March 26, 2020

RAISING Private Money With Austin Rutherford

Episode 360: RAISING Private Money With Austin Rutherford

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REIS 360 | Raising Private Money

 

At 21 years old, Austin Rutherford raised his first $250,000 through private money. While many would crumble at the mental obstacles it entails, Austin was able to push through. In this episode, he talks to Mitch Stephen about his journey of raising private money, from starting young in the real estate world to becoming the success he currently is with up to $18 million in private money. Austin shares his tactics and strategies, along with some advice and inspiration for when starting your own journey in this space. He gives us a peek into his How to Raise Private Money course, providing us a look into the ways we can tap into more money that many don’t even know they have access to.

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I’m talking to Austin Rutherford. I’m excited to talk with him because this is a guy cranking out some volume. It’s not easy to do. He’s doing between 5 to 10 deals a month consistently and he’s doing whatever the house it says to do. It’s the old house whisperer thing. He buys a property, then he goes out to visit it in his car. He leans down to the front door with his ear and it says, “Wholesale me or retail me, fix me up and retail me.” The house speaks to him as it should. We know that they can because sometimes we’re sitting back and don’t complicate things. The house will tell you what to do. The neighborhood will tell you what to do. Listen to it.

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Austin, you’re over there in Columbus, Ohio. I’ve been there before. Once upon a time in a previous life, I was in a van and I wired every Rite Aid pharmacy on the planet, from the Mississippi East or whatever, I don’t know. I was all over. That’s where I saw all the small towns. I wired all the Footlockers and Gaps and Limited and Marianne’s plus. That took me to every mall and every big city. I got to visit Columbus many times and all through Ohio. Tell us a little bit about you and how you got to Ohio and your background? How did you get into this business? We’ll take it from there. 

First, I appreciate you having me on here. I’m looking forward to this. A little bit of my backstory, I was born and raised here in Columbus, Ohio. My dream was to go to the NBA, be an NBA basketball player, it didn’t work out. After high school, I went to Arizona and played basketball for a year to junior college. I fell out of love with the game. I never wanted to pick up a basketball again. I was lost at that point in my life. I started reading a lot of books and I don’t know if this is true or not, but this is what got me hooked. He said, “90% of all people who filed a tax return with $1 million or more on it had real estate in their portfolio.” I said, “This is the way I’m going to get rich.”

Whether it’s true or not, it’s a good thing that sparked you. Sometimes it doesn’t matter if it’s true or not. If it gets you going, that’s good enough.

It doesn’t matter where motivation comes from, as long as you have it. I flew home back to Columbus. Fell in love with passive residual income first. I’ve got a full-time job trying to save some money. I found my first house. I was nineteen years old, then I found a duplex that cashflowed for me when I put the numbers into a spreadsheet. I bought my first duplex when I was nineteen years old. It was in a house on the university’s campus. I met my mentor that taught me how to flip houses. I bought my first flip when I was 21, sold it when I was 22, made $103,000 in net profit on the deal and put it all back into the business. It blew up from there.

What I’m most impressed with is the fact that you are young and that you put it all back in the business because a lot of young people would’ve been driving a nice car. They put it all behind it after they got back from the Hawaiian vacation. Hats off to you. We have similar stories. I wanted to play football and got cut about 45 seconds and then I walked around the planet not knowing what I was going to do for a long time. I accidentally screwed up and bought a rental property and sold it and made some money. That’s when my light bulb went off. I was recognizing the similarities. Did you spend this time running crazy, burning the candle at both ends, doing all this stuff and then finally figured out like, “I’m going to burn out if I don’t change the way I do this?” Did you figure that out yet?

Yes. From the time I decided I wanted to flip houses, to the time I flipped my first house was a sixteen-month process. I was working 60 hours a week as a valet. I was going to school full-time. I was trying to start real estate and when I started making money, I was ripping and running and managing job sites all day every day, doing paperwork from 5:00 PM to midnight. It was a lot. Finally, I was like, “I don’t want to keep running like this.” I’m making good money. I did a high-paying job. That’s not what I wanted to do. Finally, I started hiring a team a few years ago. Now, I have a team of six in the office here. I’ve grown. I have way more freedom than I’ve ever had.

How did that realization happen? How did it manifest? Did you go to a mastermind? Did you read a book? Did you start listening to the emails? What helped you say, “I can’t keep going like this and this is what I’m going to do?”

I’ve had mentors in different, various parts of my life. One of my mentors said consistently, “You’ve got to hire an assistant.” In my mind, I was like, “I can’t afford to pay $30,000 for an assistant.”

Isn’t that the craziest thing? Do you think you can’t afford it? You can’t afford not to.

Once you do it, it’s the dumbest thing you’ve ever thought. Finally, I pulled the trigger and hired an assistant and the light bulb went off. I went from doing all the bull crap to marketing and sales and producing income. We hired a sales department and I’m high-level and creating other businesses. It is counterintuitive. You don’t want to pay somebody to do the work, but you can’t grow without paying somebody to do the work.

I’m going to guess, you made way more money when you had the bill for the assistant than you did when you didn’t have a bill for the assistant? 

Yes. Every year, we made more money, the more people I hired.

It doesn't matter where motivation comes from as long as you have it. Click To Tweet

It’s a hard bridge to cross through mentally. We’re used to living broke. You were used to being tight all the time. You had a job and then you’re going to school and you’re tight, every dollar counts.

Dependent pension but it’s counterintuitive to what you need to do.

Did your mentor help you find this person? Did you take a course on hiring people? Did you jump in with both feet like entrepreneurs do and started putting people in chairs? How many of them failed before you found the right one?

We’ve been through a few of them for sure. I went down the Indeed route. I posted a job ad on Indeed.com, hired one. She lasted three months. She quit and I hired another one. Thankfully, she’s been with me almost 2.5, 3 years. I hired a project manager, had to fire her, hired an acquisition manager, had to fire her and then hired two acquisitions people in this position as a person. I’m like 5 or 8 or 9.

That’s good because sometimes I was always hiring people from the real estate club, which was wrong because they wanted to beat me. They want to beat you. I don’t want someone that wants to be me. I want someone who lives and breathes to help someone like me. When I thought I saw interesting resumes on Indeed or whatever, I would start testing the people. I was looking for all the good stuff. I was looking for a punctual, honest, organized, all the good stuff up. I was looking for this bad stuff that I needed. There’s not a lot of bad stuff. It’s two critical things. One is it would help if they were a bad personal money manager, so they could never save up enough to compete with me. I needed them not to have an entrepreneurial bone in their body. I needed someone who wanted a job. Thank God as entrepreneurs, we wonder why everyone’s not an entrepreneur. That would screw everything up for us. We were like, “Thank God there are people out there that like to do the books.” 

We need people to do those tests. In some positions within the company, people can be entrepreneurs. They have some desire and everything, but they don’t want to have 100% of the risk. A sale is a tremendous opportunity for somebody like that.

Think about as close to an entrepreneur as you can get especially if they’re straight commission. My salespeople are straight commission. They have to have the drive, they have to be money-motivated, they have to have all these good things to be organized, punctual and all this stuff. I don’t want them to want to be me. When I was trying to find people in the real estate groups, that was fine in that person. What I wanted for a salesman was I wanted the top Hoover vacuum cleaner salesman in the region. I wanted to take him from making $50,000 a year to making $80,000 a year. I’m giving that opportunity. I didn’t want to have to teach him how to sell and I didn’t want him to necessarily care about being a real estate investor. I didn’t want him to have any interest in that at all. I want him to be interested in a product that he could sell, use his skills and make more money than he was selling vacuum cleaners.

Real estate is our product. We run a marketing business, there happens to be real estate is the end product.

No matter who you are, you’re a marketer or you’re out of business. What impresses me though, you have a private money course and I have a private money course. We had this conversation before we got started here. I don’t care. Maybe somewhere between my private money course and his private money courses, is how you out there are going to raise your $20 million and go to places you’ve never dreamed of before. This guy raised his first $250,000 at 21 years old and that’s impressive. There are a lot of mental obstacles that would tell this kid. I’m going to call you a kid at that point. You were good at that point. There are a lot of mental obstacles that should have stopped most people or would have stopped most people. This guy didn’t do it. The key to that probably I’m going to guess is something you’ve already said. You always had a mentor. That mentor was pushing you out of your zone. 

It’s a hard-mental shift, especially when you’re that young, you’re going to usually older people that have retirement accounts that have worked their whole life to save a couple of $100,000, whatever that type of money they have in their account. For me, at that point, it was an ask. I was asking somebody their entire life savings. It was hard to come from that point of view because it’s coming as an ask. Thankfully, I had a mentor that kept pushing me and somebody believed in me enough to invest in the project with me. Now, it’s way different. It’s not an ask anymore. It’s an opportunity. I truly believe that the opportunity that we can give people, if you raise money, the opportunities that we give these people and the money that they make is almost untouched.

With the collateral that they have. 

The stock market, our people wouldn’t lose any money.

I love this season. I don’t love it because people are getting hurt, but since they’re getting hurting, it’s not my fault. They’re already getting hurt. I love walking around town going, “How about that stock market?” This is in my course. In three seconds, you can tell if they’re in the stock market or not. When the Dallas fall in 4,000 points, within three seconds, you can tell if they’re in or not. They’ll look at the ground and they’ll tell you, “It’s kicking my ass.” You’ve got your patented thing, what I say is, “I am glad I don’t have to live by that ticker tape anymore. I changed the way that I invest my money and I never even look at that ticker tape anymore and I’m glad I don’t have.” You stop and clear at them.

They’re like, “What does that mean? What do you mean?”

REIS 360 | Raising Private Money

Raising Private Money: We run a marketing business that happens to have real estate as the end product.

 

You’ve got to hold the silence and stare at them. The hardest thing in the whole wide world in sales, acquisitions, raising money, anything was the silence. You’ve got to shut up. Don’t say another word after that. If the guy leaves the elevator without asking you, probably just as well. You don’t want to talk to him anyway. If he doesn’t want to know, then for God’s sake, be glad you didn’t spend money on luxury with him. Let’s talk about your private money course. First of all, you had it going for yourself. You did $250,000 by the time you’re 21, but you’ve used the tactics, refined it. As you get a stronger track record, it gets a little easier. It shouldn’t stop you from getting money for any reason. You’re up to $18 million in private money. I have about the same or more a little bit. It’s a feat to get that amount of money. It’s a feat to keep that amount of money, but keeping it right, it’s not hard. You pay people on time.

As soon as you get someone in the door, they may test you out and lend $25,000 or $50,000. As soon as you pay him back and they see how much money they make, immediately they’re like, “Here’s $400,000.” They never want to have it back because they see that money that you’re making. Going back to the number that we’ve raised, it’s something that I’ve always lived by is, “You always want to dig your well before you’re thirsty.” It’s a lot easier to raise money when you don’t need it tomorrow. If you need it tomorrow, it’s a way different conversation. Everywhere I’m at, all times I’m always out looking for opportunities. I go to the borrower. I’m brushing shoulders with people and I’m asking them what they do, ask me what I do. I say, “I’m a real estate investor. I use other people’s money to fund my deals.” They’re like, “What do you mean you use other people’s money?” The foot’s in the door. You always have to be raising money and digging your well before you’re thirsty. Otherwise, it’s super difficult to get to that amount of money because you’re coming from a place of need if you’re only looking for it when you need it.

There are a lot of good nuggets there. One is to stop begging for money. I don’t know what you pay yet. I am paying 8% to 10%. I advertised that I paid 10%, then I tell them the terms of my 10%. Some people don’t like those terms. We get to talk about 9%, 8%, 7%, 6%. I will pay 10%. I can pay 14% under certain conditions, but you’ve got to meet my terms. I advertise 10% but that’s a fifteen-year fixed, fully-amortized loan. “I don’t want to go for fifteen years.” “I’ve got some other products.” I’ve got 9%, it’s ten years fixed. 8% is fifteen years with a five-year balloon. You can start doing any hybrids. I don’t like to make it too complicated but in my mind, 8.5% would be fifteen years with a seven-year balloon. The longer they give me the money, the higher I’ll pay them, but they’ve got to give me more time. What are your interest rates? What is your offer like?

We paid 12% depending on the terms. We’ve paid up to 14%. To me, it’s never been the cost of the money, it’s the availability of money.

Fourteen percent is nothing if you’re only going to have a deal for 30 days. That’s 14% annual and to fight, sometimes you feel guilty and you say, “Here’s the 14%. It was only 30 days out of the year. Here’s your little check.” I feel bad. Here’s $1,000 put on top of it.

We had a memo of 90 days. Worst case they get 90 days interest. It’s anywhere from 8% to 12% only. If they’re funding an entire deal, we’ll pay them more money. If they’re funding less of the deal for whatever reason in their 1st or 2nd position or something and it’s not the entire sum, then we’re negotiating the terms down to 8%, 9%, 10%. We’re right in the same ballpark as well.

Have you ever offered someone much interest rate that it scared them?

They think it’s a fraud. They think it’s a Ponzi scheme. I used to leave, went out because I was coming from a place of ask. I was like, “I’ll give you 13%.” They’re like, “No.”

They’ll run like hell. They hit the door they don’t even look back. It’s like, “This guy’s a fraud.” 

I don’t even mention it. I’ll mention double digits to get people’s interests but as soon as I have a conversation with them, I’m finding out where their money is. If it’s in the stocks or if it’s in a CD and what they’re making on and what they’re making, not what the stock people tell them 8%. “Was that before or after taxes? Did you lose the year before? What are you making here?” I go off of that number and make an offer. If they’re making 6% in the stock market, offer an 8%. I don’t lead with 12% anymore.

I made the same mistakes. I was buying the house and then selling the house on paper and selling the note at the same closing table and it was all happening within 30 to 60 days. Eighteen percent wasn’t even enough for my investor. It was $2,000 kicker per deal plus 18% because I was rolling them. Sometimes I sold them before I even bought them. I only owned them for 1.5 minutes. It was enough time to move from that room with the closing title company to that room. I don’t know notes anymore. I learned a lot of things by accident. How about you? I didn’t strategize, “This is what I’m going to do.” I would do something and screw up, then I make a lot of money and go, “What happened? I had to go back. How do you make that happen again?” Have you learned to like that?

I’ve learned things that I wanted to do more of. I’ve learned things that I never wanted to do it again. It goes both ways for sure. Most of the things we do aren’t planned. We’re like, “That makes sense,” and then you would do it again.

Tell us about the How to Raise Private Money course. What does it include? Give us a little idea of what someone could expect if they jumped into that course.

It’s a start to finish how to raise money. First off, what is private money and then where to find it? That’s always the biggest question I get, I don’t know about you, “Where do I find private money? I can’t google it.” You can’t google it because it’s private money. It goes into a lot of places to put yourself, areas you put yourself around athletic clubs, restaurants, bars, things like that where money could potentially be at. Some scripts and one-liners to get people interested in it. It teaches you how to tap into money. A lot of people would think they need to have $100,000 sitting in the bank to lend you money. That’s not it. You’ve got cash, you’ve got IRAs, you’ve got 401(k)s, you’ve got life insurance policies. You have a lot of ways to tap into more money that people don’t even know they have access to. You have to educate them during that conversation on ways that they can tap into money. You get credibility package, deal analyzers, deal package, all the documents that we use to present opportunities to lenders and how we calculate the payoffs and stuff. It’s the A to Z of where to find it, how to structure it? Who do we talk to? How does the money work going through a deal? Who does the money get sent to, that type of thing? That’s what the course includes in there.

Mules will go out and do hundreds of deals to make $5,000 a deal. Click To Tweet

Do people send their money to the title company with you or do they send it to you?

The vast majority go to the title company. For a few, and it’s only good friends, they’ll send it directly to me, but the majority goes through the title company for sure.

We have that avenue available, but 90% of the people send the stuff to us. In all fairness, 90% of the people that loan me money have been with me 10, 15 and 20 years. Some of them would have been with me 25 years, but they died. These people have a long history with me. Honestly, they become my family and truthfully, the underwriting guidelines for everybody are the same. Whether you’re my mom or you’re the person across the street, the neighbor. The underwriting guidelines are the same for everybody. Nothing changes. It sounds like you’ve done a good job of policing yourself. One of the biggest mistakes I see out there is when people get access to a lot of money, they change their underwriting borrower and they start buying crap. They don’t stay at the same standards. I always want to buy 100 houses a year. That’s always the goal to do, at least 1 house over 100. When I have money but if I only find 87 outstanding deals that year, then that’s where we’re going to be at. I don’t need to buy another thirteen crappy ass deals so I can say I hit 100.

It’s not even the number of deals. For me, it’s always about profit. I’d rather do one deal and make $5 million on it, than 150 deals to make $5 million on.

I’d be way too scared. I’d say, “I’ve got to put up $400 million so I could make $500 million.” I don’t know if I can do that. I see what you’re saying. A crappy deal that loses $10,000 takes exactly as much effort, if not more effort than a good deal that makes you $40,000 effort. I learned that the hard way. Ron LeGrand taught me that. He said, “How many people are doing more than ten deals a month?” I raised my hand and told him what I was doing. He called me an idiot in front of 300 people, “You’re an idiot.” He’s perfect. He’s an expert at holding the silence. We helped him silence long enough for me to turn four shades of red. He said, “Everybody in this room would be doing good if they were as dumb as this guy.” He was saying you’re an idiot, but everybody in the room wishes they were an idiot like you doing twelve deals, but let me explain. Ron says, “You’d be better off to be doing half as many deals, have a life and make more money.” That was the first time I thought about that concept.

We call it the magician versus the mule. Mules will go out and do hundreds of deals to make $5,000 a deal. If you get a little bit smarter, find a way to get deals better. You can do half the amount of deals and make three times of money. How do you be a magician and not be the one out there cranking all day every day?

I like you, Austin. You’re full of good ones. Dig your well before you’re thirsty. You talked about where to find the money. You talked about the pathway of the money and the documentation and how it’s like, “Someone wants to give you the money. What do you do?” That’s the scary part. How do I say, “This is what we’re going to do. Give them what they need. Sign this sign here and then transfer your money over the title company when I tell you to and the amount I tell you to, certified funds or whatever.” You probably talk about negotiating your interest rate.

You lead with something, but then you say, “If you weren’t there, it’s going to be X, Y, Z. You’ve got to fund 100% of the deal. You’ve got to wire it on time. You can’t ever come to look at the property. You send me the money and you get out the way.” If they’re like, “I want to do the evaluation on it. I want to calculate the repairs. I don’t even want to give you 80% of the loan.” Any of those things, the interest rate starts dropping. You leave with something that you’re comfortable paying, but an absolute 100% best-case scenario for you and then you go down from there. Most people off the jump aren’t going to give you 100% financed at the click of a finger and not ask any questions. If they do, I’m happy to pay interest because it’s less headache for me. I don’t have to go out there and raise the second position or I don’t have to go out there and put some of my money into the deal. We do the same thing.

I’ve always borrowed 100%, but I don’t borrow over 65% of the value. That’s my underwriting guideline to make sure that I have at least a 35% cushion and I use the owner finance value, which is a different value than maybe the comps. The comps and the owner finance value are about the same. The owner finance value is a value based on the rents. We back into the rents in that neighborhood to establish a sales price. In the recession, that price, my owner finance value can be 100% over the comps in the neighborhood. The person is across the streets paying this much rent. I’m offered a sales price where they can quit paying that money for nothing and they can pay something to own over. It’s a freaking, weird dynamic. In the recession, everyone has to rent. Rents are going up and my goal always is to make the PITI payment what the rent is, plus or minus a little bit. People will pay $150, $200 more a month to own a house, but they’re comfortable at this place, I don’t want to stress them out. I’m trying to collect their payments. I’m not trying to take their down payment away from. I’m going to run away and take their house away in five months. I hate that plan. It’s a stupid plan.

If you’re paying it to rent, why not pay the same thing to own?

We ought to trade courses because I’m sure there are things in your course that I could benefit from. I’m hugely curious about it. If you want to trade, I’ll trade you. What do you charge for your course or what are you charging? That’s what I want to say. This man has a price. He’s going to be named a price. This is this price. He has the right to change his price up or down or quit selling it altogether. I’m making this clear because these conversations are going to be archived for months if not years. What’s the date? It’s March 11, 2020. If you look at your watch and it’s not that date, the price might have changed. What are you selling it for now, March the 11th, 2020?

It’s on sale for $297, but it’s going to go up because I feel like I’m shortcutting myself. After all, we’re selling money. We’re selling you how to create money.

I’m selling mine for $997, sometimes I run a special like you, but you find one person what you learned to loan you even $25,000, that $1,000 or whatever you paid is nothing. The reason why it’s nothing is if you can do it one time with what you learned, you can do it 100 times with what you learned. You won’t stay at $25,000 long. As a matter of fact, this is an interesting comparison, I agree with what you said, people start with a little bit. They put their little finger in or the little toe in the water and they test you out. I have recognized, I’m curious to know if this is the same with you. About the third time, I make a payment on time, the phone rings and they want to know what I can do with a little more money. It’s three months, almost for the day. Even my students call me to go, “They called me for 3 months and 4 days. I measured it.” I said, “It’s uncanny.” They give you a check. The first one’s going to come on and get a second check. The third check, they’re like, “All this other money sitting around and making nothing.”

They start telling their moms, uncles, friends, parents, then money flows in from everywhere. It’s crazy.

REIS 360 | Raising Private Money

Raising Private Money: You always have to be raising money and digging your well before you’re thirsty.

 

I like to wait until they say they don’t have any more or I’ve put in as much as I want to put in. I asked, “Who else can we help instead of begging for money?” Certainly, have a mother or uncle or aunt or someone who’s not making crap on their money and 8% would be good for them. We can change their life. I like your elevator pitch. Mine’s the same. I help average people achieve above average rates of return and I give them valuable Texas real estate as collateral.

What does that mean? Is your foot in the door?

In my course, I also use a lot of NLP to get people. Do you do that? Get people to ask you the question that you want them to ask so you can get into the conversation that you want to be into. If I want to know what you do for a living, we’ll do a little role play, answer anything but you’re a real estate investor. Answer doctor, lawyer, whatever. Austin, I noticed those are some expensive wheels you’ve got out there. May I ask what you do for a living? 

I’m a doctor. I went to school for it.

What kind of doctor?

I’m a heart surgeon.

I almost took that route, but I chose a different path.

What path? What do you mean? What are you doing?

I help average people achieve above average rates of return where they’re idle money and I give them a valuable Texas real estate as a title. Normally, if it’s not a brain surgeon, if it’s something like I do landscape or something, I’ll ask for their card first stating, “I’m going to need that service soon or I know someone who’s looking for you. I know someone that needs that. Let me have your card.” Then I’ll tell them what I do, but it’s up to me whether I call them back or not. I got everything in control. It’s hard to fake, “I’m going to need a brain surgeon soon.” I might miss the car. I might have to get his name and look him up in the Rols or something. 

I love that. That’s you.

That’s why I said we should share courses. We should both take time to go through each other’s courses and we should get together one day and see what I missed from you and what you missed from me. That would be cool.

I agree 100%. I would love it.

We were talking early on, Austin didn’t know exactly what he’s going to give away, but he’s going to give away something. I want you to go to REInvestorSummit.com/Elevate. There you’ll see the Raising Private Money course. It’s evergreen, Austin. If you want to add speaking engagements or anything, you can always put it there. Have your people call my people and they’ll keep it current, whatever you want to change it or modify it. If you get a different special or you have something else coming out, put it out there. It’s a place for everyone to go and stay current with you and what you got going on. Check out that private money course. The guy raised $250,000 at age 21. How old are you now? 

I’m 26.

Money doesn't change people. Money brings out the real you. Click To Tweet

My head was far up my butt when I was 26, I couldn’t even believe it. I say this with all the jealousy in my heart. I don’t know why. I was driven. I worked hard. I tried businesses. It didn’t click with me until I was about 24. I wish I’d have had that extra 10 years or 12 years in your case, what a blessing. Please, coming from a 59-year-old, keep your head screwed on straight and live by the certain rules that have gotten you where you’re at. Don’t change a lot.

I say it all the time, people always say money changes people. Money doesn’t change people. Money brings out the real you. If you are a genuine dude who’s down to Earth, you’re going to be a more genuine dude that’s down to Earth. If you’re a jerk, you’re going to be more of a jerk.

It magnifies you, it ten times you. When I started making some more money, I did buy a little nicer car. I still don’t feel like I’ve made enough money to spend $275,000 on a Ferrari or something because it doesn’t make any sense to me. I would rather rent one for the day of the month and hand it back like, “Here, that was fun. I’ve got a lot of looks but I’m done.” On the other hand, maybe then I would find out it was important to me. It’s something I wanted to do and then that would be different. A lot of people would run out and buy these things and 90 days in it’s like, “I wish I wouldn’t have done that. I wish I could get that $290,000 back, 400,000 back.” This has been good, 5 to 10 deals a month. Do you have about 5, 6 people helping you?

There are five people out there and then me. We’ve got three on acquisitions, one insurance action coordination, one in dispositions. That’s how we operate.

What is your role though? Are you mostly, “I’m going to go about my day and when the phone rings, I’m going to solve problems for my guys, I’m going to answer their question?”

Yes, for the most part. We started the education side of the business. I’m putting a lot of time into that.

Do you want to talk to me about that? That business will take all the time you can give it and it will never stop asking for that time because there’s always another thing. “I could do this course and that course,” and then it offshoots so we could do this and we can do that.

I’m quickly learning. I thought I was going to be able to make a couple of posts on Instagram and stuff. Follow me on Instagram too, @AustinRutherfordOfficial. I thought it was going to be Instagram. No, it’s a full-blown, full-time business. I hired a full-time videographer. It’s a whole other business.

It’s rewarding though if you get in it for the right reasons. If you get in it for the money, it’s not going to be a real job. If you’re getting in there trying to change people’s lives and you’ve got a certain goal, like my thing is Dave Ramsey does the primal screaming when they don’t have any more debt, when they zero out their debt. You and I go quite the opposite direction. It’s like, “How much debt can we get into? The more we get into, the more we make.” I don’t agree with that theory, but I understand who he’s talking to too. I understand the audience he’s talking to. We ring the bell when people have that conversation with their boss about how they no longer need their boss’ service. That’s my goal. Let me get you to the point where you’ve got enough coming in or you’re confident enough to say goodbye to that job. That’s a worthwhile goal. That doesn’t even mean you have to be rich. One of the biggest a-ha moments in my life, Austin, I know you’ll get it, is when I figured out that financial freedom didn’t mean I had to be rich. It means I needed to make whatever my overhead was. If my overhead at the time was $3,500 a month and that’s what I needed to come in, that’s what I needed. I could tell my boss to go take a flying leap off a cliff. What’s $3,500 a month? All of a sudden, my whole world shrank a little bit. The first step is not to become a multimillionaire.

The first step is getting rid of your job, but still have the income so that you don’t have to give up 2,600 hours a year for someone else to make money. Twenty-six hundred hours a year, you can start to be good at something. In four years, you’ve got your 10,000 hours. You know what I’m talking about on that. Ten thousand hours on the violin separates you from good violinists. It puts you in the best in the world. It’s 10,000 hours extra is what it is. It’s 10,000 hours more than what the other guys do. You didn’t get your 10,000 hours in 4, 5 or 6 years and be your guy along the way and start hanging around with people. I like what you said about where to find prospects for private money.

If you’re drinking in a place where beer is $1.50, get out of that bar. You want a drink or drinks for $10 minimum a pop. You’re sitting next to people. Use your little NLP conversations with them and it’s relaxing. It’s fun. I hesitate to say this because it doesn’t sound right, but it’s right. I love studying the great con men of the day. They were good at separating people from their money. What they did to get people to take those was brilliant. I wanted to be like them, except that I didn’t want the part where they screwed the guy. I try to take that out.

The problem with the whole thing with the con man is the one thing you’ve got to learn to live with that you’re never going to fix that the con man does that you can’t do is he always offers us something way over the top. The offer is too good. It’s a huge profit for whoever they’re talking to. We only have the product that we have. We may not be over the top, but it’s better than what they’re doing. I settled to be better than what they have by a long shot, then over the top. If you study those guys, they’re engaging, they have a conversation, they use NLP. They ask questions or have a conversation to let them know what their offer is going to be, “May I ask what your investments now are?” “I have my money in a CD.” This guy’s making 1.5% match, maybe 2%. I know where I’m going to offer it. They say I’m in the stock market. “How has that been? I know it’s been good, but how has it been over the last few years? Try to get an average.” These guys don’t ask questions for no reason. Every question they asked was for a reason.

They know where they’re leading the conversation. That’s the thing. You have to know private money and where you want the conversation to go to be able to ask the right questions.

Sometimes we need to talk to young people that are growing their business. This man needs to take his money and put it in his business. He’s talked to a young attorney. He’s trying to grow his practice, but then he’d say, “What I do is this. You’re probably putting your money in your practice. I’m thinking to myself, if I’m you, I’m 28 years old. I’m going to start in my law practice. I’m thinking I’m trying to grow my practice. Am I right about that?” He says, “Yeah.” I said, “Do you know anybody I could help by offering them this stuff? Do you have any clients?” I love talking to attorneys because one, you can always get an appointment with them because it’s easy, a free initial consult. Always get one with them because all you have to say is, “I’m in this business. I need certain attorneys on my round table. You might be one of them. Can I come in and show you my business?” I like attorney, second, because they understand the position and the power of a first lien and what they can do to me. Plus, they don’t have to hire a lawyer because they are one. Thirdly, I like attorneys because they usually know a lot of people with a lot of money. Whether they decide to invest with me or not, they get confidence in me.

REIS 360 | Raising Private Money

Raising Private Money: You have a lot of ways to tap into more money that people don’t even know they have access to.

 

I used to go to a lot of CPAs, but CPAs are a little bit more worried about their reputation and afraid to recommend you than attorneys. CPAs won’t take any money because it’s a conflict of interest. They’ll tell you that. It’s a conflict of interest for attorneys too, but they don’t care. How to avoid all that is I say, “If you are affirming someone, instead of paying $300 for these documents, I’ll pay you $1,000 for the documents you do between me and the person that you’re bringing to the table because you have a stressful position that you’re in. Furthermore, you can represent him and I’ll sign that you’re representing them, but I’ll pay you $1,000 for the stress.”

There’s always a way to work something. I love that.

We’ve been talking here for a while, probably too long. I’d like to thank everybody. If you want to learn more about Austin Rutherford, go to REInvestorSummit.com/Elevate. As always, I’m glad you stopped by to get you some Austin Rutherford at the show. Please pay attention to my friends over at TaxFreeFuture.com. You won’t believe what your financial advisors aren’t telling you. We’re going to tell you what they’re not telling you and why. We’ll let you do with it what you want to do. No pressures, no endless stream of beating you up with emails. We will ask for a little minor information. Please give it to us. We won’t beat you up with it, but that will get you in to see the little 37 video vignettes. You’ll be amazed at what these investment categories can do. They’re funds. They’re accounts that you can grow tax for your tax-deferred. Check them out. We’re out of here. 

Thanks.

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About Austin Rutherford

REIS 360 | Raising Private MoneyAustin Rutherford, is an entrepreneur that has built a 7 figure per year real estate investing business and owns 28 rental properties (doors). He has raised over $15M in private money and has flipped over 200 houses in the past 5 years using other people’s money to fund his deals. Austin borrowed his first quarter of a million dollars at the age of 21 with zero experience and got the deal 100% funded for his first flip ever. You can raise private money at any point in your career to either get started in the business or grow what you are currently doing but you need to understand the ins and outs of private money lending and that is what this course is built for! You will learn everything about how borrowing the money works, where the money goes, the documents that we use, the conversations that we have with private money lenders, where to meet private money lenders, how to talk with them, and the ONE line that will connect you with more potential private money lenders. Austin’s passion is helping other aspiring entrepreneurs and real estate investors through coaching and mentorship.

 

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