***Guest Appearance
Credits to:
https://www.youtube.com/@leads2deals
“How to Raise Millions Without Banks | Real Estate Secrets with Jay Conner”
https://www.youtube.com/watch?v=3UAComwwh3Q&t=2s
If you’re a real estate investor—whether seasoned or just starting—you’ve probably asked yourself the age-old question: “How do I fund my deals quickly and reliably, without the headaches of traditional bank financing?”
On a recent episode of the Raising Private Money podcast, Jay Conner, renowned for his expertise in raising private money, pulled back the curtain on his strategies for funding real estate investments. The conversation with Scott Morse of the Leads to Deals podcast was packed with practical tips, insightful stories, and a dose of inspiration for anyone struggling to access reliable capital.
The Turning Point: From Banks to Private Money
The journey for Jay Conner began like many others—relying solely on local banks to fund deals. For six years, things seemed manageable until a single phone call changed everything. His trusted banker, in the wake of the 2009 global financial crisis, abruptly cut off his line of credit. As Jay Conner recounts, “I said, Steve, what in the world are you saying to me? My line of credit’s closed? I got an 800 credit score… Why are you closing my line of credit?” This sudden problem became a doorway to a much bigger opportunity.
Jay Conner’s solution wasn’t just to think harder, but to ask a new question: “Who do you know that can help fix your problem?” This led to discovering private money—funds invested by ordinary individuals, often from retirement accounts, eager for higher returns and the security of asset-backed lending.
Principle #1: The Money Comes First
One of the podcast’s resounding themes is that reliable funding should precede the hunt for deals. As Jay Conner cautions, the old advice that “money finds good deals” is a myth—don’t wait until you have a property under contract before scrambling for funds. Instead, build your network of private lenders first. This shift puts investors in a position of strength, allowing for faster offers and greater negotiating power.
How to Attract, Not Chase, Private Money
What sets Jay Conner’s approach apart is his emphasis on education over salesmanship. “No begging, no chasing, no selling, no persuading,” says Jay Conner. He advocates for a mindset rooted in service and education. His method? Put on your “teacher hat” and inform your network about how private lending works, the returns they could earn, and the security features (like deeds of trust and insurance policy coverage) that protect their investment.
He illustrates this with the story of his first private lender: Instead of pitching a deal, he simply asked a church acquaintance, “Would you refer people to me who are unsatisfied with their bank returns or stock market volatility?” This gentle, indirect approach led the individual to volunteer, “What you got going on there, Jay?” and ultimately commit $500,000.
The Math Behind Every Deal
Jay Conner’s formula is straightforward: Never borrow more than 75% of the after-repaired value (ARV) of a property. This ensures safety for the lender and allows the investor to take home a sizable check at closing—without dipping into personal funds. “If you’re buying a house and it needs renovation and you’re using private money, if you can’t bring home a big check when you buy, you’re paying too much for the property,” Jay Conner insists.
Building Your Private Lender Network
Start with people you already know: church members, colleagues, neighbors, and anyone who may have retirement accounts they’d consider repositioning. By educating and empowering your contacts, you build trust and credibility. For those looking to scale their business, Jay Conner recommends joining organizations like Business Networking International (BNI) and networking with self-directed IRA holders at industry events.
Closing Thoughts
The episode delivers a clear message: The pathway to real estate wealth is paved not by chance but by preparation, education, and genuine service. Whether you’re a young wholesaler or an experienced rehabber, private money can be your springboard—if you’re willing to learn the system and lead with value.
To dive deeper into Jay Conner’s strategies, grab his book Where to Get the Money Now, connect on his Raising Private Money podcast, and start transforming your approach to real estate investing. As Jay Conner puts it, “Allow me to serve you”—your future deals (and bank account) may just depend on it.
10 Discussion Questions from this Episode:
- The episode emphasizes the importance of “bringing home a big check” when buying a property with private money. What does this mean, and how does it reflect on the quality of a real estate deal?
- The conversation touches on the differences between hard money and private money. What are the key distinctions between the two, and why might private money be preferred?
- There’s a discussion about never asking directly for money, but instead attracting it through education and a “teacher” approach. How can real estate investors practically implement this mindset shift?
- When a line of credit was unexpectedly closed, the guest asked themselves, “Who do you know that can help fix your problem?” How did this question change their career trajectory, and what can listeners learn from this approach to problem-solving?
- The episode details a step-by-step real-life example of securing the first $500,000 in private money. What were the key elements of this conversation, and why was it effective?
- The guest mentions establishing relationships with self-directed IRA companies as one of the first actionable steps to raising private money. Why is this important, and how can it benefit both the lender and the investor?
- There’s a distinction between education and negotiation conversations when dealing with potential private lenders. What are the differences, and when should each approach be used?
- For young or new investors who feel like they have a limited network, the episode suggests building self-confidence and knowing what to teach. What strategies are recommended for getting started if you don’t already have a broad network?
- The episode discusses the misconception that private lenders must receive a percentage of equity or profit in each deal. How are deals structured in this model, and why do lenders find this structure appealing?
- Throughout the conversation, the importance of education and serving others is highlighted. How does this philosophy impact investor-lender relationships and contribute to long-term business success?
Fun facts that were revealed in the episode:
- Jay Conner raised $2,150,000 in private money in less than 90 days, without ever asking anyone directly for funds—he focused on education and attracting interest instead of “pitching.”
- When Jay Conner started using private money, his very first deal resulted in a $500,000 commitment from someone he had known for years at his church, simply by asking for referrals rather than asking for money.
- Jay Conner always borrows up to 75% of a property’s after-repaired value (ARV), not the purchase price, which often allows him to take home a big check at closing—even before he starts renovations!
Timestamps:
00:01 Leads, Deals, & Private Money
04:00 Bank Loans vs Hard Money
06:39 Bank Shutdowns and Private Money
10:28 Securing Investment with Trust
15:57 Get Money Before Deals
17:15 Private Lender Script Revealed
20:38 Investor Confidence in Proven Deal
23:32 Spreading the Word Tactfully
28:10 Why 8% Since 2009?
30:24 Scaling Business with Networking
34:06 Real Estate Profit Breakdown
37:25 Private Money vs Hard Lending
42:20 No Profit Sharing for Loans
44:40 Private Lending: Timing and Deal Preparation
48:25 Access to Capital for Hustlers
49:50 Golden Nuggets with Jay
Connect With Jay Conner:
Private Money Academy Conference:
Free Report:
https://www.jayconner.com/MoneyReport
Join the Private Money Academy:
https://www.JayConner.com/trial/
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
YouTube Channel
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Secrets to Attracting Private Money for Real Estate Deals Without Begging or Chasing
Jay Conner [00:00:00]:
If you’re buying a house and it needs renovation and you’re using private money, if you can’t bring home a big check when you buy, you’re paying too much for the property.
Narrator [00:00:12]:
If you’re a real estate investor and are wondering how to raise and leverage private money to make more profit on every deal, then you’re in the right place. On raising private money, we’ll speak with new and seasoned investors to dissect their deals and extract the best tips and strategies to help you get the money. Because the money comes first. Now, here’s your host, Jay Conner.
Scott Morse [00:00:39]:
I want to ask you, were you kind of winging it at some of it? Did you feel like you really had it down because it’s, you know, you weren’t too seasoned at it, right?
Jay Conner [00:00:48]:
No, I wasn’t seasoned at all. So the first thing I decided I was going to do and then I’ll tell you how I got my very first $500,000 from the first private lender. All right. If you’re buying a house and it needs renovation, and you’re using private money, if you can’t bring home a big check when you buy, you’re paying too much for the property.
Scott Morse [00:01:13]:
I love that.
Jay Conner [00:01:14]:
I just know that because I’ve done hundreds of deals, and that’s the way the math works.
Scott Morse [00:01:23]:
Welcome to another episode of the Leads to Deals podcast, where we talk about everything from leads to deals, and everything we talk about leads to two deals. This podcast is brought to you by Lamaso Leads.com, the industry’s first enterprise-level outbound lead generation service. If you need leads for REI, visit Lamasoleads.com, and on this podcast, we have a true industry disruptor and authority on how to build your own portfolio, building a private money network, and being tactical and smart in this journey. If you’re curious about how to bypass traditional financing and leverage private money to grow your business, this, I think, is going to be the podcast for you. You can learn more about him after today and his strategies on his own podcast called the Raising Private Money podcast, or by reading his book Where to Get the Money Now. And today we’re going to get him to pull back the curtain on it all. Welcome to the podcast. Jay Connor Scott.
Jay Conner [00:02:21]:
Oh my lands. I’m so excited to be here. Thank you so much for inviting me to come along and talk about my favorite topic and subject, and that’s private money. I’m so passionate about private money because private money alone has had the biggest impact on my real estate investing business ever since. I started back in 2003, and you know, when I started attracting the money without ever asking for it. I’ve never missed out on a deal ever since I started in 2009. Wow.
Scott Morse [00:02:52]:
I tell you, as excited as you are about raising private money, I feel about sales. And right before we went live, and I have this whole list of things he said, Heyy, I’m glad you feel that way. Because Scott, out of all this money that I’ve raised, I’ve never even really asked for the money. I’ve just created this system where it is attracted to me or flows to me. And it isn’t just, you know, morning rituals that you’re saying, that’s bringing this money to you. There’s a process. So help me understand how you get money for your investments without having to ask for it.
Jay Conner [00:03:25]:
Well, the best way I can share that is with a story. I started investing in single-family houses. And by the way, I don’t syndicate everything I do with private monies for single-family houses. It’s all asset-backed debt. So the SEC doesn’t even play into this world. But I started investing in single-family houses here in eastern North Carolina all the way back in 2003. And what happened, Scott, was from 2003 until January 2009, those first six years, the only thing that I knew to do to get my deals funded was go to the local bank. I didn’t even, I hadn’t heard of hard money.
Jay Conner [00:04:00]:
I don’t even know what hard money was. And by the way, hard money is not private money. We’ll distinguish that here in a minute. But the only thing I knew to do to get my houses funded, my real estate deals funded, is go to the local bank, get on my hands and knees, and put my hands underneath my chin and say, Please fund my deal. And you know, the banker would make me pull up my skirt. I had to show my personal assets, get my credit score pulled. Do financial statements always get appraisals? Well, I had to abide by their rules. And you know, Scott, that worked okay for the first six years.
Jay Conner [00:04:35]:
Everything changed. Everything changed. In January 2009, I had two houses under contract. And I called up my banker, sitting right here at this desk, his name was Steve. And I thought I still had a line of credit at the bank. And so I get Steve on the phone, and we have a little chat. I tell him about these two deals. And I learned that my line of credit had been closed with no notice.
Jay Conner [00:05:02]:
To me. I said, Steve, what in the world? Are you saying to me my line of credit’s closed? I got an 800 credit score. We’ve done a ton of deals. I’m never late on my payments. Why are you closing my line of credit? And Steve said, Jay, don’t you know there’s a global financial crisis going on right now? I said no, but you just gave me a financial crisis. I don’t have a way to fund my deals, you know, so, you know, they weren’t, they stopped loaning money out to real estate investors. So I hung up the phone.
Jay Conner [00:05:31]:
Scott, I want to share with you and your audience right now a very powerful question that I asked myself sitting right here at this desk after Steve cut me off from my funding. And I sat here, and by the way, this question I asked myself will help fix any problem anybody’s got. I don’t care if it’s health, financial, career, relationships, or money problems. Here’s the question. By the way, these people run around saying, Every problem’s an opportunity. I want to throw up. I didn’t have an opportunity. I had a problem.
Jay Conner [00:06:03]:
Now the problem became a huge opportunity because without the problem, I wouldn’t be here with you on your show today. Here’s the question that I asked myself. I said, Jay, I lost him. Who? There’s the key right there. It’s not how, it’s who. I said, Who do you know that can help fix your problem? And you know what’s funny, Scott? Immediately, when I asked myself that question, I thought of a dear friend, Jeff Blankenship. He was living in Greensboro, North Carolina, at the time, investing in single-family houses. So I said, well, maybe Jeff can help me out.
Jay Conner [00:06:39]:
So I called up Jeff, and I told him what had just happened with my conversation with my banker. And Jeff said, Well, welcome to the club, Jay. I said, Well, I want to be a member of that club, but what club are you talking about? He said, Well, that’s the club of your bank shutting you down. He says, My bank shut me down last week. I said, Well, how are you going to fund your deals? He said, Well, have you ever heard of private money? I said, No. He says, Have you ever heard of self-directed IRA companies and how people that have retirement funds, ordinary individuals, can move retirement funds, if they’re not happy with them, over to a self-directed IRA company, then loan that money out to us as a private lender, and the interest we pay them is tax deferred or tax free. I said, Jeff, I don’t have a clue what in the world you’re talking about. I said, What is private money? He said, Well, I’m not exactly sure.
Jay Conner [00:07:29]:
He said, but there’s this gentleman down in Jacksonville, Florida, by the name of Ron McGrand and Ron McGregor that can tell us about private money. I said, Well, what is it? He says, Jay, I don’t know. But Ron says, we can get a lot of it really, really fast. I said, Okay. So I went to my very first. After being in this business for six years, I went to my very first real estate investing conference to hear Ron Legrand to learn about private money. And boy, let me tell you, Scott, I learned about private money, what it is, how it works. And I learned that a private lender is nothing more than an individual.
Jay Conner [00:08:05]:
Ordinary people like you and me and everybody else who loan out money from either their investment capital or their retirement funds to us, real estate investors. And it’s a one-on-one transaction with no middle person, no broker involved. So I came back home in less than 90 days. I was able to attract $2,150,000 in new funding from ordinary people without ever asking for money. So how in the world, how in the world did I get all that new funding and never ask anybody for money? And how do I not pitch? How do I, how do I get my deals funded? Deals? Here’s the answer. Here’s the answer. Separate conversations between. Well, let me, let me back up, let me back up before the conversations.
Jay Conner [00:08:58]:
The first thing you’ve got to do, because people ask me all the time, they say, Jay, how do I start raising private money? I said, the first thing you’ve got to do is own the real estate between your ears. And what I mean by that is you’ve got to have the right mindset. So no begging, no chasing, no selling, no persuading. Here’s what we do. First of all, have a servant’s heart. And what did I do? I did then what I do now, I put on my teacher hat, which says private money teacher. So but before I put on my teacher hat, I had to decide what I am going to teach? What am I going to share with people? So I started with my own network of people.
Jay Conner [00:09:41]:
I go to church with people in the Rotary Club, my own network of people. So I decided, okay, what am I going to teach these people? I’m going to teach them what private money is, what private lending is. I’m going to teach them what interest rate I will pay, how they can earn high rates of return safely and securely, and expose just ordinary people in my own network. What this World is all about. And here’s the secret sauce.
Scott Morse [00:10:07]:
Hold on, you’re doing it that fast because you went from zero, you knew nothing about this, to within 60 days, we’re at X amount of millions in raised capital.
Jay Conner [00:10:15]:
Yes, 90 days. Less than 90. It was between 60 and 90 days.
Scott Morse [00:10:19]:
I want to ask you, were you kind of winging it at some of it? Did you, did you feel like you really had it down? Because it’s, you know, you weren’t too seasoned at it, right?
Jay Conner [00:10:28]:
No, I wasn’t seasoned at all. So the first thing I decided I was going to do and then I’ll tell you how I got my very first $500,000 from the first private Monday. All right? So the first thing I had to decide was what I was going to offer. What am I going to offer these people that would give them the feeling of being safe and secure and all that? So I decided, okay, I’m going to pay everybody 8%, right? I’m going to secure the notes with a deed of trust. That’s what it hears here in North Carolina. Most people call it a mortgage. I’m not going to borrow more than 75% of the after-repaired value. I didn’t say 75% of the purchase price. Big difference.
Jay Conner [00:11:08]:
I always bring home a big check when I buy a property. Who wants to get paid to buy properties, right? So what’s the underwriting? What is it I want to offer? So I put that together and, you know, I decided I’m going to name them on the insurance policy as a mortgagee. So I’m going to give these private lenders individuals the same protection that a local bank, you know, would require.
Scott Morse [00:11:33]:
Amazing.
Jay Conner [00:11:34]:
And so here we go. First, $500,000. It was on a Wednesday night at 209 Barber Road in Morehead City, North Carolina. What’s located there? The Church of Christ. So Carol, Joy, my wife, and I we’ve been members there at that church for several years. And so I walked into Bible study. I mean, we go to Bible study every Wednesday night, 7:30. I walked into the church, and I walked into the foyer, and I was looking for a gentleman named Wayne.
Jay Conner [00:12:04]:
Now, Wayne and I have known each other for several years. And I walked up to Wayne, and here’s exactly what I said to Wayne. I said, Wayne, I got something I want to talk to you about confidentially. After Bible study tonight. Would you have a few minutes? He said, Sure, Brother J. So we have Bible study, and we go down to the nursery after we’re finished, and we shut the door. And I want to share with you, Scott, and your audience exactly what I said to Wayne, bearing in mind I’m never going to ask for money. And here’s what I said to Wayne.
Jay Conner [00:12:37]:
I said, Wayne, you know everybody in this town. And he did. He was the original Zenith Television dealer in Morehead City, North Carolina. Now, if you’re listening to this show and you don’t know what a Zenith Television dealer was, you’re too young to remember life before Walmart came to town. The Zenith dealer holds you the TV, he financed the TV, and he even comes to your house and repairs your TV. You didn’t throw them away back then and go back to Walmart, and spend 299 and get another one. You actually got your TVs repaired. He was big-time involved in the Rotary Club.
Jay Conner [00:13:13]:
So I said, Wayne, you know everybody in this town. And here comes the magic phrase. I said, Wayne, and I need your help. Ooh, okay. I said, Wayne, you know everybody in this town. I need your help. I said, You see, I’ve now opened up my real estate investing business by referral only. And when you run across somebody who’s complaining about the stock market, the volatility, losing money in the stock market, or the low interest rates that the local bank is paying, if you put your money in a CD, would you refer them to me? Because I’m paying insane high rates of return to my investors now, and I’d love to share with them what I’m getting going on.
Jay Conner [00:13:58]:
Wayne looked at me, and he said, Now, what you got going on there, Jay? And I said, Well, are you saying you might be interested? And he said, Well, I might be interested. I said, Why? He said, Well, I’m losing money in the stock market. Bear in mind, this conversation was in February 2009. He’s. I’m losing money in the stock market, and I’m not making much money, you know, in the. In the local bank and my CDs. He says, What kind of rate of return are you paying there, Jay? I said, well, that sort of depends on the deal. I said, but, you know, what sounds high to you? He said, Well, I don’t know.
Jay Conner [00:14:40]:
He says, I’m only making almost. I was almost 3%. It was less than 3% in the local bank. He says, I don’t know. I guess 5 or 6% would be pretty high. I said, Wayne, I can’t pay you 5 or 6%, but I can pay you 8%. He said, Put me down for $250,000. So the next day, on Thursday afternoon, and bear in mind, unpack what I just said.
Jay Conner [00:15:05]:
I didn’t ask him for any money. I asked him to help spread the word about my opportunity that I now have. And I wasn’t talking about any deals. Here’s a writer downer, Scott. Desperation has a smell to it. Desperate. The worst time to be raising money is when you need it for a deal. And let me tell you, hey, Scott, I’m gonna take a little risk right here, and then I’ll finish my story about Wayne and that 500,000.
Jay Conner [00:15:30]:
But I’m gonna take a little risk right here and ask you a question. Yes, sir. And Lord have mercy. I don’t know, you might have said it yourself in the past. I hope not. But have you ever heard the guru on stage stand up there and say to real estate investors, particularly newbies, have you ever heard them say, Oh, just get the deal under contract. The money will show up.
Scott Morse [00:15:55]:
Hear it all the time.
Jay Conner [00:15:57]:
Or they’ll say. They’ll say, Oh, money finds good deals. Now, that’s the most asinine thing I’ve ever heard in my life. I mean, is the money going to rain out of clouds? Or has money got legs? Is it like going? Is somebody going to drop a box of money on your front doorstep? And after you got a deal under contract, I mean, come on, give me a blanket shady blank break, okay? So it just seems to me that it makes a whole lot more sense to get the money lined up, ready to go. Think about. Think about a few hundred thousand dollars burning a hole in your back pocket. You think you’ll make some more offers if you actually know where the money’s going to come from.
Jay Conner [00:16:38]:
So, back to Wayne. I went to his and his wife’s home on Thursday afternoon after that little conversation on Wednesday night, and I went to their home. And what did I do? I came figuratively with my hat on.
Scott Morse [00:16:53]:
My.
Jay Conner [00:16:53]:
I’m just going to teach them. I’m just going to expose them to this world of private money, what it’s all about, and how they’re protected and how they can get their money back early in case of an emergency, and all that kind of good stuff. And you know what? I didn’t talk about any deals. Didn’t talk. I just talked. Just talked. The opportunity. And after two cups of coffee, that $200,000.
Jay Conner [00:17:15]:
I mean, excuse me, that $250,000 became $500,000 that they wanted to invest. So then I got to share this with you, Scott, and your audience. Then I want to turn it all back over to you because I got so much I want to say. But anyway, I’ll turn it back over to you. So I want to share with you and your audience the exact script that I say over the phone. And people love scripts, and I do too. And so I want to give the script, exactly what I say over the phone to a private lender when I’ve got a deal for them to fund, and they’re ecstatic to fund it without me pitching the deal. And here’s how it goes.
Jay Conner [00:17:56]:
So let’s do a little setup here. Scott, this will make sense if you and I do a little role play. All you gotta do, all you got to do is smile and nod your head. So, let’s set this up. Let’s first assume that you and I are. We’re good friends and we’ve known each other for a while. Let’s say we go to church together like, like I did with money. All right? We go to church together.
Jay Conner [00:18:17]:
We’ve known each other. Let’s also assume that you were working previously at an employer and you left that employment. Yep. And you had a 401 (k) at that employment. And let’s say that you had $150,000 in that 401 (k) and you’re not happy with it. And so let’s also assume that I’ve told you about this opportunity. I’ve told you about this world of private money, and I’ve. And, I’ve learned.
Jay Conner [00:18:45]:
You’ve told me you got this $150,000 over in this 401 (k), and it’s volatile, and you don’t like it, and you’re looking for something to do with it. And so I introduce you to a self-directed IRA company that I recommend you talk with. And let’s assume you have moved that $150,000 over to the self-directed IRA company. And I have told you I’m gonna put your money to work for you just as soon as possible. So let’s say a week or two goes by, and I’ll call you up. Here’s the phone call. I call this the good news phone call. The good news phone call.
Jay Conner [00:19:22]:
So I call you up, you answer the phone, we have a little chat, and then here’s exactly what I say to you to fund this deal. I say, Scott, I got great news for you. I can now put your money to work. I have a house under contract to purchase in Newport, North Carolina. And the after-repaired value on this house is $200,000 now, the funding required for the deal is 150,000. That’s 75% of the after-repaired value. Closing is going to be on Friday. So I’ll need you to have your funds wired to my real estate attorney’s trust account by next Thursday.
Jay Conner [00:20:04]:
I’m going to have my real estate attorney email you the wiring instructions. That’s the end of the conversation. Now, let’s unpack what just happened and why Scott is ecstatic to fund my deal. Three big reasons why Scott wants to fund my deal. Number one, he trusted me and moved his money over to the self-directed IRA company. He did that two or three weeks ago. So first of all, the trust factor is there. He knows the program, he knows the interest rate I’m going to pay him.
Jay Conner [00:20:38]:
He knows how he can get his money back in case of an emergency. And so he’s already moved his money over, and he’s looking for me to put his money to work. That’s the first reason. The second reason Scott is excited to fund my deal is that Scott knows I’m not going to bring a deal for him to fund that doesn’t match the criteria of the program I already taught him. He already knows I’m not going to borrow more than 75% of the after-repaired value. He knows the interest rate I’m going to pay him. He knows the frequency. He already knows all that stuff, right? And so he knows that the deal I’m going to have him fund matches what I already told him.
Jay Conner [00:21:16]:
And the third reason Scott is excited to fund my deal is that he’s not making any money until he funds my deal. Because that’s when the interest rate and the rate of return start. And so one of the biggest mistakes new capital raisers make, new people that are out there raising money, is they talk too much, right? They talk too much. They try to sell or pitch the deal. There’s no selling, there’s no pitching of the deal. You are, you educate, you serve, and you are following through and you’re delivering on your promise of putting their money to work just as soon as possible. All about attracting. No chasing, no begging.
Scott Morse [00:22:00]:
That’s so much value. Packed it within like 10 minutes. But I want to compliment you from myself that only maybe certain people in my world, but I mean it as a huge compliment. You give me Zig Ziglar vibes.
Jay Conner [00:22:17]:
Let me tell you something. When I was 23 years old, I was with a sales organization. At 23 years old, I was required. I’m getting ready to date myself. I was required to listen to every one of Zig Ziglar’s cassette tapes.
Scott Morse [00:22:33]:
Automobile university.
Jay Conner [00:22:35]:
I’m talking 42 years ago. Yep, yep, yep.
Scott Morse [00:22:38]:
You give off those vibes. And I’m curious, before your. Before life, before you kind of stumbled into this, did you have professional sales training? Did you have a job where communication was key? Because obviously, you’re a great speaker, orator, and describer of events.
Jay Conner [00:22:53]:
Yes, the best capital. And I don’t want to rule out anybody but the people, the real estate investors that have the best success are, first of all, ordinary people. Ordinary real estate investors. Every. I mean, no. No special training. But if you. If you are drawn to communicating with people, you’re already ahead of the pack.
Jay Conner [00:23:18]:
You’re already ahead of the pack. And I’ll tell you another way. You’re ahead of the pack if you actually love people and you have a childlike curiosity that’s going to pay you huge dividends.
Scott Morse [00:23:32]:
Because even with your story after church, and you’re in the nursery area, and that tactic, it’s like a takeaway because you’re not asking him for his business, you’re actually asking him as a conduit to kind of spread the word. And that whole conversation would have been just 180 degrees different if you’re like, I got an opportunity for you. Instead, you didn’t even. And then he gets to raise his hand. And what I love the most about everything you talked about is something that I believe in, which is that if my product or service is good, it is. This is truly what I believe. I need to get that transfer of feelings through education. Because if I can educate you up to speed, then I should be the logical conclusion.
Scott Morse [00:24:14]:
And so I always just think educate first, then help. And it sounds like that’s really exactly what you’re doing.
Jay Conner [00:24:19]:
That’s exactly what I’m doing. So. So I have 47 ordinary people, private lenders, individuals who are funding our deals. And I don’t do a ton of deals. I’m in a small area, but I do two to three a month. Average profits are $86,000. I don’t say that to brag. I said that to make a point.
Jay Conner [00:24:38]:
There’s an argument to be made for being a big fish in a small pond. Right. And dominate the market. But, sorry, I digress. But you’re right. Of my 47 private lenders, Scott, you know what’s interesting? Not one. Not one of my 47 private lenders funding my deals ever heard of private money or private lending until I put on my teacher hat, and I exposed them to this world, and not one of them had ever heard of self-directed IRAs. Now here’s a writer downer, here’s an actionable item.
Jay Conner [00:25:12]:
If you’re listening to this show and you want to raise money, here’s one of the first things you want to do. Establish a relationship with a self-directed IRA company. That, and here’s why. Over half of my private lenders are using current retirement funds that they already had either in the stock market or 401 (k) or et cetera. And they moved it over to the self-directed IRA company that I recommended. Well, if I hadn’t already had a relationship in place. See, that’s back to education. If I hadn’t already had a relationship in place to introduce them to, to move their money over to, then I’d be missing out on more than half of my funding for my private lenders.
Jay Conner [00:25:55]:
But you’re exactly right, Scott. It’s all leading with education. Because you know, my philosophy is that when I educate people and maybe we’ll have time to talk about the private lender luncheon. I got $969,000 pledged to me at my very first private luncheon. It was all about feeding them lunch and educating them on what private money is. But if you’re leading with education and serving. Here’s, here’s another part of my philosophy. I want to leave people better off than when I first talked to them about this.
Scott Morse [00:26:32]:
Amen.
Jay Conner [00:26:32]:
Even, even if they don’t, even if they don’t become involved, then they’re going to learn some stuff and know some stuff that they in all likelihood never even knew this world existed? Yeah.
Scott Morse [00:26:45]:
Is there a difference in the quality of self-directed IRA companies, or is it just that they all kind of function the same, so it doesn’t matter who you move your funds to for your retirement?
Jay Conner [00:26:56]:
Well, I’m not going to call any names out, but I have referred more than one or two or three self-directed IRA companies and recommended more. In fact, it’s been three overall these years, and one of them was a horrible experience on cost. It all comes down to customer service. Yeah, and the management fees like some self-directed IRA companies have. Just a percentage. Like, like you know, if you got retirement funds, you’re going to be paying your stock brokerage, or you’re going to be paying some custodian a management fee. Well, some self-IRA companies do charge a management fee.
Jay Conner [00:27:32]:
Some just charge by the transaction. Right. But yes, it does, it does make a difference. And I don’t want to call out any names here for the world to hear. But you know, if anybody reaches out to me, I’m, I’m glad to have an offline private conversation and give out the recommendations.
Scott Morse [00:27:52]:
You talked about 8% when you were talking about your story many moons ago. The economy’s different, life is different. What is, if you were having that same conversation in the church on August 8, 2025, what would have been that percentage or what is that percentage today?
Jay Conner [00:28:10]:
8%. It’s been 8% since 2009. And people say, Jay, how in the world are you still paying your private lenders 8%? Of course, you know, five years ago, the local bank got down to an average of 0.17%. And then a year and a half ago, you could have gotten 5 or 5 and a quarter percent. Now it’s down to right at 3 or a little bit less than 3% on a 7-month or 12-month CD. So the market is all volatile, and people say, Jay, how in the world are you paying your private lenders the same thing, 8% since 2009? I said, well, there are two reasons why I still pay them 8%. The first reason is 8% is a whole lot more money than either 0.17 or 3, or even 5%. And it’s not unsecured, it’s secured, it’s backed by real estate.
Jay Conner [00:29:04]:
I said, the second reason I still pay them 8% is because I make the rules, right? I make the rules. This is not a negotiation conversation. Now that does trigger this important point. There are three categories of where you find private money. There are three categories of people that I’ve identified as to where these people are. I mean, where do you find these people? Well, the first category is your own network. As I shared. You go to church with them, and you play golf.
Jay Conner [00:29:35]:
I mean, here’s the question to ask. Where do you go and see the same people every week, right? The trust factor is already in place, right? Where do you go, you know, who you play golf with, who you play poker with, you know, blah, blah, blah, coworkers, etc. Who’s in your cell phone? Here’s another great question to ask yourself. Cause in my book, where to get the money. Now I actually teach the five steps in the book on how to raise a lot of private money very, very quickly. But a great question to ask yourself is, who in your cell phone is retired, right? Because there’s a good chance they have retirement funds. But anyway, that’s the first Category of people in your own network. Now, the second category of where you find private lenders is what I call your expanded network.
Jay Conner [00:30:24]:
Because if you want to scale your business, I’ve rehabbed and flipped over 500 houses since I started doing this here in just two counties in eastern North Carolina. So if you want to scale your business, you’re going to run out of your own network sooner or later. So how do you continue to grow your network? Well, I teach that in my book as well. But let me tell you a great big easy way to easy, easy way to grow your network, and that is to join BNI in your local area, Business Networking International. I’ve gotten millions of dollars through my new connections and referrals from becoming active in BNI. The third category of where you find private lenders is existing private lenders. These are ordinary people who are already loaning money out from their investment capital and or their retirement funds to real estate investors. Well, where do you find them? Well, did you know that over 70% of account holders at self-directed IRA companies want to loan you money? They want to be a passive real estate investor.
Jay Conner [00:31:33]:
They don’t want to find deals, they don’t want to negotiate deals, and they don’t want to oversee rehab projects. They don’t want to, you know, get into the wholesale game of flipping contracts. They just want to loan money out and get a consistent return. Well, those self-directed IRA companies have networking events, and you don’t have to be an account holder to attend those networking events. But here’s the thing, I don’t want you to miss when you’re talking to an existing private lender. You’re not putting on your teacher hat when you’re talking to these. You’re not teaching them anything about private money. They already know what private money is.
Jay Conner [00:32:10]:
They for sure know what it is if they’ve got self directed IRA account. So that conversation becomes a negotiation conversation and not a teaching or education conversation. And you know what? I have a whole lot more fun being a teacher than I do being a negotiator.
Scott Morse [00:32:29]:
I’m sure you said it just slipped through between the many words you said something about earlier. Like on every deal, I still bring home a check.
Jay Conner [00:32:38]:
Yes.
Scott Morse [00:32:39]:
And it made me think that there was something in that 70% of ARV versus acquisition price thought process. So walk me through what that means to Jay.
Jay Conner [00:32:48]:
So the way you bring home a check when you buy without taking any of your own money to the closing table is so, so let’s follow the math. So let me give an example of a Real deal, right? So let’s back to, let’s go back to the little role play Scott and I did. After the repair value is $200,000. Now I’m keeping the numbers low because it makes sense. I know in California you can’t even get an outhouse for $200,000. But anyway, we’ll keep it simple. So let’s say we have an ARV, an after-repaired value on a single-family house of $200,000.
Jay Conner [00:33:21]:
Now I can borrow up to 75% of the after-repaired value, so I can borrow up to 150,000. Well, if that house is distressed and needs renovation, then I’ll buy that house all day long for $100,000 if the renovation is maybe 30,000 or 35,000. So let’s follow the math. I’m going to buy it for $100,000. So I go to the closing table, and my private lender has already wired $150,000 to the closing agent. In North Carolina, we use real estate agents. Most states use title companies. But whoever the closing agent is, the 150,000 got wired in.
Jay Conner [00:34:06]:
Now I go to the closing table, and $100,000 of that $150,000 is going to go to the seller of that property. It doesn’t matter if it’s a bank-owned property or for sale by owner. Of course, I haven’t bought anything on the multiple listing service since COVID. Everything we buy is for sale by owners, and what we call off-market, but 100,000 goes to the seller. So now, after taking out a little bit of closing cost, my real estate attorney’s check that is payable to me, the buyer, my favorite phrase on her check on my real estate attorney’s check stub, Scott, is excess cash to close. And I love me some excess cash. So I’m bringing home in that example, yes, around $50,000, you know, minus some closing costs, sure. I’m going to use the majority of that money for renovation. But now check this out.
Jay Conner [00:34:59]:
I’m so excited about this. My hair is standing up on the back of my neck. Listen to this, let’s say your private lender actually requires monthly payments, monthly interest-only pay. I don’t pay principal and interest. I pay interest only because I have some private lenders that are elderly and they’re, and they’re looking to help supplement their income. So if I’m making them monthly payments, here’s my question. Whose money am I using to make their monthly payments? Right? I mean, I got 50,000 excess cash to close from the private lender. Now that money’s going to run out.
Jay Conner [00:35:38]:
I either want to get that house flipped in a, you know, as quick as possible, or if I’m going to be selling it on rent to own or lease purchase, then I want, you know, I want to get it cash flowing. But that’s how it works for you, to bring home a big check. Typically there’s going to be, there’s going to be equity in the house, right? And there may be a, there may be a renovation involved. The biggest checks I bring home are for the biggest renovations. Right? Because I’m getting all the renovation money up front. There are no draws. There are no draws in this world.
Jay Conner [00:36:15]:
All the money comes in up front.
Scott Morse [00:36:18]:
A lot of people in my network and my own clients in the REI space use like two or three major hard money lenders, and that’s literally what they do. It’s already dialed in, per se. They have their contact, they have their processes down, and they’ll go in there, and then they’ll make sure they’re done within a year, and they’re going through all the processes, paying the associated fees at a high level. Snapshot. It’s more flexible, and it has fewer fees. Like, what are they missing to really have it sink in about why they need to do this versus this traditional route?
Jay Conner [00:36:53]:
Sure. Well, first of all, I don’t poo poo hard money lenders. Some of my best friends are hard money lenders. In fact, they use my techniques to raise more money for their fund, which they turn around and lend out to the real estate investors. Right. So if the math makes sense and you don’t have private money, then of course, don’t pass up on the deal. Use your hard money lender, you know, relationship. But here, there are 20 reasons why I love private money, but I’m not going to do all 20.
Jay Conner [00:37:25]:
I’m going to do the big ones. So first of all, paying 8% with no points, I promise you, is going to be a lot cheaper than what you’re going to pay your hard money lender. You’re going to pay a much higher interest rate. Depending on your experience, you’re going to be from 11% to 14% in today’s market. You’re going to pay points, you’re going to pay origination fees, you’re going to pay some other fees that they call different things, but you’re going to pay some more fees that you’ve got to bring to the closing table. There are no such fees with private money. Secondly, you’re never going to bring home a big check. When you purchase, you’re going to have to take some of your own money to the closing table.
Jay Conner [00:38:05]:
Trust me. Right. So, the cash flow now, depending on your relationship, some hard money lenders can move pretty quickly, but most of them cannot move as fast as my private lenders. All my offers I tell my in my offers I can close in seven days. In seven days, I can close. And the reason is that the private money’s there, ready to go, ready to be wired. And I got a great relationship with my real estate attorney as well. Another big difference is the length of the note.
Jay Conner [00:38:38]:
Most hard money lenders are going to have a note of either 6 months, 9 months, or 12 months. So, there are no extension fees with private money. If you haven’t cashed out that note within the length of the note, they may extend your note. But what’s the hard money lender want? More money. I know I have a good friend who’s a hard money lender who, if you haven’t cashed out by the length of the note, will extend your note. But it’s 3% of the amount financed, and that only gets you 90 more days. That’s called 1% a month. Right.
Jay Conner [00:39:10]:
So, private money, much cheaper and much quicker. There’s no hurry to pay it back. All my notes are either two years old or five years old. Two years if it’s just liquid capital, five years. If they’re using retirement funds, they never want their money back because if they get their money back, they stop making money until I put it back to work. So no extension fees. Bring them a big check. Oh, here’s a rider downer.
Jay Conner [00:39:34]:
Scott. Here’s a writer downer. If you’re buying a house and it needs renovation, and you’re using private money, if you can’t bring home a big check when you buy, you’re paying too much for the property.
Scott Morse [00:39:49]:
I love that.
Jay Conner [00:39:50]:
I just know that because I’ve done hundreds of deals, and that’s the way the math works. If you can’t bring home a check, then you’re paying too much.
Scott Morse [00:39:59]:
I think when I hear these, I think about the guys who are kind of on the fence in the industry. They’re halfway pregnant, I call them. And it’s their wholesaling, and they’ve gotten kind of almost addicted, and their processes have gotten, and they’re feeding guys like you off-market deals who are then building their portfolios. And what they’re missing is that education, but that capital infusion to be able to start building their own. And that’s what I hope who really inspire. I have a lot of wholesalers out there that just haven’t taken that first step. And I think some of them would say, well, Scott, you know, I’m in my 20s. I’m 28 years old.
Scott Morse [00:40:39]:
I’m 25 years old. I’m not Jay, I’m not seasoned. I don’t look like. I don’t seem like that. Maybe I have some tattoos, or maybe I’m not too big in my local church or whatever it may be, because they’re just young and getting into it, but they have access to real deals because they’re making money selling to other people. How would you encourage that younger person, who really doesn’t have that much of a network, to be able to learn and execute on this?
Jay Conner [00:41:05]:
Yeah, the quickest way to get that is just what’s called self-confidence. And how do you get self-confidence? Two ways. First of all, learn what it is that you’re going to teach. Learn what you’re going to teach. In my book, Where to Get the Money Now, it’s so easy to read. And I mean, if you can read, you can do this. It’s not complicated. It’s easy to do.
Jay Conner [00:41:31]:
So first of all, you build your confidence by knowing what it is that you’re going to go about teaching, right? And then the only other way to build your confidence is just to get out there and screw it up royally. Just screw it up, right? Get out there, put on your teacher hat, and start teaching people what this is about. They’ll start asking you questions that you say, well, you know, I’m not sure about that. Let me go check on that. And. And then you call your buddy Jay Conner, and I’ll give you the answer. I love it.
Scott Morse [00:41:59]:
I was going to mention it because I love this book, Where to Get the Money Now. And I think about it. I know one of the things that you have to tackle in there is this perception. I think a lot of people in the industry have said, Well, if I get private money, I have to give up equity in the deal. Tell me, does that happen? Is it a strategy? Just stay away from it? And maybe, I guess. Why does everybody think that?
Jay Conner [00:42:20]:
Yeah, it’s a great question. A lot of people think, and they’ve got it in their mind, that if someone’s going to loan you money, then you should be giving them, you know, a percentage of the profit. And I’ve never given any percentage of my profit. And think about it. Your private what if something goes sideways with that deal, and you don’t make as much money as you had anticipated or told your private lender? Well, I’ve rehabbed over five houses, 500 houses. Have I ever had a rehab project come in on budget? No, I’ve never had one come in. That’s why the secret is in your offer and not exactly estimating, you know, the renovation to the T, but our private lenders absolutely love this program because they know, regardless of what happens with that deal, they know what their rate of return is. Right? So you know, the old business model was joint venturing.
Jay Conner [00:43:15]:
Somebody put up the money, a private lender, investor, and then you, you split the profits 50- 50, right? Well, I’ve never given any of the profit or the equity. We, if they, if they loan a hundred thousand dollars on a deal, they know that they’re going to get 8 8%, $8,000 on that hundred thousand dollars until you know, you cash out the deal. So they like the reliability of knowing exactly what to receive. And again, if you’re sharing in the profits, then you know, maybe they want to go over there and get involved in. Okay, well, what should we do to this house? Right? They want to get involved in your world. Hey, look, I want my private lenders to do what they do best, which is send me money, and they sit back and watch their account grow. And then I do what I do best is I do deals; they fund deals, I do deals.
Scott Morse [00:44:11]:
We’re getting close on time, but I have some questions still lingering, and I’m curious, does private money expire like milk? Like, if you’re getting this commitment and then you’re not utilizing it and aren’t we asking them to take it out of an active investment, put it into a self-directed, which I assume and candidly I don’t know means that it’s not doing anything other than sitting there, and then Jay doesn’t have deals. Boy, I’m really missing out. So walk me through the overcommittal and everything.
Jay Conner [00:44:40]:
No, that’s true, that’s true. Look, do not get a commitment from a private lender unless you already know how you’re going to source deals, right? So because you don’t want them moving their money over, and you know, it’s sitting there not earning any money. Now I still say don’t go get that deal under contract, and you have no idea where the money’s going to come from. But at least you know, have in mind how you’re going to source deals so that you, because like you said, is it like milk? Does it expire? The answer is yes. It’s like bananas in the grocery store. They go rotten over time. And so, yeah, I mean, you’re private. So I tell my new private lenders, because they’re going to, they’re going to ask you, well, how soon do you think you could put my money to work? And I tell them all the time, well, every week is different, but typically, I should be able to put your money to work within 30 to 60 days.
Jay Conner [00:45:38]:
And so I’m ma. Now, actually, in my mind, I know I’m gonna be able to put their money to work in less than 30 days, right? Yes. But I’m managing expectations.
Scott Morse [00:45:49]:
Great. And you’re helping people diversify, too, because if they have more than what it is, they’re just taking a chunk. They’re moving it over here. They’re getting something consistent. They’re getting something that they can understand the expectations, and it should be delivered precisely. And obviously, it’s asset-backed, which is a wildly beautiful protection you just simply don’t get in the stock market. Like, you’re, you’re not going to get that. If it drops, it drops, baby.
Scott Morse [00:46:14]:
And so also, I think a lot of people, even myself included, have these retirement funds., I don’t personally know the guy. I don’t believe anybody actually cares about my account at all, ever. Everything’s done by a computer and stop losses, and that’s it. That’s it. And to be able to be like, oh, hey, here’s somebody I know, like and trust, and I can taste test, move 100, 200, whatever it may be, over, get a feeling for this. It’s. It’s great.
Scott Morse [00:46:40]:
I think you’re giving people a lot of options. And I think for people who are watching this, the entire time we’ve spoken, you’ve spoken with such confidence and very clearly, and you made what I think could be a complicated subject matter very easy to understand. And pretty much all this is on your podcast and book. So, can you tell my listeners how they can go about absorbing more of your content, Jay, and help change some more people’s lives?
Jay Conner [00:47:08]:
Absolutely. Well, you can pick up my book on Amazon for 20 bucks, but don’t do that. I want to give you my book for free. If you’ll just cover shipping. I’ll autograph it, and I’ll express mail it to you. It’s called where to get the money now, how, and where to get money for your real estate deals without relying on traditional or hard money. Lenders, and you can pick up the book at wwwJayConner.com/Book. Now, I’m an er, not a or so that’s wwwJayConner.com/Book.
Jay Conner [00:47:46]:
And I’ll rush it right on out to you. And also, twice a week, I’m interviewing other real estate investors on my podcast about how they’ve gone about raising private money. And I’ve, you know, I picked their brain because we can all learn from each other. And so if you enjoy podcasts, which obviously you do, just whatever your favorite podcast platform is, just search for Raising Private Money with Jay Connor. And I’m almost up to 800 episodes. Not right now. And so I’m gonna have amazing guests come on the show. I’d love for you to come join the party.
Scott Morse [00:48:25]:
Yeah, well, I, I can tell you that as a master communicator, as you seem to be, Jay, I, I think that people should go over there, they should understand this part. And again, to all my young hustlers that are out there that are currently busting your butt and making fair and good money like there’s no tomorrow to it, but you struggle to actually start to build your own. The only thing stopping you, really, from cherry-picking these deals is access to reliable capital. Jay has that solution. You’ve already done the hardest part. You’ve busted your butt on the phones, you’ve dropped mail, and you ran ppc. You’re directed to the seller. There are so many people with money who could never master that part of the equation.
Scott Morse [00:49:05]:
You’ve got it all. The last thing you’re missing is a guy like Jay to show you the light. So that way you can have these committed resources to not only help those people make money, but also kind of finally build that generational wealth thing that you heard about at that seminar seven years ago when you started wholesaling. So I appreciate it, man. I really, really do. Any last notes or nuggets?
Jay Conner [00:49:28]:
Yeah, I mean, take me up, order the book. Jconnner.com book and let me get that into your hands. My direct. Com, direct contact information is in the book. And, you know, I actually do something novel. I actually answer the phone when somebody calls.
Scott Morse [00:49:48]:
Yeah.
Jay Conner [00:49:48]:
Allow me to serve you.
Scott Morse [00:49:50]:
Great. I appreciate it. We’re going to chop up a lot of this content. You can find it on our Instagram @lamaso leads. You can find it on our TikTok, Scott Morse, Rei, and obviously, like, comment, subscribe to the Leads the Deals podcast. Jay, this has been the most pleasant, most comprehensive conversation we’ve had about this subject matter. You truly are a subject matter expert, and I thank you for your time today to be able to share these golden nuggets with our followers.
Jay Conner [00:50:16]:
Scott, thank you so much. God bless you.
Scott Morse [00:50:19]:
Thank you, sir.
Narrator [00:50:29]:
Are you feeling inspired by the knowledge you gained in this episode? Then head over to www.JayConner.com/MoneyGuide, that’swww.JayConner.com/MoneyGuide, and download your free guide that shares seven reasons why private money will skyrocket your real estate investing business right now. Again, that’s www.JayConner.com/MoneyGuide to get your free guide. We’ll see you next time on Raising Private Money with Jay Conner.