind for people that are listening.

Speaker 1 (25:58):

Great questions. So I was working when I first started this game, and then it started to take off and I started to experiment with these larger and larger homes. I said, okay, this is for real. And I had a lot of doubt. I’m not going to lie. I had a lot of doubt. This was probably back in 2014, 2015. So I had a couple homes, maybe three, four homes at that point, maybe five. No, probably three. Four. And I was like, I had some money, I had some cash. I was still saving a lot using profit first type training to save from my business and to pay myself. And I went to a conference, and at that conference was this guy named Robert Kiyosaki, who I’m sure most of your listeners, if they’re in real estate, everybody knows Rich Dad, poor dad, Robert Kiyosaki. I walk up to him after the conference was over and I’m like, Hey, man, I got this question. It’s really weighing on my heart. I’m doing this room rental thing. I want to go all in, but I don’t see anybody else doing it. So am I.

(26:52):

Give me some feedback, give me some coaching. And he just gave me the ultimate confidence booster. He looks at me and he goes, Sam, that’s the wave of the future. He goes, I know people who are doing that and are starting to scale. You’re not alone. There are other people doing this. And he said, I actually know. He’s like, I’ve thought about this so much that if the economy takes a hit, which he’s very big on the economy, doing worse in the, he’s kind of doomsday right now. He’s like, I know how I’m going to split up my 6,000 square foot house into seven units. My house is basically what he told me. And I was like, well, if it’s good enough for Robert Kiyosaki, it’s good enough for me. And that was the moment I said, I’m all in and I’m all in on this strategy. And I started buying houses. So now my wife and I own, I think close to over 200 doors in this model. It is a business. It is a scale. It is what generates a lot of income. So

Speaker 3 (27:43):

You’ve proven the model.

Speaker 1 (27:44):

Yeah, it is what pays for our house right here in my mastermind, we represent over a thousand units around the United States. So end growing very rapidly. So you can now, I think there’s a cutoff point, I think when you get to five homes is where for me, I was working 60, 70, 80 hour weeks in my martial arts business as I was building this. So when I say I went all in on real estate, I was still all in on martial arts only five weeks ago from this date, December 8th, 2023. And have I sold that business? So I’ve been doing martial arts business all the way up until this point I was working, but it became a little bit unmanageable around four to five homes for me where I’d had to have someone start doing showings and handling the leads up until that point, I could handle it.

(28:28):

And so I think beyond that, when you’re going to need to have some real systems, now you have to have systems even for with one home, because this is nuanced. And so if somebody wants to have someone else manage the property for them, then they can partner with someone like me. We have partnerships all across the United States with companies that manage these. We just launched in Denver, we’re in Houston, we’re in Austin. We’re launching soon in Jacksonville, Florida, your state. So yeah, we have these partnerships where we’ll help people set them up and we’ll actually manage it for them as well. If people don’t want to do that, but they can manage it on their own. It’s not that unlike seven unit multifamily, if they want to scale big to your second question, if they want to go big and really scale, then they’re going to need the right systems to really manage the tenants. But if they have that, absolutely. I mean, pad split right now I think just is very close to 10,000 units around the United States. And so that’s not a lot when you think about how many people need housing, but it’s starting. We’re moving in the right direction.

Speaker 3 (29:36):

The wave, like you said. Okay, well that’s very cool. Then. This has been awesome. I think provided a lot of value just opening the lister’s mind to another alternative way, especially if they’re already buying these properties. This is great. It’s like another exit strategy for the real estate investor who’s already in the market. But then if this is someone new, if you’re listening to this, this might be the way to go right from the get-go to be able to squeeze this much juice from that property as possible. So how do people get in touch with you or where’s your training or however you help people with this or they want more info?

Speaker 1 (30:09):

Everybody with us, man gets started in the same way I run a company called Scale Your Real Estate. It’s really scale your co-living real estate. It’s really what it should be called, and it really helps people implement the right systems, find the right homes, not make mistakes on the rehab, get in an area where they know that they can do this, legally have the right contracts where they can do this legally in an area and just not hit a lot of the pitfalls and mistakes that I made over the last 10 years, 12 years, whatever. And so everybody gets started with the same way. I give away a free training, and it is not just a sales pitch, even though as part of it, there is an offer, but it is a lot of value. For five days we do these things called Five Day Challenges, and if anybody listening is interested in that, they just have to go to scale your realestate.com, www dot scale, your realestate.com, get on the waiting list for the next challenge, and it’s live and it’s fun. And it’s really just a community of people wanting to achieve financial freedom so they can spend more time with their families, they can spend more time with their loved ones, they can do what they want to do, not forced into a job.

Speaker 3 (31:10):

Cool. So scale your realestate.com. That’s how they can get started on that. Well, I love that. I love this. This has been great. I think this is a great way for a lot of people to be able to either get into real estate or to add to their tool belt, or especially if they’re already in, they don’t like what they’ve got going on currently with Airbnbs or their long-term rentals or whatever it might be. So I think this is awesome. If you’re also listening to this and you’re like, I want to not only make more, but I want to make sure I’m spending in the right place and keeping more of it, like Sam was talking about too, then head over to simple cfo.com, grab a CFO, or at least grab a time slot to talk with us to see how can we help you keep more of what you’re making.

(31:52):

I want you to build these types of things, the co-living space and all of that, but I want you to make sure you’re also keeping what you’re making so you can actually have the financial freedom with four properties. So that’s where it comes into play. You have to have a system on the backend for your money too. But this has been a lot of fun. I’ve enjoyed interviewing because I’ve enjoyed hearing your journey, and then obviously the talk about martial arts and just that mindset. That was another tip. Huge golden tip here from Sam is if you want a kick butt self-development course, go take martial arts. It will help you. So there’s another one there. That was really good. And then the whole thing about co-living and then the shared rooms and all of the shared housing, I really, really liked that. Get into that. That was scale your realestate.com, correct?

Speaker 1 (32:35):

Yes, sir.

Speaker 3 (32:35):

Scale your realestate.com. Head over there, Sam’s awesome, and make sure that you get a part of his challenges. Sam, thank you for being on, for being a great guest here. Then if you’re listening to this, remember to make Profit a Habit in your business.

Speaker 2 (32:51):

This episode of The Profit First for REI podcast is over, but there are plenty more where that came from. Are you ready to learn how David and his team can help implement the Profit First system in your business? Schedule a discovery call@simplecfo.com right now. We’ll see you next time on The Profit First for REI podcast with David Richter.

Title: “Profit First Strategies with Jay Conner: The Power of Private Money”

Episode: 242

There are 15 reasons to love about borrowing private money over traditional money. One of them is making your own rules for your private money.

In this episode of Profit First for REI podcast, Jay Conner, a nationally renowned real estate investor and the king of private money. He talks about how private money works.

Jay helps you get your money from private lenders and will share with you the mindset that will get you money in the door without you ever having to worry about it.

Listen and enjoy the show!

Key Takeaways:

[01:01] Introducing Jay Conner

[05:00] Introduction to private money

[08:30] The Great News Phone Call

[11:23] Why don’t you use your own money?

[13:18] Maintaining relationships with private lenders

[15:40] Private money vs traditional money

[22:05] Things that make them want to recommend you

[25:18] Advice for real estate investors

[29:01] Connect with Jay Conner

Quotes:

[07:34] “If you are talking about private money and raising private money with an individual and you got a deal for them to fund, you already sounded desperate.”

[12:07] “If you want to scale your business, private money is the way to go.”

[16:05] “In this world of private money, we make the rules. We set the interest rate, we sent the length and all of that.”

Connect with Jay:

Website: https://www.jayconner.com/book-details/

Tired of living deal to deal?

Transcript:

Speaker 1 (00:00):

I got 15 reasons I love private money over traditional money. I won’t share all 15, but the biggest one is it puts you in the driver’s seat. The traditional way to borrow money is you go to the bank and get on your hands and knees and you’re begging and chasing. Well, they are making the rules right? Like the lender is making the rules. But in this world of private money, we make the rules, we set the interest rate, we set the length of the note and all that.

Speaker 2 (00:34):

Speaker 3 (01:01):

We have Jay Connor back on the podcast. I love Jay Connor. He helps you get your money, the money from private lenders and that whole framework and process, but he does it from a passion and a place of heart. And servant Teachership. I feel like he goes out there and is a servant teacher of how private money works. Listen to this episode. He gives the magic question he tells about desperation and private lending, and I thought his perspective was so good, and then ultimately the mindset that will get you money in the door without you ever having to worry about it. So listen to this episode. Can’t wait for you to get value from it. Thank you for being a listener of the Profit First. RII podcast. Have a great episode. Hey, here’s the profit first RI podcast. Really excited to have Jay Connor back because he’s the came of private money. And this is where I love to go into this topic because I don’t care what kind of business you’re in, you probably need help with this, but especially if you’re in the real estate world, this comes up all the time at every event I’m at with every conversation I have. So we’re having the cane here talk about private money today. So Jay, thanks for being on the show.

Speaker 1 (02:07):

Hey David, thank you so much for having me come on here to talk about my most favorite topic. Of course, that being private money. And why is that? Because private money’s had a bigger impact on our real estate investing business than any other strategy that we’ve implemented in our business.

Speaker 3 (02:24):

Why did you go down that road though? I mean, you teach this all the time. You’re helping a ton of people, like anyone I’ve ever talked to that works with you is like he taught me how to do and I got money and it actually works. So I mean, how did you even go down that road where it made a difference on you and then you wanted to get it to others?

Speaker 1 (02:43):

Well, I actually backed into it. I didn’t do it on purpose. So here’s what happened. So my wife, Carol, joy and I, we’ve been investing in real estate, single family houses, other real estate full time here in eastern North Carolina since 2003. And here’s what happened. From 2003 until 2009, David, all I knew to do in my real estate investing business was rely on the local banks to fund my deals. I mean, all I knew to do was go to the bank, get on my hands and knees, put my hand underneath my chin, raise my skirt up so they could look at all my personal financial statements and stuff and actually beg to get my deals funded. That’s all I knew to do. And so I had a big wake up call in January of 2009 after being in this business here in Eastern North Carolina. I called up my banker.

(03:38):

I told him about these two deals I had under contract in Newport, these two single family houses. And David, I learned like that over the telephone that my line of credit had been shut down with no notice. My banker, his name was Steve, and the bank was bb and t at the time. I said, Steve, what in the world are you telling me? My line of credit is shut down. I got two deals under contract. You gave me no notice. Why is the bank closing my line of credit? He said, Jay, don’t. There’s a global financial crisis going on right now. I said, no, but now you just gave me a global financial crisis. Financial crisis, yeah, I ain’t got no way to fund my deals. And I got ’em under contract. So I hung up the phone and here’s what happened, David. I sat here and I asked myself a very important question.

(04:27):

And so I’m going to share this question with your audience right now. This question I’m going to share with you will help you solve any problem you’ve got. I don’t care if it’s business, financial, career, health, relationships. I don’t care what your problem is. By the way, David, these people going around and saying, any problem, you got some opportunity I want to throw up. I didn’t have no opportunity. I had a problem of not funding my deal. So here’s the question I asked myself. The question I asked myself was, Jay, who do you know that can help you with your problem? And when I asked myself that question, I immediately thought of my good friend Jeff, who lived in Greensboro, North Carolina at the time, and he was investing in real estate. And so I called him up and I told him what happened. And he said, well, Jay, welcome to the club.

(05:18):

I said, what club? He said, the club of the bank shutting you down and losing amount of credit. They shut me down last week. I said, well, how are you funding your deals, Jeff? He says, well, have you ever heard of private money? And I hadn’t. So Jeff told me about private money. He told me about self-directed IRAs and how people can use their retirement accounts and funds that they currently have and move them over to a self-directed IRA company and then loan that money out to us real estate investors, either tax deferred or tax free depending on the type of account they’ve got. Well, that just opened up my whole world. I’d never heard of that. And so what did I do? How did raise $2,150,000 in less than 90 days after being cut off from the bank? Well, here’s what I did, and here’s the secret sauce I put on my teacher hat.

(06:10):

So I put on my teacher cap, which is my private money teacher cap, and I just started teaching people in my own network what private money is, how they can earn high rates of returns safely and securely. And what’s interesting, Carol, joy and I, we got 47 private lenders right now. Not one of them had ever heard of private money and private lending. Not one of them had ever heard of self-directed IRA companies and what a third party custodian is. That’s important by the way, to establish a relationship with a self-directed IRA company because over half of my private lenders are using their retirement funds. And if I didn’t have that relationship to introduce them to move their retirement funds over, I’d be missing out on over half of my private money. So how did I go about raising all this money when I was cut off from the banks?

(07:02):

I led with a servant’s heart. I led with education. And here’s a really, really important point. I separated the activity. I separated the conversations of telling people what private money is and how they can earn high rates of return safely and securely and having a deal for them to fund. You see, desperation has got a smell to it. And when you talk about is that not true, David? Yeah, very true. So if you’re talking about private money and raising private money with an individual and you got a deal for them to fund, you’re already sounding desperate and you’re not even trying to sound desperate. So we don’t talk about deals and when we’re first exposing somebody to how they can earn high rates of return, we talk about private money. So how do we separate those conversations? Well, when someone has told me that they’ve got, let’s say they’ve got $150,000 they want to invest and get high rates of return conservatively, I’ll say, great, I’ll put your money to work for you just as soon as possible.

(08:11):

I don’t talk about a deal upfront. If they’ve got retirement funds that they want to get higher rates of return on, I’ll introduce ’em to the self-directed IRA company that I recommend. They’ll get their funds moved over. And so here’s what happens and here’s the magic sauce, David, I give ’em and I call ’em up with what I call the great news phone call. What in the world is the great news phone call? Well, the great news phone call is not a pitch. I’ve never pitched a deal in my life ever since I started raising private money in 2009. I pick up my handset with my cord attached to it here in North Carolina and I call some of your, don’t even know what that is. And let’s say, David, let’s say you’re one of my private lenders. So I’ll put my phone right up here and you’ll answer the phone and we’ll have a little chitchat and I’ll say, Dave, I got great news for you.

(09:06):

I can now put your money to work. I got a house in Newport with an after repaired value of $200,000. The funding requires 150. Closing is next Tuesday. You’ll need to have your funds wired to my real estate attorney next Monday. I’m going to have my real estate attorney email you the wiring instructions end of conversation. Notice I didn’t ask If you want to fund the deal, of course you want to fund the deal. You’ve been waiting for the phone call. I’ve told you the program. I’ve taught you the program, you know what kind of rate you get, what the maximum loan to value is, the program that I’ve taught you. And so now you’re waiting for the good news phone call, which I just gave you. And in addition to that, if you as my private lender, if you’ve moved your retirement funds over to a self-directed IRA company, you ain’t earning any money until I put your money to work.

(10:04):

You moved it at my recommendation. Now I’m ethically bound to put your money to work. You ain’t earning any money until you actually put her to work. So again, we separate conversations, we leave with a servant’s heart, we educate, and by the way, David, these people going around saying don’t just get the deal under contract. The money is show up. I want to throw up where is the money going to show up? Is it just going to rain out of clouds or something? No, get the money lined up and you can get it lined up fast. Just like me. There’s always going to be deals.

Speaker 3 (10:38):

Yeah. Oh man, that’s really good stuff. I love how you went down that road and it helped you personally. Now you’re just teaching a lot of people. I love that magic question. Who do you know that can help me with my problem? It’s that who, it’s not always the how. It’s the who did I know, and in that point it really helped you. I also run into a lot of times, I don’t know if you see this, where there’s someone who’s like, I could save a couple interest points if I just use my own money versus a private lender’s funds. What are your thoughts on that of always taking down your own deals versus going out there and putting the work into getting a private lender?

Speaker 1 (11:17):

Sure, I get that question all the time. They say, Jay, you making all that money? Why don’t you use your own money to invest in real estate? Why are you still borrowing private money? Well, here’s the answer. If you’re just going to do one deal, that’s a great use of your money. That’s a fantastic use of your money. But do you want to scale your business? I mean, right now we’ve got seven different projects going on, single family houses simultaneously. Well, I don’t want my money buried in seven houses or projects simultaneously, which here in our local market can easily be over 3 million with the prices of our homes. So if you want to scale and really, I mean most people have got a bottom of the bucket in their checkbook. So if you want to scale your business, then private money is the way to go. Another answer to that question is, do I want to pay myself 8% or do I want to use my money for something else,

Speaker 3 (12:22):

Right? Yep.

Speaker 1 (12:24):

So that’s a couple of answers to why I use private lending and why I’m still using 47 private lenders,

Speaker 3 (12:33):

Which is great. I love what you said. If you want to scale, it can run out of cash real quick. If you just keep using your own money where a lot of people have to choose between, okay, paying some percentage points or sleeping at night, and it’s like, I think I like your option a whole lot better, especially if you’re looking to grow. But I like how you said that one deal. That’s okay, but if you are looking to be a real estate investor, this is something you’re going to have to go down that road. Now, last time I asked you some questions about the private lending process. I don’t think I asked this one though, is how do you maintain a relationship with that many private lenders? You’ve got 47 people in your network that you call up with the good news call. So is it like how do you maintain a relationship with all those people?

Speaker 1 (13:22):

I mail ’em checks.

Speaker 3 (13:25):

I love that. That’s a great answer. Oh man. No better way to keep a relationship there.

Speaker 1 (13:33):

I mean, they love getting money in the mail, right? Yeah. They love mailbox money, so I mail ’em checks.

Speaker 3 (13:41):

So you mail ’em checks. So you’ve built a good enough business where you can keep 47 lenders busy and their money active.

Speaker 1 (13:50):

Well, to be totally transparent, I mean, it is a juggling act to tell you the truth. I mean, there’s more money than there is deals.

Speaker 3 (14:00):

Yep.

Speaker 1 (14:01):

There’s more money than there is deals. And so we got 47 private lenders. Some of them have got $30,000 with us, some of ’em have got a million dollars with us. I can’t buy a house for 30,000, but I can use 30,000 for rehab money. You can use private money, borrow private money in a junior position, you’ve got to disclose that. But I can put private money in a junior lien. But what comes into play there is what we call total loan to value. So I’m not going to be borrowing more than 75% of the after repaired value. I didn’t say the purchase price 75% of the after repaired value. But let’s say back to that example that we just talked about, David, where if I’ve got a after repaired value on a home of 200,000 for easy figuring, I can borrow up to 150,000. That’s 75% of the after repaired value. But if I buy it for a hundred thousand, which I do all the time, 50% of the after repaired value, I can have a private lender in first position at a hundred grand. I could have another private lender in second position at 50 grand. So add a hundred to the 50, now one 50 divided by 200,000 after repaired value, I got a total loan to value of still 75%.

Speaker 3 (15:27):

Yeah, I love that. And it seems like private money gives you flexibility and

Speaker 1 (15:32):

Options. Does that make sense?

Speaker 3 (15:34):

Yeah, that makes sense. A hundred percent.

Speaker 1 (15:37):

Oh, absolutely. Flexibility is where it’s all at. I got 15 reasons. I love private money over traditional money. I won’t share all 15, but the biggest one is it puts you in the driver’s seat. The traditional way to borrow money is you go to the bank and get on your hands and knees and you’re begging and chasing, well, they are making the rules, right? The lender is making the rules. But in this world of private money, we make the rules, we set the interest rate, we set the length of the node and all that.

Speaker 3 (16:14):

I love that. Flexibility is the ultimate play in real estate. You want to have flexibility and you want to be able to have that. So I love what you teach. Who is the person that you’re trying to teach out there? Is it the person that’s done one deal a thousand deals? Who are you trying to help the most with your business?

Speaker 1 (16:33):

Yeah, that’s interesting. At my live events, which is called the private money conference, and my live events, we have about 60% or so have already done deals. They’ve already done deals. They want to scale their business. They are real estate investors wanting to scale their business, and about 40% are looking to get their very first deal. So I’m helping everybody. I mean Stu and Harriet Baldwin from New York State, they enrolled and joined my mastermind membership community and they already had a portfolio of a hundred houses. They’d already raised over $2 million in private money, but they wanted to see how I went about it. Well, just one webinar that I recorded with them brought in 1.2 million in additional private private money. So I’ve worked with real estate investors that are brand new and those that are also seasoned to help them get more private money ready to go for their business.

Speaker 3 (17:33):

I love that. It sounds like a lot of people out there need private money, and even if you’re just getting started, if you don’t have the funds to do that first deal, like you mentioned, you do that first deal, that one deal at a time, it might be okay, but this sounds like a great spot where if you’re getting into it or if you’ve got lots of stuff going on, this could be another way to make sure your company can keep running without what you ran into with the banks back in 2007, eight or oh nine. Would you say that’s true as well?

Speaker 1 (18:04):

Absolutely. Absolutely. I mean, I’ve met very, very few people. In fact, I can’t even think of one. I haven’t met any real estate investor that says, I got enough money.

Speaker 3 (18:20):

Yeah, me either.

Speaker 1 (18:22):

I can’t use any more private money. However, David, you are looking at one right now. I got about almost $2 million right now, what I call sitting on the shelf waiting to be deployed. And I tell you what, I’ve had new private lenders come into my world that want to invest and just to prove to them that I can perform. I’ll take the new private lender’s money and pay off a current private lender, refinance the deal so I can get their money to work for ’em, right?

Speaker 3 (18:53):

Ah, yep, that makes sense. I like that. As you grow and scale, you might run into that issue and you make one lender a little bit happy. I mean, at least they’re getting paid off, but then they probably come back to you and say, I want you to put my money to work again. Do you have that come up a lot?

Speaker 1 (19:12):

Quite frankly, when I pay ’em off, they’re not happy.

Speaker 3 (19:17):

That’s why I said just a little happy, maybe a little bit.

Speaker 1 (19:20):

But when I pay ’em off, they’re not making any money on that money. In fact, with a new private lender, I’ll get ready to pay ’em off cashing out on a deal and I’ll call ’em up and say, Hey, just want you to know that you’re going to have a check coming in the mail from a real estate attorney’s trust account. We’re paying off this house. And they’ll say, Jay, can’t you just keep the money? And I’ll go, no, I can’t keep the money unless I’ve got your money secured by a property because we do not borrow unsecured funds. Now, here’s maybe a little advanced strategy for some folks, but I do substitutions of collateral or loan modifications all the time. If it’s a small amount of money that a private lender’s invested 30, 40, $50,000, and we use it for rehabbing a property. So when I’ve got another property I’m getting ready to start on, I’ll substitute the collateral and keep that 30 or $50,000 note in play. So they keep earning money on that money, but we will substitute the collateral just to a different project that we’re moving to.

Speaker 3 (20:25):

That’s awesome. So then sounds like you have a good problem. It’s like, I want that. Well, I think a lot of real estate investors would rather the problem, I have too much money versus I’ve got these deals and I can’t fund them. So I really like how you teach people that and where it could snowball into this, where it’s like, I’ve got 47 private lenders, I’ve got to go out there and get the deals for ’em. Absolutely. And I really like that. And

Speaker 1 (20:50):

For goodness sakes, you don’t start out with 47 private lenders. I started out with one, right? I started out with one and then that quickly became two and three and four and five because private lenders tell other people what’s going on. So I haven’t actively attracted private money for years because our current private lenders just keep sending us people. In fact, day before yesterday, day before yesterday, I got a phone call from the mother of a good friend of mine, his name’s Craig, lives in Newburg, North Carolina. Craig had told his mother about this investment thing that I got going on and she had never heard of it, which is really funny. I’ve been doing it now private money since 2009. So she calls me up and she says, Hey, my son’s been telling me about this investment thing you got going on. Tell me about it. So word of mouth gets around very, very quickly when you start doing business with private lenders the way I do.

Speaker 3 (21:53):

Yeah, I like that a lot. So in order to get people to talk like that, what are the biggest things that you do for your current private lenders that makes them want to recommend you?

Speaker 1 (22:07):

Well pay ’em on time.

Speaker 3 (22:08):

There you go. That’s a big one. Sounds like that would be a really great place to start.

Speaker 1 (22:12):

Pay ’em on time. But I also have three times a year I put on a party for our private lenders at the Dunes Club. So we have three times a year a VIP reception over at the Dunes Club on the beach, and it’s just an evening of private lenders getting together and we have a good old time and I feed them and give them all the soft shell crabs they want, and I tell ’em to bring their friends with them.

Speaker 3 (22:42):

Yeah, that’s awesome. So number one though, that anyone can do at any stage is pay people on time. So actually pay, would you say, what about communication? I hear that come up sometimes too. How do you do a good job on the communication with your private lenders as well?

Speaker 1 (23:03):

Well, it must be good enough. They never go away,

Speaker 3 (23:06):

Right? Yeah, that’s the big things I hear.

Speaker 1 (23:10):

Here’s one thing I have not delegated as far as communication. I personally, I mean my relationships with my private lenders are very, very important. So I personally pick up the phone, pick up the phone, and call my private lenders when I have got a deal for them to fund. I do not delegate that out. I could

(23:37):

Delegate that out, but I don’t, when I got a deal for them to fund, I’m the person on the phone keeping that relationship When I’m getting ready to pay them off. I don’t have a check just show up in the mail. Of course they got to sign a payoff instruction letter if a different closing agent is closing it for a buyer. But before any of that happens, I personally call ’em up and I tell ’em that we’ve got that property sold. We’re getting ready to pay you off. Or I’ll call ’em up and I’ll say, Hey, we’re getting ready to pay this property off, but I will keep your note open so you can keep earning money. I’m just going to substitute the collateral. We got some documents we’re going to email to you for you to sign and send back the communication. I’m personally involved in putting their money to work and letting them know when we’re cashing out and where they are on the deal.

Speaker 3 (24:31):

That’s awesome. Then since it’s the profit first I podcast here, I love this concept of the private money because you need your cash in your accounts. So to be able to run your business, do those things, and then setting up a separate account just for your private money lenders, so it makes it easier to do what Jay just told you to pay them back, to pay them back on time to be in good communication with them. So now this has been really good. Do you have any other advice before I ask you? How could they work with you? How can they get in touch with, because I know this is something that is needed desperately, that I send people your way all the time. I know I trust you to help people, but any other last minute advice here that you would give to the real estate investors listening to the podcast?

Speaker 1 (25:18):

Sure. I appreciate you asking that question. It’s going to be very hard to own a lot of real estate

(25:26):

Until you own the real estate between your ears. So what do I mean by that? People ask me, how do I start? How do I start raising money? I can tell you how you start raising private money. You get your heart right, you get your mindset right. So what do I mean by that? Well, what do you do? You lead with a servant’s heart, you lead with education, you put your private lender money hat on, you private lender, teacher hat on, and you leave with education, don’t pitch deals, and you really, really are concerned about the other person and realize, part of this mindset is realize you’ve got an opportunity to change people’s lives, right?

Speaker 3 (26:11):

That’s so good.

Speaker 1 (26:13):

We’ve got countless people that are particularly in their retirement years, that have thanked me and Carol Joy for making a difference in their retirement years to where they can, I mean, they don’t want to touch their principal. They want to live off of their principal investment. So they’ve been able to travel, go see grandkids, do all this stuff that they couldn’t do otherwise until they got involved in our program. So just know that you’ve got a way to really make an impact on other people’s lives. And lemme tell you another part of mindset. It ain’t about reaping. It’s not about reaping. It’s all about sowing. It’s all about sowing. I can’t be reaping all that private money and deals until I have sown and given and led with value first. So how you sow is how you’re going to reap.

Speaker 3 (27:08):

Yeah. Oh man, this is so good. I’m glad I asked that question because I hear the passion in your voice and I hear that you really care about the people you work with, the people that have private money lenders out there, you care about that relationship. I love what you said. Get your heart right, get your head right. I also think, like you said too, that if they don’t have that desperation has a smell. So if you’re out there, you’re desperate and you’re just going out there, then you won’t have people like you have that want to keep coming back, that want to continuously invest in you. So that was, I think, the best advice that you could give right there. Get it between your ears and get your heart right. I absolutely love that. And just to recap too, I love your magic question.

(27:55):

Who do you know that can help me with my problem? Then one day you’re going to wake up and you’re going to be like Jay, and you’re going to be helping other people with their problem. I’ve got money. I want to put it somewhere, and you’re the able to get them to where they can be. Desperation has a smell. I love that. And then honestly, I love that pivot. You are like, it’s not about the reaping, it’s not about the interest that I’m making or the profit I’m making for the deal. It’s more about sowing those seeds and ultimately you’re changing lives. That’s why you get private money, and it’s like that interest that you’re paying them is twofold. It’s like you get to sleep at night, you’re not using all your money and you’re getting to help someone else get a return that they wouldn’t be able to get anywhere else or in someone that they trust as well too, and that’s a little bit more tangible than the stock markets or all this other Bitcoin, some of that stuff that’s floating around out there. So this has been awesome. So how do people then, Jay, take that next step with you? Do you have a book? You talked about an event. What can people do?

Speaker 1 (29:01):

Absolutely. Well for your audience, David, I’ve got two gifts. First of all, I finished writing my book Where to Get the Money. Now, this is not a ebook. This is a book book that we actually send in the mail Autographic where to get the money. Now the subtitle is How and Where to Get Money for Your Real Estate Deals Without Relying on Hard Money Lenders or Traditional Lenders. It’ll walk you through step by step how to get all the private money you would want. Very, very easy to read. It’s $20 on Amazon, but you can get it for free. Being David’s audience, just cover shipping. You can go to www dot j Connor, J-A-Y-C-O-N-N-E r.com/book. So I’m an er, not an or. So that’s j Connor, J-A-Y-C-O-N-N-E r.com/book, and we’ll three day priority mail it out to you. Now, in addition to that, I’ve got an upcoming $3,000 per ticket live event right around the corner. But for your audience, Dave, I’m going to let everybody come for free with a measly $97 registration fee. This private money event. You can check it out at www.theprivatemoneyconference.com. The private money conference.com. That’s coming up right around the corner in June. Get on over there. Registrations are open, and I’d love to meet you in person at the private money conference.com.

Speaker 3 (30:31):

Awesome. I’m excited about that too. I love what you’re doing and you’re solving a big need that we hear all the time. Just like all people always needing to sharpen their acts when it comes to private money, you graciously have also invited me there to speak about Profit First. So I’m excited to get to tell people about that so they can get more private money and be more confident and not be desperate when they go and ask for people. So I’m really excited about that as well. So make sure we’re going to put those links there, but make sure either get his book or go to that event. I cannot endorse Jay Moore because I know how many people he helps, but then he also has the heart. You heard it right here. That’s how he wants to help you too. It’s very much a heart and a mission and a passion for him.

(31:13):

So Jay, thank you for coming on, for sharing your wisdom, your knowledge today. If you are listening to this episode and you feel stuck like, what the heck is going on? Where is my money? I don’t know what to do. I’m a little bit nervous to go out there and get private money. I can’t keep my own house in order. That’s where you could go to simple cfo.com where we can help you walk you through that process. We’ll link you up to Jay too. If you need private money or need to learn about private money, this is who we recommend. I recommend Jay to many people, so make sure that if you need that help you go to simple cfo.com. But Jay, again, thank you for being on the show and sharing your wisdom here today.

Speaker 1 (31:51):

David, thank you so much for having me. God bless you.

Speaker 2 (31:54):

This episode of the Profit First for REI podcast is over, but there are plenty more where that came from. Are you ready to learn how David and his team can help implement the Profit First system in your business? Schedule a discovery call@simplecfo.com right now. We’ll see you next time on The Profit First for REI podcast with David Richter.