If you want to be a successful investor and capital raiser then you’re not going to want to miss this episode. Dan Zitofsky shares great insights on how to raise capital, avoid “muddy waters” and bring value to your business.
Dan Zitofsky is a real estate investor focused on raising private capital. Over the years he’s flipped 1000’s of houses, worked in commercial real estate, plus he’s the author of the book Passive to Prosperous.
Dan’s driving purpose is to be there for his wife and his kids, and to leave a legacy that makes a difference.
KEY TAKEAWAYS:
Success (in the long run) isn’t about the money
Find a way to add value to everyone you want to work with
Be different
Don’t buy into the “scared money” limited mindset
RECOMMENDED BOOKS:
The Banker’s Code - George Antone - https://amzn.to/2Z4mpT3
Passive to Prosperous - Dan Zitofsky - https://amzn.to/367j0UT
LINKS:
https://www.facebook.com/groups/becomearealestateinvestorwithdanzitofsky/
www.passivewealthacademy.com/42k
www.youtube.com/zitofskycapitalmanagement
Title: E134: The Key To Raising Money: Building Relationships - Dan Zitofsky
Duration: 00:42:41
Interviewer: Steven Pesavento
Interviewee: Dan Zitofsky
Narrator (00:00):
It's wonderful that so many of you have stepped up and registered to partner in future multifamily opportunities together. We follow a very strict vetting process when selecting our operating partners, and all of which have a serious track record, at least five years of experience, at least 2,500 doors that they've actually managed and owned and over $250,000 of assets under management. These kinds of guidelines help make sure that we are investing together in some phenomenal deals and you can learn more by registering at theinvestormindset.com/invest. These institutional style investments bring benefits to busy professionals and real estate entrepreneurs looking to reduce their taxes and increase their returns. And you can join us by getting started at theinvestormindset.com/invest. I look forward to seeing you on the next deal.
This is the investor mindset podcast and I'm Steven Pesavento. For as long as I can remember, I've been obsessed with understanding how we can think better, how we can be better and how we can do better. And each episode, we explore lessons on motivation and mindset for the most successful real estate investors and entrepreneurs in the nation.
When it comes to real estate investing, raising capital is critical to success. And in today's episode, we dive in with Dan Zitofsky, who is an absolute expert at going out and finding capital. And we walk through the specific steps that he uses in his own business to go out and find capital to go and work directly with those folks, building relationships and most importantly, making them ask for them to join up and work with you in the future. This is chocked full of information and some stories about how Dan ended up getting to this place of being an expert capital raiser. I've listened to it multiple times and I know that you are as well. So without further ado, let's get to it.
Steven (02:05):
Alright guys, welcome back to the investor mindset podcast. I am excited, I have Dan in the studio day. How are you doing Dan?
Dan (02:15):
Great, Steve. Thanks so much for having me on, I look forward to it.
Steven (02:18):
Yeah, well, as you guys know, Dan is a real estate investor focused on raising private money, doing notes, all kinds of things and over the years, he's flipped thousands of houses worked in commercial you know, buys notes and is author of an Amazon bestselling book, Passive to Prosperous. So definitely excited to get into the mindset of raising capital and understanding how to go through difficult times or a changing market. Cause he's been there, he's done that and we're definitely able to dig into that. You ready to get into it Dan?
Dan (02:48):
I'm looking forward to this.
Steven (02:52):
All right. That's what I like to hear. So if we start out by taking a look back earlier in your life, what events or influences from your childhood shaped, who you are?
Dan (03:00):
Well, I appreciate you asking that. Growing up, that's really how I'm shaped, growing up, I did have a great role model, my grandfather, he came here from Europe, lived a very tough life himself to get here. Worked his towel off but as he was working, he took his money and he bought some real estate. He amassed a nice little portfolio in real estate. I always was an amateur buyer, I also bought my first rental property at 19 when I was going into the Navy and I did that and it was funny cause I was making more money in rental income than I was at my Navy bootcamp salary of $248 every two weeks. But growing up, I had a really tough, not that I was homeless or anything, but a really tough childhood with family.
Mother left the house, she was not really a loving mother, she took off on us when I was a teenager. My father was able to take care of us, we had a roof over our head, food, but no money for extras as he was kind of not around. We were kind of left on our own as teenagers, myself and my brother and it was almost to the point of embarrassment. You know, we didn't have money, when friends would go out, we couldn't join them because I didn't have money to join them. I started working when I was young to pay for my own stuff and I always swore to myself, back then, I would never ever raise my kids like that, I would never not have money. I always thought success was having money, so I grew up in a lot of jealousy and a lot of, a lot of resentment and stuff like that.
And when I got in the Navy, I started really hitting hard into the real estate game and I wanted to be rich so bad to me. To me, success was being rich, right? Rich with money. And that's why I started, you know, flipping houses even though I was a police officer. Even during that, I was flipping properties, I was buying properties, I was buying land, buying hotels, commercial buildings. I did everything I could do to chase money and I did very well, I'm not going to complain. At the time when I was hot and happy, I was flipping 50 plus properties a year, minimum, sometimes up to 80 properties a year and I was netting generally about 70, 80, $90,000 a property sometimes more. So I was making multiple seven figures a year over year in, year out! I was doing everything about money. So everybody's putting out there, you know - I had the cars, I had the most beautiful cars you can imagine. I had the watch, I mean, I still have a watch collection, boats - and to me that was success. And then I was working so hard, a hundred plus hours a week that, you know, my wife and I were missing kids' events. My wife was miserable because I was never home. And I thought I was doing everything right cause I grew up and I said, Noah, we had nothing so I was giving you the cars you wanted, the jewelry you wanted, the vacations you wanted, everything you wanted and she was miserable. And I almost lost my wife and kids basically because I was never around.
So when you think about it, the reason I was doing everything I was doing, right, to working so hard to make money is because I said I was never going to be miserable, I was never going to answer anybody else. I was going to have time to do what I wanted with my family, when I wanted and how I wanted but I wasn't doing it. My vision was one way my actions were totally different. So at that point, I'm going to fast forward a little bit, I'm making, let's say 70, 80, $90,000 per flip and doing 50 plus flips a year, to now turn it around and say, what am I going to do? I mean, my wife told me you're a horrible husband, you're a horrible father, you're not here for them. It was like putting a knife in my back. Like I thought I was doing everything for my family, I thought I was the best husband in the world. I get goosebumps talking about it now. I thought I was the best father in the world, I was sure I would never be like my parents. And now she just hit me with, Hey, you're just like your parents, you're not around. And I'm like, Whoa, this is horrible because I gave you everything you wanted. And I still remember I was actually crying, when she told me this. I dropped to my knees and I was crying full honesty and I remember sitting there and I'm like, what do I do? I don't know how to really do anything else. Like I know how to flip houses, I know how to make a lot of money, but like she's telling me it's not working. Like I'm in this quadrant, what do I do? So I'm like, I need to build a passive income and you know, $300 a month or $200 a month on a house wasn't as sexy as $50,000 a house, right?
Steven (07:18):
Yeah. Well, you end up getting caught up, especially as a flipper. You end up getting caught up in this like, well, I could make 50,000 or I could make $300 a month. and it's like, obviously I'm going to take 50, but the 50 takes so much more time. So it's like, you were driven to go and create income and wealth for your family. And then the motives, because you grew up without it ended up driving you down a path that didn't actually get you where you wanted to go. So you kind of took your eye off the road while you were driving with the foot all the way down, because you thought you were headed in the right direction. But you know, thank God that you guys were able to have that conversation and share openly that, hey, things were not going well.
Dan (08:02):
Right and that's why I put the story out there so much. That's why my book is called Passive To Prosperous, so passive prosperous. That's why my teachings, my public speaking I get brought in as keynote speaker, I'm a sales trainer. Like I said 50,000, is a lot more sexy than $300 a month. When you do $300 a month, a couple hundred times it gets pretty damn sexy. Right now, I have the time, essentially really, since 2011, I think I really hit hard, but since 2009, I kind of just want to make a change. And now I have more time than I ever had to do what I truly love to do, which is not chasing money.I know that's a close shot and then a lot of people say it, but I mean, I've been, especially now every week, I'm presented with opportunities to get involved where I can make a lot of money and I just look at it. And if I have to take on something that I don't want to do, I don't do it anymore because I'm not chasing the money, It's not about the money for me anymore. My life motive is time.
Steven (09:06):
You finally got in some actual alignment so that you were clear on what it was that you were actually trying to accomplish and making sure that everything went through that lens.
Dan (09:15):
Exactly, 100%. And that's my goal is to get that out there to everybody. And I think a lot has to do with when you talk about what is your vision? why are you doing what you do? And then how do you get there? And to me, it, I was, I was held up by banks and hard money lenders back then. I couldn't do what I wanted to do because when I had a hard money lender giving me money at high interest rates, points, draw schedule fees, inspection fees six months to a year, it just didn't work. Economically, it just doesn't work, right? And banks stop lending so, how do you get out of these hard money loans?
So the only way this worked for me, the only way in 2009, I swore to myself that this was going to work for me, was I needed to raise private money. And I was raising a little bit over 500,000 to a million at the time before that, I wasn't raising a lot. But in 2009, I swore to myself, I will never base my business over hard money lenders ever again. Now do I use the banks for some of my rentals? Sure. But I pay those off really quick. Do I use hard money lenders? No, I don't use hard money lenders, everything I do is with private money.
Steven (10:31):
So obviously you, you got burned pretty bad, you made some big changes in your life. Tell us, what is your focus today as an investor? What are you, what is your focus right now? What is it that you do?
Dan (10:43):
Sure. I'll give you my elevator pitch and everyone should have one, right? My elevator pitch is I raise private capital to buy distressed debt in emerging markets, pay my investors better than average returns. What that means is, and I kind of stopped there and I just, I wanted to give that to your audience because a lot of times I ask people, I go events or I speak and they come up and they want to meet or talk to me and I'm like, so what do you do? And I'm a real estate investor, I'm a realtor, I'm an engineer so why are you here? Do you need money? Yes. But why don't you tell me that? So what I do is I generally buy, I raise cap, right? I raise a decent amount of capital cause I buy debt either non performing notes, Oreos, tax liens, or deeds, or even distressed sellers. But a lot of times I buy directly from the banks. I look at big pools of assets and I might take down one asset at a time, I may take down 50 at a time, a hundred at a time, 10 at a time and hard money is not, it's not going to work for this cause I'm not, I'm not going to be out in six months or less. So that's what I do and I turn these assets into nice quality properties. I'm usually in class B to C areas in emerging markets, all right? And I turn it into a nice rental properties and I got a place for property management and I keep it. I keep it myself or I help my investors. I have a pull of investors that come to me. You know investors are not only in the United States. I've worked with a lot of people in Canada, Israel, Canada and right now, I'm working with some people possibly in Portugal as well. But I'm working with these people that want to invest their money in the United States, that want decent returns and decent quality properties with less headaches with good property managers. I will sell these properties to those investors, free the cash or one seller financing. I love to sell and sell financing, but a down payment, because that’ll create a set of seller finance notes for myself. And now I create passive income and two thirds of my portfolio is seller finance notes.
So generally it's the only business in the world where I think you can truly, I don't care what you do, - rentals are great, I love rentals. One third of my portfolio is all single family rentals and rentals are great if you do the rentals the right way, in the right area with the right tenants, but seller finance notes are the absolute best business in the world. Becoming the bank is the best business in the world because I truly can leave the country for a year, If I want. Not do anything, not touch anything, not see a check, not get on a phone, not deal with a tenant. Everything's handled by my servicing company, my storage company, ACH has, rights to my account
Steven (13:18):
It’s a lot simpler of a business model, it sounds like.
Dan (13:21):
I'm telling you, Steven, it is the ultimate business model people strive to get to visit. When you start, you know how people start in real estate, where all they start usually as wholesalers, right? Then when they become wholesalers they start saying, well I'm only making five to $20,000. And there's flippers making 15, 100,000. I'm going to be a flipper, right? So they start flipping. Then they realized, hey, I hate this transactional business because it's driving me nuts and I want to like, hang out with my family, my friends, and I can't do that. And I could do great this month and then come next month, I have no money. So I have to build a rental portfolio, I have to create some wealth. So they do that and then they transfer that into seller financing.
It's almost like, you know, the evolution of man, right? We started off on all fours, but we started saying they go straight to human beings. We started off as eight, seventeen human beings, that's the evolution of a real estate investment. I always tell people, you don't want to truly be all seller financing because that's a passive investment, you need some active investments as well. And then the negative about seller financing is when people pay you off, you don't have anything. But yet when you have a lot of them, it's okay. So I keep my portfolio, keep one third of it, active investments and the properties that can be my portfolio, I'm very generally high end rentals. Economically, they don't work for other people . For us, they work because we have a lot of cash flow so a lot of times we're buying these for cash, at this point.
Steven (14:48):
That makes a lot of sense. Well, I want to focus on something that I think is going to be really powerful for people because, there's a lot of limiting beliefs about raising money. There's a lot that goes into this thing, that real estate investors or entrepreneurs of any level when they're going out and they're trying to raise, they end up running into some roadblocks. And so, I'd love to talk about what are some of the biggest limiting beliefs that you think people have when it comes to raising?
Dan (15:15):
The sort of limiting beliefs I hear is, I'm not experienced enough, I don't know enough people to go to, my friends and family don't have money, I don't have a team in place. I don't have my own money, I hear that a lot too. That's generally the top four or five I hear all the time. The biggest is, I don't know people.
Steven (15:35):
How do we overcome those beliefs?
Dan (15:38):
Well, you have to believe in yourself and here's a couple of things. When you say those questions you've got to understand that even myself, I've raised over $30 million and use it in $200 million of velocity. And, I only have 42 investors and they're not all active at all times, right? I have 42 people. I don't go crazy and try to build a ton of money because I don't need a ton of money at this point. I know people that have two or 300 investors and you can keep building. Outset. One of the reasons I said I have 42 is because, maybe, three of them prior to when I started really focusing on raising private money, might be three of them are friends of family, the rest of the people, I never knew before I started. So take that limiting belief away, okay? You do know more than enough people. You just have to know a little bit more. When you say you don't have a team, you most certainly have a team. Right? Cause even if I ask you right now where you invest, you would tell me who's on your team. How do you know what the comps in that area are? How do you know what the rental number is in that area? How do you know who the contract is in our area? You certainly have a team. You just don't believe you have a team, right? So you have your realtors, you have your contracts, you have your property managers, you have your project managers, you have your realtor, your attorneys or title companies. You certainly have a team, all right? And you certainly know why you're investing in that market because if you don't, why would you waste your time there? So explain to me why you're investing in the market you're in. If you're in Memphis, Tennessee, why Memphis, Tennessee? Why Birmingham, Alabama? Why Dayton, Ohio? What's there, right? Why are you investing there? You gotta be able to tell me.
I think the limiting belief - but it's not even so much a limiting belief - I think it's the laziness of investors, you know? And that's why the top investors do well.
I have a lot of people ask me for money. I do lend, but I only lend to, right now, people that I’ve been doing business with for while. That's why I like to bet on the jockey, not the horse. I think we spoke about this on one of your old podcasts. I'm very big on betting on the jockey, not the horse. So when they come to me with requests, for me to fund their deal, a lot of times it's, hey, I have a deal would you want to fund it $150,000? They don’t want to give me the address. And then if they give me the address, there's no supporting documentation with that. I don't have a scope of work, I don't have a draw schedule, I don't have a bio, I don't have their team. Who's the contractor? Who's doing the work? I don't have a license from the contractor, I don't have any insurance, I don't have an application from them to show me what they have in reserves! How can they support this deal? If it goes sideways, how are they going to protect me? So we do all those things. I do it for myself, I teach my students how to do it. That you have a leg off, you have to bring value to somebody, right? And the other thing is people don't start looking for money until they need it and that's absolutely wrong. That's the word right now. I think we've talked about this before, Steven, this is the best time - I hate to use something like this to take advantage - I don't think I'm taking advantage, but I think I'm taking advantage of my business. This is the best time right now. You're quarantining in your house, you have the opportunity to watch Netflix, watch what's going on with Facebook and social media, all the misery, watch the fear-mongering going on, watch the people say the world's going to end or you can tune all that out and stay laser focus and say, I'm going to learn how to raise private money. This is the answer that helped me in 2009. I did it because it wasn't a pandemic, I did it because at the time hard money lenders did exactly what they did now, they pulled out of the business. Okay, most of them, some of them were still in, but the ones that are in are lending less money now, and they're making a whole 12 months restarted break sprint 12 months reserves who can afford that. You know, a lot of these new investors that can't afford that. Okay? And I don't blame the hard money lenders, they want to protect themselves. They should, they're smart. And the banks, a lot of them are pulling out as well so, this is 2009 all over again right now. You have probably a good two to three months to really put your business together and you could do a ton of damage in two to three months, a ton of damage.
Steven (19:38):
So on the money raising side, it sounds like what you're saying is, you need to really position yourself as a professional and provide, you know, the evidence that, hey, you, first off, not only do you have the experience, if you're going to go raise money, you've got the experience or you're attached to a team that has the experience. But once you're actually in that process, make sure that you're presenting yourself as a professional by putting together, you know, the bio and outlining who the team is and putting all these documents together that end up showing, hey, it's kind of like the preponderance of evidence here shows that this is a deal and that I know what the heck I'm talking about. And therefore you should trust me to invest in.
Dan (20:20):
Right. And I always teach people. I say, it's like show you’re the expert, don't tell them you're the expert, right? There's so much that social media does right now. You got to remember in 2009, I didn't have zoom, I didn't have Facebook live, I didn't have Insta live, I didn't have tick tock, all these things. I mean, I don't even know half these things that they have anymore, I feel like I'm getting old. But now the mode of communication is so easy and you can pick up your phone, you can just turn it around and Facebook live and say, this is what I'm doing. I teach my students how to put together a book in less than five or six hours for less than a thousand dollars. Now this book took me seven years to write and it took me almost $30,000. It's not like that anymore. You can actually put a book together and like I said, in about five hours for less than a thousand dollars yourself,
Steven (21:14):
Let's hit the tactical stuff here. Just stay on this track of raising some capital. So we start believing that we can do it, we're putting together the evidence that shows that we can, because most of the people who are listening have done some real estate. And if not, then, you know, you're attached to somebody who is doing it. What are the conversations that you're having with people, as far as introducing them to what you're doing, and what's different about that right now? Because what I'm hearing from a lot of people is that, well, hey, everyone's sitting on the sidelines. People are saying, hey, I don't really want to put money to work right now, I don't know what's going on and so, well, how does that talk track go? If you're just getting started right now and things are changing or, you know, for all the listeners who are listening to this six, 12, 18 months down the road, this stuff applies, always. But I'd love to hear your thoughts on that.
Dan (22:12):
That's a great question and it's incredibly inaccurate. I can tell you that because I've my calls, I've reached out to every one of my 42 lenders on my list, not like it's a lot. I've had conversations with almost every one of them right now. So at least, with the ones I haven't had conversations with and people I just paid back last week, already asked me if I have anything else for their money, they're going to trust you, right? They might not invest and I'm not using fair monitoring for people that are traders in the stock market, people that know what they're doing, people that are buying options in the stock market. You know, I don't like to say, hey, the stock market got hit hard, put in money in real estate. Cause the real estate market gets hit hard and it's not vice versa, okay? But what you need to do is you need to position yourself as an expert right now. Think about this, I just went through with my students and in my group page, I just gave a free training. I said, at this point, go to your local area, your local businesses in the area, all these businesses are getting hurt, right? Talk to them, be an educational resource. You don't have to be the expert, but you can bring the experts on. So right now they're talking about the SBA loans and the IBL loans and a family medical leave act. Well, why don't you invite all the business owners in your network, in your local region to a webinar and bring in an expert account CPA or tax attorney on. You don't have to be the expert, bring them on as a resource and let's talk about how you can help your business. How about if we bring the business owners on a different webinar and we talk about how you could pay your kids and you can have your kids pay for college education, okay? And then, you can start talking about the Coverdell account and how your kids can invest in real estate. You could talk about how you can do solo 401ks for your business, pay yourself and your wife and your kids and your business and you don't have to be the expert. You could actually talk about it and then have it backed up by a CPA, having it backed up by an IRA company or custodian. So you could provide a lot of value. And that's what I'm saying, content content, exactly what you've been doing, Stephen. You're doing a phenomenal job, you bring so much content to people, right?
So now let me ask you something. If you teach a business owner how to pay their kids, up to 18 years old, tax free, right? Up to $12,200. And you don't have to give him the whole thing. But up to $12,200, you could pay them tax free, if they're an 18 years old. Now let's say you have two kids, you're talking about over $24,000 they can invest in real estate. That’s how my kids' college education has been paid, by the way, two kids already go through. Solo 401k(s). You can teach a lot of business owners who don't know about solo 401ks for kids. If they don't have employees, you could teach them about solo 401k(s). In case they have employees you could do like Chios or Saks, they can self direct that they can invest in real estate.
So if you bring them on and you say, listen, I'm here to help you bring value to you. I'm a business owner,I invested in my kid's carvedell account. That's cool, I got three kids under 18 years old. I put 36 up to $36,800 in there, don't have to do the whole thing. But you want to make sure you do it the right way, because there's a way to do it wrong and the way to do it right. And you want to check for your counts, but you had me put $36,000 into this self directed IRA for my kids or 2000 a year each for my kids, Cardell, what do I do with it? Who do you think?
Steven (25:35):
Yeah, they're going to come to, they're going to come to you.
Dan (25:39):
As the expert.Well, what do you know? I have this deal I can get you involved in. If it fits your needs, here's the deal, you would get this kind of return on your money and in this amount of time, is backed by first, my position in real estate is that interesting. So those are the conversation differences, that's how I built my best, I found out how I can help business. I did everything possible and really, what I went after is accredited type business owners.
Believe it or not, I'm not into artwork at all. If you're looking over my head, you might see my only one piece of artwork. It's a cartoon, a lithograph cartoon, but I'm not into artwork. Family member’s, uncle had a 60th birthday party at the Metropolitan Museum of Art. We went to the birthday party, It was a closed off room that had wine and appetizers. And we'll walk around and look at art. Obviously I'm making fun of some of the art. Well, the gentleman walks over to me and he says, what do you know about the art? And I really didn't know much at all and I was like, Joe, I kinda like I was embarrassed. And one of his first questions is I'm David, what’s your name? I’m Dan, he goes, what do you do? And I came out with my elevator pitch and I shut up and we had a great conversation for about 40 minutes. The next day we found a member called my wife and said, Dave wants to meet with Dan for coffee and I'm like, would you talk about investing? Like, why does he want to meet with me while I was two hours away? He was in Manhattan, I live in Delaware now. So I went out and I met with him, great conversation. To this day, he's probably invested $8 million back and forth. So one of my best investors, right? Because I provided him a ton of value. And we started talking about them because, you know, you can invest your IRA in real estate. And he goes, yeah, they got REITs and I said, no, you can. And we had this conversation and he started moving his money to self directed IRAs. And that's what we use.
So I really focus on helping people. A lot of them are in there 40 forties, thirties, or forties. They have about it, right? If you're 40 years old, you're not using your IRA money for another 20 years, minimum of 59 and a half. So do I have to worry about you having your money in six months? And a lot of these people in their IRAs, they don't use it at a level off. They don't want their money monthly, they don't want to quarterly, they’re like just hold it. We can't legally hold it, we pay him back and we use it again. But they only care about getting it back right away. Because they can't use it until the 20th. They don't want to deal with it, dealing with the account. They don't want to deal with the transaction fees, we covered that anyway, but they don't want to even deal with it. So it's who you're dealing with.
Here's the other problem, most people hang in the murky waters. And I say that as you got a lot of real estate investors on this panel, on this group right now, how many of them go out and they think that they're networking by going to their local meet ups or their dirty professional events? They go to every real estate investing event there is, they buy tickets for every mastermind they see online and they're hanging out with all the other real estate investors, and they're talking about how to crush it. You know what? They're cool to go to once in a while. Cause we all know, I mean, I speak to them sometimes and we all know a lot of people have a good time. It's nice to go but I never, ever raised money at events like that. People come to me all the time and I'm just like, I'm not the right fit for you. Right? Where do I raise my money? What are my hobbies? I'm into this wine, I like to play soccer, I'm into boating so I'm part of a yacht club,I hang out at a fishing club, there is a retirement community not far from me, they have a fishing club. They go on three fishing trips a year, I'd usually do one of them, maybe two. I'm a part of a veteran organization, I pay for the vets to go. We can take all the people out, we go fishing. All of them have retired, all of them have 401ks or retirements, they all love what I do. So I'm hanging out, I have another one where I go to antique cars, a Mustang club. So I go there, they have money. Those are the places I raised my capital from. I don't raise them, ever, at meet-up groups, I don't meet up groups like for real estate investors, I don't raise them at REIA groups. I don't raise them at all these. Everybody's putting on a mastermind with 300 people, 300 people, cause let me ask you something, is somebody at that event at a real event, going to be happy, making six, 70% interest only on their money.
Steven (29:55):
They're not there. They have a totally different set of expectations. And I think it's so good to underline here that really, what you're saying is that, this is about building relationships. That raising money is about not asking for money, It's about figuring out and being confident in what you're delivering and how you're delivering value, deliver it to them over and over again, where you're teaching them, where you're educating them, where you're building that thought leadership, whether that's one-on-one or through a podcast or through a webinar or through, you know, a sit down event that you end up putting on for a small group of people. And then it's at some point once you've understood and you've got to know that person, then you say, hey, you know, this is what I'm doing and eventually someone's going to say, hey, well, how do I get involved in that? And it's a process that you can systematize and you can do on a regular basis but it really just comes down to getting to know other people, getting out there, talking about what you do and having a really good way to do it.
Dan (30:56):
Right. And thinking outside the box, like I said, I show people in my group how to go about and just meet, how to find the local businesses in your area. I mean, I can tell you this. I'll tell you, listen to this little trick. I mean, I brought this down to little lessons. This right now is go into your local, just type in Google search, whatever County you're in type in, you know, San Diego County. Like what County do you live in? Steve?
Steven (31:18)
I live in Denver County.
Dan (31:19):
Okay. So Denver County, chamber of commerce. I go in there and go to the member directory list. Pull the members in that directory, skip trace their names cause you want to get their home address. Send them a nice piece of mail to their home address, personalize it to them, not a yellow ladder, not a postcard or anything like that, you’ve got to treat them like fivestar and invite them into your online meetup that you're doing to help them during this time of need. How can I help you during this time of need? What I'm going to do is I know business owners are getting hurt right now, I'm bringing on an expert. Everybody here knows somebody that's an expert in the SPA loans, right now, because people have been studying it. I know a couple of attorneys that are really good with it. I'd bring on an expert. I want to bring on somebody that I value to help you. Okay. Right now. And maybe next week you talk about, you know, paying your kids, a week after that you talk about FMLA, and the week after you talk about solo 401ks, the week after you talk about self directed IRAs, the week after you talk about business insurance. As you bring a value to them, you're the expert. I mean, let's be honest, Steve. You have a podcast on a top podcast and that's why I'm honored to be on it. Cause I listen to your podcast, you have a phenomenal podcast so people look up to you. You're an expert because you have podcasts. I have a book. I mean, literally I told you, you could write a book in less than five hours and for less than a thousand dollars and you'd be the expert. I also made my students, I forced them to write a book. Why don't you put out a book? Put out a book on what you do in your business because if you do have a book you're already an expert. Imagine sending a free book to every business owner in your County. And in your book, it kind of talks about your meet-up event, which is an online event now, all right? And in the future won't be online, which is your podcast, which is whatever you do. It's so easy to do these days. It used to be $200,000 to do a 32nd commercial now, it's like a million dollars. Now you have your phone, you can do a commercial anytime you want. So you have the ability, you just got to be different than everybody else.
Everybody wants the easy way out, everybody has a limited mindset that there's no money out there, because they're scared right now. That's wrong. The scared money is because of the people you're dealing with. How about all those people that have money sitting right now that don't trade stocks? Like your doctors, your lawyers, your veterans, your auto auctioneers, your high end auctioneers, your farmers, your car, your automobile dealership owners, they have a lot of money. They're not there right now trading stocks. Because if you know how to trade stocks, you could make money right now. I don't know how to trade stocks. I think I have like $15,000 of stocks and I don't even look at it cause I don't know what I'm doing. But I'm not going to put all my money in the stock market and trade stocks but, I have money sitting. I want to invest in a hard asset. So explain to them, teach them why a hard asset is a great investment. Don't say invest with me, teach them why it's a great asset. Teach them why this economy is a great time to look at real estate investments, teach them whatever market you're in, what job growth is going in right now. Listen, the rental market, people always need houses to live. If you're in an emerging market with a ton of job growth, this is the best time in the world to invest in real estate. It doesn't go up or down with the economy. If banks stop lending, my rental will even go higher, right? If banks stop lending my self-financing will go up through the roof.
People are buying into what social media is showing them, right? The world's coming apart because social media says it’s coming apart. If we look at the facts and we just close our eyes to that and we refuse to let that get to our head, then we'll do so much better. And I just gave you a ton of options ,just now, where you're in place today, so you want to take advantage of this right now. But I gave you a list of this right now, like every County you live in, just go to chamber of commerce and pull a list of at least a few hundred addresses, I'm going to say, dude, your local County. Cause you know, when this comes through, you want to be able to sit down with these people and shake their hand, face to face, have a cup of coffee and ask them what is their risk level? What are they comfortable doing? What are they not comfortable doing? How much money are they working with? Do they need that money monthly, weekly, monthly, quarterly, annually, at the end of the deal? When are they ready to go? Where's the money now? Do you need to help them set up a self directed IRA, Solo 401k? I help a lot of mine because they don't know how to do it. So I helped them set it up. It's very easy to set it up, but they're like, it's a science project for them. To you it's easy. You fill out the paperwork with them, you help them wire their funds in there, you have a rep at a custodian. You should have a custodian that you work with. So you have a relationship with them, it's like, hey John, Sally, here's my investor, Steve, can you work with him? Help him get his account set up? Great. You become the liaison. I have people, I have investors that have told me, hey Dan, If you’ve got anything, I'm cool with 5% right now, I'll jump into a deal as long as it's with you. I'm just not giving my money to anyone else right now, I trust you so much. They trust the jockey, not the horse.
Steven (36:28):
There's so much here, you guys. And I really hope, and I really encourage anybody who's thinking about raising money or let's be real, everyone who's in real estate needs to be good at this skill. So I really encourage you guys to re-listen through this. Get out your pen and paper, write down some of these strategies and take action on some of them. So, we've only got a few minutes left to wrap up. So, I've got a couple quick questions that I like to ask every single time. So tell me Dan, how you define success and what is success to you?
Dan (36:57):
Defining success is very simple, sit down and write your eulogy. And when you write your eulogy and you might start crying, that's how I define success. What will people say about you? What will your legacy be? That's how I define success. And it's very deep when I say that, but you can actually take that tape that you and your boyfriend, girlfriend, spouse, partner, whoever it is, write that about each other. Your eyes will open. That's how I define success. And that's changed a lot for me over the last 10 to 12 years. Wow.
Steven (37:26):
Wow, I really liked that. And what are some of your Keystone habits? The things you do on a regular basis that have led to some of your success.
Dan (37:33):
As I said, I am very focused on my vision. If I start chasing money,I fall off my vision. When I fall off my vision, back to my eulogy, that would change.
Steven (37:44):
That's huge. Well, we've made it to the growth, rapid fire round, where the questions are quick, but the answers don't need to be. Tell us, Dan, what's a book that's impacted your life the most or one you're excited about right now?
Dan (37:54):
Well, I got to say my book, Passive To Prosperous. The one that's probably impacted me the most, is something very similar to my book, was Life and Air: The banker's code by Georgia. It is something that I really love as it resonates with me in the business sense.
Steven (38:08):
I've heard of that book. I haven't read it. Definitely adding that to the top of my list. And from inspiration. What impact have mentors made on your life and how do you look at going out and finding great mentors?
Dan (38:21):
That's great question, I just brought on somebody. I've been with somebody, Sean McCloskey, from life and he was with all life and then asked me to shift boardroom and he's the closest that aligns to me on vision, right? It's not business, even though we talk business and life, vision, but WE aligned so much. And when you get with somebody that you align with and somebody that, does exactly, that understands you and is honest enough and humble enough to tell you, hey, I'm thrown off my vision a little bit so I need to be held accountable. So I have two mentors, he's one of them. I also have somebody that is a business mentor to me, that pushes me in business but right now, from my sense, myself I need to be laser focused on my vision cause when I fall off my personal vision, then everything's out of alignment. Like if I go out and I try to do a business because it's gonna make me a lot of money and it takes time away from me, well that takes me off my personal vision and then I'm out of alignment. So you have to really go deep, you have to understand who you are. What do you want your life to be? What the perfect day is, don't be an engineer in this. Don't say you can't do it, just put it on paper. What is the perfect day for Steven than to be right now? If I could do anything I want and then make sure my vision aligns with that. Because if you say, I want to spend time, you know, sitting on the beach four hours a day writing, and you're taking on something, you'd become a roofer because you can make a million dollars, but now you've worked in 16 hours a day that takes away from your vision. That's the perfect, when you have a mentor that can keep you aligned. That's what it's all about.
Steven (39:47):
It's so important. It's so important to have a clear purpose and have somebody who can keep you on track towards making sure your life is nothing but that purpose. And so finishing on purpose, what drives you to live your best life? Every day?
Dan (40:00):
My wife and my kids. I'm seeing, you know, me being there for them, being a positive role model in their lives, being a positive role model for my students' life and living my legacy, a legacy to create financial, literacy cost for youth around the world. That's really where I'm laser focused. I like using funds I have now, to give back to communities and organizations. So just being a productive member of society and I know that I could spend a whole two hours talking about that. And I know I'm giving the overview of it and I hate to be so general, but really overall being a productive member of society and changing people's lives rather than changing your own.
Steven (40:39):
That's beautiful. Well, this has been a great conversation. I hope everyone took some notes on some ways that you can go out and raise money and get over some of those limiting beliefs that you guys have. Dan, where can people find out more about you or get into
Dan (40:51):
They can go to, definitely, not my personal page on Facebook, cause I hit that 5,000 friends limit, so I can't have any more. I have my Facebook group, become a real estate investor with Dan Zitofsky. They can go there and check to answer three questions. Every time I do podcasts, I give away free cheat sheets to people. When I'm in person, I hand it out, but they can go to passivewealthacademy.com/42, they'll get my free cheat sheet that I wrote. We started moving a lot of our videos into YouTube-there's a lot of content there. I try to get as much free stuff and all of this is free guys, I'm not charging for any of those. So on our YouTube page, there are some of the top seed capital management on there. They're going to see our videos, they're great educational videos and every week we're adding more and more. We have so many videos in the library, our team is trying to add them as fast as we could.
Steven (41:46):
That's awesome and go take advantage of some of these free gifts. And you know, we'll obviously have all the links in the show notes for you guys. So I'll leave you as I always leave you, you know, remember to go out and live a life worth inspiring others and you can do so today by actually applying some of these lessons we learned with Dan directly in your own business. See you guys on the other side.
Dan (42:08):
Thank you so much.
Steven (42:12):
Thank you for listening to the investor mindset podcast. If you like, what you heard, make sure to rate, review, subscribe, and share with a friend, head over to theinvestormindset.com to join the insider club, where we share tools and strategies from the top investors and entrepreneurs and how to take it to the next level.