*** Guest Appearance
Credits to:
https://www.youtube.com/@hanneshennche/podcasts
“How To Raise Private Money For Real Estate Deals With Jay Conner”
https://www.youtube.com/watch?v=EGQAOQF6rlM
In the recent episode of the Raising Private Money podcast, Jay Conner joins Hannes Hennche in an engaging and compelling discussion about raising private money for your real estate deal without ever asking for money.
Renowned as the Private Money Authority, Jay has been an influential mentor, guiding over 2,000 real estate investors in raising private money since 2011. This episode offers a comprehensive deep dive into private money frameworks, providing essential guidance for those aspiring to break free from traditional banking dependencies.
The 2009 Financial Crisis: A Pivotal Moment
Jay Conner’s journey into private money investing was spurred by the financial crisis of 2009. Until that point, his investment strategy heavily relied on local banks for funding single-family houses. The sudden cessation of his line of credit by the bank during the global financial crisis left Jay in a dire predicament, with properties under contract and no fiscal avenues to proceed.
This crisis prompted a crucial self-reflection, leading Jay to a mentor who introduced him to the concept of private money and self-directed IRAs, forever changing the trajectory of his investment approach.
Leveraging Networks for Private Money
Equipped with newfound knowledge, Jay successfully raised over $2,150,000 within a span of 90 days by tapping into his existing network. His sources included acquaintances from his church and members of his Rotary Club. Jay’s experience underscores the importance of personal connections and networking in the realm of private money lending.
For individuals who may not have an established network, Jay advocates for rapid network expansion. According to him, there is a direct and unassailable correlation between the breadth of one’s network and their net worth. He equips newcomers with strategies to build and nurture these relationships effectively.
Educating Over Selling: The Servant’s Heart Approach
A cornerstone of Jay’s methodology is the principle of leading with a servant’s heart. He emphasizes educating potential lenders rather than aggressively pitching investment opportunities. This educational approach fosters trust and counters any impression of desperation, which can be detrimental to securing funding.
Desperation, as Jay notes, carries a distinct and off-putting odor. In contrast, a calm, informative stance invites collaboration and mutual growth, making potential lenders more amenable to funding opportunities.
Ensuring Lender Security and Confidence
In his discourse, Jay underscored the paramount importance of protecting private lenders. Transparency and security are integral to his approach, providing assurances such as collateral, insurance, and an equity cushion. This not only fortifies lender confidence but also builds long-term, trust-based relationships.
Additionally, Jay’s approach includes offering an 8% interest rate devoid of points or origination fees. This consistent and fair treatment of lenders further cements his credibility and reliability in the marketplace.
The Strategic Role of Self-Directed IRAs
A significant portion of Jay’s lenders use retirement funds through self-directed IRAs. This strategy enables greater flexibility and tax advantages for both investors and lenders. Many potential lenders are unaware of such opportunities until they are informed by knowledgeable mentors like Jay.
Collaboration with reputable self-directed IRA companies that adopt transactional fee structures rather than account balance fees is pivotal. This ensures that fees are only incurred when funds are actively invested, not when they are idle, further enhancing lender satisfaction and participation.
Conclusion and Resources
The episode concludes with a reference to Jay Conner’s book, *”Where to Get the Money Now,”* which serves as a valuable resource for those looking to navigate the intricacies of raising private money independent of hard money lenders. The book, which can be acquired on Amazon for $20 or obtained for free by covering shipping costs at https://www.JayConner.com/Book, provides detailed guidance and practical insights.
Hannes Hennche aptly encapsulates the essence of the discussion, acknowledging the manifold benefits and comprehensive knowledge shared by Jay. This episode stands as a vital resource for real estate investors seeking to enhance their funding strategies and secure their financial future.
10 Lessons Covered in this Episode:
- Lead with a Servant’s Heart
Focus on educating your network with valuable information rather than selling, persuading, or chasing after funds. Desperation can repel potential lenders.
- The Power of Private Money
Jay emphasizes private money as a critical component for real estate investment success. This alternative funding source has had a greater impact on his business than any other strategy.
- Financial Crisis as a Catalyst
In 2009, Jay’s line of credit was abruptly closed by the bank. This experience pushed him to explore private money, transforming a problem into a profound opportunity.
- Rapid Money Raising
Jay successfully raised $2,150,000 in less than 90 days by leveraging his existing network. He didn’t directly ask for money or pitch specific deals; instead, he educated his contacts.
- Cultivate Your Network
Your network is directly tied to your net worth. Jay advises actively growing connections through community involvement, such as church groups and rotary clubs, to broaden funding opportunities.
- Teach Before You Pitch
Separate the act of teaching potential lenders from pitching deals. Initial conversations should focus on educating them about high returns from private money investments without discussing specific deals.
- Good News Phone Call Script
When you have a deal, call your potential lenders with excitement. Inform them that you can now put their money to work, specifying deal details and providing wiring instructions without seeking their decision.
- Join Networking Groups
Business Networking International (BNI) is a potent resource. Jay has raised millions by being an active BNI member, which fosters a culture of mutual support and lead-sharing among members.
- Mindset and Confidence
Acknowledge and overcome fear and rejection. Maintain a positive, confident demeanor to attract funding and build trust with potential lenders.
- Educate on Self-Directed IRAs
Introduce potential lenders to the concept of self-directed IRAs. These accounts enable individuals to invest retirement funds in real estate. More than half of Jay’s 47 private lenders utilize self-directed IRAs, underscoring the importance of educating your network about this tool.
Fun facts that were revealed in the episode:
- The Bank Crisis:
Jay Conner faced a financial crisis in 2009 when his reliable bank suddenly shut down his line of credit without notice due to a global financial crisis, despite his excellent credit history.
- Rapid Fundraising:
Despite the financial setback, Jay Conner managed to raise $2,150,000 in private money within just 90 days, drawing from his personal network, including friends from church and the Rotary Club, without directly asking for money.
- Unique Approach:
Jay emphasizes the importance of leading with a servant’s heart in private money lending, focusing on educating and not appearing desperate, which he believes is crucial for successfully raising funds.
Timestamps:
00:01 – Raising Private Money Without Asking For It
06:01 – Teaching people to earn high returns safely.
07:05 – Educate, not sell, leading with a servant’s heart.
11:50 – Overcome fear and attract private money investors.
14:33 – Teaching program to new private lenders protection.
17:42 – Consistently offering 8% with no fees.
20:58 – Promissory note includes 90-day call option.
25:11 – Let experts handle IRA company introductions.
28:21 – “Where to Get the Money Now” – https://www.JayConner.com/Book
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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How Jay Conner Raises Private Money: The Power of A Servant’s Heart
Jay Conner [00:00:00]:
The way this works is you’re leading with a servant’s heart, and you’re simply educating. You’re not selling, persuading, chasing, begging, because, you know, desperation has got a smell to it. And if you’re desperately seeking money to fund a deal, the money is going to elude you.
Hannes Hennche [00:00:27]:
Welcome to the Path to Wellth. The show is about well-being, fulfillment, and financial freedom. I’m your host, Hannes Henchy. Welcome back to the Path to Wellth. I’m your host, Hannes Hennche. In this episode, I’m excited to welcome Jay Conner, a real estate investment leader who is known as the Private Money Authority. Jay has coached over 2,000 real estate investors since 2011, teaching them how to raise private money. Jay will guide us through how this unique approach to raising money works and what it has done for himself and students over the last decade.
Hannes Hennche [00:01:05]:
Thank you for joining us today, Jay.
Jay Conner [00:01:07]:
Honest, thank you so much for inviting me to come along and be on your podcast to talk about my favorite subject, and that’s private money because it’s had more of an impact on our business than anything else we’ve done.
Hannes Hennche [00:01:21]:
So where did the pain start to dive into private money? Like, what was the original pain point that you tried to solve?
Jay Conner [00:01:29]:
Well, I remember the pain very well. So I started investing in single-family houses all the way back in 2003, full-time here in Eastern North Carolina. And from 2003 until 2009, the 1st 6 years, all I knew to do was rely on the local banks to fund my deals, to fund my single-family houses. And then in January 2009, that’s when the pain hit. I called up my banker. His name was Steve, and we had done a ton of deals together in those 1st 6 years. And I had 2 properties under contract to buy. And I’ve learned like that over the telephone that my line of credit had been closed, shut down with no notice.
Jay Conner [00:02:20]:
And I had a great credit score. I had a great history with the bank. And my banker’s name was Steve. I said, Steve, what are you why are you shut why is the bank shutting my line of credit down? And Steve says, Jay, don’t you know there’s a global financial crisis going on right now? I said, no. But now you’ve given me a global financial crisis. I said, I can’t I can’t fund these two deals. And, so, anyway, I hung up the phone, and I sat here for a moment. And I thought to myself and I asked myself a very very important question, and that question was, I said, Jay, who do you know that can help you with your problem? And, by the way, these people going around saying every problem is an opportunity.
Jay Conner [00:03:07]:
I wanna throw up. I didn’t have a problem. I mean, I don’t have an opportunity. I had a problem. I had these two deals and no way to fund them. So when I asked myself that question, who do I know that can help me with my problem? I immediately thought of Jeff, a good friend of mine living up in Greensboro, North Carolina at the time. Well, Well, he was a real estate investor. And so I called him up, and I told him what had just happened.
Jay Conner [00:03:32]:
He said, well, Jay, welcome to the club. And I said, what club is that? He said, the club of having your line of credit shut down at the bank. He says, they just shut me down last week. I said, well, Jeff, how are you going to fund your deals? And he says, well, have you ever heard of private money? I said, no. And, he wasn’t talking about hard money either, and I hadn’t heard of hard money either, but he says private money. I said, no. He said, well, have you ever heard of self-directed IRAs and how people can use their retirement money to invest tax-deferred or tax-free and loan money out to real estate investors? I said no.
Jay Conner [00:04:10]:
And so I learned very, very quickly about private money and how you can raise it quickly. So I was able to raise $2,150,000 in less than 90 days when I first learned about private money and was cut off from the banks.
Hannes Hennche [00:04:27]:
Well, I think that speaks to your network that you already had to some degree.
Jay Conner [00:04:31]:
Absolutely. Yeah. I mean, these private lenders came from people that I go to church with, at the Rotary Club. If somebody is a recluse and does not have a network, you know, of people, then, of course, I teach people how to grow your network very, very quickly. Right? Because as I’m sure you know, there’s a direct correlation between your network and your net worth. Right. Yeah.
Hannes Hennche [00:04:59]:
So how do you help somebody grow their network genuinely? Because we all know kind of quick sale, and nobody likes to be sold on an investment. Like, if I learned one thing over the years is that you gotta approach people kind of where they are and you can never push an investment up on them because it’s just You
Jay Conner [00:05:19]:
are so right. In fact, did you know after all these years, right now we’ve got 47 private lenders that are loaning money on our deals? Here’s what’s interesting. I’ve never asked anybody for money. I’ve never pitched a deal. And people and real estate investors say, well, Jay, how do you have 8, access to 8 and a half $1,000,000 through your private lenders, and you never ask anybody for money, and you never pitch deals. And here’s how it works. First of all, how I raised that initial $2,000,000 and all the rest of it is I put on what I call my teacher hat, and that says my private money teacher hat.
Jay Conner [00:06:01]:
So I separate conversations between teaching people, individuals, ordinary people like you and me, how they can earn high rates of returns safely and securely, but I’m not having a deal in that initial conversation to pitch to them. So I’ll show them I’ll, you know, I’ll start conversations with, you know, you ever heard of, have you ever heard of self-written IRAs and how people can earn unlimited money per year, tax-free or tax-deferred? Simple conversations. And so I had when I first started out, I had a private lender luncheon. Had about 20 people there. I raised $969,000 at one luncheon. And so separating separating the conversations. So how do I do that? I teach first either in a group or 1 on 1. By the way, of these 47 private lenders that we have, not one of them had ever heard of private money or self-directed IRAs until I told them about it.
Jay Conner [00:07:05]:
And so I put my program together. So you see the way this works is you’re leading with a servant’s heart, and you’re simply educating. You’re not selling, persuading, chasing, begging, because, you know, let’s just say desperation has got a smell to it. And if you’re desperately seeking money to fund a deal, the money is going to elude you. So first, we teach, right, in our own network of people. And then when I’ve got a deal for them to fund, they’ve already told me how much they’ve got they want to invest. Maybe they’ve got retirement funds, and I’ve introduced them to a self-directed IRA company that I recommend, and they’ll move their funds over there so they’re ready to go. So when I’ve got a deal or a property for them to fund, I call them up and I give them what I call the good news phone call.
Jay Conner [00:08:00]:
So I call them up and I said, I got great news. I can now put your money to work for you. You see, they’ve been waiting for the phone call, particularly if they’ve moved their money over the retirement funds to a self-directed IRA. They’re not making any money until I put their money to work, so I’m ethically bound. So here’s the good news phone call, and I’ll give you the script. The good news phone call is, that I’ve got great news. I can now put your money to work. I’ve got a property under contract in Newport with an after-repaired value of $200,000.
Jay Conner [00:08:34]:
The funding required for the deal is 150,000. By the way, I know they got a 150. They already told me. The funding requires a 150. Closing is next Friday. You’ll need to have your funds wired to my real estate attorney by next Thursday, and I’m gonna have my real estate attorney email you the wiring instructions. End of conversation. The most stupid thing I could do is ask them if they want to fund the deal.
Jay Conner [00:09:00]:
Of course, they want to fund the deal. They’ve been waiting for the phone call to fund a deal. And, you know, so I’m not gonna ask them if they want to fund the deal. Of course, they do. And so, again, it’s separating teaching the program. They’re ready to go and then have the deal for them to fund a separate conversation. Now you asked me, a couple of minutes ago, how you grow your network without chasing people. It’s really simple. Join BNI, Business Networking International.
Jay Conner [00:09:35]:
I’ve raised 1,000,000 dollars by being an active member of BNI, and that’s not a social or civic group. That’s a group that was, founded by Ivan Meisner. And, I mean, here in Morehead City, the population, is 8,000 people. There’s a BNI here in Morehead City. Right? So you join the group, and now all of your other members are supporting each other and bringing them leads. So it’s like having a group of support where you’re bringing leads to them for their business, and they’re bringing leads to you for your business.
Hannes Hennche [00:10:10]:
Yeah. And especially there, the terms are clear. You know, it’s business. Everybody wants to generate business for each other. You know, you’re you’re you’re not just, like, trying to educate somebody who isn’t interested in business. Exactly. It’s like trying to make a horse drink that isn’t thirsty, you know?
Jay Conner [00:10:31]:
Exactly. I like the way you put that.
Hannes Hennche [00:10:33]:
Yeah. So, how do you help your students generate the necessary mindset to get that? Because, you know, not everybody that has the security around funding necessarily has the right mindset in place to feel comfortable doing this. Some of them might lack a track record. Like, you initially already had a track record and were like, hey. I’ve been doing this for multiple years. This has been working. The only bottleneck right now is funding has dried up. You could be the partner with me in these deals and participate in the upside.
Jay Conner [00:11:10]:
Yeah. So how do you get the mindset right to begin with? Well, first of all, let’s talk about fear. So we really don’t know how fear works. We just know we know how we’re feeling when we’re not comfortable. Right? So first of all, it’s very natural. It is natural to feel uncomfortable when you’re starting to do something for the first time that you’ve never done. I mean, I was uncomfortable. I mean, the very first potential private learner that I talked to, I was uncomfortable because I never had that that type of conversation.
Jay Conner [00:11:50]:
So here’s one way we get the mindset. First of all, there’s nothing to fear, and here’s why there’s nothing to fear. And that most of the time in this context, new real estate investors who haven’t raised their own private money may fear rejection. Well, here’s the answer to fearing rejection. How can you fear rejection if you’re not asking anybody for money? You’re you’re leading with making a difference in their life. Right? You see, there’s a lot more private money than there are deals. And so over the years, we have received so many thank you notes and thank you’s from our private lenders saying you have changed our retirement years by allowing us to be a part of your private money program. So the truth of the matter is it’s a win-win scenario, and the private lenders need, you more than you need them because there are so many more of them than there are deals.
Jay Conner [00:12:51]:
I mean, for example, I’ve had a problem for a long time. I’ve got more private money accessible to me than I can put to work. Right? But now let’s address the other part of that with a brand new, real estate investor that does not have a track record. You know, that they’re just starting out. Right? Well, here’s the answer to that track to that question. For goodness’ sake, don’t start out by yourself. Don’t make the mistake I made. You need to get either a mentor or coach to work with you who is in the business today, has been in the business, knows what they’re doing, and that can be somebody local in your area that, you know, could help mentor you.
Jay Conner [00:13:32]:
Of course, there’s, you know, mentors and coaches out there that, you know, do it professionally as well. But be sure and work with somebody who can hold your hand and walk you through. Now when you’re walking when you’re working with someone like that, you can leverage the relationship with that person when you’re talking to new potential private lenders. You can say honestly myself and my business partner, that is whoever you’re working with, have done x number of deals, etcetera, and you can leverage their experience since you’re working together with them.
Hannes Hennche [00:14:08]:
Yeah. And this way you don’t look like you’re even faking it. It’s very genuine. It’s like, hey, this is somebody who has walked this already. You know, they’ve they’ve done it 5, 10 years. They’ve had multiple exits. You can point towards a track record. Like, but I’m aligned with that individual, and they are deeply involved in this transaction to make sure that your money is safe.
Jay Conner [00:14:33]:
Absolutely. Another part of teaching the program to a new potential private lender is, of course, you would want to share with them how they are protected. Right? Because, obviously, whether you have done business with somebody in the past or not, they wanna know, well, what happens if you don’t pay me? Right? What happens if you don’t pay me? Well, here’s the answer. If you don’t pay your private lender, the property does. Now what do I mean by that? Well, you’re not going to borrow unsecured money. You can legally. You can just do a promissory note and borrow unsecured money, but don’t do it. You want to give your private lender a mortgage or a deed of trust here in North Carolina that’s going to collateralize that promissory note so that if you don’t pay them, then the recourse that the lender has is getting the property.
Jay Conner [00:15:30]:
Now, of course, they don’t want the property. They don’t want to mess with the property, that’s why they are a passive investor as a private lender, but that is their security. In addition to that, how do we protect them? We don’t borrow more than 75% of the after-repair value of the house and the property. So that’s going to give the private lender what we call a 25 percent equity cushion so that we’re not overleveraging the property. Now I didn’t say a maximum of 75% of the purchase price. I didn’t say that. 75% of the after repaired value. That’s why we always bring home a big check when we buy.
Jay Conner [00:16:10]:
It’s like who wants to get paid to buy houses, right? I always bring home a check from closing when I buy because we’re borrowing more than we need for the purchase. And of course, a lot of times that’s 30, 40, $50,000. We take none of our own money to the closing table. So we’re gonna use that 30, 40, or $50,000 for the renovation of that house. Right? We also, protect the private lender, and and this is giving them a comfortable, secure feeling. We name them on the insurance policy, the property and casualty insurance policy, as the mortgagee. So that way if there’s a claim, an insurance claim against the property, then the private lender is named on the check from the insurance company. So the private lenders got to sign off on that check, in order for you to, you know, deposit that check.
Jay Conner [00:17:03]:
We name them on the title policy as additional insured in case there are any other title issues down the road. So, again, give them these extra layers of protection, and you want to know what protection to give them. I’ve got that in my book, where to get the money now. Very, very easy to read. And so how do you get the mindset right to begin? Here’s another answer. Know your program. So it’s just easy conversation. You just want you just wanna know, like, what’s the interest rate that you’re gonna pay? I pay 8%.
Jay Conner [00:17:42]:
I’ve been paying 8% with no points or origination fees. The same thing has happened since 2009. Keep the same program for everybody, and that way all of your private lenders are treated equally in the same way. So the mindset, know your program backward and forwards, and it’s not that many points to it to where you can be having a cup of coffee at the coffee shop and just talking through your program, you know, as to how you can, you know, pay people high rates of return. Here’s one more comment on the mindset, and that is here’s another way I never ask for money. This is called the indirect method of conversation. And my very first private lender that I had when I was cut off from the bank, I went up to him after church on a Wednesday night at 7:30 at bible study, and, we went back into the nursery and, to visit for a few minutes. And I said to him I said, Wayne that was his name, one of my first private lenders.
Jay Conner [00:18:46]:
I said, Wayne, you know everybody in this town. And he did. Very well connected. I said, Wayne, I need your help. And here’s exactly what I said. That’s a magic phrase, by the way. I need your help. And here’s what I said.
Jay Conner [00:19:01]:
I said I’ve now opened up my real estate investing business. Now remember and bear in mind, this is right after I was cut off from the bank. I’ve now opened up my real estate investing business by referring only to people I know and trust. And here’s what I need your help with, Wayne. When you run across somebody who is complaining about the low yields or CD percent, certificate or deposit, what they can make at the bank or the volatility of the stock market or losing money in the stock market, would you refer them to me, and I’ll tell them about my program where I’m paying high rates of return, safely and securely. But what do you think Wayne said? Wayne said, well, now, brother Jay, what you got in mind? And I said, well, are you saying you might be interested? He said, yeah. Might be interested. We’re only earning 3% down at the bank and a certificate of deposit.
Jay Conner [00:19:54]:
He said, what kind of rate are you paying? And I said, well, that depends on the deal. What sounds high to you? He said, I don’t know. Maybe 5 or 6%. 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. Right? So I went to his and his wife’s home the next day, and I went over the entire program like I was talking about, how they protect protected, what the length of the note, frequency of payments, interest only, that type of thing, how they can get their money back in case of an emergency. And so that 250,000 quickly became 500,000 dollars after they understood the program. And, so you see how that works.
Jay Conner [00:20:41]:
I started that conversation with I need your help, and I never asked them directly for money.
Hannes Hennche [00:20:48]:
Yeah. So you just mentioned in case of an emergency, how they would get their money back. How is something like that structured where you would return money?
Jay Conner [00:20:58]:
Put in the promissory note what’s called a 90-day call option. So for any reason they have an emergency that comes up, we will give them their principal back and any unpaid accrued interest. And 90 days gives us plenty of time to replace their funding with another private lender that we have. Now we don’t put that in the, we don’t put that 90-day call option when they’re loaning money from their retirement account because it’s very, very unlikely that they’re gonna, you know, need the money back when they’re loaning it from their retirement account in a self-directed IRA. But you know, in reality, in all these years, I’ve only had 2 small notes called due, $30,000 notes that were in second position because of a medical emergency. Now remember, this is your program that you can customize any way you want to. I say duplicate mine. It sort of works.
Jay Conner [00:22:01]:
But you can create any program you want to teach. And if you don’t want to offer a night-a-day call option, you don’t have to offer it if that’ll help you sleep better at night.
Hannes Hennche [00:22:11]:
So at one point, do people, might need additional legal advice? Like, you know, there is there there’s always where you might get SEC into s e c territory, you know, where do people need to be careful that they stay within the legal boundaries?
Jay Conner [00:22:30]:
Yeah. So here’s where the difference is. When you’re raising money for a fund, such as if you’re doing a commercial unit project, apartments, or whatever, then you’re gonna need an SEC attorney to draw up what’s called the private placement memorandum. But in this world of private money, we’re not raising money for a fund. Everything that we do is what’s called a one-off. One-offs. And a one-off is you’ve got a private lender or a couple of private lenders that are funding a particular single-family property. So these
Hannes Hennche [00:23:08]:
laws limited to single families? Because we do have 5 or 6 b’s where we syndicate, but it’s multifamily. And then obviously, there is some SEC compliance with that. How does that differentiate?
Jay Conner [00:23:24]:
Yeah. So, again, on the 5 o on the 506 b, here’s where the difference comes in. You know, Dodd-Frank and all that. The difference comes in is that if you’re going to publicly advertise for money, like on the Internet, TV, radio, direct mail, and all that, then typically, you’re gonna be, limited to accredited investors. Yes. But if you are starting your conversation with people in your network or people that you have met socially, then the SEC is not gonna be involved in it. However, when it comes to attorneys, you always want to have a good relationship with a real estate attorney for your closings. I’ve been using the same real estate attorney and firm ever since 2003.
Hannes Hennche [00:24:14]:
Yeah. Definitely in terms of that compliance where you just wanna make sure that you’re not part of creating any securities. Yeah. And in terms of the self-directed IRA, you did mention that you refer a company for many people to the concept of taking charge of their own retirement and actually maybe taking it out of Wall Street, so to say, out of their 401 k where it used to earn meager returns compared to maybe what they can earn in a self-directed IRA. How do you make people comfortable with those additional layers? This is something, a hoop they have to jump through, so to speak. It’s it’s also there’s some fees, like, that come with a self-directed IRA. What would you say is that conversation like to make somebody comfortable to actually transferring their money into a self-directed IRA?
Jay Conner [00:25:11]:
Right. Well, I let the experts do the talking and I get out of the way. So all I do is I it’s important, and I’m glad you asked this question. It’s important to have a relationship as a real estate investor if you’re gonna raise money with a self-directed IRA company, also known as a third-party custodian. So that when you’re talking with an individual that you know and they have retirement funds that they’re not happy with, then all you have to do is make that introduction to you the person that you have the ref, the relationship with at the self-directed IRA company and have a, you know, a Zoom meeting with the 3 of them or a conference call. Introduce your potential private lender to the Self Real IRA company, and let them answer the questions. Right? Let them do the talking because they are the expert as to what you can do and what you can’t do and how the logistics work. And I’ll tell you why this is so important to have this relationship.
Jay Conner [00:26:17]:
You know, I mentioned we have 47 private lenders right now that we’re using on different projects. Over half, over 50% of those 47 people, over half of them are using their retirement funds. And you know what? Not one of them had ever heard of a self-directed IRA company until I told them about it. Right? So again, this is all about education. If you don’t have a relationship to introduce to your a self directed IRA relationship to introduce to your new potential private lender, you’re gonna miss out on over half of the private money that’s out there available that you could use.
Hannes Hennche [00:26:59]:
Yeah. What would you say is a reasonable, fee for those custodians?
Jay Conner [00:27:05]:
Because there’s It depends on the it depends on the self-directed IRA company that you use. The one that we’re referring to right now, there is no of course, by the way, good point. Regardless of where people have their retirement funds, they’re gonna pay fees. They’re gonna pay management fees. If they got it on Wall Street, they’re paying fees. So there are fees no matter where you get it. The company that I’m recommending now does not charge any kind of fee based on the amount that’s in your account. How they calculate their fees is by transaction.
Jay Conner [00:27:39]:
So that way, you’re not spending any money on fees unless you’re making money. So they charge, a fee for when the when you’re actually investing or loaning money on a deal.
Hannes Hennche [00:27:51]:
So that’s only when the money is in velocity, not when it’s sitting in a deal.
Jay Conner [00:27:55]:
When it’s just sitting there. Yes.
Hannes Hennche [00:27:57]:
That is very good. That’s actually a very important distinction because there are companies who charge quarterly fees and regardless of what you do with your money, they will make their money.
Jay Conner [00:28:08]:
That’s right. They’re gonna charge you their fees with it if it’s whether you’re making money on your money or it’s just sitting there in your account.
Hannes Hennche [00:28:14]:
Yeah. Well, Jay, where can people find out more about the private money authority?
Jay Conner [00:28:20]:
Oh, right.
Jay Conner [00:28:21]:
I’m glad you asked. I finally, finally finished writing my book And my book is all about what we’re talking about, how to raise private money without asking for money. And the name of the book is where to get the money now. And the subtitle is How and where to get money for your real estate deals without relying on hard money lenders or institutional money of any kind. It’s on Amazon. You can get them on Amazon for $20 but don’t do that because you are listening to this show. You can get it for free. Just covers shipping, and it’s not an ebook.
Jay Conner [00:28:55]:
This is an actual book that we put in priority mail. So, you can pick up my book at www.JayConner.com/Book. So I’m an ER, not an OR. So www.JayConner.com/Book.
Hannes Hennche [00:29:18]:
And we’ll also make sure to get that URL and put it in the show notes so that everybody can directly go to the book. Well, Jay, thank you so much for your time. This has been extremely informative.
Jay Conner [00:29:32]:
Thank you so much for having me. I appreciate it.
Hannes Hennche [00:29:40]:
Thank you. For friends and family that want to take their life to the next level of wealth.
