fbpx
Menu
SCHEDULE A CALL NOW

Stop Trading Your Time for Money: A Profit First Journey With Nick Perry

Episode 104: Stop Trading Your Time for Money: A Profit First Journey With Nick Perry

 

The Profit First REI Podcast

August 15, 2022

David Richter

 

Summary:

Our guest for this episode started investing in real estate around eight years ago with little knowledge on his hands. 11 months and 104 failed deals later, he finally landed his first paycheck. What made him successful is that he stayed away from the safe route, applied a systematic investing approach, and followed his mentors who showed him the way to accumulating wealth and success. You may be thinking that real estate investing is hard. But once you crack the code, you’ll eventually realize how simple it is. If he can do it, so can you!

Today, let’s take a deep dive into how to scale a seven-figure business using Nick Perry’s systems and processes. Learn the hacks and tricks of real estate investing by clicking on that play button!

 

Key Takeaways:

[1:39] How did he get into real estate investing and where is he on his journey today?

[4:08] What is he doing right now in real estate and how does he help other people?

[10:39] How does he make sure to prioritize profit and pay himself first?

[15:17] Are they using KPIs to make sure that they’re on track?

[17:54] Nick’s real estate advice to the listeners

 

Quotes:

[7:26] “Your business is never going to outgrow you.”

[11:01] “When you pay yourself first, that’s what’s going to allow you to go out and create.”

 

Links:

Nick’s Instagram-www.instagram.com/nick_perry_rei

The 7 Figure Cartel-https://www.7figurecartel.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:

Nick Perry:

But it was that mindset shift that, Hey, let’s stack as much cash as we can first before going in and doing it the other way. And I think most people get in that paycheck to paycheck mentality. They’re living hand to mouth because they haven’t adopted that mindset shift.

Intro:

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

David Richter:

Everyone have another special guest today on the Profit First REI podcast, who is a true believer in Profit First. And he has implemented in his business. And I believe this just been a, an impactful book for him and system and process. So we have Nick Perry. You’ve probably heard of him. He, I feel like I see him everywhere in all these different groups and honestly changing and transforming a lot of lives too. He does the real estate investing business, but he also helps other people too get to where they need to be. And that’s what I love to see is people who are doing it and have been doing it for a long time and then helping other people get to where they need to be. So, Nick, thanks for being on the show today.

Nick Perry:

Yeah. Thank you so much for having me I’m I’m honor and excited to be here and try to provide as much value as I can.

David Richter:

Well, you always do. So I know that today will be no different and we will just dive right into it. So for people who might not know your background or how you got into real estate investing, or like where you are today, like give ’em just as brief snapshot of where’d you come from, where are you now and give ’em that journey?

Nick Perry:

Yeah, absolutely. You know, I started I grew up in Northern Virginia, right outside of Washington, DC. My family was all federal government CIA and you know, I, in my, in my, you know, journey growing up, I had been playing sports. I was always active. So my first career out of high school, I was a personal trainer. You know, I graduated school and rather than going to college, I started personal training and I, I realized I was like, man, all these people around me that I’m training are really successful and they’re doing really well, is it because I didn’t go to college that I, I messed up and I realized all my wealthy clients, none of ’em really went to college. And they all own businesses in some capacity. Yeah. Or they were in real estate. And so through interviewing my clients, I realized, you know what, I need to find a vehicle that’s gonna help me to create, you know, the, the money I want live, the lifestyle I want.

Nick Perry:

And you know, it ended up turning out to be real estate. You know, so I stopped trading my time for money. And you know, I moved outta my home city in Northern Virginia. I’d grown up there. I didn’t want to go to work for the federal government and climbed the corporate ladder there. I wanted to go be an entrepreneur. And so kind of on a whim you know, I was just coming up to the end of my lease in Virginia. I decided, well, I’m just gonna go down to Austin with the limited savings I have. I think I have like seven, five or $7,000 to my name. And I relocated and started watching, you know, YouTube videos trying to figure out what my next move was gonna be. I didn’t know it was gonna be real estate, but it was a different opportunity and resonated with me. It’s what made sense. And so that was it. I started putting out marketing and, you know, it was a long road to get where I’m at, that was seven years ago. And that was kind of my journey into into real estate.

David Richter:

Okay, awesome. And then you’re doing stuff to help others today too, and helping others, you know, reach those goals, reach their potential. And so why don’t you talk a little bit about, you know, like where you are today in your business and, you know, cuz like we talked about even before jumping on this call, like that’s, that is your main business, you know, your main business is still the real estate that you do. So talk a little bit about what you’re doing right now in the real estate and then how you help other people as well too.

Nick Perry:

Yeah. So, you know, I’ve been very, very fortunate in real estate. I’ve got a tremendous team. So I live in Miami beach, Florida. My team’s in Austin, Texas. You know, I’ve got you a small lean team full of great people. I’ve got eight people in my real estate company. We do anywhere from 250 to $400,000 a month between flips wholesale you know, cetera. And then we also hold rentals. So we’re actively buying, you know, three to four single family rental properties every month. We we’re purchasing mobile home parks. I just closed on 48 units last week. So we’re you know, doing great with just a, you know, small team. You don’t need a ton of people, you just need the right people. And you know, the it’s allowed me freedom, you know, basically I’m, I’m not gonna stay here and say, I’m doing a lot.

Nick Perry:

My team is doing the majority of everything. I’m, you know, 33 and pretty much like semi-retired, I don’t have to work anymore. So yeah, that was, that was a very pie in the sky. Unrealistic, you know, thought when I first started this, that would be, you know, 33, basically semi-retired able to do what I want when I want travel the world and, you know, have a, a, you know, great, you know, financial income at the same time. Yeah. But you know, it didn’t, it didn’t start off that way. I had to go through a lot of ups and downs and you know a lot of seminars and everything to get it dialed in. So you know, now that hindsight’s always 2020, right, right. Where I’m sitting right now, I’m like, it’s always, oh, well, if I would’ve just known what I’d known now I could have done it in a fraction of the time time.

Nick Perry:

Well, that’s the great thing about, you know, mentorship and stuff like that is you can pay for the, the fast pass and just get to where you want to go in a much shorter amount of time. So we’ve had we have a, a mentorship program called the seven figure cartel where we’ve got students and mentees coming in and we’re helping them, you know, from where they are right now to get to that multiple seven figure a month mark in their real estate business. And because I’ve already been through all the challenges, you know, I’m seeing tremendous results from all the students, cuz they’re all go getters. They’re all wonderful people, hard working. And so I’m giving them the resources and the information and it’s just been great to watch, you know, so many people’s businesses transform.

David Richter:

Yeah. So then I love what you said, you know, being 33 and you know, having this business that you’re kind of like you said, semi-retire like you don’t have to work. What were some of those things that were key along your journey that made the big difference to where you got to today? I know investing in, in, you know, in the education and, but you know, some people say it’s the people that you hire and it’s the systems and whatnot, but like what for your personal journey helped get you to where you are today?

Nick Perry:

In terms of like, you know, tangible things that you can take away. Cause a lot of it was development on myself.

David Richter:

Mm. There you go. Yep.

Nick Perry:

So your business is never gonna outgrow you. You, you have to, that’s

David Richter:

Good.

Nick Perry:

Right. You know, if, if you’re a hundred thousand dollars a year person, you’re gonna be a hundred thousand dollars a year company. Yeah. If you’re a dollar a year person, you’re gonna, you have a $10 million a year company, but your company will never outgrow you. So that’s why it’s very important to not only work on, you know, the business and practical tips, which I’m getting ready to give you right now, but also be continuing to, you know, get better as a person in all areas, your life, because it filters into the amount of revenue you make. So focusing on your your, your mind, your health, your fitness, your faith, and then your finances will, will expand from there. But really what is, you have been, my X factor has been where I’m really good at digital online advertising. So you, in terms of lead generation we do all paper click.

Nick Perry:

So I don’t do any cold calling or direct mail or texting. I do all online. People go to my website, fill out my form and we reach out to them. So that’s been huge because those leads convert at a much higher rate than like a direct mail lead or a cold calling lead. It only takes this 11 leads to get a deal here. Wow. As opposed to, you know, some of the traditional forms of marketing work could take you 40 to 60 leads to get a deal mm-hmm <affirmative>. So you just look at that, you know, that that completely changes a business, you know, you’re way more efficient. My guys only have to make 11 talk to 11 people to get a deal where, you know, other companies are having to talk to three, four times more people. Oh yeah. We’re locking up contracts three or four times faster and we’re getting three or four times more deals than, you know, our, our competitors. So that’s, you know, a big tangible takeaway. And then, you know, the people that I have on the on my team are, you know, topnotch a players, you know, I’ve been, I’ve hired and fired a ton of people and, you know, have got really good at, you know, being able to identify eight players and hire and retain top talent.

David Richter:

Yeah. Those are that’s usually what we hear is the people that are doing it at a high level are not just going after anyone they’re going after the right people. And, and I, someone said a really, really well on a podcast, they said, I’m hiring thinkers, not doers anymore. Like I want someone who’s gonna think through the problems and implement and get the, you know, like the high level. So I don’t have to, like you said, semi-retired, you don’t have to be there because you probably don’t have to make a lot of the day to day decisions anymore inside of the business. And that comes from hiring those high level people. So now that’s awesome. And I think that’s a lot of value there if you just rewind the podcast a little bit, just to listen to those, those practical advice, but what he said too, about working on yourself, that’s the biggest thing.

David Richter:

And I think that’s probably one of the biggest things with Profit First, as well, too, going into that and really understanding who you are and how you, how you interact with your money and how you interact in the mindset you have behind it, of, you know, are you paying yourself first? Are you making sure that profit’s a priority? So that way you can carry those out. So I guess, can you speak to that? How the transformation, maybe in the business or in your life came when you read that book and then you started implementing, you know, that system.

Nick Perry:

Yeah. You know, it became a lot clearer because you know, when you pay yourself first, that’s what allows you to go out and create additional opportunities for yourself. If you’re just paying bills first, you know, whether that’s business bills or personal bills, you’re never giving yourself the ability to go beyond, beyond that. Right. Cause there’s hardly, it’s never that you’re, you’re always gonna spend to your capacity. So I wasn’t able to really create additional streams of revenue for myself until I implemented Profit First. Hmm. Once I was started paying myself first, putting that into, you know, separate account that grew pretty quickly cuz I’ve got a really good real estate organization. And then, you know, next thing you know, I’m looking at all this money and I’m saying, okay, well what do I do with it? I need to invest it into assets, rental property. I need to buy you know, I, I own oil and gas Wells here in Texas. I have commercial property, mobile home parks. And so that’s what it’s allowed me to do, but it was that mindset shift that, Hey, let’s stack as much cash as we can first before going in and doing it the other way. And I think most people get in that paycheck to paycheck mentality. They’re living hand to mouth because they haven’t adopted that mindset shift.

David Richter:

Yeah. Yeah. I think that’s, that is huge. Cuz it is hand them out the deal to deal cycle. It’s like, it’s not why you start real estate wasn’t to go from one rat race to another, you know, in a worst one. So yeah, I totally understand that. And that’s awesome. And I love what you’ve done with your business, how you’re helping other people and how you’ve grown, you know, and like that’s awesome. 33 years old semiretired. I think a lot of people can just learn that what you said there, working on yourself, working on your business and then hiring the right people, getting those right people in there mm-hmm <affirmative> and where you want to go too. And I think it’s a, I don’t know if you would agree with this, but I think it’s something that you need to sit down and have that personal conversation with yourself too, of like, do we wanna scale and grow? Like, do I want a team of eight people or whatnot? Or do we wanna stay small? Or like, is that something that you had to sit down at one time and say, you know what I wanna, this is where I want to go.

Nick Perry:

I had 22 people for a good period of time. Yep. And you know, what I realized was we were making a lot of revenue, but we’re spending it all too. My margins were very slim cuz my overhead was through the roof. So I went in basically cleaned house. I got rid of all of my people except for my top performers and you know, what happened, my business, the revenue and the amount of contracts and the amount of closings we had with fame. But my expenses were down here. Yeah. So I had all this extra money with way less headache because I’m only dealing with my top guys. And you know, that was something that was a big shift for me was, you know, more leads plus more people doesn’t equal more money that you’re taking home to your, your family. Yeah. And that’s why we got business at the end of the day was, you know, for the freedom and lifestyle that it provides. And so I’m all about, you know, bottom line net profit, that’s all that matters. Right? Yeah. Going big gross numbers doesn’t mean anything. How much are you bringing home?

David Richter:

Yep, exactly. And I think that’s where the Profit First mentality is like that is we, we hear it all the time too. We’ve heard those cliches, you know like revenue is vanity profit is sanity. You know, like we hear some of those like sayings and it’s like, we gotta make that real to us. And that’s why I like the system too. Cuz it gives you a system to, to put that in place and an actual practical way to say like, okay we are profitable. We are focusing on that bottom line and it like, like we go to these events and you hear it all the time. Like, oh we’re a $6 million business or whatever. And it’s like, okay, but do you have 22 people on the team? And it’s just all, you know, you’re making six and you know, six and a half is going out the door, you know, it’s like, you gotta make sure you’re in the right space.

David Richter:

So yeah, definitely resonate there have heard a lot, you know, of that going and wanna make sure that we get this message out the door. So now that’s awesome. But now with your business and with the seat that you’re in, do you still manage it from a numbers perspective? Like are there KPIs that your team brings to you to make sure that you’re on track still? Are you like in that, to where that’s basically your role now inside of the business is just managing those numbers or do you still meet with the team? Yeah. Or like what do you,

Nick Perry:

Yeah, I mean it’s, it’s just one of my companies. Right. Okay. So the risk is just one of my companies. So you, I keep an eye on it. Just like I keep an eye on all my other companies, but I’m not getting in the way. I don’t know what’s going on with, you know, a lot of the deals we have working. Yeah. I’ve I know I got 14 fixed and flips going on right now. I couldn’t give you a single address for one of them. I got probably like 20 wholesale deals. I’ve got multiple rentals I’m buying right now. And I couldn’t tell you an address on any of ’em. I couldn’t tell you how much I’m buying for or anything like that. But I do, I do look at, you know, P and LS. I’m looking at, you know, our weekly scorecards with my, I have a CEO that sits on top of my real estate company and runs the entire. And so he reports to me. Yep. You know, that’s the extent of it, you know, I’m actually here in, you guys called me, I’m in my office, my real estate office today. I’m usually in my, my home in Miami beach. But you, I do like, I still like to come to the office, like I’m not here cuz I have to be here. I’m here cuz I want to be here. So

David Richter:

Yeah. That’s awesome. And that’s where we’ve seen a lot of the successful owners are in that box. Like they have a CEO and that manages the day to day and the CEO and then they’re reporting to you like the scorecards and the numbers and making sure we’re on track because as the owner you wanna make sure, you know, like, yeah, I’ve handed it off to the right people and everything’s still going well and that’s awesome. And I think that’s where most people, when they think of entrepreneurship and real estate investing and the Robert Kiyosaki stuff and like, they think of exactly where you’re sitting right now of like, okay, I’ve got good people in place running 15 rehabs. I don’t know the addresses and you know, knowing that things are going well. So that’s awesome. If you can if you could just listen to one thing from this podcast, it is that it’s those things that Nick was talking about, those key points in his business that he got in place in the right team, getting the lean, not, you know, that’s where our business, a long time ago we were doing like 25, 30 deals a month, but had like 25 people on the team.

David Richter:

It’s like, there’s just too much there. You know, it’s like getting to the right place of what is the right size team for you? What is profit? What does that mean to you and getting to that place? So thank you so much. There’s just a, I just got a couple last questions here. What general advice would you give to the real estate investor listening to this podcast right now? Just, you know, last minute advice here before the podcast.

Nick Perry:

Yeah. My advice is really the, the biggest thing. If you guys are trying to, you know, get to where you’re trying to go the fastest. And I wish I would’ve known this earlier on is, you know, just find who’s already doing it, find who’s in that position already and whatever it takes, you know, go work for them, pay them if they got a mentorship sign up for it. Because I don’t know about you, but I, I don’t want to, I like to pay for speed. Like when I go to Disney to get the fast pass and just like do what I need to do so I can get it done. So if you’re committed to your success you know, I’m a byproduct also a lot of great mentors that poured into me. Mm-Hmm, <affirmative> hate ’em for their knowledge. And I continue to pay for knowledge.

Nick Perry:

I continue to, you know, go to seminars to learn. So, you know, continue to learn. And you know, the biggest thing is also focus, right? If I had to give you guys one piece of tangible advice, especially now we live in an Instagram society where our attention is everywhere. Stay laser focused. If you’ve, if you’ve, you know, if you’re listening to this right now and you’re a wholesaler, well be the best wholesaler before you start jumping into Airbnb arbitrage. And now you’re doing you know, owner finance and now you’re doing you know crypto and next thing you’re doing e-com and like, you’ll just never get good at anything. If you, you can’t stay laser focused. Like one thing that I did that was beneficial was I didn’t touch any other industries for the first, let’s say five and a half, six years. I was later focused. I’m talking, you know, 60, 80 hours a week just doing single family, real estate, nothing else was just became, you know, an expert at that. So get, become an expert in one lane and you’re gonna go much further. It’s gonna open up doors for all of that other stuff in the future, but don’t put the car before the horse.

David Richter:

Bam. That was awesome. That was good stuff right here. And make sure you find someone who’s been where you are, where you want to be and then follow them, figure out how to work with them or provide value to them. Whether that be through the mentorship, if they’ve got it formally or working for them for free or whatever you have to do to get in the door there, like Nick said, and then being laser focused, that is so important, such a relevant message for today. Like you said, we live in that just very unfocused society and just notifications going off everywhere from every which direction, giving everyone access to our most precious commodity time all the time. So just be very laser focused there. So Nick huge value today. How could people provide value back to you, the listeners and what do you have going on the sevenfigurecartel or how, what do you want them? How do you wanna connect with people?

Nick Perry:

Yeah, man, first of all, thank you so much. It’s been, been an honor, but shout to me on Instagram you know, pretty good there, it’s just, you can find me. It’s just my name, Nick Perry and then REI like real estate investments. So nick_perry_rei I’m always putting out content on there. I try to, you know, provide as much value on I as I can. And then if you guys are, you know, interested in joining the mentorship, you can click the link in my bio and learn a little bit more about it. If you have any questions on it, just let me know.

David Richter:

Cool. Well, there you go. And Nick’s worth following. And Nick is worth working with, if you want to get where you need to go in real estate investing and getting to that next level. And Nick is that next level investors. So make sure to follow his content, always providing value. Nick, thank you so much for being on today. It was an absolute honor to have you.

Nick Perry:

Thank you just to see you soon.

David Richter:

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

David Richter:

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

If you Want HELP
implementing Profit First...

Our team of experts would love to help you

make and keep more money in your business!

Click below to book a
no-obligation discovery call:

SCHEDULE A CALL NOW

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.

 

 





Facebook Instagram Linkedin