Raising Private Money with Max Keller | 444

Max Keller is a real estate investor, best selling author, and highly sought after consultant, speaker, and expert panelist on the topic of lead generation and marketing for real estate investors.

In just a few short years Max went from being a full-time high school Math teacher to flipping over 100 houses. His unique marketing approach landed him onstage with Robert Kiyosaki being presented with the 2019 Industry Innovator of the Year Award.

Fueled by his passion for real estate, Max is still a teacher at heart, and today he is going to share a strategy that’s working right now – in some of the most competitive real estate markets across the country – transforming ordinary inventors into the TRUSTED EXPERT in the eyes of motivated sellers and private lenders.

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Chris Miles (00:08):
Hello! My fellow Ripplers. This is Chris Miles, your Cash Flow Expert and Anti-Financial Advisor. Welcome you out for a wonderful show today. A Show that’s for you and about you. Those of you that work so hard for your money, and you’re ready for your money to start working harder for you. Now, you want that freedom. You want that cash flow, that prosperity today, not waiting 30 or 40 years from now. If you’re lucky in the stock market, hoping that someday you might be able to retire and have some sort of crappy fixed income freedom. That’s not what we’re here about today, guys. Cause we’re here about creating freedom and cash flow now. So you can use those years and the things that you love to create a life of living of purpose of legacy, and be a Rippler by creating a “ripple effect” through the lives of others, by blessing them with the gifts and the talents that you have versus just living in survival.

Chris Miles (00:55):
And guys, thank you so much for allowing me to create a “ripple effect” through you. Because through this show, you guys have been amazing. You’ve been bingeing, you’ve been sharing with others. The show just keeps growing and that’s all because of you. So thank you for doing that. And for applying these things in your life, as a reminder, check out our website, WWW.MONEYRIPPLES.COM There’s again, the great blogs on there and members subscribed, not just to our show, but even to our YouTube channel, you can also see there on our website. So check it out today, guys. So I’ve got a special guest here, so I’ve got Max Keller. So Max here, the thing that I love is that this guy has so much experience in the real estate space, right? He’s been an active investor for many, many years. He’s a real estate investor.

Chris Miles (01:34):
He’s a bestselling Author. He’s got tons of books out there. He’s a highly sought after Consultant Speaker and an Expert Panels on the topic of Lead Generation and Marketing for Real Estate Investors. So if you’re an active real estate investor, this is the guy you need to be following. By the way, in just a few short years, Max went from a full-time high school Math Teacher position to flipping over a 100 houses. His unique marketing approach led him on stage with Robert Kiyosaki being presented with the 2019 Industry Innovator of the Year Award ,field by his passion for real estate. Max is still a teacher at heart and which is something I can definitely relate to. And today he’s going to share a strategy that’s working right now. So guys, the big thing I want to talk about here is so many of you guys will say, all right, I’ve got so much money, but how do I get more? How do I get more leverage, right? How do I get more OPM if I can’t get it from the bank? Where can I get it? And that’s really the topic of the show today. So if you want to figure out how to get more cash in your hand to be able create better returns, this is who we’re talking to here. Max Keller. Welcome to our show, man!

Max Keller (02:34):
Hey Chris! Good to be here. Just glad it’s a great day. Great weather. And we’re just going to make it happen.

Chris Miles (02:41):
That’s right, man. We at least are not being hit by hurricanes. That’s what matters, you know,

Max Keller (02:45):
That’s right.

Max Keller (02:46):
That’s pivotal.

Chris Miles (02:48):
Yep.

Chris Miles (02:48):
So tell me like, what how’d you even go from Math Teacher to be in Real Estate Investor? Like what was that jump? What, made that happen?

Max Keller (02:55):
Sure. Yeah. You know, I was teaching Math and I really enjoyed it. I figured that I was gonna be a Math Teacher my whole life. But I wanted to, you know, make it extra income, probably like a lot of people, you know are listening to the show. And so like a lot of people I liked, you know, the house flipping shows, I met some local mentors and kind of always had the mindset that if I saw somebody else doing something, you know, I could do it too. And you just really just need the knowledge. I mean, you need a formula, you know, you have to know what you’re doing. And you know, I had a growing family, you know, you have a large family and you know, I did too. I had we had just had our fifth child. And so, you know, salary wasn’t really enough, you know, and I wanted to have more time, freedom and more passive income.

Max Keller (03:42):
So yeah, just started dipping my toes into real estate. You know, I started out wholesaling. Then I was flipping about one house at a time and then I started flipping multiples and then, you know, things kept going, you know, really good. The problem was is that my deal flow was exceeding, you know, my funding that I could handle on my own. So I had to reach out to, you know, to banks. I had to reach out and get more financing so I could do more deals and scale up my business. And this was a new concept for me. And, you know, there’s, you know, tens of thousands or hundreds of thousands of other real estate investors like me who are kind of in the same predicament all the time, especially, you know, now with what’s happening with the, with the virus and the disruptions.

Max Keller (04:27):
There’s a lot of, there’s a lot of houses that need to be rehabbed. I mean, there are every year people move out of them. And so there’s a huge market for people, active real estate investors who borrow funds to revitalize these neighborhoods. And so, you know, I started out going the traditional route. I used, you know, all of my, you know, lines of credit and all the things that I had I qualified for, you know, that I went to community banks and I found that they were really, you know, they, weren’t very flexible, especially now, you know, the lending is really strange and are really tricky. So I get in with the community bank route and then and then I started using hard money and hard money is a good place to get started, you know? And it really helped me understand that relationship, but, you know, I had local, I would talk about what I do and I had local business owners that would reach out to me and say, you know, how could I get involved in this?

Max Keller (05:23):
And they didn’t really know what private mortgage lending was and you know, and how it even works. So their idea of getting into real estate was like buying a rental. Like if you find me a rental, you know, can you, can I buy it and can you manage it? And, you know, so there’s just like, I think that there’s a lot of people out there. I know this is why it was for me. They kind of know like real estate, they’re making connections between wealth and real estate cash flow and real estate, but you know, what are like the actual step-by-step process to get there? And that’s the part that you is a little bit fuzzy. So yeah, just, I was flipping more homes and I started meeting people in my office, building people at my local community that wanted to get involved.

Max Keller (06:06):
You know, I started learning the private lending system and creating, you know, a program for my own and started using private funds to, to take down, you know, the deals for short and long-term deals and, you know, help, you know, investors make great rates of return. And now we’ve expanded it to an education program where we actually my partner, Brant, and I wrote a book and we use it to teach people how to get involved in the space because, you know, there’s, you can’t just give your money to somebody and you know, it’s not hope estate it’s real estate. So like there are steps, there are checks and balances. And if you’ve never been in real estate before, it’s a great thing. It may be great for you, but I just encourage people to get the education, get the knowledge, really understand, you know, details matter, you know, the deal matters who you’re working with matters. So that’s been the journey for us. You know, we flipped about 120 houses in the last few years here in Dallas Fort Worth. And, you know, we have rentals and now just, I think being a teacher turned into a whole another mission, which is now we’re on this mission to educate people on private lending and how it works and you know, what mistakes to avoid.

Chris Miles (07:21):
Yeah. It’s a big deal. I mean, I’ve done it personally as well, like before the last recession. And that was not fun, especially when it was in a real estate deal that depreciated and then couldn’t get their money back because there was no liquidity. Right.? And that was a nerve wracking place. And there’s a lot of liability behind that. I mean, there’s, I mean, you don’t do it right. I mean, it can be a big risk. It’s, it’s amazing. Like it creates massive leverage and it’s awesome. It’s way better than using banks. Cause it’s a lot less red tape to go through, but I mean, you got to be careful.

Max Keller (07:52):
Yeah. The active, you know, both people do, you know, the active real estate or, you know, from, you know, as you know, when I’m sitting in the seat. Cause I do both, I lend, you know, my own money and then I’m active real estate investor. I borrow.

Chris Miles (08:04):
Yeah.

Max Keller (08:04):
And so, yeah, you know, when you’re borrowing are the mindset that we, me and Brant have and in our students who co-author some of our educational books, they don’t trust the experts all over the country. You know, the mindset that we want them to have is, you know, you have to be able to put the odds in your lender’s favor and just do everything that you can to, like you said, stay liquid and make sure that, you know, you’re borrowing somebody’s money and this is a big deal.

Max Keller (08:35):
And so what are your, you know, plan? What’s the plan B you know, what’s the backup plans? What are the contingencies? What are, you know, do you have the capacity to make somebody whole even if, you know, you don’t make a lot of money on the deal or lose money on the deal, you know, Brant and I have been thankful the way that we structure our deals going all the way back you know, Brant, I think for 13 years to where we’ve never you know, we’ve been able to pay every single lender back and that’s super important. There’s kind of two components to that. So if you’re passive and you’re thinking about maybe getting involved in real estate, you know, step number one, educate yourself, really understand, you know, how does that a borrower? How does that a deal?

Max Keller (09:18):
You know, how to make sure that you have your documents set up to where your, you know, your money is, securitize. And it has, you know,

Chris Miles (09:27):
Right. Has collateral.

Max Keller (09:29):
Yeah, that has the collateral. It has the correct forms, you know, and they’re prepared by the right people. You know, these are details matter. So that’s, I would just say education, you know, first and then, you know, make sure that you’re working with somebody that number one if a deal goes sideways, they take responsibility. You know, we take personal responsibility for the deals that we borrow. Some people don’t, that’s okay. Just find out. And then you know, so people don’t pay investors back for one or two reasons. They either don’t want to, the deal went sideways and that was the risk they took, or they don’t have the capacity. And so, you know, if you, people who get involved in private lending, you know, does the person that you’re lending to have the capacity to pay you back, if something goes wrong in a deal and go sideways, even if they want to? So those are some things that we, you know, encourage people to really learn about as they’re going down the journey.

Chris Miles (10:26):
Yeah. I always remind people that they’re being the lender. They got to think of themselves like a bank too, you know, like there’s gotta be assets there. There’s gotta be something to back it up, you know? Or what if there’s something does go wrong, what’s plan B or even plan C case even plan B doesn’t work. Right? You know, where’s there some recourse, do you have even other assets that could possibly have claim? Usually that’s going a little bit farther than, than what most people will do and what you maybe even need to do. But because if the deal is good, if it’s got equity, I mean, there’s different things you can analyze to see if that’s good, but definitely on the borrower side, I mean, there’s a lot of responsibility there. So let’s kind of go into that as well as is. Why would we want to borrow private capital? Like, why do you think there’s such a benefit to that with despite all these risks and everything else? Why should we do it?

Max Keller (11:09):
And so you’re one of the great ways is that, you know, just from, you know a benefit to everybody standpoint, you can help a lot of people, you know, there’s right now that are, you know, investing in the stock market. They don’t feel like they have control. And they’re not sure if it’s going to go, you know, up down sideways or diagonal. And so, and they don’t even know about this. It’s like a secret club. And so, you know, when we bring people into our program, you know, they’re so excited. It’s the peace of mind, you know, and they know that real estate is there and, you know, if it’s insured correctly and they’re named, you know, on the insurance policy, like, you know, they just, it just feels better. It’s really the way to explain it.

Max Keller (11:51):
So from the barrower’s standpoint, it’s great because number one, working with private lenders you build relationships where, you know, sometimes you work at banks and other people you know, it’s kind of, you know, it’s just a corporate thing and it’s kind of hard to really get that continuity. So it’s great to build relationships with like-minded people help them. It’s great. As a business owner, because you can do more deals, obviously, if you have more funding, you know, it takes money to do deals and to make big improvements. And so, it’s really how you have it structured. If you have it structured to where it’s a win-win, then it’s good. I mean, you obviously have to know what you’re doing. I tell folks, you know, who are active real estate investors, if they’ve never done deals or they haven’t done a lot of deals, don’t borrow from private lenders go and borrow from hard money lenders.

Max Keller (12:44):
Go more from banks, borrow from people who are, you know, looking at this all day. Because the last thing that you know, that you want to do is not qualify for a hard money loan or a bank loan, and then, you know, borrow money from a private individual. That is not what you want to do, you know? And the same thing, you know, a lot of times the private lenders, they’re not as up on this, they made their money in something other industry. They don’t understand real estate that well, and they’re just trusting the person you got to do more than that. You got to know a little bit about what you’re looking at, because you may have somebody in front of you that just got turned down from a hard money lender. They got turned down from a bank you’re kind of their last hope. And that’s not probably the deal that you want to invest in. So it’s just, it’s an education, there’s education involved on both sides. And that’s what it really takes to make it a win-win.

Chris Miles (13:40):
Yeah. I agree. Yeah, you know, the thing that’s amazing. I mean, not so much my clients, because my clients usually want double digit returns. Right? But I’ll tell you like the general population, they horribly question double digit returns. They think that it’s, there’s like, it’s gotta be a scam. If you’re going to pay me 10, 12%, it can’t be legit. It’s too good to be true. Would you tell them, Hey, we’ll pay you a steady income of 6% or 7%. They’re all over it. You know, they think that’s great because that’s more than I can pull out from my mutual funds where I’m making two or 3% a year. I can make double the cash flow, the double, the income from the same money. Right? And so for them, it’s like you said, it’s a big win-win, but it’s also a win for the person, because if they’re only paying six or 7%, unless you stink at real estate, it, you should be able to make a lot more profit than that.

Max Keller (14:26):
Right. And you know, the other thing about that, a lot of the demand from people who find out about private mortgage lending to real estate investors and never heard of this or done it before, a lot of the demand comes from the fact that they’re not just looking for return of you know, they’re not just returning, looking for return on their investment. They’re looking for return of investment.

Chris Miles (14:49):
That’s right.

Max Keller (14:50):
But with some of the other, you know, we’ll just use, we’ll just pick on the stock market for right now. I mean, it can, I guess, theoretically go to zero and I’m not saying that house prices can’t go up or down, you know, I’m not a CPA, I’m not an attorney. You know, I don’t, I can’t predict the future, but people feel like, okay, I’m looking at a physical building here and I just don’t know how it would ever go down to zero.

Chris Miles (15:14):
It has an intrinsic value.

Max Keller (15:15):
Yeah.

Chris Miles (15:16):
Yeah.

Max Keller (15:17):
A utility. And,

Chris Miles (15:19):
Yeah.

Max Keller (15:19):
So that’s really, you know, a lot of the draw and the benefit is, there’s been folks and you have been, you do this long enough, you know, who lost, I mean, at least in the last recession, the major one, right? Or, Oh eight you know, they lost a lot. And you know, so they lost a lot of principal. Wasn’t just the interest. And so those are some, that’s really what drew me into it. I mean, that’s what, I didn’t even know that existed. When I got into real estate, my goal was to get one rental a year. I thought if I just stayed in that teacher, get a rental a year, you know, that’ll do something. And then after 20 years, you know, I’ll have some stuff I’ll just, it’ll be paid off and that’s pretty different ways to go.

Max Keller (16:02):
But then, I like lending now from my own, out of my own bunnies, because it’s so passive, you know, I don’t, I can drive by the house, you know, if I’m lending to somebody local, it’s insured, you know, if there’s a buyer or something like that, I can go check on the property. It’s somebody that I know, like, and trust, there’s always risk in whatever we do, but I, that’s why I do it is because it makes me feel good. And and it’s just, yeah, just feels like you know, once you know, what’s going on, I don’t have to spend much time in it. Like I don’t have to go check on the house every day. I don’t have to spend hours doing research. You know, I mean how to do research on some of these companies. I just, you know, I already have a relationship with the borrower and I look at their deal and then I send the money to the title company.

Max Keller (16:55):
And then, you know, I get either my monthly interest or, you know, some of my borrowers, I get paid monthly, you know, some of them, we just let it accrue until the end. And then, you know, that’s not a sign the release form at the end, you know, for the payoff. So it’s like, it’s very passive. One thing, you know, Chris, you know, as well as me, we’re both really into time and how it’s, you know, in spending time with our families and not just being a, you know, a wage slave.

Chris Miles (17:25):
Yeah.

Max Keller (17:25):
And I was really important. And so it’s not just return. Return is important. Okay. Return of your investment, then you know what the return is going to be on it. But then also is how much time do you have in the deal? Because if two people make, you know, 10% returns and it’s a certain amount of money at the end of the year in two different investments, they didn’t make the same amount.

Max Keller (17:48):
They had time costs involved. They had different emotional costs involved. So it’s just, so I just, you know, just from my own personal experience, that’s what drew me to private lending was because of the time leverage. I don’t have to put a lot of my time in the emotional costs for me, isn’t very high because I already, because I’ve researched it and learned. And so I know what it looks like. So I’m going to bed at night fine. And that’s, you know, so that’s what people can, you know, aspire to if they’ve never done it before.

Chris Miles (18:19):
Yeah. I love it like that leverage of, i mean time and energies to me is way more important than money. Right? And that’s the key right there. And yeah, to leverage that time to go say, Hey, now I can get the returns, you know, depending on what they look like. Yeah. I agree. And I definitely love what you said too. I mean, it’s more important to I, this is a mantra I use of my clients. It’s more important to get return on your money or return of your money than as the return on your money. Right? You know, that’s always, the first priority is how would I make sure I get my money back? And then secondly, do I get return on top of it too? So, yeah. Great advice. I really appreciate it, Max. If people want to, like, you know, either like understand more like how to do this for themselves. And I know you’ve got a lot of great educational tools and things like that, how would they go about reaching out to you or following you more?

Max Keller (19:02):
Yeah. So I’ve got a couple you know, contact emails and things like that. So why don’t I just I’ll one of them is MAX@SAVIORREALTY.COM So they can send me an email there. If they want to get access to some educational materials, we’ve got some of those. And then you can just, you know, probably easiest where I’m most active Is Facebook. So you can just look me up there, Max. N as in Nicholas Keller FACEBOOK.COM/MAX.N.KELLER And all my stuff’s on there, send out a message and yeah, I hope it works out for, you know, everybody just explore it and learn about it. You know, my partner, Brant and I have a book out that teaches people how to invest in private lending if they’ve never done it before. And so we, more than happy for, you know, folks who reach out to send them a copy, you know, digital or print, you know and get into their hands. No problem.

Chris Miles (19:52):
Awesome! Love it, man. Again, thank you so much for your wisdom and your experience and in your advice here, this has been very valuable, so I really appreciate it today.

Max Keller (20:00):
Hey, thanks for having me on!

Chris Miles (20:02):
So everybody else remember, it’s not just, it’s not enough to just be a hearer of the word. You got to be a doer as well, right? It’s not just enough to like hear it and say, yeah, I get this it’s about, can I actually apply it and make it work in my life? So it really translate into real wealth. So that’s my challenge. You guys today make it a wonderful prosperous week and we’ll see you later!