Our real estate investing journeys may differ, but the keys to success are often quite the same. Dean Rogers began his career in the NFL and soon started getting involved in real estate. Even though it seems his career gave him a leg up, Dean’s journey and success are not that apart from the rest of us. It did not happen overnight. It took him hard work, discipline, and consistent action. In this episode, he joins Chris Seveney and Lauren Wells to tell us his story and the hard lessons he learned along the way. They discuss getting private lending and how it differs from hard money lending, as well as the success accelerators that helped Dean create a successful business. Dean also talks about deepening relationships through meetups, branding, and social media.
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From The NFL To Real Estate Investing: Building Wealth Through Consistent, Disciplined Action With Dean RogersWe’re joined by Dean Rogers. For those who don’t know, Dean began his career in the NFL with the Chargers. After he kept playing with his health at stake, he started getting involved in real estate right around the same time I did around 2013 out in California. Since that time, he has built a successful wholesale business as well as a fix and flip business, where he now has a portfolio in the tens of millions. He’s a person like ourselves who’s very passionate about real estate and helping others learn how to build wealth through freedom. Lauren and Dean, how are you two doing? I’m awesome. I’m doing well. We are finally cooling off here in California. We are all panicking with all this heat we have. We don’t do anything above 75 with the light breeze. I’m excited. I bought a sweater weather. We’re good. Here on the East Coast, you wake up. It’s about 50 to 55, and then it will creep up to about 75 to 80 during the day. You get the brisk mornings and then the afternoons with t-shirt weather. We wanted to talk to you, Dean. We’ve got several topics for the people who are reading, but we want to touch upon the story of Dean and how he built his successful real estate business because, as some people may assume, Dean, in his career, was around some high-net-worth people, but that’s not how he built his career. He built it outside of that, which all the props and respect to you. We will talk about his business and a little bit about getting private lending and some differences between private lending and hard money lending because there is a difference, which a lot of people have asked us. The explanation I heard from Dean was one that I wanted to steal, to be honest. Dean, thanks for joining us. I’ll let you tell us a little bit about what you have going on now, and then we can work back to how you got there. We will start with where we’re at. I’ve gone through quite the journey. The biggest thing that I preached to people is this. What got me here isn’t some special story like I came from money, or as we talked about before we started the show. I didn’t go to my NFL buddies and say, “Philip Rivers spot me $5,000. I want to start buying properties.” It was from being disciplined. That’s one of the biggest things I keep preaching. It’s about discipline. What discipline does is it allows you to be consistent with doing the work because, using the analogy of sports, what allowed me to get to the NFL was being disciplined. It wasn’t that I was the fastest. It wasn’t that I was the strongest. It wasn’t that I was the first-round draft pick. It was the fact that I was disciplined to put in the work every single day, whether my legs were tired, my tummy hurt, or I didn’t feel like it. Whatever it was, I still continue to put in the work. We’re at a real estate portfolio of about $10 million rental properties and then active wholesaling and fix and flipping business of multiple seven figures. I love real estate and talking about it. We have built a team of eight people now, several of which are acquisition managers focused on that, an office manager, some supporting team members, and then my partner and me. We’re a team of eight. I’m super passionate about connecting with other good people and growing my network. I’ve started a coaching program because I am so passionate about it. I kept having people asking, “Can you mentor me or coach me?” I have been doing that as well. It’s fun. I want to be doing and talking about real estate all day. Did you always have that passion for real estate when you were younger? Where did that itch come from? Discipline allows you to be consistent with doing the work. Click To Tweet What’s your a-ha moment? The a-ha moment was when I was done playing football, to touch on the past a little bit. I started working in the corporate world. I hung up the cleats, started the corporate world, and went from a seven-figure contract to a $65,000 salary. I started all over from scratch. Working in that for a year, I realized, “This is easy.” I remember spinning in my chair, “I get to sit at a desk and slap this keyboard around. This is the easiest job I’ve ever had.” I’m used to working away for hours on end and putting in the hardest physical labor I could possibly do. I thought it was so easy. I worked my butt off. That’s what I always did best. At the end of the year, they’re like, “Great work. You’re so good. We’re going to give you a big salary increase of $2,000. You’re now at $67,000.” I was like, “This is getting me nowhere fast.” My gut dropped like, “That’s all I got.” I got on Google and searched for how to get started in real estate. What year was this, to put this into context? This is probably late 2012 or before 2013. This is December 2012. I just got done with football. How old were you at the time? I had to have been 25 or so. I did that good old Google search and found a free podcast, Sean Terry’s Flip2Freedom podcast. I was, in an unhealthy way, so obsessed. I was like, “This is what I need. Where has this been?” I got started from there. That was the a-ha moment. I did my first deal within three months of taking massive action every single day and consistently doing it. That was an eye-opener for me there. One question I would add is you harped upon early on the commitment and the consistency. That is something that’s always required for anyone to continue success. A lot of times, people ask me, “What does that look like when you say you want to maintain consistency or be passionate about it and stay on that course?” For your business, when you’re getting started to get to grow that business because I’m guessing you didn’t go from zero to multimillions overnight, and I’m sure there’s a time that we can talk about it, but when you started, when you talk about being consistent and obsessed, what were you doing? That’s what I was going to ask. You woke up every day and took massive action. I’m like, “What was that action?” That’s something I always would ask, “What does that mean? What does that look like?” It doesn’t look too exciting from the outside because it’s not super fast. That’s one of the misconceptions that’s probably sold online as the get-rich-overnight thing. For me, it wasn’t, “Get rich overnight.” Some people have some stories of how they made $1 million on one deal and stuff like that. I’m either playing too small or I haven’t played the right games yet, but I consistently produced multiple six figures a month and kept doing it. That’s me. I’m Mr. Consistent. What it looks like when you’re getting started and even when you’ve got all the wheels turning is it’s not like I had the Rocky Balboa music playing. I woke up and ran down the street. There was a property over there. I’m like, “I want that one. I bought it.” This is not how it works. For me, it was like, “I’m going to listen to this podcast. I’m going to continue to learn and be intentional about learning because I could casually listen to it and not be that focused.” Before I did my first deal in those first three months, I remember waking up at 2:00 in the morning because I wanted to relisten to the podcast episode that talked about filling out the contract. How exciting is that? I was so obsessed that I knew it was important for me to know word by word how to fill this contract out. I didn’t have YouTube to show me click by click, typing it in. It was a free audio podcast. I was listening, pausing it, going back to the paper, writing it out on the paper, and then unpausing it to make sure I understood how to fill out the free contract I downloaded from Sean Terry. It was by doing those small things and continuing to add new things. The next was, “How do I market to these people?” The most important thing is to generate leads or deals, which lead to deals. I could either find them on the MLS or through handfuls of other ways to find deals. I wanted to do it the way Sean was doing it because I didn’t want to reinvent the wheel. I didn’t want to have to go to listen to somebody else on how they were doing it. I wanted to know how Sean is doing it because he’s awesome. I followed what he was doing. He was doing direct mail. I need to learn how to do direct mail. He walked me through how to go to ListSource.com. Click by click, I’m doing the same thing. I’m on the internet. I’m pausing it, clicking on the thing, and going to the next step. It was continuing to do that, adding new layers to it, and then doing it. I sent out the mail pieces. I scrounged up some money, “I’m putting this towards marketing. Let’s hope it works.” What do you know? Calls started coming in. I answered my phone. That’s the next step. Answer your phone. I kept starting to work these leads, which turned into another deal and then reinvested it back into marketing. It was building on itself. It wasn’t massive, “I bought five properties within my first month,” but it was being consistent about continuing to learn and continuing to do the small things, which lead to deals, and along the way, learning the skills and continuing to listen to negotiation techniques. How do deals come together? How do you talk to the escrow companies? All these little things that are important make a well-rounded investor. One of the things that resonate with what you said to people reading if they’re looking to be more active versus passive in some roles is you didn’t try to do everything at once, meaning you would be like a sponge and try and absorb this information, but you also broke it down into pieces, “What is important or pertinent that I need to learn or do now?” You did that step by step because a lot of people will go and listen to 50 different podcasts on the same topic. They will try and get too much information. They suffer from analysis paralysis. They end up making no decisions or movement because they’re trying to do something you don’t do until you’re about three years in the business. They’re trying to implement that in their business now, where they’re missing the blocking and tackling of your business. That’s what you need to focus on. I can’t preach enough. There are lots of other different investment strategies, but if you’re looking to buy an investment property that you’re either going to wholesale, fix and flip, or keep as a rental, the first and foremost thing you need to do is learn how to get a deal. How do you get a deal? How do you attract leads toward you? There are multiple strategies there. It’s getting focused around that. What was your first deal? Following one of the episodes Sean Terry had was about how you could find preforeclosure houses on HUDHomeStore.com. These were FHA loans that were going into foreclosure. They had their special website, HUDHomeStore.com, where the government was involved in these Freddie and Fannie Mae loans. They would first auction them off within the first 30 days to owner occupants or nonprofits. These weren’t at the courthouse steps. These were on their online auction. After 30 days, investors could place bids on these houses. I would go into the website, do the filter for investors, look at the properties, and bid on them as Sean Terry told me to. I even listened to them so specifically that I was even bidding on houses that were in his market in Phoenix, which were the same properties he was bidding on. That’s how literal and specific I listened to him. Lo and behold, I followed it. I got the first property under contract. I started looking for buyers on Craigslist to wholesale the property and wasn’t finding someone quick enough. I got clever and went to Sean Terry’s website because he talked about it on his podcast. I went and filled out the form like I was the seller with the property information. His acquisition guy called me. I told him what was up. He is like, “I’ll put you in touch with Sean. He will get this taken care of.” He gave Sean my number. Sean Terry was calling me. I’m a fanboy getting all excited, like the random boy or girl standing outside the locker room who wanted my autograph even though they probably didn’t even know who I was. I was super excited. He is like, “No worries. I’ll take care of it.” He got it sold within a couple of days and got the deal closed. We technically co-wholesaled it. There I was closing my first deal. As part of that, though, one of the things that resonates a little bit is you got the deal under wraps. It wasn’t working for you. You went and asked for help. You went to somebody and asked for help. In real estate, sometimes egos get caught in the way of a lot of people. They don’t want to ask for help, or they want to take it on themselves and end up getting themselves in a lot more trouble down the line. It’s interesting. In your first deal, you went and asked for help. It’s something that more people should do as they get into this business. The quickest way to succeed is to get help from those with experience. Click To Tweet I love this topic because I was the same way. Even though I was brave enough to do it then, a lot of people get trapped. They put on their blinders. They’re staying in their world. They’re afraid or maybe even have a little bit of a fragile ego to ask for help because they don’t want to be perceived as someone who doesn’t have it together, they’re not doing that well, or whatever it is. The thing I preach the most now is this. The quickest way to get success is to get help from those who are experienced, like Sean Terry, the OG legend. That was the smartest thing I possibly could have done there. Otherwise, I would have probably remained stuck and maybe even frustrated and discouraged, but because I went to someone experienced who knew how to get it done, he accelerated my success in an opportunity that would have fallen apart because I wasn’t able to get it done myself. I say to everybody new, “Go to the experienced person who’s going to shorten that learning curve, help you get a successful deal done, and create a new relationship with someone who’s experiencing. Make it more valuable for everyone involved.” There’s so much value there. Have you worked with Sean Terry since? We did a couple of deals. We haven’t done any other deals beyond my first handful of deals but I won’t say it’s over yet because I joined a mastermind that he’s a part of. Are you alongside him now? I’m going to be alongside him. I’m going to be a peer. From fanboy to a colleague. When I see him, I’m going to give him a big old hug and everything like that, which I’m sure he will love, and start growing our relationship even more. There are so many opportunities to work with other people. What’s exciting when you get around people that have an abundant mindset is they recognize that there are enough deals for everybody. There’s an exponential factor when you work with other people who are driven and motivated and have the right values. It opens up more opportunities than you could do on your own. That’s what’s so exciting as I’ve grown and matured through my career, done that, and seen it. When you get around others that are doing the same, it makes it so much more fun too. I’m still getting over the fact. You had the contract, and then you took a 95% pay cut. You’re in a much better place a decade later. It’s to go from where you were salary-wise all the way down and then have the consistency to grow. One of the misconceptions is that not everybody who plays a professional sport is making tens of millions of dollars. The highest people do, but the average salary is much lower. When you get back into that corporate world, it can be extremely challenging. That growth is very interesting. It leads to what I want to ask next. You started in this business and so forth. How long did it take before you thought, “This is taking off,” or it started to take off? It took a couple of years. Everyone has got a different path. One of the things that are hard in our world is comparing yourself to others. Your path might be faster than others or slower. There are so many different factors at play. It might be because of your effort. It might be because of outside factors that are out of your control. It might be the opportunities and luck that fell in your lap. There are so many different things that come into play. In the first year, I did a handful and a half or so of deals or almost two handfuls. They were great. It was exciting. I knew it was the direction I needed to go. In my second year in the business, I opened up that year, getting started in flips. I was wholesaling deals at the time. My business partner was like, “You’re good at finding deals. Do you want to do flips together?” I was like, “That sounds great. It’s the next thing I wanted to do.” Funny enough, he was like, “It’s getting slow here in central California. You were doing some deals in Phoenix. Do you want to do some flips over there? You’ve got some contacts and stuff. Let’s do some flips there.” It’s going well for me so far. We did all the rookie mistakes. He’s a seasoned investor. He’s got experience flipping and being very successful. He jokes that he felt like anything he touched was turning into gold at that time because he was on a super hot streak of doing everything perfectly. We rushed into buying six houses within a month, going back to the joke of, “I didn’t buy a bunch of houses.” This is the beginning of year two. We bought six houses right away. Four of them turned out perfectly fine. We made money. The other two, which were the first two we bought, had all the rookie mistakes attached to them. We had bad contractors because we didn’t validate, get the right references, and do our due diligence thoroughly enough. Even though we met him in person, we were like, “His name is good enough.” We didn’t check references and do all that. The realtors we were using to help us locate the properties gave us bad comps. On this side of the street, the houses were perfect. On this side of the street, not so much. They didn’t sell for the same value. We were on the other side. It was all these combinations of things stacked on each other to where we ended up losing $100,000 on those two properties. Talk about a gut punch of starting this new career, getting some success and some trajectory in the right direction, and then taking some steps backward to have to dig myself out. On that note, this brings me to an interesting question. When you were in your first year, were you still working a full-time job? When did you leave that job? I was there for several years, going and working through all this. That’s important for people to know because you talked about how people would compare themselves to other people’s journeys and progression. There are some people that leave their job super early on, whether that’s because they ramp up so quickly, or they have family help or support, or whatever it is but a lot of people don’t talk about, “I worked my job for years before I went all-in.” Whose money did you lose when you lost $100,000? I didn’t have $100,000 to lose at the time. My partner said, “Do you want to do flips?” I’m like, “I’m not the big guy sitting on money.” I left my contract with seven figures. I didn’t leave with my seven figures. He’s like, “Don’t worry about it. I’ll take care of it. You bring the deals. I’ll fund the deal.” We use a hard moneylender. He put down the down payment. I did the rest of the sweat equity work type of stuff. Technically speaking, the money we lost was my partner’s money. It was his down payment, plus some on top because of the fact that we were at a negative. He was floating that money. Even though he didn’t ask me face-to-face, he was faced with wondering, “Is this guy going to stick around and pony up the half on this? Is he going to peace out?” That’s a big gut punch when you’re new to the game. What did I do? I picked myself up, got the work, and started focusing on getting more deals. That’s what we did. The next year, I focused on paying the bills and paying back my partner as we worked through doing deals back in our market, which is where we should have started anyways. That was a slow roll. That we maybe did fifteen or so odd flips that year and paid it back. After that, it was like, “We’ve got a clear runway. Let’s get to work now.” We scaled it to about 30. Next year, we scaled it to about 50, 70, and then 100 and took it to do that many flips. We got to a point where we felt like it was the law of diminishing returns. We would have twenty flips going on at a time and cranking on these things. Instead of maxing out our profit, it felt like we were chipping away at our profit because we were going over time and over budget. What's exciting when you get around people with an abundance mindset is they recognize that there are enough deals for everybody. Click To Tweet My partner is a hustler and a go-getter, but he is not Mr. Detail or the organized guy who we needed for managing so many projects at a time. While I was working on marketing, acquisitions, and closing deals, he was out running around, going to projects, and meeting sellers in person if we needed to sign that contract. We decided to pivot and get into wholesaling. What year was the pivot? The pivot was 2019. We were cranking off flips until then and then realized in 2018 that I was on this hamster wheel. All this money was going out to flips. It would come back in, and then more would go out. I felt broke all the time. If I had $30,000 in the bank account, I felt like, “We will make it through this month.” That was seven years into it. I like to contextualize all of this for people. I had another boo-boo along the way too. As I was going through 2017, I got out of this hole. We’re cranking and making some money. It’s like, “Life is looking bright and beautiful. I’m ready to take things to the next level.” I’m living in San Diego. When I started corporate, I moved up to San Francisco. I moved back to San Diego. I’ve now got a community of investors here too. I’m thinking, “I want to invest here in San Diego, where I’m living as well.” There was someone in the community who cut to the punchline was a wolf in sheep’s clothing. He was working with a lot of other people in the community that everyone knew, liked, and trusted, but he was slowly but surely building this Ponzi scheme of taking people’s money, putting it on a project, and then saying he had it recorded and it was secured. He would borrow other people’s money and do all this crazy stuff. It ended up blowing up soon after he asked me to come in on a project, “I got this new construction deal. It’s ready to go. As soon as you buy into this deal, I’m going to develop the one right next door. We will build this together hand in hand. Here’s what the numbers look like. Everything is in place. Plans, permits, and everything are approved.” The short version of the story is on day one, I bought it. It was all a lie. It started to unravel as I started to call the architects, the civil engineers, and the hard moneylender that was in place. It was all a total S storm. It all fell apart. I had to fix all these problems of these people that were unpaid. I ended up losing $187,000 on that one deal. I didn’t move one piece of dirt. Imagine buying a piece of dirt to do a project, working on all these disasters for about a year, and then coming out of it on the other side, losing $187,000. It was gut-wrenching and so painful. The biggest lesson I preached to everybody that hears me tell the story is all it would have taken is one more phone call. I would have called the civil engineer, “Are these plans proved and ready to go? I was told these things in front of me were accurate. Is that true?” I would have called the hard moneylender, which I knew and had the cell phone to one of the main people, “You’re cool with me coming in on this deal. I was told this is the green light.” “This is not a good deal. This is falling apart.” That would have saved me a lot of pain. It’s that one extra phone call, but I had to learn the lesson. God said, “This is a lesson you need to learn. This is the time for you to learn it right before your firstborn child. Here you go.” I went through that. In 2018, the light bulb went off. I’m on this hamster wheel. I’m not building wealth. I’m earning money and making a good living, but I’m not creating wealth. For the wealth that I wanted to create by being in the NFL, buying houses for my family, and having generational wealth like my dreams, I need to buy rental properties. That’s what’s going to get me there. Some of the flips we already had were like, “This one, that one, and these are going to be rentals now.” In 2018, we bought eighteen rentals and then started buying from there. We’re at 60 rentals. We will add anything else that makes sense to the portfolio, but that light bulb moment went off. In 2019, we realized, “We’re good at finding deals but not good at doing too many flips. Let’s wholesale and buy rentals and then some easy flips here and there.” That has been the magic recipe for us ever since. Have you changed? I’m sure I know the answer to this but have you changed? With COVID, real estate saw a crazy boom. With where we’re at now, how has that changed since 2019? In 2019, we started doing the wholesaling, building more relationships with buyers, and doing all the stuff you need to do when you’re wholesaling properties. In 2020, we had a great idea, “People know us. They know we’re doing deals, but I don’t feel like they know us on a deep and personal level. Let’s start a meetup. This will be the thing that we need to do. We need to start an in-person meetup.” It wasn’t Valentine’s Day. February was our first in-person meetup. We had 100 people show up. There was a great turnout, “We’re onto something. This is going to be what’s going to help us deepen relationships in our community and open up these new doors and the abundance mindset.” The second meetup is scheduled and planned for March. It’s shut down. I’m about to get on my flight in a couple of days, and the news drops. Were these meetups up in Central California? Yep. I’m thinking to myself, “How the heck are we going to continue connecting with people?” A lot of people were driven to the internet and were looking for information, more podcasts, and stuff. I continued to do some virtual meetups and would have great turnouts. That was going well, but it still wasn’t like developing. I want relationships where I’m making an impact and someone is making an impact on me. I want to do deals with people. I want to open this up and do more deals. I got clever at the time and started posting about the stuff we were doing and providing social proof, “Look at these deals we’re doing. I found this deal this way. This was a tough deal. We had to negotiate it like this. This problem came up.” I started sharing stories and also successes, “Look at this deal we closed. We got this wired for $20,000 or whatever it was.” People started taking notice and getting excited about it. It developed into the idea, “If you need help with deals, let us know how we can help. If you have a qualified lead and you need help with negotiating with the seller, going on the appointment, making contact with them, getting it under contract, selling it to a buyer for top dollar, or handling the whole escrow process, we will help you with anything. We will split it 50/50 with you. Whether you’re brand new or experienced, we will help you get this deal done. We will maximize the deal by negotiating it well, selling it for top dollar, and making sure it doesn’t fall apart in escrow.” People started getting excited about that slowly but surely. It wasn’t a landfall, but people started reaching out and asking for help. I would show online, “Look at the success we’re having with other people. We closed this deal and made $40,000. We each made $20,000. This is super fun.” It developed into, “I love sending friends money. I’m making new friends. How cool is it when you send friends money?” It turned into Friends with Benefits. I started branding it Friends with Benefits. People loved it. Everybody laughs about it. You get one of our company mugs if you close a deal with us. I’m not wearing it, but I have a shirt that says, “Friends with Benefits,” on the back. People love it. You’re in the friend zone until we do a deal. If we do a deal, we’re friends with benefits. You get a shirt. It’s fun to talk about. We have people reaching out to us, “I want to do a Friends with Benefits deal. How can I get one of those shirts?” I’m like, “You have to earn it.” In 2021 alone, it added $1 million of revenue to our business by branding that and talking about it on social media. Remember, I’m a virtual investor. I’m not physically there shaking hands and rubbing shoulders at escrow with people. I’m here online talking to people and telling them what I’m doing. That in itself added seven figures to our business. The sky is the limit. We’re still barely scratching the surface. Doing deals with other people and having that abundance mindset is so much fun because these relationships are that much more meaningful and valuable from both sides. It all stemmed from the standpoint of, “Let me add value to other people and not necessarily expect anything in return.” As people come and receive, they end up reciprocating, too, because they want to get value at some point in time. That becomes a super beautiful and magical thing. That is rewarding. I’m laughing. Lauren, I’m visualizing you speaking on the phone with an investor who’s 85 years old and telling him about our friends with benefits. Doing deals with other people and having that abundance mindset is so much fun because now, these relationships are much more meaningful and valuable from both sides. Click To Tweet We have a very different target audience over here. One of the guys who we have done multiple deals with closed a $50,000 deal. He said he loves wearing the shirt, but his grandma will look at him funny, “What’s that all about?” Besides that, people love it. I’ll wear it out in public. People will stop me and be like, “What’s this all about?” It’s an attention grabber. That has become fun. I’m curious based on post-COVID. You’ve got a course and some mentoring training. As the dust starts to settle post-COVID with interest rates creeping up or exploding, as some would say, and talks of some softening and so forth. Are you changing anything as part of your business? Are you seeing what happens and somewhat reacting to it? What are your next steps? We’re fortunate to be ahead of everything because we’re on the front lines talking with sellers. We’re seeing how they’re reacting. We’re also on the second line of people with the buyers buying deals from us and seeing how they’re reacting and their sentiment on things. Generally speaking, people are being a little cautious, but maybe at this point we’re at, they have also seen that the sky hasn’t fallen. I’m going to be conservative. I’m not going to be in the prior real estate market stage where everybody was thinking it’s going to the moon. People are being a little bit more cautious. When we go through our analysis, we’re going to be conservative on what we call our ARV or the After-Repair Value. If the property was worth $300,000 based on the comps, maybe we will say it’s $275,000, be very conservative, and keep it at that. If people are looking at the same numbers as us, they will probably feel comfortable and confident about the numbers. We have been able to sell our properties. I didn’t know if we were going to circle back to hard money lending versus private lending. I wanted to circle back on that a little bit because I did hear when you were speaking on another podcast that you were talking about some hard money lending, private money lending, what your preference is, and why, and explaining that. I would love for you to share some of your experiences in dealing with that. I’ve done it both ways, hard money and private money. I’ve certainly done much more private money in the hundreds of transactions, whereas on hard money, I’ve done maybe a couple of dozen. The biggest difference when it comes to hard money and private money is, first and foremost, hard money is an actual institution. It’s an organization that was created both around the law and its intent from day one to lend money to real estate investors. It’s a beautiful thing. It’s easy. You don’t have to awkwardly ask, “Are you maybe lending money?” That’s what they do. They’re looking for more of you. They want to lend you their money because they have borrowed it from someone else. They might be giving them a nice conservative preferred return. They will lend that money out, charge a little bit more, and charge some points for administration so they can make a buck. It’s awesome. Hard moneylenders are great. The only thing with hard moneylenders is they’re an institution. They’re an organization. They’re more corporatized in the fact that they have a process they need to go through. They take it through an underwriting process and review your deal. They have a big stack of papers that you ultimately have to sign promising that you’re going to pay them back. Otherwise, you’re in big trouble. Hard moneylenders are great. It has a little bit more rigor to it in that you have to go through their process, which in most cases means that it might take you a couple of weeks to close escrow by using a hard moneylender. It is generally speaking still pretty fast but in terms of a private moneylender, what’s so beautiful about a private moneylender is this is someone who has funds and wants to invest their money as a passive investor. They want to place their funds into something. They want it to be something that’s secure and something they understand. What are their options? They have retirement accounts, the stock market, and assets like crypto, which you could say is like the stock market, but there’s also real estate, which is a tried and true investment. It’s something physical you can see. It’s not a paper asset like stocks, which can drop to zero overnight. It’s something that people understand because everybody knows it and lives in a house. It makes sense to them. Like banks, that private investor still secures their investment against the property. The mortgage you would get against the property and shows up on the title that the bank has a mortgage is the same thing that a passive investor and a hard moneylender would do. If you know, like, and trust somebody as a private moneylender and see that Dean is flipping houses, if Dean can give me a 7% to 10% return, that’s a good return. That sounds like a good investment for me or them where they can tie their money to the property and get that passive return. They’re not going to take on the risk of having to flip it or do anything like that. As the borrower, I have so much more flexibility because it’s like me calling you, Chris, and saying, “Do you have $200,000 you want to put on this property? I’m ready to close tomorrow.” The escrow company puts the paperwork together and sends it over. If we both sign it and you send your money, we can close that quickly. We close escrow in 24 hours using a private lender, which wouldn’t be possible with a hard moneylender. Ultimately, a private lender is a person like you and me that has money and wants to secure it against real estate and get that return. That, for me, as the borrower, creates so much more flexibility. I might have had an initial conversation with and built a relationship with some of my lenders, but now I just send them a text message, “I got a property. I need to borrow $200,000. Are you good for it?” They’re like, “That sounds good. Connect me with escrow.” That’s it. They don’t even necessarily want to know the address or the numbers on it. They’re good for it. That’s the power of building those relationships with the private lenders and the flexibility it creates for you. I was going to ask about the private lenders. How did you source them? You didn’t meet them at meetups. There was probably COVID for some of them during that time. I’m curious. What advice would you give the people? How did you meet your private lenders? Back in 2014, I was doing my direct mail marketing and getting started in the business. My partner asked me if I wanted to do flips. I’m like, “I don’t have money available at the time.” Quite honestly, I didn’t understand the whole private money and hard money thing yet. I was focused on wholesaling. I didn’t even know about it, but I was starting to learn a little bit about it. I understood that you could buy houses with none of your money. You could use other people’s money or OPM and insert a private lender. I have been sending marketing out and had one of my leads call me, saying, “I don’t want to sell my house at 123 Main Street, but I’ve got $3 million in the bank. What could you do for me on that?” I said, “I could give you a 10% annualized return.” He’s like, “When can we meet? I would love to meet at one of your properties.” I said, “Let’s get together this Thursday.” He said, “Is it cool if I bring one of my friends? He’s got more money than me too.” I said, “That sounds great to me. You both come on over. We will meet you there.” He had millions of dollars in the bank. His friend had millions of more dollars in the bank. They were good old boys in town who were experienced and seasoned investors who were wanting to do passive investments at this point. Years later, we did hundreds of deals with them. We didn’t need other private lenders. There was a handful of other private lenders that we would sprinkle here and there as we developed relationships and wanted to get their money working and build that relationship. There were hundreds of deals we did with those initial two guys. That’s the power of private lending. Think about all the other things you can do if you have access to money in terms of other types of deals or doing the next one. That was a huge opportunity. It was a blessing. Out of curiosity, you mentioned direct mail. How much were you spending a month on direct mail if you remember roughly? When I got started, it was a $1,000 a month type of deal. Now, we will spend $10,000-plus a month. It certainly changed. If I knew what I know now, back then, I probably would have been spending $10,000 a month on direct mail when it wasn’t as competitive and not as many people were doing it because it probably would have been that much more lucrative. At the time, with the budget we had, that’s what we were doing. It worked great. That’s a common question I see a lot of people ask. In our business, it’s a little different with the mortgage notes. People go out to private lenders, “Are you looking to sell the loan you’re holding to cash it out for something else.” I usually tell people, “You have to spend thousands because some people will try and start with a low budget of a few hundred bucks. Unfortunately, it’s probably not going to get you very far in that because it’s something where you have to cast a wide net.” That’s why I was curious. Lauren, is there final thoughts as we wrap up this episode? I don’t have any. It was good to hear and see you map out how you started and how you’re working your job still. It’s that progression. Transparency is good for a lot of people to see, especially when people are thinking. If you’re on TikTok or any of the other social media channels, you see these people who are like, “I made this much overnight.” That’s great. Maybe that’s their story, but that’s probably the rarer of cases. It’s good to see the other side of it. If you stay consistent and work hard, you'll definitely have breakthroughs and can and will succeed. Click To Tweet I try to keep it real because people see all the flashy stuff online, “This person got rich so fast. They have been getting richer. They’re so stinking rich.” Most people, especially ones that are pushing hard and trying to get to those other next levels, make mistakes. They get knocked down and get hurt badly. Usually, when I go around and tell the story of how I lost $187,000, there are plenty of people that are sick to the stomach, but occasionally, there will be a person who’s like, “I lost $1 million.” I’m like, “You took the cake. You win.” There are all sorts of different stories and different experiences. Everyone has got their path and journey, but if you stay consistent and work your butt off, you will have breakthroughs. You can and will have success. You’ve probably seen those memes where someone is digging for gold, and they give up, “It doesn’t work for me.” They’re walking away when gold is right there on the other side. You have to stick with it. My concern has been good for pretty much anybody in real estate. Now that times are going to get a little more challenging, people have found, “This is easy.” The moment somebody thinks real estate is easy, sometimes you have to be careful. I’m on BiggerPockets a lot and so forth. I’m reading some of the things people do on there and some of the things they are doing. My career has been in real estate for 25-plus years. I shriek a little bit on some of the things I see people are doing or some of the things people are paying over 2021. Short-term rentals are probably the one that is the scariest for me. Hopefully, people make it through the end of the day, but as quickly as you can earn it, you can lose it, unfortunately as well. Dean, are there any final thoughts as we wrap up this episode? I appreciate you having me on. I love real estate. I’m passionate to talk about it. For anybody that’s on the fence about whether they want to do it or they’re trying to figure out that next breakthrough. Usually it starts with reaching out and connecting with other people so that you can either get the motivation or find that answer to have that breakthrough and get that first deal or to take things to the next level. The answers are out there. The right people are out there. Find relationships and build connections with other good people in your market. You will see things take off. That’s a key thing that I’ve heard from almost everyone we have interviewed or spoken to, “Find someone to talk to. Find someone who does what you want to be doing and reach out to them.” It’s so interesting that it comes up. No matter who we speak to and whatever industry they’re in, that keeps coming up. That’s great advice. If people want to reach out to you, what’s the best way for them to reach out? You can either go to DeanRogers.com and click the tab at the top that says Connect. You will see all my social media stuff on there. It’s @DeanRogersRealEstate for Instagram or Youtube.com/DeanRogers. DeanRogers.com will have all the stuff for you if you want to connect with me. Please, reach out and get connected with me. This game is all about relationships. It could be just one conversation that sparks something and gives you that idea or opens up that new door. You have to reach out. Thanks, everybody, for joining us on this episode. If you like the show, subscribe, share it with a friend, or leave us a review. Thanks, everybody. Thank you. Take care.
- Dean Rogers
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