Alan Cowgill:
Well, I didn't. It took me four years to learn that. And the reason being I had this J-O-B and I was going to the bank and I was getting loans from the bank to buy property. And I knew I should get on with this private lender thing and it was working for me. I just procrastinated to be honest with you. And so if there's one message I could leave to folks tonight its when you get off this call is don't procrastinate. Get out there and find private lenders because you can use it in so many facets of this business and your life will be so much easier and the money is so much cheaper overall and the pay low is way, way, way reduced because private lenders are great folks to work with.

So to answer your question I quit my job. I wanted to become a full-time real estate investor and in November of 2001 I quit. And the company had one of those sweetened offers if folks would volunteer and I'd been with the company for 17 ½ years and I raised my hand and took the package and went out on my own to become a full-time real estate investor and I'll be darned the first thing that happened was the rental market here softened and I had to evict some tenants and I ended up with a bunch of empty properties and I hit a – I had a $10,000 negative cash flow going on.

And boy that'll wake you up, Jeff.

Jeff Adams:
Yeah, that it will.

Alan Cowgill:
And so I realized that I was in trouble and that I needed to do something quickly and the banks wouldn't loan me money any more and that's where I'd been getting all my loans. And you know there's a real dichotomy that I found out there in the business to where people that – real estate investors are honing their skills getting an education and along the way they're borrowing money from banks but their goal is to quit their job. But when they quit their job, then banks won't have anything to do with them. You know? I mean it’s a real dichotomy that I see a lot of real estate investors go through and that's what I went through. Because I quit my job and now the bank where I was getting my main source of funds to fund my real estate deals wouldn't – didn't want anything to do with me because I didn't have a paycheck coming in.

Jeff Adams:
Yeah, yeah.

Alan Cowgill:
So I realized that this private lender idea was the way to go but there wasn't a roadmap back then in 2001 and so I had to figure it out for myself. People – educators will tell you go find private lenders but they wouldn't give you a step-by-step program to go do that.

Jeff Adams:
So you basically learned from the School of Hard Knocks, then.

Alan Cowgill:
Yeah, that's exactly where I – that's exactly right. So what I decided to do was I wanted to leverage my time and I decided to have a meeting, and I served the folk's lunch. I'd get up a bunch of people in front of me that had the wherewithal to loan money and I'd tell them my story. So what I did was I ran an ad in the paper and I'd sent out a postcard and I invited people to my luncheon and I also created a PowerPoint slide presentation to tell my story.

And so when I got to the first luncheon – you gotta realize, too, Jeff I didn't know if this was going to work; I didn't know if I'd be in the room alone or if there would be 150 folks in the room. The way it worked out was there was 18 people there and as they were coming in the room –

Jeff Adams:
Real fast, Alan how'd you get those 18 people there? How'd you do that?

Alan Cowgill:
Yeah, good question. What I did was I realized that people like my mom desperately needed guys like me that would pay them a high rate of return and so mom had her money on a certificate of deposit so I figured my target market would be people with CDs. And so what I did was I went to a list broker. And a list broker is a company that will sell you people's names based on different criteria that you ask for. And so what I did was I asked for people that had a money on a certificate of deposit and that they lived in my county and they bought things through the mail. I thought that was kind of a cool ad there at the end because I was sending them a postcard and I wanted people that would buy.

So the list broker sent me a name of 1,074 folks of people that had certificates of deposit and so I mailed them out a postcard and then I also ran a little ad in the paper about 3x3 and the headline on the ad was, "Tired of low CDs?" So I was targeting the people with certificates of deposit that wanted to change the rate that they were getting and I could offer a higher rate of return.

So based on the postcard and the ad, I ended up with 18 folks, and as they came in I had a sign-in table there and we would hand them information on IRA money because – and you – and I might want to talk about that in a little bit because as real estate investors you can use private lenders' IRA money. So they came in and I had a little table set up with information about private lending and I had a little bowl of pretzels there so they'd go over and get a pretzel and they could read up on my program. And really what I was trying to do was build credibility before they ever met me.

Because if these people got money down at a bank on a CD, you know, the bank has a lot of credibility right off the bat. Well, I had to – I realized early on that I had to build credibility, so I did the things I shared with you, and then also I created a credibility kit and in that kit it gives them a letter from me and then also there's a letter on what the company is doing and what my programs are, which is single-family houses and small multi-units and then also if I had testimonials I put those in there from people that I'd bought and sold houses from. I would also put in certificates where I'd been to a seminar or a boot camp and that certificate would tell the name of the boot camp and who ran it and the location and in this business we end up going to a lot of different boot camps, at least I did, so I had a lot of certificates in there and that's pretty impressive on the getting a solid education.

And then I also had a special report on – its 13 pages and 15 questions of a Q&A on private lenders, so the credibility kit would be there and they could leaf through that and I had pictures of houses on the cover and then also what I had was a slide presentation going on of before and after pictures of houses.

Jeff Adams:
Sounds great. Sounds like you really built up your credibility with that.