Welcome to another amazing episode of Raising Private Money with Jay Conner!
Today, we are joined by our top coaches, Chaffee Thanh-Nguyen and Crystal Baker, and their students, Michelle Caudill, Greg Caudill, Angela Minnis, and Jerry Owens to discuss the challenges and rewards of real estate investing, specifically focusing on raising and leveraging Private Money.
One topic that stood out from the episode was Jerry Owens’ experience with partnerships in real estate investing. Jerry shared how he learned the hard way that partnerships can be like a bad marriage. It became clear to him that having a solid foundation of Private Money in his business was essential to avoid potential complications and conflicts. This highlighted the importance of following the advice of The Private Money Authority, Jay Conner, who always emphasizes the need to get the money first.
Chaffee Thanh-Nguyen reaffirmed the significance of raising Private Money in real estate investing. He encouraged all listeners, regardless of their level of experience, to prioritize obtaining private funding before diving into deals. He mentioned Jay Conner’s five-step process, which can be found in Jay’s book, and how it lays the groundwork for successful Private Moneyraising. Chaffee also explained how their Platinum Plus and mentorship programs provide further guidance and support to ensure investors stay on track.
Another question that arose during the episode was the benefit of lease options versus seller financing for selling properties. Angela Minnis sought clarification on this matter for a property she had owned for over a year. While Angela acknowledged that she wasn’t focused on capturing depreciation, she wondered why she shouldn’t just sell or finance it herself to maximize interest over time. Crystal Baker addressed her query and provided insights on the differences between lease options and seller financing, taking into consideration the control and ownership aspects.
These valuable discussions shed light on the intricacies of real estate investing and the power of Private Money. It goes to show how crucial it is to educate yourself on different strategies and leverage the expertise of seasoned investors like Jay Conner, his team, and the guest speakers on the Raising Private Money Podcast.
Timestamps:
01:02 – Has experience in real estate but needs help with private lending?
05:35 – Private Money and lease options
09:49 – Seller financing, deed transfers, and best protection in the financial aspect.
12:42 – Stay motivated, take action, and ask for help.
14:53 – Gain knowledge, download Jay’s free guide, and skyrocket profits.
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Closing Deals with Private Money: A Step-by-Step Guide for Real Estate Investors
Jerry Owens [00:00:00]:
Finding now is that it is a giant hole in my business because the people that I’ve been finding weren’t interested in doing private lending. They wanted to JV or be a partner. And if I can tell a sad story, that is really not the way to go. I learned this the hard way, that partnership is like a bad marriage.
Narrator [00:00:29]:
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.
Chaffee Thanh-Nguyen [00:00:57]:
Do you have experience in real estate? Do you want to unmute and share real quick?
Jerry Owens [00:01:02]:
Yeah, so it’s Jerry Owens, and I’m actually a master with Ron Legrand. And so I’ve done some fixes and flips and I’ve done some lease options and owner finance and subject to. So I have a little bit of experience for the last couple of years. In fact, you all actually were very helpful with my very first one to kind of help me to see how to really work that thing. But where I failed was I signed up for the course, started going through the course, and then got caught up in not finishing the course and not actually applying for the private lender thing. And what I’m finding now is that it is a giant hole in my business because the people that I’ve been finding weren’t interested in doing private lending. They wanted to JV or be a partner. And if I can tell a sad story, that is really not the way to go.
Jerry Owens [00:02:13]:
I learned the hard way, that a good partnership is like a bad marriage. I’m really now getting excited about getting back on board and getting Private Money to do this because what ends up happening is you find a deal. You’ve analyzed it, you’ve looked at it, you’ve given it the go-ahead, and then your partner comes in who has no concept and then wants to try to keep Renegotiating it down. And you’re like, we’re going to make money, don’t worry. And it’s a mess as of today. I don’t know if you heard my first question or the other people, but that directly ties into that. Now I’ve got somebody who has backed out of the deal and you’ve got to pay that EMD that earnest money deposit or do the deal. We’ll see how that goes on the next one.
Jerry Owens [00:03:16]:
I’ll make sure to let you know how things turned out.
Chaffee Thanh-Nguyen [00:03:18]:
Perfect.
Jerry Owens [00:03:19]:
Thanks so much.
Chaffee Thanh-Nguyen [00:03:20]:
So thanks for sharing and let me jump in real quick and just say that the first thing that Jay always teaches, hands down, without question, is to get the money first, period, right? So we tell all the students that is get the money first. So I don’t care what kind of experience you’ve had. If you’ve done 100 deals or if you’ve done zero deals, get the money first because that’s the right way of doing business. It makes things everything else so much easier. Right. How do you get started with Jay’s program? Is Jay’s got a five-step process? If you don’t have Jay’s book, I highly recommend everybody here get Jay’s book. Just go to www.JayConner.com/Book. You can get it for free.
Chaffee Thanh-Nguyen [00:04:05]:
You pay for shipping, but you get the book itself for free. And in there is his five-step process of how to raise Private Money. And it’s just using his step-by-step system and process. And that’s when you start with our Platinum Plus and mentorship programs. We go through that process step by step. The difference is, yes, you can do it yourself. Yes, you can get the home study system and make that happen. As you found out, Jerry, a lot of times you get halfway through and you stop, right? Well, when you’re with us, know Crystal and Jay and I will make sure you do it, and she’ll beat you over the head until that happens.
Chaffee Thanh-Nguyen [00:04:45]:
Right? And we take it to that next step, too. We record a webinar where you’re doing a webinar with Jay and Crystal. And then we do luncheons and we go through that whole process of raising Private Money and doing it the right way, following Jay’s system. As you said, Jerry, Jay never partners with his private lenders. Right? They are private lenders. They are silent investors in his business, and they’re not partners. And so we go through all that process step by step. So that’s the best way to get started is to go through Jay’s five steps of Raising Private Money.
Chaffee Thanh-Nguyen [00:05:18]:
First, raise the Private Money and start putting in those systems to find deals so that once you find a deal, you can go in and close with Private Money quickly and get the best deals.
Jerry Owens [00:05:32]:
I appreciate you.
Crystal Baker [00:05:35]:
Absolutely. So, Claire, I’ve been working through the rest of this chat, and I think I’m back down to a question, and that is, Claire said, I know I should be clear on this, but does Jay flip or do lease options or both? And in a flip, are there three times in the process that you make money or only with the lease option? That’s a great question, Claire. And it’s okay that you’re not clear on it. It’s good that you ask because we are never clear until we ask all the questions that we need to ask to make sure that we’ve clarified. So, yes, Jay does both. And by that, I want to be clear. He doesn’t purchase on lease options. So there’s a lot of trainers out there that do sandwich leases.
Crystal Baker [00:06:17]:
They’ll purchase on a lease option and sell on a lease option. This is not what we’re talking about. He would purchase with his Private Money and of course other terms deals. But to not muddy the water for this three-check thing, he makes three checks on a flip. Yes purchase with Private Money, and take home a check because he borrowed his 75% loan to value and has the money already in his hand for rehab and carrying costs. So that’s check one. Check two is the nonrefundable option fee from the tenant-buyer. Check three is the actual sale of the property.
Crystal Baker [00:06:54]:
When he does just a straight flip where he doesn’t lease option it with a tenant-buyer, there are two checks. So just to give clarity to that. That was a good question, Claire. Hopefully, that answers it for you. Yeah, perfect. Very good. And I don’t see other questions. Oh, I did slide.
Crystal Baker [00:07:16]:
Okay, Angela? Angela asked if I could piggyback on selling options, what is the benefit of a lease option versus seller financing if you’ve owned for over a year? I can answer that, but do you want to answer that?
Chaffee Thanh-Nguyen [00:07:32]:
No, you’re good, go for it.
Crystal Baker [00:07:34]:
I’ll answer that. Or do we have a student that wants to answer that? I don’t know. I mean that’s an option. One of our plus members or somebody that’s in here that’s well versed.
Chaffee Thanh-Nguyen [00:07:44]:
Anyone?
Crystal Baker [00:07:46]:
Any take?
Jerry Owens [00:07:47]:
Well, I’ll take a crack at it and just help me to see if I’m right. I’ll be bold here.
Chaffee Thanh-Nguyen [00:07:52]:
Go for it.
Jerry Owens [00:07:54]:
If I understand the question, if I could piggyback on selling options, what is the benefit of lease option versus seller financing? Well, okay, so on a lease option, you don’t actually own the property yet unfortunately that means that you don’t get to take advantage of depreciation, appreciation, et cetera. But the good news is you control the property, whereas with seller financing, basically you own the property and now you can take advantage of all those things.
Crystal Baker [00:08:31]:
Okay, so let me ask a clarifying question. Angela, are you able to unmute for 1 second? Hey Angela, do you mean to try to buy that way or do you mean to dispossess it, sell it that way? I’m talking about selling. I have a property that I’ve already.
Angela Minnis [00:08:50]:
Owned for over a year. So I’m not trying to capture depreciation so much. So why would I think I don’t need to do it for me?
Angela Minnis [00:09:02]:
I could be doing it to help somebody because they need time to be able to purchase it. But why not just sell or finance it and get all of the interest over time myself?
Crystal Baker [00:09:14]:
It’s interesting that you asked that one. This is a great question to identify with your attorney. Is it faster to evict someone or to foreclose? That’s the first question you ask yourself. The nuanced difference here is when you sell on a lease option, you retain the title, the deed still is, you still hold it, and your company still holds it. So I actually just like that because I got it. It’s still my property. If you sell on a lease, option the deed transfers. I mean, if you sell Seller Finance I just said that.
Crystal Baker [00:09:49]:
That’s what I get for talking faster than my brain can spit it out or vice versa. Anyway, when you’re selling with seller finance, the deed transfers, right? So I want you to be thinking of what’s your best protection, what’s the quickest way to get the property back if, God forbid, you have to. And I will also say, Angela, unless the process is not favorable for me as the landlord versus the financing agent, I would rather hold on to it and go ahead and still get depreciation, still get cash flow, and still make the bank at the end. It’s really just a matter of you have to determine what’s going to protect you best when you sell it that way. That’s really the first and foremost. And then look at the financial aspect of it and determine what really is most favorable. Because private lenders don’t bucket anything. If they’re truly a private lender, they’re there to just go ahead and they’ve got a nice equity cushion.
Crystal Baker [00:10:54]:
They’ve got all their securities. They love collecting checks, so they’re easy to deal with. But I do understand the want to refinance. You just going to have to either find another company that refinances or figure out a way to get this one to adjust their thinking. But typically when it comes to financial institutions, they are what they are what they are. Okay, thank you. Absolutely wish I had better news.
Chaffee Thanh-Nguyen [00:11:22]:
Well, that’s why we work with private lenders, right?
Crystal Baker [00:11:25]:
Exactly what I said. Yeah.
Chaffee Thanh-Nguyen [00:11:28]:
But if you already have Private Money or a private lender in there and they’re looking to get the cash-out, absolutely. You can find one or two or more additional private lenders to replace that private lender. So just remember, we don’t pool funds. Right. That said, as long as we’re under a certain loan to value, you can have multiple lenders on a property. They just get separate lien positions. So first lien, second lien, third lien, whatever makes sense for your deal or your property. As I mentioned earlier, the key to this business, or any business is taking action.
Chaffee Thanh-Nguyen [00:12:16]:
So if you have questions, ask questions. Only take action with everything that you’ve learned. Go out there, talk to people, find those deals, and make this your best year yet. We still have plenty of time. I know summer is coming to an end. You’re like, oh, I got to go back to the school year, all that kind of stuff. And guess what? I’m telling you, pick it up. Let’s finish the year strong.
Chaffee Thanh-Nguyen [00:12:42]:
So don’t let the end of summer pull you down. Use it to energize you to refocus and get going to do the things that you haven’t done yet this year make a difference, and make an impact in your life and the lives of the people around you. So always stay on top of this and realize that anybody can do this business. And if you’re struggling, if you’re having a challenge, maybe having a difficult time, don’t just let it all sink in and mole about it and do nothing. Right? Because sometimes a confused mind ends up doing nothing. Go out there and talk to people. Ask for help. Don’t be afraid to ask for help and get out there and start learning more and start doing more.
Chaffee Thanh-Nguyen [00:13:27]:
We appreciate you guys, and we want to see all of you succeed. And real quick, Greg and Michelle, since you guys are there, why should people come to the live event? I know you guys were at the last live event, and I’m picking on you because I like your blue shirt. Greg?
Greg Caudill [00:13:53]:
Well, we’ve been to one in February where we signed up. We went to the one in June. We went to the one in June to get a refresher on it, too, because we got a little slow start.
But it rejuvenates you.
Greg Caudill [00:14:04]:
And we’re platinum plus. I’m not sure if we’ll make it in October or not because we have other travel plans in September, but we may try. There’s just so much energy there that it’s infectious when you’re there.
Michelle Caudill [00:14:19]:
Yeah, great networking.
You meet wonderful people.
Michelle Caudill [00:14:22]:
You can ask questions, and get reinforcements.
Michelle Caudill [00:14:28]:
It is just like no other and Jay and Crystal and Chaffee, I mean, my God, they’re just outstanding. They have a speaker that comes in typically, and Coach David is just you can’t say enough good about it.
Michelle Caudill [00:14:49]:
It’s just great.
We love it.
Narrator[00:14:53]:
Are you feeling inspired by the knowledge you gained in this episode? Then head over to www.JayConner.com/MoneyGuide.
That’s www.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.