David: Welcome back guys, this is the Discount Property Investor Podcast. This is your host David Dodge, joined with co-host Ray Bartle today.

Ray:  Good morning guys, welcome.

David: We have a special guest today guys, we have Mr. Alan Cowgill. Mr. Alan Cowgill is the expert in private money and how to raise private money. So, Ray, you wanna introduce Alan for us?

Ray: Sure. I am really excited that Alan is able to join us today. I mean, personally, he's one of the gurus that I ran into prime midway through my career, because previously I used private lenders, not really knowing what I was really doing and I just kind of crop along -- and all of a sudden I was introduced to Alan Cowgill's program, which I purchased and I started using it. And what happened to me is -- I start out growing my lenders, so I had to go ask more and more private lenders to loan me  money to keep my business -- it's just made the big difference in the real estate business and also my  rehab projects. And I've been studying Alan for many, many years, and I really appreciate him coming in today -- I will just tell you, his program works, I can tell you that first hand, and that's why I really am glad that he was able to meet with us today. We'll go through some questions and then we want talk with Alan and at the end of course, we're going to see if there's anything special you like to offer or any kind of advice you'd like to give us. I guess the first I want to do -- Alan, could you give us some of your background, exactly, how you got started into private lending and kind of, how your career began?

Alan: Yeah, I'd loved to and I greatly appreciate you guys doing this education for everybody, it's great and I appreciate you asking me to join you.

David: We're happy to have you.

Alan: I started out many years ago, broke. I was in a corporate America, and I've been successful as middle manager -- but as I was climbing up that corporate ladder, one day I realized that I had the ladder against the wrong wall. And I need 2% of the population retire at poverty level, after work in [00:02:42:00 - inaudible] I got my attention, because I was struggling, I was struggling paying my bills. Even though I've been successful in corporate America, I was living in little dinky two bedroom apartment, and kind of look - you know, I was living there at the time, I had this old beat up car that I needed to put some money into, but I was too busy paying my other bills and I've put that on the back-burden, and then one night on the first date this thing paid me back -- you know it is going to be an ugly story, right? Yeah, I'd pulled up in front of this apartment complex and walked this lady up to her door, after our very first date, and half way up to the door I turned around and looked my car had burst into the flames.

David:  No way.

Alan: Yeah. When I tell that to groups that I speak to, like when I spoke for you guys, Ray -- I hear somebody in the back of room yell, "Hot date," you know.

Ray: Probably really impressed her, I assume.

Alan: Oh, yeah. That was our last date, you know, every morning that she wakes and remembers that day was a burnt charred mark in a parking lot. So, it kept me frustrated with my life, I didn't know what to do, I looked into franchises, but they take money and I didn't have money. I did decide to invest though. But that year I took my whole federal tax return and plugged it down on Ohio lottery tickets.

Ray:  How that worked out?

Alan:  That didn't work out at all. I kind of kid the people that listen to me that -- you know, now they don't think I'm the sharpest tool in the shed. So I -- kept me broke, kept me pressed through, I was worried about paying my bills, and one night I couldn't sleep, and I get up and I started to channel surf, and I hit one of these real estate infomercials, and I watched it, it got my attention. And I didn't have the money to spend on the home study system, because I spent my money that day on lottery tickets, but I picked up the phone, at the 2 o'clock in the morning, I ordered that home study system and became enthralled with real estate, that year I bought two properties and next year five, following year I bought eighteen. Since that point in time, I've done hundreds of real estate deals, but half the deals I do are without monthly payments.

Ray:  Oh, I like that part

Alan:  Yeah, and that's all because along the way, I found private lenders and that's how I fund my deals.

Ray:  Great. Can you tell us about -- well, what is private money?  Why should real estate investors actually try to use it in their deals too, like you did?

Alan: Yeah, when I was coming up through my real estate education I heard this thing about hard money lenders and private lenders, and I’ve been going to the local bank and get my loans -- but one day the regulators came in and took a look at the bank’s books and they said, "You can't do those types of loans anymore," what that did -- is that shut off the funding for all of us creative real estate investors within 24 hours. And so I had to do something else. I went on a line of credit, but -- you need a lot of money in this business, you max that out, you shut your own business down -- every year they can call that money due, and I didn't know what to do, I looked at hard money lenders, and they were very expensive and so I heard this thing about private money, but I thought it was the same as hard money at the time, but it's actually distinctively different. A hard money lender -- what they do is they set the rules. What we do -- private money is we get to set the rules. My mom had command of some money when my dad passed away and she did what most folks would do -- she took the money and plunked it down on a bank certificated deposit.  And she would drive 45 minutes one way, just to get the few pennies more on interest on that, because she knew she had to live off that the rest of her life. Well, I went to mom and I said, "Look, you're getting this ,[00:06:52.00 - inaudible] return on a bank CD, I can give you three four, five times what you're getting on bank CD, I can give you a mortgage, a promissory note, added insurance,  lender title insurance. I can pay you simple interest and pay you monthly, “and mom jumped for joy, and started to loan me money. So, to answer your question, private money is money that you borrow from a private individual and you get to set the rules on your funding. They don't set the rules; they let you do it -- at least lenders that I do business with. I said something earlier about -- half the deals I do are without monthly payments.  Let me talk about that for just a second.

What I found is that if you could find someone that had an IRA, or they worked at JOB and company offered a 401k program -- if that person has quit, retired or gotten laid off and - folks, listen up, you want to write that down - If you know someone that has a 401k and they've quit, retired or gotten laid off, they can take that money and roll it over into a self-directed IRA, which is what you want them to do -- a self-directed IRA. Well, as that money is in that IRA they can borrow money out of that IRA to live off of every month, but they still have a pile of money in there, they want to make grow. And that's where we come into play, where we can use that money on our deals. We can use that money on our real estate deals.  So, mom's money wasn't IRA money, I could just borrow a bank CD. But some people -- they move their money into self-directed IRA and you can also borrow their money, and the beauty of that is they don't need the monthly payments, like my mom did. If they want money to live off, like I said, they pull it out of IRA, but what happened is, I found these people didn't need monthly payments. Now, let me take you back in time, and maybe you're gonna get into this in a little bit, but let me go and talk about it now.

It's when I got started, the going rate was 15% interest -- I've been in real estate 20 years, and I had my first private lender two years into that.  So, yeah, you are right, that's a high interest. Well, over time the market changed and I got feedback from my private lenders that 15% was too good to be true, so I lowered my interest rate to keep them happy.

Ray: There you go.

Alan: It’s the best joke I got right there.

Ray: So, Alan, today -- what is the best interest rate that you're offering –your private lenders now?

Alan:  What happen was -- when that thing dropped, I paid a split rate, 10 and 12%; 10% if they wanted monthly payments and 12 percent if they would let the money accrue.  I have to be honest; I didn't think anybody would go for the "no payment" idea.

Ray: Right.

Alan:  But what I found was all these people that had these self-directed IRA's and that's exactly what they took because they were more interested in getting a higher rate of interest.  Now to answer your question, the market shifted again and I've got students that are paying four, 4 1/2, 5, 6 % interest.  The going rate I see right now is between 6 and 8 % throughout the nation, so.

Ray:  Is that with or without payments?

Alan:  Well, you know you can structure the business however you want to.

Ray:  Right.

Alan:  You could do 6% and no payments, or you could do 6% with payments and 8% without payments.

Ray:  There you go.

Alan:  You see, I was able to offer two interest rates because of my properties. I've got rentals and rent-to-own properties, and so I had monthly rent coming in and so I could pay a monthly payment to my private lender. But, I also like to retail property by fix-sell and so for those folks, they would be the no-payment ones.

Ray:  Oh wow.

Alan:  So it can be structured however you want.  You could use either one.  The answer to your question is you could do -- what I do is I either do a no-payment or I do a payment, or I will do a low interest and amortize the loan and keep the house.

Ray:  Wow.  So long-term kind of lender.

Alan:  Yes.  The beauty of this is that it fits for all real estate investors.  About 40% of my student base are commercial and the rest are residential.

Ray:  OK.

David:  Wow, I wouldn't think that it would be that high.  40% commercial, that's great!

Ray:  Wow!  That is good.

Alan:  Yeah I get a good portion of my folks that are doing commercial stuff.You know, I didn't either when I got into it. I didn't realize that, but once I got out there and started teaching, I see that it fits for anything.  You know, people want to buy an office building or 40-unit apartment complex or --

Ray:  Right, right.

Alan:  --or storage units, which are hot.  You know, they come to me to figure out how to get private money.  I don't loan money.  What I do is I teach people how to fish.  I teach people how to go out and get their own private money, and then they can use it for a lifetime.

Ray:  So let me ask you this Alan.  Let's say I found somebody and they have an IRA, we—they--get into self-directed.  What paperwork do I need to be able to make the lender feel comfortable and cover myself too on that particular loan?

Alan:  Oh, that's a great question.  You want the same paperwork basically that a lending institution would use, and let me boil it down.  It's not a big thick bunch of paper like they do.  For us, it's a mortgage, a promissory note, hazard insurance, lender's title insurance, and a disclosure statement.

David:  So it's literally five different things.

Alan:  Yes.  There are basically five things.  And on that disclosure statement, we ought to talk about that for just a minute.

Ray:  Yeah, lets.

Alan:  The “powers to be” that allow us to go get private money is called the FCC.

Ray:  Right.

Alan:  And I'm not an attorney--I don't give legal advice--so I had to hire an attorney many years ago to figure out what the rules are.  He researched every state in the United States, and I even had him do Canada because I've got students up there to.  When he got done he called me up and he said: "Hey, I want to thank you." I said "Why is that?" and he said, "Well, I'm done with the project, and I'm moving into my new house, and you bought it.”

Ray:  Was that because of the fees you paid him?

Alan:  Yeah.  You know you don't want to hear that from anybody, that you bought their house.  You know?

David:  That was good news for him!

Alan:  Yeah.  So what happened when I did that is that it set me apart from anybody out there even thinking about teaching private money, because I've got the rules for every single state and so Ray, when I came out and talked to the folks out there--your group--what I did was I shared with them the information on their state and encouraged them to go get an attorney to take care of that.

Ray:  So every state is going to be different, I assume.

Alan:  Yeah.  You know the beauty of it is there are only five rules typically in every single state, and that's one of the things my attorney found out, and the rules are very simple.  The problem of it is that real estate investors don't know what they are.

David:  Right.

Alan:  But once they find out what they are, they realize how simple they are.

Ray:  Right.

Alan:  And they just jump right in using private money.  On the disclosure statement, one of the things that you need to do with a private lender is disclose what you are doing.  My disclosure statement is nine pages long, and it's very simple.  It just tells them who I am, how the money is used, how they get paid back, what interest rate do I pay, what kind of property am I buying/is the money on and how I expect to use the property.

Ray:  Do you have a specific property identified at that point?

Alan:  No.  The disclosure statement tells them the type of business I am not what type of property I'm buying.

Ray:  Okay.

Alan:  No, I shouldn't say it that way.  Not the address of the property, so I can use it over and over again without changing it.

Ray:  So like "I'm going to buy a residential property or I'm going to buy commercial" I guess. Is that kind of what it says?

Alan:  Yeah.  In my case, it's ugly, stinky houses.  I don't say that quite that way in the disclosure statement, but you know--"Low-end property."

Ray:  Yeah, so let's say we've got the money and we've got the paperwork in place, now do they just hand me a check or do I go to a closing, or how does that part work?

Alan:  Wow.  I'm glad you asked that--that's a great question.  You know, people getting into this, they don't understand that.  They think it's okay to touch the money, but the problem is that we promise private lenders that the money is secured by real estate.

Ray: Okay.

Alan:  And therefore, if you touch that check, then that money is unsecured and you would be violating what you told the private lender.  It could be construed as committing fraud.

Ray:  Oh wow.

Alan:  It could be seen that way, so that's not what we do.  What we do is we have the lender send the money to a formal closing, that I set up. The money is put into escrow there and I order up money about 7-10 days in advance before I'm getting ready to close.  The lender needs to send "good funds" in, which means it needs to be a wire or a bank check--if it's a personal check then we're going to have a dry closing or we are going to have to let the thing sit there for a while until it clears.  So the money goes into escrow, we close, and what I do--I think you guys are going to love this--I always borrow extra.  In fact, everybody listening ought to write that down…"Always borrow extra".  You know, we are taught when we get into real estate that we earn our money when we negotiate the deal, but you physically don't get your money a lot of times until you sell the property.

Ray:  Right.

Alan:  In my world, I get the money on both ends.  I get the money when I close and I get a bigger chunk of money when I sell.  When I close to buy, I get a little chunk and so I always borrow extra money so when I go to closing, on my side of the paperwork, I will have enough money to rehab the property.  I'll have this extra money in case I missed my rehab--in case something goes amiss.  If something doesn't go amiss, then I've got extra cash the day I buy and that helps everybody’s cash flow.  Imagine doing a deal borrowing extra money right up front and having no monthly payments.

Ray:  That's great.

Alan:  Think about what that would do.

David:   Alan, do you mind if we ask how much extra you borrow?  Is there a formula for that?  Are you borrowing 10% -- are you borrowing five grand extra…like how do you determine how much extra to ask for or to borrow?

Alan:  You know, I just do it deal by deal.  I never got that fancy on it with a percentage.  You know, if I've got a deal and I want to borrow like $3000, I borrow that.  The highest amount that I ever took out was $17,045.

David:  Whoa.  Are you saying extra?

Alan:  Extra.  The day I bought.  In fact, let me tell you about that deal.

David:  Sure!

Alan:  What happened was I was sitting at my desk and this lady calls up and she says "Are you one of the 'We Buy Houses' guys?" I said, "Yeah, I am."  She said, "Well, I bought this property nine months ago and I've never bothered to make the first payment on it, and for some reason, the bank wants it back."

David:  Imagine that!

Ray:  Imagine that!

Alan:  She said, "I talked to the bank, and if I can find somebody to pay cash for this by the end of the month, they'll sell it to them for pennies on the dollar, on what I paid for it."  Well, I went over and took a look at the house and one of the things, when you hear "the end of the month" it doesn't sound too bad until you realize the end of the month is five days away.

Ray:  Whoa!

Alan:  So that would make some people pucker, I'll tell you, but if you've got private money, it's a phone call away.  In fact, I tell my students it's like ordering pizza.  The way I order money is the way you order pizza--that's how easy it is.  So I picked up the phone, I called a private lender, they sent in money to closing and five days later I owned that house.  A property that I didn't know I was going to buy on a Monday I owned on a Friday, and when I walked out of closing I had $17,045 to put in my bank account.

Ray: Oh my gosh.

Alan: See the negotiator at the short sale, there's so much equity in that house that I ended up making $3,.945 on the deal when I sold it eventually

Ray: Wow, that's sweet.

David: Holy cow, that's great!

Ray: Back on handing the money over,  I know in Missouri we use title companies in St Louis, is Ohio the same? Or do you use attorneys?

Alan: I just got off the phone with a title company just a few minutes ago before we talked.We got title companies, we use attorneys too, so -- yeah, whatever. You know, you want to use.

[00:20:53 - cross talking]

Ray: The other thing I was gonna say -- okay, so -- how do I go find these private lenders? I mean, it sounds so easy, how do I do that? I do I find private lenders?

Alan: Well, great question. You know, the heart of my system is teaching people how to attract and then convert people into private money. So that's exactly what I teach folks. I got a fortune on my first one because my mom was getting such a low rate of return on bank CD and -- in fact, if folks look at USA Today, the American newspaper, if you go to the money tab, there's a different tabs in there, if you go to the money section on a Thursdaytypically or maybe a Friday, in the bottom left corner on the front cover of the money section, it will have the national CD rates. The rates out there are horrible. When I see them down they double 00 2-2%, then to 3-3%, I mean a third of 1%. It's pathetic. You think somebody loaning a person £100,000 and that money sets out theredouble 3-3% and after four months they have got 330 bucks. I mean that would break [00:22:18 -cross talking] if a real estate investor wants to pay 7% at the end of the year that same $100,000 for that person  would make $7000

Ray: Wow.

Alan: So to answer your question on how to attract lenders, there's a number of different ways, in fact I have come up with 16 different ways to locate private lenders.

Let me take you down to two paths: one path is people that you know and what I would do is I would create power point presentation. When I was in Corporate America I would be giving presentations using power point every week. In fact, they flew me to Europe to give a 20 minute presentation once. So I would recommend you to create a power point presentation to tell your story and then meet people either at a restaurant and you know, if it's a mom you can meet them at their house, but I don't like meeting people at their homes because of all the distractions. Moms it's okay, but if it's somebody else out there, you know, like your Dentist or somebody, your child's teacher and you want to talk to them about private money, I don't like going to their house because of the distractions.  The dog running the house and somebody comes at the door, the kids and all that.

I prefer to do it at a restaurant and sit with your power point presentation and go through it. I have also got a special report that I give them, which is the typical 12 questions that are asked by private lenders. And so I cover them all and I give them a little brochure. You know, if you have got these questions, here's the answer. This is what I do. And the other thing I've got that I like to use is an audio business card. You know, some people like to read, like my mom, other people like to listen to CDs and things like that, and so I offer both and on the CDs is a 22 minute audio explaining what private lending is about and encouraging them to loan money.

And so --that's just a few of the ways to attract private lenders. Now you can't jump off this podcast and start advertising for private lenders, because that's one of those restrictions by the FDC. You have to ask for permission before you can advertise to strangers. I'm guessing here that, in the eyes of the FDC, they don't want your empire to grow so largely you hurt people that they don't know about it. And if you advertise then you can amass a lot of private lenders. But you can advertise, it's not hard, you just have to fill out the paperwork. Sometimes you have to pay a small fee, sometimes there's no fee, and after you get done with that you get the right to advertise.

A lot of times that is controlled by your state.

Ray: I know Alan you have mentioned that special, that power point presentation. I know when I first purchased your program that was what really got my business going. And actually you also have a credibility report you provide. Actually I used yours; I just changed my name a few times.

Alan: Yeah, you don't have to reinvent the wheel.

Ray: No, it was a great thing. It was –that's really made a big difference to me. When you come and talk to people, they might not think of you as a real estate person until you start show them the things you have done and the credibility report makes it look like wow this guy knows what he’s doing, look at his background -- it's a really good way to build credibility. Especially people that you know, some might now you as – for instance, one of my private lenders I've known him since he was probably high school, we played against each other in basketball. He was a coach for 30 years, he retired, had a bunch of money, he's been watching me do this. He looked at me as a basketball player, you know, guy and now he's looking into the real estate business: “Hey, this looks like a good place to put my money”. Sitting there, CD rates, 1.5% rates, whatever, and Ray’s going to give us a lot more than that. That, I think, that's the biggest thing I've got from your program was that credibility kit.

Alan: Oh, I'm glad you told me that. Let me share something with you that you might not know on how that came about,  what happened was -- this couple had a house for sale, and I went in  and I looked at the house and -- we were sitting at the kitchen table, they were motived sellers because the wife had a boyfriend. That makes them motivated I guess and they wanted to unload the house.

So what happened to me sitting at that table was -- in my mind I thought it was a done deal, I thought I had the house. It was a beautiful house and there was a lot of equity in it. And the wife said “Prove it. Prove what you have told us today that you can really do”. Now when I walked into the place I didn't have anything in my hand and so I left, agreeing to get them some  information, went back and I pulled together a lot of information, and when I was back, by the time I got back my competitor owned the house.

Ray: Oh no.

David: Yeah.

Alan: So they agreed to sell it to him and so ever since that day I realized the importance of having something that I would be able to communicate in writing, some of the reasons people the sell the house should loan me money. And so when I started working with private lenders it was a natural thing for me to take that same credibility kit and let them look at it, and if they want to keep it they can but normally they don't. Normally what they do is they will thumb through it, they read a few things and give it back to you. But what it does is that it raises the confidence in them loaning money to you. You see, private lenders loan you money based on the fact that they trust you.

Ray: Exactly.

Alan: And you need to know that. I know you do, and so that's where that credibility kit comes in. I thought you did a marvelous job explaining what it has done for you.

Ray: It has really, really helped my business a lot, Alan. It has given me the confidence to go talk to people that may not know me as well and to be able to get funds that way too. You know, one question I do have: so let's say I'm in Missouri and I have a buddy of mine in California who wants to loan me money, is there any rules that goes against crossing any lines?

Alan: Yeah, what happens is, there’s kind of two levels in the FCC. One is the federal level, the other is the division of the FDC it was in states. But when you go across state line, then the federal FCC wants some paperwork filled out and it's free. I'd give the form right now so folks can write it down, it's called 504 ragD and I got that from my attorney. I will say that I'm not an attorney; you should go get legal advice. [00:29:44 inaudible]. What I'm talking about is that you have to work with FCC attorney, not your real estate attorney, because just like doctors, there's different specialty: there's a chiropractor, a heart surgeon, a general practitioner, so it's the same with attorneys, they have different expertise.

So -- yeah the 504ragD is a form you can download off the internet, easy to fill out and that allows to cross state lines. You filled it out, it's free, you turn it in and you are good to go.

David: Is there any rules about how much money you can borrow from private lenders?

Alan: There is, that's a great question! There are rules, ha! How do I word this? There's different levels based on what you want to do and, for example. If I want to borrow money in my state, and most states are like this, like we can borrow up million dollars, but if I want to go unlimited I have to fill out some paperwork and then I can go unlimited dollars; which would be called a private placement memorandum. Some of you might know that as syndication.

Rules on that are 506 six rule C and 506 rule B. 506 rules C: you can advertise and with 506 rule B you cannot advertise, but you can amass unlimited amount of money. And so, about -- I told you about 40% of my student base is commercial, about 25% of that 40 would be used in PPM’s. Where they want to go unlimited. So that's a good question because people get into this, they don't know that there's some thresholds out there.

Ray: That allows you to pool private money then too?

Alan: Oh yeah. Yeah. You can pool money within your state, but you got a million dollar cab, you have to fill out paperwork to do that.

Ray: [00:32:00 inaudible] … if I remember correctly. But that should be checked by an attorney.

Alan: Yeah, I think that's 35.

Ray: It might change.

Alan: Yeah. The other thing you need to know, for folks out there, is that like, in my state, I can go get private lender in the next ten minutes. And most states are like that, you can get a private lenderinstantly and then you can go up your million dollar cab, and then at that point if you want to get more money, then you have to fill out some paperwork and go above that.

Now there's 13 states that, before you get a lender, you need to go fill out a little form, a  state form, and pay a fee – I think they do it for a fee, that's a personal opinion, then you can go get a private lender right after that. But you need to know if you live in one of those 13 states.

David: So Alan I wanted to ask you if [00:33:12.8 inaudible] open the door recently on advertising.

Alan: Yeah! What happened back in the first quarter of 2012, the Congress forced the FCC to make some changes and my understanding is that at the FCC weren't really excited about that because they liked things the way they were. What happened in September 2013, they finally rolled out where people could advertise and it gets back to that 506 rules C that I talked about. And that's exactly what you are talking about. The PPM, which is called a private placement memorandum, what happened on that was people could, before September 2013, they weren't allowed to advertise using that big hammer and I  --personally I thought that was silly because you got unlimited money, it seems like you should be able to advertise, but they weren't. Congress forced the FCC to allow that and so they rolled it out and they wanted to retain the old way which they named it a rule B and they also created a rule C where they can advertise.

And you’re working there with what’s calledcredited investors. Now what Ray was talking about a little bit before about the 35 folks, that's still on the rule B. So you can have 35 non-credited and the rest has to be accredited. And with the rule C is that they are all accredited investors which means that they are worth, their net worth is a million dollars not counting their personal residence. Or they make $200,000 dollars a year and maybe expect it next year.

Ray: So I guess this means that they should know what they are doing, is that right?

Alan: Exactly. Yeah, what happened is that, in the eyes of the FCC, we are professional real estate investors and we are looking for skilled and savvy lenders, and people that have amassed that kind of net worth or earning power should be pretty savvy. So therefore, they relaxed the rules on lenders who do business together.

Ray: Let me ask... are you familiar -- I see a lot on the wire today about crowdfunding. Is that something you know some things about? I just see all the time and it’s curious.

Alan: Yeah, I created – when they first rolled out  -- I created and eBook on it so yeah, I've got some knowledge on that -- but here's the deal: when you are crowdfunding and you go out and you go on this portals, some place where you can advertise, they've got some rules, so you need to understand the rules, and then you go out and you put your offer out there, typically you would create a video that explains your offer and maybe you'd give away some prizes or whatever if you reach your goal and things like that to people. And you market it; you have to drive traffic to that. Now, that takes a little bit of work, a little bit of time. In my world I can get a private lender yesterday, just by knowing the words to say and going out and talking to somebody. And I could have money really, really fast. And not have to wait all that time

Ray: In that case you have to build up to get your money, sounds like eh

Speaker 1: Yeah, exactly. And I am not putting crowdfunding down, because I know it's exciting for some folks and things like that, but in my world it's just not worth the time.

Ray: Yeah, okay

David: Okay, interesting

Ray: So Alan, I appreciate your time. If you were starting over, like a lot of our students are just now starting out trying to learn the business. If you were starting from scratch, say tomorrow, what advice would you have for a new investor?

Alan: Two things. One is I would bring private lenders into my life right off the bat.

Ray: Yeah, definitely.

Alan: You know, it took me a while to understand, to learn it and all that, and then probably get a couple of private lenders. And after I got two private lenders it took me another four years [00:37:56.8 inaudible] my language B before I got my third lender, because I didn't see the power and the potential of that juncture. It's a shame because the wealth building I lost over the years because I didn't embrace the private lender concept.

I wouldn’t do that, I would get private lenders right away, -- and the other r thing I would do, I would work on my education and I did that. I worked on my education and it was exactly the right thing to do. I did live events, I got home study systems, I went to a lot of one-day long workshops, and I was just a sponge for getting my education.

Alan: Yeah, and that's the  thing -- you know, to our students, we teach them --  join a local club,  a local REIA, get out and see some people, to get into real estate look at it as another career change if you are not a real estate person, we can't try to teach people that, it takes a while. You know, you see all these people online saying “In two days I made a million dollars”. I mean, it's just crazy things, while in reality it takes some time.

David: Oh yeah, it does.

Ray: Okay, so -- what else do we have here?

David: I just have one more quick question, the FCC, about the structure of it. So who does the FCC refer to? And like -- how are they structured?

Alan: Well, the -- I wanted to know that too. I ended up having my attorney create four audios on that for me to give me the information on that. But, the federal FCC is a massive organization

David: Regulating [00:39:16.23 - inaudible] security in exchange nationwide, right

Alan: Yeah. They also have things coming across the pond too, things from other countries and all that. So -- but every state then -- will have their own -- they call it the division of the FCC which is in every single state. So here I have got the Ohio division, the FCC.

Now sometimes, I have noticed a couple of states that have given it a different name, but it is actually the same department, the same function. So what they do is they control commerce within the state. The federal FCC will cover it when it crosses the state line

David: Gotcha

Alan: In a nut shell.

David: So who do they report to? Do they report to the congress? Or is it just the governor then? I don’t understand the structure of it

Alan: Well -- within the state they work closely with the attorney general's office

Ray: Okay

Alan: At the top level I think it is a DOJ but I’m guessing

David: Sure.

Ray: Yeah, that is what I guessed too

David: Okay, cool

Ray: So I guess -- I appreciate all the time you have given us, Al. I kind of want -- I know our students will be glad to get some information. Is there any parting words of advice you have for any of the new guys trying to get into the business

Alan: Yeah, I -- every chance I get I tell my students this -- I got a little saying. 'Education is the foundation to your real estate business.

Ray: Oh wow

Alan: And -- yeah so -

Ray: Say that again so I can write it down

Alan: Okay, 'Education is the foundation to your real estate business'

Ray: Well said

David: Okay, awesome

Ray: I like that

David: Is there anything you would like to promote? You can share some information with our listeners, our viewers -- our students as well. How -- they might be able to contact you or -- any courses they you are offering that they could purchase. Can you give us some information about how they can reach you, and maybe purchase one of your courses

Alan: Yeah, well a couple of things. What if I give them something for free

David: Even better

Alan: How about a free eBook on private lending

Ray: That would be awesome

Alan: If everybody writes this down, it is 'www.alancowgill.com/home' they can get a free eBook on private money and further continue this conversation. Continue education on private money

David: Awesome!

Alan: Okay and the second thing is that you talked about my products. If folks go to 'www.privatelendingmadeeasy.com' there is a couple of things there you need to know. One is you can sign up for 35 e-coaching lessons that I have put together on private lending and real estate.

David: Sweet.

Alan: They can sign up for that. And there is also -- another place where they can -- sign up and there is five items that they can download. Like I said something briefly about money from across the pond. Well that is called RegS, I have got a little -- students ask me about that, I have got a little eBook out there, couple of pages actually, not real big, but enough to get familiarized with it.

David: Sure.

Alan: And some other stuff, some other cool stuff out there. Downloadable CD, things like that. So you get more free training there.

Ray: Another thing I remember -- recently, didn't you launch -- you identified private lenders that students can go in -- you identified some in your area through a new program you just started not too long ago?

Alan: Yeah, I got -- when they get -- I don't do it until they get the system because --

Ray: Right, I understand.

Alan: I make sure they have the tools to manage the lender. And so -- my -- the system I am known for is my premium system. When folks get that, along with that they get a website that is updated monthly with people that have loaned money, throughout the United States -- right in their backyard too. So you got private lenders right there at your fingertips on this website.

Ray: That's amazing. Alan, I really want to thank you for joining us today. I appreciate everything you do to help the real estate industry and -- being the expert in private lending I think it has opened up a lot of people's eyes and it has helped my business greatly to grow to where we are at. So I want to thank you and -- I know David here is --

David: We just appreciate having you on today and for your time. All of our students, listeners and viewers are going to be appreciative as well so -- thank you very much, Alan we appreciate you.

Alan: You are more than welcome, I enjoyed it. I love talking about private money.

David: I want to end this out with a closing quote, I know you have already said it a couple of times, but I want you just to repeat it one more time. Go ahead and give us the ending quote for the podcast episode today.

Alan: Sure yeah, what I tell folks is, "Education is the foundation to your real estate business".

David: Love it.

Ray: Thanks guys.

David: Awesome. Thanks, Alan we appreciate it.  Thanks for listening everyone, until next time.