Hi everyone, my name is Liz. I'm so excited to be back here with all of you. I'm one of the
co-founders of the DeRosa Group. I'm also one of the co-founders of the Real Estate Investher
show and community. We just publish a book called The Only Woman In The Room. There's a lot
of exciting things we're doing over on the real estate Investher side. I'm also very proud of all
the things we're up to in the DeRosa Group. So I'm here, I'm going to be doing more and more videos
here on our YouTube page. And I'm going to be talking about various topics that I'm passionate
about and that I have knowledge about. And today's video is going to be about everyone
knows people with money, and I'm here to remind you of that very important tip and teach you a
few things to get really your wheels turning about raising private money. I know [Matt 00:00:42] is
the expert in this space and I know he does a lot of videos on this. I thought of it this morning,
I'm presenting on something later in the week, and I said, you know what, this is a really
good video for our subscribers and the folks that follow us on YouTube to just get reminded of that
everyone really knows people with money. And sometimes we don't think that, but we really do.
And where you find that and how do you position yourself. So that's what we'll be talking about
today. I'm actually going to share my screen. I've put a few slides together for all of you.
Okay. So again, excited to be back here with you. You'll be seeing a lot more videos from me
on our YouTube channel. And if any of this speaks to you, the men, the women, obviously
our mission on the real estate Investher's side is just to empower women to live a financially
free and balanced life. So if any of you, this sounds interesting, you're watching it on our
YouTube channel here, you can check us out over on the real estate Investher side as well. It's
therealestateinvesther, H E R, .com. Okay. So everyone knows people with money. And
I do believe that wholeheartedly you, you, yes you who's watching this and listening to this,
know people with money. Number one tip, before you can think about the people to
potentially work with as a private money lender or equity partner, you need to know the type of
money that is out there. And I'm just going to remind you of a few things on that, okay?
Number one, really basic stuff, but really important stuff, especially for people who are
newer to raising private money. There's two real key types of private money. Number one is private
equity and the other one is private lending. So equity. The simplest way that I explain equity
to you is somebody has ownership along with you. They may have 10% ownership, you may have 90%, you
might have 50, 50 ownership. It could be 70, 30. It really doesn't matter in terms of the split,
but they have equity. They have a partnership with you, in essence, in that real estate project, in
that LLC or whatever entity you own that property with, they have ownership along with you. So what
does that mean? That means you win together. That means you lose together. They're not necessarily
lending you money and then they want their money back, that's not how this has worked. There's
an operating agreement, the business entity gets formed as an operating agreement that you really
need to have an attorney review and help you put together and it's laid out there what your
role is, what their role is, are they a limited partner, are they an active partner, are they
a passive partner. All of that is laid out in an a really good, effective operating agreement.
So my point in sharing this with you is equity is all about ownership, okay? So they have $100,000
and they put that $100,000 in that LLC that owns property A. Okay, they didn't lend that money to
you, they actually own it with you. They own that property along with you according to how
you spell it out in the operating agreement. So that's number one equity. And that strategy can
be used on large deals. Our first private equity partner was we had bought two single family home,
row homes along with him. He put in 50,000, we were both active, we had different roles,
but that was our first private equity partner. He put 50,000 into the project
and we put zero money into the project, but we did other really important things and we
had roles and responsibilities and laid that out in the operating agreement. And we own that LLC
together. He didn't lend us that money. The second way, though, that's listed here
is private lending and that's more of the classic approach if somebody has $100,000, they lend it
to you for an agreed upon interest rate, as well as a certain term, an agreed upon time of that
lending happening, whether it's six months, nine months, twelve months, two years, whatever,
but it is a certain amount of time that's established, certain amount of money that's
obviously being lended, and obviously the terms, the interest rate, et cetera. Again,
that's all in writing. That's all put in writing so that the lender's protected, you're protected,
same as equity. So I just want to get that in your consciousness. One's more like a lending,
they have no ownership. They're literally just lending money. They're getting their money back
plus their interest rate. Equity is something very different. Now they very well, you can
write it into the agreement with equity, how this works and the timeframe, all that, but again,
that's laid out all in the operating agreement. On the equity side, lending is laid out more.
Another important documentation that you need. I'm going to move on though. I just
want to get that into your consciousness real quick. I'll just remind you of that.
So there's three sources of money. The one that's most obvious is cash, right? People have cash to
either partner with someone, blend to them, or become an equity partner.
They have money in their retirement accounts. Again, if they have money in their self-directed
retirement accounts, they can really work with you within that fund. They can either
put that money into a long-term rental project, we've had people with our apartment building
complexes that we've syndicated, they've put their self-directed IRA money into that type of project,
or they can lend it, right? Again, same thing. They lend the money,
agreed upon interest rate, et cetera. So they can either be equity partners or lenders and
it comes through their self-directed IRA. Again, huge, huge opportunity there to work with people,
to help them invest their money in different things beyond just the stock market.
So third thing is equity in your home or equity in someone's home that they can potentially then
invest with or invest with you. In a simple way, it's called a HELOC, home equity line of credit.
It basically means that the amount of money that your property is worth is a lot more than the
amount of money you owe on the property. Okay? So you work with a bank on that, et cetera, you
can either do it with your own home and invest in your own deals, or it could be worked with where
someone has that home equity line and they invest that money into your deal. Either or, again,
all things that need to be obviously very careful, very protected, everything in writing, all those
sorts of things. But those are three sources of private money. Just again, remind you of that.
So tip number two, everyone knows people with money, okay? Everyone knows people
with money. You do and I want to get it into your consciousness around where to find it. So
three great tips. Number one, people that used to work for a great company, usually a larger company
that had a really strong retirement planning, retirement accounts, maybe they matched money
or somebody may have put money in, but then they match that amount of money, but that the people
don't work there anymore. And they also usually worked for them, this great company, for more
than seven years. So they were established, they had a lot of time to potentially put that money
into their 401ks, which then could get rolled into self-directed IRA. So then that person,
obviously the name of it's self-directed, they can kind of direct that money where they want it
to go. Not just real estate, they could direct it in a lot of places according, obviously, to those
guidelines, but real estate's one of them. The other third tip is finding private monies.
I can't tell you how great it is to work with people who have self-directed IRAs. You're
creating a win-win, giving them an alternative to invest in and you are being able to fund
your real estate deals. These folks are always hosting free workshop conferences. Start getting
involved because what's fascinating is when you start to get involved and you start to network,
people that go to these events have money to lend, have money to invest and you're somebody
who's maybe looking for funding. Again, could be a great partnership, great opportunity for you.
Last thing I wanted to share with you on my video today with you is, think about your inner circle.
So many times people say, no, I don't know anyone with money. And they just don't realize,
right, how many people are in their circle that might have that money. For example,
there's a psychological term. Friend's talking to you and says, I bought the new white Nissan SUV,
call it whatever you want to, and you're like, that's funny, I've never actually saw that one
before. I didn't even know Nissan had a new SUV and I didn't know it was out already,
what kind of thing. And then you talk and you move on your day and then the next day you're driving,
right, and then you look and you see that car that your friend just told you they got. And
then later in the day, you take another ride to go pick up your kids and you see that same car,
the white SUV that's brand new. Again, did that mean all these white SUV's that were brand new
type of models that appeared in your life the day after your friend told you about it? No.
Your awareness was peaked so of course you're going to start to see it because
that is just the beauty of that in our lives. So it's the same thing with this. If you start to
think about, I know people with money, I'm just not seeing them right now, people are
going to start to appear for you, not out of thin air, but because they're in your circle.
So a few things I want you to think about when you think about people who have money in your
inner circle. Number one, your neighborhood. And your like, in your neighborhood? I'm not going to
talk about this with my neighbors. You want to start talking about what you do in investing
in real estate with everyone. Again, not salesy or pitchy or weird. Obviously if you're in Target you
don't go up to people and start talking to people. That's weird, right, most of the time. I mean
you're just in a conversation with someone and it comes up naturally in flow, it's not like this
weird thing that you're just talking to everyone about with what you do. You could start talking
about what you do in a very natural way that does not seem pushy or reared, okay? There's a finesse
to it. But your neighborhood, your neighbors. Number two, restaurants and stores. One of our
biggest private lenders of our projects came from someone who owned a pizzeria right down
the block of our office building. We went in there almost weekly to get our lunch for the day. Me and
my husband would be talking, he'd be like, "what are you guys up to these days?" And we would tell
them what our projects look like, what we were doing. We just started to get into a relationship.
And six months later, one day we went in there and got our slice of pizza, he goes, "you know what?
Next project you got, tell me a little more about. I might want to lend you lend you money on that
project." It wasn't like we were pitching this guy, we just kind of started a relationship,
got into what we talked about, got into our project, started sharing
what we were up to and look what happened. Coworkers. Obviously you want to be careful
there. You don't want to pitch your real estate side project to your coworkers because that's
not appropriate. But in terms of knowing your coworkers, getting into relationships, it's all
about getting into relationship with people, right? Being able to share what you're up to,
what they're up to, and again, looking at opportunities to create win-wins.
Number four, volunteer groups. If you're active in a group, and again, all this is a little,
sometimes tougher, in the age of COVID and not being able to see people as much,
but still you're still able to connect with people. And there's just maybe more online,
creative ways to do it, okay? Social groups. Whether it's something where
people are part of a country club, those sort of things. Or they're not part of a country club and
they're just part of a local volleyball club. You never know who's part of these different groups.
We underestimate who we're always around. We just think people who have money are
going to flash their money. Those aren't the people you want to work with. It's the very
hidden people that have money that are looking for investment opportunities. They're not going
to just tell everybody that, most people who have that, but they want to build relationships,
they want to work with people they trust and like and work with someone who's going
to protect their money most importantly. Other group is religious groups, church group,
et cetera. I got into a conversation with somebody, we go to church. Again, what we do,
those sort of things, and one day they came to us and said, "you know what? Your next deal,
we'd love to partner with you." Again, you never know how powerful that might be.
College, grad school. One of our first private equity partners came from,
I reached out to someone I was very good friends with in grad school and I said, "Hey, I'm going to
be in the city, this was New York city many years ago, for some training, I'd love to grab coffee."
And he was someone we always had interesting conversations, good networker. And we, over lunch,
we're chatting and talking. And he said, "what are you up to now?" I said, "Oh, my husband and I are
buying rental property in Trenton and renovating them and what have you." And he goes, "that's
awesome." He goes, "I would love to invest in real estate. I've always wanted to, I just don't
have the time." And that is the most beautiful statement for someone who could be a private
lender or a private equity partner. They want to invest in real estate, they like real estate,
they don't have the time, but they have the money. That's where you come in because you have the time
and the knowledge and all those sort of things. Okay? So again, never know. You just never know
when you're get into these conversations. Business networking. These could be the weekly,
the BNI or the weekly networking like that or meetups, those sort of things. Just start getting
into conversation with people, what you do and what you're looking for, and people can help you,
okay? So often we think people are going to read our minds of what we're looking for,
what we need in our worlds, but that's not the case. You can just start building relationships
with quality people who know other quality people and you start talking about what you're up to,
how you can help them, et cetera. And then, by the way, this is what I'm looking for. If
you know anyone, I'd love some introductions. You start sharing what you do in a very kind of easy
and kind of in a way that flows. So I hope this was helpful. Everyone knows
people with money. Again, my name is Liz. I'm one of the co-founders of this amazing company of the
DeRosa Group. Thank you for being on our journey here with us on our YouTube channel and everything
we're up to. I'm also very involved in the real estate Investher community with a podcast. We
have meetups, we have a Facebook community, and we have a membership. And we just released our
first published book The Only Woman In The Room. You can get that on Amazon or you can go over to
our website, therealestateinvesther.com and check it out. So thanks so much for being with me here
on this video and I'm going to be doing more and more videos here on our YouTube channel and
I'd love to hear in your comments what did you get out of today's video. Thank you so much.