The Real Estate UNLOCKED Podcast
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The Real Estate UNLOCKED Podcast
What is Raising Private Capital: Step by Step Guide | Episode 14
Unlock the secrets of real estate success as Jill Jensen, the Chief Investment Officer at Sonos Capital, shares her remarkable journey from selling door-to-door to leading a nationwide pest control company, and finally finding her niche in real estate investments. Jill's story is one of transformation and insight, offering listeners a chance to learn how the power of private capital can outshine traditional bank loans. With practical advice on building strategic partnerships and utilizing other people's money, Jill reveals the mindset shifts needed to seize real estate opportunities and create lasting financial freedom.
Journey into the world of mobile home parks and discover why private capital is a game-changer in real estate investing. Drawing lessons from industry giants like Pace Morby and Grant Cardone, we explore how to leverage external funds to maximize growth and reduce risk. Jill provides a masterclass on the nuances of private lending versus partnership, and the benefits of syndication and funds, offering a roadmap for newcomers and seasoned investors alike to secure high returns with minimal hassle.
Learn how to captivate investors through the powerful combination of storytelling and urgency. Inspired by public figures like Taylor Swift, Jill emphasizes the importance of creating trust and FOMO (Fear of Missing Out) to encourage investment. This episode is filled with practical tips for engaging with potential investors, understanding their needs, and turning them into partners on your journey to real estate success. Before we sign off, get ready to connect with Jill on Instagram and stay tuned for more insights into the world of private capital in our upcoming episodes.
What up everyone and welcome back to the Real Estate Unlocked podcast. I am your host, Joseph Marohn, and today we're going to be covering arguably one of the most important skills to learn in your real estate business. One of the most powerful ways to fund deals no money out of pocket, a guaranteed way to scale up your real estate empire. Today we're going to be covering the topic of raising private capital. Raising private capital is money not raised from a bank or a financial institution, but rather an individual investor, family and friends or a wealthy individual, Meaning you can structure your own terms based on the investment opportunity presented, as well as the personal relationship built with that private money lender. Raising private capital for real estate is vital because the advantages and opportunities in real estate are amplified by simply using other people's money. Now, if raising private capital is a skill you want to master and develop, then stay tuned, because we're going to show you exactly how to structure these opportunities, where to find these wealthy individuals and why you should no longer be limited by the amount of capital that you currently have in your bank account. Now you know how we do it on the Real Estate Unlocked podcast. If we're going to do it, we got to do it right. We can't just bring on anyone to speak about raising private capital. We gotta bring on the queen of raising private capital.
Joseph Marohn:Today, our special guest on the podcast is Ms Jill Jensen. Jill is a real estate investor who, in 2022, skipped single family homes and jumped directly into purchasing mobile home parks. Her entrepreneurial journey began with her doing door-to-door sales that led her to start a nationwide pest control company that generated millions of dollars annually. She is now the Chief Investment Officer at Sonos Capital, raising capital to invest in large mobile home parks, providing passive income opportunities for individuals seeking to capitalize on their money and building a team of capital raisers to work alongside her. Jill joins us today to share her knowledge and expertise in raising private capital and will give us valuable insights on how you can also start raising capital today. So, without further ado I've been talking long enough, Everyone if you will, please allow me to formally introduce to you Jill Jensen. Jill, what's up? How are you doing today?
Jill Jensen:Joseph, thank you for having me. I just, I guess I can say, I'm living the dream out here in Utah.
Joseph Marohn:You absolutely are. How's everything going with you today?
Jill Jensen:Good I was. I've been traveling quite a bit and just got back last week doing some fly fishing in Montana with some business partners. So now back at it Monday morning. I saw that you did a little fishing with Montana with some business partners, so now back at it Monday morning.
Joseph Marohn:I saw that you did a little fishing with Pace Morby himself. How was that?
Jill Jensen:It was one of those days when you're on the lake and it's a work week for other people and I was like this is why I do what I do, so that I can have days like this, not with my phone, in the mountains fishing with a bunch of people I do business with, and I guess you could call that's what's living the dream.
Joseph Marohn:That is, living the dream. I was a little jealous. I was watching all the videos and the pictures. I said, man, I wish I was out there on that lake right now with you guys.
Jill Jensen:I only caught 18 fish and I was not the top person, but I'll take it.
Joseph Marohn:Oh yeah, You're a professional out there.
Jill Jensen:They took us to a good, good lake with a lot of fish, awesome.
Joseph Marohn:Well, jill, welcome to the Real Estate Unlocked podcast. We really appreciate your valuable time here today. I know you've been extremely busy with your latest mobile home park. You could be at a million of other places right now, but you chose to be here instead and allow us to really pick your brain on how you're raising all this private capital and sharing knowledge with us all on one of the most important skills to learning your real estate business. So thank you you are very welcome.
Joseph Marohn:Thank you for having me. Okay, so for the people that don't know who Jill Jensen is, tell us who you are. Walk us through that early journey into becoming an entrepreneur. What was it that attracted you to real estate and at what point did you decide this is it. This is what I want to put all my focus in. This is what I want to do, moving forward.
Jill Jensen:Well, I asked myself the question what do all wealthy people have in common? They hold real estate.
Joseph Marohn:And I was like.
Jill Jensen:I don't know how to do that, but I'm going to figure it out. I became highly successful in the door-to-door industry selling pest control, and it's really simple. All I did was found the top sales rep in the company and I asked him all the questions what do you say? What do you do? What do you wear? How do you overcome the objectives? What state do I move to? How do I knock a door? How do I pick a neighborhood? How many hours, how many months of the year do I knock a door? How do I pick a neighborhood? How many hours, how many months of the year?
Joseph Marohn:All the things.
Jill Jensen:I knew if I did the same things, I'm going to have similar results. Then I did well, so started recruiting other sales reps, created teams, and then my former husband and I decided why are we putting on accounts for another company? Let's go start our own pest control company. So we had hundreds of sales reps putting on accounts for our company and that's where it kind of clicked with the residual income, because we would go service someone's house every three months, which means money was coming in every three months without going out and finding a new client or a new customer.
Jill Jensen:After that I got bought out of that company and I was left with some money. And this was a problem, a good problem. Just how do I get my money, making me money? And that's where that question came into my mind that I just said what do all wealthy people have in common? Real estate. Then it was kind of like throwing spaghetti on the wall, because the people in my circle of influence were not in real estate and I wasn't telling them because I didn't want them to talk me out of it.
Jill Jensen:I was on the internet, I was sneaking into the local university because they had an entrepreneur class and they were teaching about real estate investing. So I was like I just got to go meet the teachers, I got to get my foot in the door. Long story short, I came across Pace Morby on social media and it was pretty much instant. I was like this is the thing I've been manifesting, like this is the thing I'm looking for. I joined sub two and then I had the same mindset of when I became successful at pest control. I need to find the top person lending their money, not someone who needs my money. I don't want to learn how to underwrite, I don't want to find the deal, I just want my money making me money. And so, same thing, other people get on the phone and call sellers all day, and I just called sub two students every day and Pace taught me to ask two questions, and these two questions have transformed my business completely and to this day, I still use these two questions.
Joseph Marohn:Okay.
Jill Jensen:What do you have to offer and what do you need? Do you have to offer and what do you need? And when I say what do you need, it's also like I asked them where are you currently in real estate and where do you ultimately want to be? Majority people wanted to have passive income. I was like perfect.
Jill Jensen:I got to go solve that problem because that's what everybody is wanting Fast forward. I found someone who was kind of like my middleman. People had deals, they brought them to him and he did all the negotiating, the underwriting. He had the TCs and then came to me and said, hey, this much money I need for this long, and the biggest thing was loan to own. Don't lend on a deal if you're not willing to own the worst case scenario.
Jill Jensen:I love that the worst case scenario. I love that. So, as a person that doesn't know how to underwrite or find deals, still to this day I was like, okay, how do I overcome this problem? It's about being creative and we over collateralize on all of our deals and what that means is I'm holding let's say it's a fix and flip, and they run out of money and the fix and flip flops. Well, I was holding collateral on a different property they had that was cash flowing, so now I'm able to take over or foreclose on that home. And I actually went bigger because my collateral was worth more than my loan. So for me, my worst case scenario if it happened, it was pretty secure. I also had that middleman and he's getting a part of the deal, so if we had to, like, acquire our collateral, he's the one that takes care of it. So that's kind of how I got in the door and found out how to figure out to private money lend myself, but not having to learn how to do it all.
Joseph Marohn:Yeah, it's amazing because, you know, I think a lot of people they overcomplicate things and you're like I don't need to know everything, I just got to go find the right people and ask the right questions. And then a lot of people when they first get into real estate, they think, oh, I have to be the one doing all the phone calls. I got to be talking to the sellers, I got to be talking to the agents and you're like that's not what I want to be doing. You know, like I just want to get into the sub two group. I want to find these people that need money or need deals and opportunities, and I'll leverage that and make those opportunities work. So that's amazing. You know, that's a great story and I really love your background, your background, doing the right things there. So, absolutely so.
Joseph Marohn:Something I want to dive into here is most people understand when we say we're raising private capital. They know that we're simply saying that we are raising money for some sort of investment, right. But Jill, you know firsthand that there's a lot more to it than that. Let's talk about it. What does raising private capital mean to you, and what does that process even look like?
Jill Jensen:Raising private capital is just serving and solving a problem. For a wealthy person or someone that has money or a retirement account, it's as simple as serving or helping someone else get their money working for them.
Joseph Marohn:Awesome. So can we raise capital for any type of investment, or what type of investments are you typically looking at that will require raising private capital?
Jill Jensen:investments are you typically looking at? That will require raising private capital. You can raise capital for just about anything that you're working on. I personally took raising capital as a stream to lead me to real estate.
Jill Jensen:And my story is what is solving the problem for someone else, and what I mean by that is people are like oh, raising capital can be tricky, it's all in the mind, it's just a mindset. And there are so many people that have money or retirement account or money in a CD that's just stagnant, it's just sitting there, and you're actually doing them a disservice by not providing them an opportunity to go have passive income or acquire more real estate properties, or if it's in something outside of real estate. I have done a few deals that have actually been outside of real estate, but it all came back to people that I've done business in within real estate.
Joseph Marohn:Yeah, I'm glad you brought that up because I remember watching one of your videos where you were talking about, you know, having tools in a pile, you know. Do you remember that? Can you tell everybody what you said in that video?
Jill Jensen:I love what you said in there it's the analogy of someone building a boat with a butter knife and I'm like, hey, what are you doing?
Jill Jensen:and they're like I'm building a boat and I'm like, well, there's a heaping pile of tools next to you right why aren't you using the tools and they're like, oh, because I'm just saving it, it's better to just sit there because I might need it for an emergency one day, or I might need it to build something, but not right now. And so it's the analogy of I have money sitting in a bank account, I have money sitting somewhere for something someday, but I don't want to use it yet.
Joseph Marohn:You know that's so funny because I think a lot of people think like that, you know, and like even me, like I'm guilty, you know, coming into this business when I would find deals that I wanted to hold on to my business partner and I would just use our own capital to fund entry fees, renovations and furnishings or whatever we had. You know, lack of knowledge or experience of you know why would we borrow money at 10 to 12%, you know, when we could just fund it ourselves with our own capital, right so, which made a lot of sense then. But knowing what I know now, I just can't stop thinking about all the missed opportunities and money I've left on the table. The compound effect of lending is nuts. Now someone might say, well, I don't understand. That is smart. Why would you borrow someone else's money and pay interest when you could just use your own and not pay any interest? Jill you mind explaining to everyone why I was actually losing money and opportunities with this mindset?
Jill Jensen:You were thinking small. Absolutely, you were looking at what's right in front of you Pace Morby, grant Cardone, cody Sanchez. They're not using their own money. Why? Because they're thinking much bigger. If you want to think big, just look at the people and follow what they're doing. Okay, yeah, pace could go use his own money, but why is he doing it that way? Maybe I don't need to figure out all the answers. I'm just going to go model what someone else successful has already done.
Joseph Marohn:I know it's so funny and you're absolutely right. I was thinking small because when I first came in I'm like I don't get it. Like these people have money. Why are they using other people's money? You know they have their own. But yeah, I realized after that my money is it could be making way more. Instead of tying it into one project, I can put it in something else, another vehicle, that will make me a larger return on my money. So it took a little while for me to wrap my mind around that, but absolutely.
Jill Jensen:And that's exactly where I was and I still am. I have money in my own fund, I have money in partnering in smaller mobile home parks and I'm also a private money lender in other areas also because I like doing some of it, I like being active and being in other people's deals and for me it's also being strategic, because you reap what you sow, and if I can serve someone else in their deal and I know that they're financially stable guess what? They might need some tax advantages or they might need an opportunity, or they might know someone that's accredited, and then they'll be one of my investors.
Joseph Marohn:Absolutely Now, let's say, somebody is watching this podcast today and they find this topic very interesting and they want to start raising capital too. How do they jump into the pool? Are they just going to local meetups and networking? Are they reaching out to people on social media, or are they just waiting for Thanksgiving dinner to come around so they can hit up big money? Uncle Louie, what are some of the first steps to finding these wealthy individuals?
Jill Jensen:First of all, it's finding the person with the deals. Your reputation is on the line because if a deal goes south, that lender is going to look at you, not the person that's using or leveraging that money. Your reputation is also on the line if it goes well, because people love to talk about how they're making money and then their friends are like I went one in on that too. So for me personally, the first thing I did was I was in a position to lend my money, so I learned what it was like to be in the shoes of an investor. So, asking an investor okay, like myself, what are the things you're looking for? What are the things you're nervous about? Then it's about finding the deal, because what are you raising capital for? You can go find money, but why would they trust you? What do you need? What are my returns? It's more about who, not figuring out how In my case, I partnered with someone who already had established a fund and a process, something that I felt highly confident in the person and how they're acquiring their deals. Then it was just reverse engineering and figuring out how much money do you want to raise? How much money do I need for that deal? Okay, I need to go raise $2 million on my first deal. Now, how many people is that going to take? Okay, that's four people at half a million dollars. Or let's say I want to raise a million dollars in a month. I'm like, okay, that's four people at 250K. Okay, or 10 people at 100K, if I'm raising a million in a month. Now, where do I find those people? I need accredited investors, and accredited investor is someone who has a net worth of over a million dollars, or they make over $200,000 in a year. Now I'm going to take it one step further. How do I get in rooms with those types of people? I'm going to real estate networking events. I'm getting in real estate groups. And here's something huge that I learned at a place called Raise Fest. A gentleman got on stage and he said people have avatars in all these different areas of real estate, and what he was referring to was someone does fix and flip, Someone else does mobile home parks, someone is a wholesaler, and they all get good at their one avenue. And he was teaching us how to raise money and he said this find your avatar investor. You can go acquire all these different types of properties or you can get really good at one. You can go raise capital from all these different types of people, or you can find one avenue of people you know that have money. Now I'm going to give you some examples of those people Someone that helps people with their retirement accounts.
Jill Jensen:Okay, I'm going to just understand retirement accounts, how to speak that language, post about it on social media and that's just what you're going to hit on the head over and over and over. Talk about retirement accounts. You're going to go to conferences about retirement accounts. You're going to go to these dinners for retirement accounts. You're going to become friends with people who help people with their self-directed accounts, because there's trillions of dollars in that one area.
Jill Jensen:Okay, there was a gentleman. He got on stage and he was a pre. Previously he was a dentist and now he's a full-time real estate investor. His avatar is other dentists, because you can relate to them and say hey, look, I was in your shoes. I was working nine to five, I was a dentist making money. Here's what I was doing with my money. I can help you. Okay, I have someone else who's in life insurance these whole life policies in the cash value account on your infinite banking. Now where do I put it? Or are you going to work with accountants? I personally work with investor groups that's my avatar People who that are already investing and my oh wait, go ahead.
Joseph Marohn:No, no, I was just going to say, you know, I was just thinking about it right now because I know somebody listening to this and be like, okay, that's great. You know you're showing us where to find these individuals that have the money, but you know where do you find these opportunities? And I and you also touched on the on the fact about avatars. So I think anyone, no matter what your avatar is, can benefit from raising private capital. I don't care if you're a wholesaler, fix and flipper, realtor, buy and hold investor, whatever. Raising private capital is a powerful skill. To understand why? Because everyone in this business needs money. If you have access to those funds at your disposal, deals and opportunities will come to you. You don't need to go out there and find them, because you have the keys to a door that everyone is trying to open.
Jill Jensen:Totally. And I also think, if you're going to think bigger, it's partnering with someone that focuses on raising capital. People are trying to do deals and also raising capital where it's like, hey look, let's partner, let's JV on this thing. I'm going to focus on raising capital, you focus on the deals.
Joseph Marohn:I like that. That's great, all right, so you know one of the what are the advantage advantages of using private capital for real estate investments compared to other types of funding, like why not just use a bank or get a hard money loan?
Jill Jensen:There's more leverage working with individuals than going straight to the bank and you can close quickly. You don't have to get qualified and some of the deals are short term. I only need money for three months. I only need a month for the 30 days where the bank is like. That's a process and being able to raise money quickly by leveraging people who are already seeing the value in lending in private money lending.
Joseph Marohn:And not only that, you can also negotiate your own terms, right when a bank has their set terms that you have to you know accept or you know decline Whereas if you have a private money lender of some sort that you've built a good relationship with, the terms can be negotiated just based off your relationship alone. Totally Now. So why would an individual choose to invest their private capital in real estate projects? What are the benefits for them?
Jill Jensen:Here's the thing when it comes to lending, there's two different avenues. Well, there's more, but in my case it was first being a private money lender. I was getting high returns. I can get money quickly and I can take advantage of not having to wait a long time to see my money or my returns come back. Another avenue is being a private money partner and investing in real estate deals. You can get equity on these deals. So an example of mine was and this is coming from a private money lenders my situation, and it helps being able to talk to lenders to understand their story of what's going on in their head and why would this lender? I want to learn from people like go ask questions to people that are lending their money. Be like what are your deals? What are you doing? Why did you pick that? Because all you have to do is overcome the story that the investor is telling themselves.
Joseph Marohn:I like that.
Jill Jensen:It's not about your agenda and it's not about your deal. It's about whatever's going on in their head.
Joseph Marohn:I think that's the secret sauce right there.
Jill Jensen:I'll give you an example. In the same week I raised $100,000 from two different people. It was about 48 hours and when I go through, it's called a pitch deck or an investor deck. When I have a project or a property, I have a PowerPoint and I go through it with them and I go through why? Mobile home parks, this is where I'm going to be spending the money, these are your returns, this is the time frame and so forth.
Jill Jensen:These two different individuals, the way I pitched them in 45 minutes was completely different on the exact same deal and they both invested. Why? Because the first individual was a gentleman who had lent his money over 10 times. He wanted to know the numbers, he wanted to know the time frame and he wanted to know his security. Awesome, he already understands real estate. He was in. Another woman saw me post something on social media and said hey, you said something about a cash value account in a real, in a whole life policy. My husband has an account, but I don't know how to use it and I've never lent on something like this before. So her story I'm not going to be using the jargon and the terminology I used with the first guy.
Joseph Marohn:Right.
Jill Jensen:I needed to overcome her concerns of being like hey, I actually know how to use the life insurance policies because I'm actually a licensed life insurance agent, so I guide you through how to do that part. These are the reasons why I'm investing. I was just like you. I had a problem of having money. I didn't know how to get it working for me, and this is how I went and I basically figured it out for us. I'm just going to guide you through it. Okay, this is how you're going to sign the documents. We're going to go through it on the phone. This is how you wire your money. I'm going to help you become accredited because I have a third party. And then, after you invest, this is what happens. You're going to get monthly updates. I'm going to send you an email if you're around and you want to see the park, overcoming all of the process and the steps for this woman of what it looks like today, why we're using mobile home parks or leveraging them in real estate, how you literally wire your money.
Jill Jensen:And then what happens after your money. And overcoming being like I'm going to hold your hand, I'm not going to disappear. She's like what's worst case scenario? I'm going to invest a hundred thousand dollars. But like, remember how I was like, if you can loan to own, if you're okay, lending on worst case scenario, and that way I was able to overcome that was this thing has been cash flowing since before I was born, so it's only uphill from here. We are only going to find deals that are increasing value from where they are. We're not going to go negative before we go up. So then she was like okay, you overcame my concern, I'll at least get my money back. And so it's all about overcoming what they're thinking, not you. So it's all about overcoming what they're thinking, not you.
Joseph Marohn:Yeah, I love that because you're putting yourself in their shoes and you're like, hey look, I was in the same situation and now this is what I'm doing. Let me show you how I do it, Let me hold your hand through the process and then that really just eases up their, their biggest concerns. Right, Because they're I mean they may still have their, their concerns of it up their biggest concerns. Right, Because they're I mean they may still have their concerns of it, but you know, you walking them through that and holding their hand, it just makes them feel a lot more secure than they originally did and you're speaking their language, right. So now something I was just thinking about, like, as you're securing these funds, are you putting them in an account or are you just keeping the funds on standby?
Jill Jensen:That's a great question. A lot of people do what's called a syndication and they go find a deal and then they raise capital and they're trying to raise capital quickly before they close on the property. My position is with a company called Sonos Capital and it's a fund, and a fund is where you can raise capital and have it sitting in a bank account and it's ready to go. So when you find a deal, you can close on it fast. You have leverage over someone that's doing a syndication, trying to raise capital. I'm able to just take down the deal. It's also more secure because when you're doing a syndication deal, a lot of times you're creating an LLC with other people. You're sending JV agreements through email where, in our case, you have to work with the SEC. There's a lot of legalities behind it, but it's much more secure when you're placing your money in a fund.
Jill Jensen:So, personally, we have an investor portal. They're able to log on and fill out their information From there. All of the documents are in there that they're going to sign. They upload an accreditation form they need to be accredited investors and then it has the wiring instructions In their investor portal. They're able to log on at any time and we do ACH transactions, so we just deposit every quarter into their bank account. On this portal they're able to pull it up, see every time they've been paid. Their K-1 is in there. Other investment opportunities pop up and then I always just make sure that I'm constantly following up and keeping that connection with my investors.
Joseph Marohn:Now, are you only working with accredited investors? Do you ever work with non-accredited? Because I'm just thinking like, let's say, someone's not at that level to get to an accredited level, but they want to start investing. Do you have any recommendations for them on how they can get rolling?
Jill Jensen:Perfect. I find, like I mentioned before, highly successful people that are lending their own money and partnering with them, saying hey, if I bring $100,000 because I'm not accredited to the deals that you're doing, I'll share. I'll give you a piece of my percentage because I'm trusting someone that's doing this with their own money. I personally have people come to me all the time wanting to invest that aren't accredited, and so if someone is interested, I personally have people that I refer them to. Once again, my reputation is on the line, and so I will only refer people that I have done business with personally and gotten my funds back.
Joseph Marohn:Great, and so, as we all know, there's risk with any type of investment. I know we touched a little bit on that earlier, but my question is how are we mitigating these risks? What are we doing to protect our investors? Are there contracts in place, lien positions? Talk to us about that.
Jill Jensen:I mentioned a few of the things that I do. You definitely have different type of JV agreements. You want to work with TCs or transition coordinators, the legal documents. If you need an attorney involved that can oversee the documents that you're signing so that if someone's late on their payments, what's going to happen, when is your time frame, what is your collateral, what is your worst case scenario. All of those things need to be documented and signed before any lending happens. Also, you do not want to wire money to an individual. It needs to go through a title company or an attorney, depending upon the deal or how you're lending your money.
Joseph Marohn:Okay, are there any legal considerations that investors need to be aware of when raising private capital?
Jill Jensen:I think you need to work those out with your attorney or who you've been working with, because every situation is different.
Joseph Marohn:Right.
Jill Jensen:And a big part of it comes down to the documents and the paperwork and making sure you're doing your due diligence on the person, and that's why I go back to who are the people that have been doing this a while and their process. Also asking people that have lent money to them. I need some referrals on. Who's worked with you before is another avenue that I've gone down.
Joseph Marohn:Yeah, great response there. Now, Jill, how important are relationships in the private capital world and what are some effective strategies you use to build these relationships?
Jill Jensen:I am all about business and I can build. It's interesting because people are like you got to nourish these relationships and you got to build friendships, so people trust you, and I actually am like, hey, I'm down to business. I want to know what you're doing in real estate, where you're going and why you want to get there. We can talk about our friends and our families later, but what is your process? And that's just how I personally work, where I'm like I want to see how serious you are with your numbers and your strategies and my business partner the reason why I joined Sonos Capital was because of how strategic he is and we jumped into business being like, okay, look, he is a dealer for mobile homes.
Jill Jensen:The reason this is a big deal is because he can get these houses at wholesale. He can get them at significant discount. He had to go take a test, he had to do all of these things and it's so when we bring in these homes, we're getting them at a discount. We put in 40 homes on this property we just closed on and we're selling them at cost, which means we're going to be able to sell them faster, which means we're going to be acquiring rent on our pad even quicker, which means we're going to just be cash flowing even more. He's a board member for affordable housing in Arizona and that's where we're currently purchasing mobile homes. So people are coming to him trying to get approved for different affordable housing projects in the state we're buying, which means he knows a lot of information that a lot of other investors don't. He knows where big box stores are coming in, where's Walmart, where are job opportunities popping up.
Jill Jensen:So he's very strategic and it's because he talked a lot about okay, this is why I'm doing what I'm doing. And then from there I got to know him as an individual. I'm like what are your morals, what are your values? What do you? What is your life like? What? How do you, you know, present yourself, who do you associate with? Um? And so mine stemmed from how are you doing business? And then let's get to know each other on a personal level, where a lot of people are like, hey, let's become friends, um. But I personally am like, hey, let's get to the point and then see if this is a good fit.
Joseph Marohn:Yeah, I like that because you know, instead of being on the phone, you know, hey, how's your day going? You're kind of like, hey, look, this is what we do with our business. I'll let that build the credibility with you and then, as we start working together, then we'll become friends.
Jill Jensen:Totally. And that's as a woman. So women raising capital, men get confused when you're like overly nice. They're like is this girl into me? Like what's?
Joseph Marohn:going on.
Jill Jensen:It's just human nature. That's why, every time I get on a call, I also do this thing called hold the frame. You want to stay in control of the conversations because it gives you authority and they respect you more. When I get on a call, I say, hey, I have 45 minutes, I have another call and so let's jump into it. I want to know where you are in real estate and where you ultimately want to be. I'm going to tell you what I'm doing and then we're going to see if we can collaborate. If not, let's refer each other to someone else we know Ready Go.
Joseph Marohn:I love that Straight down to business. I know, and it's true, I think they'll respect that a lot more. I'm sure they do.
Jill Jensen:Yeah, it's worked so well so far.
Joseph Marohn:Now, I'm not sure if you experienced this yet, but let's say, the deal doesn't go as planned or, even worse, you end up taking a loss and now you're having a difficult time to pay back your lender. It happens. What's your backup plan? How do you pivot?
Jill Jensen:Mine. I haven't lost a dollar yet.
Jill Jensen:Perfect and like I said, I took my time. Pace taught me I'd rather you pass on a hundred deals before you do one, and it came down to the person and their process. Remember how I told you how I have a middleman who's been doing this for years. He's kind of my lifeline. I don't know much about my deals as a lender, he's the one taking care of those things and it's interesting because now I'm that middleman for my investors. Now I know what it's like to be on one side, being like I just want my money making me money and not have to worry about it. I went and found the person and he. One of the ways is we leverage, having timeframes, so let's just take a fix and flip. You don't? It's hard to say exactly when you're going to get your money back. Contractors don't show up, things get prolonged. You know there's unknowns. So how I've done that is I will lend you $125,000 at 13% for three months. If it takes four months, it's 14%. If it takes five months, it's 15%.
Joseph Marohn:Every day after that there's a late fee for a month Every day after that there's a late fee for a month and by six months I'm acquiring your, my collateral. So there's this buffer on the time frame, but there's also kind of consequences. So we're communicating to these private capital sources, but when you're speaking to them, what kind of information are these investors typically interested in? What kind of terms are they asking about? Can you run us through some of those type of questions?
Jill Jensen:That is a perfect question, because every person is in a different spot. You're going to have people who want quick turnarounds and high returns, where someone with a retirement account they're like, okay, it's in there for five years, what do I do after the five years? And I'm like I'll have another deal, we'll just put it in another, in another deal. I personally, when I started out, I didn't need a high return because I was just trying to learn the ropes. I'm like, look, eight, 10%, that's more than double than what's in my CD and if my deal's secure, awesome, okay. Last week I did a deal and it was 18%. Cool, I'm 10% higher than I was when I started. So I'm going in the right direction. So it kind of depends upon your caliber of like, your risk and tolerance too.
Joseph Marohn:And I know you're really good at raising private capital. Can you give us an example of like a pitch that you typically do? Not to put you on the spot or anything, but I just think people can really learn from your skillset here.
Jill Jensen:This is like my favorite part. Remember how I talked about being the guide First. It's about telling your story and how you are going to help them.
Joseph Marohn:So, myself.
Jill Jensen:I'm like look, this is my problem. You want to talk a lot about problems and they were my problems, but I know they're the same problems that they're having, so I'm using my problems at what I know their story is.
Joseph Marohn:Right, that makes sense.
Jill Jensen:And so then they're like oh my gosh, I can totally relate to you. I was like I had money and I didn't know what to do with it. Here's the process I went through. Now I'm building credibility in their head of okay, why should I trust this person? And it's because I said I went out and I found the right people. Basically, I just told them you found the right person because I went and did the work for us. And then I show them I go through an investor deck. Let's just jump on a call. I'm going to go through the deck. I explain why I'm picking mobile home parks. I elevate my team. I want to be on the same page as them. I'm their friend. If you notice Pace Morby when he speaks, do you ever see him on the stand or do you see him?
Joseph Marohn:walking around, he's walking the room and he's just like pointing people out, he's telling like life stories about them. It's amazing like that that man has the greatest memory. I can't even remember like someone's name like 10 minutes ago, let alone a backstory on him no, that's right.
Jill Jensen:So grant cardone, he's on stage. Did anyone see him after? Has anyone ever talked to him?
Joseph Marohn:no, he was gone on and shit does he have a community of people?
Jill Jensen:does he have people that trust him as much? Another example taylor swift. You feel like she's the girl next door. You feel like she's your best friend. She interacts with the people, her fans, where beyonce is just on stage and then she bounces.
Joseph Marohn:Yeah.
Jill Jensen:Just notice how people are interacting. So it's like becoming friends on their level, not trying to be better at them and looking at them of okay, this is how I'm going to make money off of you, but this is how I'm going to help you solve your problem and getting your money, making you money. I want to be very direct on what I'm doing with the money. The more you can show them of being like, this is how much this thing is cash flowing. This is our projections and why and how we got those projections. Let me show you the comps. Let me show you how far away a hospital and a Walmart is. We did test ads on how quickly are these mobile homes themselves going to sell. Well, we put out an ad that said mobile home for sale, $72,000 in this area. How many people were calling? We were getting 21 calls in a week, four to six people that were qualifying. So now we're able to calculate okay, this is going to take about two to three years to sell 40 homes.
Jill Jensen:Because of the research we did, the strategies behind it, I'm elevating my team and then I give them exactly what they're going to get. People are like just tell me what it is and I show them if you invest $100,000 on this deal over five years, you will profit $239,000. We pay quarterly distributions. So I show them by the end of year one you'll get paid 9,000. The end of year two, you'll make 20,000. End of year three, we refinance. I'm just creating them the story of exactly the steps of what's going to happen. People don't like to be sold but they want to buy and they hate FOMO and the fear of missing out and I'm going to explain at the end exactly how to get that. But it's the tipping point at the end because people can get through the deck or their opportunity. But then how do I get them to wire money? Like there's just that gap. Like, do you want the deal? Are you interested? I'm just following up is the worst line you can say. Don't say I'm just following up, sorry.
Joseph Marohn:Yeah, I like, no, I like the fact that you're laying it all out of them, out for them, because you're removing the unknown, right, they actually get to see these numbers, they get to see what their returns are going to be. Then you kind of talk about creating FOMO, which is a great way of doing it, because you know some people. They may walk up to somebody and they're like hey, you know, would you mind lending 100 grand on this, on this deal, where instead you're probably restructuring the way you say that and you're like, hey, look, I got this awesome opportunity. This is how you're going to make this much money. This is what's going to be like year one, two, three and four, and you don't want to miss out on this opportunity. Is that kind of like what you're doing?
Jill Jensen:Yeah, are you ready for that tipping point at the?
Joseph Marohn:end. I'm ready for it.
Jill Jensen:I do this every time and I say the same words. I go through the deck, I show them these are the tax advantages you're going to get. You invest a hundred K. Over the five years, you're going to be able to write off 122 K. So I'm creating the story of you're an investor. You're going to have taxes. This is how we are going to solve your problem, which means I want them to be the hero of their own story. I'm not. They are here. It is the very end.
Jill Jensen:I say let me just show you how it works. And then that's when I go through the process of what happens with signing the documents. This is what happens. And I pull up our website. You log on to SonosCapitalcom, click join now. You're gonna fill out the information. We're gonna jump on a call. I'm gonna walk you through the documents, upload the accreditation form and wire your funds From here. You're going to get quarterly distributions, you're going to get a quarterly update and you can come visit the park whenever you desire. Then they say this here it is. I'm going to send you this information, this pitch deck and our website. I'm going to give you 24 hours to send me all of your questions, but I need an answer in 48 hours because I got to finish raising the capital, so I need to know if you're in or not.
Joseph Marohn:Damn, that's good they're like. No, I don't want to miss this opportunity.
Jill Jensen:But I'm not going to sell you on it. I don't need your money.
Joseph Marohn:Right, I don't need you.
Jill Jensen:But I'm not going to sell you on it. I don't need your money, right, I don't need you, but here's an awesome opportunity that I just explained to you. They also don't want to be sold, so here's the information. You go, make a decision, send me your questions. I just need an answer in 48 hours. Does that work? Great Talk to you in two days.
Joseph Marohn:Now you reversed it.
Jill Jensen:Now it's almost like they need you, yeah. And then they have 24 hours, because people always say let me just think about it.
Joseph Marohn:Well, let me think about it.
Jill Jensen:Yeah, it takes out the procrastination of it. And yeah, that's awesome. Thanks for sharing that. I'm giving them permission to go think about it here. Go think about it 24 hours. Send me all your hard questions. I just need to know in 48 hours because I got to finish raising the capital.
Joseph Marohn:Yeah, you got to be careful, because now people are going to start using your line here.
Jill Jensen:It works. And then guess what? Do you want to know the best part about this?
Joseph Marohn:What's that when?
Jill Jensen:I was at Raise Fest and the gentleman was talking about finding your avatar of who you want to raise capital from. Here's where Jill's entrepreneur brain goes. As soon as I figured out what mine was, my second thought was I'm going to go find 10 avatars to raise capital for me. Avatars to raise capital for me. I'm going to go find 10 people that have those network of people and I'm going to just clone myself. I can raise a million in a month. I'm going to go find 10 people that can also raise a million dollars in a month. So then guess how much money I'm raising in a year? 120 million, and that's just because I found people who can have that avatar. So, like right now I have someone that works on retirement accounts. I have another gentleman that's interested and all he does is train pilots, and I was like oh cool, you're just sitting next to people who have a lot of money, kind of like the guy that's a dentist. Someone else is a fisherman with other rich fishermen.
Joseph Marohn:Someone else is on the golf course with all these retired gentlemen that golf, like all these random avatars of people that have these networks it's funny you say that because I was watching a video where pace was talking about he thought he had to go and find all these rich people at the golf course and so he got a golf membership and he said 10 years later he has never found one person to raise money on that.
Jill Jensen:but he became a better golfer and it's the person that has the group of people that they all already golf with.
Joseph Marohn:Right oh.
Jill Jensen:I'm the guy that goes with the people. Or here's another one MLMs, how they have. Go find some of the people that are at the top of doTERRA or these door-to-door companies, or someone at the top that has a group of followers that have money.
Joseph Marohn:Yeah, that's awesome. Now, is there ever a point where you're looking for a private money partner rather than a loan?
Jill Jensen:Well, when you become an LP in our group, in our fund, you're becoming a partner, you are acquiring this property with us and so you're getting. You get tax advantages, not just interest returns. So it's like, okay, I'm a partner in this fund and now, like I mentioned, you invest $100,000. And on our last deal you'll be able to write off 122. And so that was a problem for me that I had to overcome, because as a private money lender, you get hit with taxes if you don't hold assets. Where a mobile home park depreciates over 15 years, where a single family home, it's 27. And in year one we can do a bonus depreciation and we share that with our LPs just the people who are lending so they're able to write off on their taxes, yet they don't have to do anything with the park itself.
Joseph Marohn:That's awesome. Now, Jill, are there any books, courses or videos you could recommend for someone who wants to learn more about this?
Jill Jensen:Yes, great question. First, who, not how, find the people who already know how to do it. And then another line that I like after that is it's not who you know, but who knows you. I love that it's about yourself. A book, I would suggest Pitch Anything, and that helps teach you what I was kind of explaining about holding the frame and staying in control of the conversation with you and the potential investor.
Joseph Marohn:There's also another book. I forget the author off the top of my head, but it's called Raising Private Capital, just Raising Private Capital. Do you know who the author is, by the way? On that I don't. Yeah, that's a book I've seen Pace recommend and I know he had the gentleman on his podcast. I just can't think of the name off the top of the head. But yeah, great, great advice there. And then, lastly, I guess could you just share like a case study or an example where private capital was successfully raised for one of your real estate projects.
Jill Jensen:Yes, I was able to raise $2 million for our last mobile home park. The gentleman was 84. He was just ready to retire. We were able to get it on seller finance 84. He was just ready to retire. We were able to get it on seller finance. So our down payment was pretty low and the capital that I was raising was to update the amenities and bring in new homes. And what I love about our company is we are also genuinely solving a problem for affordable housing, being able to sell these homes at cost. We're not trying to make money off of the homes themselves and there's a high demand for it, which is also a selling point for my investors of mobile home parks. There's a high demand and when we are not taking care of the homes which means no tenants, no toilets, no termites that means low overhead. Average person stays in a mobile home for 14 years, so there's low turnover and there's high cash flow and high tax advantages, and these are all selling points that I always share with my potential investors.
Joseph Marohn:That's amazing. I just remembered the name of that author. His name is Matt Faircloth. Raising Private Capital by Matt Faircloth. I just purchased it. It's actually on its way. I'm waiting to get that and I'm excited to start reading that. But any final words of advice for someone who's just starting to explore the option of raising private capital. Who's just starting to explore the option of raising private capital?
Jill Jensen:Find the right people to learn from, don't be afraid to ask questions and ultimately, in the end, you're just helping solve a rich person's problem by getting their money, making them money. So it's more about the mindset than it is being afraid of actually raising the capital.
Joseph Marohn:I love that Awesome. Well, jill, you've been great Glad to have you here today. You come in here dropping bombs, giving valuable gems to us all. I'm sure everyone watching this today now have a clear understanding of what raising private capital is and how it can tremendously benefit their business. You're doing one hell of a job raising capital. You're killing it in the mobile home space and I'm excited to see where Jill Jensen is headed a year from now. Thanks, joseph, and we definitely got to bring you back on because I know you have a ton of knowledge on talking about mobile home parks, investments, on that, and that's a topic we have not covered on the podcast yet and I would love to bring you back to talk about that. If you're open to it, perfect, let's do it. Awesome. Now, jill, where can people get ahold of you?
Jill Jensen:I am Jill, actually on Instagram. Are you ready for my tag name?
Joseph Marohn:I'm ready, we're going to plug it in anyways, but go ahead and tell them what it is.
Jill Jensen:I am a Jillian air. I love that. How far out will this um air? Because I am going to have a landing page and it's jillsonoscapitalcom and you're going to be able to just book a call with me.
Joseph Marohn:Awesome, well, well, it generally takes about a few days, so I would say probably about Wednesday or Thursday ish. I don't know if you have it ready by then, but that's when we'll have it ready. Now, if you guys are finding value from this podcast, don't forget to show your voice of love. Subscribe to the channel and hit that bell icon so you can stay updated on all future episodes. Smash that like button and drop a comment down below on what Raising Private Capital would currently do for your business. Appreciate all the continued support and, guys, stay tuned, because we're bringing these episodes to you every two weeks. I've got some exciting topics coming up next that you definitely don't want to miss out on. Best believe, I'm going to keep bringing you that fire. Thank you, jill.
Jill Jensen:See ya. Thanks for watching.