Transitioning from flipping a house or two a year to managing a scalable, systematized business calls for expert insights and proven strategies. Enter Bill Allen, who shares the stage with Jay Conner on the “Raising Private Money” podcast to unlock the principles behind successful private money raising. Here’s an in-depth look at the topics discussed, aiming to revolutionize your approach to real estate investing.
Building Trust and Confidence
One of the first things Bill Allen emphasizes is the vital role of trust in raising private money. According to Allen, building a high level of trust and being authentic is foundational. He recounts the necessity of transferring trust from past roles, such as being a Navy test pilot, into new ventures like real estate. Friends, family, and professional connections are often the first to invest based on pre-existing trust.
Allen’s story is a testament to the power of integrity and reliability in establishing credibility. His advice is clear: believe in yourself first. Confidence is compelling and contagious. Potential investors won’t either if you don’t believe in your capabilities.
The Importance of Framing: Investment vs. Loan
Jay Conner and Bill Allen agree on a critical semantic shift: talking about investments rather than loans. Conner points out that when you say “loan me money,” that focuses on you, the borrower, not the investor. But when you talk about them investing, then the focus is on their benefit. This reframing not only positions you as a professional but also highlights the added value to potential investors, aligning with a servant’s heart approach.
Crafting Your Investor Matrix
Allen introduces a powerful tool he uses: the Investor Matrix. This method involves creating columns for different phases of your life, such as high school, college, and various workplaces, and listing names of people you know from each phase. Bill emphasizes rating these connections from 1 to 5 based on trust and potential financial capacity.
He elaborates that you should list out names of people you had relationships with during those times. This exercise often jogs your memory, revealing more potential investors than you initially thought possible.
Leveraging Social Media
Using social media to tell stories and plant seeds about your projects is another tactical approach discussed. Allen mentions how he makes use of Facebook and Instagram to share anecdotes about his private lenders’ successes and how they enjoy high returns without managing property hassles. He believes that marketing is essentially storytelling, so sharing these stories online can effectively attract interest.
Soft Approaches Over Hard Pitches
Jay Conner underscores the principle that desperation has a smell to it. This echoes Allen’s advice to avoid pitching a deal too early and instead focus on planting seeds. Conversations should be natural and relational rather than transactional. For instance, when reconnecting with an old friend, you can share what you’re up to and plant a seed about investing without pitching a specific deal.
Allen provides a closing line for such conversations that removes pressure. He suggests asking if they know anyone who might be interested in these kinds of returns. This approach often leads to the person expressing interest themselves or referring you to someone else, removing the risk of outright rejection.
Diversifying Investment Opportunities
As you grow in your venture, Allen advises creating varied investment opportunities to cater to different investor needs. Whether it’s monthly payments through fix-and-flip projects or high annual returns via syndication and apartment deals, having multiple avenues ensures you can accommodate different investor preferences.
Conclusion: Learning from the Best
Raising private money takes skill, trust, and the right mindset. Bill Allen and Jay Conner provide a masterclass in not just obtaining funding but doing so in a way that builds lasting, trustworthy relationships. Whether you’re new to real estate or looking to scale your business, these insights offer a roadmap to effectively raise private money and achieve 7-figure flipping success.
In the world of real estate investing, trust is your currency, and relationships are your bank. Leverage them well, and you’ll find that private money not only accelerates your growth but also enriches your investment journey.
Stay tuned for more episodes of “Raising Private Money,” where seasoned experts like Bill Allen share transformative insights to propel your real estate investing career to new heights.
10 Discussion Questions from this Episode:
- Trust Building: Bill Allen emphasizes the importance of trust in raising private money. How does he suggest transferring trust from past successes to new ventures in real estate investing?
- Experience vs. Trust: In the episode, Bill and Jay discuss the difference between having experience and having trust when raising private money. How can new investors leverage trust when they lack experience?
- Language Use: Bill Allen prefers using the term “invest” rather than “loan” or “give” when discussing private money. Why do you think this distinction in language is important for potential investors?
- Networking Strategies: Bill mentions the process of creating an “investor matrix.” How can this method help in identifying potential private investors, and what are the steps involved?
- Social Media: Bill uses social media to subtly market his real estate opportunities. What are some potential benefits and pitfalls of using social media in this context?
- Fear of Rejection: How does Bill suggest framing conversations to avoid the fear of rejection when discussing investment opportunities with potential lenders?
- Masterminds and Mentoring: Both Bill and Jay talk about the value of surrounding oneself with like-minded individuals and mentors. How can being part of a mastermind group or having a mentor accelerate success in real estate investing?
- Long-Term Relationships vs. Immediate Pitches: Bill advises against immediately pitching deal specifics to potential lenders and instead recommends planting seeds first. What are the advantages of this long-term relationship-building approach?
- Diversifying Investment Opportunities: Bill has several different types of real estate investment opportunities he offers to investors. What are some benefits of having diverse investment offerings?
- Personal Stories and Testimonials: How important are personal stories and testimonials when trying to attract private money, according to the podcast discussion? How can new investors gather and utilize such stories effectively?
Fun facts that were revealed in the episode:
- Background Transition: Bill Allen is a retired Navy test pilot who made a significant career shift into real estate. He now runs a highly successful business called 7 Figure Flipping, which focuses on house flipping and wholesaling mentorship.
- Impressive Fundraising: Over his real estate career, Bill Allen has successfully raised more than $200,000,000 in private money. This substantial amount highlights his expertise and credibility in the field of real estate investing.
- Pickleball Enthusiast: In addition to his real estate ventures, Bill Allen has a passion for pickleball. He is even planning to build a large indoor pickleball facility next to his office, showcasing his enthusiasm for the sport and his entrepreneurial spirit.
Timestamps
00:01 Raising Private Money Without Asking For It
05:10 Trust as Key in Real Estate
07:25 Who Invests in Newcomers?
10:27 Securing Investors with Superior Returns
15:25 Support in Career Transitioning
17:00 Seek Guidance from Bill Allen
22:52 Private Lending Stories on Social Media
26:31 Conquering Fear of Rejection
29:06 Strategic Investment Inquiry Approach
32:32 Real Estate and Investment Plans
33:39 Real Estate Investment Annuities
35:00 Connect with Bill Allen: https://www.instagram.com/billallenrei
37:09 Private Money Investment Guide: https://www.JayConner.com/MoneyGuide
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