In a recent episode of the Raising Private Money podcast, Jay Conner, a seasoned real estate investor, had an enlightening conversation with Mustafa Ladha, a guest with a proven track record in property investment. The discussion provided a deep understanding of the strategies that real estate investors can use to raise private money, particularly focusing on education and adding value to attract investors.
Building Wealth with Strategic Real Estate Investing:
Mustafa Ladha’s journey from pharma to property illustrates a strategic move many are considering: shifting gears into real estate for its recession-resistant properties and scalability. Veloce Capital, the private real estate investment firm Ladha represents, offers tailored investment strategies that align with investors’ specific financial goals, from generating monthly income to long-term wealth accumulation.
The Magic of HELOCs and Arbitrage:
Jay Conner introduced the concept of utilizing Home Equity Lines of Credit (HELOCs) as an arbitrage tool. By drawing on the equity in one’s home and investing that capital into real estate, one can potentially experience an infinite rate of return—a concept that may seem daunting but is made accessible with the right insights and strategies.
The Power of Education in Investment Attraction:
A pervasive theme in this episode was the importance of leading with education. Mustafa and Jay discussed how raising over $20 million in private money was made possible through establishing trust and addressing investors’ concerns head-on. By creating informative content and offering value upfront, investors are more likely to commit their funds since they’re making informed decisions rather than being pressured into a deal.
Networking and Fundraising in the Digital Age:
Mustafa Ladha shared his success in using WhatsApp for fundraising, highlighting how he joined networking groups on the platform to discuss investment opportunities. This innovative approach to attracting private money underscores the potential of utilizing social media and messaging apps for financial networking. By understanding the mentality of the groups he engaged with and offering them real value, Ladha was able to scale his investment strategies and attract serious capital.
Alternative Investment Vehicles:
Throughout the discussion, the use of self-directed IRAs and life insurance policies as investment vehicles were examined. These methods provide additional ways for investors to participate in the real estate market, with Jay Conner offering insights into how to lean into these often-overlooked options.
Instilling Confidence in Potential Investors:
The narrative of projecting confidence was especially crucial. Mustafa Ladha emphasized the “fake it till you make it” approach, not to mislead, but rather to convey an unyielding belief in the value of the investment opportunities presented. Confidence, combined with a solid understanding of the real estate market, makes it easier for investors to identify and engage in viable deals.
Cultivating Long-lasting Investor Relationships:
The importance of not appearing desperate but instead focusing on the service aspect of investment opportunity was echoed repeatedly. This approach fosters long-term relationships based on trust and added value. Mustafa and Jay agreed that there’s an abundance of capital available; the challenge is finding deals that are worthy of investment.
Investment Philosophy:
“I don’t need the money. But if you invest with me, we’ll all make money together, and it’ll be a great example of how we can all scale together.”
- Mustafa Ladha
10 Questions Covered in this Episode:
- How do HELOCs (Home Equity Line of Credit) provide an opportunity for arbitrage in real estate, and why does Jay Conner refer to them as having an infinite rate of return?
- Can you explain the specific strategies that Mustafa Ladha’s firm, Veloce Capital, employs to provide monthly income, long-term wealth, and tax savings for investors?
- How does Mustafa Ladha recommend aligning real estate investment strategies with individual goals and preferences, and why is this alignment crucial for investors?
- What are the benefits of passive real estate investment with Veloce Capital, and how do they differ from active real estate investing?
- Mustafa Ladha mentioned the importance of scaling in real estate investments. What are some effective scaling strategies that both novice and experienced investors can adopt?
- During the episode, Mustafa highlighted the value of education in attracting private money. What educational approaches does he believe are most successful in establishing trust with potential investors?
- What role does a “servant’s heart” play in raising private capital, according to both Jay Conner and Mustafa Ladha, and how can investors embody this quality?
- Mustafa discussed his success in raising funds via WhatsApp. What are some tips he shared for leveraging such networking platforms to attract investors, and what is the profile of an ideal group member?
- Jay Conner and Mustafa Ladha touched upon using self-directed IRAs and life insurance in investment strategies. How can these vehicles benefit investors, and what should they know before employing these methods?
- Considering Mustafa Ladha’s transition from a pharmaceutical job to real estate, what advice does he give to others considering a similar shift towards entrepreneurship, especially in the real estate sector?
Here are three fun facts that were revealed in the episode:
- Mustafa Ladha successfully raised over $20,000,000 in private money using just the WhatsApp application.
- Mustafa transitioned from a pharmaceutical job to entrepreneurship, specifically choosing real estate for its scalability and recession resistance.
- Jay Conner and Mustafa Ladha advocate for a strategy of raising private money without directly asking for it, emphasizing education and leading with value as their primary tactics.
Timestamps:
00:01 – Raising Private Money Without Asking For It
03:30 – Financial planning, real estate investment, diversified income.
06:50 – Diversify income sources, and invest for financial security.
11:01 – Raising private money by educating rather than begging.
14:22 – Desperation has a smell to it!
17:21 – Confidently convey value without seeming desperate.
21:51 – Inviting investment, educational focus, and scaling opportunities emphasized.
25:19 – Networking and investing in various platforms.
27:51 – Started networking to find aggressive money seekers.
30:27 – Build meaningful connections, not just a numbers game.
32:30 – Connect with Mustafa Ladha: https://www.VeloceCapital.com
33:08 – Different strategies for tax savings and wealth.
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Strategies for Recession-Proof Real Estate Wealth with Mustafa Ladha
Jay Conner [00:00:01]:
Welcome to another amazing episode of Raising Private Money. I’m Jay Conner, your host. This is the show where we talk about Raising Private Money without even asking for money. Now on this amazing show, my guest today, check this out, he has raised over $20,000,000 in Private Money. And guess what? He has done it in a way that I bet you you have never heard anybody else doing. In fact, I’ve been Raising Private Money all the way since 2009, and I have never heard of anybody Raising Private Money like my guest does. Do you know how he does it? He does it he’s raised over $20,000,000 by using the WhatsApp app. Can you imagine attracting $20,000,000 in Private Money by using the Watts App app, for goodness sake?
Jay Conner [00:00:54]:
Now part of his secret sauce that we’re gonna talk about, he leads with education. He leads with education just like I do. So we’re going to dive really deep in this episode as to how exactly he’s done this. In just a moment, you’re gonna meet my very, very special guest, Mustafa Lada, right after this.
Narrator [00:01:18]:
If you’re a real estate investor and are wondering how to raise and leverage Private Money to make more profit on every deal, then you’re in the right place. On Raising Private Money, we’ll speak with new and seasoned investors to dissect their deals and extract the best tips and strategies to help you get the money because the money comes first. Now here’s your host, Jay Conner.
Jay Conner [00:01:46]:
Well, welcome to the show, Mustafa.
Mustafa Ladha [00:01:48]:
Thank you so much, Jay. It’s a pleasure to be here.
Jay Conner [00:01:51]:
Well, it is my honor and my pleasure to have you. Mustafa, my guess is you have a story that is somewhat similar to my story. And what I mean by that is I’ve discovered in interviewing, oh, over 600 episodes, guests here on the show, we all have something in common, and that is something that happened in our career. Something happened in our journey that triggered us. It was a pivotal moment. It was something that happened that caused us to now get into this world of Private Money. Myself, I’ve been investing in real estate full-time since 2003. For the 1st 6 years, I relied on institutional money.
Jay Conner [00:02:34]:
I relied on the banks. And then in 2009, I lost all my lines of credit. That’s what happened to me. I had to find a better and quicker way. Please share with us your story as to what happened and how you got into this world of Raising Private Money.
Mustafa Ladha [00:02:51]:
So first and foremost, Jay, before I answer the question, you look way too young to have done 300 so 600? How how many were it interviews?
Jay Conner [00:02:59]:
Over 600.
Mustafa Ladha [00:03:00]:
You look way too young to have done over 600. So congratulations to you on that, Jay. So I think it’s a very simple and great question. Anyone who’s in real estate you talk to, they have a unique story that, you know, sometimes fundamentally comes down to, like, some stress factor or the realization that they’re not where they wanna be in life. And I think that was the situation for me. Like, early on, I graduated from college. I went to work, you know, in a pharmaceutical job in big pharma at Pfizer at the time. And very simply, it was, hey.
Mustafa Ladha [00:03:30]:
If I do this job for the next, you know, 40 years, I retire at 65, what does life look like? Have I made enough money to live the life I kind of want to? And does delayed gratification really make sense and resonate with what I’m looking for ultimately? And if not, I need to figure out a way to make money. And that was kind of, you know, my journey from from, you know, graduating college to getting into the workforce to to entrepreneurship. And then within entrepreneurship, it was okay. What’s the most scalable business? And what has historically been, you know, the most recession-resistant? Like, you mentioned, you know, starting in 2003, being in the real estate market in 2009, and continuing to invest, which indicates to a lot of listeners that real estate is that market that you wanna be in long term. And you wanna, like, you know, plant the seeds now so that way it can, you know, grow into, like, a beautiful lawn that you can really enjoy. And I think that’s that’s the situation with real estate for me. I looked at a lot of different businesses. I invested time and created a lot of different, you know, income streams.
Mustafa Ladha [00:04:31]:
And real estate has always historically been the most scalable, and that’s where I’ve, you know, doubled down. And as you mentioned in your, you know, nice introduction, you know, I’ve had moderate success. I’ve done alright, But, fundamentally, it’s always been about adding value to people. And that’s why I love, you know, podcasts like yours just because people can learn so much. It doesn’t really matter if they’re raising capital if they’re not. It’s just about understanding the different strategies that are out there and how they can help you scale ultimately.
Jay Conner [00:04:59]:
So you said something just a moment ago in your answer, and you talked about how real estate is quote, unquote recession-resistant. I wanna dive into that for a moment because that really sounds counterintuitive. Right? I mean, I mean, you know, you hear people say it also, when’s the next recession? When’s the next bubble? When’s the next crash? Obviously, our economy is in recession.
Mustafa Ladha [00:05:29]:
Yep.
Jay Conner [00:05:30]:
So how is it from your perspective? Obviously, I understand. I mean, I’ve already been through more than one cycle of up and down. It’s been my journey has been recession-resistant. It has not been problem-resistant, but it’s been recession-resistant. From your perspective, how is real estate recession-resistant?
Mustafa Ladha [00:05:52]:
I think it’s a great question, and it’s really simple, but it really hits home to a lot of people, especially right now, depending on where you are in the economy, what job you have, etcetera. So, fundamentally, a lot of us were kind of pitched this dream or this ideal, you know, from elementary school, till you graduate, that, like, you’ll get an education, get a good job, and you’ll be okay. In theory, that makes sense, But the fact of the matter is most Americans don’t retire with enough savings to actually enjoy retirement. So then when you start to look at the data, there’s a bit of a disconnect where, hey, if I get a good education, that’s great. But that doesn’t mean that I’m set. If I get a good job at a good company, that’s great. But that doesn’t mean that company will necessarily look out for me with a pension or with, you know, a well-funded 401k or with a game plan that most of us invaluable for the next 4 years. I’m only invaluable if I perform, which is fine with me.
Mustafa Ladha [00:06:50]:
But then there can be some situations outside of your control where which is happening right now in the So So it becomes a situation where, to some degree, you wanna limit your risk. And in a lot of situations, we’re told to just have one source of income, our primary W2 job and that can be very risky in, in a challenging market. And that challenging market is typically referred to as, like, a recession where, you know, depending on your industry, you know, you can lose your job. So then it becomes, okay. Hey. What am I gonna invest in to mitigate my reliance to limit my reliance on my w two on my sole income? Typically, people will go to the stock market. Typically, it’ll be in the form of a 401 k, which is better than not investing at all. The problem with that from my perspective is that the money is locked up typically until 65.
Mustafa Ladha [00:07:46]:
So I wanna say, okay. Hey. How can I invest now? How can I build an income stream today that I can use for whatever I want? Because who knows if I’ll make it to 65. And if I do, like, it’s great to have money at 65. It’s better to have money today. So if that’s the mindset, Jay, then it becomes, okay, let’s look at entrepreneurship. Let’s look at, you know, creating businesses. Let’s look at generating revenue today.
Mustafa Ladha [00:08:08]:
And then as you go through that, it becomes, okay. Hey. How do we scale this? What’s the most efficient way? And then depending on your answers, ultimately, for a lot of people, for the average millionaire in the US, it comes down to real estate. And now the reason why, to answer your question, Jay, the reason why I view real estate as recession-resistant is because it’s all about the strategy. In real estate, a lot of times people tell you you make money when you buy, and that’s really critical because it means that you need to buy well. Think about it like today, you know, we’re recording this in April, and we’re saying, hey. It’s April. It’s springtime.
Mustafa Ladha [00:08:45]:
I’m gonna go out and buy, like, shorts or something that’s, like, seasonal. Those seasonal expenses are gonna be more in demand now because we’re entering a period of nicer weather. Right? So the caveat would be, like, hey. If you’re doing a lot of shopping or whatever, you might wait until Black Friday when there are tremendous sales. And now the parallel to real estate would be we’re in this environment of high-interest rates where people are saying, hey. Rates might drop. A year ago this time, they’re saying rates are gonna rise. Fundamentally, the question of rates can create angst or uncertainty in the market, and people might not be sure whether or not to invest.
Mustafa Ladha [00:09:26]:
And so then it becomes when you’re underwriting a deal, you wanna understand, hey. Am I buying right? And then the rates issue, I’m underwriting for them, and I’m saying, hey. Rates are maybe a little bit higher than they are today just to be conservative. And then you build out your strategy with your base assumptions and you say, hey, in 2024 rates are high versus 2022, But maybe over a 30 year period, rates are kind of normal. Like, they’re not high, they’re not low, they’re about in the middle. So if that’s the lens, and I’m a real estate investor investing for 30 years, then I can’t get caught up in the minutia of life because somebody is always gonna be screaming doom and gloom. Somebody Somebody is always gonna be screaming like, oh, hey. This is a very exciting time to get invested.
Mustafa Ladha [00:10:06]:
You kinda wanna be level-headed and look at the data from my perspective, Jay, and I probably assume from your perspective as well based on all the podcasts I’ve heard, that it’s just about looking at the fundamentals and making a sound decision based on the numbers and then scaling from there, if that makes sense.
Jay Conner [00:10:21]:
Absolutely. Makes sense. Now one thing I love about your philosophy, your approach, and your mindset is that you attract Private Money. You don’t chase like I don’t chase. You attract Private Money by leading with education. In my case, when I was cut off from the banks in 2009, I put my private lending program together. In other words, what was I gonna offer my potential private lenders, what kind of returns, and how they’re protected without combining that with some particular deal? You know, it’s interesting.
Jay Conner [00:11:01]:
Ever since I started Raising Private Money, I’ve never asked anybody for money. I educate them. You know, the traditional way of borrowing money is you go to the bank or the hard money lender, and you get on your hands and knees, and you put your hands underneath your chin, and you beg, and you plead, and you and, you know, you say, please fund my deal. And, you know, in this world, it’s not about applying or asking for a mortgage. We’re actually offering a mortgage, making a difference in other people’s lives. Ordinary people just like you and me, I’ve got 47 private lenders now that are loaning money on our deals. With that, my question to you, Mustafa, is, specifically, how do you lead with education and then segue us into whenever the time is right? No.
Jay Conner [00:11:49]:
I’m not gonna ask that question yet. Hold up. Don’t go there yet. Ask and answer the question first. How do you lead with education?
Mustafa Ladha [00:11:56]:
Sure. So I think fundamentally, I approach life as, I don’t know what I don’t know, Jay. So when I get into a conversation like today it’s, hey. What can I learn from Jay, and how can I add value to Jay? And you’re asking a very great, you know, simple question of, hey, how do you attract investors? Fundamentally, it’s about establishing trust, establishing value for them, and understanding what they want out of life. If you went up to anybody randomly on the street and you said, hey. Do you wanna make money? Everyone would say yes, in my humble opinion. But do they trust you to make them money? No. Because you haven’t done anything to establish that relationship.
Mustafa Ladha [00:12:34]:
And the thing is, in a lot of situations, you’re doing things out of altruism in some situations, and to develop a relationship and to say, hey. Listen. I can add value for you here. I can talk to you about these strategies that I implement in my own life based on my experience, and then, you know, use them if you want. You can invest in real estate through your retirement account. Most people don’t know that. So now all of a sudden it goes from I don’t have money to I have this annoying 401k that’s not performing. Can Mustafa help me solve this problem? Now for you, Jay, that’s a great solution because now your Private Money lenders who are making maybe 5 to 8% in the stock market can now invest in your deals.
Mustafa Ladha [00:13:15]:
And that’s kind of what it comes down to because the same could be the tread set of a HELOC or of a life insurance policy or of liquid cash if the structure made sense. And that’s really how I lead by education, Jay. It’s by positioning myself kinda downstream where people who are interested in making money are in the right forms as me, and they’re saying, hey. This is my problem. Is there anyone who can help me? And so then you’re in a conversation where it’s not like you’re begging, they’re begging. It’s a good product fit for everybody. And you kinda mentioned a good example where you go to the bank or you go to a Private Money lender and you’re applying and all of this. That’s a great process.
Mustafa Ladha [00:13:54]:
There’s nothing wrong with it per se. It’s just not how I do business. And everyone does business differently if that makes sense, Jay. It’s just about figuring out how you can provide as much value at scale to people. And then ultimately, sometimes that value that they want is they wanna secure investment opportunity. And then it’s about you positioning yourself, answering their questions, so that way they can understand whether or not you fit their needs.
Jay Conner [00:14:22]:
What you just said, Mustafa, reminds me of this truth, and this truth is as follows. Desperation has a smell to it. Now what I mean by that is I hear new real estate investors or even seasoned real estate investors that are looking to raise capital for the first time. And when they go out raising capital, they’re asking for money. But if you’re asking for money, where is your focus? Your focus is on you. Well, guess what? When your focus is on you first, you can’t be leading with value. You know, what you just said, Mustafa, is when you are leading with education, leading with a servant’s heart, your focus is on them first, giving value first. So what’s an example of that? The very first private lender luncheon meant I just invited about 20 people in my own network that I knew or knew.
Jay Conner [00:15:21]:
And, I bought them lunch, and I didn’t pitch a deal. I just taught them about the self-directed IRAs that you just mentioned, Mustafa. And on high rates of returns safely and safely. Right? And so I raised without pitching a deal, I raised $969,000 in my very first private intervention, educating people and giving them value first. Right? And so this whole mindset of leading with education is just so different. I think you like the phrase, desperation has a smell to it.
Mustafa Ladha [00:15:59]:
I loved it. I loved the phrase because you know what it is. Like, you and I both have a similar mindset of leading by education. But then when you’re a bit pessimistic, you could say, oh, hey. He’s only educating to raise capital. It’s not really a funnel or any, like, you know, malicious strategy. It just comes down to fundamentally, you and I both appreciate somebody randomly cold calling us and adding value to our lives. Who doesn’t appreciate that? But how many cold calls do you get that are from, like, some call center in China versus, like, exactly the pain point that I have? And that’s the difference. Like, to some degree, when we’re out there raising capital, it’s very easy to say, hey.
Mustafa Ladha [00:16:40]:
I need to make rent this month. I need to put food on my table. I need to, you know, buy a formula. Whatever whatever your needs are, it’s very easy to just focus on that. But fundamentally, the investor kinda realizes that not, like, overtly, but behind the scenes, they’re like, like you mentioned with that desperation that it leaves a sense. I think to some degree that, like, inner confidence that maybe you get from having a lot of deals done. When you don’t have that, it can be very difficult to get the first deal done. And because this podcast is, you know, for new and seasoned, you know, real estate investors, what I would say is, you know, not in a bad way, but fake it till you make it.
Mustafa Ladha [00:17:21]:
In the sense that if you believe in your product, so much so that you’re investing your own capital, or that you’re investing your own time, which in a lot of situations is worth more than my capital. If that’s the case, then you need to be able to communicate that to a potential investor in a way that doesn’t wreak of desperation. Like, when I go to the BMW dealership, the Porsche dealership, whatever, you know, the salesman is gonna be a little different potentially than, like, that used car salesman example where they’re, like, pitching me aggressively on how I need to buy this car today. And to some degree, that’s what you wanna kinda create, whether that’s through education, which is how you and I, Jay, prefer to do it, or through some other strategy. You wanna position yourself that, hey. I have some skill sets that can add value to others. So if other people realize that, they’ll come to me and they’ll ask me for advice. Just like you’d go to a doctor and ask them, okay?
Mustafa Ladha [00:18:14]:
What do you recommend? Or you’d go to a new restaurant and you’d ask a waiter, what’s the best thing on the menu? That waiter may or may not have a higher net worth than you. It’s not about money. It’s about local experience. They’re the best at knowing what’s best on the menu for this restaurant, and that’s why you’re giving them the power to decide for you. And so that’s kinda what you want to establish within the space of real estate or not even real estate, but your micro niche. If you’re in multifamily like me, like ground-up construction multifamily, if that’s your niche, then that’s what you focus on. And you say hey I’m very good at this, I’m happy to help you underwrite other deals, but this is my wheelhouse. And then it all scales from there, Jay.
Jay Conner [00:18:56]:
One phrase that you just said, Mustafa, was mindset. I tell people all the time, that until you own the real estate between your ears, it’s gonna be hard to own real estate traditionally out there. And so I want us to dive in for a moment on mindset, and that is we’re not chasing. We’re not begging. We’re not selling. We’re not persuading. All this leads to education. And another part of the mindset and I want you to hone in on this, Mustafa.
Jay Conner [00:19:28]:
Part of my mindset is if I ever feel like I’m starting to sell somebody in this world of becoming a private lender, I step back. In fact, in all of the conversations I have, I sorta wanna feel like I’ve got a foot in the back door getting ready to walk away because quite frankly, they need us, the private lenders need us, more than we need them, and here’s why. And that’s not an arrogant statement. It’s just a fact. There’s so much more money out there than there are deals, to tell you the truth. I’ve got a problem. I’ve got 1,000,000 and a half dollars, what I call sitting on the shelf, of unused Private Money just waiting for me to deploy.
Mustafa Ladha [00:20:13]:
I have a debt fund for you. Don’t worry about it.
Narrator [00:20:16]:
Oh, yeah. You you solution.
Jay Conner [00:20:17]:
Yeah. Yeah. You got a you got a you got a solution to my problem. I love it.
Mustafa Ladha [00:20:22]:
I’ll I’ll take care of you offline, but continue.
Jay Conner [00:20:24]:
I appreciate that. I appreciate that. So comment on that mindset of not having to sell or persuade. You sort of talked about it a second ago, the used car salesman versus, you know, the BMW, Mercedes, Rolls Royce, you know, rep.
Mustafa Ladha [00:20:42]:
Yeah. I think it’s a great it’s a great point. And there’s a fine balance. Like, you know, anyone watching this, like, I can appear pretty serious on these on these podcasts or in conversation. And so sometimes, when I say something along the lines of you don’t I don’t need you, you need me, which can come across on calls, It can come off arrogant, and it’s been very few times that I’ve gotten that feedback. I’m not really an arrogant person, in my opinion of myself, which could be arrogant, you know, itself. But that being said, it’s hey.
Mustafa Ladha [00:21:16]:
Like, I always wanna lead by creating value. At the same time, sometimes you meet a person who’s kinda sucking the juice out of any deal, or they’re taking all the profit off the table for everybody. And that’s not how my deals are structured necessarily. It’s everyone who makes money together or me first. But not like you make all the money or I make all the money. So that being said, you know, I got that feedback from somebody a couple of years ago that said, hey, Mustafa. You know, when you first started raising capital on WhatsApp, I felt like, you know, there was this, you know, young, arrogant guy who’s talking about a deal. Because the way I structured it is very simple, like, hey.
Mustafa Ladha [00:21:51]:
I’m investing 800k on Friday. Today is Sunday. You’re more than welcome to join me, or you’re more than welcome to watch, and it’s a proof of concept. Fundamentally, to position it that, like, I don’t need the money. But if you invest with me, we’ll all make money together, and it’ll be a great example of how we can all scale together. And that’s how I position, you know, my first capital raise, Jay. And it was very simple to really focus on the educational piece and not to feel like I was selling people because like you mentioned and maybe alluded to, to some degree, we’re in our own way a bit introverted where we wanna work with people, we wanna educate people, we wanna help them, but we don’t wanna go around begging or asking or making other people feel uncomfortable because that would make us feel uncomfortable. So we always want a foot out the door a little bit to say hey you can invest in this structure, you can invest in this other structure, or you can invest in no structure.
Mustafa Ladha [00:22:44]:
And sometimes that can lead the person to be a little confused, and then it’s like, no problem. I’m here to help you. I’m here to clarify the different options. But, fundamentally, there’s a lot of money out there, and there aren’t that many deals. But when you’re asking for capital, people feel like you’re desperate. And so it’s about kind of clearly communicating that we’re raising capital for this deal because this is the goal long term, and this is what you can be a part of. At the same time, if it doesn’t fit your parameters, if you’re not sure about the risk profile, if you feel like, you know, we’re gonna default or whatever your concerns are, don’t invest. I’ll be around in 5 years, 10 years.
Mustafa Ladha [00:23:23]:
You can circle back with me then, and we’ll have that same kind of conversation. And I’ve had that conversation with investors who 3 years ago didn’t decide not to invest, and now they’re investing. And what happened? They missed out on the opportunity cost of making double-digit returns. Does that mean they’ll make double-digit returns in the future? No. Because I can’t guarantee performance. That’s illegal. And that’s the type of conversation that I would have with investors to say, hey, listen, If you want information, more than happy to provide that. If you want testimonials or references, more than happy to provide that.
Mustafa Ladha [00:23:57]:
But it’s not a situation where I can stop the deal just for you to decide to invest or not to invest, or it’s not the situation where I can, you know, indefinitely move timelines. Sometimes the deal gets funded and people miss out, and that’s sort of a byproduct of it being an amazing opportunity, but I’m not gonna, like, beat you over the head with the fact that this is an amazing opportunity. I’m just gonna say it once casually and move on. And that’s typically how I address those things, Jay, if that makes sense.
Jay Conner [00:24:26]:
Mustafa, you just said something that got my attention. You just said that you have raised money on the WhatsApp app. How in the world I’ve never heard anybody else say that? Now I’ve heard people say, you know, put the word out. What are you doing on social media, etcetera? But you have a niche right there. How in the world have you raised money on WhatsApp?
Mustafa Ladha [00:24:53]:
Yeah. So it’s kinda like your it’s kinda like your your luncheon example. Right? So really it’s about positioning yourself downstream like I mentioned earlier. I think fundamentally, everyone is looking to make money. There’s loads of money out there like you alluded to as well. So it’s about positioning yourself on platforms where maybe there’s less competition. Maybe you understand the mentality of people more to say, hey. People are always looking to make money.
Mustafa Ladha [00:25:19]:
They can go to a coffee shop and meet somebody and invest. They can go to a luncheon to meet somebody and invest, or they can meet somebody online, on Facebook, LinkedIn, on Twitter, or WhatsApp. So for me, what I did was I joined different networking groups on WhatsApp with the intention of investing and networking and growing, you know, their financial literacy. And on those platforms, I saw that there weren’t really that many. There, you know, there were options that made sense to people but I felt like we had a compelling case of maybe a structure that would be you know more advantageous for investors. So then it came down to taking that structure that was maybe only available to ultra-high net worth individuals and really scaling it down to more of a crowdfunding-type strategy. And that’s really what I went around doing, saying, hey. This is a project that I’m working on.
Mustafa Ladha [00:26:08]:
You’re more than welcome to join me. And then in that first deal, I wasn’t fortunate enough like you to raise 900k, but I raised, you know, a modest to good, you know, 205k. And in that situation, those investors made 4.5% in three months. I returned all their principal and their profit. And then I said, hey, guys. If you wanna do this again, we’ll launch a fund. It’ll be a 1 year minimum investment, and, we’ll get started on, you know, scaling the portfolio. And that 200k that I returned with profit, they then invested 1,000,000.
Mustafa Ladha [00:26:40]:
And then that scale to now over 30,000,000 that I managed just on WhatsApp. And, so you know, I’ve been decently fortunate enough. I’ve had a good performance, things of that nature. But, fundamentally, to the heart of your question, it’s just about understanding people’s mentality and seeing, you know, what value you can add to them. And then as you add value, they feel comfortable scaling as well.
Jay Conner [00:27:06]:
So two questions. You know, the the profile of the average Facebook, user is one thing, a LinkedIn user, a TikTok user, or an Instagram user. How would you describe the WhatsApp people?
Mustafa Ladha [00:27:27]:
I don’t know in the sense that it’s like, how would you describe a coffee person? Right? They could be going to Starbucks. They could be going to Dunkin’. It’s different. So fundamentally, like, when you talk to somebody or when you’re advising somebody who’s getting started. Right? Like, you’ve been in the capital raising business for years. You have much more experience, and you’re better looking than I am. Right? So when you advise somebody, you would say, hey. Start with friends and family.
Mustafa Ladha [00:27:51]:
I did not start with friends and family. Right? The way I started was, hey. Who’s looking to make money? Who are the people that are most aggressively looking to make money? And where are they hanging out? In this situation, I came across a network of people on WhatsApp who literally have their own virtual coffee stores talking about making money. Those are the groups that I joined. And now when they’re talking about money, I’m looking at it like, oh, hey. They’re not making that much money in my opinion. So how do I have that conversation in a respectful way? It’s by educating, by saying, hey. Here’s a different strategy.
Mustafa Ladha [00:28:29]:
And that’s really what I did by leading by example, by showing the value, and then ultimately by scaling those relationships with proof of concept. And then it’s like, okay. Hey. No one’s talking about having a fund admin on their other investments. Let me have a fund admin. Hey. No one’s talking about audited financials. Let me talk let me add audited financials.
Mustafa Ladha [00:28:49]:
Let me make this an institutional-grade product to the best of my ability for retail investors. That way, before any competition can even develop, it’s that, hey. This guy has had 5 years, 10 years of track record, and he has all of this. So now to compete, like, a new product doesn’t have that double-digit track record for 5 plus years. They don’t have the audited financials. They don’t have a fund admin. They don’t have all these different plus points. So it becomes harder to some degree for a new product to compete with mine in that one micronish.
Mustafa Ladha [00:29:22]:
And then at the same time, it becomes, hey. Everybody is still working. They’re still making money. They’re still looking to invest. And because they’ve had a good performance, good track record, good communication, they’re comfortable, you know, referring you to others. And that’s how it scales. And I think that’s the thing, and it’s probably similar for you, Jay, except the only thing was instead of a virtual setting, it was in person. And I think it’s also a changing of the times to some degree in 2024 to raise capital online is no longer unique.
Mustafa Ladha [00:29:55]:
To raise capital on WhatsApp, I agree. I don’t think many people are doing it. I don’t know of any other people who are really doing it at scale, but that doesn’t mean that it’s the best strategy or the right strategy. I think the right strategy is as a capital raiser because I know this is also for new capital razors, this podcast. What I would do is I would say whatever feels natural to you, that’s where you should be raising money. If, you know, you enjoy being on WhatsApp, raise money on WhatsApp. If you enjoy Twitter, do Twitter. If you enjoy raising money at, you know, the racetrack, do that or the pickleball court.
Mustafa Ladha [00:30:27]:
Whatever it is, whatever, you know, your preferences are, that’s where you should be making, you know, meaningful connections because it’s not really a lot of people think it’s a numbers game, but to me, it’s about, like, building the depth of relationships. Because that one investor that, you know, starts out at 10k, he might be a multimillion-dollar or a $1,000,000 investor for you. You just have to establish proof of concept for him, and then he’ll scale with you, and he’ll happily scale with you. And I think that’s the difference, you know, from my perspective, Jay, that there’s no one right way to raise capital. It’s just whatever feels right to you, the capital raiser.
Jay Conner [00:31:03]:
That is so intriguing, Mustafa. So intriguing. I appreciate you sharing that, particularly about WhatsApp. A few topics we didn’t have time to cover, but I want to cover them right now very quickly. Sure. And that is we talked about self-directed IRAs. Of the 47 private lenders that we have investing in our deals, over half of those 47 private lenders are using their retirement funds. And you know what’s interesting? None of them ever heard of self-directed IRAs until I put on my teacher hat and I started teaching them.
Jay Conner [00:31:38]:
So I just want the audience to know this, particularly those who are listening and are interested in being a passive investor. Let Mustafa do all the work. You just invest the money, and Mustafa will give you a high rate of return safely and securely. You can use your retirement funds. And if you don’t know how to do that, Mustafa can teach you how to do that. You can also use life insurance. You can use life insurance to invest in real estate. Mustafa can teach you how to do that.
Jay Conner [00:32:09]:
You also can use HELOCs. You can use home equity lines of credit to invest in real estate. That’s called arbitrage, and I love it because that’s got an infinite rate of return. If you like to learn how to get an infinite rate of return by leveraging the bank’s money, talk to Mustafa about that. So I’m leaning toward Veloce Capital. Veloce Capital, Mustafa. Tell the audience about Veloce Capital and why they would want to learn about that.
Mustafa Ladha [00:32:38]:
Sure. So Veloche Capital, we’re based in New Jersey. We invest a lot in New Jersey, a lot in Baltimore, Maryland, and Atlanta, Georgia. And, fundamentally, we’re a private real estate investment firm. We have a lot of different strategies for investors. Really, it comes down to your goals. Right? If you’re somebody who’s looking to make money monthly, there’s an income fund that can help you do that. If you’re looking more for long-term wealth, maybe with a short investment period of a minimum of 2 years, there’s a strategy for that.
Mustafa Ladha [00:33:08]:
And if you’re looking for, you know, tax savings and, you know, more generational wealth, you’re somebody who’s in high-income earner, there’s, you know, different strategies for that. And fundamentally, it comes down to you and your goals. Because as we mentioned in that coffee example, there’s no, you know, one best place to get coffee per se. It depends on your preferences. It’s the same with real estate. Real estate is a vehicle, and you want that vehicle to be in alignment with your goals. So it’s a really intimate conversation to say, hey. This is how I wanna make money.
Mustafa Ladha [00:33:36]:
And then I say, okay. Hey. This is a structure. Does it make sense? Does it resonate? And then accordingly, we really build that out for you. And ultimately, it’s customized based on your needs. So
Jay Conner [00:33:48]:
if you’d like to learn how to be a passive real estate investor by being an investor in Veloce Capital, go to www.VeloceCapital.com, and, of course, that will be in the show notes as well. Mustafa, thank you so much. You and I are definitely aligned in our philosophy
Mustafa Ladha [00:34:19]:
It’s my pleasure. Thank you again, and have a good one.
Jay Conner [00:34:21]:
You got it. There you have it. Another amazing episode of Raising Private Money. I’m Jay Conner, the Private Money Authority. And if you happen to be watching on YouTube, be sure and subscribe and ring that bell so you don’t miss out on any other of the upcoming episodes. And, of course, if you’re listening to your favorite podcast, be sure and follow so you don’t miss out. I look forward to seeing you on the very next episode of Raising Private Money with Jay Conner.
Narrator [00:34:52]:
Are you feeling inspired by the knowledge you gained in this episode? Then head over to www.JayConner.com/MoneyGuide. That’s www.JayConner.com/MoneyGuide, and download your free guide that shares seven reasons why Private Money will skyrocket your real estate investing business right now. Again, that’s www.JayConner.com/MoneyGuide to get your free guide. We’ll see you next time on Raising Private Money with Jay Conner.