*** Guest Appearance
Credits to:
https://www.youtube.com/@TheCREAMrealestate
“How to raise private money without asking for money”
https://www.youtube.com/watch?v=a58toe2v0oo
Raising private money is often shrouded in misconception and apprehension. The intriguing podcast episode featuring Jay Conner, a seasoned expert in the field, hosted by Dave Payerchin and RJ Pepino, dismantles these barriers. Let’s delve into the wisdom shared on the transformative power of mindset, strategic approaches to capital raising, and the pivotal role of education in dominating the real estate market.
Mastering Mindset for Success
Jay Conner begins the conversation with an essential reality check – that the journey to successfully raising private money starts with owning the “real estate between your ears”. This metaphor encapsulates the fundamental idea that confidence, trust, credibility, and reliability are the cornerstones of exciting investment interest in potential partners. Jay stresses that one must exude these qualities from within to attract private lenders.
Central to this is the mindset transformation from viewing oneself as a supplicant, dependent on the whims of traditional banking avenues, to adopting a posture of partnership and opportunity sharing. As Jay reveals, “The power is in the questions.” Asking who within your network can assist with your funding needs opens the door to new possibilities – a strategy that proved invaluable when traditional banks turned down their requests in 2009.
The Educator’s Edge
Innovation often comes through the simplest shifts in approach, and this podcast shines a light on the importance of education in raising private capital. RJ Pepino encapsulates this with the poignant statement, “He who educates the market dominates the market.” Jay echoes this sentiment by emphasizing how crucial it is to become a private money teacher, rather than a salesperson.
By leading with a servant’s heart, an investor can subtly but powerfully distinguish themselves as experts and stewards of opportunity, sparking interest in potential partners. Jay Conner has entirely reframed conversations with private lenders by first educating them about the potential of private money, often before even bringing up a specific deal. This signature move removes the “stink” of desperation, instead focusing on the abundant possibilities available to investors and private lenders alike.
Key Strategies for Private Money Success
Jay articulates a vital strategy in capital raising: keeping investment discussions and deal presentations separately. This step is crucial in ensuring that discussions about opportunities remain educational, rather than transactional. By segregating these conversations, an investor positions themselves as a partner offering valuable knowledge, thus alleviating pressure and creating a natural entry point for later deal-specific discussions.
Moreover, he highlights the benefits of flexibility through tools such as self-directed IRAs, which many potential lenders are unfamiliar with. By leveraging these tools, investors can offer novel ways for partners to gain substantial returns, guided through each step by the investor’s knowledge and experience.
Mindset and Success: The Symphony of Growth
Throughout the episode, Dave Payerchin and RJ Pepino passionately align with Jay Conner’s vision, reminding listeners that mindset is not just about how one views the world, but also how one positions oneself within it. By exercising gratitude and positivity, even seasoned investors can further their growth and prosperity. “Focus on what you are sowing and let what you reap take care of itself,” is a powerful mantra of this mindset.
Conclusion: Cultivating Success Through Service and Knowledge
The engaging discussion in this episode reinforces a crucial takeaway: in the world of private money, the investor’s journey starts internally. Building confidence, educating potential lenders, and approaching private capital with a mindset of abundance and service distinguish great investors. Jay Conner’s insights reveal the transformative power of teaching, partnered with an unwavering commitment to adding value, positions real estate investors for unparalleled success in raising private money. Whether starting on your first deal or expanding your portfolio, these timeless strategies serve as a blueprint for thriving in the competitive arena of real estate investment.
10 Discussion Questions from this Episode:
- How does Jay Conner describe the mindset shift necessary for successfully raising private money?
- What are the key characteristics that Jay believes one should exude when approaching potential private lenders?
- Discuss the “teacher” approach that Jay Conner advises. How can educating potential investors about the investment process benefit both parties?
- According to Jay, what is the significance of the “good news phone call” in his private lending strategy, and how does it facilitate trust with the lenders?
- Examine the importance of the conversation starter Jay uses regarding self-directed IRAs. Why might this be an effective way to begin discussing investment opportunities?
- Reflect on the concept introduced by RJ Papino: “He who educates the market dominates the market.” How is this applicable in real estate investing?
- How does Jay differentiate the risks associated with syndications and funds versus single-property investments with private lenders?
- Discuss Jay’s strategy of letting the interest accrue when securing private money for renovations. How does this impact cash flow and project management?
- What lessons can be learned from Jay’s emphasis on focusing on what you sow rather than what you reap, and how does this relate to building relationships with investors?
- Jay advises pairing with a mentor or experienced investor when starting out. What are the potential benefits and drawbacks of this approach in real estate investing?
Fun facts that were revealed in the episode:
- Jay Conner is not only an expert in raising private money but also an extraordinary piano player.
- Jay introduced his first private lender from a conversation after a Bible study at his church, securing $500,000 within 24 hours.
- Jay emphasized the concept of “exuding” confidence, trust, and reliability, using the phrase “owning the real estate between your ears” to describe the mindset needed for successfully raising private money.
Timestamps:
06:28 Raising Capital Without Directly Asking
10:02 Financial Planning and Teaching Strategies
11:25 Tax-Free Earnings via IRAs
15:17 Commitment to Invest Dave’s Funds
20:20 Expect Nothing, Gain Everything
22:58 Private Lenders Are Investors
26:32 Simplifying Real Estate Financing
30:57 Focus on Sowing, Not Reaping
33:41 Fund Strategy for Large Investments
34:55 Private Lender Deal Coordination
40:21 Creative Real Estate Financing Strategy
44:50 Success: Comfort Zone & Failure Lessons
45:27 Collaborate for Success
Connect With Jay Conner:
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https://www.jayconner.com/MoneyReport
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Have you read Jay’s new book: Where to Get The Money Now?
It is available FREE (all you pay is the shipping and handling) at https://www.JayConner.com/Book
What is Private Money? Real Estate Investing with Jay Conner
http://www.JayConner.com/MoneyPodcast
Jay Conner is a proven real estate investment leader. Without using his own money or credit, Jay maximizes creative methods to buy and sell properties with profits averaging $67,000 per deal.
#RealEstate #RealEstateInvesting #RealEstateInvestingForBeginners #Foreclosures #FlippingHouses #PrivateMoney #RaisingPrivateMoney #JayConner
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Unveiling Expert Methods for Private Money Acquisition with Jay Conner
Dave Payerchin [00:00:01]:
Ladies and gentlemen, it is 11:11 on Wednesday. Welcome back to the Cream livestream. We have a very special guest today, somebody who it is impossible to not smile around this man’s energy, mister Jay Conner, who is an expert at raising private money. We are huge fans of Jay personally, but we are also huge fans of, really, raising private money. We have built our entire career off private money. RJ and I, just did a post today, Jay, and we’ll get into this stuff, after our little brief intro here, but we’re paying off over a million dollars worth of debt this week. It was a lot Whoo. A week-long build, but that doesn’t even count the profits.
Dave Payerchin [00:00:42]:
Right? We’re paying back private lenders. There’s you know, there’s something in there for us. But everything that we have built, RJ and I, has been built on the backs of our private lenders. It’s not even built on the backs of them. It goes hand in hand with running this race together as partners. These are financial partners, and Jay is gonna teach us today what has worked for him at attracting these financial private lenders, these capital partners. And we’re gonna be talking about the markets a little bit, how to utilize private money today to its full extent. RJ, how’s the vibe?
RJ Pepino [00:01:17]:
The vibe is alive, and I wanna make sure everybody is paying attention. So get out a pen and, a piece of paper, because Jay is gonna school us on all of the things that private money Jay’s Jay’s the OG when it comes to this. We’ve learned a lot from Jay. From doing this for many, many years, but this guy’s been doing it for way over a decade. And, the last time that we saw Jay was at one of the masterminds that we’re a part of, and he’s a natural. He’s also he’s just like this, he’s an extraordinary piano player, by the way. So if you get a chance to see Jay in action, listen to the tunes that he’s, putting out there because he’s a he’s a master at that. But today is about private money, and I’m ready to get into it, Jay.
RJ Pepino [00:02:02]:
What do you get for us, man?
Dave Payerchin [00:02:04]:
Jay, hang on one second. I gotta I gotta tee tee this thing off here for Jay. So, Jay, the number one thing we get from our students and everybody, is the market. Right? People tell us all the time. It’s like, how do I raise private money? There’s this inner fear, and I think a lot of it has to do with, like, maybe a self-confidence thing, and maybe it’s kind of like a self-worth thing. Like, people have this fear of, like, asking other people for money because they’re looking at it from the standpoint of, like, they’re asking to get something. You have positioned this in such a way where it’s like, how do we ask for money without talking about the money or asking for the money? How do we create this, like, energy of, like, partnership? It’s not like you’re begging somebody for money. How do you approach people where it’s like a partnership, and how does this all work?
Jay Conner [00:02:52]:
My lands, Dave, and RJ, thank you so much for inviting me to come along and talk about private money. My favorite passionate subject because private money had more of a bigger impact on my and Carol Joy’s investing business than any other strategy. My lands with that intro, you just like triggered my brain to go down so many important, critical, pieces of information here for people to understand. You know, one thing you just said, Dave and RJ was, you know, you hear all the time, how do I start getting you know, how do I start raising private capital? And I can tell you the answer. If you’ve never raised private money before, here’s how you start. You start by owning the real estate between your ears. Now what what do I mean by that? What do I mean by that? What I mean by that is, you know, everything everything moves from the inside out.
Dave Payerchin [00:03:47]:
Yes. It does.
Jay Conner [00:03:48]:
And what I mean by that is if you are not exuding if you’re not exuding confidence, trust, credibility, reliability, knowing what you’re talking about. Who in the world is gonna invest in your deals and loan you money if you’re not feeling that yourself? So the question is, how in the world do you get that feeling? How do you come across that way? Well, first of all, you come across that way by owning the real estate between your ears or mindset. And here’s the mindset that is critically, critically important. You see when I was borrowing money from the banks and institutional money from 02/2003 to 02/2009, think how far back that was, all I knew to do was go to the local bank, get on my hands and knees, put my hands underneath my chin, and say to the banker, please fund my deal.
Dave Payerchin [00:04:41]:
Yeah. Begging like a pauper, like a poor poverty poverty-wanting person. That’s a low vibration, bro.
Jay Conner [00:04:48]:
And that’s all I knew to do. I mean, you know, I’d read books. I mean, I mean, I never even heard of hard money lenders back then. For goodness’ sake, I never heard of private money. That’s all I need to do is go to the local bank, pull up my skirt so the banker can see my assets, make my financial statements, give me a colonoscopy, and pull my credit score. That’s all I need to do. So here’s where the mind shift comes. When I was cut off from the banks, that’s a story in and of itself as to how to push through and have resilience.
Jay Conner [00:05:19]:
When I was cut off from the banks back in 02/2009, January ‘2 thousand and ‘9 to be specific, I hung up the phone when I got that news, and I sat here and asked myself a critically important question. The power is in the questions. And the question I asked myself was, Jay, who do you know that can help you with your problem? When I was cut off from the banks. And, you know, these people running around saying, Oh, every problem’s an opportunity. I wanna throw up. I didn’t have an opportunity. I had a problem. Let’s face reality.
Jay Conner [00:05:51]:
I didn’t have a way to fund my deal. So I called up my good friend. I had that answered in my brain immediately when I said, who do I know that can help me with my problem? I called up Jeff Blankenship, my good friend in Greensboro, and he’s the guy who introduced me to private money, private lending, and what that was all about. So when I learned about it, the first thing I did was get my mindset straight. So let’s dig into this right now. One thing I hear all the time is, and you mentioned it, Dave, from new capital raisers, they’ll say, I’ve got this fear of rejection. Right? Fear of rejection. Here’s a rider downer.
Jay Conner [00:06:28]:
Here’s a rider downer. Ask yourself this question. How can you have a fear of rejection when you’re not asking anybody for anything? You see, the way the mindset works to be a successful capital raiser is what I did, and here’s what I did, and here’s what I do. We separate how do you how do you get deals funded without asking for money. Here’s the answer. You separate the conversations between, first, putting on your teacher hat, which says private money teacher, and leading with a servant’s heart and exposing people, first of all, in your warm market, people you have connections with, to what this world is even about. You see, I have 47 private lenders right now funding our deals. You know what’s interesting, Dave and RJ? What’s interesting is not one of these 47 private lenders that are funding our deals ever heard of private money until I put on my teacher hat, and exposed them to it. Right? And so none of them ever heard of self-directed IRAs and how people can use their current retirement funds and lend to us real estate investors and get returns either tax-free or tax-deferred.
Jay Conner [00:07:49]:
So I don’t know anything about that. I had to study it. So how do I get my deals funded without asking for money? Here it is. Separate the conversations between teaching your opportunity and having a deal to fund. So let’s play that out. So after getting my mindset right that I wasn’t gonna beg, chase, you know, persuade anybody, I’m gonna lead with a servant’s heart Mhmm. And expose and share people to this world. Right? How did I do that? Private lender luncheons, one on one, Starbucks coffee.
Jay Conner [00:08:22]:
My very first private lender came from church where Carol Joy and I go to church on a Wednesday night after bible study. There’s a story there with scripting as to how I got $500,000 within twenty-four hours of just exposing this opportunity. So back to separating the conversations. Here’s a writer’s downer. Desperation has a smell to it.
Jay Conner [00:08:48]:
And what I mean by that is if you are talking about your opportunity for people to be private lenders and you’re talking about a deal in that same initial conversation, you already sound desperate for goodness’ sake without even trying to. Yeah. Like, you’re talking about a deal. I mean, you’re pitching a deal, and you’re not even trying to pitch a deal. And by the way, I’ve never pitched a deal ever since 02/2009. So let’s unpack this. So put on your teacher hat, know your program. There’s a writer-downer right there.
Jay Conner [00:09:24]:
You can’t well, I mean, the question is, what are you gonna teach for goodness sake? Mhmm. What are you gonna teach? What are you gonna expose? Well, you’re going to expose, share, and teach what it is you offer. Why do people want to invest with you? So you want to determine, and I say, just duplicate my program. It seems to work pretty well since 02/2009. Right? So just duplicate my program. Decide on the interest rate that you’re gonna teach. Well, I’ve been paying 8%, no points, no origination fees, no extension fees since 02/2009.
Jay Conner [00:10:02]:
Same deal, same thing. I don’t care if the local certificate of deposit is 0.17% or it’s three and a quarter percent it is right now, or if it’s 5% like it was a year ago, 8% across the board. So know the program that you’re gonna teach. What’s the interest rate? How can they get their money back in case of an emergency before the note comes due? What’s the maximum loan-to-value as compared to the after-repair value? What’s the frequency of payments, etcetera, etcetera, etcetera? So we know what we’re gonna teach. So and have a relationship, here’s a written or down or actionable item, have a relationship with a self-directed IRA representative.
Jay Conner [00:10:46]:
So that, when you’re talking with someone in your warm market, your connections, and you learn that they’ve got retirement funds that they’re not happy with, then you immediately can do a three-way call introduction or a three-way group text or whatever, and introduce them to your representative at the self-directed IRA company so they can move money over. So let’s just do a little role play here for a second. Alright. Let’s just say, Dave, that you are a new private lender with me.
Dave Payerchin [00:11:15]:
Okay.
Jay Conner [00:11:16]:
Let’s let’s say hypothetically, let’s say we go to church together. Right? Alright. And, I met you for coffee.
Dave Payerchin [00:11:24]:
Sounds good. And we
Jay Conner [00:11:25]:
Were and we were having coffee at Starbucks or whatever. And let’s say I started the conversation with and I love conversation starters. I love conversation starters. Not starters, but bringing up the topic of private money. One way I may have brought up this topic to you, Dave, while we were having coffee is I might’ve said, by the way, Dave, did you know there’s a way people can earn unlimited money per year tax-free? And of course, you’re not going to know the answer to that question. And then I may say, well, have you ever heard of self-directed IRAs and how people can use retirement funds to get unlimited money per year tax-free? And you’d never so that led to a little conversation about retirement funds and how that works. And I learned in that conversation while I was drinking coffee with you that you’ve got retirement funds. Maybe it’s a previous four zero one ks.
Jay Conner [00:12:14]:
You’re not happy with it. And let’s say you got $150,000 and that’s what you want to start with. So you’ve told me you want to start with $150,000 I introduced you to my self-directed IRA representative. You’re all excited. You love the program. You know what your rate of return is going to be, but there’s no deal attached to this. You see? That’s part of the secret sauce. No deal attached.
Jay Conner [00:12:37]:
So you’ve now moved your money over your hundred and $50,000 of retirement funds that you’re not happy with. Maybe it was in the stock market, volatile, etcetera. You’ve moved it over. Took a couple of weeks to get your money moved over. And now you’ve told me, Jay, my account’s funded. I’m ready for a deal. And I told you initially, I’m gonna say, Dave, I’m gonna put your money to work for you just as soon as possible when your account is funded. Now your account is funded by the self-direct IRA company.
Jay Conner [00:13:05]:
I’m going to share with you guys and your audience right here, right now in front of God and everybody. I’m going to share with you right now the exact script, the exact script that I’m going to call you up, Dave, my new private lender. I’m going to call you up. Here’s the exact script that I’m going to say to you to get my deal funded without asking you for any money. Bear in mind, up to this point in time, I haven’t asked you for any money at all. All I’ve done is put on my teacher hat and share the program with you. You love it and I’ve held your hand and here you are going, by the way, this program is just not for people using retirement funds. I mean, it could have been Dave’s just investment capital sitting around in the money market earning nothing.
Jay Conner [00:13:51]:
So here we go. Here’s the script. I told Dave that I’d put your money to work just as soon as possible. Let’s say a week or two has gone by. Don’t wait long because they’re getting antsy. So I call up Dave. Of course, I know you guys, it’s hard to believe we still have handsets and cords here in North Carolina, in Morehead City, handsets attached to telephones. Anyway, so I call up Dave.
Jay Conner [00:14:14]:
Dave answers the phone. We have a little chitchat. Here’s the script. Dave this is called the good news phone call. This is called the good news phone call. Dave, I’ve got great news for you.
Dave Payerchin [00:14:26]:
K.
Jay Conner [00:14:26]:
I can now put your money to work.
Dave Payerchin [00:14:29]:
Okay. I’m listening.
Jay Conner [00:14:30]:
I got a house in Newport with an after-repaired value of $200,000. I’ve got it under contract. The funding required for the deal is $150,000, and that matches up to what you’ve got. And of course, that’s what is it. That’s the criteria of the program. I’m not going to borrow more than 75% of the after-repair value. So I got the house under contract after the repair value of 200,000. The funding required for the deal is $150,000 Closing is going to be next Thursday.
Jay Conner [00:15:01]:
So I’ll need for you to have your funds wired to my real estate attorney’s trust account by next Wednesday, a week from today. And I’m gonna have my real estate attorney email you the wiring instructions. End of conversation.
Dave Payerchin [00:15:16]:
Done.
Jay Conner [00:15:17]:
That’s the end of the conversation. The most stupid thing Listen, folks. Listen. The most stupid thing I could have done is ask Dave, do you want to fund the deal?’ Of course, Dave wants to fund the deal. He’s he loves the program. For goodness sake, he’s moved his hundred and $50,000 from wherever he had those retirement funds over to the self-directed IRA company that I recommended. His account is funded. For goodness sake, he’s not earning any money until I put his money to work and I’m morally and ethically obligated to put his money to work and invest his money because he moved his money at my recommendation and advice and he’s not earning any money until I fulfill and deliver on my promise of putting his money to work.
Jay Conner [00:16:09]:
And now Dave is ecstatic that I’ve given him the good news phone call, and here we go. So Let me
Dave Payerchin [00:16:16]:
Give you a little let me give you a little unpacking here because RJ’s got a quote. RJ’s been saying this for years, Jay. He says he who educates the market dominates the market.
Jay Conner [00:16:27]:
Oh, my god. Can I can I steal that? Can I
RJ Pepino [00:16:30]:
steal that?
Dave Payerchin [00:16:31]:
Run with that. That is an RJ Papino original right there.
Jay Conner [00:16:34]:
I want to put I I wanna put that as a banner in my live event for the private money conference. He who let me make sure. I’m gonna give you credit. I’m gonna put so he who educates Give it to him. What is it? He who educates?
Dave Payerchin [00:16:49]:
The market dominates. Hallelujah. Hallelujah. That is right. So here’s the thing. You know what I got from you? That’s what that’s what we’re we’re all about that. You gotta teach them. It’s because that removes the stink.
Dave Payerchin [00:17:03]:
That’s what I wrote down. Desperation has a stink. It’s got a smell to it. It’s a it’s more than a smell. It’s a stink. It’s an odor to it. Right? But when you are coming across as a teacher, you are putting out let me ask you this question, Jay. Because what you said, you gotta you know, what it is what it’s about, the real estate between your ears, it’s about exuding confidence, trust, reliability.
Dave Payerchin [00:17:28]:
When I hear exuding, I hear putting out. Now let me ask you this, Jay. Have you ever heard this quote before? You reap what you sow?
Jay Conner [00:17:36]:
I think the apostle Paul said that one time. Yes.
Dave Payerchin [00:17:41]:
Let me tell you something. Let me tell you. This is spiritual knowledge. I know you approach it like a sermon, and that’s something I love about you. Here’s the thing. You reap what you sow. A low vibration. A lot of people out there, Jay, they’re so focused on what they are reaping that it puts that stink.
Dave Payerchin [00:17:59]:
It puts them in that stink of desperation because they’re so focused on what they’re reaping and then the ego kicks in and it’s like, well, I don’t have enough. And now you’re stinking. You’re stinking like desperation when you’re focused on what you’re reaping. But there’s an even lower vibration than focusing on what you’re reaping. You know what the lower vibration is, Jenny? Focusing on what other people are reaping. That’s as low as it gets. When you’re looking outside of yourself and you’re looking at what it oh, so and so keeping up with the Joneses, Look what they’re reaping. You are at the lowest vibration, the most desperation stink you possibly can be when you are focused on not only what you’re reaping, but what other people are reaping.
Dave Payerchin [00:18:40]:
If we can flip the script on this, become a teacher, now you are exuding knowledge. You are exuding value. You are exuding confidence. You are educating the market. That is what we’re talking about here. Focus on what you are sowing and let what you reap take care of itself. Hallelujah.
Jay Conner [00:18:58]:
Our good friend, Matt Andrews, I’ve heard say it all the time. He was a keynote speaker at my mastermind not too long ago. And the mantra that he kept saying over and over and over again was, quote, unquote, it’s all about sowing. He kept saying it all the time. It’s all about sowing because you ain’t got to worry about the reaping. Right? And how in the world can you reap before you sow? Right? And, you know, it’s all about serving here’s another one. That’s all I mean, you got you guys got me thinking now. You guys got me thinking now.
Jay Conner [00:19:38]:
It’s it’s it’s all about sowing with no strings attached whatsoever. Yep.
Dave Payerchin [00:19:45]:
Yes. No
Jay Conner [00:19:46]:
Expectation. Expectation.
Dave Payerchin [00:19:48]:
It’s unconditional service. Unconditional like, unconditional love. There are no conditions.
Jay Conner [00:19:53]:
It’s like, you know, I was talking to some good friends, a little while back, and they were in this relationship, husband and wife, and they were complaining. They were complaining about, you know, I I I don’t get any appreciation. You know? He never says or she never says he appreciates me or whatever.
Dave Payerchin [00:20:14]:
Well, they’re that not to cut you off, but what is she focused on? She’s focused on Exactly. Exactly. And it’s like my
Jay Conner [00:20:20]:
Advice was my advice was when you ex when you don’t and this comes right here to our topic of private money and so on. When you don’t expect anything in return, how can you ever be disappointed? I mean, everything everything’s about and, of course, I’m expecting people to do business with me because I know over time, the majority of them I mean, here’s the deal. If someone is interested in getting high rates of return safely and securely and they come listened to my presentation or I put on a luncheon and they hear my presentation or I’m just visiting with somebody one on one, I’m telling you, if they’ve got retirement funds, they’re doing business with me. Period. Because the question is, where else are they going to get these safe, reliable funds? Now, yeah. Can they invest in somebody’s fund out there, which, by the way, my investors don’t invest in a fund? Everything’s a one-off. They’re investing in a single-family house, so they got their promissory note.
Jay Conner [00:21:25]:
They got their deed of trust. Amen. You know? So they’re not investing in the fund. Now are there people out there offering stuff at 12 to 15% return and investing in a fund? Sure they are. But let me just tell you a little something and a little secret. That’s what the pro form said, and there ain’t never a pro form that’s right. So in this deal with single-family houses, then they know it’s just like they’re putting their money, the private lenders are just putting their money in a CD at the local bank. The private lender is the bank.
Jay Conner [00:22:02]:
They know exactly exactly what that rate of return is gonna be. And, you know, one quick and so let’s come back to mindset for a second. Y’all got me y’all got me all cranked up now.
Dave Payerchin [00:22:13]:
We’re all fired up over there. I’m highly set up. We’re ready to go.
Jay Conner [00:22:17]:
So, you know, back to mindset. One thing one question one question that I hear all the time, and it’s a very valid question. It’s a very valid question from a new real estate investor. Maybe he hasn’t done a deal yet. Maybe he’s only done a couple of deals. And the question from that real estate investor to me is, quote-unquote, Jay, who in the world is gonna give me money and I’ve never done a deal before? Now, let’s unpack that question for a moment. First of all, they ain’t giving you any money. If somebody gives you money, that’s a gift.
Jay Conner [00:22:58]:
Yeah. If somebody gives you money, that’s a gift as if you don’t have to pay it back. Right? And in fact, I prefer after people understand where I’m coming from. I prefer to call my private lenders investors because private lender they are. They’re private lenders. Right? And I call them private lenders. But I segue into after they understand, I segue into calling them investors because a private the term private lender focuses its benefit on me, the borrower. Investor focuses, even though they’re not getting into any equity position, they’re not getting, you know, they don’t have any ownership, but they are, I mean, let’s, hey, here, at the end of the day, ‘s the deal.
Jay Conner [00:23:48]:
They’re not loaning you money on your deals, even though they are. They’re not investing in your deals, even though they are. In there let’s talk about the lender’s mindset. They’re investing in you.
RJ Pepino [00:24:00]:
You. Yep.
Jay Conner [00:24:01]:
You. Yes. You’re collateralizing the note. Yes. You’re taking care of them. You know, you’re giving them the protection they need. But their mindset, they are investing in you. So back to that mindset.
Jay Conner [00:24:13]:
It’s all about focusing on their benefits. What are they looking for?
Dave Payerchin [00:24:18]:
Yeah.
Jay Conner [00:24:18]:
Right?
Dave Payerchin [00:24:20]:
Yields.
Jay Conner [00:24:20]:
Where where are they coming from? You know, they want yield, and they wanna be able to sleep at night and not worry about losing their money. Yeah. There’s only one reason. There’s only one reason that someone is not going to loan you money or invest in your deals. They don’t believe they’re gonna get paid back. Yep. That’s exactly what I’m saying. That’s the that’s the only their level of trust or level of belief, that’s the only reason.
Jay Conner [00:24:49]:
Right? And so in my program that I want you to duplicate, if you’re listening to this show, in my program, all kinds of layers of protection protect the private lender. And, you know, back to mindset, I tell my new private lenders, investors, I tell them, I said, part of the program is and listen to this languaging. Listen to this languaging. I do not allow my investors. You hear that? I do not allow my investors to invest more than 75% of the repaired value because I wanna protect them. Yep. Yep. Right? And when you use that word allow, that necessarily infers you’re in control and you’re looking after your people.
RJ Pepino [00:25:44]:
Because you are. Yeah.
Jay Conner [00:25:45]:
And because you are. Yeah. Because you are. Yeah. I ran aground back to you guys.
Dave Payerchin [00:25:53]:
Well, RJ, what do you get here?
RJ Pepino [00:25:55]:
I just wrote down there’s so many good things in this last, you know, twenty minutes of us talking. So please, if you’re watching this after the fact, definitely rewind and listen to Jay’s script. Very generous for us to share that, and thank you for sharing that, Jay. But he’s keeping it super simple. He’s making sure that they’re protected. And you’re you can get all of this. We gotta get how can if people wanna, work with you and your and your system, Jay, what is the best way, for them to get a hold of you? How can we Best?
Jay Conner [00:26:28]:
Yeah. Yeah. I’m sorry. Go ahead.
RJ Pepino [00:26:30]:
How can how can they connect with you, Jay?
Jay Conner [00:26:32]:
Yeah. The best way to learn this, and one thing that I’ve been told, I believe God has given me the ability and the gift to take what may appear to be a complicated subject and make it super simple. Right? Mhmm. As our good friend, Tom Crowell says, easy peasy lemon squeezy. So what I’ve done is I’ve taken my process, and I’ve boiled it down very simply, step by step, in a book. And the book is called Where to Get the Money Now. The subtitle is How and Where to Get Money for Your Real Estate Deals Without Relying on Traditional or Hard Money Lenders. The book is $20 at Amazon, but for goodness’ sake, don’t give Amazon your money.
Jay Conner [00:27:17]:
Don’t spend $20 with them. May I, Dave and RJ, give this book for free to your audience If they’ll just cover a little bit of a couple of dollars for shipping for free?
RJ Pepino [00:27:28]:
Absolutely. Amen. Yep.
Jay Conner [00:27:30]:
And I will, three days express this to you through the United States Postal Service. By the way, believe it or not, the Postal Service is still in business. So I’ll mail this to you. This is not an ebook. Actual book, book, book, bestseller. I’ll autograph it for you and I’ll ship it to you at Three Day Express. And in the book, you got my contact information. I’m very easy to get up with.
Jay Conner [00:27:55]:
You know, it’s a novel thing we do here. When somebody calls my phone, we answer the phone, if you can believe that. But anyway, by the way, let’s put my phone number in the show notes, for people if they just wanna pick up the phone and call, you know. I’d love to talk to anybody about this subject of private money. 252 and by the way, I’m in Eastern time. (252) 808-2927. 2 5 2 8 0 8 2 9 2 7. And then one more way to connect with me is I’m now in my eighth year, the eighth year of my podcast.
Jay Conner [00:28:30]:
And my podcast is called Raising Private Money. Imagine that. Raising Private Money with Jay Conner. You go to any of your favorite platforms and just search for Raising Private Money. And what we do there, I have two shows a week. They come out early Monday morning and Thursday mornings on Raising Private Money with Jay Conner Podcast. I’m interviewing people twice a week as to how they, very successful real estate investors, have gone about raising private money because we all can learn from each other. We all have our little nuances.
Jay Conner [00:29:05]:
And so I raise cap I mean, I interview capital raisers for multifamily, large apartment complexes. I interview private, real estate operators that raise money for self-storage. Yesterday, I interviewed a guy who raises private money for land. Of course, I interview other people who raise private money for single-family houses, etcetera. So if you’re looking for money for your deals in addition to my book, come on over and join me on my podcast at Raising Private Money.
RJ Pepino [00:29:34]:
How how did they how did they get the book again, Jay? Is there a website?
Jay Conner [00:29:37]:
Oh, I’m sorry. That would be helpful, for goodness’ sake. Here’s how you get the book. I got so excited. I forgot to even give you the URL. So here’s the URL on how to get the book for free. Just cover a couple of bucks in shipping. www.JayConner.com/Book.
Jay Conner [00:29:55]:
And I’m an E-R, by the way, not an O R. Most people spell Conner with an O R. So it’s www.JayConner.com/Book. That’s www.JayConner.com/Book, and I’ll rush it right out to you.
Dave Payerchin [00:30:13]:
There it is. We got it on the screen here. We got www.JayConner.com/Book. I know I’m getting mine, and I wanna bring it back here for a minute. We’re we are getting into the real deal. And so Jay’s a deep guy, and we consider ourselves pretty deep as well. And, you know, you said something a very powerful word, and then I cannot make this up. Right? You said the word allow.
Dave Payerchin [00:30:36]:
Right? And here’s the thing. This is my journal right here right here in front of me. It’s right here in front of me. Look at the Can you read the date on there? It says 01/2925 here. Right? This is me today. Something I wrote down today was I allow massive success and abundance in my life. I allow. That’s a major thing here, Jay.
Dave Payerchin [00:30:57]:
So there are two things that we covered that are extremely powerful, and extremely deep. It’s taken me years to realize this. Number one is to focus on what we are sowing and not what we are reaping. This is a powerful, powerful thing. Right? Focus on what we are putting out. What are you exuding? Are you exuding a vibration of neediness like I don’t have enough so I need more and I’m desperate and do you have that stink? Or are you exuding value? How can I add value to this person? How can I teach this person? How can I educate this person? Right? You’re focusing on what you are sowing. Right? The next thing is allowing. Here’s the thing.
Dave Payerchin [00:31:39]:
Once you figure out the first part, which is what I’m putting out, the way to allow, the way to receive, that is also an internal game. We talked about how focusing on what we sow. That’s an internal game between the ears. Right? What we allow into our life, you’re gonna like this, Jay. That’s the heart. Right? And we allow through the heart and that’s the way you feel about yourself. That’s to those limiting beliefs. So you could stay look at yourself in the mirror in your head and you can say, I’m successful.
Dave Payerchin [00:32:07]:
I’m successful. I’m successful. But if you don’t feel successful, if you don’t feel the feelings of blessings, if you don’t look around and truly feel grateful for what you have right now, it is going to be impossible to receive. Right? We cannot receive until we are grateful for what we currently have. I truly and truly feel grateful. We have to feel grateful and feel blessed now, and that is how the blessings flow to us.
Jay Conner [00:32:37]:
Man, Dave. I love it. I love it. Shoot. I mean, you you guys, we got the same core value. We got the same we got the same filter and pair of glasses as to how we see this world. It’s
Dave Payerchin [00:32:52]:
It’s the way it is, bro.
Jay Conner [00:32:53]:
It’s such a joy. Drew. The joy is all mine to be here with you all on your show today. It is.
Dave Payerchin [00:33:00]:
Well, we are wrapping this thing up here, and, we’ve covered quite a bit. And, RJ, what else do you get here from mister Jay Conner? We got his book. I’m getting on the book, www.jconner.com/book. RJ, what do you get here? Bring us on a little Bit of time.
RJ Pepino [00:33:16]:
We gotta be respectful of Jay because he’s raising a bunch of capital doing deals down in North Carolina. If you guys have any questions about what he just covered, put him somewhere in the stream. I’ll take a quick peek. We’ve got some.
Dave Payerchin [00:33:31]:
I have a question for you, Jay. We got a question from the listeners here. Why do you do one-off lending deals and not do a fund or a syndication?
Jay Conner [00:33:41]:
So that’s a great question. The way I look at it is I’m gonna do a fund if I’m raising large amounts of money for, say, multifamily, a larger project. So the so here’s the deal. If I raise a bunch of money for a fund, then I don’t know if I’m gonna have all of it put to work all the time or if I’m not gonna have enough. So I don’t wanna be paying interest on borrowed money that I’m not using. Amen. So I don’t wanna come up short. So right now, I’ve got about a million dollars, what I call sitting on the sidelines, that is pledged from my private lenders waiting for me to put that money to work.
Jay Conner [00:34:34]:
Mhmm. So I’m using it and turning it all the time. Right? By the way, when I have a new private lender that comes on board with me, which, by the way, I’m not accepting any more private lenders because I’ve got just the right amount. Right? Now, my Mastermind
Dave Payerchin [00:34:49]:
You know, he’s got a waiting list here. He’s got a waiting list. I do.
Jay Conner [00:34:52]:
I got a waiting list. Yes. Oh, yeah.
Dave Payerchin [00:34:54]:
Yes.
Jay Conner [00:34:55]:
However, I do match up, some of my private lenders with my mastermind members, which is my elite group, and I’ll help them fund deals as well. But, anyway, back to answering that fun question. When I so I got money sitting over here waiting. That money’s from three private lenders that I have recently paid off, and those three private lenders are totaling about a million dollars. I’ve recently paid them off, and they’re biting at the bit. They’re not making any money until I put their money back to work. But the interest that I’m paying on these other deals right now that are in process to my private lenders, my investors, I’m using that money. Right? So by having a promissory note matched up to a private lender, we know exactly how much I mean, I’m using that money for a deal.
Jay Conner [00:35:43]:
Right? So that that’s the reason. And there’s another reason. There’s another reason. I want to protect my private lenders. When someone in when someone invests in a fund, your investment loan your investment is not collateralized. It’s not I mean, in your security is a piece of paper that’s got that’s called a private placement memorandum that was created by an SEC attorney.
Dave Payerchin [00:36:13]:
And which is fully written to protect the money raiser, not the investor. It’s fully written by the attorney of the syndicator or of the fund manager to protect them. And if something goes wrong with the fund, your money is tied up with 10 other people. Who gets paid back first? Well, I’ll tell you who gets paid back first. It’s the attorneys who get paid back. Whatever is whatever is left over then is divvied amongst all the other people who’ve invested in this fund. It is not collateralized. I want you to stress that because this is the stuff that’s real that we see and you’ve seen in your years in business.
Dave Payerchin [00:36:51]:
You’ve seen people kinda lose money with these funds because it is less collateralized or not collateralized a lot at all. No one’s talking about this, though. This ain’t the shiny stuff. This ain’t the fancy stuff, but this is the doggone trick.
Jay Conner [00:37:03]:
And, you know, what you just said, Dave, also triggered this to share with everybody. Back to that question of a new real estate investor, new capital raiser, who is going to and we already talked about give. There is no giving of money. But who’s on so let’s put it in the right framework. They will ask, who’s gonna loan me money or who’s gonna invest in my deals and I’ve never done a deal before. Here’s another answer to that question. Write it down, quote, unquote. If you don’t pay your investor, the property does. Mhmm.
Jay Conner [00:37:37]:
This means, that if you don’t pay them, they get the property. It’s collateralized. Now, they don’t want the property. They don’t wanna mess with it. That’s why they invested in you. They just wanna be passive. But what I just shared emphasizes the point that the note is collateralized and their legal recourse is to foreclose on that property, which, of course, for goodness sake, they’re not gonna need to when you follow my program that’s in this book of not borrowing more than 75% of the after repaired value. By the way, don’t miss that little point.
Jay Conner [00:38:13]:
See, I have 20 reasons why I love private money. Why do I love private money the way I do it? Long list. One of those reasons is there’s no limit to the amount of private money you can borrow. There’s no limit to the number of private lenders you can have. You are your underwriter. There are no applications. You are already approved. You are already approved because you’re offering, not asking.
Jay Conner [00:38:34]:
But I wanna make this point. Another reason I love private money is because in the world of single-family houses, here’s a rider downer. You always bring home a big check when you buy without taking any of your own money to the closing table. Now my question is who wants to get paid to buy houses? So Ding ding ding. Exactly. Now the only way that works I heard the ding ding. The only way that works is if you are buying a property that is distressed and you’re buying it at a deeply discounted price, which is most of my deals.
Dave Payerchin [00:39:12]:
Amen. I
Jay Conner [00:39:12]:
This means that if I have a $200,000 repaired value house and it needs 30,000 or $40,000 in renovation or rehab, I’m buying that house between 80 and a hundred thousand dollars. Yep. All day long. All day long. All day long. I’ll buy it. If I can borrow up to 75% of the repaired value so follow the cash. Follow the money.
Jay Conner [00:39:37]:
If the repaired value is $200,000 and I allow there’s that word. And I allow my private lender to loan me up to 75% of the repaired value. Well, I’m borrowing $150,000 when I purchase it or close. If I’m buying it for $100,000 I’m getting a $50,000 check when I buy that property. Well, how in the world does that work? The private lender wires $150,000 to the closing agent. A hundred thousand of that hundred and $50,000 loan goes to the seller. That leaves me with a $50,000 check, which I love the phrase on my real estate attorney’s check, which is excess cash to close. And I love me some excess cash to close.
Jay Conner [00:40:21]:
So I’m bringing home a $50,000 check when I buy. Took none of my own money to the closing table, but of course, that’s less closing costs. So of course I’m going to use the majority of that money for the renovation or the rehab. I’m going to use $30,000 or $40,000 of that for the rehab. And look, I can use it for carrying costs, marketing expenses, and a lot of times I will structure a deal to where I just let the interest accrue and I don’t have to make those payments. So follow this cash flow. Buy a house, bring home a big check without taking any of your money to the closing table, make no monthly payments, let the interest accrue, and cash out your private lender when you cash out and sell the property. Do you think that’s gonna help your cash flow? For goodness sakes, yes.
Dave Payerchin [00:41:10]:
We teach the same thing, my friend, because we’ve been we’ve seen the good, the bad, and the ugly, and you gotta keep your cash flow positive for operations. Keep food on the table. And, you can’t just give all your money in monthly payments to to lenders. It’s it doesn’t work that way. You’re gonna put yourself in a bind. So, yeah, we are all about letting it accrue because, for those who are listening, who might be new, accrue means the lender gets all their money at the end. Right? So instead of paying their interest monthly, they’re gonna get all of their principal back plus all the interest that’s owed to them at the end when you sell or refinance the property.
Jay Conner [00:41:50]:
Yes. Here’s another writer downer, quote, unquote, writer downer, quote, unquote. When you’re buying a property that needs renovation and you’re using all your private money, here’s the quote. If you cannot bring home a big check when you purchase, you’re paying too much for the property.
Dave Payerchin [00:42:16]:
That’s it.
Jay Conner [00:42:17]:
If you can’t bring home a big check when you’re purchasing the property and there’s a renovation involved, you’re paying too much for the property.
Dave Payerchin [00:42:25]:
There we go. Be patient. Be diligent. Right? Just because you went out there and you got somebody interested in doing private lending with you, doesn’t mean the money needs to be bullet you know, burning a hole in your pocket. You gotta go out there and buy a bad deal. No. Wait for the right deal. You make your money when you buy.
Dave Payerchin [00:42:43]:
You get paid when you sell or refinance. Right? Buy a good deal. It’s better to say no. The great Warren Buffett, says I say no a hundred times a day. Right? That’s why his office is in Omaha, Nebraska. He does not even on Wall Street. He doesn’t wanna hear all the noise. Right? Pay for the right deals, then you get your lender.
Dave Payerchin [00:43:02]:
It’s gonna protect the lender. You’re gonna make a lot of money. People get off the rails when they’re chasing these deals. They feel like they gotta go out and buy something because I finally got people who wanna invest. No. Be patient.
RJ Pepino [00:43:14]:
Yep. All the deals that we probably lost in the years of doing this, Dave, are when we’re hastenly trying to fund a deal. Right? Is that, like,
Dave Payerchin [00:43:21]:
Right? Yeah. That’s that energy. No. RJ and I know this energy well, and you get it from con so it’s not just when you’re buying and, like, trying to place money and do these loans. It’s also with contractors. Like, when a contractor is just like, I need money. It’s all this, like, rushing around and craziness. It’s never been a profitable venture to be in this energy of this, like, weird, fast-moving everybody’s gotta chill out.
Dave Payerchin [00:43:46]:
That’s that’s the vibe.
Jay Conner [00:43:47]:
Yes. Sometimes, You just need to take a deep breath and take your medicine.
Dave Payerchin [00:43:58]:
Ladies and gentlemen, the great Jay Connor, get his book free. He’s doing us a solid. You don’t even you can go buy it on Amazon if you want for $20, or he’ll just send you a free copy, www.jconner,c0nner,.com/book. Also, he’s got his phone number here, and that is (252) 808-2927. We are putting a bow on this thing. Mister Connor, what burning desires get leave us with some final words of wisdom, sir.
Jay Conner [00:44:32]:
Ask yourself the question, how recently have I done something new that I’ve never done before? I’ll just let that sit.
Dave Payerchin [00:44:47]:
And that’s called getting out of the getting out of the comfort zone.
Jay Conner [00:44:50]:
Well, my good friend who works for me and helps me coach my students, Crystal Baker, her sign off at the end of her email, quote-unquote, saying, Success begins at the end of your comfort zone. Yeah. Love it. Love it. Yes. And, by the way, here’s another rider downer, quote-unquote, Success is a horrible teacher. Success is a horrible teacher. So guess what? It’s okay to get out there and fail learn lessons and get better.
Jay Conner [00:45:27]:
But for goodness’ sake, don’t get out there and fail by yourself. Work with somebody like Dave and RJ who can hold your hand and keep you out of the minefields. Don’t start in this business the way I did. I started in this business for the first six years by only relying on my experience in, mobile homes and reading some books. For goodness sake, if you’re brand new, join hips with somebody who knows what they’re doing that you want to do.
Dave Payerchin [00:45:59]:
I gotta write her down for you, my darling.
Jay Conner [00:46:01]:
My pen is right here.
Dave Payerchin [00:46:03]:
Listen. You gain knowledge by learning from your mistakes. You gain wisdom by learning from other people’s mistakes. That’s why you gotta pair up a couple of I write this down.
Jay Conner [00:46:14]:
I’m writing this down. Knowledge comes from, you said your own mistakes. Right?
Dave Payerchin [00:46:20]:
Correct. Wisdom is from learning from your mentor’s mistakes. Somebody who has walked this path already. That is true wisdom right now.
Jay Conner [00:46:28]:
From your mentors and coach. I love it. I love it. Thank you for sharing. My lands, God bless you guys. I’m so grateful and full of joy being with you all here today.
Dave Payerchin [00:46:42]:
Appreciate you being on. It’s always positive energy, brother. Yeah. I’m here for you. If you need anything, you know how to reach me, but we truly appreciate you taking the time for ourselves and our audience. Give our very best to Carol Joy. God bless you, sir, and we will talk to you real soon.