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Beginner Steps to Raise Your First $1,000,000


Want to explode your real estate portfolio? Then you MUST know about raising private money. When done correctly, private money (also called private capital) can help you and your investors reach financial freedom faster instead of wasting months or years between deals as you wait for your savings to grow. The best part? It’s not just the big players that are raising private capital. Small-time investors doing five or ten-unit deals can still massively benefit from private money, and we’re about to show you how to get it!

When talking about private capital, there’s arguably no one who knows the subject better than Matt Faircloth. Matt literally wrote the book Raising Private Capital and has used the same strategies in it to raise millions of dollars for his own investing business, The DeRosa Group. Matt’s partner, Hervé Francois, also joins us today to go over the beginner steps of raising private capital. These two capital-raising experts will show you exactly how to raise your first $1,000,000 in three simple steps and give you a pitch example you can use to raise private capital from ANYONE in your network!

Connect with more investors, get more deals done, and raise private capital faster with a BiggerPockets Pro membership. Podcast listeners get 20% off with code “FUNDING24”!

Matt:
Welcome to the BiggerPockets Podcast guys. My name is Matt Faircloth. You might have heard me before as a contributor or as a co-host of the BiggerPockets podcast, and I’m super honored today to be having this conversation with you, with my business partner, my very good friend, and very first BiggerPockets podcast guest, Mr. Hervé Francois. Hervé, how are you today?

Hervé:
I’m doing great, Matt. Thanks so much, man. Excited to be here. Part of my very first BiggerPockets podcast, really pumped up.

Matt:
For those of you guys that don’t know me, I’m the author of the BiggerPockets book, Raising Private Capital, and for those of you guys that don’t know Hervé Francois, Hervé is a 23 year Wall Street veteran and he and I have spent a lot of time and done a lot of work at DeRosa Group at our company, raising millions of dollars, and we’re gonna be talking to you guys today on how you can apply the technologies we’ve used to raise all that money for our company to raise your first million dollars for your business. And if you’re a visual learner like I am, go to the BiggerPockets YouTube page where you can watch this webinar presented as a full deck with the podcast integrated with it as well. It’s gonna be a great content. Hope you guys can check that out as well. Irving, without further ado, let’s hop in. What do you think?

Hervé:
Alright man, let’s go. Let’s do this.

Matt:
Hervé. The world’s changed, man. It is getting very difficult and, and just, it’s just different raising capital these days, isn’t it,

Hervé:
Matt? It is really, really difficult raising capital out there, right? We know that banks have kind of tightened up their credit landing standards and whatnot, very, very difficult as deals keep on getting scrutinized even more important to have the right tools so you know how you can go ahead and start raising capital for your deals.

Matt:
There’s deals to be done and there are investors in all of our networks and of our cell phones, dare I say, that are looking for opportunities and and maybe are getting a little skittish in where Wall Street’s going and they’re looking for another way. And us as capital raisers for real estate have a unique opportunity more than has ever existed, I think, to show them an opportunity to make money in deals alongside our companies.

Hervé:
Absolutely, absolutely. And let’s not forget, right, banks have really tightened up over the past year. They’re getting a lot more scrutiny over deals. They want you to have a lot more paperwork. They want your deal to be absolutely rock solid. We know a lot of deals out there are not very rock solid. So just even more and more pressure to understand the tools that you need in order to raise private capital for your deals.

Matt:
Hey guys, we’re super grateful that you guys are here with us today, and we’re gonna be sharing some phenomenal content and value that you guys can use to grow your businesses, raise all the capital you need for your deals, lots of content coming your way, but even better, we’re gonna be talking to you guys about a tool that BiggerPockets has to offer. You call it a BiggerPockets Pro membership that you can use to raise even more capital for your business. And better yet, beyond that, how about a free gift? How about a BiggerPockets Pro membership at a discount? So go to biggerpockets.com/pro and under the coupon code funding24, we all need funding in 2024. So funding24 is your coupon code for a discounted pro membership. And we’re gonna be teaching you guys during this webinar and podcast of all the ways that you can take that pro membership and apply it to raise that million dollars that you guys need for your business and take it to the next level. But wait, there’s more, right? If you want another even more amazing free gift beyond that, stick around to the very end of this podcast in this webinar and we’ve got a crazy amazing free gift for you guys for those that stay till the very end. So I’ll see you there. Hervé, what do you think about a BiggerPockets Pro membership as a means to grow your business?

Hervé:
It’s absolutely amazing. I’m telling you right now, Matt, I’ve had a pro membership for years. I wouldn’t have been able to raise the amount of capital that I’ve been able to for my deals without some of the tools that’s offered by a BiggerPockets Pro membership.

Matt:
Okay guys, so as we hop in, let’s tell you a little bit about ourselves. So as you might know, I’m Matt Faircloth. I am a been host and contributor to the BiggerPockets podcast. I am an author for BiggerPockets of my book, Raising Private Capital contributor to BP in articles. And I’m also a speaker at all. I’ve spoken proud to say at all the BiggerPockets conferences since Nashville many years ago, and I’m super proud to be here with my counterpart here. ve can you tell them a little bit about you and your work at DeRosa?

Hervé:
Absolutely. Thanks very much, Matt. You know, I come from a Wall Street background where I was a research analyst, a salesperson, stock picker for over 23 years. Came over to ROSA group really pretty much to help out on the acquisitions side, but the rules has been around for 18 years. Start off traditional fix and flips. Started getting into small, mid, multi-family seven years ago, really picked up the large multi-family. And here we are today, 1700 units later across the country.

Matt:
And let me tap you guys in to the why, right? Uh, why multifamily, why capital raising, why it’s important to me when, when Liz and I started our company 18 years ago, we started it with a mission to transform lives through real estate because we believe that real estate as a vehicle is a way to affect a lot of people’s lives, be those the lives of our tenants or the employees that work on the properties, or even the investors who just get to see a better way to reach financial freedom through working with us as real estate investors. So transforming lives through real estate is the foundation of that our company’s built on. And that’s the why that I put behind what’s so important for me to raise capital, because as I raise more capital for my businesses, that, and as you guys hopefully do the same for yours, you are helping your investors achieve the financial freedom while you do the right thing as landlords and properties that you guys get involved in. So that’s the why, that’s what’s possible for you and maybe a big hairy audacious why that’s well beyond making money that you can carry forward in your business as well. Swimming lives through real estate. Okay guys, here’s a summary of the things we’re gonna get into in today’s podcast. We’re gonna talk about why raising capital is, is important. Why should you even do that? Why shouldn’t you just fund deals with all your own money and not even bother raising capital outta your own network?

Hervé:
There are just three easy steps to move your capital game to the next level. Stay with us. We’re gonna go ahead and walk you through those three easy steps.

Matt:
And guys, I’m gonna be mock pitching Hervé on private capital right here on the show with a script that you guys can and apply in your own businesses and lives as well. So stay tuned for that. And then don’t forget at the very end, I’ve got yet another three gifts coming for you guys, so stay tuned for that also. So Hervé, before we go and start talking about raising millions of dollars for people’s businesses, let’s talk about just why, why is it important to raise capital to begin with and why should people just go with their own money and why should they bother to raise money at all?

Hervé:
Matt, that’s a great question, right? And there’s a couple of reasons, but the main reason why is that we want to make sure that you use good leverage smart debt on your deals that allows you to go ahead and de-risk your deals by going ahead and raising capital from investors as well. Gives your investors an opportunity to make a nice return on that deal you’re putting together

Matt:
Further. Hervé if I’m going to use my own money, let’s say I’m lucky enough to have enough money in my own bank account that I can buy a five unit apartment building, right? That’s great, but if I use the leverage of my network and raise some capital from my, from just outta my, outta my Rolodex so to speak, or outta my cell phone, I could maybe buy a 30 unit apartment building or a 50 unit apartment building. I can, I can take down larger assets and get into larger deal sizes, um, perhaps lower risk factors or just more exposure that way by having capital and have other people partner with me. And then, yes, I don’t own the entire 50 unit apartment building, I’ve got investors, but I get, I get to enjoy the upside and the, the scale of that larger asset and the management plays, all the things that actually larger real estate in some ways gets easier when you’re into larger deals. I can enjoy that systemization that comes along with larger real estate and have some partners with me along the way so I get exposed to that larger deal. So do my investors and I can grow that much faster?

Hervé:
Absolutely. And Matt, what’s so important to know is that how much easier it gets in raising capital for you after you do that first deal, you wind up getting more repeat investors from those folks in that digital Rolodex of yours. That’s why it’s so important. Get that first one done and you’re gonna see more repeat investors want to come with you over and over again,

Matt:
The people around you in your network, those folks in your social media network, in your cell phone, and standing next to your kids’ t-ball game as we’re going to see later during our mock pitch. Those folks need a better way, whether they know it or not, they’re looking for a way to build their wealth and achieve their financial freedom goals. What if they could do that by working with you and your business? They might not be aware of it, and you as a capital raiser could be an educator to them on how they can achieve a better way for their financial goals through working with a local operator like yourself. And raising capital allows you to take the capital in your network and put it to work around you in the world. And that now builds you to give a better life to tenant a better life for employees and a better life for maybe those investors who can achieve financial freedom and get a better way, uh, to get to their, to get to their goals outside of Wall Street that they can get there by maybe working with local operators such as yourself.

Hervé:
We are gonna take a quick break, but stick around because we have more information on Raising Private Capital after this quick break.

Matt:
Welcome back to the BiggerPockets podcast. So let’s hop in guys to what we had talked about before, the three steps to building your capital raising machine. And guys, these are real steps you guys can apply today. Hervé what is the biggest mistake that a lot of people think this isn’t the right answer, right? The biggest mistake that a lot of people think capital raisers make, uh, when they’re raising money for their deals. What, what are, what are ones that you hear? They’re in the incorrect answer, but, but, but the the ones that we hear nonetheless.

Hervé:
Well, Matt, one of the biggest mistakes I see a lot of folks makes is that they start to raise capital once they have the deal. You have to start raising even before you have to deal again, leaning into your digital Rolodex and talking to people about your real estate business,

Matt:
That’s definitely a mistake. It’s not the biggest mistake. And I’ve also heard people think that the biggest mistake you can make in raising capital is maybe not having the right network, right? Or not doing the pitch the right way, or, you know, not saying the right thing, whatever it may be. These are all, you know, perhaps mistakes, but what we’re leading to here, guys, is the, the kind of the sneak attack big mistake that people make when they raise money is that they don’t choose a market first. When you’re investing in deals and you’re putting deals in front of your investors, what you need to do is you gotta put the market in front of your investors first. Let’s pretend just because it’s an, it’s a fun name to say ve let’s pretend we’re talking about Albuquerque, New Mexico, right? So I, I’m gonna start with Albuquerque, I’m gonna lead with that and convince my investors that Albuquerque is the best place ever to invest in real estate. Then I’m gonna present deals. Hervé why else should people go in market first and make that the first thing that they do when they start raising capital?

Hervé:
Listen, you wanna pick your market first because you want to be able to show to your investors that there’s a method to the madness, right? That you did some research that fully makes them understand how you went about by selecting the market that you did, all the metrics that are involved, right? To protect the integrity and also show the growth of the deal because of population and jobs and so on and so forth. There’s some great tools out there that can help you do that research. And guess what? In BiggerPockets Pro, Invelo, Invelo is a absolute amazing tool that can help you find those off market deals in the right markets for your deals.

Matt:
There’s plenty of opportunities with brokers to send you guys deals, but invelo gives you guys options for deals that are not controlled by brokers off the market opportunities. So once you’ve done your research and found the market that you wanna invest in, you guys need to go and do full market infiltration by using tools like invelo to determine which deals are, are the best for you guys, and maybe get inside tracks on deals that are out there that no one else knows about. On top of that guys, what guys wanna do is once you’ve chosen a market, and it could be the market you live in, it could be a market that you used to live in or a market that you have good data on, that’s going to be showing good metrics for growth, whatever that is, go in the BiggerPockets forums and join conversations about, let’s say it again, Albuquerque, New Mexico.

Matt:
Yeah, markets like that that you want to become an expert in. Go and read up on what people are saying about Al Albuquerque. What conversations are they having there? Join those conversations, ask questions. Those communities of people of other investors on BiggerPockets are going to help you become an expert. And then take those conversations you’re having with folks and take those to your investors. Take it to your investor base and say, Hey, I’m learning this. Here are some great things about Albuquerque. Did you guys know this factory is expanding? Did you guys know that that employer is adding more staff? You’ll find out that data by talking to other people that are in the know that you meet on BiggerPockets in those markets. The next thing you gotta do, here’s the next tip, Erbe on the way to raise lots of capital for your deals, is you’ve gotta get the word out about you.

Matt:
Here’s the thing, the people that know you, right, they know you and they know you’re amazing because you’re you, but that you that they know could be the firefighter, the school teacher, the insurance sales rep, whatever very viable, very upstanding contributor society job you have. They know you as that person. It could be their brother-in-Law as well, or other relations they have with you. What they don’t know is you the real estate investor. And you need to start telling your market about how great of a real estate investor you are and what you are learning through organizations like BiggerPockets and start teaching them the best capital raisers. Hervé are those that are willing to teach those around them, what they’re learning from organizations like BiggerPockets and whatnot about how great real estate investing is and how investors can enjoy all the great benefits that we already know of about real estate investing to teach those around them, about those things as well and get them excited. Get them to know you and get them to know real estate investing.

Hervé:
Matt, listen, you are so right after I left Wall Street, I figured how am I gonna go about by meeting other real estate investors where I could find folks to invest in my deals? I started going to a local RIA meeting and I just started networking with other like-minded folks. Next thing you know, I started sharing with them the type of real estate deals I was looking to invest. And right from attending some of those meetings, I went ahead and found a couple of my first equity investors in my deal and things really just started to take off

Matt:
For me. That’s awesome. Hervé and you know, that reminds me, uh, this conversation reminds me of a point in raising private capital that I talk about the three tiers of capital raising, right? I just wanna highlight that real quick. So tier one are the people that like and trust you because you’re, you, you’re, you know, like I said, your brother-in-Law, the guy you go bowling with, if you still go bowling, the, the, the, the, the father of your kid, uh, his best friend at t-ball, all those kinds of things, these are people that like and trust you because you’re you. These are people that are more likely to get consider investing with you. They already, they already like and trust you. And this could be immediate family, friends, whatever. It’s the second tier of capital raising are referrals from tier one. So your very own mother may have someone she grew up with that’s also looking for, uh, another investing option or something like that.

Matt:
You ask for referrals from tier one for tier two referral for tier two folks and that’s how you expand your circles out. Then tier three is what we’re gonna talk about now and that’s where you really go public with your capital raising game by taking the deals you’ve hopefully done with tier one and tier two people. You take that, that’s your track record. And then tier three is when you go and pick up the lovely megaphone of social media and you go and tell the world, all everybody about what you’re up to and how amazing it is and how it’s going. And that’s where you start doing more and more content on social media. That could be on your organizations like Facebook or Twitter or it, it doesn’t matter what it is, it just matters that you’re broadcasting what it is you’re up to, uh, using hopefully capital you’ve gained through tier one and tier two relationships.

Matt:
And of course the entire time you should be posting about your journey and asking questions and contributing on the BiggerPockets forums. ’cause there are people that are walking that same road alongside you and maybe a few steps ahead of you on that road that are willing to reach back and pull you ahead, give you some tips. And maybe I could tell you ve I’ve met multiple investors that have joined our organization as passive investors on the BiggerPockets forums because I’ve been, you know, okay to get out there and talk about my journey and these are folks that are, maybe you’re looking for some things that I’m creating in my business. It’s a great way to meet people as active investors. That could be your friends, colleagues, uh, and you know, folks that can help you along. And also potential investors are out there as well.

Hervé:
And Matt, a great way to go ahead and touch even more investors out there perhaps is go ahead and start a newsletter. You go ahead and you start a newsletter. You’re gonna go and start sharing things about the market that you’ve chose to invest, the kind of properties that you’re looking to invest. And you might even find a great article in BP that you can include in that newsletter as well.

Matt:
There you go. There’s a lot of great articles on BiggerPockets that you can share with people. Like I said, capital raises are educators. And if you’ve got people that are on that newsletter base, and again, that newsletter base could be your Uncle Charlie, your Aunt Sally, and people you went to high school with, doesn’t matter who’s on that newsletter base, eventually it’s gonna grow and you’re going to promote stuff that’s going to educate them about why real estate investing’s amazing. That’s really your primary purpose until you’ve got a deal. And guys, one last thing. If you are a pro member, you might think it doesn’t mean much, but I can tell you what that little blue little badge you get at the bottom of your photo on BiggerPockets matters. It means you’re invested, it means you’re serious. It means you’re committed to really raising your game as a real estate investor and you’re willing to use the tools that pro provides and also give you guys real data.

Matt:
A pro membership is proven to increase your network faster. Those that have BiggerPockets Pro connect a network with three times more people than those with a free membership on BiggerPockets. Why do you think that is? Hervé it’s because it’s proven that that, that like it’s a visual thing, partly that you’ve got that little pro name underneath your, underneath your picture, but it’s also pro opens up a lot of tools that people can use and gives them that advantage, let’s say it to go in and spend their network that much faster on BiggerPockets. It’s, it’s a real thing. It really matters. Three X survey, isn’t that crazy?

Hervé:
That’s absolutely crazy, Matt. I think really what it’s shown to people as well is that you are active, you are engaged, you are all in on your real estate business and that they, you are someone that they can start connecting with asking questions and as well even start networking.

Matt:
And the way the salt trails back to raising Capital guys is the bigger your network is, these are all maybe potential investors or potential deal referral partners to you. Your network is a example of the amount of capital you can raise. So the faster you can raise your network on BiggerPockets, I’ll be straight guys, the more money you’re gonna be able to raise for your deals. Alright, tip three, you guys wanna raise more money? You need to raise your game and let’s talk about what that means.

Hervé:
It means three things. You get great at analyzing deals, you get to share those deals and use a format that’s really easy for investors to understand.

Matt:
So let me ask you, you start talking about analyzing it, why is it important for a capital raiser to be able to analyze deals? Why does that matter?

Hervé:
Listen, it matters because the deal that you’re looking to analyze, the numbers have to play out, right? They have to make sense. Is this a good investment or not? Not only for yourself, but even more importantly for your investors.

Matt:
Yeah, and well, and they’re gonna ask you, right? I mean, if I’m an investor in, in a deal, I’m gonna say, why Does that make sense? Does that cash on cash? You’re quoting me, you we’re really gonna make 10% on our money. That sounds amazing. Where does that come from? And as a capital raiser, you need to be able to understand your numbers and know where those numbers came from, to a point where a more savvy investor might ask some more pointed questions and you’ll be able to answer them with, with a well thought out answer. I’ve raised a lot of money using the BiggerPockets calculators and you guys should all check those out because you know what, they’re easy to understand and there’s plenty of jargon full, uh, you know, lots of data and charts and Excel spreadsheet oriented, uh, you know, deal analyzers out there.

Matt:
The BiggerPockets calculators are not that. These are easy to understand. The spreadsheets that I’m talking about are great for real estate analysts and people that sit in a cubicle all day and love to play with Excel. Um, and maybe those are necessary on much larger deals, but if you guys are presenting your investors with like a five unit or a 10 unit or something like that, the BiggerPockets calculators can give them something easy to understand that their eyeballs are going to easily flow through. They’re gonna understand how much money needs to get is gonna be put into the deal, how much money’s gonna get made from the deal where the deal’s located and nice, easy to understand charts and graphs that they can quickly with their eyes, get their head around what it is you’re putting in front of them. And it’s important to meet people where they are.

Matt:
A lot of people aren’t full-time financial analysts or anything like that. These are folks that have other time, other careers just looking for a better place to put their money. The BiggerPockets Calculators is a great vehicle for people to understand where, what it is you’re asking to do with their money and how they’re gonna get it back out. Hervé a lot of the deals that I talk about in raising private capital or fix and flips and BRRRR strategy deals. Did you know, at that point in my career, I exclusively used the BiggerPockets calculators to put fix and flips in front of my investors that came in with me as lenders and equity partners on those deals. And when I started doing slightly more complex bur deals and those kinds of things, as I talk about in the book, those were all presented with those investors and they joined me on the journey through presentations made in the BiggerPockets calculators.

Hervé:
I’m not surprised, Matt, that BiggerPockets calculator, all of those calculators, they’re going to be able to really siphon the deal for you to show you whether or not the deal plays out or if it doesn’t. The great thing about using the BiggerPockets rental Property calculator, it’ll take you about 10 minutes to go ahead and analyze a deal. It’ll go ahead and show you all of these great reports that you can go ahead and share with your lenders and with your equity investors.

Matt:
If you wanna raise your game, why not get around more people raising their game man? And the the BiggerPockets bootcamps is something that’s a great way to get around literally hundreds of other people through the networking groups that are provided through those programs, through the accountability groups that are provided through those programs to get around other people that are raising their game too. As I said before, capital raisers are educators. And if you wanna educate your investor base on why real estate investing is an amazing way for them to reach the financial goals you need to get around the conversations that are there for you. Whether that’s through the Multifamily bootcamp that you and I teach through DeRosa group or through many other things that are taught through the Rookie Bootcamp, the BRRRR Bootcamp, or many other bootcamps that are out there. They’re all there for you guys to learn and raise your game and get around other people that are doing the same thing.

Hervé:
And not only the opportunity to go ahead and raise your game, but to go ahead and network with other investors that might be looking to invest in the same markets that you are looking to invest to. Maybe you wanna go ahead and do a jv, maybe you want to go ahead and partner up with other folks that perhaps have skillsets that you don’t have because you like to look for deals, but they like to go ahead and underwrite deals. And you guys are located in two different cities. All of a sudden you meet each other on one of these bootcamps, you’re starting to talk with each other, you’re starting to network, you’re starting to do deals.

Matt:
There are people that met each other at our BiggerPockets, multi-family bootcamp. They met each other in the accountability groups. They decided that they liked working together. They, they decided that they had a lot of the same core values and those folks that met in our bootcamps are now out there doing deals together, raising capital together, finding opportunities, making things happen together. And they met in a bootcamp. So far we’ve discussed the fundamentals of raising private capital, but after this quick break, I’m going to do a live pitch on how to raise private capital stick around.

Hervé:
Welcome back to the show. All right,

Matt:
Hervé you ready for the pitch?

Hervé:
I am ready for the pitch.

Matt:
Well, here’s the deal, man. I got a pitch coming your way where you and I are gonna do a mock pitch real quick, and we’re gonna do this as value to our listeners and webinar guests because a lot of those folks out there, they’ve got people on their network that they want to talk to, they’re ready to talk to about raising capital for their deals, but they just need to know what to say. And guess what guys? It’s not that difficult. You just gotta kind of know how to tee it up. So everybody you ready? You’re gonna be a dad at my kids’ t-ball game.

Hervé:
Okay. All right. All right.

Matt:
I’m gonna be teeing this up, uh, in, in a manner for you guys to use and we’re gonna be talk, we’re gonna be targeting in, in an avatar that’s in all of your networks, millions of dollars of money is ready for, for it to be invested in your businesses. Um, and you’ll see where I’m gonna go here with it and you’ll realize, oh wait, I could have this conversation with many people in my life. Okay, alright. Right? Ve here we go. Here we

Hervé:
Go.

Matt:
Hey, Hervé , how are you today, man?

Hervé:
I’m doing pretty good. I’m doing pretty good. I’m watching your kid play t-ball over there. He’s pretty good, man. Not too bad.

Matt:
Yeah, he’s all right. Sometimes I’m not sure if he even knows there’s a baseball game going on, and some days I feel like he’s, he, he’s the next Eric Cheater. I don’t know, uh, at this game of t-Ball, we’ll see, right?

Hervé:
That’s the game. Hey,

Matt:
Hey man, listen, congratulations on that new job you got, man.

Hervé:
Thank you very much, man. It’s exciting. Lot of hours, but I’m really pumped up to be able to switch jobs

Matt:
And I’m, and I’m really glad for you. I I, I know you had a good gig going at that last company. We were talking at the, you know, t-ball a couple months ago about how happy you were, uh, with all the benefits that they gave you there. But I get you gotta move over, you gotta move forward, you gotta move upward. Um, question for you, man. Yeah. At that last job that you had, you had a retirement account, didn’t you?

Hervé:
Yeah, I did. I was at that job map for about eight, nine years. So I pretty, I I built up a pretty significant 401k plan,

Matt:
Probably company match and lots of, you know, lot, lots of, uh, ways to help that, help that money grow and the stock market’s been doing really well, these different now it’s been going really well, right? Yeah,

Hervé:
Absolutely. Absolutely. But

Matt:
I, I get a question. Did you know, did that 401k you had at that, at that company, it’s new you is no longer 401k and you can actually move it to whatever you want because you don’t work at that company anymore. Are you aware of that?

Hervé:
Yeah, you know, I did know that I wasn’t gonna be able to keep it in the 401k, so I went ahead and I transferred those funds into a traditional IRA and I was just gonna plan on letting the money sit there and grow until I’m able to tap into it once I hit retirement age.

Matt:
And you’ve done well, uh, with the stock market going as well as it did, but the question is, I mean, things, the economy’s changed a lot and so it might make sense for you to consider putting that IRA into something else.

Hervé:
Yeah, let me tell you something right now. I mean, I am kind of concerned of all of the exposure that my now new traditional IRA has to the stock market, right? I’m in a variety of different stocks. Um, granted the market’s doing well right now, we know in the past it tends to be a little bit of volatile. Who knows what’s in front of us over the next 12 to 24 months. Um, I’d hate it for it to take a huge hit as I’m approaching my retirement years. But truth be told, I don’t really know where else to put the funds in that traditional IRA has to continue to be exposed to stocks and bonds.

Matt:
But what if it didn’t? I gotta tell you, I’ve been doing a lot of edu and I know I, I love what I do for a living as well, but I’m also taking control of my financial freedom. And I found a website that teaches me to do that called BiggerPockets. And on that website, I’ve met a lot of people on their online forums that have many investors that are invested in deals with them through IRAs. Believe it or not, BiggerPockets has taught me that there’s a vehicle called a self-directed IRA and I can take that retirement account for people in my network such as yours, and they can roll it over to another account, doesn’t cost much. And that IRA can get invested in all kinds of things, including real estate deals. I met a guy, I took one of their bootcamps for multifamily taught by these two great guys at the DeRosa group, and they had somebody in their student group there that had bought a 10 unit apartment building with somebody that he knew is IRA and that IRA account was the equity investor.

Matt:
It didn’t have, the person didn’t have to do anything, just the IRA took some ownership of the apartment building and the other person was able to be the operator of the building and those two people partnered up. I gotta tell you, Hervé I’m really serious about this real estate thing and I’ve made some real investments in myself through a BiggerPockets Pro membership and through other vehicles out there to advance my education. I’ve got a great deal and as you know, I used to live in Albuquerque. My sister still lives there. I’ve got great inroads in the market of Albuquerque. I’ve been there to visit it twice in the last couple months. I even told you how much I love that market. Remember, if you remember our conversations, I’ve got an opportunity in Albuquerque and I think it is something that I’d love to show you on how maybe that retirement account of yours could actually become part owner of this 10 apartment building deal. I have. What do you think? Should we get coffee next week and talk more about this?

Hervé:
Matt? Listen, right now I got a lot of my funds, obviously in traditional IRA and the funds in there. They got exposure to the stock market right now, stock market’s doing pretty good, but you know, at times if it could be kind of volatile, I hear you talk about real estate, there are some things that I like about real estate, but tell me right now, particularly with my IRA performing as well as it is, why should I invest in real estate right now rather than just keeping my money in the stock market?

Matt:
Here’s the deal, man. You know that times are changing quickly, right? Uh, you know, you read articles and everything like that. We’re not, the times today are not the times of two years ago. And there’s also like, what’s the stock market gonna do tomorrow? You know, it, it could go way up, could go way down. It’s important to diversify into a few other things. I’m not saying you should take that entire IRA and put it into real estate, but you certainly could take a piece of it. And all I’m trying to tell you is there is another way for at least diversification into other things. You invest part of that in real estate, you’ve at least got the sticks and bricks, the collateral of the dirt that’s there. It’s not gonna go to zero, is it? So you’ve got something that’s there that’s going to pay regular predictable cash flow on a monthly, and I’m happy to sit down and go over the numbers with you to show you what we’re projecting this deal is going to do and we’re gonna hold it for five years and then sell it. And this should generate another big shot in the arm for your IRA account. It’s just, it’s not that real estate’s better, it’s just that it’s different.

Hervé:
Matt, you know what? That sounds real compelling. Let’s definitely meet up next week for that coffee to talk more.

Matt:
I’d like to take you through the entire deal. I can show you how self-directed IRAs work. I’ll show you a great, uh, little pitch sheet that I put together using the BiggerPockets calculators on how this deal’s put together in kind of cashflow. We’re projecting. I’ll see you there, man.

Hervé:
Alright man. See you next week.

Matt:
So that, that was a little mock pitch, but the point I wanted to carry across is a lot of people in your network are presenting that opportunity to you, whether you know it or not, they have retirement accounts from jobs they used to work at. Many people used to work at one place and now work at another place, the place they used to work, pay them a retirement accountants part of their compensation package and they can take that retirement account. Once they don’t work there anymore, they can take that retirement account and then use it for all kinds of different things when they don’t work for that firm anymore. They can do all kinds of stuff with it through a, through a self-directed IRA, including investing in real estate. That going back to the, to the part before capital raisers are educators and you as a capital raiser are there to teach those in your network how something like their retirement account for a company they used to work at could get applied directly into real estate opportunities.

Matt:
You have to provide them if you present ’em in the proper light. Hey guys, listen to sum it up, Hervé and I have talked about three tips to get your capital raising game to the next level and to raise that first million or more for your real estate business, okay? Just to sum it up, tip number one, get your market down. Really understand that market research, infiltrate that market. Perhaps use some tools that BiggerPockets has that are available to you to help you understand and find some off the market deals in the market. Tip number two, tell everyone about you, right? Tell everyone about how great of real estate investor you are, including those people that like and trust you because you’re you and also the greater world about you and your journey through real estate investing. And also why real estate investing is such a great vehicle for all people.

Matt:
And number three, raise your game guys. Get to know people that are on the same path as you get your underwriting game down so that you can quick analyze deals that are there for in real estate opportunities and show them to people that wanna invest with you. Get those things really tight and get around people that are, you know, walking the same walk as you that can kind of help you along, maybe even partner up with you through the BiggerPockets Bootcamps. And that sums it all up ve to something that, that we can offer you guys today that can help you really, really put Rocket fuel into your spaceship of real estate investing to get you guys to the next level. And that today, guys, is the BiggerPockets Pro membership, right? The BiggerPockets Pro membership can help you take everything we’ve talked about today and just get there that much faster, right? BiggerPockets Pro has a discount on Invelo and Hervé could you real quick just highlight Invelo, I know you, I know you’re a user of it. Tell us real quick why Invelo is amazing and why people should consider BiggerPockets Pro so they can get a phenomenal discount on that service.

Hervé:
Yeah, listen Matt invelos an absolutely amazing tool. A lot of folks are always concerned and complaining about how they can’t find deals. It’s hard to go ahead and put offers on listed deals and things like that invelo has their resource of off market deals. So now you can go ahead and start looking at deals even before they hit the market, even if they don’t hit the market at all. But you have an opportunity now to go ahead and search these off market deals as closest as right, even in your backyard. Then you go ahead from there, use the additional tools that BiggerPockets Pro offers, you’re gonna start analyzing deals, start printing out those reports and start sharing them with your investors.

Matt:
BiggerPockets Pro gives you that pro member badge and pro member tools that you guys can use. Remember the pro members at BiggerPockets expand their network three times faster than those with a pro, without a pro membership. That’s the upper hand that you guys need to meet more potential partners and more potential investors for your deals. The BiggerPockets calculators is, is something that a pro gets access to and they can save deals they underwrite and you can download deals you underwrite using the BiggerPockets calculators and email them off to prospective investors. You can put your cool little company logo in there. You can do a lot of great things and take those calculators to the next level and use them to raise capital for your projects. We talked about the BiggerPockets bootcamps as a way for you guys to network, raise your game, meet other people on the same journey, enjoy the networking and accountability groups those bootcamps have to offer.

Matt:
Well guess what? Pros get 50% off all the bootcamps. What a great value that is. So you can join those bootcamps for half the price if you upgrade to pro and you can, you know, just get there that much faster and meet lots of great people that are, that are doing the same thing that you are, are probably pro members as well, right? So guys, as I said before, you can get there certainly on your own, but why not get there using such a great vehicle as BiggerPockets Pro and use the coupon code we’ve talked about today to get 20% off of BP Pro and the coupon code guys is funding. ’cause we all need funding, right? Funding 24, funding in 2024. Funding 24 is that coupon code. Use it at BiggerPockets forward slash Pro to upgrade right now. And if you guys do it right now, my book Raising Private Capital sold like 60,000 copies and people have paid really good money for that book.

Matt:
You my friend, my listener friend and my webinar watcher friend, get a copy of that book for free, capital F free Hervé can you believe that BiggerPockets has given that book away for free? If you upgrade a pro right now using funding24 as the coupon code, you’ll get a copy of that book so you can read all the great things in that book, including the three tiers of capital raising, all the great stories of my personal journey of capital raising everything from what a cash provider and a deal provider is and everything else that I’ve covered in that book that you guys can use to take your capital raising game to the next level. It is yours for free when you upgrade right now using funding24.

Hervé:
Listen folks, when I got started in real estate about seven, eight years ago, Raising Private Capital by Matt Faircloth was truly one of the first books that I’ve ever read. I’m not lying. I took that thing, I read it from front to back, I took notes along as I read it, and I’m telling you, it has some incredible tools, tips, advice, opinion on things that you can implement right away to start raising money for your deals. You have to do it. Don’t think about going into your savings account and seeing how much you have. So that’s what you’re gonna be able to afford to buy for your next deal. You have to raise private capital for your investors, but you gotta do it the right way. Get that book Raising Private Capital again with this coupon, you get it free.

Matt:
Thank you so much for your kind word, Hervé and wisdom man. Congratulations on your first BiggerPockets podcast appearance. Thank you. It’s been an honor to do this with you today, guys. We hope this podcast was of value. Please apply these principles to go and raise millions or more for your real estate businesses and thanks for listening.

 

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Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.



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