Private money to buy real estate? Watch to find out how!

Private money to buy real estate? Watch to find out how!


– Welcome. This week I’m thrilled to have a guest. My buddy Jeff Patry. He’s a full-time real estate investor and specifically a private money expert. Welcome. – Thank you. I’m thrilled to be here as well. – We have a few questions
to ask you, Jeff. How did you get started in real estate? – Well, interestingly enough, I was watching a late night infomercial back in 2005, one of those
scammy kind of things, and I did some research
on real estate scams and through doing that
research I found out different strategies to
invest in real estate and my wife and I bought
our first investment, which was a flip, a property to flip. We were lucky to make money on it, we decided we didn’t want
that transactional income, we just wanted to have
something for the future. So in 2007 we started buying
up regular rental properties, to rent out to tenants, duplexes
and single family homes. – So, how long have you been a full time real estate investor? – Full time since, I guess
I would have to say 2012 I guess would be more accurate. – What is private money? Sorta define it. – Well, that’s a good question actually, because people don’t
actually understand sometimes what it means. A lot of people think
it’s just people that have cash in their pocket or at the bank. The other way to do it
is to use someone’s RSP, education savings plan,
tax savings account, that sort of thing, and they can lend from that
in order to make money. So a lot of people think
all they can invest in is stocks and bonds and things like that– – Mutual funds. – Mutual funds and things like that. Private lenders can invest
their registered money as well. – You can take your saving
and loan it out on a mortgage? – Correct. It just has to go through a trust company, so it’s a little more complicated,
but it still gets done, it’s the same thing. – How did you get into
the private money deals? – Well, that’s an interesting story. I was unloading groceries
from a car one day and my neighbor, Jenny, came
running across the street. You have to picture this, she
was 80 years old at the time, 75 sorry, 75 years old at the time, a little tiny lady from
France, French lady. She came over and said, “Hey,
Jeff, I’m just wondering if you need any money.” – Does this happen to you often? Old ladies just asking if
you need money like this. – I thought she was asking me
to help her across the street. No, actually it was just by chance, she had been losing money
in the stock market, she took it out and she
knew that I was investing in real estate. The money she was
offering was just exactly what we’d spent on the flip. So she ended up putting
kind of a second mortgage on the flip property so
that we could actually free up credit on our house. So it was kinda neat. – Great, that is great. And what are the benefits,
disadvantages of private money? – Well, the advantages are
the ease of getting it done. We all know it’s getting harder and harder to get mortgages these days, and it’s quite a process, you have to jump through a lot of hoops. If your credit scores a little bit off, and sometimes it can be
as a real estate investor because you’re buying things all the time and using credit for things all the time so you’re going up and
down, up and down, right. Of course property is
always a concern as well, if you’re buying a property
that needs renovation, sometimes the banks, the
lenders don’t like that. – Debt service ratio. – Yeah, exactly. But with private lenders,
once they understand your strategy and if they like it, it’s pretty much when they have the money they’re willing to lend it. – Where do you find these investors? – That’s always a question I get, right. Invariably when I talk about private money people ask me who my lenders are. Seems sad to say, but private
lenders are everywhere. It doesn’t give people much guidance. If you put yourself in
a position to be out at social events and clubs
and things like that. You know toastmasters, you and I both belong to toastmasters. Things like that, you meet
people who are interested and they start asking you questions about what you’re doing, you know, it invariably happens, and
that’s how you meet people. – What do you suggest to
people who are looking to get into private money deals? What are the steps to go about it? – The first thing I’d have to say is, this is gonna sound really corny, but be yourself. – It can be tough. – It can be. I wouldn’t want to be you either. Sorry, anyways. What I’m saying is, people
try to make themselves into something they’re not, try to make themselves more professional, you know they’ll wear a suit and a tie when they don’t normally do that and then they’re uncomfortable
in their own skin basically. Or try to speak a certain
way that they’re not used to. You know, when I met, one
of my main private lenders who has lent me quite a bit of money and we met and sat in his
truck in a Tim Horton’s parking lot. – Wow. – It was February, little slushy day and I was talking to him,
I’d never met him before, and the windows started to get fogged up, so it was really awkward. – What’s going on here? – That’s right. I just said, he asked me, what do you do? What are you trying to achieve? That’s all people want to know, you know. I like your strategy. Okay, well when something
comes up, let me know and we’ll see what we can do. Then six months later,
it was six months later when something came up
that I thought he might be interested in, because he
told be his goals as well, what he’s looking to achieve, right. Then he did the deal
with me, my first one. – Are you a smooth salesperson? – No. No, I think I like to
be positive and friendly and upbeat, and that’s
kinda the way I am anyway. You tend to attract people
who are like you, right? What was I saying? – Be yourself. – Yes, be yourself. And the next thing is
always find out first, it’s a big mistake I find people make, is they never ask what the
potential lenders goals are, in terms of income, interest
rates, that kinda stuff. – What kind of interest
rates would they get? – Good question. I try to, as a borrower
of course you try to get the lowest interest rate you can. As a lender you’re trying
to get the highest rate you possibly can within reason. That’s why it’s so important
to ask people ahead of time, what kind of return are you expecting. Because you don’t do that,
I’m not saying you’re wasting your time, but
it’s basically saying hey, coffee is on me, thank
you so much, nice to meet you. You know, go on to the next person, because otherwise there’s no point. Mortgage brokers, because
they deal with people, I don’t wanna say professional lenders, you know the people who
do this for a living, they’ll usually charge
a little bit higher. The people I deal with
are just regular people like you or I, saying hey,
I need a better return on my money, how do I do it? It’s win, win. – Those are great answers. So where do we find you? How do we get ahold of you? – The best place to find me seriously, is to search my name on Google. – That’s great. – But I do have a website
called privatemoneymentor.ca if you wanna check that
out, that’s fine too. – Great. Well thank you for coming by. – Thank you for having me Rene, pleasure.

Leave a Reply

Your email address will not be published. Required fields are marked *