*** Guest Appearance
Credits to:
https://www.youtube.com/@Keystone.Private.Capital
“Revolutionize Your Investing: Jay Conner on Leveraging Private Money in Real Estate”
https://www.youtube.com/watch?v=ivHYcpky90Y
In an enlightening episode of the Raising Private Money podcast, Jay Conner, a seasoned real estate investor, joined Angel Gonzalez on Taking the Leap Into Commercial Real Estate Podcast and shared his transformative journey from relying on traditional banking systems to embracing private money lending. This shift not only revolutionized his investment strategies but also paved the way for a more lucrative and less stressful approach to real estate investing.
Jay Conner’s Background and Early Journey
Jay Conner embarked on his real estate investment journey in 2003, focusing primarily on single-family houses in a small market in Eastern North Carolina. With approximately 40,000 people in his market, Jay successfully made an average profit of $82,000 on 2-3 deals every month. Initially, he relied heavily on local banks for funding, which was a conventional approach but came with its own set of limitations.
The Turning Point in 2009
January 2009 marked a significant turning point for Jay. The global financial crisis prompted his primary banking partner, BB&T, to close his line of credit. This unforeseen setback could have been catastrophic. However, it led Jay to discover an alternative financing strategy through private money lending, introduced to him by his friend Jeff Blankenship. This discovery was a game-changer.
Understanding Private Money
Private money involves individuals using their investment capital or retirement funds to finance real estate deals. Unlike hard money, which is institutional and comes with stringent conditions, private money is more flexible and borrower-friendly. Jay emphasizes that private money lending allows borrowers to set the terms and conditions, making it a more appealing and less cumbersome option compared to traditional financial institutions.
Strategies for Attracting Private Money
Jay’s strategy for attracting private money was rooted in education rather than solicitation. He invested time in educating his community about private money and the benefits of self-directed IRAs. By leading with a servant’s heart and offering valuable knowledge rather than directly asking for money, Jay successfully attracted $2,150,000 in the first 90 days. Today, he manages $8,500,000 in private funds from 47 lenders.
The Importance of Having Funds Ready
One critical lesson Jay imparted was the importance of having funds lined up before securing deals. Contrary to the advice of some “gurus” who suggest finding a deal first and expecting the money to follow, Conner advocates for securing the money upfront. This allows for confident and swift offers, giving investors an edge in competitive markets.
Case Study: Quick Flip Success
In a riveting case study, Jay shared an experience where he initially accepted an offer too hastily. Subsequently, he received a better all-cash offer of $628,000 with no contingencies and a quick closing date for a property he bought for $425,000. This deal underscores the flexibility and speed that private money lending affords, enabling investors to capitalize on lucrative opportunities without the delays typical of institutional funding.
Launch of the 7-Day Private Money Challenge
To help others achieve similar success, Jay launched the “7 Day Private Money Challenge.” This initiative includes seven days of video training on raising private money, released daily. The challenge aims to empower participants with the knowledge and tools needed to attract private funding effectively, fostering greater confidence and success in real estate investing.
Private vs. Hard Money: A Critical Distinction
A key takeaway from Jay’s discourse is the differentiation between private and hard money. Hard money is institutional, comes with rigid terms, and often carries a negative connotation due to its inflexibility. In contrast, private money dealings involve individual investors, offering more personalized and negotiable terms. This distinction is crucial for investors seeking more control and better terms for their deals.
The Role of Mastermind Groups
Jay highlights the transformative power of mastermind groups in both personal and professional development. He discovered the concept of mastermind groups in 2009 and has since been actively involved in various high-level real estate masterminds. These groups provide invaluable insights, shared goals, and collective wisdom, helping members avoid costly mistakes and achieve significant breakthroughs.
Mindset and Accomplishment
Jay emphasizes the importance of having the right mindset for success. Surrounding oneself with like-minded individuals and maintaining a positive, growth-oriented mindset can significantly impact one’s professional journey. Jay’s success story is a testament to the power of mindset, education, and strategic networking.
Conclusion
Jay Conner’s journey from traditional banking to private money lending offers a wealth of knowledge and inspiration for real estate investors. By focusing on education, strategic networking, and maintaining a servant’s heart, Jay has revolutionized his approach to real estate investing, achieving remarkable success and financial freedom. His insights and strategies serve as a valuable guide for anyone looking to navigate the complex world of real estate investment with confidence and proficiency.
10 Lessons Discussed from this Episode:
- Real Estate Profits
Description: Jay Conner achieves an impressive $82,000 average profit per deal on single-family houses, even in a small market of 40,000 people. - Bank Dependency Pitfalls
Description: The 2009 financial crisis highlighted the risks of relying solely on traditional bank funding, as Jay’s bank line of credit was abruptly closed. - Discovering Private Money
Description: Introduced to private money lending and self-directed IRAs by a friend, Jay learned about using individual investors’ capital for funding real estate deals. - Teaching Over Asking
Description: By educating others about private money rather than directly asking for funds, Jay successfully raised $2,150,000 in private money within the first 90 days. - Servant’s Heart Principle
Description: Emphasizing the importance of a servant’s heart, Jay focused on providing value and opportunities, which led to significant funding success. - Surplus Funding
Description: Jay’s educational approach resulted in attracting $8,500,000 in private money from 47 private lenders, showcasing the power of relationship-building. - Setting Deal Terms
Description: Using private money allowed Jay to dictate the terms of his deals, unlike hard money lenders who impose strict conditions and requirements. - Importance of Masterminds
Description: Joining mastermind groups played a crucial role in Jay’s personal and professional breakthroughs, providing valuable networking and learning opportunities. - Marketing and Closing
Description: Innovative marketing techniques, including drone footage and professional videos, helped Jay sell a property for $610,000 within a week, demonstrating the effectiveness of strategic marketing. - Leveraging Individual Investors
Description: Empowering regular individuals, such as retired teachers and civil service workers, as private lenders offered more flexible and stable financing alternatives to institutional funding.
Fun facts that were revealed in the episode:
- Jay Conner raised $2,150,000 in private money within his first 90 days of educating his community—without directly asking for funds.
- Conner’s best all-cash offer was $628,000 for a property he bought at $425,000, renovated for $11,300, and paid $31,000 to his realtor.
- He successfully marketed an oceanfront condo using drone footage and professional videos, leading to an over-list all-cash offer that closed in 7 days.
Timestamps:
00:01 Raising Private Money Without Asking For It
03:50 Lost credit line during the global financial crisis, discovers Private Money
10:07 Napoleon Hill’s “Mastermind”: Collective wisdom from groups.
10:57 Mindset is crucial for success in real estate.
16:42 Distinguish between private money and hard money.
18:50 Widow invests $1,250,000 retirement in real estate.
22:51 Use self-directed IRA funds to gain excess.
25:15 Borrow $150k, buy for $100k, gain $50k.
27:28 Private money: no credit checks, close quickly.
31:01 Motivated sellers search on Google
36:22 Patience pays: The next offer was $628,000 cash.
37:23 The Money Comes First
Connect With Jay Conner:
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https://www.jayconner.com/MoneyReport
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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
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The Power of Mastermind Groups in Real Estate Investing With Jay Conner
Narrator [00:00:01]:
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.
Narrator [00:00:32]:
Welcome to Taking the Leap Into Commercial Real Estate, the number one podcast dedicated to helping you get comfortable in the commercial real estate arena and equipping you with the latest market news, insights, and strategies you need to make informed decisions about investing. Now, let’s get into today’s episode with your host, Angel, and Brittany Gonzalez.
Angel Gonzalez [00:01:02]:
Alright, everyone. Thank you so much for joining us again here on Taking a Leap in a Commercial Real Estate podcast. I’m your host, Angel Gonzalez. I have my guest host here, Alvin Scioneaux. You can say hello.
Alvin Scioneaux [00:01:12]:
Hello. Good to be here.
Angel Gonzalez [00:01:15]:
And we have the honor today of actually really getting into private money with, today’s, good old guest of ours. And his name is, Jay Conner. So I’m just gonna jump right in and ask. Jay, can you please introduce yourself and describe what it is that you do?
Jay Conner [00:01:29]:
Well, thank you so much, Angel and Alvin, for inviting me to come along here and talk about what I’m most passionate and excited about, which is private money. Why in the world am I so excited about private money? Well, I’ll tell you, private money has had more of an impact on my and my wife, Carol Joy’s Invest in Business than anything else that we’ve done. We’ve been investing, excuse me, we’ve been investing in single-family houses, but we do commercial deals as well. We’ve done a shopping center from the ground up, condominiums, etcetera. But our focus has been single-family houses. Well, we’ve been doing that full-time since 2003, Here in Eastern North Carolina, in a small town, with a small target market of only 40,000 people as our total target market. And we do about 2 to 3 single-family houses a month. Average profits right now are $82,000 per deal.
Jay Conner [00:02:24]:
I do not say that to brag whatsoever. The reason I share that is to make a point, and that is you don’t have to be in a huge market to make significant income. I like to be a big fish in a small pond and sort of on the market, you know. Well, here’s what happened. From 2,003 until 2009, January 2009 to be exact, all I knew to do to get my deals funded, Angel and Alvin, was to go to the local bank, get on my hands and knees, put my hands underneath my chin, and say, please fund my deal and let my banker look up my skirt and all my assets, and look at my verification of income and my credit score, and get appraisals. And they made the rules, and that’s all I knew to do. Well, it worked out pretty well okay for the 1st 6 years. And then, y’all, I remember I was sitting right here at this desk, and I had 2 houses under contract.
Jay Conner [00:03:27]:
This was in January 2009. And I called him a banker. His name was Steve. I called him a banker. I told him about these two deals. And let me tell you, I had had this kind of same kind of conversation for 6 years with Steve. And, since they’re no longer in business, I’ll call them by name, BB and T, Branch Bank and Trust. God bless them.
Jay Conner [00:03:50]:
They’re out of business. Anyway, so I call them up, and tell them about these two deals, and Steve clears his throat and tells me over the phone. He says, Well, Jay, I’m sorry, but we have closed your line of credit. I said, Steve, what in the world are you saying you’ve closed my line of credit? We’ve been doing business for 6 years. He says, Jay, don’t you know there’s a global financial crisis going on right now? I said, No. But now you just gave me a global financial crisis because now I can’t fund these two deals that are representing over $100,000 in profit. So I hung up the phone, and I sat here, and I asked myself a very important question. And this question I’m getting ready to share that I asked myself, your audience, you can use this question to help fix anything you’ve got going on in your life.
Jay Conner [00:04:43]:
I don’t care if it’s financial, health, personal, or relationships. Here’s the powerful question I ask myself. I said, who can help me with my problem? And by the way, these people run around saying every problem’s an opportunity. I wanna throw up. I didn’t have an opportunity. I had a problem. I couldn’t get my deals funded. Well, when I asked myself that question, who can help me with my problem? I immediately thought of my good friend, Jeff Blankenship, who lived in Greensboro, North Carolina at the time.
Jay Conner [00:05:14]:
And I called up Jeff, and I told him what had just happened. He said, well, Jay, welcome to the club. I said, what club is that? He said the club is getting cut off at the local bank. My bank cut me off last week. I said, well, how are you gonna fund your real estate deals? He said, well, have you ever heard of private money? I said, no. He said, have you ever heard of self-directed IRAs? And how people, just like ordinary people, can use their retirement funds to be passive real estate investors and be private lenders, and fund your deals? I said, no. I never heard of that. Well, I knew Jeff had told me something.
Jay Conner [00:05:50]:
So I studied private money and private lending, and I’m not talking hard money. I’m talking about doing business for human beings, individuals, that use their investment capital and or their retirement funds to fund your real estate deals. So I put my program together, and you know what? I didn’t ask anybody for money. I’ve yet to ask anybody for money. Since 2009, I have had 47 private lenders funding our deals, never asking for money. And they say, Jay, how in the world do you get people to fund your deals and you don’t ask them? Well, here’s how. I attracted. I didn’t chase.
Jay Conner [00:06:24]:
I didn’t beg. I didn’t sell. I didn’t persuade. I attracted $2,150,000 in funding in the first 90 days. And here’s how I did it. I put on my teacher hat and I started teaching people in my community that I go to church with, the Rotary Club, and on my cell phone, What private money is, and how they can earn high rates of returns safely and securely. So the money started chasing me. And so, right now, I got $8500,000 in private money from just regular individuals, you know, that are funding our deals.
Jay Conner [00:07:03]:
And it’s all about leading with a servant’s heart, showing people. I mean, here’s the interesting thing, Alvin and Angel. I’m gonna call you all the an a and a duo, dynamic duo. They’re the double a’s. So here’s the deal. These people, not one of my 47 private lenders ever heard of private money. They never heard of self-directed IRAs until I told them about it. So instead of asking for money and, you know, trying to persuade people to fund my deals and that kind of stuff, instead of asking, I just simply put on my teacher hat, offered the opportunity on how to get involved, and as a result, I got more money than I can use.
Jay Conner [00:07:50]:
And, you know, when people start doing private money the way I do, they have the same problem. Got more money than you can use. And so I tell you what, that’s just sort of it in a nutshell as to how this whole thing started, and how I got involved in private money. And, I mean, truthfully, it was the biggest blessing in disguise. You know, I mean, if I hadn’t been cut off from the bank, I wouldn’t be visiting with Angel and Alvin today.
Alvin Scioneaux [00:08:18]:
Jay, I love and appreciate the attraction. You know, a lot of people especially in, you know, sales and related industries. Right? You you chasing and running this way and running that way, but you really wanna get to a point where you just provide an opportunity. You know, I’m trying to level up your life as well. And did you mention BB and T. I banked with BB and T. I went to college in South Carolina, Watford College? So I now I know about BB and T as well, and I end up closing my account.
Alvin Scioneaux [00:08:54]:
God bless them.
Jay Conner [00:08:55]:
God bless them. God bless them. Well, I can’t god can’t even bless
Alvin Scioneaux [00:09:00]:
them because they wouldn’t exist. Restructure somewhere. But
Angel Gonzalez [00:09:03]:
They wouldn’t have existed if they would have kept Jay’s business. It is as if it was a good time to sign it. Words.
Alvin Scioneaux [00:09:12]:
What a great story, Jay. I’d love the journey. Can you share some significant milestones or turning points in your career that shaped the path, that you have been going down?
Jay Conner [00:09:25]:
Yeah. In addition to private money, probably the biggest milestone, and, you know, I can interpret that word a lot of different ways. So I’m gonna interpret milestones with a breakthrough. How about that? Breakthrough. So one of the biggest breakthroughs I discovered, also 6 years after being in this business in 2009, I discovered this thing called the mastermind. I’d never heard of a mastermind or knew what a mastermind was. And looking at you guys, you’re probably in 5 different mastermind groups. You know? And you probably said to yourself, why in the world am I in all these groups? I can’t keep going to all these meetings.
Jay Conner [00:10:07]:
But anyway, you know, Napoleon Hill, who wrote Think and Grow Rich, everybody’s read that book. Well, he’s got a chapter in that book called The Mastermind, which is when a group of like-minded people get together that have got the same goals, same struggles they’re working on. And this 3rd mind evolves, and you have, you know, more wisdom that comes out of that group than just the sum of the parts. So I joined my first Real Estate Investing Mastermind group back in 2009. And as a result, since that time, I’ve been a member of multiple groups. I started running my own, Mastermind group. Mercy. I guess about 10 or 11 years ago, where I’ve got high, you know, high-level real estate investors in my mastermind group.
Jay Conner [00:10:57]:
But the reason that was a breakthrough is because I experienced and still experienced so many breakthroughs, not only in real estate but personally. You know, sometimes people will say, Jay, how do I get started in private money? What’s the best way to get started? I can tell you how to get started in private money. It’s the way you get started in doing anything brand new, and that is before you can own any real estate, it’s gonna be hard to do that until you own the real estate that’s between your ears. I’m talking about your mindset. Right? Get your head screwed on right. And so these mastermind groups that I’ve been a member of and I’m still a member of is I was getting ready to say it’s just as much about that’s not right. It’s more about your mindset. It’s more about your mindset than it is about knowing the strategies, the techniques, and the skills in whatever it is that you’re doing in your vocation, whether it’s real estate investing or something else. Because I mean, for example, how many new real estate investors do you guys know that never really got off the ground? They learned what to do.
Jay Conner [00:12:14]:
They learned that it’s not a matter of knowledge. What was holding them back was implementation. And there’s a long list of reasons why some people don’t implement what it is they learn to do. I mean, it’s everything from I don’t feel like I deserve it to fear to a long list. But getting your mind straight so, you know, so the point of that story is if somebody’s listening to my voice right now, and you have not discovered the mastermind, if you have not discovered a group of people that have got like-minded goals like you do, and most importantly, have got the same core values that you do, then seek them out. Seek them out. For all I know, Angel and Alvin, you’re running your mastermind group. And if you are and you’re listening to my voice, you need to get an Angel and Alvin’s mastermind group.
Jay Conner [00:13:10]:
Right? Because, I mean, I don’t know who came up with the phrase, opposites attract. That’s the most stupid thing I ever heard in my life. I want to hang around people who are like me. Right? And so if you’re listening to this show, that means you already resonate with Angel. You resonate with Alvin. Alvin wouldn’t be here unless he reginated, and resonated with Angel. So we’ve all got the same core values. Right? We attract each other into our world and just seek out master, a mastermind group to where you can give and receive.
Jay Conner [00:13:41]:
Mastermind is just about just as much, if not more about giving as it is receiving. Because you wanna be in a group that’s got a core value of having a servant’s heart leading with value. And by the way, when I think of servant’s heart, I think of the book, The Go-Giver. I know you’ve all read it. One of the best books I’ve ever read. I was in fact, on my podcast, which is, called Raising Private Money. Can you imagine? On my podcast a few months ago, I had the co-author, Bob Burg. Come on my show, co-author of Go-Giver, and I highly recommend that book. Anyway, that’s one of the biggest, breakthroughs, that I’ve had is being involved in You
Angel Gonzalez [00:14:30]:
know, I appreciate you talking about that. I know Alvin, one of the things that attracts me to him is he’s all about mindset, all about how you go about, like, looking at everything. One of the best lenses I know, by the way, in case anyone wants to know.
Alvin Scioneaux [00:14:43]:
I always say that you know, everything that ever existed or will exist starts as a thought. Right? So, you know, that’s that’s just the the thought seed of everything.
Jay Conner [00:14:51]:
Well and everything, expands outward. So if you do whatever you wanna man all I’m redoing now is repeating what you just said differently. And so if you’re listening to my voice, if you want to manifest something out here in your world, it all starts from the inside, as you just said. Everything moves from the inside to the outside. Except there’s one exception to that. Whoever you’re hanging around, that outside is gonna migrate to your inside. So be careful who you
Angel Gonzalez [00:15:26]:
hang around. Funny because I remember when growing up, my my mom and my parents and family telling me that. And you know how many of us have kinda wanted to ignore that? They’re like, you’re friends. You’re friends. And you’re like, oh, but I’m not like that person. Not true. You do, through osmosis, absorb back and forth. It’s just the human condition.
Angel Gonzalez [00:15:44]:
So I would I do believe in that. But I wanna ask you something, as you’re thinking about private money, the field, like, how have you seen it evolve since you started, I guess? Because I know that that is something I continuously think about when I think about this private money. So especially in in our new in our market today.
Jay Conner [00:16:05]:
So when you ask how have I seen it evolve, getting on that.
Angel Gonzalez [00:16:10]:
Because I wanna tell you, I still believe there are a lot of people that do not understand the world of private money. And they do not understand the strategies around it. And quite frankly, it’s a foreign concept to a lot. And I am back to your point earlier when you talked about masterminds, Alvin and I have gone through coast to coast for different things. And I can tell you that it’s still it’s still shocking to me about a couple of different nuggets that are completely kind of like, what are you talking about? What do you mean? Where do I find that information? And so that’s why I’m wondering, how have you seen it?
Jay Conner [00:16:42]:
Yeah. Well, most people, as you just alluded to, when they hear the term private money, they hear hard money. Right? In fact and by the way, I’m not knocking hard money lenders. I say establish as many relationships as you can with as many people who can help you with your funding. I’ve got good friends who use my techniques to raise private money for their hard-earned funds that they turn around and lend out to real estate investors. It’s all the same money. It’s a matter of what are you attracting and raising that money for. Are you a hard money lender? Are you a hard money broker? most of the time, are a middle person who raises money for their fund that they then charge points, origination fees, extension fees, charge a higher interest rate than they’re paying their investors to invest in their fund. And what I do and what I teach is, you know, you can go straight to the source.
Jay Conner [00:17:47]:
You can go I mean, it’s all it’s it’s the same money, but, I mean, go straight to the individuals that want to be passive, get high rates of return safely and securely. And, you know, there’s a lot of differences between hard money and private money. There is a movement right now. There’s a movement among hard money lenders and brokers. Again, I’ve got great friends that are hard money lenders and brokers. There’s a movement to try to get rid of the hard money phrase. They’re trying to get rid of the hard money term. Right? And they call themselves private money.
Jay Conner [00:18:26]:
Right? Well, they are loaning out private money, but it’s not their money. They’re loaning out individuals’ money. So when we talk about private money, we are talking about doing business with human beings, individuals. And, you know, my 47 private lenders, are regular old people. Regular people. Just like you. I mean, listen. I’ve got a couple.
Jay Conner [00:18:50]:
Well, unfortunately, the husband just recently passed away. But anyway, the husband and the wife, of them are retired school teachers from Mississippi. Some of the lowest-paid teachers in the United States, in Mississippi, and they are retired. And, and, and, and, and, and the widow now, the widow is investing $1,250,000 in my real estate deals because they both worked in the school system for over 30 years. They never touched their retirement money and it grew and now they were, they became retired and didn’t know what to do with it. Well, what did I do? I put on my teacher hat and taught them an option as to what they could do with that retirement money. So ordinary people, school teachers, retired, and civil service workers. I’ve got people that are still working, on the police force.
Jay Conner [00:19:53]:
So anyway, back to hard money and private money. So as we said, some people are just confused about really what that difference is. So if I can, I’ll take just, you know, a few seconds and highlight what are the big differences between hard money and private money. First of all, and, and, and, and here he talks about getting your mindset right and getting you, getting your head screwed on right. Well, to get your head screwed on right, sometimes you just got to take your head off and put it back on and screw it on right. Right. And, and, and get rid of what Zig Ziglar used to call stinking thinking, and let’s get the right thinking going on. So here’s what I mean.
Jay Conner [00:20:32]:
First of all, a hard money lender makes the rules. Any kind of institutional money, they make the rules, right? That’s pretty much all of us know. They set the interest rate. They set the length of the note. They set the frequency of payments. They set how much they’re going to advance when you buy. They set what’s the maximum loan to value. They set what’s your minimum credit score.
Jay Conner [00:20:55]:
Everything I just said applies not at all, 0, to this world of private money. What do I mean by that? Well, here’s the first thing to get straight. We make the rules. We make the rules. As the borrower, we make the rules. We set the interest rate. I’ve been paying 8% simple interest, not compound interest. APR, annual percentage rate, 8%.
Jay Conner [00:21:26]:
Ever since I started in February 2009, borrowing private money, I still pay 8% today. No points, no extension fees, 8%. And people, you know, in this market, they’ll say, Jay, how in the world are you still paying your lenders 8% and the interest rates have gone out of sight? I mean, before COVID, the average 12-month certificate of deposit yield got down to 0.17%. Well, today, you can go down here on Bridges Street in Morehead City, North Carolina, to the First Citizens Bank. You can get a 7-month CD for 4%. They said, Jay, how are you not paying your private lenders any more interest? I say it’s really simple. Two answers. Number 1, I make the rules, not the lender.
Jay Conner [00:22:14]:
I made the rules. Number 2, 8%. The last time I checked my calculator, it was still twice as much as 4%. Right? It’s still a whole lot more money. Right? So we make the rules and reset the rate and the frequency of payments. Now, how often we pay our private lenders comes down to their objective because different private lenders have different needs. I have some retired private lenders that need the monthly income. They don’t wanna touch their principal investment amount, but they need the monthly income to live off of.
Jay Conner [00:22:51]:
Others are using retirement funds, and I’ve shown them how to move their retirement funds over to a self-directed IRA company. Well, that return isn’t coming back to them directly. That just goes back to the self-directed IRA company. So again, but listen, I always bring home a big check when I buy a property. My real estate attorney who does all my closings on my purchases, I love my favorite phrase on her check stubs that I pick up is excess cash to close. And I love me some excess cash. So I always can borrow more than I need for the deal. So they say, Jay, how do you bring home a check when you buy and you never take any of your own money to the closing table? Well, let me pull the curtain back on that little secret.
Jay Conner [00:23:40]:
Number 1, I can’t bring home and you can’t bring home a big check when you buy, unless you’re buying at a discount. Right? You gotta be buying at a significant discount. And most of your discounts on properties are going to come from properties that need some type of renovation or rehab. So what do I do here are my criteria in my program I teach my private lenders what they love. I’ll borrow up to 75% of the after-repair value. I didn’t say 75 percent of the purchase price. 75 percent of the after-repaired value. So here’s a, here’s a quick little example of that.
Jay Conner [00:24:22]:
Let’s say, just for easy figuring, I’m buying a house with an after-repaired value of $200,000 Now, I know in California, you can’t even buy an outhouse for $200,000 But here in Eastern Eastern North Carolina, you still can. And I know down there in South Carolina, you can too. So if you got an after-repaired value of 200,000 well, let’s say I buy that house for 100,000. And I do it all the time. If you got a house that’s got an after-repaired value of 200,000, it’s got renovation of, you know, 30,000 or 40,000, I buy that house all day long for a $100,000 And so follow the math. I’m gonna teach right now, in a nutshell, how you bring home a $50,000 check and take none of your own money to the closing table. After Apparent Value. Now, listen.
Jay Conner [00:25:15]:
If you listen to my voice and you’re not driving down the road, you might want to write this down. If you are listening and you’re driving, come back and listen to this and write it down. So, let’s say you have an after-repaired value of $200,000 Let’s say I’m going to buy it for 100,000. I do it all the time when they need renovations. Well, what is 75% of $200,000 A $150,000 So that means I can borrow $150,000 from the private lender when I buy? That’s 75% of the after-repair value. Well, now, here’s your test question. If I buy it for $100,000 which I do all the time, and 150,000 is wired into my real estate attorney’s trust account, my closing agent, well, that’s $50,000 more wired into the trust account than is needed to buy for a 100.
Jay Conner [00:26:14]:
So I’m bringing home a check, less closing costs, of $50,000 Who wants to get paid to buy houses? Right? Getting paid to buy houses is what I’m talking about. So I bring home a $50,000 check. Now I’m gonna use 30 or 40,000 of that $50,000 check to do the renovations. Right? And my private lender is counting on me to perform. You see, private lenders ain’t investing in your deals. They’re investing in you. They’re investing in you, the operator. Right? So, I’ll use 30 or 40 to renovate that house.
Jay Conner [00:26:51]:
I got about 10 left over. Then I’ll go sell it for the after-repaired value of 200,000. I still owe my private lender 150,000 that I borrowed because I’m paying or accruing interest only. That’s a win for them and a win for me. And so I’ll sell it for 200. I still owe the private lender 150. I’ll pay my realtor fees 5% to sell it. So that’s $10,000 between bringing home, 50 when I bought it, I keep about 10 of keep about 10 of that.
Jay Conner [00:27:28]:
And then I bring home another 50 and 10 goes to the realtor. So you see on that $200,000 house, I’m on a net net about $40,000 at the end of the deal. But that’s just a quick little example of how the money works when you’re using private money. So the difference between hard money and private money, bottom line, your credit score ain’t got nothing to do with it. My private lenders never pull my credit score. They never, look at my verification of income, right? There are never any appraisals. We’re using my Realtors Comparative Market Analysis. So the bottom line, private oh, close quickly.
Jay Conner [00:28:05]:
I make all my offers. You can close in 7 days. And listen, I just closed on a deal at 5012 Highway 101 Harlow, North Carolina last week. And I bought that house. And the only reason I got that deal is because I could close in 7 days with private money. And I let them live in the house for 30 days for free. But that’s how I got the deal. I get the, I get, I get more offers accepted because I let them live in the house for whatever period we agree on.
Jay Conner [00:28:37]:
But here’s the secret. They don’t get all their proceeds until they’re out of the house. Ask me how I learned from that little situation. Well, you know who you asked that one.
Jay Conner [00:28:47]:
You know? So they get half the proceeds when I close. They get the other half when their assets have worked out.
Alvin Scioneaux [00:28:56]:
Do not want to go down that rabbit hole, because they can okay.
Jay Conner [00:29:02]:
No. I only had to do that one time.
Alvin Scioneaux [00:29:04]:
Good, learning learning throughout the the years, the experience. I mean and that and that’s something that that plays a part. Right? You know, for somebody that’s just beginning, they may not know that, and they end up figuring out learning the hallway. You know? So, you know, that’s good.
Jay Conner [00:29:21]:
That’s another reason to join the mastermind group because because of the mastermind group, will save you from making those very expensive mistakes like I have done, particularly those first 6 years before I discovered mastermind groups. And you learn from each other’s mistakes, so and it saves you a lot of saves you a lot of money and a lot of stress.
Alvin Scioneaux [00:29:44]:
Well, I appreciate that rundown. Jay, how about you share a unique or interesting project or maybe a capital raise that you did and what made it unique and interesting?
Jay Conner [00:30:01]:
Boy, I got a lot of them to choose from. I’ve renovated over 500 houses, and every one of them has got their own story. Okay. Well, here’s a unique one. I just pocketed a $160,000 on this deal, last week. So that’s pretty fresh on my mind. So here’s the unique deal, and I’ll tell you what made it unique. So oceanfront condominium here at Atlantic Beach, North Carolina at Colony by the Sea.
Jay Conner [00:30:31]:
Top floor, oceanfront. You look like when you’re in the living room, you’re looking out from a cruise ship over to the ocean. Absolutely. Just drop-dead gorgeous. So I run, I run multiple ads, Google Ads, Google Ads. And what I love about people responding to Google Ads is that they’re looking for us. These are motivated sellers. Now, I run Facebook ads too, where, you know, the Facebook ad just shows up in the news feed.
Jay Conner [00:31:01]:
But what I love about Google is that you’ve got motivated sellers that are going into Google and they’re searching for 75 different hot phrases, such as sell my house fast, you know, buy my house fast, you know, that kind of stuff. And so we had this individual. His name is Brian. Brian contacted us from one of my Google Ads, and this was just 5 weeks ago. He con he got 5 weeks ago contacted us on a Google ad on this oceanfront condo. Well, he had 2 major layers of motivation. One layer of motivation is he inherited this condominium from his parents. Both of them had passed away.
Jay Conner [00:31:45]:
And he lives out of state. He doesn’t have any interest in coming here to use it. His second layer, so it was inherited. Right? His second layer of motivation was it was going to the courthouse steps at the foreclosure sale in less than 2 weeks after contacting us 5 weeks ago. So there are your 2 layers of motivation. So he contacted us. So we knew we had to move fast. We had to move fast.
Jay Conner [00:32:13]:
So and I’m telling you, you cannot make money in slow motion. I’ll tell you that. So we had to we had to move fast. So we go so immediately, we go over and, and we get access to take a look at it. Let me tell you, this thing was beautiful. Beautiful. I’m talking luxury accommodation, furniture and I mean, anyway. So we look at it.
Jay Conner [00:32:37]:
This condominium needed a whopping $11,300 in renovation. Interior paint, I mean nothing. I mean nothing. It needed nothing. Right? So we did interior paint, you know, cleaned up a few zoinks, you know, into sheetrock, and, new front door, and that’s it. So, anyway, we got it all ready to go. So private money. If I had not had private money available, I couldn’t have closed in 7 days, which I did.
Jay Conner [00:33:11]:
I closed in 7 days. Bought it with private money for 400 $25,000 And my realtor had already told me we could sell it and get multiple offers if you list it for 5.95. 5.95. Well, I didn’t have to take this deal to the committee to get this deal approved. I said I think that mask is going to work. So, we did the renovation in less than a week. And, I listed it for $595. I wanted to list it for $625, but I just couldn’t see the comps out there.
Jay Conner [00:33:46]:
Anyway, so here’s a little secret. Here’s a little secret. So we listed it on Monday. Now, I always get a music video. Music video. Matterport, drone footage, all that stuff. We use lighthouse videos right here. So I had a music video and about 50 professional pictures by lighthouse, videos.
Jay Conner [00:34:09]:
So we put it in a multiple listing service on Monday under the category, Coming Soon. Now, y’all, this is a big secret right here. Coming Soon. Now, what Coming Soon means is, that you can look at the video, you can look at the pictures, you can see the price, but you can’t get in. It’s like making them wait to go inside a furniture store that’s going out of business. So I’m I’m building up demand. Right? So we are coming soon on Monday, and we’re gonna go active on Friday. So I want them lined up with appointments on Friday to get in.
Jay Conner [00:34:45]:
So we go active at 8 AM on Friday. Well, now Thursday night between 7:30 and 9 o’clock before going active on Friday, I had 2 all-cash offers, unseen. They’d seen the pictures, they’d seen the video, but they hadn’t been inside the condo. And so, I mean, this thing is, I mean, it was furnished, I mean, it looked like it was ready for Southern Living Magazine Pictures. So 2 cash offers, on Thursday night. Well, they were lowball offers. Right? So nothing good on them. Anyway, come Friday, when we went active, we had 5 showings on Friday.
Jay Conner [00:35:26]:
We had 3 offers on Friday night. And 2 and one offer came in at about 7 p.m. on Friday from a realtor. I and Carol Joy were eating dinner at, Soundside Restaurant. And so the offer comes in on my cell phone, $610,000 That’s 15,000 over the list. No appraisal. No, all cash. No contingencies. Close in 7 days because they wanted to get in there, you know, by July 4th.
Jay Conner [00:36:00]:
And I’m going I’m looking at it and saying, well, there’s no reason not to accept this. So I texted my realtor back and accepted the offer. About 45 seconds go by, and my realtor texts me back. He says, hold the phone. I just got another all-cash offer from another realtor. I said, but I already accepted it. He says I ain’t sent it in. You’re okay.
Jay Conner [00:36:22]:
I haven’t I haven’t sent it in. So now the next all-cash offer comes in at $628,000 cash, no contingency, want to close, you know, to get in by July 4th. And I said, Lord, there is a lesson in that little situation. Don’t be so quick and happy to accept your offer. Just sort of at least sleep on it before you accept the offer, you know. Anyway, so we just closed on it, $628,000 bought it for 425, and renovation was 11,300. And by the time I paid my realtor $31,000 which I was glad to do, I netted, 100 whatever it was, 160, $170,000 And, so what’s the takeaway lesson from that little story? Had to have private money to close within 7 days. You ain’t going to use no institutional commercial money and close in 7 days.
Jay Conner [00:37:23]:
So I had the private money ready to go. I had my Google ads in place for when they were searching, and, and I was ready to move fast. So knowing how to find the deal, have the private money ready to go. And by the way, and I know we’ve got to wrap up here in 2 minutes. But by the way, I know I’m getting ready to say something real quick. And I know you all heard it and it makes me wanna throw up. These gurus go around the nation on the platform saying, oh, just get the deal under contract. The money will show up.
Jay Conner [00:37:54]:
I wanna say, where is the money gonna show up? Is it just gonna, like, rain out of clouds or something?
Alvin Scioneaux [00:38:00]:
Right. Right.
Jay Conner [00:38:00]:
I know y’all heard that mess before. Just get just get the money. I just got the deal on the contract. So that’s why I say, get the money lined up first. It doesn’t take long. Get the money lined up first, and then think about how much more confident you’re gonna make with money burning a hole in your pocket, making offers on deals.
Alvin Scioneaux [00:38:18]:
Jay, what was the story?
Jay Conner [00:38:19]:
and I’m sticking to it. Atlantic Beach Atlantic Beach, North Carolina, is right across the high rise from Morehead City.
Angel Gonzalez [00:38:26]:
Well, since we do have to wrap up quickly, I know Alvin was gonna jump on, but I wanna make sure that this question gets asked. So we have 2 final questions that you can do. The first one is, what we call the keystone question. It’s really important to us, so our motto is faith, family, giving. I would just ask you, of those 3, which one would be the most important that you think resonates with you?
Jay Conner [00:38:47]:
Right.
Angel Gonzalez [00:38:48]:
Perfect. Yep. My man. And that’s what and then the other part is, because of time, we’ll just say one last part is, how do people find out more about you and what you got going on, Jay?
Jay Conner [00:38:59]:
Absolutely. Angel and Alvin, thank you so much. So I just launched. Listen, if you’re listening to my voice, you want to make note of this. I just launched my brand new 7-Day Private Money Challenge. So what in the world is the 7-Day Private Money Challenge? So I have recorded 7 video trainings on private money where I dive deep to help you get the private money. They’re only 15 to 20 minutes each. 15 to 20 minutes each.
Jay Conner [00:39:27]:
And, I just launched them. So, when you enroll in the Private Money 7-Day Challenge, you’ll immediately get the very first 15, 20-minute training video. And then every morning for the next 6 days at 10 AM Eastern in your email inbox, You’ll get the subsequent training videos. Very, very easy to understand. Here’s how you can join me in the 7-Day Private Money Challenge. Go to Jay Conner.com/ 7 days. And that’s the numeral 7. 7 days, d a y s.
Jay Conner [00:40:03]:
So, Jay Connor, jayc0nner.com/7 days. Come join me. You’ll learn how to raise private money, and I guarantee you
Alvin Scioneaux [00:40:13]:
We like to have fun, Jay. Appreciate it.
Angel Gonzalez [00:40:16]:
Hey. We appreciate Jay. Thanks so much for taking the time. As we wrap up another episode of Taking A Leap in a Commercial Real Estate podcast, I just wanna thank Jay for being with us here today, as well as Alvin, our co-host. And I just wanna always make sure everyone keeps in mind, as part of our motto in our podcast is building relationships is really about going deep and not wide. And you’re gonna know that. Why? Because guys like Jake can use those relationships to maximize profitability as well. So keep going deep because these relationships matter.
Angel Gonzalez [00:40:46]:
Otherwise, I’ll just say, have a great weekend, guys, and take care.
Narrator [00:40:52]:
Thank you for joining us on the Taking the Leap Into Commercial Real Estate podcast. If you enjoyed the show, please take a moment to support us by subscribing and leaving a positive rating and review on Apple Podcasts and Spotify. And remember, the views and content shared on this podcast do not reflect that of Keystone Private Capital. Thank you for tuning in, and we’ll catch you in the next episode.
Narrator [00:41:24]:
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.