No Broke Months For Salespeople - Forget the Banks! Matt Faircloth Teaches How to Fund Your Deals with Private Investors

Episode Date: February 13, 2025

If you're a real estate investor, agent, or wholesaler looking to scale your business, you need to understand how to raise private capital. In this episode, Matt Faircloth, Amazon bestselling author of Raising Private Capital and host of the Best Ever Real Estate Show, breaks down the exact steps to find investors, structure deals, and unlock hidden capital from your own network. Learn how to tap into retirement accounts, home equity, and cash savings to fund real estate deals—without relying on banks. If you’ve been missing out on deals due to lack of funds, this episode will change how you think about raising money forever.What you’ll learn on this episodeHow Matt Faircloth raised $72 million in private capital for real estate investmentsWhy your network is sitting on untapped investment capital (and how to access it)How to use self-directed IRAs to fund real estate dealsWhy 30% of Americans own their homes free and clear and how to use that equity to fund dealsThe #1 mistake real estate agents and wholesalers make when looking for capitalResources mentioned in this episode📖 Raising Private Capital by Matt Faircloth – A must-read guide on how to secure private investment for real estate deals, covering key funding strategies and deal structures.🌐 DeRosa Group – www.DeRosaGroup.com – Matt Faircloth’s real estate investment company specializing in multifamily real estate, private capital raising, and real estate education.Best Ever Real Estate Podcast – Learn more from Matt and his teamAbout Matt FairclothMatt Faircloth, a full-time investor since 2005, has completed hundreds of millions in real estate transactions and manages thousands of multifamily units.A host of the Best Ever Podcast and author of the Amazon bestseller Raising Private Capital, Matt is dedicated to educating investors through his active YouTube channel and extensive experience with fix-and-flips, office buildings, single-family homes, and apartments.Join us this Wednesday afternoon as Matt discusses How to Raise Capital for Your Next Investment Deal.Connect with MattWebsite: DeRosa GroupInstagram: @themattfairclothFacebook: Matt FairclothLinkedIn: Matt Faircloth To find out more about Dan Rochon and the CPI Community, you can check these links:Website: No Broke MonthsPodcast: No Broke Months for Salespeople PodcastInstagram: @donrochonxFacebook: Dan RochonLinkedIn: Dan Rochon

Whatever it is, understand that there's a lot of people out there that are looking for the same thing that you are, which is a little bit more of a leg up. They want to climb the ladder just a little bit faster. Maybe not sprint to the top. They don't need to be Jeff Bezos. Maybe they just want to get there just a little bit faster. And you can help them get there if you take your blinders off and look at all kinds of different ways to get things done. Welcome to the No Broke Months for Salespeople podcast. different ways to get things done. behavior by mastering the art of the teach to sell method. Get ready to transform your approach and achieve unparalleled success. But you know, it's the best ever podcast. And he's the author

of the Amazon bestseller, Raising Private Capital. Matt, welcome. Oh, good, Dan. All good. No, no, no, man. You can be the best. It's a fun fact. The Best Ever Show is the longest running daily real estate podcast. It's been on the air for upwards of 10 years. I'm grateful to be one of their hosts. I'm not crazy enough to do a daily show. Joe Farrell has started it doing a daily podcast. I'm just one of the seven hosts that host that show. I'm grateful to be working with them and I'm really grateful to be here with you, buddy. Welcome, Matt. So talk to us. So before we get into how to raise capital for your next investment deal, tell us a little bit about Matt. What's your journey been like? Tell us, go back as far as

you're comfortable or as far as it makes sense to go back. Back when I was two years old, Dan. No, no. I kind of stumbled into raising money from other people, man. It pretty much was put in front of me as, hey, I've got money to put to work. Can you put this to work? And I was like, sure. What the heck? This is a guy that my wife went to college with that had 50K that was just sitting there and he wanted to put it into something. And so he gave it to us and I went and put it into a couple of real estate deals that I had found. And before you knew it, he was happy and was making a good return on his money. And he told a bunch of his buddies about me. And, you know, and we were off to the races from there, man.

And, you know, just started building a brand around it with YouTube videos and educational product on real estate investing and everything like that. So it grew organically over time to the point now our company's raised about $72 million in investor equity since we've been raising capital. And we've been raising capital for upwards of like 14 years now in that. So we're sitting at about $72 million in total investments, mostly multifamily apartment buildings. We also have a fund that does hard money loans and that kind of thing too. So we're blessed and grateful, man. What's the name of your company? DeRosa Group. D-E-R-O-S-A. DeRosaGroup.com. Okay. So tell me, Matt, so if I got an investment deal and I want to raise money for it, what do I do? Well, first thing you got to realize, let's say that you're a real estate agent,

that you stumble across a sweetheart deal and you're like, you know, example, let's say somebody's got you come into like a five unit apartment building, small multifamily thing. Seller's a little in distress. Maybe, God God forbid they're getting divorced or something like that. Or maybe it's an estate and they're just, the seller's not looking to get absolute top dollar. They just need to get it off their plate as soon as they can. Right? Now a real estate agent or a wholesaler, whatever, like a wholesaler is going to wholesale because they think they don't have the money to do the deal. A real estate agent's going to broker it so they can make a commission and feed their family with it, right? What if that wholesaler or that real estate agent could go reach into their handy dandy cell phone

and with a few phone calls, like put together a few investors so they could take that deal down and that real estate agent could make probably upwards of the same amount of money they'd make in a real estate commission once. What if they could make that every year in passive income, right? Or the wholesaler and whatever their wholesale fee would be, what if they could make that every year in passive income, right? Or the wholesaler and, you know, whatever their wholesale fee would be, what if they could make that, you know, annually in passive income over and over and over again, mailbox money checks coming into their inbox. sitting in our cell phones waiting for another home. And the fact of matter beyond that is almost all people that parked their money passively, except for the savvy, and I'll talk to you about how to deal with them. But aside from savvy investors, almost all people park their dollars that they want to grow on Wall Street. And there's nothing wrong with that. I'm not an anti-Wall Street guy. I'm just an options guy. People should have options on where to put their dollars. And there's nothing wrong with that. I'm not an anti-Wall Street guy. I'm just an options guy. People should have options on where to put their dollars. And if you know how to talk

to people, they will love to know that their retirement account or their cash or whatever it may be is right down the block from where they live in that five-unit apartment building that that realtor or wholesaler found versus a couple of hours away sitting in the hands of a mortgage broker or a stock broker. They don't even know in that. So that's what this whole thing is all about and knowing how to find that money that's right underneath our nose. So walk us through this. So let's say I find, let's say there's an estate sale and there's some errors and they live out of state. They just want to get rid of it. It needs some improvements and there's a bit of equity in it. What do you do?

Yeah. And that could be a fix and flip, guys. That could be, like I bought fix and flips off of estate sales. Again, it was a blessing to them because they got the big fat check in their pocket and everything like that. And they were able to clear the estate and move forward. Or it could be a rental property, whatever it is. It's just got to be somebody who's willing to let something go at a reason, a way really like a great price. That's a win-win for the buyer and the seller, right? The way you go about it is, and you don't start looking for money when you got a deal. You look for money before you got a deal. And in my book, Raising Private Capital, the way I tell people to do this is to make your money list and your money list has to have three different money sources. You know, there are like the sources of money are three

different things. And it sounds so obvious to him, but I'll break it down for you one by one. The money sources are, first one, cash. Not like greenbacks underneath your mattress. I'm talking about just dollars sitting in your savings account earning you a whopping two and a half percent. That's number one. Number two is equity in real estate. That is the equity in your home. And the third one, which is the, this is like the magic one that nobody thinks about, and that's retirement accounts. Because people don't realize you can put a retirement account into real estate investments. It does not have to be on Wall Street. It can be on Main Street. So if you like,

you and I can dissect each one of those. You want to do that? Well, yeah, but I got a question specifically specifically about the so if you're investing yeah walk me through that right to be like a self-directed ira for example walk me through that because i've done self-directed iras directly as the principal but not as like the person raising the capital or as a limited partner investing it so just walk me through that if you could hey salesperson are you struggling to close deals or struggling to gain trust? Or are you struggling to create consistent and predictable income? I'm Dan Rochon, and I've seen it all. Salespeople stuck in uncertainty, guessing their way through the business.

And that's why I created the Consistent Predictable Income CPI Inner Circle to give you the tools to master, teach yourself, and finally eliminate the struggle. Learn how to influence, close, and turn doubt into trust on repeat. No more trial and error, just results. Ready to take control? Visit www.nobrokemonths.com. That's nobrokemonths.com. Click login and get started today.

All right. We're going to do hypothetical, right? I'm Matt. I find the deal. You're my uncle. That's not hypothetical. What's that? I really do find the deal. You are Matt. That's not hypothetical. I really am Matt. I could change my name to Jerry if you want. Just for this conversation, I could change my name if you'd like for me to. But let's say I'm the deal finder, or in my book, I talk about the deal provider, right? So I find the opportunity. I may be the full-time real estate investor or the agent or the wholesaler or whoever that's got their tentacles out there looking for opportunities.

And I find an opportunity and I reach out to my good buddy, Dan here. And I happen to know that Dan used to work for, I'll make it up, like Conrail. He's an engineer at Conrail. And then he moved over to another company, right? Why are you laughing? It really is hypothetical making me an engineer, but go for it, man. Did I just give you an upgrade? Probably so. Probably so. Okay. So he was an engineer. He's like, well, let's make you an executive. You're a C-suite executive at Conrail, right? And then you got picked up by, you know, Eminem Mars or something like that. And so now you're over there.

I know that you're a friend of mine that used to work at company A and now you work at company B. Listeners, think about that. Everybody knows somebody who used to work here and now they work there. What's great is my buddy, what I know is that the retirement account that my buddy Dan had when he worked at company A, when he was a C-suite executive running the show over at Conrail, or even an engineer at work, doesn't matter what he was doing, making coffee at Conrail, doesn't matter. Whatever his job was there, he had a retirement account and he moved over to another company. And that retirement account 401k that he had at Conrail is now automatically an IRA because it's not a 401k anymore. Automatically gets converted to an IRA. I know that I can get Dan through about

a two-week process to roll over that IRA to what you've already talked about, Dan, a self-directed IRA. So what I'm going to do is I'm going to go to you and I'm going to say, hey, Dan, I know you got that IRA account when you used to be with Conrail. Do much, you know, do you mind me asking how much is that? Well, last time I looked, nobody looks at the IRAs, by the way, Dan. Nobody looks to see how much is in their watches. They kind of forget about it, right? So you're like, Matt, last time I looked, there was 250K sitting there. Well, I can't, but I can't touch it until I'm 65, right?

Yes and no, Dan. You can take that money and roll it to an IRA custodian, and I can help you grow that money much faster than it will on Wall Street by investing in this deal, this estate sale that I got. And you, Dan, either step in as a lender, as a bank on the deal, and I structure this whole thing with a promissory note, loan agreement, everything like that, and you become my bank for that fix and flip deal, or you and I become JV partners. It doesn't matter. JV partner means if I buy the property and God deal, or you and I become JV partners. Doesn't matter. JV partner means like, if I buy the property and God willing, the creek don't rise, I make like 75K doing the fix and

flip. Great. I cut your IRA in for a portion of that profit, and I keep a portion of that profit. You want to be a lender? You want a little more security? Great. I can give an IRA collateral. It's a bank. I can put it as a lien on the real estate, just like you would a bank, Wells Fargo, whatever, is going to put a mortgage on the property. Well, I can give you, your IRA account, a mortgage on the property. And I got to make you a monthly payment, whatever it is you want, back to your IRA. And when I sell the property, I give you your principal back. It's protected with a lien on the property. There you go. That's how you structure with an IRA, with cash, whatever it may be. But I've got to lead you, I got to lead the horse to water and show you how it goes and structure all these

things for you and take you to the IRA custodian. Because a lot of times investors don't know that these things even exist. And so that in essence, Dan, is how you would set it up. Yes, you can take your IRA and invest it yourself in deals, but I can also find people in my network that have access to these resources to put into my deals too. to invest it yourself in deals, but I can also find people in my network that had these access to these resources to put into my deals too. Are there any challenges with the self-directed IRA? Because I know you'd have to get a non-recourse loan. So then if you're doing that like in a JV or as an investor, like that's the piece there that I'm like, I'm not, like, I'm not clicking on that piece there. Got it. So you're, you're, you're right. You're wrong,

but no, I'm kidding. I know I'm right. and I know I'm wrong. Especially I know I'm wrong, but that's where I'm like trying to figure this out. Walk me through that. There's one lane of traffic that you can do this thing in. Let's say that like Dan's got his IRA and Dan wants to then go and invest that IRA into his own rental property or his own fix and flip. You can do that. You can take your IRA, Dan, and buy bars of gold with it. You can take your IRA and invest it in private placements. We do that too. You can take your IRA and invest it in all kinds of things, and you can invest it in your own fix and flip. If the IRA is taking title, if it's owning the real estate directly, you are

correct. You cannot have a recourse loan. Recourse means that, God forbid, you don't make your mortgage payments. The bank can come and look like they would for me. If I stopped making my mortgage payments on my home, they could come and take the house and they could also sue me personally. That's called recourse. That means I'm responsible. The law says that an IRA cannot be held accountable, cannot be exercised on recourse. I can't come and take somebody's retirement account if they don't make their payments on a house or whatever it may be, right? Now, that's if you're taking title direct as an owner with the IRA, but your IRA can invest in my deal and I'm on title. I'm the owner, right?

Got it. Yeah. Yeah. The IRA does not matter if it's recourse or not. It doesn't matter. And if your IRA becomes the bank, then it's the bank. You take your 200 grand IRA and it's loaning me 200 grand to buy the property, fix it up, and off we go. So there's no recourse requirement if you're an investor. If you're a passive investor in somebody else's deal, the recourse rule does not kick in. Okay. So they could like say, loan you a hundred and you go take a loan for 300 or whatever.

Yeah. That 300, you or your company is signing for that. So that's got nothing to do with the person that's giving you the whatever portion of the investment from their self-directed. You got it. That's it. Got it. All right. Thanks for letting me understand.

You are welcome, sir. I'm going to touch on one thing. I said real estate, right? People are like, real estate? Yeah. It's hard to get the capital out of real estate. But guess what, Dan? You know what percentage of America, last time I looked, owns their home free and clear? 30%, dude. 30% of America owns their home free and clear, right? Realtors may have encountered people that go to sell their home and they're like, oh, hey, wait a minute. Title company needs your mortgage payoff. There is no mortgage payoff. The houses

I own, I paid this house off. Most people that own their home free and clear brag about it, you know, because it's a feat to pay your house off free and clear. That's the thing, right? So what's great is, yes, you've relieved yourself of one of the major burdens, which is debt service, you know, and having to pay that overhead for your household every month. What you've also done is unlocked enormous potential. And you can go and take that free and clear real estate or just real estate with some equity in it. Like my home is not free and clear because I have really cheap debt. So why would I go paying that off? And the home I'm living in now, I have a HELOC on it, a home equity line of credit. I take that HELOC and I put it into hard money deals. I'm about to close in a fix and flip in

two weeks using the home equity line of credit I have on my home. A lot of America could take the equity they have in their house, go get themselves a home equity line of credit and invest it in short-term bridge loans. They can invest it in their own fix and flip deals, or they could give it to active operators like you and me and make even more cash flow to unlock that equity that's just sitting there. It's the biggest piggy bank America's got and unlock it and put it to work into deals. I spent a lifetime in business and in sales. You know what I've seen far too often? Struggling. Struggling to close deals. Struggling to gain trust. Str struggling to create consistent and predictable income that's a problem I'm here to help you solve because success it starts with a

simple truth it's not about you it's about them that's why I created the consistent predictable income CPI inner circle a system designed to give you the tools to thrive master master, teach yourself, and finally eliminate uncertainty in your business. Inside, you'll learn how to overcome doubt and build trust that leads to sales. How to spot hidden opportunities, influence meetings,

and get hired fast. How to master hiring and find top tier talent without the guesswork. How to inspire, lead, and gain influence. So people follow you with confidence. Just think about that. Listen, there's a formula to success and I'm handing it to you. No more trial and error. No more struggling. It's time to create a business that thrives. Visit www.nobrokemonths.com. That's nobrokeMonths.com. Click login at the top right and get started today.

I'm Dan Rochon, host of the No Broke Months podcast, the show that helps salespeople create consistent and predictable income so you never have another broke month ever again. Let's get to work. Yeah, particularly with the appreciation over the last several years that if you bought something five years ago, you got equity. And so there's a lot of my past clients, I've been helping as a real estate broker since 2007. So I've got past clients that go way back that have tons of equity in their real estate. And so that's an opportunity there. And then you said cash as well, which is, I guess it's probably harder to save, you know, a hundred thousand dollars of cash than it is to get a hundred thousand dollars of appreciation through real

estate. But nonetheless, some people have, have a bit of cash. Some people live like I admire them, but some people live so far below their means. It's crazy, man. Like they got, this is the person that's got the same car last 15 years. They got a bunch of promotions at work and never moved you know they're not like living at or god forbid above their means they're living way below their means and they're putting their money in things like cds or savings accounts or yeah wall street too whatever it may be this is like there's a book it was written a long time ago dan says some of the principles are a bit dated, but it's called The Millionaire Next Door. Who's the author of that? Thomas Stanley.

Thomas Stanley. All right. Thomas Stanley. And William Danko. Both PhDs, thank you. That means they must be smarter than you and me, man. Yeah. That's right.

Yeah. When I have a question, I don't know the answer to, Dan, I got to get it. I'm like, you know, all the answers in the world are at our fingertips. I got to Google it. So... Yeah, I'm the same way. I'm the same way. All right. So what are the doctors? What do they say to us? The good docs then are telling us that if you and I are sitting at a stoplight and on the left, I got a Lamborghini. Then on the right, I got a Ford F-150. The

statistics say that the driver of that Ford F-150 has a higher probability of being a millionaire than the Lamborghini does. The Lamborghini is probably what they call broken another level. They're probably living with an expense line at 40 grand a month, 30 grand a month, whatever it may be. Maybe they got a great job, but they're spending every nickel that they're making. So the book, in essence, says that millionaires in America tend to be in disguise. And that's what I talk about in the book Raising Private Capital is how to find in your own network, in your own network, listener, not going to millionaire.com and trying to find an investor to invest in your deal. Go to your own cell phone and think of the person that I said earlier that used to have a job

working at company A and went to company B, or that has had a bunch of promotions or doesn't go on fancy pants vacations or hasn't moved in the last 15 years, or as Dan said, was smart and got a good debt on their home in like 2017, 18, and the market blew out and they were smart and didn't refi up, up, up, up, up, up. They've got lots of equity. Whatever it may be, these people could be millionaires next door and they could have money sitting in CDs or money sitting in the stock market and just aren't sure how to get to their wealth goals. And you can help them get there by helping them put it to work in opportunities you come across. A little bit. So, all right, let me sum all this up, Matt, make sure I got this. So you've

used the word Rolodex and I knew if you used that on the show, I'd have to be like, all right, let me sum all this up, Matt. Make sure I got this. So you use the word Rolodex. And I knew if you used that on the show, I'd have to be like, you know, I am ashamed that I know what the hell a Rolodex is, right? I am too, man. I am too. I'm embarrassed. I'm going to tell the audience what the Rolodex is. Anybody under the age of 45 listening to this show is like, what is it, Rolodex? Is that a website I can go to, to Rolodex.com? Is that where the rich people are?

Is it Rolodex.com is that where the rich people are all right so you got people in your database that are you got i'm gonna stop saying rolodex i still use that term just because it's i know you said it means your database yeah but you know old guys like you and i know what the hell that is you know like oh rolodex i got that yeah yeah anyway all right yeah, yeah. Anyway. All right. People you know. People in your database, people you know who, you know, either they're frugal and they've saved money throughout the years

or they have equity in their homes or they have a self-directed IRA. And then you've got your own, you know, potentially cash, potentially equity and potentially, you know, your own IRA to be able to, you know, have some of your own resources, but then reaching out to those, you know, those that you know, have some of your own resources, but then reaching out to those,

you know, those that you know, and you would be surprised because the guy driving that F-150 is more likely to, you know, to be that millionaire. I do remember reading that book years ago, and I remember that concept. So thank you for reminding me. In the book, they say the most common, I didn't just pick Ford F-150 out of a hat, the most commonly driven vehicle at the time of that book was written, the most commonly driven vehicle of millionaires is the Ford F-150. It's not a Porsche. It's not a Mercedes.

I got to tell myself. Not a Beamer. Yeah, there you go. When I read the book, guess what, Matt? I drove a Ford F-150 and I was not a millionaire. You're in the statistical outlier, right? So, all right, Matt, thank you for sharing this all with me. If you were to leave our audience with like one nugget of something that you would say that you've learned through your journey and

you have an expansive journey, what would that be? Take your blinders off, guys. The realtor, the investor, whoever you are listening, you might make a few bucks selling that great deals or looking for great opportunities. And you got to feed your family on that real estate commission, whatever it is you're doing. But think outside the box a little bit and realize that with a little bit of creativity, you might be able to create win-win scenarios. And I'm not saying you stop being in any of these good professions in America, like a real estate agent or a wholesaler, whatever it is. But what if you sold a deal, sold a deal, bought a deal, sold a deal, sold a deal, bought a deal by taking your blinders off and seeing that the folks in your network are looking for a better way too, right? Maybe they're looking for another

way to raise their own wealth or to feed their own family or to reach their own wealth goals, right? Whatever it is, understand that there's a lot of people out there that are looking for the same thing that you are, which is a little bit more of a leg up. They want to climb the ladder just a little bit faster, maybe not sprint to the top. They don't need to be Jeff Bezos. Maybe they just want to get there just a little bit faster and you can help them get there if you take your blinders off and look at all kinds of different ways to get things done. How can someone get in touch with you, Matt? They can go to derosagroup.com, D-E-R-O-S-A, derosagroup.com. My book is called Raising

Private Capital. Exactly those names. It's a book very similar to that name that's not my book. Raising Private Capital is the name of my book. You can pick that up on Amazon or you can go to derosagroup.com and you can connect with our company. Thank you for your time today, audience. Thank you for your time today. Have the best day of your life. Be grateful. Make good choices.

Go help somebody. And God bless you. See you guys. Hey there, No Broke Months listener. I've got some exciting news. We just passed 375,000 downloads for the No Broke Months podcast, and I could not have done it without you. I am beyond grateful for every single listener who tunes in daily, takes action, and shares this journey with me. Now, with you and I, let's take it a step further. If this podcast has helped you, imagine what it could do for another salesperson who might be struggling. Share the show with them.

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