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[00:00:00] Sarah: Hello, listeners. Welcome back for another great week. My name is Sarah Karakaian.
[00:00:04] Annette: I am Annette Grant. And together we are–
[00:00:05] Both Annette & Sarah: Thanks for Visiting.
[00:00:07] Sarah: Let’s kick off this episode like we do every week, and that is highlighting one of you amazing listeners who is using our hashtag, #STRShareSunday. If you use it on Instagram, we’ll find you, and we’ll share you here in the podcast and to our entire email list. Annette, who are we celebrating this week?
[00:00:23] Annette: This week we are celebrating– I like that Sarah, @twinflowercabinky. Again, that’s @twinflowercabinky. And they have done just a phenomenal job with this cabin rehab. A couple of things I want to point out. One, amazing outdoor shower. Two, amazing indoor shower tile. Love the color.
[00:00:47] Sarah: I do like the tile.
[00:00:47] Annette: It is good. One thing that they’ve done that I haven’t seen very often, and it’s in their listing, they did a great job of styling the pullout couch. So they showed you where the table moves to. It makes a really nice side table. They’ve put the sheets and the blankets on it. So it actually looks very inviting and not just this pullout couch.
[00:01:11] They showed the before and after, and an aerial view, and a view standing. I haven’t seen that much, and I thought that was lovely. One other thing I wanted to note, and just a hosting hot tip for everyone, in their listing photos on Airbnb, and it’s styled wonderfully inside the bathroom in their laundry area, is a small first aid kit.
[00:01:34] And that’s one of those little things when people are swiping through, it’s the compound effect of really looking like your listing is where they want to stay. And when I saw that, it was in one of the small first aid kits with the red cross on it, and it made me feel safe. I noticed that. And so listeners, if you don’t have a first aid kit, please make sure you are supplying one to your guests. But well done Twin Flower Cabin KY. We need to drive down there and stay. It’s so close, but Sarah, let’s get on to this episode.
[00:02:10] Sarah: Annette gets schooled.
[00:02:11] Annette: I do, but I want to be schooled. And so listeners, when I get schooled, email us. Help us out.
[00:02:17] Sarah: No, Annette’s amazing at, and I try to be better at it every day, being super honest about what we can improve, how we can continue to work on our mindset. And so this episode is celebrating one of our speakers at TFV Con 2023. If you don’t have your tickets yet, you still have time to get an early bird ticket. Head to tfvcon.com.
[00:02:41] Our guest today is Bill Allen. He’s a CEO and owner of 7 Figure Flipping, a real estate organization based out of Nashville, Tennessee. Bill began his career as a Naval officer with 18 years of military experience and discovered through the avenue of real estate that his calling is leading others by helping them find their own success through networking and accountability. Bill is also a master at raising private capital. And that has been something that Annette and I have had to work on with our mindset. We have all these ideas. We’re incredible operators. And so we need to work with more private lenders to be able to do these deals
[00:03:21] Annette: We need the capital. Right.
[00:03:22] Sarah: We need the capital and listeners. We know that you do too, and opportunity is out there. And people with money want to work with you. So Bill is going to give us a taste of what he’s going to speak on at TFV Con 2023. But Annette, what was the promise he made at the event? What content he’s —
[00:03:39] Annette: Oh, yeah, that. People at TFV Con will be raising money. Before, he’s done– 50,000, $100,000. And trust me, raising money, you’ll see in this episode, is a huge fear for me. He had me believe, and I’m like, let’s go.
[00:03:54] Sarah: Yes, we will be there. We will be raising 50,000, 100,000 plus. Will you be? But with that, let’s work on your mindset. Let’s get you ready to raise capital for that next short-term rental project you want to take on.
[00:04:05] Bill Allen, we decided we have to say your full name. Welcome to the show.
[00:04:11] Bill: Thank you. I’m excited to be here.
[00:04:13] Sarah: You were introduced to us by one of our Hosting Business Mastery members, Tanya Rooney. Shout-out. And Tanya does not dish out compliments easily, but when she does, she’s incredibly enthusiastic about it. And she said you have to connect with Bill Allen, and you are gracious to meet with me on a Zoom call while you’re on vacation. But Bill, tell us a little bit about yourself and why raising private money has become such an important part of what you do.
[00:04:45] Bill: Yeah. First of all, Tanya is awesome. And I’m sure there was an expletive in there when she said something.
[00:04:50] Sarah: Yes.
[00:04:50] Annette: There was a few.
[00:04:51] Bill: We’re going to keep it G-rated on the podcast. My background was in the military. I was active-duty Navy pilot. I actually just retired on June 1st of this year, 2023.
[00:05:00] Sarah: Congrats.
[00:05:01] Bill: So I did 20 years. Thank you. Fifteen years of active duty or so. And then five years in the reserves. I had the opportunity to fly tons of different aircrafts, and I was a closet entrepreneur. I didn’t know I was an entrepreneur, but when I look back on it now, as a kid, I was always trying to turn a dollar into $5.
[00:05:18] And I was buying candy in bulk, breaking it up, and selling it to my middle school friends. And I did baseball card shows when I was 13 years old. And most of these guys were 40 years old at the shows. And I was always just hustling to try to make money. I was fascinated with money.
[00:05:34] I went in the military, just punched a clock, got a paycheck. Tried to save. I was saving like 60% of my salary every single year. As I got raises, I just saved more and more. And I wanted to be a millionaire one day when I was, I don’t know, 65 years old, following the 8% stock market growth and stuff like that.
[00:05:50] So that was my life. But I always loved money. I had no problem talking about money. I just didn’t really make a lot of it as an active-duty pilot. So then I found real estate, and I got really intrigued by that. I wanted to build a big rental portfolio. So I started buying rental properties one at a time.
[00:06:07] And I was watching HGTV TV shows around that time, the flipper flop type shows and stuff, and got me really into it. Reading forums, and blogs, and all this stuff. Just totally fascinated by it. And then I started flipping houses. So that was my entry. I bought a couple of rentals, fixed them up, lived in them. And then I’d move every year or two.
[00:06:27] I was in the military. I’ve moved 19 times in the last 20 years. So anywhere from nine months to– the longest I was ever in a house was about two years. And so it’s just constantly bouncing around from place to place. And so I was single for most of that. So I fixed up a house, live in it, and sell it. I mean, then rent it out when I left, and I buy another one, fix it up, rent it out, and just do that. And so that’s the beginning of the story. Started flipping houses, built a pretty big business while I was active duty.
[00:06:55] I started flipping and wholesaling. The first year, I did 67 deals after I joined a coaching program, probably a lot like yours, like the short-term rental coaching program that you guys have. You got these hosts that are like, you can build a portfolio really fast with a coach, and a mentor, somebody like that.
[00:07:09] So I got that in flipping. And, uh, I went from doing one deal a year to 67. Then I did 135 the next year. Then I did 187 the year after that. And I was doing 200 houses a year with a team. It’s a small team. And we were doing three and a half, $4 million a year. It’s crazy. And a couple of million dollars while I was at active duty.
[00:07:27] So it’s possible, if you have a full-time job, to build a pretty big business. It’s really cool. But the whole time, in the beginning, I didn’t know that I needed– money was always the thing that slowed me down. I didn’t realize that my mindset around having to use my own money. I was like, I was saving up money for a down payment on a house.
[00:07:45] And it would take me like two or three years to buy the next one because I was saving up another down payment. So my first house, I sold a car. I had a 2003 Ford Mustang Cobra. It was super fast. 600 horsepower. I loved it. It was my baby. It only had 3,000 miles on it, but I sold it to buy that house to put a 20% down payment on it. And then fix that house up, and rented it out, and I was out of cash.
[00:08:09] Second one, I took a loan from my 401K to put the down payment on that one. So I took my $50,000 out of my 401K, add up a little bit more money that I had saved up over the past two or three years from that rental, and saving a ton of money, and eating ramen noodles. And then I bought the second one. And then I ran out of cash again.
[00:08:26] And it’s just a consistent thing. And so when I got into this mastermind, this coaching program, I found a partner there, and we did these 50-50 flips. So he would fund all the deal, and I did all the work. I’d find the property. He was a rich guy from San Diego. And I was living in Pensacola, Florida, then.
[00:08:43] I was finding these houses on the auction website, and he would put all the money in. He’d just pay cash. I’d find them. I’d fix them up. I got the contractor, did all the work, and everything like that. And we flipped them, and we’d make 30, 40 grand, and I’d make 15 or 20. He’d make 15 or 20, and he gets to sit on the couch all the time.
[00:08:59] So that’s when I realized. I was like, man, if I had money– it’s not deal flow that was the problem for me in the beginning. It was money. And I started doing the math. We did 10 or 12 of those together, and I was like, gosh, I could be making as much money as I’m making in the Navy right now if I could just figure out where to find this money without giving up 50% of the deal.
[00:09:18] So that’s when I started just learning more about private money and using other people’s money, and just trying to become a master of that, because I think there’s two things. If you can control the deal, and if you can control the money. The reason why I was able to scale my business so fast– I threw out those numbers. Sixty seven houses, 135 houses.
[00:09:36] The reason I could do that is because I was able to wholesale a deal or close on the deal. It didn’t matter. When I walked in, I knew I could get the deal done. I think a lot of people are shy to do a deal, or say yes, or sign a contract because they’re not sure where the money is going to come from. And that slows down their growth.
[00:09:53] So one of my secret sauces to grow a company so fast was just I’ve never had question. I would just always say yes to deals because I would just go figure out how to get the money and get the deal done. And then what’s happened is, over time, I feel like I’ve become the guy that talks about money more than anybody else.
[00:10:12] And the guy who can raise money. I had to raise $8 million for a deal a couple of years ago. We were building storage units in Florida. This operator couldn’t raise money. We raised $8 million in two weeks to get the deal done. I got 50% of that deal. It was worth a million dollars to me.
[00:10:27] Annette: Nice.
[00:10:28] Bill: Over four years, after we build it, able to raise $8 million bucks in two weeks. Produced a lot of equity for me because he couldn’t get the deal done if he didn’t have the money. So there’s two parts. If you can master both of those, you can control everything. Sorry, I went on for a while, but that’s why it’s so powerful, to be able to be really confident in being able to find the money to get the deal done.
[00:10:52] Annette: Bill, this is exactly why we’re having you come to TFV Con and why we want to link arms with you. Will be vulnerable right now. That is my weakness. I don’t want to ask people for money. What if a deal doesn’t go through? My answer is never yes. It’s like, wait, how can I just come with all of the money? I don’t want to ask other people for money. But I know, when we can break through that, we’ll also have a huge breakthrough in our portfolio, in our wealth building because what we’re doing is working, but I know that this option is out there, and we want to find the right mentors, and we want to work with the right people.
[00:11:31] So the people that are going to come to our live event, they’re good. They are freaking rocking it in those short-term rentals. Or if they aren’t yet, they know they could. And it’s really, like you said, it’s the money that’s holding them back. Because it’s like, all right, I have a HELOC. I already bought this house. I need to have another 20%. I need to get this money in order to expand. So offer us that.
[00:11:52] Is it our mindset that needs to shift first? Is it we need to know the numbers first? Because I’m like, I want to know who my people are before I dive into these deals. Give us some of ABC, step one, two, three of Bill going from one house to 67, because something had to have happened there. Was it the mastermind? What was that linchpin that changed the game for you?
[00:12:13] Bill: Yeah. Before I go there, let me ask you a question. In your guys’s program, when you get somebody that comes in, are there trigger words that they say, or statements that they make behind their mindset that you just go like, oh my gosh, I have to fix this immediately to have a foundation start? And if so, like, what is it? What’s a trigger word that somebody says, like, I can’t, or this is not possible, or whatever? There’s something, right?
[00:12:36] Annette: Mm-hmm. It’s the timing of the investment. But when this happens is when they’ll do it. It’s always a little bit down the road. They need to be further down the road.
[00:12:45] Sarah: Perfect timing.
[00:12:46] Annette: Yeah. More perfect timing.
[00:12:48] Bill: Yeah. I need to know everything, A to Z. This time’s not right. I have a full-time job right now. When my kids move out. There’s some trigger word or statement. So you just said a trigger word to me.
[00:12:58] Annette: Ooh, what was it?
[00:12:59] Bill: You were like, oh, I hate to ask for money.
[00:13:02] Annette: Right. I know. And I even know that. I’m not asking for money. I’m making an offer.
[00:13:06] Bill: Oh, you’re triggered.
[00:13:08] Annette: Two trigger words in the same– yes.
[00:13:11] Bill: I hate asking for money. I hate asking for money. I distinctly remember one of my first conversations very early on in my money raising time. I mostly raise money from friends and family. So my dad was one of the investors, and my dad’s not totally loaded where people are like, oh yeah, this guy. Of course, he’s got a silver spoon.
[00:13:29] We had very little money when I was growing up. He eventually built a pretty successful company and had some funds that he was willing to invest with me. And so the early investors that are going to invest with you are people that already trust you. So you have to build trust. I remember distinctly talking to my aunt. My aunt Sandy.
[00:13:46] And so she lives right down the road from me now, but at the time she was in Virginia, and I was building my business, and a couple of our family members had become investors with me, and I’d done really well for them. So they start talking about it. And I remember talking to her. And growing up, my cousin’s name is Billy, and I was called Billy.
[00:14:05] My middle initial is Y, his middle initial is A. So he was Billy A and I was Billy Y. So for context, you’re going to need to know this story because she’s going to say something to me that, looking back, was a very pivotal moment in my money raising career. I was talking to her about this investment, and she said, Billy Y, if you need some money, I will loan you some money.
[00:14:28] And right then, I just went, okay, something is totally wrong in this conversation where she thinks I need her help. I am providing the help to her, not her providing the help to me because I have an opportunity that is unmatched anywhere in the marketplace that she could go out and invest her money with the security that I’m giving to her and the type of return that I’m giving with the confidence that I’m bringing it, and the trust has already been built.
[00:14:58] I was like, this conversation right here can never happen again. I am not asking you for money. I’m providing you an opportunity. This is a gift that I’m giving to you that can fundamentally change the future of you and your husband’s life by making way more money on your money with better security and no more up and down of the stock market. A fixed return, all this stuff.
[00:15:22] I said, it doesn’t sound like it’s a good fit right now. Now you know the things that I do. It’s great. But I tell you what, when you guys are ready to move your money from the stock market, when it’s just become too much for you and you want to invest in a secure asset that has a fixed return, that doesn’t have all the ups and downs and not all the pain that you’re going through right now, just give me a call.
[00:15:47] But saying that you’re asking people for money is like you have your hat off your head, and you’re holding it out, and you’re basically saying, could you please spare some change for me? We’re providing an opportunity. And the more confidence that you bring that opportunity to the table, the more they realize that, wow, this is an opportunity that I don’t want to miss.
[00:16:07] And so every conversation that I have now is about, I have an opportunity for you. This is for you. This is not for me. I’ll just go down the road and find somebody else to invest in this deal. And so a lot of times, what we’re doing is we’re coming into the conversation just hoping that they’ll say, yes. We’re desperate. We’re desperate for the money. And you can spell desperation. Can’t you?
[00:16:26] You’re two ladies that have probably been out on a Friday night, and you know what desperation smells like. That is not confidence. Nobody’s interested in that desperation. So for all of us, I think in our business, what we need to do is realize that our confidence, the trust that we build, and the confidence that we portray in our deal, in our business, and everything that we’re doing, it goes a long way.
[00:16:52] So I don’t ask for money at all. And if somebody doesn’t want to invest with me, fine. Their loss. I’m going to find somebody who does. So that’s the first step. The first step is the mindset piece. For most of us, it’s our relationship with money that we then project on everyone else.
[00:17:07] Annette: For sure.
[00:17:08] Sarah: Mm-hmm.
[00:17:09] Bill: Not all of us grew up with money. Not all of us even understand money. Not all of us can speak the language of money, the returns, compound interest. We are actually not that confident in our own financial world, and so now what we’re doing is projecting our thoughts of money and what we feel with money to somebody else and like, why would they invest with me?
[00:17:32] So I think we have to start in our own home in the beginning of like– and not necessarily. You don’t have to have a bunch of money at all to understand this, but you do have to be confident talking about money because other people just– you don’t have to be the most brilliant person in the room when it comes to finances. You don’t have to speak the language of financial brokers or things like that, but you have to be really confident in what you’re doing. And if they’ve could feel the trust and the confidence coming from you, then they’ll know that it’s a safer investment with you than somewhere else.
[00:18:03] So I don’t ask for money. I don’t ever ask for money. And I don’t even say that word. The phrase that you kept saying, I was like, oh. I was tweaking, trying not to interrupt you. So I think a lot of us, what we say is what we believe, just so you know. You’re like, I know that I’m not asking for money, but you just said it four times without even noticing that you were saying it, I bet.
[00:18:22] Annette: Absolutely.
[00:18:23] Bill: And so a good coach will hear that and say, that’s where you need to work on first. So Annette, that’s where you need to work on first. I don’t know everybody else that’s listening where they need to work, but I bet that they almost all of them are like, I hate asking for money. That’s what I hear all the time. I hate asking for money.
[00:18:42] Well, first of all, you’re not asking for money. And if you think that you are, you’re already starting from a weaker position. So I just went on for a long time, but that’s a huge problem that I see, is really the foundation that we’re building on is broken, and we don’t even realize it most of the time. The things that we’re saying, the way that we show up, the confidence that we bring.
[00:19:02] Look, you’re probably an amazing operator. You guys are great operators. People that are listening, you’re awesome at something that you do, and so somebody else wants to be a part of that. You have an opportunity that they cannot do on their own. There’s no possible way that they can do it without you. And so they’re the missing piece for you, and you’re a missing piece for them. It’s a great partnership.
[00:19:21] Annette: The next thing. When you’re structuring the deals, obviously, you’re you were just doing, like, these are the guaranteed returns. This is that. Right now, when you don’t have that history of those partnerships, when you were just starting out, when you were making the guarantee to the return to your partners, were you just going off your proforma? How were you actually guaranteeing that? I think that’s also like where I feel on wobbly ground of like, well, I don’t want to make a guarantee on the percentage back if I don’t really know if that’s what they’re going to get on this particular deal.
[00:19:51] Bill: Yeah, so that’s another word that I never ever use. Ever.
[00:19:54] Annette: Guarantee.
[00:19:55] Bill: So you guys here, if you go back and listen to what I was saying, I used one word specifically. I used fixed. So I use the word fixed. So I’m a secured investment with a fixed return. So those are the terms I use. I’m very specific because there’s a lot of SEC stuff that comes along this, right?
[00:20:15] Annette: Mm-hmm.
[00:20:15] Bill: And that’s another thing that stops people, is three letters. The SEC is like, oh, I don’t know the regulations, and all this stuff. I’ll tell you right now. I don’t like to say guarantee. I don’t like to say above average. I don’t like to say all of these buzzwords that really bother me. So very simply, I will secure it with a property, and you get a fixed return. Or I’m going to partner with you on the up and the down. So the syndications that we do, if we lose money, so do you. You’re a partner with me.
[00:20:44] But if I’m going to pay you a fixed return, and you’re going to get a monthly interest, or you’re going to get a balloon at the end, just where the interest accrues and I pay you at the end of a project, then it’s up to me to make more money than your return. I am on the hook for that legally.
[00:20:58] There are laws that are designed for us that our founding fathers made called bankruptcy that can wipe away that. I’m not the kind of guy that ever wants to do that, but we are protected by a lot of different things in the future. But making a security, creating a note. A note is just an IOU. I owe you this much money. And then I secure it to a property.
[00:21:17] And you guys know your numbers really well to the point where if you can pay 6%, 5%, 8%, 10%, and you’re like, oh, I’m not sure exactly how this deal is going to go, then figure that out, make sure your numbers are on, and then you got to do what you say you’re going to do.
[00:21:34] At that point, you got to be the operator. And a really great operator, I think, is going to do a great job. I mean, most of the time, we’re buying these properties at a great rate. We’re usually making way more than we think we’re going to make. You got your guys in the coaching program. They’re in there.
[00:21:49] They’re building up their portfolio. They’re understanding the technology that they can use, the different places to market these properties, the variable rates to adjust to make more money. And now, you’re paying a mortgage on that property, and a private lender, and you get to make the spread.
[00:22:06] So my answer to that really is, the better you can dial in your systems, and process, and build the numbers, and look at your proforma, like you’re saying, most of the projects I was doing were flips. I mean, I lost $70,000 on a house. My two lenders on that project never knew I lost a single dollar. They got paid in full.
[00:22:25] And 40,000 of that 70,000-dollar loss was interest that I paid to my lenders. The good thing is I had a business that was running really well. I made 150,000 that month. So when I lost 70, it didn’t crush me. I didn’t make as much as I would normally would have made. I probably broke even that month because I had to pay my staff, but it wasn’t my only project that I had going on. So I could lose 70,000. And those guys, they probably know now because I wrote about it in my book, but they didn’t know that I lost money on the house. They just know I sold it. I paid off the note with interest, and I moved on to the next one.
[00:22:54] Annette: I appreciate you sharing that.
[00:22:57] Bill: Absolutely.
[00:22:58] Annette: Because people go through all the numbers and the accolades, and it’s like, no, I biffed that one big time.
[00:23:03] Bill: Oh, there’s three houses that were high-end houses in Pensacola that I flipped. I lost 70 on one. I lost 50k on another. And the other one I made 10, but then I bought the house back in a lawsuit two years later. And I ended up losing $300,000 on that house.
[00:23:16] Annette: Oh, sorry. I laughed too soon.
[00:23:18] Bill: No, it’s cool. They were suing me for 50 grand. And I said, I’m not going to say that I did anything wrong. I’ll just buy the house back for everything that you paid for it. So I bought it back. And then I had a contract to sell it for 700 grand, and a hurricane hit a week before closing and wiped out the whole downstairs. $300,000 of damage. I ended up selling it to the same buyer nine months later for 300 grand less than what he was buying it for. It was crazy.
[00:23:41] Sarah: That’s a whole other episode.
[00:23:43] Annette: Yeah. That needs to be a book on its own.
[00:23:45] Bill: Yeah. I got a bunch of those. So to my point of guarantee, there’s many ways to skin this cat. It could be a partnership where you share the up and the down. That’s why I liked that 50-50 so much from the beginning. It let me cut my teeth a little bit. I wouldn’t have done it any differently. Let me cut my teeth a little bit. We shared the risk. So if we lost money, I was going to take half of the loss also is how I structured it with that guy.
[00:24:10] But you can take it where, hey, if we lose money, it’s on you, man. You’re the money guy. There’s a partnership like that. There’s joint ventures that you could do. There’s fixed rate type returns, like we talked about before where you’re– I mean, I use guarantee loosely. There are times where I’ll use a personal guarantee, and I’ll put my name on the line. With a personal guarantee, if they’re really risk averse, and they want and need that, I don’t recommend it. But I do that sometimes to just back it up.
[00:24:34] But in the beginning, I think that the main part of that question is when you’re getting started. When you’re getting started, you really have to go to people that know, like, and trust you already because you don’t have a track record. And the other thing I always recommend is if you can pull your track record for somewhere else to this, all you need to do is build trust and confidence.
[00:24:53] So if you were managing a multi-million dollar portfolio for somebody else in your W-2 job, or you were in acquisitions, like I was a test pilot for the Navy, so I would do like multi-million dollar acquisitions contracts, a 100-million-dollar acquisition contract. So I could take that experience. I managed a $100 million for a project in the military. I’m pretty sure I can manage a 300,000-dollar house for you.
[00:25:16] And so taking that confidence in who you are, and your background, and your resume, and just moving it over to another industry is very easy. I had a nurse that I was coaching who was nursing for 30 years. She was the highest level instructor as a nurse could– to teach somebody how to do things in five seconds. Came over to start flipping houses, and she was like, I have no confidence. I was like, who are you? Break out your resume, read it, and just take the confidence that you have from here. It’s very simple.
[00:25:44] It’s the exact same thing. You’re managing people, you’re managing projects, you’re doing the same thing. There’s some tactics and terminology that you don’t know that you have to learn. And so I think a lot of people, if they can do that, they take the confidence, and the resume, and the tactics from the things they were doing before and move it over into the current industry, they’ll be more confident from the beginning. And so you’ve managed probably money, other people’s money, things like that. It just hasn’t been your payroll. It hasn’t come out of your pocket. And so it’s the same thing. You could just do it like you do in your corporate job, possibly.
[00:26:14] Annette: No, that’s a great tip, the looking back at your resume. I like that.
[00:26:18] Sarah: Let’s get people excited to, whether it’s face their fears, or change their mindset, Bill. What are advantages of raising private money for the investor? What are some things that they get to take advantage of?
[00:26:33] Bill: So specifically for the investor, the best thing that you can do is help other people. If you can help other people get what they want, you’re going to absolutely get what you want. What I love is I love, at the end of a project, sending somebody’s money back and being like, hey, I’m sorry, I don’t have another project for you.
[00:26:48] And they’re like, wait, what? You’re giving me this money back? I don’t want this money. Take it back. What else do you have? Or when people are knocking on my door, like, hey, when’s your next apartment coming up? I have money. We just sent back $3 million three weeks ago, and people were like, what? You sold that building? What’s going on? Is everything okay? I don’t want this money back.
[00:27:09] And people are getting 200 grand back. They invested a 100, they’re getting 170 back, and they’re like, oh, what can I do with this? Where can I put it? Do you have something else? And so it allows me to do more deals that way, help other people. And the benefit for them is they really get to see real returns. They have an actual asset that they can look at.
[00:27:30] The cool thing is for you guys, let’s say you’ve got a private lender in one of your deals. They get to tell all their friends that they’re involved in real estate. They get to tell all their friends that are watching the TV shows or doing all this stuff. They’re playing poker on Friday, and like, oh, yeah, I’m flipping houses. This is what they say.
[00:27:45] My investors say, oh yeah, I’m flipping houses now. It’s really cool. And so they feel like they’re part of the story. They’re part of the event. You can send him the property, send him the address, keep him up-to-date on that stuff, some social media posts about it. And like, man, that’s my house right there. I’m the mortgagee. I’m the bank on that house. And they get to be a part of it, and without having to do any of the work. No tenants, no toilets, no calls in the middle of the night. It’s such an easy pitch for you guys.
[00:28:11] It’s like, hey, you know what? Somebody is going to check in. There’s might be a fire in this property. They’re going to call me. They’re not going to call you. You’re going to get your check every month. It’s going to be awesome. I’ll take care of everything. It’s the easiest way you can make money. So just formulating that story.
[00:28:23] And then for me, the best part for the investor for you is it opens up so many doors and opportunity. The fact that it’s so hot– people think it’s so hard to raise money. It’s a good secret for the people who can, because if everybody thinks it’s hard to raise money and they don’t have any money, then you can get in on any deal that you want.
[00:28:43] If you have the ability to raise money and you have that superpower, people are knocking down your door to do deals. I tell you right now. There are so many apartment syndicators that want me to be a GP on their deal, a general partner, to come in on their deal because I have the ability to raise money. If I had $500 million right now, I could put it on the street in probably two hours. No joke.
[00:29:04] All I have to do is post on my social media right now. Hey, I got $500 million. Who’s got a deal? And it would break the internet today because there’s so much money out there. The Wall Street people don’t have a problem raising money. There’s stupid money in Wall Street. There’s stupid money in VC money right now. And there’s billions of dollars of unused IRA funds, and 401K, and retirement funds right now.
[00:29:26] And they just don’t understand that– there’s a mismatch in people that have deals and people that have money. They’re just not talking to each other. So a huge opportunity for the investor themselves. If you can learn this skill and build it up over time, you can just get involved in whatever you want. There’s opportunities and doors that open everywhere. Even if it’s not your money.
[00:29:46] Annette: Let’s go, Bill. I’m ready. I’m ready for you to hit the stage. I’m there. I’m there.
[00:29:53] Bill: I’m ready too.
[00:29:54] Sarah: I think about not having to deal with banks, not having to deal with the time it takes to qualify or to make sure that my project’s a good fit for the bank. That whole painful process, I get to completely avoid, correct?
[00:30:07] Bill: Oh, bank is another trigger word for me.
[00:30:09] Annette: Yes, we’re three for three. Nice job, Sarah. We’re trigger hacking.
[00:30:14] Bill: The underwriting. Oh my gosh. You pull my credit.
[00:30:18] Sarah: The feeling of being judged.
[00:30:20] Bill: Oh, I’m sorry. I’m sorry. We don’t have the appetite for that right now. You did two weeks ago. You don’t anymore? No, that bucket’s full. Sorry. If you have any storage, maybe I can lend on that. It’s horrible. Oh, the rates have changed. DSCR. That drives me nuts. So, no, you don’t have to do any of that. Literally, I call a guy, send a note mortgage, I get a wire to my account the next day. They could send a title company, send it to me. So here’s an example.
[00:30:47] We do owner finance houses in Kentucky. So we buy houses in Kentucky at– some of them are pretty cheap houses. Some are a little more expensive, but the ARVs, the after repair values, are no higher than maybe 140 to 190, somewhere. Definitely not over 200. And so we do a lease option with the buyer, and then they pay rent.
[00:31:09] And hopefully, eventually, they buy the house. Usually, they move out. They give up their option. And then somebody else comes in and buys it. And these are people anywhere from like, I had a divorce, and I don’t want to buy a house right now too. I don’t have good enough credit to buy a house, but I have a lot of cash. Or I don’t want to deal with banks. I’d rather deal with you kind of stuff.
[00:31:26] Let’s use an example. I just bought a house. I think we bought it for 50, and we put $30,000 into it. So we’re in it for 80. All in for 80, maybe 85 with closing costs and all that stuff. Directly from a seller. So no realtor fees or anything like that. So 50 grand, but we’re going to put 30 into it. 80,000. The ARV on it is 130, something like that. So we got good equity in there. And so what I do is I go get a private money loan for 85% of the after repair value. So 85% of the ARV. Let’s see. Math. 130,000 minus 15%. It’s 20 grand less than the ARV.
[00:32:03] So I’m getting a loan for 110, 000 on day one when I close on it, when I buy it. So I have built trust with my lenders that they’ll give me $110,000 when I buy a 50,000-dollar house. So I get it by the 50,000-dollar house with closing costs. I get 60 grand in my operating checking account when I buy it. I put 30 grand into my rehab account, so it’s there, ready to rehab.
[00:32:25] That’s his money. It’s going into the rehab. And then I pay myself $30,000 when I buy it with his money. And so a bank would never do that. A bank would give me 70 to 80% of the purchase price. We have lenders that will do 100% of the purchase price and 100% of the rehab banks. But then they’ll do a draw, where I have to have the money ahead of time to do the draw, right?
[00:32:48] Annette: Mm-hmm.
[00:32:49] Bill: And then they’ll only be in, I don’t know, 70% loan to value and maybe– I have banks that will do 100% loan to cost. But I’m doing the draw system. I’m paying points. I’m paying all that stuff. He doesn’t even know what a point is. I’m paying 8% interest, and I’m just making a monthly payment every single month on his $110,000. So every month, he gets his 8% on $110,000. So 8% annualized. So I’m just making a normal payment to him. We fix it up fast. We get a tenant in there.
[00:33:19] Then the tenant pays us 10 or 15, 20 grand. Put that in our bank account. Now I’m at 50 in my account. And then they’re paying monthly, and I’m making the spread on it. So that’s the beauty of what private lending can be versus a bank. And I could get that deal today, close it in two days, three, however fast we can do the title work, and get it closed and funded directly to the title company or directly to my bank account.
[00:33:45] Sarah: Even when you said the word bank, you were like, bank.
[00:33:49] Bill: Ugh, the banks. I mean, I have to have relationship with banks. We got to use them. We’re buying 10, 20-million-dollar properties, but our syndications are the same way. We’re not coming out– I mean, I’ll put my own money in, but I’m buying equity. And we got to raise a couple of million dollars in capital on top of the bank’s money just from partners.
[00:34:08] So there’s lots of ways to do this. And I think people, they make it more difficult than it needs to be. It really is simple. If we can simplify things, we can understand them. We can do it. And you don’t need a fancy lender packet to give to them. You don’t have to build up all this stuff. You just got to talk to people about money. I look at myself like, I am a financial advisor that has no certification. So when I get on a phone with somebody, I’m just like, hey, how much money you got? Where’s your money now?
[00:34:38] Annette: Mm-hmm.
[00:34:39] Bill: What are you doing with it now? Why are we on the phone? Why did you reach out to me? Why don’t you just keep it in the stock market? Oh, I hate it. It’s up and down all the time. I’m watching it. Oh, I just don’t– okay. So it’s the same thing as talking directly to a seller, finding out their problems. We work really hard to get deals and negotiate, but then we like lay down for our lenders. It’s like, I just do the same thing with a lender. Like, hey, what would life be like if you had a fixed return then? I got money at 6% interest right now.
[00:35:10] Annette: Nice.
[00:35:10] Bill: I had 4% interest money in 2018 to 2021. Now they’re getting 31/2% interest in a money market account, so I really can’t negotiate 4% or 5% as easily anymore. So anywhere from six to 9%, 10% is– that’s like bank money now. My bank money is seven or eight.
[00:35:35] Annette: So my last question is, we’ve got listeners, and they’re like, you know what, I’m happy with my portfolio. I think I’m doing okay. What is a why though? What could be the difference maker? Obviously, if we don’t know, we don’t know what we’re missing out on. No pun intended here. What can you lend our listeners of like, if you haven’t tried using other people’s money, why should they? What’s the difference maker if they feel like they’re exactly where they need to be?
[00:36:04] Bill: That’s a tough question because in my mind, if you’re– everybody’s got a different business model. I really don’t want anybody to fit into my goals, my plans, my dreams, my vision. So if you have a dream, you have a goal, you have a plan, and you feel good with where you are, my personal advice to that person is good. Cool.
[00:36:24] I’m not going to push you to do more, be more, grow more, expand, scale, do all that stuff. However, most of us do this for freedom. We want financial freedom. We want time freedom. We really want the freedom to do what we want to do, with who we want to do, when we want to do.
[00:36:40] Ultimately, as far as everybody I’ve ever talked to, really, that’s their why. They say it’s their family, all that stuff. When they say it’s their family, I say, all right, well, you got little kids. If you had 10 million dollars in your bank account, would you stay home and change your diapers all day, every day?
[00:36:53] And they say no. They say no. I’d still work. So then I was like, well, it’s not really your why then. If you really truly find what that is, there’s a next level opportunity for all of us usually. And it’s either more impact. There’s something there. And money, specifically money, which I really like talking about, obviously, it allows us to have that freedom.
[00:37:13] It’s really the scoreboard for everything that’s out there in society right now. And the people that have a lot of it, a real lot of it, I’ve been around some of those people before. They have different concerns and worries. Money’s only going to amplify the problem that you’ve already had in your personality, in who you are, and all that stuff.
[00:37:31] So if you weren’t a good person before you had money, you won’t be a good person when you do. But the people who are really good people that have a lot of money, their life is pretty good. It’s really awesome. They can just do whatever the heck they want, whenever they want, with whoever they want.
[00:37:43] They can say no to things. They don’t feel stressed. So if you’re good where you are, that’s fine. But if there’s something clawing at you of like, hey, I need to grow– I really want to grow. I want to grow. Not I need to grow. Not I should grow. I want to do more. I want to grow. I think having access and availability to money.
[00:38:02] And also, I really think impact is the next level opportunity for everyone out there. Once you feel like you’ve hit a level of I’m good, I feel like that’s selfish. I personally feel like I’m good is really selfish because what about everybody else around you? What about your family? What about your friends?
[00:38:19] What about your warm network? What about all the people you come in contact with? You have this secret sauce that they don’t have, and they can’t do that you can really help them be good. And when you help them be good, then you are going to be really, really good. So I feel like a lot of that– I can retire today.
[00:38:39] I feel really good about where I’m at, but there’s a next level impact that’s possible to unlock and help other people do a lot more. And when you get a taste of that, I tell you what, when you get a taste of helping somebody else grow their portfolio, make more money, go on vacation and say, it’s just because of the deal that we did together, I was able to go on this Disney cruise, and they send you a thank you note and a picture of their family, it’s like, whoa.
[00:39:04] That’s next level stuff. That’s a drug that I’d like to take every single day. So I think if you’re good, a lot of times it’s a little bit selfish. And I think that unlocking the opportunity and the ability to do this for somebody else and make money is the key. So I’d just push you to go do that.
[00:39:22] Annette: Awesome.
[00:39:23] Sarah: Bill, you’re going to be at TFV Con 2023. There is still time for our listeners to grab a ticket and get their butts to Columbus, Ohio. What can they expect from you when you hit the stage?
[00:39:37] Bill: Yeah. So I’m a systems and process guy. I have a mechanical engineering and aeronautical engineering background. I love to build out systems and process. So I’m going to give you the exact system and process that I’ve used to raise $30 million in the last two years. I will give you everything that you need to know.
[00:39:53] I’m also a hold nothing back kind of guy. I’m an open book. I’ll be there. I’ll be able to answer questions, whatever you guys need. And it really is a foolproof, easy way. You don’t have to build a bunch of documents. You don’t have to go get an MBA. You don’t have to do all that stuff.
[00:40:10] It’s layman’s terms, super easy. I will do my best to speak at a third or fourth grade level, so I can understand it and so can everybody else. I’ll make it really easy to go out and raise money. And if you do what I say, you will raise money that day. You will raise money that day for your business.
[00:40:28] Annette: All right, let’s go.
[00:40:29] Sarah: That’s worth more than the price of admission alone. So Bill, we cannot wait.
[00:40:32] Bill: Ten times, 100 times. Seriously. I bet people in your audience, by the end of the day that day, will have raised between 50 and a $100,000 each.
[00:40:41] Annette: Nice. Let’s go.
[00:40:42] Sarah: Bill, if people want to find out more about you prior to our event, where can they do that?
[00:40:48] Bill: So I have a podcast called 7 Figure Flipping, this wholesaling and flipping real estate marketing podcast. And then, uh, I’m on Instagram, and Facebook, @billallenrei.
[00:40:57] Sarah: We can’t thank you enough for your time today. We cannot wait to see you in September. Listeners, with that, I am Sarah Karakaian.
[00:41:03] Annette: I am Annette Grant. And together we are–
[00:41:04] Both Annette & Sarah: Thanks for Visiting.
[00:41:05] Sarah: We’ll talk to you next time.
