Episode 124: Raising Money for Your Business with Susan Lassiter-Lyons

Okay, we're rolling. You have two options, Susan. You can hoot and holler with us when we start up. We love that. Or you can do a Chewbacca imitation and avoid that.

Horrible.

Do you have a preference?

God, yeah. I'm just gonna banter with you because I don't know if I fully trust my Chewbacca.

Oh.

Oh, then you have to try it. I'll do one if you want.

All of ours are so crappy.

Horrendous.

Yeah. Want me to do one first?

Yeah, you're the one who does the good one, Mike.

I know, I know.

Oh, yeah. Soon. Why don't you do yours, Christina?

I can't do it.

Try it. Okay.

Okay. I mean, mine's too high.

Oh, my God. Sound like a dying donkey or something.

Mine's too high.

No, it's a roll.

It's.

You have to do the gut back here. It's like the German.

I can't roll my Rs.

I can't roll my Rs either. Like, here's what happens. Like, I'm always like, I can't roll my Rs. Who can do that?

No, I can't roll ours. Here. Mike McCalvic, you're the winner of the game show.

Thanks for playing.

I'm going to Mexico next week, and I'm visiting Rodrigo and all of my friends down there, and I am going to struggle because they always make fun of me and my inability to roll Rs.

I can't do it.

I roll it.

You can do it, though. You could fake do it, but at least it's not.

Totally rolling. Your R's here. This is. That's as good as my R's get rolled.

Oh, my gosh. Well, none of us will make it in Mexico or Spain.

Nope.

All right, well, yeah, on that note, welcome to the Profit first podcast, episode 124. Oh.

Oh, man.

Come on, Susan.

There you go. Oh, she got a hallelujah button. Yeah. Screaming out there.

Welcome to the show, everybody. Everyone, we're happy to have you. We're gonna talk profit. Is that okay with you? Well, we're gonna do it anyway. My name's Chris Curran. I'm the founder of Frack the Recording and Pause youe Life.

And I'm Mike Michalowicz, the author of Profit First. That book kicked off this show. Yes. And I've had books subsequent to it, including Surge and the revised and expanded version of Profit, first released by my buddies over at Penguin.

Yes.

It's coming out this February 21st, I believe of 2017. You can pre order. Yeah. And I'm joined in the studio by Christina Bulduk.

Hey, Christina.

Often mistaken for a Chewbacca imitator with her sound. And you, listener, you're listening to the Profit first podcast. This is the show where we explore all elements of profitability, from writing a profitable book to running a profitable crowd campaign to. What we're gonna discuss today is how to raise money, private money, for your real estate business. So that too can be profit.

That's right.

Our website is profitfirstpodcast.com. if you go to that website, profitfirstpodcast.com you'll see all our previous episodes. You'll be able to link to itunes and Stitcher and tunein radio. Basically, wherever you listen to podcasts, you can find our show. So definitely subscribe and you can leave us ratings and reviews as well. And of course, on this show, yes, we talk to experts and normal people, normal entrepreneurs and business owners who have had great experiences about profit. And then we give our takeaways after. After the guest is done, we, Mike and Christina and I give our takeaways. And this show's about profit because revenue might be for everyone, but profit is for. That's a tough one.

The next bun in the oven.

Shut up.

That was horrible.

That was awesome.

There was nothing there.

Yeah, nothing there. It's okay.

That's the definition of winging it, guys, right?

That is the definition of winging it.

We don't script it ever.

No, nothing. It was horrible. Hey, Chris. What have you been up to?

My brother, you know, I'm gonna climb a 14er.

No way.

Well, look, don't get all excited. I'm not using like ropes and ice axes and crampons. It's literally like you can actually drive up to about, about 11,000ft elevation and then walk like the seven mile trail to the top. So it is a 3,000 foot elevation gain, but it's pretty easy on a trail and it. But it's still, you know, a whole day endeavor and it's. Climbing at that altitude is not so.

Easy to discredit yourself.

Yeah, that's pretty amazing.

Yeah. Yeah. What have you been up to, guys?

Dude, my son Tyler, my oldest son got his job at a local zoo.

Oh, nice.

Turtleback zoo. Which is a pretty big zoo. So he, he is studying herpetology, which is not the spread of herpes like I thought. Like I. It's the study of reptiles. And he aspires to work at a zoo. That is his passion. I mean, he smiles Ear to ear. Every time he talks about snakes and stuff, he got the job. Reptiles are awesome. Next time you go and you see that guy cleaning out the snake exhibit, that's my son or Chewbacca, because he kind of looks like Chewbacca. It could be my son or Chewbacca.

Oh, geez.

Yeah. What have you been up to?

I'm super excited that our new offices are within walking distance of two theaters. The Daris Theater is right across the street from us. And then literally, like, two blocks up is the Opera House. I need to start talking to people and start inching my way in. Yeah, it was the best commute ever.

Oh, my God. The Daris Theater, you know, Bob Hope performed there. George Burns performed there. Has a great history. The Opera theater or the Opera building is now just offices. I believe they just restored it. The exterior to, say, the Bouton Opera House, but definitely goes to the Daris Theater. And who knows? That building's for sale. Maybe.

Do you want to buy me a theater?

Yes, I do. Crowdfunding. All right.

Hey, Christina.

We had an amazing guest.

Yeah.

Oh, I'm sorry, Christina. By the way, Barry has. Has been in the same position as you. He wanted to get into a couple theaters. So what he did was his. His strategy was to walk in and look at the owner.

There's no activity.

Look at this place.

No giggle, no nothing. Yep.

And then.

That's a great tip, Barry. Thank you.

Yeah. I got to see some gig. I got to see some giggle. We have an amazing guest coming on. One second. But we gotta thank our corporate partners. I'll give you more details on that in a second. You know, and we gotta start sneaking in, guys. I have a strong suspicion when I go into my ramble about these wonderful companies at the end, that people are skipping over it because I skipped over it. I was listening to one of episodes. I'm like, oh, my God. I have to hear about this.

Well, that's different.

Make me laugh. Make me laugh, boy. Dance, monkey, dance. So I just want to give them a shout out. And then, Chris and Christina, your job is to integrate them as you see fit. In our episode today, I want to thank snextiva.

Oh.

Voice over IP phone system receipt bank.

Oh.

The ultimate efficiency tool for scanning your receipts. Zero cloud accounting Fundbox.

Oh, Jesus.

Could there be anything greater? Yes, One more funder. Oh, my God. Now you're ready to do your fourteener. You know, that's horrible. For God's sake. Oh, do we have a shout out? Do we have a shout out?

Yes, Give me a second. My computer just went black.

Oh.

So this is a comment on our Amazon page for Profit first from Mary D. Schuyler. And she said for her 63rd birthday, she spent three days with Profit First. She's been in business for seven years and while not suffering the debt cycles of entrepreneurs described in the book, she was always anxious about money. And she said finally figuring out how to work all her different bank accounts and having that relief makes her feel like she's finally a grown up businesswoman.

Oh, yes, yes. Good for you. Good for you.

That is ink. Great.

Yes. Her name is Susan Lasteter Lyons and she is the most sought after private capital consultant in real estate. You know who number two is? Christina, you.

No.

No one knows who number two is.

I don't know.

Because they are so far behind Susan.

Right.

That they don't even come up there. And in their bio, you read their bio, it's like, you know, I am Joe Blow. I am the second most sought after private Catholic consultant.

She's kicking the dust up.

Yeah. She's famous for structuring investments that provide an excellent return for investors without giving up equity or control of the company. She's raised 26.2 million. Stick that in your crowdfunding. 26.2 million in private capital from debt part to fund hundreds of deals. She is also an author of an Amazon number one bestseller called Getting the Money the Simple System for Getting Private Money for your real estate deals. Susan, welcome to our show.

Thank you so much. I love being here. You guys are awesome. This is great.

Oh, thank you, thank you. You may not feel that way after.

The crowd's going wild.

Hold on tight because you may change your mind. So why does, why do people need to raise money for real estate deals? I don't even get that part.

So here's the thing. Real estate investors are a different breed. Right? When you're buying a home to live in, to put your all of your belongings and your beautiful children and your fluffy dogs in, it's one thing, and banks love that. But when you're a real estate investor and you're doing this as a business, they don't like that so much. So real estate investors have a really tough time getting funding from what we call conventional funding sources like banks, you know, like the bank of Americas and the Wells Fargo's and so forth. They put a lot of restrictions on us as to the number of financed properties that we can have, which is, you know, depending on who you use, anywhere from 4 to 10. And if you're going to grow and scale a real estate investing business. Obviously, if you stop at four or 10 properties, that's going to really impact your profitability. You know, we're all about profit first. Can't make a profit that way.

So no, wait, how is that, how is there a cap on how many properties you can own? I don't understand that.

Yeah, Fannie Mae and Freddie Mac, that's who you have to thank for that. Here's the thing, the regular underwriting protocols for owner occupied properties, which is just our residences, the places where we live, have to do with our ability to repay the loan. So if I make enough money and they run my debt to income ratio and they think I'm going to afford this house and they'll give me the loan, but unfortunately they underwrite residential investment properties that way too. So now I have to have all these cash reserves and I have to have enough income to support. Right. And offset any vacancies in these residential investment properties. That's dumb, for lack of a better word. It's just D u m dumb all day long. And so what we look to do if we're going to use a conventional funder is look for banks, usually those smaller community banks or sometimes credit unions that are going to underwrite a residential investment property just like a commercial property, meaning they're going to look to the cash flow of that property first to see if the cash flow of that property can pay the mortgage or what we refer to as the debt service on that property. So I think there's a, just inherently, you know, Mike, kind of like you discovered a flaw in the accounting system, right. That you were able to share with all of us. I think that's a major flaw in the funding system for real estate is that banks and conventional funding sources try to underwrite investment properties just like they do your primary residence. And so that kind of skews things and that's why they have those limits in place.

Okay, that makes sense. How do you, as a real estate investor, how do you analyze the returns you're going to get the cash flow? How do you do that prior to making this investment?

It's a really simple equation. It's really, it just has to do with what we call the net operating income. So you just take the income from that property and you know, that can be obviously rental income, but you can put some extras in there too if you're going to charge for laundry or something like that. I know that I had a triplex a three unit property once and the rents were okay. I kind of tested the waters with raising rents a little bit and I got a little pushback. So I thought, okay, I need to figure out a way to earn some more revenue here. So I went to a used appliance store and bought a used coin operated washer and dryer and set it up in the basement. And then I had enough quarters to play just about any video game in any arcade across the country that I want on a regular basis. So yeah, it's just taking the income from the property and subtracting the expenses and what you're left with is the net operating income. And what lenders look for, right. Is what they call a debt service coverage ratio. So they want to make sure that the income right from that property after all the expenses are paid can exceed your mortgage payment by usually a factor of about 20%. It's really simple.

Okay, so then how do you find these lenders, meaning if it's not the traditional lenders, who are the ones that understand it's about cash flow and will actually look at the deal that way?

Yeah, so you have to go with what I call portfolio lenders. So, you know, I talked before about conventional lenders. An example I used was like Wells Fargo and Bank of America, Chase, like these are all the big name banks that everybody is, everybody knows these banks. They all underwrite to the standard guidelines like that Fannie Mae and Freddie Mac put forth. And that's old way in that way that I don't think is fair or right. So we want to look to banks who, and I should back up a step. The reason why they have those protocols in place is for the kind of the end game. Right. So like if a Chase bank or a Wells Fargo originates a loan, it's like they're not, if they make me a mortgage loan from my home, they're not going to like keep my loan on their books at their bank. And I'm not going to like be able to go to my neighborhood, you know, Wells Fargo and hand them my mortgage payment every month. They're going to sell that. First of all, they're going to pull my mortgage up with everybody else's mortgage, right. That they've closed that month or that quarter or whatever, or even that week, depending on how much volume they're doing. And then they're going to sell these off as a security. They securitize them and sell them off to the secondary markets of Wall Street. Right. One of my first jobs in mortgage finance was working in secondary marketing for Pulte Mortgage and I worked in secondary marketing where we were packaging up these loan pools and securitizing them and selling them off to the highest Wall street bidder. And so Wal, when they're buying a package of loans, they want all of these loans to be the same. Right. They want like every loan in there to be underwritten to the same guidelines. So they want similar credit scores, they want similar cash reserves, they want similar debt to income ratios, similar property types, so forth. What we're looking for is a bank who's not going to securitize and sell that loan off to the highest Wall street bidder. We want, you know, that old fashioned bank who's going to keep it in their portfolio and they're going to service that loan and they're not going to sell it off. And what we do there is we look for what I call portfolio portfolio lenders. And those are those smaller local, sometimes regional banks and credit unions that are going to be local to the property. Right. So if I live in Denver, but I'm investing in Tampa, Florida then I want to identify a portfolio lender that's going to be in Tampa, Florida. Because these guys are interested in their own community, their community based lenders.

Oh, and will they, if they originate the loan, which I don't know the term now, does that mean that they're the founder or the starter of the loan?

Yeah, that means that they take your application and then you know, they, you know, they request all the documents from you and they process it and underwrite it and they give you the final approval and they close it and they, you know, they're the ones.

Is it their money, is it the local credit union's money that they're using their money?

Yeah, absolutely.

And do they hold onto these loans for the entirety of it?

Typically, yeah, usually. And that's the beauty of it, right? So they don't follow, the majority of these guys don't follow those rules, the restrictive rules of Fannie Mae and Freddie Mac just because they're not securitizing these things and selling them off because they're keeping them on their own books and they're servicing them. Them can make the rules. And so oftentimes they have these in house credit committees that set up these rules. And there are some super smart, you know, portfolio lenders like these small banks and credit unions who understand that an investment property loan is a business loan as opposed to a mortgage loan. Right. So they underwrite it appropriately, looking to the property first to see if the property, the Income and the profit from the property can support that mortgage payment as opposed to, you know, the income and reserves of the individual.

So the people deciding, it's a committee who decides if they should approve a loan or not, is that correct?

Yes.

Okay. Is it the same people? Do they approve real estate loans and business loans and auto loans?

Yeah. Yeah. Well, it's not probably the same person. Right. Because they're going to have different departments within the bank so that they have like a credit card division or an auto loan division that's not going to be in the business loan division. But yeah, you know, you have the people. And here's an example for you. I work with tons of people and obviously have done this myself. And one of the things that we like to do is seek out and establish these relationships with these local lenders first before we even start any real estate investing activity in a certain area. Because once they get to know us, right. Then it opens up a whole other host of lending opportunities to us. Once we do a couple of deals with them for investment properties, then we can start talking to them about business lines of credit. We can start talking to them about, I call it a master loan commitment. Other people might call it guidance lines. Right. If you really want to scale your business and your real estate investing operation, there are a whole host of other goodies, you know, that they can make available to you. Once you start that relationship, do you.

Have any secret tips or tricks to influencing them? I assume if I go into my local credit union, say, hey, I want to buy real estate and here's my intentions. If it's new to them, they're going to need more information and more education and I presume sometimes is new to them. What can I do to put myself in the best light in seeking out a loan like that?

Yeah. So you put together what I call a credibility kit. And the credibility kit really is just your personal financial statement. It's going to be a list of your real estate owned, usually accompanied by a rent roll. Right. If you are a landlord and have what we call buy and hold properties so that they can get a sense of how your property's cash flow or don' and then a little, I call it a real estate resume. It's just a simple kind of executive summary, just a one pager of your experience in real estate investing, a little bit about your investing company and what you hope to accomplish, you know, over the next whatever year, two years.

Can you meet with the committee? Could you ever go in and say, listen, I wish I met with one person here, I got to talk to the whole team and tell you what's going on. Would they ever let the doors open open to you in that way?

No. Chewbacca guards the doors and you cannot get in. See, that's what happens every time. No, the. So here's what happens. You work with somebody within the bank, the banker. And he is the one that will take your case and make your case to the credit committee. Trust me, I've tried to get into those meetings and you know, those typically are closed meetings. I've never been able to pitch directly to the credit committee.

Okay. Yeah.

I wonder if these local bankers are factoring in this new thing called Fundbox, which is. What is it, Mike? It's a cash Excel.

Yeah, it's a cash flow accelerator.

Cash flow, Phenomenal. Right?

Because you can use it with your rental people.

Really?

Renties? Yeah.

And your renties, that would be like tenants.

No, I call clearly, Susan.

Your renties.

Yeah, your renties. You're the Landmaster.

We're gonna try to make men quit trying to make men quit trying to make renti happen.

You are so. You are so. 2000. No, it's now Landmaster and Renties.

And the truth is, I'm not sure it's gonna catch on the box.

If your renties aren't paying you in time, you don't have to go and break legs anymore, Susan. Now you just use funds. They'll release the funds to you in minutes.

Cool. Minutes. Are you serious? This is very cool. I'm gonna have to check this out for my piece.

Yeah, no, they really do. They honestly do. They actually do. And when you call them at Funbox, you know, check out their phone on.

Your next Eva phone on your next.

Step, when you call them, tell them you heard about them on this show.

Yes.

And ask for the $75,000 cash reward now. Yeah, they don't offer any discount, anything from us. So we're telling you people who are calling Funbox just ask for anything. Who knows? May they'll fall for it.

Wow. I like it. I mean, I just thought I was gonna come on here to have some fun, but. 75k?

Yeah. You'll be richer.

Yeah, totally.

I'm not promising that. They'll probably laugh you off the phone, to be honest.

They would never do that.

But, you know.

You have to ask. Nothing happens unless you ask.

I'm into that.

I'm into that.

Hey, if I'm doing real estate deals, you know, I've actually seriously have been considering it for myself. Down the road, is there a way to get started? Do you start small, build your way up? Like, how does someone new to the real estate space go into it profitably?

Great question. There are a couple of ways that you can do it. You know, like for myself, I started as the accidental landlord. I had a house and got involved in a relationship and we decided, hey, let's take this to the next level a year later and move into one of our houses. And my house unfortunately lost the contest and wasn't the one that got moved into. And so I had an extra house, which is kind of cool. I didn't necessarily want to sell it. I didn't have that much equity in it at that time. So it wasn't going to be that great of a deal for me. So I decided to rent it out and became the external landlord. Started that way. And then I kind of progressed to some different strategies, like tax lien investing, where you can go to some of the local tax lien auctions and you can bid on past due taxes, you know, tax liens that they put on properties and you can hold them for, you know, a year or two. And if they redeem and somebody pays the taxes, then certain counties will pay, you know, up to like 16 or 20% interest for the redemption of those tax liens. And I mean, I've tried just about every strategy, but I think that the majority of people kind of get involved either by becoming the accidental landlord the same way that I did and realizing, hey, this is cool and I want to go out and acquire more properties to put more, more tenants in to increase my portfolio, or they decide, hey, I'm going to study a specific strategy like tax lien investing or apartment building investing, and they kind of go for it from that perspective. So there's lots of different ways that you could approach it. It just really depends on you and what you want this sideline business to look like. And you know, how you want to profit from it. You know, if I, if I tell you like, hey, get a property and be a landlord, I mean, some half of the people are going to like be like, gross. There's no way I want to deal with. And we call it the three T's, tenants, toilets and trash. And then there, you know, 50% of the other people are going to be like, hey, that sounds like the best thing ever. I can't wait to like be best friends with my tenants and teach them how to talk like Chewbacca. So who knows, you know, it just depends on you.

I have an Opinion about this. I like Landmaster better than Landlord.

Actually, I kind of like Landmaster too. I really do. I mean, it's kind of growing on me. For sure.

It is growing on you. And you go into a bank and say, I'm a Landmaster. Oh, God. You're a what?

It's like guaranteed approval. Hello. And you know how I couldn't get into the credit committee before? That's definitely gonna get me into the credit committee this time. Landmaster.

If you think about technically, like if you watch a movie, if someone's a lord, they report to the master. Yes, yes, master, Right. So you can say, I'm a Landmaster. And they'll say, is that like a landlord? You say, no, no, we're superior to landlords. We're Landmasters. Hey, is there any no no's, Susan? Like, do not buy real estate and then do Airbnb, at least when it comes to the lending, because that is such a variable type of tenant that it's too risky. What are the no nos?

You know, Airbnb is interesting. I love Airbnb and I have several friends who are making a killing buying investment properties specifically, you know, to put up on Airbnb. Unfortunately, it's illegal. So there's in certain areas, not, certainly not in every municipality. But I know here in the city and county of Denver, you are allowed to offer your primary residence as a short term rental, but you're not allowed to do less than a 30 day rental on an investment property. And so the people who are doing this aren't compliant with the laws. And I know that some of the more tax strapped municipalities are going after some Airbnb people with investment properties, with levying fines and so forth. So just check the laws. Just whatever your planned use for your property is going to be, make sure that it's copacetic with wherever this property happens to be. So that would be one. The next one would be as far as no no's. You know, there's a certain strategy, and this is super advanced, but there's something called the due on sale clause. And sometimes with creative financing, like if we buy a property and. And instead of like renting it to a tenant, if I want to actually sell this property using seller financing so that the deed to the property actually transfers to the new buyer instead of staying in my name. But I still hold the note, right? And I can collect the cash flow, which is a great strategy, by the way. What we're doing is we're creating a wrap mortgage, we're wrapping that underlying financing. And that underlying financing usually has the clause that says, you know, if you do something like this, if the, if the name of the property owner changes, we have the right, but not the obligation to call this loan due immediately. And it's called a due on sale clause. And I know it causes a lot of paranoia sometimes for some of the more creative investors out here that are utilizing those types of strategies.

Is it smart, I'm again thinking from the new real estate investor, is it smart to start off one property, build your reputation with the lender and then go for more? Or is it better to, when the deals are hot, just get as many as you can.

When they're hot, get as many as you can. But here's the thing. Let's take this out of the context of talking about it in terms of a lender, okay? Because we've talked about my love of these portfolio lenders, these local banks and credit unions, but I mainly use these lenders for what I call takeout loans or refinances into permanent financing for properties in my, in my portfolio. The way that I like to acquire properties either one at a time or in bulk, as you've just described, is with what I call private money. And that's really kind of the, you know, the one, two punch. We use investment partners, capital to acquire the properties and make any improvements needed to these properties and get them what we call stabilized, which just means that, you know, they're in rentable condition. We have a tenant in there, the tenant is on a lease, they've been paying for a couple of months, and we feel stable in this property. And then we look to that portfolio lender relationship, our, you know, friend Chewbacca over the credit committee and say, okay, now there he is. We want to take this loan out, meaning we want to refinance this private money partner so that we can take that cash and go back and acquire another property. Does that make sense?

Wow.

Yeah, it does.

That's our strategy.

Yeah, it totally does. And you specialize in raising private money?

I do.

Does that mean. Well, I assume it doesn't mean these federal credit unions or other, these are wealthy individuals or who was private money even mean?

Yeah. So private money, it's an interesting term. Private money just means non institutional money. Okay. So it's like the complete opposite of like the Wells Fargo or the Chase Manhattan. Private money just means that you are utilizing a private individual or, you know, they can be like an entity like a smaller LLC or a hedge fund group or something like that on the institutional side, but you're raising private capital to fund these deals. And typically these are from individuals. There's basically like three buckets of private money that you can utilize. Bucket number one is, you know, if you're familiar with raising capital or the capital stack for any kind of business, it all starts with first. It starts with the founders round, right? So that's if I'm going to look into my bank account and see, okay, I've got like a hundred, couple hundred thousand dollars I can afford to buy a house of cash. That would be funding it. As the founder, the next stage that you go to is seed, um, and so seed capital usually comes from that friends and family bucket. And that's the first bucket. Friends, family, acquaintances. You're going to, you know, Uncle Bill who has, I don't know, a couple million dollars in an IRA or a 401k, and if he can roll it over to a self directed IRA or 401k, then he gets the ability to stroke a check and invest in all sorts of fun things as opposed to just the standard mutual funds and other stock investments that are available in that IRA or 401k. So it's, you know, the first bucket is working with Uncle Bill, Grandma, your next door neighbor, the guy at work, somebody who wants to make a bigger return on their money than that money is currently making.

Aunt Matilda.

Matilda. I haven't talked to her yet.

So that was our buzzword, you know, from last, last episode.

Oh, okay.

Yeah. Do you actually. Did you guess the buzzword for this episode as we've said it? Just get one guess.

I want to say. Chewbacc.

No. Well, that was you. You were saying that over and over. No, it was something that we said. You were very close though. One more try.

Okay. Landmaster.

Oh my gosh.

I got it.

I did it. I never get the answers right. That's awesome. Cool.

Landmaster, we interrupted you right in the middle of the third, explaining the third bucket.

Okay, so bucket number two, I would say, here are the three buckets. The first bucket of people to approach to invest in your deals on a private base basis are your friends and family. Bucket number two is people who are already investing in real estate. Right? So if you're a real estate investor, it's a good idea to go to like local meetups and local real estate investor association meetings and, you know, just kind of hang out with other real estate investors who are local to you, because there are going to be people in that group who are investing in real estate who have Cash. And they want to put that cash to work. That's actually where I met my very first private money investment partner. His name was Rick. I met him at a real estate investors club meeting and he had about $300,000 that he was able, you know, and willing to deploy into one of my deals. And we ended up, you know, we've worked together for man, like more than what, 20 years now together. So bucket number three then is going to be the people who are already making loans to real estate investors. So in real estate investing, if somebody can't get a loan from a conventional bank like the Wells Fargo's and the bank of Americas, then the next thing that they kind of default to, which I think is a shame, is what we call a hard money lender. Have you ever heard that term?

I have not.

Okay, so hard money lender, it's a very popular term in real estate investing and basically what it means, it's a, you know, a person usually or a very small company that makes loans specifically to real estate investors. And these loans are probably the most like usurious loans that you could ever see. I was a hard money lender in my market. I went and raised a ton of capital and was making hard money loans which are short term loans to real estate investors in my market. And I was charging, Are you ready?

Yeah.

Four points and 15% interest on a six month term.

Hot diggity dog.

Hot diggly dog indeed.

Wow. You know there's a fourth bucket which is, which is, which is getting your book. Getting the money.

Oh yeah, there's that too. I talk about the buckets in the book.

Book, yeah. So tell, watch, tell us as we wrap up here, where can people learn more about you, Susan, and also pick up your book?

Yeah, sure. So visit my website. It's the Investor insights dot com. That's my main company hub website. And as you know, we're a training and coaching company for real estate investors. I got a really popular blog there, so be sure and check out some of the articles and that'll give you some information on my book as well.

We gotta hook up Susan with Billy Ann Greg. Do you recognize that name at all? Billion.

Say it again.

Billy Ann Greg. Okay.

Billy and Greg Grig.

Greg Griggs. Yeah, I swallow like every word I say. But Billy and Grig, could you make a note of that? She's in the real estate space, but she only, she's a bookkeeping. She does all the bookkeeping for real estate investors.

Awesome. I would love that. My people are always Asking for bookkeeping, referrals.

Okay. She's phenomenal. So. All right, Susan, you passed the test. You figured out Lamb Master.

Master.

There you go. That's. Say.

That's exactly how I'm gonna say it. Thank you for having me. I really appreciate it.

I've had a lot of fun, by the way.

Yeah.

Me and Barry were there when Mike and his wife were actually talking about real estate investing up a storm.

Profanity is left. Every second word was a hip word.

Well, welcome to the day in the life of a real estate investor.

Oh. All right. Now we're going to discuss in just a moment what Chris and Christina, what we learned. I want to thank our corporate partners. You know what? We snuck them in there. We did Xero, though we didn't talk about. They're a cloud accounting software package. Check them out. They're the most advanced cloud accounting software on the planet. But, man, is it simple to use receipt bank. Scan those receipts that are piling up on your desk or in that shoebox. First of all, why do you have a shoebox? Aren't we past that stage in life?

No.

Got your little. Little collection of. I don't know what you have.

Collector's items.

Collector. You get a collection of collector's items in there? Well, use receipt bank scanner. Next, Eva is voiceover. IP FundBox. We talked about their cash flow acceleration. You got an invoice, they'll pay it for you. And then Fundera. One stop loan funding. Chris, what'd you learn today?

Well, look, I'm not in any position to begin real estate investing, so this, it's not. I'm kind of not ready for all this conversation, but I really liked it and I really followed it, obviously, especially the learning about Landmasters and Renties. But I like the idea, like, I like the idea that there's the big banks and they do it one way, but there are a lot of other options. And I think maybe a lot of people, especially me, didn't realize that you have so many other options than just the regular bank.

So for me, it was just. She said it's almost a side comment, the way to generate additional rental income. So I asked about the cash flow analysis and she said I couldn't raise rents. People were going to leave the place. So I added a laundry machine downstairs and that started generating some money. There's a lot of these additive benefits you could plug in to generate more positive cash flow. What about you, Christina?

Well, I'm right there with Kris. I know next to nothing about this field But I think it's kind of brilliant of taking a private money vendor, taking their investment, the capital to stabilize the property, and then use the portfolio lenders to refinance to acquire another property. If you want to keep building on and on. I think that's brilliant.

I know a guy in Hoboken. His name is Jim. I won't say his last name. Just. I don't know if I should or not, but his name is Jim. He would. He would buy two buildings in Hoboken. This is when in the 80s and 90s, he'd buy two buildings in Hoboken. Then he would flip one and use the flip of one to buy two more and hold one. So he kept on, and he subsequently had, I think, almost a thousand apartment units through all different buildings, you know? Yeah. Very wealthy guy, very successful in real estate. I'm not ready for it myself either, but I'm starting to get curious about it because it's good. What they call passive income. It's money without work. Well, besides cleaning toilets and taking out.

The truck, the three T's. And I'm sure there's more T's involved as well.

Well, there's so many teas.

Yeah. All right, Chris, we gotta start wrapping things up here, bro.

I know this has been a really good episode. Again, just a lot of food for thought. And, you know, I always love looking at the next higher level, and in this case, it's 10 levels above for me, because I always feel like in my business and in my life, thinking on those higher levels actually pulls me up towards them. So even if you're listening to this and you're not ready for all this, this helps. Trust me, this helps broaden your mind and make you aware of all these other things. And, you know, one day in the shower, it's gonna hit you like the fourth T, like the water. You're gonna realize. You know what I mean? So you can find all our episodes@profitfirstpodcast.com you can also comment on this episode. So if Susan said something you didn't get, or Mike, or you have a question for anybody or a comment, comment on this post, and we want to know what you learned. You can also rate and review our podcast and itunes and Stitcher and all that. And we didn't mention the project I'm working on, which is pause your life. Just go to pause your life dot org. You can find out all about it. I'm really psyched about that. And you know, Mike, the work you're doing over there with Obi Ron. I mean, I know you have lightsabers, and the average business does not have lightsabers at their disposal.

Dude, I can pull them out.

Now.

Listen to that, huh? See?

Profit First Professionals. Tell them about that real quick.

Yeah, so I mentioned Billy Ann Grigg. Well, who's Billy Ann Grigg? She is a Profit First Professional. She was a successful bookkeeper who joined our organization, and now she's a wildly successful profit advisor who also happens to do bookkeeping for real estate investors. That's why she's a perfect match in this case. I don't care what industry you're in. Maybe you are a real estate investor. We have a resource for you, Billy Ann, Greg, maybe you're into your own pizza shops. We got a resource for you on the West Coast. Maybe you're into something you shouldn't be into. Oh, then don't join us. But otherwise, we got resources for you. Go to profitfirstprofessionals.com. step one. Step two. Click on find in the top left of the screen. Click on Find a Profit First Professional. Fill out the information about your business. We will find someone who will drive profitability in your business. They know the language you're talking, they know your industry, and they happen to either be a bookkeeper, a coach, or an accountant. Those people that you need, anyway, they are first and foremost profit advisors. So do it now. You got no excuse.

There you go. Profit First Professionals dot com. Hope you can go there and click Find and at least check it out. I mean, you know, go poke around Mike's website. It's fascinating. Fascinating. And there's funny pictures of him as well, which I don't picture him with phone cords wrapped around his neck and clocks hanging from his neck like one rapper. Well, your name is Daddy Fat Back. But thanks, Mike. Thanks, Christina. Thank you, Susan. And thanks to everybody over there in the background at Profit First Professionals, including Obi Ron Kenobi and the Hawaiian Lumberjack and all the other nicknames you have. Have people with me.

Kravitz is the new one.

Kravitz.

Kravitz is in the house. Mo.

We'll see you all next week. Enjoy your profit journey. We're right here with you. Take care, everybody.

Go.

Sam.