[862] How Experienced Investors Raise Capital

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FDIC, subject to credit approval. Welcome back to the Seven Figure Flipping podcast. I'm your host,

Adam Whitney, the CEO of Seven Figure Flipping in Blackjack Real Estate. And I'm joined by my guest,

Lindsay Arco, my business partner in the COO at Blackjack. It helps us in Seven Figure Flipping.

And today we're going to talk about how to raise private money for your real estate deals.

So if you've ever asked yourself, I don't know anybody with money. How do I get money? Or if you've

ever said to yourself, I don't like or want to ask for money. We're going to completely debunk

that by the end of today's episode and tell you exactly how to talk to people, how to do this

without ever being rejected. Here's the biggest issue that I see investors have. So let's start here.

They first off, they don't have a deal yet and they're not making action on getting a deal because

they think they don't know if they can get the money. So they're doing nothing. They're not raising

money and they're not going after deals. So sometimes people just get paralyzed because they're not

sure, should I get a deal first before I start raising money? Do I need to raise money in order to

get a deal? What comes first? What should I do? I think this is a great topic. Before we go on,

let's introduce our third partner here who's on the show with us today. If you may or may not

bid a sim, he's just off camera potentially. His name is George and he is a poodle. What kind of

poodle is he? He's a he's a standard poodle. If you see our standard poodle walking through the

the podcast studio, it's because he's part of the team. So yeah, you're thinking I need money,

but I also need a deal. I can't get money without a deal, but I can't get a deal if I don't have

money. And you're stuck in this perpetual state of doing nothing. And the worst thing you can do

aside from buy a bad deal is do nothing. Okay. So let's talk about some of those things and how we

overcome them. Here's the problem. If you wait, you're already going to be weak, you're going to

be in a position of disadvantage. And you want to operate from a position of advantage. So I think

it's important to understand that there's $22 trillion sitting on the sideline right now waiting

to be employed. And here's the thing that money cannot just sit there. It has to get employed.

The problem for the money is that you're not getting it a deal and you're not bringing it

you're not bringing the deal to the money. So what should you do first? The truth is,

is you should be hunting for deals all the time. You should be raising money all the time. Always

be raising and always be hunting. How would give us an example like how how would somebody who's

starting to raise money start to educate their friends, their family, their co-workers,

whatever that they're that they're interested in raising money? Yeah. First and foremost,

you know, somebody might think my friends and co-workers, my family, nobody has money. People

I know don't have money. I come front like me. I come from Detroit like nobody has money.

But that's an assumption you're making and you have no idea who has money. I can't tell you how many,

you know, administrative front desk people, teachers, people you think like they don't make a whole bunch

of money, but they've saved. They have old 401ks. There's capital out there that you don't know

about and you have to stop making assumptions. But the word that you said was how do you start

educating? First and foremost, I'd ask you. Right now, I want you to open up your phone and look

into your contacts. How many people are sitting in your contact list right now? Okay. And if you

just looked in there, how many of those people have you told that you're a real estate investor and

there is an opportunity for them to invest with you? My guess is either nobody or maybe a few

people. So if people don't even know that there's an opportunity to invest, how would they ever be

able to invest? You don't need to go in with expectations thinking everybody I talked to is going

to invest with me. Only a small percentage will. You just need to let people know what you're doing

so that they start to come to you instead of you coming to them. Right. One of the easiest ways

to do that, something we're going to talk about more a little bit later, is by telling people

every single day, leveraging your social media and talking about what you're actually doing,

specifically in real estate. And if you wait to raise capital, you're already too late. And what I see

people do is let's say you do take action. You're going after that deal. You finally get something.

It underwrites well, the numbers look good. You're going to make money. You've never got money to

buy this deal before. You're not sure. Do I go to hard money? What is private money? And you don't

know what to do next. Well, the problem that I see is usually what happens is you start operating

with this unnecessary urgency. And you start speaking from a place of desperation. You start

saying words like need. The truth is, I just told you there's 22 trillion dollars in the marketplace

and there's not 22 trillion dollars worth of deals. So does the money need you or do you need the money?

Yeah. And you know, something I think Bill taught us and this really helped me when I started

raising money was that you're not asking for money. You're actually giving them your friends,

your family, your people in your network an opportunity to make money. Why would we want to give

money, pay interest to banks if we can help our friends grow their wealth as well? When you look

at it from that perspective and you see that as an opportunity, it becomes so much easier to talk

about. And I think you have to be comfortable knowing that it's not an opportunity for everybody.

It's an opportunity for the right person. Your only job is to let people know what opportunities

are available and the right people will surface. Right. And when we don't do this, when we don't

start educating, when we don't build that foundation, most of the time we rely on using hard money,

which is great. We have hard money lenders. They're amazing. We have great partnerships with them.

But when you only rely on those partnerships, what happens is you become less flexible. Right.

You are having to work underneath those timelines. When the market changes and there's less money

available, the amount of money that you could borrow might become less. The amount of opportunities

out there might become less. And so you can't move quickly like you can if you have private lenders.

And the thing is this hard money has a utility. It certainly has a utility. But it's expensive.

People don't understand the actual path to getting a hard money loan. Getting a hard money lender

to lend you is not the hardest thing in the world. But once you go to get that hard money loan,

after you go through all the paperwork, all the underwriting, they say, yes, we'll do a loan with

you. Then you get a deal. Now what you didn't know was you have points. And the points are

due when you buy the house, not at the end, whereas private money you can structure it to come at the

end, even if you have any points at all. What you also don't know is hard money always has some

kind of fees involved with it that are due when you buy the house. So I see hard money lenders having

an admin fee. That's like a thousand bucks or 1,500 bucks just to close on a house. And no,

by the way, hard money lenders going to require you to get additional things on the title.

The lenders title policy and all these additional things that can come with it. They call them

exceptions in title. Those things all cost money. So there's hitting cost with hard money. And look,

it's it's it's a useful. There's a utility to it. But it's not nearly as flexible as private

money, like you said. Well, and you still are going to have to come out of pocket at close because

in addition to paying those points upfront, those fees, you will need to pay your closing costs.

If you're raising private money, you can raise enough money to cover those things so you don't

have out of pocket costs right when you go to close on the house. Yeah, so you have all those

additional costs. And then there's the timeline associated with buying a deal because these deals

move fast. You get a deal under contract with a wholesaler with an agent. A lot of times you're

closing in 21 days and 14 days and 10 days and seven days. And it again creates a unnecessary

degree of urgency and you will feel like you're not prepared for it. And it will be

create all this pressure. And anytime you have pressure, you start making bad decisions that are

expensive. So you take the path of least resistance. You know, there's a sharky hard money lender

who's at 14% and four points. And instead of going through the more institutional lender or

the private lender, you end up with some sharky hard money lender and you're paying way more than

you should be paying for a flip. Right. And it can also, it can put you at a disadvantage when

you're buying from wholesalers. So if we are wholesaling a property and we have a buyer that has private

money or cash versus a hard money lender, we would typically give preference to that cash buyer

or private money purchase because we know the likelihood of it closing on time is greater.

When we talk to most investors about raising private money, one of the things that we hear a lot

is that they're afraid of being told no, afraid of damaging a relationship. They don't want to feel

like they're pressuring people they know to put their money into a project. And they sometimes

they don't feel like they have enough experience to actually go and ask somebody if they're

interested in investing. Yeah. And here's the cool thing. Like you can take all the pressure off.

You don't even have to ask. You can literally just say, Hey, Lindsay, thanks for showing interest

in what I'm doing in real estate. I don't know if you know this or maybe you know somebody else

who might be interested. But we actually allow people to invest in our deals with us who might

have some cash or some 401k or IRA sitting on the side. And they don't even have to do any of the

work. Would you know anybody else like that? It takes the pressure off completely. So I didn't

ask them directly. So there's no way they can tell me, no, I won't do that. And they don't feel

asked. So only a couple of things happen in that conversation when it's framed that way. And it's

you know, I don't know anybody. But I'll think about it. Or well, what about me? I would be

interested in that. And you're indirectly asking the question, which avoids rejection, which

you don't have to feel like you're selling anybody. Because it's like raising capital isn't

about selling anybody. It's not about selling the deal. The deal is second. They're they're

investing with you because they trust you as the operator first. And then the deal mechanics have

to make sense. Most of the time somebody is investing with you. It's because they know like

and trust you. The deal is important. And you should have your facts and data. But you don't

need to go into a conversation with a pitch deck and a credibility package. You're you're already

talking with people who you have that with. So it's just about asking who might be interested.

And the the frame here that you know, of course, I learned almost everything I know about raising

capital from Bill. And one of the cool parts about this is it's not about us. It's not about our

deal. It's about that investor. And it's about really knowing truly genuinely if it's a good

opportunity for them. And that you will only know that if you start to ask great questions. What

okay, I know I see you're interested. What is your money doing right now? What kind of return

is it getting? Look, when would you be ready to deploy that capital? If I had a deal tomorrow,

would you be ready to deploy it? And then you start to learn, hey, my money is in a CD for 12

months. It's about to expire. It's getting 4%. And they tell you that and it goes, okay, cool.

Like what kind of return after you after you don't want that CD? What kind of return would you be

looking to get that would make you really happy? I want to keep doing this with the investor.

They might say six or seven percent. Right. Most people go into it and think, oh, I need to offer

double digit returns or something really impressive without even we're just making assumptions. We're

not even asking what somebody would be happy with. Yeah, and I love this analogy that Bill explained

to me. He said, look, if you go to my grandma and you tell her you're going to get her a 12% return,

she's going to think you're a scam because she is getting five or four percent in a CD. Now,

she would be like, ecstatic about seven percent. But you start talking 12% and you start to make

people feel like it's too good to be true. And that's you projecting what you think somebody

should get or what somebody wants. Instead of asking great questions, you're shooting yourself

in the foot and you're potentially pushing away really good investors and you're robbing of

of an opportunity that they really want. Well, they can think it's too good to be true, but they

also could associate something like that with it being a high risk investment. When really what

we offer is secured by real estate. It's secured by an asset. And so it's much safer than most other

types of investments that they can get into. But we just have to know what it is that they really,

really want. And that only comes through great questions. And I think the people who are

committed and serious to what they're doing, even if you're brand new, you're going to take action.

If you're serious about this, you're raising capital all the time. And that doesn't mean you're

putting out pitch decks. That just means you're literally telling people what you're doing. And I

know me, you and Bill all just did this collective thing where we brought awareness. All we did

was bring awareness around what we were doing. Can you talk a little bit about that? Yeah. So Bill

created this this amazing challenge. It's 30 days to 500 K. And it's part of the the challenges

in the training that he he runs. And so there is an action that you will perform every day live

on Facebook. It can be short as 30 seconds. It could it could be longer and just simply talk about

what you're doing. Who you are is a human. What projects are you working on? What are you doing

in real estate? Why are you doing it? And you don't have to ask for money. It's not really about that.

It's really at the beginning. It's just about educating people about what you're doing.

And and I love this too because a new investor might think, but I'm not doing anything. Well,

the investor, when we talk to new investors inside the seven figure flipping community, it's like,

but you are doing you're in here. You're learning. You're listening to podcasts. You're watching

training videos, your network. You're doing a lot of stuff. You're not giving yourself enough

credit. You don't have to talk about doing what I'm doing. You need to talk about what you're doing.

You need to talk about I'm working on finding my first deal. I'm working on refining how I

analyze deals to make sure I buy the best deal possible. Here's what my minimum profit is going to

be. All these things that you're learning are the things, exact things you should be talking about

every day to as many people will listen to you. So they start that because that starts to build trust.

They start to see that you're serious. They start to see that you know what you're talking about

even if you're in your learning phase. And our members have such a great advantage because

they can talk about how they invested in themselves to educate themselves and learn from the best

flippers and wholesalers in the country to make sure that they're doing things the right way.

Okay, let's let's go into the market pulse and just talk about why raising private capital,

true private capital, not institutional, not hard money, but like borrowing from friends and family

and and other people who are like really close to your circle that are watching you, but maybe

you're not talking to them every day. In 2020, there was a global pandemic, which I'm sure many of you

remember, if not all of you, I don't know unless you're living under a rock potentially. But the

when the pandemic hit everybody freaked out literally the hard money, the institutional money,

it froze it completely froze. They were not doing loans. People's businesses were basically shut off

if they were only invest, they only had hard money. And we we talk about this a lot. Like I said,

hard money is not bad, but you need multiple layers to your capital stack. You got to have hard

money lined up. You got to start working on private money. You should have some business credit

lined up, some lines of credit. Like you don't need them all right now, but these are all different

buckets of money that you have to start working towards to create liquidity in your business

so that when a pandemic hits everybody else's sideline, you have a massive opportunity in front of

you. The even during that time, there was like a 30 day freeze where you couldn't get loans with

hard money lenders. However, even after that period for a short period of time, the amount of money

that you could borrow was less than it was before because they were insulating. They were protecting

their lenders. And so having private lenders gives you just so much more flexibility. If you had

private money during that time, you didn't skip a beat. You just kept moving through your projects.

Good operators and where you should be growing to you're you have you don't want to be emotional.

Emotional operators go out and they get expensive money because they have all this urgency and

desperation. A structured dial-in operator is building a bench of capital, whether it's private,

whether it's hard, whether it's credit, whatever it may be. And they're going to have optionality

that just regular investors who don't have the skillsets that they need in raising private money,

they'll never have that. And I always say this, there's two skills that if you have these two

skills, you can literally dominate any asset class. I don't care if it's residential flips, commercial

multi-family. The ability to find good deals and the ability to raise private capital will get

you heads and shoulders above anybody else in the marketplace. So with that said,

do I need to go and get four different types of capital or do I need a deep and certain types

of capital? How would you approach it? I think you should always have hard money available to you.

You never know when you're going to need it and it's good to have it available. But you want to

keep building your bunch of private lenders. Here's why. You never know what your private

lenders are investing in. They might have their own projects. They might also be investing with

multi-family. They could be investing with other investors. And so at the time when you need money,

just because you've borrowed from that person before, doesn't mean that that money is available now.

And so having consistent communication, giving project updates and ask them what their next

project is if they're willing to reinvest what their timelines look like are all very important

because you need to have the bench of people who are willing and able to loan to you at any time.

And I'm just looking at what we have right now for private money. And we currently

employed right now. I don't know if you know this, but we have $2.55 million of private money

employed across 20 or so deals that are we have active right now. Right. I just updated it

this morning. So you do know that number. Yes. And that didn't come from one person. That's not one

lender. It's, you know, it's spread across six or seven lenders of people who wanted the opportunity

to invest with us. And by the way, there are a lot of people right now looking for an operator

to invest with or looking, even if they have capital and they want to do their own deals, sometimes

what happens is it's, it's, it's really great experience for them to come in with an experienced

operator like us or somebody who's even just a little ahead of them, be able to invest in their

deals, see the mechanics of it, see how the lending goes, see how the money moves, and then set some

up later to potentially just run their own deals. And there's a lot of people like that that would

just love to be a part of what you're doing. Like you said earlier.

Yes to right now. The all new Audi Q3 made for the yes life.

Inside of what we do, there's things that are designed to help you do this in a structured way.

There's a blueprint. What to say, like what to talk about. And we just went through this. And

I would just be curious to know from your experience, like, did you just love getting alive

on Facebook every day for 30 straight days? Like, what did that feel like for you?

I was really nervous. As a matter of fact, I've kind of been avoiding doing it for a little while.

I just, I was afraid like, what if I say the wrong thing? Like, I can't delete it. I can't redo it.

It won't be perfect. And I was, I was pretty nervous. So like my first week, I, it cut out on me,

and I had to restart it. I actually said the wrong words. I, I called it a flip funding challenge

instead of 30 days to 500 K. So, but after that first week, it was really, it was okay. And

you know, what's interesting is that I had a lot of great questions about seven-figure flipping,

what we do from that. And so I was able to educate. I was able to talk about our projects where we

have these scrap and replace mobile homes. And a lot of people didn't know that's what we were

looking for. So we have more deals now coming to us because of that. And I had, I had some people

just asking us how, how can we invest with you? And so by the time I was done, the last couple,

I, I felt really confident. It wasn't something I had to work hard at doing. It's just that consistency

every, every day. What, what I, what I, well, I was nervous too, by the way. Like, I'm like, what am I

going to say even though it tells me kind of what I should be talking about. But what I found was

there were people who I knew on the fringes. And they, I said, and I would always invite them,

hey, I will have a call with you. We'll look at what you're doing. I'm happy to talk to you about

real estate. And I would get on these calls every week that I would do this. And sometimes somebody

would tell me their position, where their capital is at, what kind of return it's getting. And I

would, I would say, you know, I don't know if this is the right thing for you, but I would start

looking at X. And sometimes people would be like, Hey, I've been watching what you're doing. I

want to get involved. What's the best thing to get involved with? I'd say, Hey, if you're really

interested, I'll send you some information on this or we can have a deeper conversation. We'd

have a conversation. And then people would invest with us. Or they would get the information they

need to go on and do something else. Either way, it was a win for me because I got to help somebody

in the process. Right. Okay, let's, let's go into the field report. So you and I, we have a

myriad of projects going on right now, but we just went on to a project about was that a week ago?

It was yeah. And we bought five acres of land to two and a half acre plots. We tore down the

existing structures and we had brand new manufactured home delivered there. You want to talk about

that deal and like what's that experience been like? Yeah, this is this has been a new experience

for us. We've we flipped mobile homes. That's that's been pretty straightforward and easy. But

this is different because we are working now with getting permits, removing existing structures,

putting new mobile homes on and existing lot, but we have to replace subtics. We have to put in

wells. We have to replace electrical. All these things where we have to figure out the schedule of

what order are we actually going to do this? And how do we do it most efficiently? And so

it's been a new and interesting process for us. What would you say has been maybe the most

challenging part of this? I think anytime you go into something new, there are known knowns or

things we know. There are unknown knowns or things we know we don't know, but then there are the

unknown unknowns. And a lot of times that rears its head in terms of different types of cost or you

may cost assumptions so that you can continue with the deal. And then when the rubber meets the road,

you find out what the true cost are. Sometimes they're higher. Sometimes they surprise you

and they're lower. And then sometimes there are things that you didn't plan for at all. And you go

crap, how did we not know that that was going to be an additional thing? We assumed it was part of

this. So we kind of learned all of the nuance in doing that you could never learn. I mean, we have

people, friends, like people in our world that could literally tell us step by step what to do,

but maybe they're in a different county and the requirements were different for them.

So in our county, we found things out that we either have to do that cost more money or things

that we don't have to do at all. And what that did for us, at least for me, was it helped me to refine

our deal analysis model. How much we could pay for certain things. It helped me to refine our

buy box. What are we willing to buy and where? And that's going to go into future deals and

literally just make us better margins and be way faster at our next like three or four deals.

And then we'll be humming. Absolutely. I think for me, it was also sequence sequencing,

figuring out what order do we do this in? Because every day we use private money lenders for our

projects. But every day that we don't get something done in our properties, it costs us money.

And that takes away from our profitability. And so really figuring out the sequencing has been a

really valuable part of this project, because future projects will go more smoothly.

Yeah. And I think it's important to know that this is why time in this type of industry matter so

much. So let's say you take out a hundred thousand dollar loan and somebody lends that money to you

for 10% over 12 months. Over the entirety of that 12 months, that's going to cost you $10,000. So

that's a hundred grand times 10%. Okay. And that's over 12 months. So then you divide that 10% that

10,000 by 365 days. And that's what your daily cost is, though, just to hold the loan. Doesn't

mean doesn't count utilities as a count insurance. So you have to become really efficient as an

operator, because the faster you're in and out of deals, the bigger the margin, you're going to have

the safer your lenders are in that deal. So it's really important to us as operators to be super

dull in our process on the job layers and sequencing like you talked about to be in and out of these

deals as fast as possible, return the capital as fast as possible, and then turn it over again on

the next deal. Right. And then we have this other project. We're we're really still deciding what our

exit is going to be, whether it's going to be a flip. And we're going to do some work there.

Or we're going to demo it out. And we're going to put a new mobile home on the lot. And one thing

this week, we were a little surprised by turns out we have a rattlesnake living inside the unit.

I was wondering if you are going to go remove it. I'm probably not going to be the one to remove it.

Although it would make for great content, I also could potentially end up in the hospital,

which brings me to the point of risk. Rattlesnake risk usually doesn't go into my calculation,

but I look at all these deals through the lens of the risk. And what I like to do is I like to model

the different worst case scenarios for every exit strategy. And when you talked about we're looking

so we bought a deal with a plan. And it was a good plan. And then we start to learn new things

and we go, is it the best plan? What are the different worst case scenarios for this plan?

So you and I even over the last few days, we went through every scenario, all the different costs

we had are contractors pricing different things out. And then we start to get clarity on the numbers.

And we go, you know what? Let's explore this other avenue. So the upside might be less,

but the speed will be faster. And then risk could be less. Risk would go down. We get rid of that

deal. We make a little bit of money and then we go in and reset. We buy the next deal at

including all the new things we've learned. And now we increase our margin.

Yeah. And that's why it's really important, though, to when you're underwriting a deal,

to have more than one exit strategy, if you can, because then you have options. And when things

don't go the way you plan and you need to pivot, you can, right? If you're betting on everything

to go perfect and only one exit, that's a recipe for disaster.

For sure. And I think our investors love that we are modeling these worst case scenarios.

It gives them confidence in the deals that we're doing. Even though we openly will talk to them

about it, hey, we're either going to do this, this or this. Here's where we see the upside,

here's where we see the downside. And it just instills confidence in our investors. And they know,

we don't, we work really hard to be effective. Our rule number one is don't lose money.

So as long as we never lose money and we play the game enough times and long enough,

we're going to be way up, right? So if you, if you were to go to the roulette table or the poker

table and you lose 40% of the time, but you win 60% of the time, you just keep playing more.

You keep playing more and you're always going to be up because you're winning most of the time.

We're winning way more than 60% of the time, like 98%. So if you take all this stuff that we've

talked about today, the different risk modeling, like how important money is, the different bucket

some money. And then our own lessons learned, right? So we're very experienced, but we start a new

kind of asset class with manufactured homes. And it's similar, but it's not the same. And we learned

the unknown unknowns. And I think if we go back and say, what did you do to mitigate that? So if

you're a new investor, there's a lot of unknown unknowns, I'm sure. Well, first and foremost,

we did the thing. We didn't sit on it. We executed the strategy ASAP. We knew we knew as much as

we were going to know and needed to know to go. So we win. Then as we learn new things and maybe

cost went up on stuff, we didn't just like wallow in that. We went back. We repolled comps.

We looked at pricing. We said, where do we really think we can sell this right now? What if we

sold it as it sits today? That's one thing we thought about. That's something you should be thinking

about for every deal you hold. If I had to sell this today, what could I sell it for? So we looked

at that. You're still looking at comps. I think that's important. We didn't just look at comps before

we bought it and then stop doing that. We consistently have looked at comps since we bought it,

because other properties of clothes did not may influence our decision. And so that's really

important for everybody to do it too. For sure. And you buy it. You think you're going to make

a thousand a million dollars. And then you start to see comps selling for a hundred thousand

totally changes your decision lens, right? And that's an extreme example, but an example.

And or you might see like holy crap, we got a really good comp that we didn't have before.

It sold for three 10. We thought it was going to be 280. Now we have 30K more potential room.

And then what do you do? You look at that comp. You go, why did it sell for that much? Where is it?

What school district is it? And how much land does it have? Like what makes this one different

than the other ones? And then if you're real pro, you go a step further. You call the agent who sold

that. You go, what were your showings like? It shows you around market for 55 days. Like how many

offers did you get? Was this just one lucky buyer? Was this there was a genuine interest in this deal?

And that gets you to get clarity on where the exit strategy should be. And this is like the process

we are going through on these deals. Here's another thing to tracking what you're spending as the

project is going on. Don't wait until the end to get surprised by how much you spend and then

figure out if you won or lost in the deal, right? Like actively track how much money you're putting

in the deal and track that against your profitability so that you can pivot and make different

decisions if you need to. We literally looked at our deal today and said, how much money do we

currently have in the deal? What have we already paid for in this deal? From interest cost, surveys,

to inspections, to everything we've spent on one deal, add that up with what we bought it for,

plus all the closing costs, all this money we put in to understand what is in the deal today to

say, can we just sell it right now? If we sold it, what would we have to sell it at to make it make

sense? And not that we're even going to do that. We could just still go with plan A, the original

plan we had, it might be the best plan. But even today, we look at our deals and we go, what is the

most optimized thing that we can do? We're going through all these different scenarios that could

happen or have happened already. Because we track everything, because we plan out for worst case

scenarios, because we have that communication with our investors, it builds a lot of trust.

And what is that for us? So we do all that stuff, we continue to optimize, we continue to count

the pennies and make sure everything is optimized. What does that do for our investors with confidence?

And then because they build confidence, what does that allow us to get? Well, it builds confidence,

it builds trust. And we are very transparent. I mean, we just talked about the exact decisions

we're making in our business and it goes out online. And so our investors know the process,

the due diligence that we go through, the fact that we're on top of our numbers throughout the

entire project, so that we can make good decisions, which also protects them. So that gives us

more credibility. It allows us to continue to invest with these, these individuals on multiple deals

and not only that, they will recommend us to other investors. So we raise more money,

but what if you don't have a track record? We didn't necessarily have a big track record in this

asset class. What if you don't have a track record? I think you start with talking about the things

that will give you credibility. I gave an example a little bit earlier about if you're new to the

community and you're investing in yourself and you're learning from the best flippers in the

country, getting direct assistance, learning the right way to raise money and take really good

care of your investors, talk about that. That will start to develop credibility and trust. And then

as you get your first project, put that out into the world, tell everybody what you're doing, show

everybody how you're responsible, how you're tracking it, talk about all the things that we talked

about today. And that alone will build a ton of trust and credibility. And that is literally

building the track record that you say you don't have. I don't have a track record. Right,

you have to go build it. And that's the point. So let's say right now, one of our funding sources

dried up and we didn't have access to the money that we thought we would. What would we do? What

our business stall? Yeah, I think it's such a great question. The action steps that I would take

like immediately is I would open up my phone and I would start reaching out to people telling them

what I'm doing. Hey, I'm doing this and real estate, I have great opportunities. Do you know anybody

else who would be interested in potentially investing in something like this? And you just

just go do that for 10 people. But in reality, you probably have a thousand or more people in your

phone. If you really wanted it, you would start reaching out, not feel any shame about it because

you understand it's an opportunity. And then pro tip, how do you prevent that from happening?

Prevent the stall. You do this proactively before you need it and you you are constantly

ABR maybe always be raising. And I would say there's just like a couple, there's a couple things

you're trying to do when you do that reach out. Now your phone is one medium. You all have a

social media account. You go on to social media, click the go live button. And again, you just

start talking about what you're doing. I know everybody wants to over complicate this. They want

to think I got to have a track record. I got to have a fancy deal deck and a PowerPoint presentation.

And I have to understand every bit of the process before I touch anything. Well, if you do that,

you'll never understand any of the process because you don't gain understanding just from watching

and learning. You gain understanding from watching, learning and doing. And then once you do,

you learn again and the loop goes around. But if you just do learning, learning, learning,

learning, you're stuck in a learning loop and in a learning loop, you don't make money and you

don't get freedom. Just remember to people who want to work with you are doing not because they

know they like you and they trust you. It's not because you put together a fancy presentation.

So I mean, there's a lot to unpack there. And obviously in 30 minutes, we can't like give

every detail of exactly how to do this. But good news. We run a challenge. My partner, our partner,

Bill Allen runs a challenge where he teaches his entire playbook literally step by step on how he

does everything we just talked about. He also goes into how the paperwork works, how the transaction

works. He goes in exactly what to say. Like you can't mess it up when you go do this training

because you get the exact step by step playbook. So I would encourage you guys to check out the flip

funding master class that Bill is doing. There'll be a link in the description. Like always,

you can sign up. I think it costs the amount of a coffee from Starbucks. I think it's like seven

bucks or something. And the reason there's a cost to it is because if it's free, a bunch of people

are interested, but not serious, we'll sign up because while we love to provide value, we love for

you to actually do the thing and be successful. It's more important to us that you're successful

than it is that you just sign up for a court. So it's seven bucks to come. If you spend seven

bucks, you're way more likely to show up. You're way more likely to do the thing that Bill is going to

tell you exactly how to do it. So check that out at the link in the description for the flip

funding master class that Bill is doing. And I think that alone will give you the playbook you need

to master one of the two skills, which is having private capital available. And the next skill you

can work on is finding great deals. Okay. So look, I love doing this podcast. I love providing value

to you guys. I only have one favor to ask you. And that is I would like you to send us an email or

put a comment. If you're watching this on YouTube or in a place where you can put a comment, put a

comment below and tell us, Hey, this was awesome. And tell us what else you want us to go into. We do

so many amazing things in our business. And there's so many amazing investors in our community

that are doing really incredible stuff that we could totally come on here and give that value to you.

But I'd like for you to tell me what it is that you want the most or need the most in your

business today. And then I'll bring that to the podcast and future podcasts. So if you like this

episode, two things for you to do right now. Number one, if you need capital for your deals,

sign up for the flip funding master class with Bill Allen. And number two, tell us what you want to

hear on the future podcast. And we'll make sure we bring it to you. Thanks for listening. And I'll

see you on the next one. Hi, this is Farnoosh Tarabi from So Money with Farnoosh Tarabi. And

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