How To Raise Money For Flips and Rentals
I’m actually kind of jacked up right now not just because I’ve been slamming all this Starbucks coffee, but because I just came back from a really powerful, powerful, powerful mastermind called the boardroom with a very close friend, one of my brothers, Kent clothier. He and I started this years and years ago, and it is one of the best if not, you know, if not the best masterminds to be around for the people and the level of quality that the investors are there, everywhere from kind of beginners that have cut their teeth and gotten couple deals all the way to people doing millions and millions and millions of dollars with wholesaling, flipping, and portfolio acquisition. So it really, really fired me up. And I wanted to give you guys a little bit of a takeaway that I got from this mastermind.
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The one thing that really quite literally as my notebook, I’m looking here that I wrote down that I wanted to bring to you guys, is this idea of raising money, how to raise money, where to raise money, in quite literally something that I think everyone has access to, but no one really thinks about now, some of you might think about this, but I would tell you, most of you probably don’t. Now, I would say this, raising money for fix and flipping isn’t easy. But there’s a lot of money out there that is meant to be lent as a lender and make sure you protect yourself with the right paperwork and make sure you’re not promising anything. So you don’t get in trouble with the SEC, they don’t want you selling securities, right. But then this whole other thing that was brought up in this mastermind is raising capital for long term holds, and how to do it. And I had, you know, kind of my own model that I’ve created for myself. And I’ve shared it several times here on this podcast. But what was brought to light and actually was talked about at length for you know, almost the better part of two hours was this model of taking retirement accounts, people with retirement accounts, and utilizing them as private lenders into your long term rentals. Now, though, it makes sense, rationally, when you hear that you might be thinking yourself, Justin, you’re not saying anything that maybe I don’t know, I can understand that. But why would you utilize their money for your long term? And it’s because you can provide more value to them. Okay, because if you really think about why they even have a, you know, retirement account is for the long term, they’re not worried about quick money, because any money that you do give them as, you know, interest or profit share or whatever, they can’t really touch it anyways, unless they want to take a huge tax it and so what I would say there is there are I forgot what the number I think it was quoted in our millions of people with retirement accounts. And I’m actually going to go into this new year 2022 really heavily thinking about who do I know, that would be interested in in, you know, using their retirement account as a way to lend money as a lender, and all interest paid on that loan goes back into their retirement account, and they don’t get taxed on it and build their retirement account. And I literally wrote a list as I’m looking down here at my notebook from this mastermind about people that I know that have retirement accounts. And you know, there’s some clarity that needs to be discussed here about whether it be a 401k or an IRA. You know, 401k is much more company retirement accounts. So you’d likely have to the person that has a 401k would likely have to transfer into a self directed IRA. And then you have so many Many different types, right? Do you do a SEP IRA? Do you do a Roth IRA.
And I’m not going to be the expert right now for that, right. So just know, I know enough to be dangerous to myself, but I’m not going to be the expert. In fact, the individual, one of my closest friends, he actually married me and my wife, he actually owns a Trust Company. And he was the one that brought this idea up. And it started this whirlwind of ideas and concepts and questions regarding how to structure this. And so I’m actually going to do you guys a favor, I’m going to bring him on very, very shortly. So we can do a podcast together so we can get more tactical with you guys. But what I wanted you guys to realize, and quite literally, the entire podcast, the science of flipping podcast, is to teach you what I’m doing and what is successful in the space of real estate investing, from everything from wholesaling, to flipping to wholesaling to buying rentals, and including where do we find the money to do it. And so this is something that I think if you literally took a minute, and pulled out a notepad, and literally wrote down people that you believe, probably have a retirement account, then it’s just simply a conversation, right? Because these individuals have that retirement account for one reason, one reason, right, and that is to put money into their retirement. Well, if you can help them do that, because you’re providing a value or a resource, that they can lend money out of it, again, likely, you’re gonna have to be a self directed IRA. So they’d have to take it out of 401k. And we again, my friend can discuss all that kind of stuff with you guys, when I have him on the podcast, but I wanted this to be kind of the introductory component of, there’s a lot of money out there, there is a lot of money out there, you just aren’t actually, you know, doing a good job trying to find it, maybe you’re nervous, maybe you don’t know how to have the discussion. And I can help you with that, right. But there’s a lot of people that have these retirement accounts that would love to be able to make an extra 567 8% a year on the money that’s just sitting in there is quite literally just sitting in there. You know how I know all this is because this is a little tangent, but I actually took my self directed IRA, and actually took a chunk of it. And I actually invested it into cryptocurrency in a Bitcoin because my trust companies actually my buddies Trust Company, he actually has a platform where I can from my IRA, I can invest into cryptocurrency. And then if I sell and when I sell, take all those profits back into my IRA, I love it right? Again, I’m not going to touch the thing to him 59 and a half. So for me, a small component of that can go into crypto can go into real estate excetera. My point being is, why not make money while the money’s sitting in there. So I wanted this to be kind of food for thought, I’m going to literally call him right after I do this episode right now. We’re going to schedule a podcast I’m going to get him on. We’re going to talk more tactical about all this, but there’s really no limit. So when you guys are thinking about well, how do I get in the flipping game? How do I buy and hold? This is partially your ticket finding the individuals that have capital sitting there that you can actually offer a massive value because it’s building up their retirement account. So they’re only going to take it out once or 59 and a half. And it’s tax free at that point. So instead of them just adding to it based around whether it’s income or whatever, maybe like for me, I just take a portion of my income and I put it into my IRA, right? I’m I’m self employed, right? So instead of me just doing that, why not lend on my real estate deals out of it, right? Or have my IRA buy it, right. So I can also actually buy a flip for let’s say, for example, and I’ll take title to that flip in my IRAs name, okay. And then when I sell that flip, and make 2030 4050 6080 100, grand, all of that money goes back into my IRA, and guess what is tax free. Now, unless I want to take it, because if I need the income, or if you’re in a position that you need the income, you might want to take it, then you’re going to get taxed on it. So there’s not the same advantage, right. But if I’m just building out, you know, let’s just say I’m doing 20 wholesale deals a month and I want to flip a property, I might not need that income from the flip because I’m doing 20 wholesale deals a month. So why not just put that flip my IRAs name, flip it, put all the profits back into my IRA. Now I’m growing it without having limitations on my own personal
I guess allowance how much I’m allowed to put in there. Guys, this is really, really beneficial for all of us, right? All of us investors, even if you’re a wholesaler, these are individuals that would love the opportunity to build their retirement account. I promise you that. So I’m literally going to jump off this episode right now. I’m going to call him and we’re going to schedule this we’re going to dial in a time so that way you guys can get some more tactical here. But I’ll promise you it is a game changer if you yourself, have a self directed IRA or 401k, you really need to think about making sure it’s a self directed and actually start to utilize that in your own real estate investing business, just like I do, and so many other people do. Because, again, as long as you don’t need the money from the wholesaler or the the flip, or the rental, all that money can go back in and build your retirement account. And guess what we’re all in this for the long haul. So this fired me up is kind of a game changer going in 2022 I’m, you know, yet leverage it to build my rental portfolio. If you have a retirement account, you want to talk to me about how you could be a lender to me, I’d love that. I would love it. Send me a message on Instagram, the Justin Colby or somewhere here on YouTube or just somewhere hit me up somewhere. And let me know. You know, I’d love to have that kind of conversation with you. I’m going to be building a long term rental portfolio with that type of funds. And that would be very cool to have conversation with you. So hope this finds this well finds you. Well, hopefully it fires you up the same way it fired me up. I’m fired up. Obviously I have my new studio here. So if you’re not subscribed to my YouTube channel, make sure you subscribe make sure you give me five stars on iTunes and I will see you guys on the next podcast episode. I’m calling my friend right now. Peace