On today’s episode, we welcome Andrew Jarett and Nic Cooper to the show. Andrew & Nic are from Western New York, where they’ve successfully redeveloped single-family homes. They started a property management company and later sold it, shifting their focus to acquiring smaller multifamily and single-family investment properties.
Andrew and Nic now hold several hundred rental units in Western New York and have expanded their investments to large multifamily apartment complexes in Florida and Georgia. They are also the #1 bestselling authors and the hosts of “The Passive Road to Retirement” podcast.
Tune in to this episode of Raising Private Money as we speak with Andrew and Nic to extract their best tips and strategies for raising private money!
Key Takeaways:
- The best way to start raising private money
- Expanding your network through your real estate attorney
- The difference between hard money and private money lenders
- How to start a conversation about private money with a potential investor who has never heard of it
- Andrew and Nic’s ventures
- The benefits of being a private lender
- Do private money lenders have interest-only monthly payments with a balloon payment?
Check out my book: 7 Reasons Why Private Money Will Skyrocket Your Real Estate Business and Help You Build Incredible Wealth!
Get it here for FREE: www.jayconner.com/moneyguide
Connect with Andrew and Nic:
Website: https://www.JarettCapital.com
Podcast: https://www.youtube.com/@passiveroadtoretirement
Timestamps:
0:01 – Raising Private Money with Jay Conner
1:25 – Today’s Guests: Andrew Jarett & Nic Cooper
3:45 – The Best Way To Get Started In Raising Private Money
6:07 – Networking Through Your Real Estate Attorney
6:52 – Hard Money Lender vs. Private Money Lender
8:54 – Current Rates In Private Money
10:46 – Jay’s Free Money Guide: https://www.JayConner.com/MoneyGuide
11:37 – How To Start A Conversation With A Potential Private Lender
14:15 – The Jarret Capital – https://www.JarrettCapital.com
17:43 – Benefits Of Being A Private Lender
19:05 – Do Private Money Lenders Have Interest Only Monthly Payments With A Balloon Payment?
21:42 – Connect with Andrew & Nic: https://www.JarrettCapital.com
How Andrew & Nic Raise Millions In Private Money
[00:00:00] Andrew Jarrett:
So I was gonna go with a bank. They charged me 10,000 up front for the loan, and it took six months for this refinance, and I still did not close. So finally I just got fed up and I said, why am I doing this with a bank? I bought these properties with private money. Why don’t I just go out to the market and see if I can raise the money?
Within 45 days, I raised the private money, all of it. All of it and closed the refinance.
[00:00:31] Narrator:
If you are a real estate investor and are wondering how to raise and leverage private money to make more profit on every deal then you are in the right place on raising private money, we’ll speak with new end 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.
[00:01:09] Jay Conner:
Welcome to another episode of Raising Private Money. I’m Jay Conner, The Private Money Authority, also your host for the show, and we’ve got amazing. Lined up for you today. I’ve got a couple of guys here on with me today that are simply gonna blow your mind. First of all, they have raised several million dollars for long-term rentals.
[00:01:31] Jay Conner:
They’ve also raised millions of dollars in private money for apartment deals. A little bit about their background. They are currently holding several hundred rental units in a market in place. They’ve got an in-house management pro company. They’ve got maintenance teams.
[00:01:50] Jay Conner:
In addition to that got a podcast called The Passive Road to Retirement Podcast. I was a guest on it pretty recently. That’s an amazing podcast that you wanna set out. These guys have scaled their investments to the acquisition of large multi-family apartment complexes. They’ve got several hundred units located actually in Florida and into that in Georgia as well.
[00:02:16] Jay Conner:
They have a company and an investment team that has experience in investing tens of millions of. Of capital across real estate cycles, asset classes, and all kinds of risk profiles. Their investment team has over 40 years of combined real estate investing experience and knowledge, and in this episode, I’m gonna get them to pull back the curtain, and share with you exactly how they have raised a lot of private money for their real estate deals and how you can too.
[00:02:47] Jay Conner:
Don’t go anywhere because in just a moment you’re gonna meet my friends and my guest, Andrew, Jarrett, and Nick Cooper.
[00:02:54] Jay Conner:
Hello there Andrew. Welcome to the show.
[00:02:57] Andrew Jarrett:
Hey Jay. Great to see you again.
[00:02:59] Jay Conner:
Great to see you again. We’re reversing roles here on this show today, right? Yeah, exactly. , it’s great to have you on here as a guest and your partner, Nick Cooper. Hi Nick. Welcome to the show.
[00:03:12] Nic Cooper:
Hello. Thanks for having us, Jay. Appreciate being on.
[00:03:15] Jay Conner:
Absolutely. But first of all, we’re gonna pull the curtain back and we’re gonna talk about how you guys have raised millions of dollars in private money. I’m just gonna throw the questions out there. And you all can decide who’s going to answer the question, right?
[00:03:31] Jay Conner:
So the first question is, whoever wants to tackle it both of you can. Who wants to tackle the question of how you get started in raising private money, like for a real estate investor? Here’s the question. A real estate investor that’s never raised private money before, what’s the best way to get started in raising private?
[00:03:52] Andrew Jarrett:
Me, I started in small multi-family and single families. So what I did was I went to my local RIA real estate investment club and networked with people there and usually, they have private money lenders there you can meet. They also have hard money lenders, which are higher rates, but they have a lot of private money lenders.
[00:04:12] Andrew Jarrett:
So I met some people there. Once I started closing deals with those lenders, I. And talked to some attorneys in town and of course, they’re closing the deals, so they knew heads the money, right? So I talked to him and started asking around and they referred me to people that did, did tons of loans.
[00:04:31] Andrew Jarrett:
And then I had, quite a bit of money at my disposal to buy some more deals,
[00:04:36] Jay Conner: Nick.
[00:04:37] Nic Cooper:
So for me, it started, with everyone eventually running out of their own money, right? So I did my first few deals with my own money, a single family. And next, I scaled up to multi-family after 15 years of doing single.
[00:04:50] Nic Cooper:
And then I realized that I don’t have any more money left to get more deals. So what I had to do was go into find, your power base, your friend group, friends of friends, family, or even groups you belong to. Like for me I’m retired military, so you find a place where you already have some rapport with people.
[00:05:08] Nic Cooper:
So if like my wife has also raised money with us or. And she’s in medical sales. So it helps to have those connections too in different industries so her medical, and for me, it’s, military government service.
[00:05:24] Jay Conner:
So your power base is really where you want it. At least start in the beginning. What’s the difference? Just to make sure we’re all on the same page here. No, Nick, I’m not gonna ask you that question yet. I wanna go back to something Andrew said. Andrew, I don’t want our listeners to miss something you said. You said that, or maybe it was Nick, I don’t know.
[00:05:41] Jay Conner:
The two of you are already running together with me. Who said that your real estate attorney can refer you to private lenders?
[00:05:49] Andrew Jarrett:
Yep. That was me. ,
[00:05:50] Jay Conner:
That was you, Andrew. So that’s a nugget right there. If you are doing business with a real estate attorney that is closing private money loans, That’s a writer-downer right there.
[00:06:03] Jay Conner:
Networking through your real estate attorney as to who else is loaning money.
[00:06:08] Andrew Jarrett:
What better reference can you get than an attorney that’s closing the deals?
[00:06:13] Jay Conner:
Exactly. So Nick a second ago you said you made a reference to private money lenders and hard money lenders.
[00:06:23] Jay Conner:
I want you to drill down on that for a moment, because a lot of times real estate investors, particularly newer real estate investors, will confuse hard money with private money. How about, letting our listeners know really who’s a private lender, who is a, or what is a hard money lender? What’s the difference?
[00:06:44] Nic Cooper:
I think that was Andrew that had that, that statement there.
[00:06:47] Andrew Jarrett:
So yeah, the difference is the rate. So a hard money lender typically varies, but for instance, hard money could be 12% with two points upfront. Whereas private money is an individual just looking for a passive income stream, and maybe you’re paying them 6%.
[00:07:08] Andrew Jarrett:
They’re not doing it as a business, they’re just looking for, passive income. Whereas the hard. Is a business or a corporation lending out the money? So quite a difference therebetween, private and hard money rates.
[00:07:20] Jay Conner:
Yeah, Andrew, it’s been my experience that most of the time a hard money lender, as you said, has got much higher rates, much, have got points.
[00:07:29] Jay Conner:
So most of the time a hard meter lender’s gonna be a. There’s gonna be a broker of private money, and I’ve got a lot of friends that are hard money lenders. I’m not knocking hard money at all. I say, put together and establish as many relationships with funding sources as you can. But of course, in this world of private money, we make the rules.
[00:07:49] Jay Conner:
We set the rate, and set the term, whereas, in traditional institutional, The lender sets the terms and makes the rules. We got Andrew McAllister from LinkedIn saying hello to all of us and Herardo says, Hey gentlemen. Now, what rates are you seeing in the private money world right now? I can tell you what I’m seeing in private money and what I’m paying.
[00:08:11] Jay Conner:
It’s interesting since I made the rules. I’m paying the same thing I did. Started in 2009. Andrew, Nick, what are you all paying now? Let’s answer Ernesto’s question. There are. Oro. I can’t even, I’m not Hispanic. I’m trying to get this right. , I gotta write. Are y’all paying out to your private money lenders?
[00:08:26] Jay Conner:
And do you ever pay points to your private lenders?
[00:08:30] Andrew Jarrett:
I have never paid points to my private lenders, but I typically pay, I could lower my rates, but I don’t, I just keep it at 8% interest only. I know you can probably borrow for five or six private money-wise, but for me, I’ve always just offered eight since I started and that’s what I.
[00:08:49] Jay Conner:
Andrew, I’m the same. I put my private lending program together back in 2009 when I was cut off from the banks. I haven’t changed it even though mortgage rates have gone up considerably in recent times. Even now today the average certificate of deposit yield is paying 0.97% in the local bank.
[00:09:11] Jay Conner:
And, you come along and pay 8%, that’s more than eight times what they can get in the local bank. And my private lenders, your private lenders, we, they are just as happy as they can be cause they’re getting a high rate of return safely and securely. We’re not borrowing money unsecured.
[00:09:27] Jay Conner:
We always give them a deed of trust. We give them, the mortgage to back that note. And Andrew and Nick, I want all my listeners to get an understanding of what this world of private money is all about. And I just finished writing. I’m so excited about it. A brand new private money guide, Andrew.
[00:09:47] Jay Conner:
I know you know about it. Yep. It’s called Seven Reasons Why Private Money will Skyrocket your real estate investing business and help you build incredible wealth. You can download this new private money guide for free. And it will get you on the fast track to private money. You can download my Private Money guide for free at www.JayConner.com/MoneyGuide.
[00:10:15] Jay Conner: Download the money guide for free and get on the fast track to private money. Andrew or Nick, how do you start your conversation with a potential private lender that never heard of private money and doesn’t even know what it is?
[00:10:38] Andrew Jarrett:
For me, what I ask is I never directly ask the person, so I’ll say, do you know anyone who is looking to make a return secured by a first mortgage on a property at pay-percent interest rates?
[00:10:54] Andrew Jarrett:
And for people that are worried about getting turned down, you never get turned down or you never hear a no because you’re not asking directly. And a lot of the times for me, what happens is they’ll. I would be interested in that. And they’ve become a lender, or they have two or three people that they think off the top of their head that they refer you to.
[00:11:14] Jay Conner:
Andrew, what you just described is exactly. how I raised and started raising private money. My very first private lender was from church. It was on a Wednesday night after church Bible study. Carol Joy and I were there, and I, there was this gentleman that I’ve known for years. I asked him if he could visit for a few minutes and we went into the room down the hall, shut the door and I said you know everybody in this town and I’ve now opened up my real estate.
[00:11:43] Jay Conner:
Business to people I know and trust, and I’m now paying crazy high rates of return safety and security to people that want to invest with us passively. And when you run across somebody that’s complaining about the volatility of the stock market, or not getting hardly any money in the local bank, would you refer them to a million?
[00:12:04] Jay Conner:
I’ll teach ’em my private lending program. Same thing as you, Andrew. Do you know what he said? What have you got in mind?
[00:12:13] Nic Cooper:
I think he made a great point there, Jay, is you tell them your story. You don’t tell ’em just, Hey, it’s a great return. What’s your story? What are you doing? People resonate with that and are attracted to your story and how you’re doing things.
[00:12:24] Nic Cooper:
The numbers, what’s the whole saying? It’s like facts tell, story sell. So tell ’em that.
[00:12:30] Jay Conner: Yep. Go ahead, Andrew.
[00:12:33] Andrew Jarrett:
No, I agree with Nick. That’s a great point. Instead of just throwing out numbers, if you can tell him a story and kind of reasons why and resonate with somebody and get that relationship, that’s what private money is.
[00:12:44] Andrew Jarrett:
It’s relationship money.
[00:12:46] Jay Conner:
That’s a good point. You’re right. That’s another name for relationship money. Nick and Andrew, I know that we have got thousands of listeners here tuning into this show and there’s a good chance. We have listeners that are tuning in that would like to get a high rate of returns safely and securely.
[00:13:05] Jay Conner:
They know all they can get is less than 1% of the local bank. You guys have got a fantastic track record of working with private lenders to give them fantastic returns. It’s safe, it’s secure. How about talking about your all’s business, your business model, and the real estate that you’re investing in? and why someone might wanna reach out to you to learn more about what you do and perhaps become a private lender.
[00:13:30] Andrew Jarrett:
Sure. Nick, do you wanna talk about the multi?
[00:13:33] Nic Cooper:
Yeah, so Andrew and I do multi-family, so it’s gonna be, larger apartment complexes, 20 units to about hotter units is our target, audience or looking for a class C like workforce housing, which is gonna be, blue-collar workers.
[00:13:47] Nic Cooper:
And what we do is we’re called syndicators, so that’s where we do. Private money for these deals. And like I said earlier today, you can’t do this all on your own. A multi-family is a team sport. So how do we get everyone to buy this? Like when I was growing up, you always saw those apartment complexes like, who owns those?
[00:14:06] Nic Cooper:
Now it can be you. So we can all buy this together and we all get the LLC, we run the deal, we get private money investors to come in there and invest with us.
[00:14:14] Jay Conner:
Andrew.
[00:14:17] Andrew Jarrett:
Yep. That’s the apartment business. And then we also have I still have quite a few single families and smaller mal ties, and I just did a deal.
[00:14:26] Andrew Jarrett:
So I was gonna go with a bank. They charged me 10,000 upfront for the loan, and it took six months for this refinance. And I still did not close. So finally I just got fed up and I said, why am I doing this with a bank? I bought these properties with private money. Why don’t I just go out to the market and see if I can raise the money?
[00:14:48] Andrew Jarrett:
Within 45 days, I raised the private money, all of it, and closed the refinance, and yeah, the. Just, just basically told him I’m not gonna do the deal. But it was so much easier just to raise the private money and get it done. And I had a couple of things that happened actually.
[00:15:06] Andrew Jarrett:
So one lady when we first, bought a duplex from her, and when I first bought it I haven’t talked to her in years. It was her and her husband. So I called her and said, My mortgage is, I think another five years out, but I’m doing a refinance that I can pay you off early while her husband passed away she said that she counts on the income every month and she didn’t want the money back.
[00:15:27] Andrew Jarrett:
So what we did was just restructured her into interest-only payments. And now she’s got another five years of money coming in at 8%, which, actually made me feel pretty good that I can help her meet her monthly income goals. And also another token is some of the loans I had, I would call ’em and say, we have 10 years left on this loan.
[00:15:48] Andrew Jarrett:
I owe you a hundred thousand. Say, would you take 75 if I could pay you off in two weeks? And, eight, nine times out 10 people will take a discount. So you are actually saving money when you pay them off as well.
[00:16:04] Jay Conner:
Awesome, Andrew, thank you for sharing that. Why, for the benefit of our listeners, why would an individual be interested in being a private lender?
[00:16:15] Jay Conner:
What are the benefits of being a private lender, Nick or Andrew? I think you make the rules.
[00:16:20] Nic Cooper:
That’s the situation here like before like I think Jay, you mentioned the banks have all the power and all the rules. Now you can be your bank. You make the rules, you decide what the rate is, Hey, 8%, oh, maybe that’s, But it all depends.
[00:16:32] Nic Cooper:
You agree with that person and I think that you, get power back in your accord and the person le who’s borrowing from you. So both of you guys have control.
[00:16:43] Jay Conner:
Yeah. It’s gotta be a win-win scenario, right? Everybody’s got the win. Andrew, if I wanted to be a private lender and invest in your syndication Andrew, why would I want to consider being a private lender with your fund?
[00:16:58] Andrew Jarrett:
Our track. And we, Nick and I both put our investors above the deal. I know Nick as well as I would do whatever we had to do to make sure that we protected our investors’ money. That is our main thing. And, a lot of people not a lot of people, but some people, look out for themselves.
[00:17:14] Andrew Jarrett:
But, our main focus is to protect our investors.
[00:17:17] Jay Conner:
Absolutely. We just had another question come in from our LinkedIn audience. And the question is, you may see it in the comments, they say that they have a few properties to cross-credit collateralize for a private money loan., it’s worth about 3 million.
[00:17:33] Jay Conner:
They’re looking for 360,000. The question. For either one of you or both of you, do private money lenders have interest-only monthly payments with a balloon payment?
[00:17:43] Andrew Jarrett:
The best thing about private money is you can structure it however you want. So the refinance I just did, I did 8% interest only with a five-year balloon.
[00:17:53] Andrew Jarrett:
And everybody was happy with that. You could structure it, with 8% interest only with a 10-year balloon or 20-year balloon or whatever you want. Whatever, yeah. Just ask,
[00:18:03] Jay Conner:
Yeah. Nick and Andrew, same thing for me. I leave it up to the private lender or private lenders when I’m doing a.
[00:18:14] Jay Conner:
How often do they need payments? It’s the same money. Yeah. I pay 8% per year, and I’m only paying that 8% while I’m using the money. But whether they get monthly payments, quarterly payments, or semi-annual payments, the only difference is how often we write a check. There’s no more income for them to make.
[00:18:35] Jay Conner:
Of course, interest is not. Interest is not like paying rent. Interest is always paid in arrears. So we pay interest after we have already used the money. A lot of deals, we’re able to structure where we don’t even make any interest payments at all. We just let the interest accrue until we cash out on the deal.
[00:18:57] Jay Conner:
A follow-up question to the question we just had come in is, what is a balloon payment?
[00:19:03] Andrew Jarrett:
So balloon payment is when the entire note becomes due and payable. Whatever your interest and principle are for that time, you had the money.
[00:19:13] Nic Cooper:
So five-year balloon to be in five years from the day is when you owe all that close the loan out.
[00:19:19] Nic Cooper: Yep,
[00:19:20] Jay Conner:
Exactly. So the balloon is the principal amount owed at the time of the balloon? Yes. You got it. You got it. We got LinkedIn feedback here. Thank you. You guys are great. The LinkedIn audience is loving you guys. This is phenomenal. Nick and Andrew, I know that some of our listeners are wanting to reach out to you.
[00:19:40] Jay Conner:
What is the best way? Your website, I believe is www.JarrettCapital.com.
[00:19:48] Andrew Jarrett:
Awesome. Go ahead. Yeah, you can send me an email. It’s just andrew@jarretcapital.com.
[00:19:55] Jay Conner:
So for those of you listening, who want to network and continue the conversation with Nick and Andrew, you can go towww.JarrettCapital.com.
[00:20:07] Jay Conner:
Final word. And then Andrew I’m sorry, what was that? I said you got the final word, Nick, and then Andrew after you,
[00:20:28] Nic Cooper:
I’d say reach out to us if you’re looking to grow scale or even just.
[00:20:33] Nic Cooper:
So we’re here like we do this full-time. This is not our part-time job. I retired from the military almost two years ago. Andy’s Andrew’s been doing this for almost his whole life. So it’s all we do. Reach out to us.
[00:20:46] Andrew Jarrett:
Yeah, I would say learn the power of private money. The money guide that you told everybody to get is amazing.
[00:20:54] Andrew Jarrett: I
‘ve looked at it. I would recommend people to get it. It’s a way to go. I prefer not to go with smaller multi-family, not to go with banks anymore, and just raise private money. It’s the best way to go and I recommend it.
[00:21:07] Jay Conner:
Thank you, Andrew. And thank you Nick for taking the time to join me here on the show.
[00:21:12] Jay Conner:
And there you have my friend, another episode. Of raising private money. I’m Jay Conner, The Private Money Authority. If you found this episode valuable, then I really would appreciate a shout-out there. Subscribe, if you’re watching on YouTube, and be sure and click that bill if you’re listening in here on iTunes.
[00:21:33] Jay Conner:
Be sure and click follow so you don’t miss out on any of our amazing upcoming episodes. Look forward to seeing you right here on the next show. This is Taking your Business to the next level. I’m Jay Conner, The Private Money Authority wishing you all the best. We’ll see you right here on the next Raising Private Money.
