Jay Conner’s guest is a highly sought-after speaker on the subject of raising capital, Brad Blazar.
Brad talks about how he raised $2 Billion dollars in private money. Additionally, he has closed the largest mega-million dollar transactions for multiple leading real estate companies – $9M, $7.5M, $5M for SmartStop Self Storage, and national operator of self-storage assets in addition to $11M for USAllianz.
Today he mentors others around the world as part of a global coaching business on how to raise funds from high net worth investors to build, buy, and scale a business – or fund a special project like real estate.
As a real estate investor himself, he has purchased, rehabbed, and renovated dozens of properties and invests as co-GP or GP in multi-family today.
As the author of two books, his first book On The Wings of Eagles – Learn to Soar in Life quickly became a top-rated #1 read for entrepreneurs in addition to hosting the 2nd highest ranked podcast Beast Nation to help you cope with COVID-19
As a philanthropist, Brad donates a portion of his business revenue to MD Anderson Cancer Research and feels more needs to be done to fuel cancer research.
An avid speaker, coach, and entrepreneur, Brad is passionate about helping others step into their bigger future.
Timestamps:
0:01 – Get Ready To Be Plugged Into The Money
1:28 – Jay’s New Book: “Where To Get The Money Now”- https://www.JayConner.com/Book
2:28 – Today’s guest: Brad Blazar
5:01 – How Brad Blazar started his real estate business.
8:18 – How to buy a house Subject to the Existing Note.
12:42 – Raising Private Money with Brad Blazar
15:30 – What is Private Money? What is the difference between a Private Investor & Hard Money Lender?
17:42 – The Process of Finding and Getting Private Investors
23:10 – The Four-Step Blueprint System
26:31 – Brad’s Biggest Mistake In the Real Estate Business
29:35 – Brad’s workbook and guide for your real estate business – https://www.JayConner.com/Brad
Connect with Brad Blazar – https://www.BradBlazar.com
Private Money Academy Conference: https://www.jayconner.com/learnrealestate
Have you read Jay’s new book: Where to Get The Money Now? It is available FREE (all you pay is the shipping and handling) at https://www.JayConner.com/Book
What is Private Money? Real Estate Investing with Jay Conner http://www.JayConner.com/MoneyPodcast
Join the Private Money Academy: https://www.JayConner.com/trial/
Jay Conner is a proven real estate investment leader. Without using his own money or credit, Jay maximizes creative methods to buy and sell properties with profits averaging $64,000 per deal.
What is Real Estate Investing? Live Private Money Academy Conference
YouTube Channel
https://www.youtube.com/c/RealEstateInvestingWithJayConner
iTunes:
Listen to our Podcast:
How Brad Blazar Raised $2 Billion In Private Money with Jay Conner, The Private Money Authority
Jay Conner
00:02:35
I’m going to give you the definition of “a lot” here in just a second. But my guest was formerly a CEO of an oil company and he became an expert in raising capital. Let’s just put it this way. My guest has raised in excess of $2 billion. He’s raised over 2 billion in private capital. And what he’s so good at is how to raise funds from high net worth investors and lenders to build, buy, and scale a business or fund a special project like real estate. Here’s the kind of deals my friend has done. I mean, we’re talking about large, megamillion dollar transactions. I mean, he’s done one capital raising at 9 million, another it’s 7 and a half million, another for 5 million. Then he did another deal, $11 million that he raised. Well, he’s done it all.
Jay Conner
00:03:36
He’s purchased, he’s rehabbed, he’s renovated dozens and dozens of properties and he’s in multi-family today. So he’s been in single-family and multi-family. In addition to that, he’s authored 2 top selling books. The first one is titled, “On The Wings of Eagles: Learn to Soar in Life.” When he released that book, it quickly became one of the top read books for entrepreneurs. In addition to that, he is hosting the second highest ranked podcast titled, “Beast Nation,” and that’s to help you cope with COVID-19. As I said, during his career, my guest has raised over $2 billion. And just as a side note, he and his wife live out there in the great state of Texas. Western Lake, Texas, where my wife, Carol Joy, is also from as well. With that, I want to welcome to the show, my friend, my special guest, an expert in private money, Mr. Brad Blazar. Hello, Brad. Welcome.
Brad Blazar
00:04:37
Hey, thanks so much, Jay! Boy, I’ll tell you, it’s going to be hard to bring the excitement and energy after a tremendous introduction like that, but thank you so much for having me here today. It’s great to be here with you and all of your wonderful listeners.
Jay Conner
00:04:50
Well, that’s fantastic! I knew having you here as a guest here on the show, I had to bring my A-game introductions. So there you have it. Well, Brad, as we just said in the intro, you’re an expert in private money, but before we dive into the private money subject, how’d you get into real estate to start with?
Brad Blazar
00:05:10
Well, it’s really interesting. You know, I actually was at a large event, like a lot of entrepreneurs. I believe it was a Zig Ziglar event many years ago, and they were talking about different opportunities, how to get into stocks, how to get into crypto, how to get into real estate. And so they were pitching a Russ Whitney training program. And so I signed up, I think I spent about $97. And of course that took me to a 3-day boot camp where I got to sit down and be in a room with a lot of other entrepreneurs. And I just took notes and I just listened. And at the end of the day, I said to myself, “You know, I’m not going to go run to the back of the room and sign up. I’m just going to do my research.” And so I started Googling and I started researching how to get started in real estate and decided the way I wanted to go about doing it was basically getting into pre-foreclosures.
Brad Blazar
00:06:06
And so I became essentially a ‘subject to’ expert, did my first deal, rehabbed it, got it rented out, and went on to do my second deal. And I woke up about 6 months later and had over a dozen properties in our portfolio. We were cash flowing a couple thousand dollars a month and I thought everything was great. And so I started basically unloading them. And as I did, I started taking the money on the back end of the deals, and just started investing in larger properties. And so that largely for me is how I got started in real estate. It was really just being exposed to other people that were having massive success, making a lot of money, and really just talking about it.
Jay Conner
00:06:50
I gotcha. What year was that that you started?
Brad Blazar
00:06:54
I started in late 2004, late 2005. So for me, it was just about 15 years ago. And you know, that was after a very successful career in the oil and gas industry. And I haven’t looked back, I’ve been in real estate basically from that point forward. Today, I’m a real estate syndicator. We work with investors weekly and of course we raise capital and we put that into our fund. Or we put that into other multi-family projects where we joint venture or co-GP with other people.
Jay Conner
00:07:26
I got you. Well, you and I started about the same time. My wife, Carol Joy, and I, we did our first deal in October of 2003. And so, you and I, we’ve been doing it about the same at the time. Now you mentioned the name Zig Ziglar. I just got to say Zig Ziglar, of course, he’s passed away now, but he was one of my big heroes. I started listening to Zig Ziglar trainings when I was 24 years old, almost 40 years ago. But yeah, I was in the mobile home business. I mean, we were required to listen to Zig Ziglar trainings. In fact, I got to meet Zig twice in person. And those were two big highlights, just getting to meet the guy. But anyway, so you’ve been doing this quite a while. When you mentioned that you started out buying houses, subject to the existing note, take a second and tell our audience what that means to buy a house subject to the existing note.
Brad Blazar
00:08:32
Yeah, it’s really not ‘buy,’ it’s more like, just ‘take possession of.’ So when you acquire a piece of real estate ‘subject to’ essentially what you’re doing is you’re taking over somebody else’s monthly payments. And when I got started, Jay, I wanted to do it in a manner that would allow me to take on very little risk, control a lot of property, and do so very quickly. And so, as I looked at the different ways of getting into real estate, what I learned is that here in Texas, where I live, you could purchase a list of all of the people that were in pre-foreclosure. That means that the lenders had filed the property and it was now posted for foreclosure. And all of these people were about to lose their homes through the foreclosure process. And so every month me and my team were buying this list. It was a couple thousand people.
Brad Blazar
00:09:28
And then we would take that list, Jay, and we would create a mail merge and we would mail out a really nice letter to all of the people explaining to them that we were investors. We wanted to hopefully help them get out of this very, very dire set of consequences that they were facing. And so my phone started ringing off the hook. People would call me and I would schedule appointments with a lot of these homeowners going by their home, sitting down in their living room, and really just explaining to them that I wanted to help them out. There were many things that they were unaware of, that a lot of lenders didn’t want them to know, like loan modification, short sales, forbearance agreements. And so I basically had most of these people sign what’s called a “mortgage release of authorization form” that allowed me to fax or email that into the mortgage company.
Brad Blazar
00:10:17
And, basically, then I could call a couple of days later and start asking questions where the lenders would share information with me. And I used to structure deals, and then go back to these homeowners and say, “Hey man, I got great news for you. Your lender is willing to structure what we call a forbearance agreement. And all we need to do is come up with something like $5,000 and wire it to them here in the next couple of days, that’ll stop the foreclosure process altogether.” And they were looking at me like, “Well, if we had $5,000, we wouldn’t be in foreclosure.” And I said, “Well, I’ve got another solution. Perhaps I’ll give you $2,500 to move out, maybe get into a small rental or an apartment. And you’ll deed the property over to me. And what I’ll do is I’ll pay your lender that $5,000, and I’ll start making your monthly payments, clean up the property, and then put it into my rental portfolio.”
Brad Blazar
00:11:11
And they looked at me like a knight in shining armor. And so the beautiful thing about ‘subject to’ is, number one, you, meaning the investor, are not physically going through the underwriting process to get a mortgage or getting a loan. You don’t have to qualify for anything. Number two, all you’re doing is you’re taking over somebody else’s monthly payments. And that’s exactly what ‘subject to’ means. You’re acquiring a piece of real estate subject to the lending that’s already in place in somebody else’s name. And then you simply have a moral obligation to make good on that promise. And I did that, Jay, and I acquired probably well over 10 properties that way. And then what I did is, after I got them rented, I would do a cash out refinance and I sometimes pull out 15, 20, 25, $30,000 in equity that many of these people had locked up in their property, that they were bound to lose in the foreclosure process. And then of course, that money came to me and that’s how I was able to reinvest and acquire more real estate.
Jay Conner
00:12:17
That’s beautiful. Yes. ‘Subject to’ is a brilliant strategy. I’ve been using the ‘subject to’ strategy since 2008 or 2009. Now, you don’t need a lot of private money or any private money on doing ‘subject to’ deals, unless you’re going to use private money to bring payments current. If you’re not going to use your own money to bring it current. So, share with us the story, how is it that you moved into this world of private money and using private money?
Brad Blazar
00:12:50
Well, I’ve been basically raising money most of my career. It all started when I was in my 20s, I was a college student. I was studying architecture and I wanted to use the architectural skills, Jay, to become a real estate developer. Architecture is a 5-year degree program. So while I was in my fourth year, I opened the newspaper looking for a job and I responded to an ad to go to work for a small oil company. And the CEO took a liking to me. He said, “Brad, you’re a real smart kid. You think quickly. We’d like to give you a job where you’re going to get on the telephone. We’re going to give you a list of high net worth accredited investors to reach out to. And your job is to basically build trust, build a relationship with these people, and convert them to investors.”
Brad Blazar
00:13:39
And so working 12-15 hours a week between class and after school, I would go in, I’d get on the phone. And I became real proficient and real good at this. I mean working 12-15 hour weeks as a 21 year old, I was making close to $100,000. And so after a year, Jay, went to work for another small oil company doing exactly the same thing, but, lo and behold, let’s just say that the ethical standards of the CEO didn’t match my own. Turns out, they were committing fraud. And so I immediately resigned. All the investors looked at me and said, “Well, Brad, what are you going to do now that you’re no longer working with this group?” And I saw a huge opportunity. And with about $10,000 in savings, I launched an oil company. I have never drilled into oil.
Brad Blazar
00:14:27
Well, I was 23 years old at the time and all I knew how to do was pick up the phone and raise capital. And so what I was able to do is build a team around me of geologists, legal team, accounting. And we built that into an oil company over the course of 10 years, with 35 employees raising millions of dollars a month. And that’s really what started my journey of raising capital and using other people’s money to build my business. And then in the late 80s, due to the Tax Reform Act and collapsing prices, we closed the doors. We sold off some assets, took a year off. And then that’s largely when I went back to school and came out and professionally started raising money for other people and consulting other people on how to attract and how to close private capital.
Jay Conner
00:15:19
Gotcha. Well, that’s just a fascinating story. So you had the perfect background and skills and experience to bring over into the road of real estate. So just to make sure everybody understands what we’re talking about, Brad, take a second and tell people what is private money? What is a private lender in contrast to a hard money lender? Because we’re not talking about hard money in this conversation.
Brad Blazar
00:15:47
Sure. Great question. So a hard money lender is, most people in real estate know, it’s somebody that will give you a loan. They’ll let you borrow their money. Typically they take points, they charge interest. What I’m talking about here is an investor. Somebody, basically, that you can approach that has a high net worth that is willing to give you money in exchange for equity or exchange for a percentage of profits in a deal. You know, typically, there are affluent people that most of us know, they’re your doctor, they’re executives. If you’re a member of a country club, they’re probably country club members. They’re simply people that have discretionary income that, if approached and asked, would you have an interest in getting an above average rate of return on 50 or a hundred thousand dollars? Would you have an interest? And they say “Yes.”
Brad Blazar
00:16:40
And that begins basically a conversation with them of building trust, building a relationship, letting them know what you’re doing. And then of course, when you do the deal, you have an agreement that you memorialize in writing. I always put my agreements in writing. You want to do that and then you typically split the profits on the back end. And the great thing about doing this is using other people’s money allows you to really accelerate and grow your business much faster. The biggest thing I hear with, literally, the hundreds of people that me and my team talked to is so many people have a dream. They have a vision of the life they want to lead, or the life they want to build. And I ask them, “Why are you not doing it now?” And it always comes back to, “I don’t have the money.” And I explain to people all the money you need exists out there in the pockets of other people. You just need to be taught and learn the skill of how to attract this to you. And once you do your entire life can change.
Jay Conner
00:17:41
Yeah. So let’s spend a few minutes getting you to talk about what’s some advice that you can give on what that process looks like, from starting a conversation to having the initial question that you just said. And then how does that conversation go? In other words, are you teaching about a particular project? Are you teaching about private money? Initially is it done in the form of a group? Do you do it one-on-one over the phone? Just what, take us through the process, step-by-step from an addition, an initial question to actually having a private lender or investor.
Brad Blazar
00:18:30
Sure. No, it’s an approach that I’ve taken for many years. Jay, real estate, of course, has tremendous tax benefits attached to it. And as we all know, most people are always looking for a way to reduce their taxes. So I’ll naturally just bring up a conversation with somebody that maybe, I’m introduced to, or perhaps I know, and just say, “Out of curiosity, would you have an interest in looking at an opportunity that would provide you with some consistent monthly income, some upside appreciation, but most importantly would help you dramatically reduce your taxes?” And usually most people to that question would say, “Yeah, I mean, what are you talking about?” And what I like to do immediately is disarm people. I want to let them know right from the get-go that I, right now, don’t have an opportunity to discuss or talk to you.
Brad Blazar
00:19:22
And the reason that this is so very important is most people, unless they’re friends and family, will not invest with you until you build trust and you build a relationship. Those are two very critical things. And so people are always so desperate to talk about the investment or to pitch the deal, when in reality, that’s actually the improper and the wrong thing to do. You want to step back and get to know the person and really ask probing questions because they will tell you what the temptation is for them that will allow you then to position that opportunity at some point in the future. So I simply just ask them questions like “Jay, you know, when you invest, are you looking for growth or are you looking for income? Or are you looking for a combination of the two? Are you using this money to do something special?”
Brad Blazar
00:20:15
“Like putting your children through school or maybe to invest and buy a second property?” And as I’m probing on building trust and I’m building a relationship and after I talk to the person 2 or 3 times, I usually ask a very important question. And what this question does for me is it validates that trust has been established, but it also opens the door to now a discussion about a potential investment opportunity. And it’s something like this, Jay, “I’ve really enjoyed getting to know you over the last couple of conversations. But like I said, right now, I just don’t have an investment that I can discuss with you. And the reason is I always like to give my existing investors the right of first refusal on most of my new programs. But what I’d love to do is just add your name to a list. And in the event, I have a small allocation or small opening at some point in the future, do I have your permission to get back in touch with you?” And when they say, “Yes,” they have now validated that they trust me and that they want me to call them back with a potential investment opportunity.
Jay Conner
00:21:23
That’s beautiful, Brad. You do it and I do it exactly the same way. As far as the process, when I started raising private money in 2009, February 2009, you know, we call it “mom and pop money,” right, from individuals. And I did the same thing. Similar to what you just said, I never have an initial conversation with a potential private lender and have a deal for them to invest in because for one thing, in addition to the trust may not be there, the credibility, et cetera. But I already sound like I’m desperate and I’m begging without even trying to sound like I’m desperate and I’m begging. When I’m like, so, you know, I put on my teacher hat, I teach people what, you know, Carol Joy and I have what we’ve got right now, about 47 private lenders that, you know, invest with us.
Jay Conner
00:22:26
We move it from property to project to project. And not one of them had ever heard of private money. None of them even knew anything about self-directed IRAs. And that’s a writer-downer right there, like over half of our private lenders actually are using their retirement funds that they had moved over to a self-directed IRA company. But yeah, it’s like, if I talked with someone about private money and a deal in the initial conversation in parentheses, they’re hearing me say, “Oh, you need me to fund that deal and you’re in a scrape if I don’t.”
Brad Blazar
00:23:06
Yeah. That’s pretty much it. And that’s why when I built my oil company and when we teach and train people, we use something that’s called “The 4-Step Blueprint.” It is a system built around 4 calls or 4 meetings or 4 Zooms, but it’s broken down where the first two are largely to build trust, build a relationship, present the opportunity on the third call, and hopefully close and ask for the commitment of investment on the fourth. Now, sometimes it’s 5, but it’s broken down. And here’s the reason. There’s a wonderful book that I recommend to anybody that wants to understand this process. It’s called “The Trust Economy” and you can find it on Amazon. It was written by a wonderful gentleman who is a psychologist and an economist, and it’s called “The Trust Economy.” And inside this book, the author, Philipp Diekhöner, talks about 6 things that have to happen, sequentially, one after the other to build trust in another person.
Brad Blazar
00:24:10
The first thing is, it starts with perception. What does that person think of you when they first meet? They’re checking you out, right? How you dress, the quality of your business card, and by the way, Jay, you’ve got the best business card I think I’ve ever seen in this business. Number 2, it gets to temptation. This is you asking questions, building that relationship, finding out what’s going to tempt them to move forward. Then it gets to 3, connection. Understand this, listeners, investing is an emotional buying decision. These people are not looking at a spreadsheet. They’re not looking at a flow chart. They’re investing ultimately in you that confidence, that enthusiasm, and that emotional connection that you’re making. Then you get to number 4 and that’s what we call ‘validation.’ That’s what I did before with that question.
Brad Blazar
00:25:04
I validated that trust existed before I presented the opportunity. Then you get to ‘affiliation.’ That’s where they’re invested, they’ve given you the money. They now want to see success. And if you do it great, and you perform, you get to the sixth step. And that is what we call ‘attachment.’ That’s where they open up their book and they say, “Jay, you need to meet Scott. Scott’s my golf buddy. And he’s got money, too.” You see, getting referrals from your existing investor base is the most beautiful thing about learning how to use other people’s money because then it becomes a warm introduction and a warm relationship. You can accelerate the process dramatically because that implied trust is already there. That introduction is now coming from somebody else. But those 6 steps or the 6 steps in building that relationship and going from 0 to 60, and then to what I call ‘the closing table.’
Jay Conner
00:26:04
Yeah. You mentioned referrals, and I’ve lost count on how many new private lenders, potential private lenders were referred to me from current private lenders. I can’t think of one that I talked to that did not end up doing business with me that came referred to us from a pre-existing private lender. One last question, and then I believe you got a free gift for the audience to give away to help them in their business. And so this is sorta hitting left field. You and I didn’t prepare any of this, but you’ve been doing it for so long. I know you’re going to have something come to mind. What would you say was your biggest or one of your biggest mistakes that you made in the past in this world of private money and private lending and working with investors that if you knew then what you knew now, you would do it differently?
Brad Blazar
00:27:04
Two things, really. Number one is always make sure the person investing with you is suitable and really make sure that the investment amount they’re giving to you is suitable for them and their set of circumstances. The second thing which was a real hard lesson is sometimes it makes sense to take less than you’re offered because big-time investors will actually test you. And what I mean from that, Jay, and this actually happened to me is, I was working with an investor a number of years ago. And I called them back on that third call. And after I went through the deal and I presented the opportunity, I said, Jay, “How many units in the program would you like to take today? You want 3 units, 2 units, 1 unit or none?” And they came back to me and they said, “Well, really what I’d like to ask you, Brad, is I’ve got a million dollars.”
Brad Blazar
00:28:10
“Can I give you a million dollars?” Now, most people would have jumped out of their seats in euphoria saying, “Absolutely!” And that’s what I did once before and the money never came in. So what I learned to do when somebody wants to offer me a substantial amount of money is step back and say, “I don’t know that I have that much remaining on the current program. Let me put you on hold and check with my investor relations team to see what I can do.” And I put them on hold and I do my little happy dance. And after about 20 seconds, I come back and I say something like, “Jay, you know, right now, unfortunately I can’t take all of it because we don’t have that much. I can take 600 today and then I can get back to you on the next deal. And you can place the balance with us in a couple of weeks. Does that sound good?” And the reason I’ve learned to do that over many years, raising tens of millions of dollars is, sometimes big-time investors will test you. And that’s the best advice I think I can give is take less to earn trust, build that relationship in the long run. You’ll get a whole lot more.
Jay Conner
00:29:22
Wow. That’s amazing. I’ve practiced the same thing and I guess it just sort of happened intuitively, but that’s brilliant advice, Brad. Brilliant advice. Tell everybody about the free gift, and we’ll tell them how they can get it.
Brad Blazar
00:29:39
Yeah, absolutely. You know, we have a wonderful mentorship program where we currently work with people all over the world and 7 countries, not just here, but Canada, Australia, New Zealand, and the United Kingdom. And as part of that, one of our modules is actually built around what we call “Securing Your First Investment.” And so what I want to provide today is access to this tremendous workbook, this tremendous guide that’s going to walk you through the steps to get you, hopefully, your first investor. If you’re a newbie, if you want to learn how to raise capital, you simply go to the website that Jay has put up on the screen, www.JayConner.com/Brad, that’ll take your right to this particular workbook and guide. And it goes into everything – how to pitch, how to locate investors, what to say, talks a little bit about the 4-step blueprint. And so that is my free gift.
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