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So the big question is this, what would you do if money didn’t matter? So you had millions in your bank account, what would you focus on? Would you spend more time with your family, with your wife, with your kids? Take family vacations.
Would you pursue your gifts and talents and dreams? Serve your local community, teach others, serve your church. You see if what you would do if money didn’t matter, it was pursuing your gifts and talents and dreams to serve others, and that is probably what you should be doing.
The problem is most people are in the rat race, living five inches in front of their face with no time to pursue what they were born to do. That is the problem, and the solution is to develop enough passive income to replace your working income so you can quit your job and be free to live your life the way you were created to.
That is a solution and this podcast will show you how…
Ryan Enk: What’s going on everybody? This is Ryan, your host, with cashflow dad life. Welcome to another awesome episode. I’m stoked for our guest today…
Clay Popham is kind of a local investor here and uh, he’s actually crushing it right now here in Louisiana, but he’s been doing real estate investing all over the place. And originally I don’t think you’re from Louisiana, right? You came from, was it Georgia?
Clay Popham: Yeah, I grew up in south Georgia and lived all over the country.
Ryan Enk: So one of the main reasons, guys, that I wanted Clay to come on the show is because one of the things that we talk about and one of the biggest barriers that people have when they’re trying to get started investing in real estate or if they’ve gotten started, but you know, maybe they put the brakes on for awhile and they wait till they get enough money to do the next deal…
One of the reasons that I was really excited to have clay come on is because he has done a tremendous job at raising private capital and with his new company, a High Ground Solutions Llc, he’s raised over a million dollars and the way he did it was pretty easy.
So I invited him on the podcast to share with us just his story and how he did that and hopefully you guys can glean some tips and get some confidence and knowing that it’s really quite easy to raise private capital for I really good real estate investment if you know what you’re doing.
So thank you so much, Clay, for agreeing to come on the show. And it’s a pleasure to have you here…
Clay Popham: Yeah, thanks for having me, Ryan.
Ryan Enk: So if you could just start us off, tell us a little bit about your backstory. What made you want to get started with real estate investing in the first place?
Clay Popham: Well, I don’t know how deep you want me to go into this…
Ryan Enk: Deep…
Clay Popham: So at 17 I joined the marine corps and was doing marine for things. Uh, after about six years got picked up to be a part of a commissioning program that sent me back to college. So I decided to go to Auburn University even though I’d never been to the state of Alabama the day that I showed up there.
As I was driving around looking for apartments that were $1,200 a month for rent, I drove past the townhouse. I had a for sale by owner called them up. They gave me a price. I called the bank and maybe preface this a little bit more.
I don’t come from any money at all. So owning a home, even though it was like 24 at the time, seemed like kind of outrageous. I’m just…it just wasn’t the way I was necessarily brought up, but I called the bank and you know, the payment, oh, going to be like 725.
Clay Popham: And I said, well, okay, I’ve already got a roommate that said go find us a place. I’ll pay no more than 500 and $1,200 apartment or 7:50 condo. I can do that math.
And that was kind of what got me started and then the next four years while I was in college, I just had I took some unorthodox courses that most people probably wouldn’t, that had nothing to do with my major of religious studies and philosophy one of which was estate planning.
If you know anything estate planning, obviously real estate’s a big part of that. And the professor who taught it happened to be a real estate attorney who then let me do an independent study to help create a course on real estate law.
So while I was there, um, I, I got to really know about what real estate really was and I had a big desire to own land and one of the things…
Clay Popham: So it was cool about that time period in the early two thousands, I was thinking about this earlier, is there was not as much data on the Internet, but the data that was there, I felt like it was easier to access because there wasn’t quite the premium put on.
You know, people talk about skip tracing now trying to find absentee homeowners and stuff. It used to be that you just go into whitepages.com and everybody, you wanted to find…
The information was known to the public…
But the area I was in had a GIS system that was really ahead of its time and you could search by parcel size and so I just went through and if you had between 50 and 100 acres and you lived out of state…
I’ve spent hours and hours finding phone numbers for every one of them and we’ll just personally I call up hundreds of people until I found somebody that has 75 acres that they wanted to sell.
Clay Popham: But couldn’t, that had never been on the market because they had title issues. It had been passed down. It had been in their family since the 18 hundreds.
Well, because of the course I’ve taken with the real estate law and estate planning, I had learned my way around the courthouse…
So I asked them again, free time was in the college students. So, you know, had time, not, not really money. I was able to put a deal together on 75 acres, 12 miles from the stadium and Albourne kept that for a couple of years until I realized that even though the only land sounds cool, it doesn’t pay you every month and it was just money going out.
So I sold that a couple of years later after meeting a former real estate mentor, Jason Hartman, I don’t know if you’re familiar with them.
He’s worn them probably the larger a turnkey providers across the country and he had it really done a lot for my education at that time and really started just seeing the benefits of passive income for rentals.
So I sold that land and started buying properties in Auburn and then a module Louisiana a few years later after I was done being a marine in California and did some live in fix and flip ’em, did some bar fix up, ran out refinance, and then went to retire from the Marine Corps and said, “Hey, I have acquired all this knowledge.”
At that time I had property in Georgia, Louisiana, California, Alabama, that I’ll go be a realtor. You know, folks will love this knowledge and then I found out that I absolutely hated being a realtor.
Clay Popham: It was funny because you would meet folks and one of the things that really would excite me is being able to present people with equity, Opportunity, value, add opportunities and in conversations with folks that sounds great, but the reality is like most people walk in the street like one, they don’t have to.
At the end of the day, the retail buyer wants like, what’s the most amount of money the bank will give me so I can look the coolest to my friends, not what’s going to put the most money in my bank account and to me like that’s what’s exciting.
Not like I don’t care what you think about where I live at. I know what would my equity position is and that gets me much more excited.
Ryan Enk: I don’t know what it is about you marines, man, but it seems like everybody’s a marine that gets into real estate, just absolutely crushes it.
Clay Popham: What? Well, that name may not be true. I don’t know. You know, so after I decided I didn’t want to be a realtor, I decided, okay, well what’s the next move?
And so I opened the retail business and with the idea that I was going to open multiple and you know, having formerly formally had to lead 120 150 guys, I was like man or retail business with two or three people, like I can do that, like in my sleep and I can just completely overloaded by, let one or two or lose one of those people out of two or three when you don’t have a bench.
And guess whose turn it is like you, you know. And so I’m just became a slave to, to nine to seven, which was not the idea and someone listens. This is not working now. So I had a big mindset shift for years because I was a W2 person.
Clay Popham: I always looked at real estate as that passive investment in place to, to earn money and watching growth. But it was a big shift for me to say, okay, how am I going to make that my primary means of, of income, how’s that going to be my active source of income?
And then it was just, you know, okay, who is doing this and seeking those people out and people do it on a high level. People doing 5,100, 200 deals a year, like they exist and they’re much more common than you would have thought and five years ago for Youtube and, and, and the popularity of facebook and things like that.
Like it was just less likely that you’re going to know that that was even like a real thing. And so I just connected with those folks at, “Okay, how are you doing it?” They showed me and it should have been repeat the success at other people who’ve have had yet.
So then this year we had, at the beginning of this year, he said, okay, I want to make a real effort to do this. Was fortunate to be able to partner up with another individual named Josh Miller who was making his out of the navy.
So I’m a former marine marine infantry officer guy and he was a navy seal. Um, so both of us definitely have an attitude where we’re super competitive. We refuse to fail….
Ryan Enk: Chew someone’s face off if they get in your way…
Clay Popham: But, you know, one of the things it’s also cool too is, um, you know, we’ve, we’ve lived in austere conditions. You know, people I know that you tell from another podcast about fear and different things for us when, when, when you put it into context of life, like, what’s going to happen.
Like this deal is not going to work. Like, okay, it’ll be okay. You know, when you start really looking at worst case scenarios. We’ve slept in deserts, we’ve slept in mountains like it, we’ve, we’ve endured the suck and it was just fine. Like, you’re still gonna be fine.
So I’m then able to partner with somebody like that. And he had, he had gone out about a year and a half ago with no money, zero money whatsoever now like a candidate about two years ago, and say, clay, when teaching real estate will go to this podcast, go to this book and come back to me later, uh, will, will, he did much more than that.
And he just went out and started doing deals and doing them with absolutely no money…
Ryan Enk: That’s the guy you want to partner with…
Clay Popham: Yeah. I mean, he, he had given up six figure income for zero income and said this is what I’m born to do and, and was able to do it. And so when it came to me and said, hey, do you want a partner? I was in a position where I had more tasks than I had time.
And so we joined, joined together and it’s been awesome, man. We’ve been able to not only do a lot of the creative financing would sellers that he was doing on his own, but this year we’re really successful in meeting our, our, uh, private money goals and hooked the double that next year.
Ryan Enk: That’s awesome, man. Look, you know, I think I’ve got part of it figured out with the marine and the navy thing…
I think a big part of that, and I tell everybody, in fact in my last podcast I think was about this was about the “problem between people’s ears.”
And when you’re in the marines and you’re in the navy, it seems like you’re trained to not be afraid. You’re trained to remove some of the limiting beliefs that some people have. Which kind of segways me into my next question with what you’ve been able to accomplish.
One of the biggest limiting beliefs that people have, they just say, “Well, this is the money that’s in my bank account and I’m not going to be able to invest until there’s x dollars in my bank account.”
And what you did is you virtually said, “Alright, let me just eliminate that idea and say, “I’m not going to be restricted to what’s in my own bank account. I’m going to find other people’s money.” Which is what smart real estate investors.
That’s how you’re able to scale and grow to a massive portfolio of real estate and grow wealth is by not using your own money. So you essentially in the last, well I didn’t even take a year to essentially take you a couple of weeks to raise a little over a million in private money lending.
Clay Popham: It was every few months. I mean we, we went after more as we needed more and we were, we were definitely strategic about what it was we wanted to do this year.
Some folks are definitely go all in and do everything you can, as fast as you can and that’s great. But we’ve been very methodical about building out a team.
We have great people that we work with. We pay them more than most people do, but it has saved this so many headaches…
But we’ve had to go through a lot to get to that point. And even on the construction side, like we, we took more time than we should have on some of the first few deals. Just learn how to do it so that yeah, I don’t ever need to float sheetrock and mint in my life, but the next time I need sheetrock quoted, I know how long I should take and that’s a valuable thing.
But the same thing with money. We went to the folks that we thought maybe most likely and we’re able to show them success. And you know, the thing that’s cool about raising private money is when one person has success, they don’t not tell anyone else.
You know, some of the other industries with data has been folks that they heard from the people we borrowed from before and said, well, can I do that too? It’s kind of a, just a repeatable process. And that, that sentence,
Ryan Enk: People tend to brag when they make money. It’s just a human nature…
Clay Popham: Real estate’s fun man, like everybody wants to be a fixer-upper. Everybody loves to say that they are in real estate and it’s a great opportunity for folks to, to be able to make that claim that don’t have the money and have other methods of, of, of their income earning.
Ryan Enk: Yeah. People who necessarily don’t necessarily want to go through the tough educational process that you went through or go through the trial and error that she went through and learning how to fix and flip and different stuff like that, but they still want to be involved.
Then real estate is a great opportunity for them. So, uh, so if you could kind of walk us through from start to finish, what was, what did that whole process look like from the time that you were like, all right, I need more money other than my own. What were the next things that you did?
Clay Popham: The next thing was identify who do I know that has money and who do I know that has money, that is not my family, that, that wasn’t where I wanted to go to first. And now it’s just a personal preference.
I figured I felt more comfortable showing them success with other folks before I came to them and for a lot of folks there they’re going to do that the other way and that’s fine too. So I went to the folks who I knew had money and who I knew, understood real estate and land those folks out that weren’t necessarily investors themselves.
So then just went to him and said, “Hey, like here’s some of the deals that we’ve done over the last six months and here’s some things I’ve done over the last 10 years.” And then just show them, “Hey, here are a couple of projects we have coming up, these are the terms that we’re offering, would you be interested?”
Clay Popham: And they were interested enough to sit down. And so we sat down and I’m probably 30 minutes into breaking down each deal we did, which there were a lot of creative ones that were in there from work josh had done prior and some other ones.
I mean eventually it just got to the point where they said, “Okay, yeah, just shut up. Like I got it. Like, you know what, you’re, you’re, you’re talking about fine.”
So that was kinda the first person and then they found a, you know, their friends her, that they were a lend into it. So it was a, it was a couple of investors that we met with to begin with.
They saw the returns they got and said, “Hey, can we meet him?” Yes, sure. Um, and then some of them were, it was really random doing live facebook videos of walkthroughs and different properties and whatnot, you know, um, there are a lot of folks even still for me and that’ll be something that changes next year.
Clay Popham: A lot of people still had no idea what I do because I haven’t done much of. I haven’t personally put forth much of an effort to promote myself.
My partner has done a lot of that. And, and so that was a super easy way of just, hey, do a facebook live of whatever project you’re working on or thinking your own or thinking of. And you’d be surprised how many folks will reach out and said, oh, I had no idea. Yeah, well this is, this is what I’ve been doing.
So just folks knowing that was the first part and then now I think I told you last time we spoke, I put a post last week of a property we had coming to market a couple of sentences, “Hey, our latest project, here’s some pictures, you know, anyone interested in a home, have them get in touch and if you’re interested and invested in any of our future projects, we’ve got a high farm with stuff always in it.”
Clay Popham: had six people hit my inbox. The next day one of them is, is in the Middle East right now. Calls me and says, Hey man, what are you doing? I’ve got some money on, so let me send you some stuff. I’m sending all of our files, had a call with them a few days later, “Hey, did you have a chance to take a look?”
Actually I didn’t look at any of it. If your name is on it then I’m good with it. You know. So a lot of it, I think that it’s important too, is it has less to do with my real estate knowledge than it does with the character that those individuals perceive that, that my partner and I have, they just trust us. And that’s been a huge part of it.
Ryan Enk: Yeah. I want to, I want to stop and reiterate what you said for a second because you know, a lot of people might be listening to this and they might be thinking, all right, well, you know, that’s, that’s easy for Clay to do because he did some projects before.
I want to just stop for a second and say, had you done no projects but you just did that thing that you just told us…
Like basically you got a house under contract and you had some, some pictures of it and you put that up on facebook and you said, hey listen, this is the deal that we’re working on. If anybody’s interested, do you think it probably wouldn’t have been as easy had you not had your past experience?
But the most important thing that you just said was that they knew you, they liked you, and they trusted you a. yeah,
Clay Popham: Absolutely. I mean I go to a closing here in 30 minutes with the lender, the same guy. We’re talking about the funding as $120,000 that hasn’t looked at a single thing that we’ve done and didn’t care. He had no idea that I had ever done it before because we only knew each other in a completely different capacity that had nothing to do with real estate.
And when he had, I hadn’t spoken in eight years, like eight years later, a guy saying, yeah, I know that if you say it’s good, then the math is good. And I do think that’s important for people to think about it. Just ask yourself like, would you invest in, you know what I mean?
And if the answer to that is no, like go fix that. Like you don’t even get worried about real estate and raising money like you need to have. I love that picture yourself as a person.
Ryan Enk: Like stop being an asshole. That’s your first step. Is like, be a good person. I love that man. That is a gem right there. What would you invest in you and if you would not invest in you, then you’ve got some some work internally to do a, but once you are ready to invest in yourself, other people are going to be ready to invest in you as well.
Clay Popham: You know, one of the things I’m I’m referring to in some of these talks here are things that I’ve sent folks. Look, we don’t put together a big investor your packet. If I were doing something like you, I know that you do some apartment things and some, some more complex projects.
We don’t do all that. We have one page that says who we are, what we’re about, and three to four investment options and the different types of deals that we do. You know, if we’re doing a wholesale deal, this is how long we’ll have your money. This is what we’ll pay for your money.
If it’s a flip, here it is. If it’s a lease purchase, here it is, and that’s it. And then we have a separate one that really we just keep a running tap ourself and excel spreadsheet of deals that we’ve done over the last 12, 18, 24 months.
Clay Popham: And so every time we close another one out, we just add that and we just send that to them. But we’re not spending a lot of time and putting a big thing together and, and there will be some folks that do want more of that.
Do you know your engineers?…
They’re going to want to see it, a ton of numbers and you’ll need to be able to speak to that. But, um, it, the, the point I’m making is don’t get wrapped up and I need it. I need an inch thick book of what it is that I’m proposing. Like it’s super simple. This is what the property is, this is what I’m asking for. Here’s how you’re protected.
Ryan Enk: Yeah, it’s, it’s actually, you know, people tend to make it a little more complicated than it actually is. If you’re an investor, all they care about is, do I trust the guy that I’m putting my money in? Will I not lose my money? Will I make money?
So if you can articulate that in the simplest way possible though, people tend to approach people with you know, data sheets, spreadsheets, pie charts, you know, and those things can be helpful.
But most times I think the most important thing to remember is if you’re going after a private money lender and it’s not this sophisticated investor, which most times it’s not like extremely sophisticated investor, is that a confused mind doesn’t make decisions.
So the most, the more simple you can make it better and, and, and, and the better, the chances. I want to touch on something else that you said too, because you mentioned that you went after this, you got this one guy and then he kind of told other people and you’re able to get it through.
That is this whole concept of birds of a feather flock together. So if you are able to get just one investor and you get that person results, you know, it’s almost like you’re set just within that guy’s network because he will tell other people about those results.
And if we could just briefly, if you could give us some of the very nitty gritty specifics, how are you structuring some of these loans for the specific deals that you’re doing? Like interest rates?
Clay Popham: We typically will offer a one point or one percent origination, um, if that’s okay.
Ryan Enk: Explain for people what that means because some people might not know.
Clay Popham: Yeah. So if we, if we borrow a $150,000 from somebody, the day that they fund us, they’re going to get a check back for $1,500.
Now if it’s anything under 100,000, would give them a thousand dollars as a minimum to make it worth their while know there are, there are times one of the, one of the wants to do for us is to do a seller financing where we just take over the more the mortgage to do a property subject to.
But then we’ll just borrow the renovation funds from someone. So if we want a $40,000 for a project, the interest rate on that may not be super appealing, but you throw a thousand dollars on top of that.
And their right of return really increases pretty significantly and I would want a thousand bucks just for my hassle. So we’re happy to do that.
Ryan Enk: The bank’s going to get that. If they lend you the money.
Clay Popham: That’s right. And then we pay between 10 to 12 percent depending on what it is they’re doing. If they’re, if they’re 100 percent of the purchase and the renovation, they’re getting 12 percent. If they’re only doing the purchase or they’re only doing the renovation, then they’re at 10 percent and those numbers will go down over time as we get more investors.
I mean we’ve, we’ve used, I think six different private investors this year, but we’re still, we’re still learning how, how deep some of these investors pockets are like we, we don’t know.
I mean we, we had one recently that we previously had done maybe a 100,000, 200,000, now they’re going to do one for through free, 50 $400,000 that we had no idea that they had sitting around, but they did.
So you just never really know. But um, as we get a bigger, a bigger bench of lenders, then we’d like to have that down to around eight percent and in the future 20 slash 20, the goal is to be able to have that three, four, $5,000,000 line with the bank on our terms, which right now we don’t have enough tax returns to show them or we haven’t knocked on the right bank store and that’s a, that’s a whole job in and of itself.
Clay Popham: But Hey, there are people out there that I know personally that have three, four, $5,000,000 lines of credit that do nothing but flip single family homes. So it’s infuriating to talk to these banks and they act like it can’t be done.
And then it’s just not true. It’s just do they want to or when, when are you going to have success?
They’re not going to be able to tell you no, but that’s not where we’re at yet. Hopefully 20, 20, we’ll have that line as well. But even then I will, I will forever pay more to a private person to eliminate the pain of dealing with a bank. So until it’s a line of credit that I can write a check out, oh, I’m just not doing it. Too much work.
Ryan Enk: It’s a pain in the butt and you constantly have to give them a statements and all kinds of stuff. It’s a constant, a Fattier w2’s and your P and l statements and balance sheets and all that, which is fine, but, you know, the bank gives you the best lending terms.
I mean, you’re not gonna be paying a bank nine to 12 percent. You could be paying a bank four to six percent interest.
So it’s, you know, they serve their purpose and it is good once you, once you have that two, $3,000,000 line of credit, you know, that’s, that’s kind of a, the point of unstoppability. Um, but, uh, but yeah, so are you structuring these interest only with your investors until the house sells?
Clay Popham: Yeah, we are typically their, their interests only. Typically we’re making monthly payments…
Some don’t care, some will take quarterly, some will take a balloon upon sale and some will allow us to just, they want their money to work the whole time so we can, we can do a substitution of collateral and we’ll put it from one property to another or it’s just a signature loan to us and we have floating indefinitely.
But usually interest only and most of the time we’re, we’re, we’re forecasting that into what we’re borrowing, you know, we’re, we’re key. He going to be for minds. Is, is the planning factor, um, oftentimes for less, Matt, sometimes we’re, we’re beyond that. But um, yeah, monthly interest is the, is the most standard.
Ryan Enk: Well, thank you so much for sharing the, uh, the details of how you structure that. A lot of people want to keep this information close to their chest.
And I think the, the what, what I’ve learned, and I’m sure what you’ve learned too, is that the more you’re willing to share value to other people, the more you, you’re blessed and the more value you receive in return.
So I appreciate you opening your books, pulling back the curtain and showing us exactly how that’s done.
Clay Popham: Yeah. Can I, can I give you a book recommendation as well? Absolutely. Yeah. So Susan lasted or lions I think getting the money. That’s a really good one.
It’s a short read, an easy read and one of the things that she really hot summer and I had voted I still need to get better at is people can’t help you if they don’t know what you’re doing.
Right. You know. Um, and I personally, I don’t care if somebody says no and that’s, that’s another thing that we didn’t really talk about is I’m not, I’m not asking for you to do me a favor. I’m painting incredible rates of return that if you’re money isn’t it? Like most people’s money doesn’t earn 10 to 12 percent and if you,
Ryan Enk: The stock market now it’s a seven percent annual at the stock market.
Clay Popham: Yeah. Non Real estate investors, most of them are not earning that kind of money.
So, that’s important to just own that as well as like if they have it available and are getting a property that has equity the day that the day that they invest, if I walk away and everything is jagged, they still have a property with equity in it.
Like they’re, they’re just protected on so many fronts. And we also may know we’re only investing in an asset class that would pad full of rentals. So we’re not worried. Even if a property doesn’t sell, it’s not a big deal.
We’re just going to get long term permanent finance and in and put a tenant in there. So those things help the investors feel better. But the book. But again, it’s just folks know him, like this is what you do. Like people can’t help you if they don’t know,
Ryan Enk: You know, I think that’s something that you said is another, uh, military and navy a mindset is that you don’t care if people tell you no, you’re not, you’re not asking people to do you favor.
I mean, you guys, you guys have been in the roughest of conditions, you know, and so it’s like, what is, what is somebody who has money telling me no gonna going to do for me what you have. So many people are afraid of that.
They just don’t want to be told no. They’re like, if, what if somebody doesn’t like me? What if they don’t? What if they tell me no big deal?
Ryan Enk: You are open hand begging them for money, that they’re getting a great return for them.
Clay Popham: You don’t get the hot chick to go out with you by not asking her out…
Ryan Enk: That’s true. She does. Yeah. That is true. The hot chick typically does not ask you out…
Clay Popham: That’s not my experience.
Ryan Enk: I love it will also, man. Hey, thank you so much for, for sharing your wisdom with us. I hope to have you on the show, again a future date just to talk more about some of the successes that you’re having because you’re, you’re business is growing. It’s exploding.
We covered one topic which was, you know, finding private capital, but I’m sure there’s a lot more wisdom than we can glean from you, so thank you so much for sharing everything you have with us today.
Clay Popham: Yeah, thanks Ryan. I appreciate your willingness to always help help folks out, man. I appreciate it, brother. Thank you.
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