*** Guest Appearance
Credits to:
https://www.youtube.com/@moneywithmission3142
“Money is Everywhere with Jay Conner”
https://www.youtube.com/watch?v=FgTaMJjHOYY
Exploring the Power of Private Money Lending for Real Estate Investments
Jay Conner, renowned as the “Private Money Authority,” recently graced the “Money with Mission” podcast hosted by Dr. Felicia Froe. During the episode, Jay delved into the transformative power of private money lending, sharing his journey from relying on traditional bank loans to becoming a successful advocate and educator in private money. This blog post unpacks the wisdom shared by Jay Conner, offering actionable insights for real estate investors and potential private lenders alike.
A Turning Point in Jay Conner’s Journey
The Bank Collapse and a Search for Solutions
Jay Conner’s real estate career, which began in 2003, took a dramatic turn after the 2008 financial crisis. By January 2009, Jay faced an abrupt financial dilemma: his bank unexpectedly severed his line of credit. With two houses under contract and no traditional financing available, Jay found himself questioning how to overcome this seemingly insurmountable obstacle. It wasn’t about “how” he would resolve it, but “who” could assist him.
Discovering Private Money Lending
A pivotal conversation with his friend Jeff Blankenship introduced Jay to the concept of private money, including the use of self-directed IRAs. This option allowed individuals to lend their retirement funds for investments. Jay’s curiosity led him to research and ultimately master the private money lending model, paving the way for his remarkable success in raising funds.
Crafting a New Financial Path
The Power of Raising Private Money
Jay’s in-depth understanding and strategy for private money paid off quickly. Within 90 days, he raised $2,150,000, far surpassing his previous $1 million bank credit. This success was a game-changer during a time when conventional loans were nearly impossible to secure.
Shifting from Borrower to Educator
Acknowledging the transformative effect private money lending had on his business, Jay transitioned into a teaching role. By focusing on education rather than solicitation, he attracted investments organically. He emphasized the importance of leading with a servant’s heart and sharing knowledge about private money lending’s benefits to potential investors.
Strategies and Practices for Real Estate Investors
Practical Approaches to Real Estate Deals
Jay leverages private money to fund fix-and-flip deals, averaging a profit of $82,000 per deal. He typically conducts two to three deals per month, amounting to approximately 30 deals annually. Additionally, Jay employs creative financing techniques, purchasing single-family homes on terms and then offering them on lease purchase or rent-to-own agreements.
Navigating the Market Landscape
Jay’s strategy involves acquiring off-market properties, crucial amidst low inventory scenarios. The speed of acquisition, facilitated by private funding, often leads to substantial profits. He cited a recent condo flip netting $160,000, showcasing the effectiveness of his methods.
The Dual Roles in Real Estate: Lenders and Investors
Opportunities for Private Lenders
Dr. Felicia Froe highlighted the significance of financial independence, especially for women, advocating for investments in cash-flowing assets. Jay further explained that self-directed IRAs, an IRS-approved entity, enable individuals to diversify their investments and achieve higher returns compared to traditional retirement funds. Since 2009, Jay has consistently offered returns of 8%-10% to his lenders.
The Role of Networking and Education
Both speakers underscored the importance of networking and education in real estate. Jay noted that 99% of people, including financial advisors, are unaware of self-directed IRAs and private money lending. Educating potential investors using conversation starters like “Did you know?” questions can pique interest and open up new financial avenues.
Personal Stories and Ethical Investing
A Relational Approach to Networking
Jay shared a personal story about leveraging community ties to engage potential investors without directly asking for money. His approach involves educating and building relationships, which organically leads to investment opportunities. This strategy not only lowers the ask but also fosters ethical responsibility in sharing financial knowledge.
Fulfilling Financial Goals through Service
Reflecting on his motivations, Jay stressed the importance of pursuing endeavors that extend beyond personal gain. A money-only focus often leads to dissatisfaction, whereas a purpose-driven approach, aiming to help others, naturally brings about personal and financial fulfillment.
Conclusion: Embracing Private Money Lending
Jay Conner’s insights on private money lending offer a roadmap for securing financial independence and making impactful real estate investments. By learning and leveraging private money, investors can navigate unpredictable financial landscapes with greater confidence and success. Engaging in private money challenges, like Jay’s “7 Day Private Money Challenge,” provides an educational platform for both potential private lenders and investors to begin their journey toward financial freedom.
For more information on Jay Conner’s strategies, resources, and contact details, visit https://www.JayConner.com and the private money challenge at https://www.PrivateMoneyChallenge.com. Additionally, explore the educational materials available at https://www.MoneyWithMission.com for comprehensive insights into fostering social impact through real estate investments.
10 Discussion Questions from this Episode:
- Jay Conner’s Journey:
- How did Jay Conner’s upbringing and his father’s entrepreneurial influence shape his approach to real estate investing and private money lending?
- The 2008 Financial Crisis:
- What were the critical steps Jay Conner took after his bank cut off his line of credit post-2008 crash, and how did this situation lead him to discover private money lending?
- Private Money Lending System:
- Can you describe Jay Conner’s method for successfully raising over $2,100,000 in private money within a short period and the core principles behind this strategy?
- Self-Directed IRAs:
- What are self-directed IRAs, and why does Jay Conner advocate for their use in the context of private money lending for real estate investments?
- Educational Approach:
- How does Jay Conner’s method of educating potential investors differ from directly asking for money, and why does he believe this educational approach is more effective?
- Overcoming Fear:
- For new investors, how does focusing on education help overcome the fear associated with raising private money, according to Jay Conner?
- Financial Independence for Women:
- From Dr. Felicia Froe’s perspective, why is it essential for women to achieve financial independence through investing in cash-flowing assets, and what role does private money play in this?
- Long-term Success:
- Jay Conner speaks about the importance of not appearing desperate when seeking investments. How does maintaining a “servant’s heart” contribute to long-term success in real estate?
- Creative Financing:
- Can you discuss some of the creative financing techniques Jay Conner uses, such as purchasing single-family homes on terms and selling them on lease-purchase agreements? How do private funds facilitate these deals?
- Community and Networking:
- How does building strong community relationships and networks contribute to Jay Conner’s success in attracting private lenders, and what ethical considerations should one keep in mind when utilizing these networks?
Fun facts that were revealed in the episode:
- Jay Conner successfully raised $2,150,000 in private money within 90 days, during a time when conventional loans were scarce.
- Jay Conner’s father, Wallace Conner, now 91, remains active in real estate development, influencing Jay’s entrepreneurial mindset.
- Jay’s introduction to private money came through a conversation with his friend Jeff Blankenship, exploring the concept of self-directed IRAs.
Timestamps:
00:01 Transitioned from traditional loans to private money.
05:03 Early job taught communication; money perspective shifted.
09:17 Line of credit closed; can’t fund deals.
10:47 Learning about private money for real estate.
14:31 Share investment opportunities; let them express interest.
16:55 Networking is crucial for real estate success.
22:18 Private lending offers higher interest than CDs.
25:30 Unlimited tax-free income: self-directed Roth IRA.
29:51 Seeking referrals for real estate investment program.
32:50 Creative financing enables profitable real estate investments.
34:30 Help others succeed; then you’ll succeed.
39:22 New 7-day private money challenge launched.
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
https://www.youtube.com/c/RealEstateInvestingWithJayConner
Apple Podcast:
Facebook:
https://www.facebook.com/jay.conner.marketing
Twitter:
https://twitter.com/JayConner01
Pinterest:
https://www.pinterest.com/JConner_PrivateMoneyAuthority
Raising Private Money: Jay Conner’s Systematic Approach to Real Estate Investments with Dr. Felicia Froe
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.
Dr. Felicia Froe [00:00:29]:
Welcome back to Money with Mission. This is Doctor. Felicia Froe your host, where we believe in money with mission, that every woman should have the financial ability to walk away from any job or relationship that is not in her best interest. While there are a variety of ways to get there, we focus on cash-flowing assets, particularly in real estate and businesses to help us get to that point where we are not relying on our W2 income, our spouse, the government, anybody like that to help us get our money. All right. Today, we have Jay Conner, the private money authority. Jay comes to us to talk about private lending and getting private money for your real estate investing. He began investing in real estate in 2003.
Dr. Felicia Froe [00:01:21]:
At the start of his career, he relied on local bankers like most of us do, traditionally getting loans, because that’s all we know. Right? He got tired of those personal guarantees for every deal, origination fees, all the things that go with that private, that banker mortgage, all the intense scrutiny on everything that you’ve done in your life. After the market crash in 2008, his banker cut him off. He had to abandon everything he had known about financing his deals. And then he heard about the world of private money. He developed his system for gathering 1,000,000 dollars for his real estate deals. He has refined his system and is now repeatable and dependable. And he works with others to help teach them how to find private money.
Dr. Felicia Froe [00:02:13]:
In a few months, few short months, Jay raised over $2,100,000 in private money. And at first, like most of us do when something bad happens, we curse the event. Jay cursed his banker at the beginning, but then was very happy with the way things came out because it is, it led him to where he is now, being able to finance his deals and help private money lenders make money. Welcome to the show, Jay.
Narrator [00:02:44]:
Be the change you want to see. Make a difference by giving your money a purpose, a mission to do good. Welcome to Money with Mission, where we show you how to create passive income so that you have options for how to work and how to live your life while leaving a legacy of positive social impact.
Dr. Felicia Froe [00:03:00]:
Welcome, Jay. Thanks so much for joining me today on the Money with Mission podcast.
Jay Conner [00:03:05]:
Doctor Froe. Now let me tell you, I am so excited and so thankful that you invited me to come along and talk about what I’m the most passionate about, and that’s private money for real estate deals. The reason I’m so passionate is that private money’s had more of an impact and a difference on our investing business than anything else we’ve done.
Dr. Felicia Froe [00:03:27]:
Awesome. Okay. Let’s get the elephant out of the room. Where are you from? Because I know people are hearing your accent. They can know. Okay. What boy is this guy?
Jay Conner [00:03:38]:
Well, my wife, Carol Joy, and I live here in Eastern North Carolina in a real town called Morehead City, North Carolina. Population, 8,000 people.
Jay Conner [00:03:50]:
But we’re here in a resort area, so my total target market is only 40,000 people where I live.
Dr. Felicia Froe [00:03:58]:
Wow. Okay. So now you can know you guys. He is in the United States. That’s not some foreign accent. That’s a
Dr. Felicia Froe [00:04:04]:
United States.
Jay Conner [00:04:07]:
That’s yeah. It’s Purity South. I’ll tell you that. Purity South.
Dr. Felicia Froe [00:04:13]:
Alright. Hey, Jay. Let’s get into it here. Tell me your money story. How did you grow up? Were you born into money? Were you born knowing how to make money? How did you get to where you are today?
Jay Conner [00:04:25]:
Yes. I was very blessed, doctor Froe, with being raised by an entrepreneur, my dad, Wallace Connor. He is now 91 years old and still doing deals. He’s in the middle of a subdivision where he’s building 350 new houses at 91 years old. Wow. And he says, Jay, when I stop when I stop making a deal and I stop negotiating, I die. So I’m not ready to die yet. Anyway, so, yes, I was raised around my dad.
Jay Conner [00:04:55]:
My dad put me to work in his company in the summer when I was 11 years old.
Dr. Felicia Froe [00:05:02]:
Okay.
Jay Conner [00:05:03]:
And he put me on the telephone. He had an acceptance corporation, a finance company, if you will, that financed the mobile homes that, the industry that he was in. And so in the summertime, before my voice even changed, the people I’m calling think I’m a woman that I’m talking over the phone. And he had me call and check-in people’s credit and check-in people’s employment and talking to landlords and talking to furniture stores that finance these people. So I was so blessed to get this on-the-job training in communication and talking to people at a very, very young age. However, my attitude towards money changed drastically when it changed drastically when I was 24 years old, and it changed again in January 2009. And I’ll share that story as well. So I had 2, like, major shifts as far as my attitude towards money.
Jay Conner [00:06:03]:
I’ll share real quick about the one when I was 24 years old. I got all caught up in wanting to get involved with multilevel marketing companies. I just thought that just sounded so was to make the money. I failed miserably. I never got off got off of square 1. Yeah. And every time I’ve been passionate about something in business and I had and I had a good business plan to it, I just can’t stop because I’m just really it’s all about other people. It’s all about leading with a servant’s heart.
Jay Conner [00:06:49]:
So hopefully that answers the question. I’m not sure Yes.
Dr. Felicia Froe [00:06:52]:
Yes. That’s that’s good. But you were born to a family of entrepreneurs. I’m sure your mother was not dragging your dad back. That’s how he could advance the way he did with his mobile homes. I keep thinking mobile homes and I think campers, but that’s not what you’re talking about. You’re thinking of?
Jay Conner [00:07:08]:
Yeah. Manufactured housing, if you will. So, you know, most mobile homes in the industry that we’re talking about were affordable housing. They were delivered and seldom where they ever moved again. Most of them just stayed right there on the spot. But the financing From Wall Street for the consumer financing for that product fell out of favor big time in the early 2000s. And I knew if I ever got out of manufactured housing, I wanted to get into single-family houses. So my wife, Carol Joy, and I, she’s Froem Texas.
Jay Conner [00:07:41]:
We’ve been full-time investing in single-family houses primarily since 2003.
Dr. Felicia Froe [00:07:47]:
Okay. That’s about the same time I started in 2004.
Jay Conner [00:07:51]:
Okay.
Dr. Felicia Froe [00:07:52]:
And then we so we both rode that nice way, buying lots of things.
Jay Conner [00:07:57]:
Oh, yes. And I don’t
Dr. Felicia Froe [00:07:58]:
Know if maybe you knew more than I did, but I learned how much I didn’t know in 2,007, 2008.
Jay Conner [00:08:05]:
Well, that’s that was my next big mind shift on money. So from 2003 until January 2009, all I knew to do was go to the local bank, get on my hands and knees, put my hands underneath my chin, and beg and persuade and pull up my skirt so they could see my assets and check my credit.
Dr. Felicia Froe [00:08:28]:
Do a colonoscopy to figure out if you’re worth doing give a loan and money to. It’s
Jay Conner [00:08:33]:
Exactly. Yeah. And I tell you what, doctor Froede. I remember it like it was yesterday. I was sitting here at my desk in January 2009. I’d already been in this business for 6 years doing very well, and I had a great relationship with my banker. His name was Steve. And he had funded a lot of deals for me in those 1st 6 years.
Jay Conner [00:08:55]:
And, believe it or not, here in Eastern North Carolina, we still have these things called handsets that have cords attached to them, telephones. Anyway, so I picked up my phone.
Dr. Felicia Froe [00:09:06]:
But if anybody’s not watching, he’s talking about a landline. A landline.
Jay Conner [00:09:13]:
So, anyway, I had 2 houses under contract.
Dr. Felicia Froe [00:09:16]:
Okay.
Jay Conner [00:09:17]:
And so I call I pick up the phone. I called Steve, and Steve and I had this kind of conversation many, many times. And I told him about the 2 deals under contract. Well, I learned like that that my line of credit had been closed with no notice. I said, Steve, what in the world are you telling me you’ve closed my line of credit? And I’ve got a great relationship. Never been late on payments. He said, 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 my two deals.
Jay Conner [00:09:55]:
That represented over $100,000. So I’m gonna share this, doctor Froede. I hung up my phone and I sat here. The power is in question. Mhmm. Really good questions. That’s what the power is.
Dr. Felicia Froe [00:10:07]:
Love that. Yes.
Jay Conner [00:10:08]:
And I sat here and I asked myself a question that I’m gonna share with you and your audience. And this question I’m getting ready to share, From my experience, will help fix any problem you’ve got, whether it’s health, relationships, finances, or career, it doesn’t matter. And, by the way, these people running around saying every problem’s an opportunity. I wanna throw up. I didn’t have an opportunity. I had a problem. Right? So here’s the question I asked myself. I said, Jay, who do you know? You know, it’s who, not how.
Jay Conner [00:10:41]:
I said
Dr. Felicia Froe [00:10:42]:
Yep.
Jay Conner [00:10:43]:
Who do you know that can help you with your problem?
Dr. Felicia Froe [00:10:47]:
Yep.
Jay Conner [00:10:47]:
And, immediately, when I asked myself that question, I thought of Jeff Blankenship, a good friend of mine in Carol Joys. He was living in Greensboro, North Carolina at the time and investing in single-family houses. I called him up and told him what had just happened. He says, well, Jay, welcome to the club. I said, what club is that? He said, the club of having the bank shut you down. My bank shut me down last week. I said, well, how are you gonna fund your deals? He says, well, have you ever heard of private money? I said, no. He says, have you ever heard of self-directed IRAs and how people can use their retirement funds to become a private lender and loan you money for their retirement funds and how they can be protected and get high rates of return and you win and they win? I said, no.
Jay Conner [00:11:33]:
I never heard of that, Jeff. So I put on my study hat.
Jay Conner [00:11:38]:
And I studied private money. Now, when I’m saying private money, I’m not talking about hard money. I’m not talking about institutional money. I’m talking about doing business with individuals. People just like you and me either have their investment capital or they have retirement funds. They’d like to be a passive investor and get nice returns, but they don’t wanna be out negotiating deals. Well, so let me tell you what I did. I put my opportunity.
Jay Conner [00:12:04]:
I put my program together as to what I was going to offer to just start with people with my connections. People I go to church with, people in the Rotary Club, people in my business network, and an international club here locally. And I’m just gonna start sharing my story and teaching people how they could be a private lender and get these high rates of return safely and securely. And so in less than 90 days, I was blessed to be able to raise $2,150,000 in private money. I only had $1,000,000 at the local bank. So here amid this global financial crisis, our income tripled because all these foreclosures were going on and the banks weren’t loaning money, so you had to have the cash. Yeah. And so how did my attitude change? Well, here’s how my attitude changed about borrowing money.
Jay Conner [00:13:01]:
This world of private money has nothing to do with begging, selling, persuading, or trying to talk to anybody to end anything. How did I raise that $2,000,000 in less than 90 days? And how do I now have today 47 private lenders, and individuals, funding our real estate deals, and I’ve never asked anybody for money? Well, here’s the first step of the secret sauce. I put on my private money teacher hat.
Dr. Felicia Froe [00:13:28]:
K.
Jay Conner [00:13:28]:
I got a hat that says, private money teacher. Probably and I
Dr. Felicia Froe [00:13:32]:
Please stop For anybody just listening, not watching, it’s got some baseball cap that says private money teacher.
Jay Conner [00:13:39]:
There you go. And so I took on this attitude of leading with a servant’s heart and being a teacher and teaching people initially in my network as to what private money is and what my and what interest rate I’m I’m gonna be paying and how they can get their money back in case of an emergency and etcetera without having a deal to pitch.
Dr. Felicia Froe [00:14:05]:
Okay.
Jay Conner [00:14:05]:
That’s another part of the secret sauce. Desperation has a smell to it.
Dr. Felicia Froe [00:14:11]:
Yes. It does. Yes.
Jay Conner [00:14:12]:
It does. Talking about private money and how somebody can be a private lender, and I got a deal for them to fund that I’m already sounding desperate.
Dr. Felicia Froe [00:14:21]:
A deal that you have to fund. I have to get this thing funded. I gotta find the money. They can see it in your eyes.
Jay Conner [00:14:27]:
Oh, yeah.
Dr. Felicia Froe [00:14:28]:
Absolutely. In your voice, you’re struggling.
Jay Conner [00:14:31]:
So Absolutely. And now real estate investors or people that are just starting to raise capital, they’ll say, well, Jay, how do I get over the fear of rejection? And I say, look. How can you be rejected if you’re not asking anybody for anything? You’re simply sharing a way that they can get high rates of return with their retirement funds, with their investment capital, and I promise you, you’re gonna be sharing information with them that they’ve never heard before. And you don’t have to ask them. You teach it and that they’re gonna tell you if they got if they wanna get involved or not without you even having to ask. So then here’s the other part of the secret sauce on how to get that funding without ever asking. So let’s say well, doctor Froede, let’s say that you are one of my new private lenders and you’ve told me you’ve got $150,000 and you’ve got it sitting in a 401k from a previous employer or something, and you’d like you’d like you’d like to do this. Well, then here’s exactly what I would tell you.
Jay Conner [00:15:27]:
I’d say, I’m gonna put your money to work for you just as soon as possible. So maybe a week or 2 weeks or a month goes by, and I pick up the phone. I’m gonna share the script right now as to exactly what I said over the phone when I would call up Doctor Froeh. I call this the great news phone call.
Jay Conner [00:15:49]:
Here’s the great news phone call. You answer the phone, we have a little chit-chat. I say, doctor Froeh, I have got great news for you. I can now put your money to work. I’ve got a house in Newport under contract with an after-repaired value of $200,000. Now the funding required matches up to what you’ve got in your retirement funds. The funding required for the deal is $150,000 Closing is gonna be next Friday, so you’ll need to have your funds wired to my real estate attorney’s trust account by next Thursday. I’m gonna have my attorney email you the wiring instructions.
Jay Conner [00:16:27]:
That’s the end of the conversation. The most stupid thing I could have said in that little conversation was, do you want to fund the deal? Of course, you want to fund the deal. You’ve moved your money over to the self-directed IRA company that I recommended, and you’re not making any money until I put your money to work. So that, in a nutshell, is how you separate those conversations and confidently do business with your private lenders.
Dr. Felicia Froe [00:16:55]:
I’m gonna back up because you said that you just gave a lot of information. So I wanna one of the first things you said, you gave the question that you asked yourself, who can help me with this problem? So many of us type a, went to school, got great grades, a student people did it by ourselves. We didn’t have the network and we’re not used to asking for help, but in real estate investing in all of every other aspect of life, a network is where you succeed. It’s just a way to think. It’s not, oh my gosh, how am I going to solve this problem? Who can help me solve this problem? And I promise you more people will come to your head than you can imagine. And if they don’t, you need to get out and start talking to more people. So that’s big, big, big, big, big, big with real estate. Okay.
Dr. Felicia Froe [00:17:53]:
Then you become an educator, not a beggar, not an asker. You under you educate yourself on what it is you wanna do. And now you’re starting to educate other people on what you’re doing. Make sense so far, then we’re getting into the self-directed IRA and all those kinds of things. When it comes to private lending, we’re gonna, I’m gonna talk about that a little bit more. So how do you have the conversation? I’ve got my money sitting over here in this thing that’s making whatever percent. I have no idea what it’s making. Right? Usually, most of us have no idea what that money’s making.
Dr. Felicia Froe [00:18:26]:
We look at it when, like, last week when you saw the stock mark stock market drop a 1,000. Like, oh my god. What’s happening to my 401 k? Otherwise, we don’t pay attention to it. So how well, how does that conversation go? Well, first of all, let’s talk about what’s a self-directed IRA. Because there are people out there who know, and I’m sure there are people out there who don’t know what
Jay Conner [00:18:44]:
It is. Sure. So a self-directed IRA is also known as a third-party custodian. So a self-directed IRA is a company that’s approved by the IRS. And what the self-directed IRA company is allowed to do, it cannot give any advice, cannot give any financial advice. What it is, it’s like an, it’s an agency that houses your retirement funds. So let’s say you have current retirement funds in Schwab or mutual funds or a previous 401 k at a previous employer, and for whatever reason, you’re not happy with the returns that you’re getting. So what the IRS allows you to do is allows you to transfer those funds, those current funds you have, retirement funds, part of them or all of them, over to a self-directed IRA company approved by the IRS, and there’s no tax penalty, there’s no tax effect that’s triggered at all, you move it over.
Jay Conner [00:19:48]:
Once your account is funded at the self-directed IRA company, normally takes about 2 weeks to 3 weeks to get it moved over, and then you can truly self-direct. That’s why it’s called a self-directed IRA. You can truly self-direct how you want to invest those funds, and you can invest those funds in a lot of different ways. You can be a private lender, as we’re talking about. You can loan that money out to a real estate entrepreneur or investor get returns, and earn interest. And by the way, it’s either gonna be tax-deferred interest or tax-free interest depending on the type of retirement fund you’ve got. You can take your retirement funds and truly self-direct and go invest in real estate. You can go buy a house, you can invest in an apartment, or whatever.
Jay Conner [00:20:40]:
However, remember, all the returns or the profits are going back into your retirement account and not into your personal pocket, because, a tax-deferred or it’s tax-free. So you truly get to self-direct how you want to invest your retirement money.
Dr. Felicia Froe [00:20:58]:
Got it. So instead of Schwab or Fidelity or Vanguard investing your money for you in a mutual fund, you’re in this fund, this self-directed IRA that you can tell, you can call your fiduciary, your person at the self-directed company to the I’m going to invest this. They handle it all that you just tell them what you wanna do. The paperwork goes to them. All that stuff happens off your hands so that you never touch the money. It stays in that account. Please, please, please, everybody realize we are not tax professionals at all. You really wanna talk to your tax professional to understand all the implications, complications, risks, and all the things associated with this.
Dr. Felicia Froe [00:21:45]:
These are things that we have done. I’ve used a self-directed IRA to invest in some things. Jay uses it and helps other people use theirs to make better returns than they’re making in their Fidelity account with less. It’s a different vehicle to invest your money. So it’s not tied to the stock market. Does that make sense? So you can be, you can still have your stocks, have your stocks, but you wanna be diversified so that it that they’re noncorrelated. One’s not going up and the other one’s going they’re not doing the same thing at the same time. Does that make hope that makes sense?
Jay Conner [00:22:18]:
Oh, absolutely. If I can say this real quick, doctor Froede, but any more these days, I’m getting to the age if I don’t say it while it’s up here, it’s gone. So one easy way to think about being a private lender, what you can expect, at least when you do it when you’re doing it my way, is it’s like putting your money, whether it’s liquid investment or it’s retirement funds, it’s like putting money in the local bank in a certificate of deposit. Okay. But you’re just gonna make a lot more, interest income than you are in the local CD. I’ve been paying I’ve been paying the same thing. I’ve been paying 8% or 10% depending on the position of the note. I’ve been paying the same since 2009.
Jay Conner [00:23:00]:
And it’s funny, real estate investors will ask me, doctor Froeh. They’ll say, Jay, how in the world are you still paying your private lenders the 8% you paid them in 2009, and now with all the interest rates going up and all that, how are you still paying them 8%? I said, well, there are 2 answers to that. Number 1, I make the rules, not the lender. I make the rules. I said, that’s that’s a big mind shift right there.
Dr. Felicia Froe [00:23:26]:
Yeah.
Jay Conner [00:23:26]:
That’s a 180-degree mind shift. People ask me, they say, Jay, how do I start? I say, well, here’s how you start. It’s hard to own real estate until you own the real estate between your ears.
Jay Conner [00:23:39]:
And, instead of having the mindset of it’s the lender that’s making all the rules, when you are the teacher see, these 47 private lenders that I’ve got, not one of them ever heard of private money
Jay Conner [00:23:52]:
Before I taught them.
Jay Conner [00:23:54]:
None of them ever heard about self-directed IRAs until I taught them. Right? So, how am I able to pay the same thing since 2009? I make the rules. You make the rules if you’re the borrower, and 8% is still a whole lot more than 4% or 4 a half percent.
Jay Conner [00:24:11]:
That you can get at the local bank.
Dr. Felicia Froe [00:24:13]:
Yes. Yes. Yes. It’s that that’s huge. Having your mind being the lender, becoming a bank in your head is key to being able to do this. If you’re still thinking about how the bank makes money, how am I, wouldn’t it all those, it is really about owning your brain, owning your thoughts, and wrapping your mind around this, learning about self-directed IRAs. And there are lots of different models for that. So that’s a whole nother education, but that’s not a hard education.
Dr. Felicia Froe [00:24:45]:
This is not a medical school, law school, or engineering kind of education. I promise you. Well, if you’ve done those things, you can do this. You can learn this. You’re like, oh, some of it’s just a matter of, I never knew this existed. I remember the first time I found out about it, I was like, oh my gosh.
Jay Conner [00:25:04]:
I know it. And the funny thing about it is is 99% of the public walking around has never heard of this stuff that we’re talking about. Private lending and self-directed IRA. And when you just bring it up in conversation, I love conversation starters or change the conversation to where you want it to go. I love the questions you know questions. Yeah. I love the questions you know questions. You’ll be having coffee or at a social gathering, whatever.
Jay Conner [00:25:30]:
And here’s one of my favorite questions, by the way, I’m just talking along. Right? I said, by the way, did you know there’s a way people can earn unlimited money per year tax-free? Well, you just got their attention with that question because, of course, what am I talking about? I’m talking about having a Roth IRA in a self-directed IRA company is what I’m talking about. And they’ll say, no. How in the world can you make unlimited money tax-free? I said, well, my follow-up question to that is, have you ever heard of self-directed IRA companies? And, of course, they’re gonna say no. Even financial advisors haven’t heard of this because there’s no commission in it Yeah. For them. And so then that just opens the door for a conversation.
Dr. Felicia Froe [00:26:11]:
How much money is out there in self-directed IRAs or 401ks that just sitting over there hanging and somebody’s making money off of it, but usually, it’s not the person who owns the thing? How much is sitting out there?
Jay Conner [00:26:23]:
I’m glad you asked the question because what this answer is gonna prove is that there’s more money all around you if you’re listening to this show. There’s more money near you in your backyard through your connections than you’ll even be able to use. There’s more money than there are deals. Before COVID, cash sitting on the sidelines was $18,000,000,000,000. Today, this side of COVID, $31,000,000,000,000 And look, people don’t know what to do with their money. It’s our ethical responsibility to relieve them of their problem and put on your teacher hat, your educator hat, and educate them.
Dr. Felicia Froe [00:27:05]:
But so just think about this, you guys. You have a friend who’s got money sitting in an account doing nothing, and you know how they could do better and you don’t tell them. All you get to do is share whether they do it or not is not up to you. You can only control what you share, what comes out of your mouth. They may or may not believe you. That’s not your problem. You have shared. I can’t tell you how many people I share things with who don’t do anything with that information for a few years.
Dr. Felicia Froe [00:27:35]:
And then they come back. It’s like, remember when we talked about it? I was like, I thought you weren’t even paying attention to me. And they remember when, and now they’re ready. So all you can do and all you should do is share without any intent or anything, but to share that information. Some people will be ready right now. Some people will be ready in 5 years. Some people will never be ready and think you’re crazy. It’s not your responsibility.
Jay Conner [00:28:01]:
I love the way you put that, doctor Froehn, and it’s so true. Of my 47 private lenders right now, some of them are ready. My very first private lender that that that started with $250,000, which within 24 hours became $500,000. My very first private lender was ready, ready to go. And I gotta share the quick version of that story because it’s so good. Here’s another way I don’t ask for money. Here’s another way I don’t ask for money. Here’s a magic phrase.
Jay Conner [00:28:30]:
It’s called I need your help. Mhmm. I need your help. And I’m not needing their help asking them for money. Here’s the short version of the story. When I was cut off from the bank, as I shared, I learned about private money and put my program together very quickly. Well, it was on Wednesday night at bible study. Carol Joy and I went.
Jay Conner [00:28:51]:
We’re very involved in the local church here. Still the same church since this story I’m telling. Anyway, I walked into the foyer. There was a gentleman that I was looking for. His name was Wayne. He’d known me quite a while. I’d known him quite a while. And I asked him if we could visit for a few minutes after Bible study.
Jay Conner [00:29:07]:
He said, well, sure. So, we got together, we went into the nursery, I shut the door, I looked at him, and here’s exactly what I said to him. I said, Wayne, everybody in this town. And he did. He was the original. Alright. This is gonna be a little risky. Hardly anybody’s gonna know what I’m talking about.
Jay Conner [00:29:26]:
He was the original Zenith Television dealer What? In Morehead City, North Carolina. And if you don’t know who the Zenith Television dealer was, that means you’re too young to remember life before Walmart. Anyway, I took I took you back, didn’t I?
Dr. Felicia Froe [00:29:45]:
I took you back. Picture of a z on the TV, one of those thick, wide ones with the Oh, yeah.
Jay Conner [00:29:51]:
That’s it. That’s it. Anyway, I said, Wayne, everybody in this town, you’re connected to the Rotary Club. And then I said the magic phrase. I said, I need your help. He said, what do you need there, brother Jay? I said, well, I’ve now opened up my real estate investment business by Referral Only, and I’m now paying insane high rates of return for people that come on and invest with me. When you run across somebody who’s complaining about the volatility of the stock market or the low interest rates in the bank, would you refer them to me, and I’ll tell them about my program? Well, what do you think Wayne said? Wayne says, well, now what you got in mind?
Jay Conner [00:30:34]:
Alright. And he said, well, what kind of rate are you paying? I said, well, Wayne, that sort of depends on the deal. I said, what sounds high to you? He says, well, we’re only getting 3%, and that’s what it was in 2009. You’re only getting 3% in the local bank, and we’re losing money in the stock market. He says, 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, and the next day, I went to his home with his wife and went through the program that I put together in detail, how they’re protected.
Jay Conner [00:31:11]:
I’m not borrowing unsecured funds. How can they get their money back in case of an emergency? What’s the length of the notes? How often will I pay you interest, etcetera? Takes only 15 minutes to talk through it. And so, yeah, by that visit, it was 500,000. Bear in mind, I didn’t bring up those 2 deals that I had under contract because desperation’s got a smell to it. So I told him I said, I’ll call you back soon. So a few days went by, and I called him up with the great news phone call. And, they were private lenders of mine for many years. Unfortunately, both of them have passed away now.
Jay Conner [00:31:47]:
But you see the point of that story? I’m not asking for money. I ask them to just help me spread the word.
Dr. Felicia Froe [00:31:55]:
I love it. I love it. Are your deals so there are two sides to this? You can be a private lender or you could be the person who uses, who helps people with their money, make money with their money. So you could either be the lender yourself, or you could be the deal finder and maker and help me, Jay, whoever your friends make money on their money in your business. Do you, are you buying single-family houses? Are you long-term holding them? What kind of strategies are you using with your business?
Jay Conner [00:32:28]:
Yeah. It depends on how I buy it and how I fund it. If I’m using private matter to fund it, then I’m doing that for my fix and flips. My average profit right now in this small little town is $82,000 per deal. And we do 2 to 3 of those a month. 2 to 3 of those a month. We’re averaging about 30 a year. I don’t say that, by the way, to brag.
Jay Conner [00:32:50]:
I say that to make a point. You don’t have to be in a big market or big population area to make significant income. But back to your question. Now, I also do, of course, I guess, private money is creative financing as well. But I was going to say, I also buy single-family houses on terms. Uh-huh. Meaning, I negotiate terms with the seller. So if they have a mortgage and they need debt relief, they need to get out Froem underneath that monthly payment, then I’ll buy that single-family house subject to the existing note where they keep the mortgage in their name, I agree to make the payments, they transfer title and ownership.
Jay Conner [00:33:27]:
On those deals, then I’m going to sell it on lease purchase or rent to own and help the buyer get a mortgage, which is different from a lot of real estate investors. So, my rule is, that if I pay all cash, I want to cash out. If I’m buying on terms, I wanna sell on terms, have the positive cash flow coming in, and collect large nonrefundable lease option deposits. In my market, since there’s no inventory whatsoever, there’s no inventory in the multiple listing service. And all of our deals were buying what we call off-market Froem for sale by owners.
Jay Conner [00:34:02]:
I’m flipping houses as hard as I can. And I just flipped a condominium. I only had it for 5. On the oceanfront, you would look like you’re on a cruise ship. I only had it 5 weeks and netted after realtor fees, $160,000 just on that one condominium. But the reason I share that story is if I didn’t have private money available to close quickly, we closed in 5 days on that deal just 7 weeks ago, and I would have missed out on the deal.
Dr. Felicia Froe [00:34:30]:
So, just to catch everybody up, yes, you need the money, but you also need the team. I’m sure Jay’s not in there fixing up that condo by himself to get it sold. So we get our eyes big. And I want you to go back to one of the things Jay said when he was doing things and I have the same experience for the money only It failed. It didn’t get off the ground. When you are working to help somebody else, whether it’s your private money lenders make money, whether it’s that seller that’s in a pickle and can’t sell their place or some homeowner who’s stuck with their debt that they can’t. These are you get creative to help someone, not just to make your money. And when you’re helping someone, you will make money and you will do well.
Dr. Felicia Froe [00:35:17]:
But that’s what money with mission is about. That’s what Jay’s company is about. It’s not helping is serving, not just about making the money for yourself. Money comes when you serve.
Jay Conner [00:35:29]:
I just
Dr. Felicia Froe [00:35:30]:
Had to put that out there and I’ve got off the subject of the team because the, we start thinking, I have no, a lot of people in California who are gonna like, I wanna do this. I wanna do this. And I’m gonna do it in North Carolina. I’m gonna do it in Missouri or I’m gonna do it in Oklahoma, whatever. If you don’t know anybody there who can help you get that stuff done, you are buying yourself another job, because you’re gonna be flying out to Oklahoma. I live here. You can stay at my house, but I’m not building things. I’m not working and cleaning up stuff.
Dr. Felicia Froe [00:35:57]:
So you have to have that stuff in order or know how you’re gonna make it happen before you start taking it. Just, I hope that hope this is making sense to you guys. Okay. There’s a lot, of this pride in raising money again, Jay saying money is everywhere. That part is not the hard part. It’s not the hard part. The rest of it becomes challenging if you haven’t thought it through.
Jay Conner [00:36:20]:
So true. I love I love you and I have so much in common, doctor Froede, Froem our the mindset where our heart is coming Froem. Share a quick story with you that’s gonna emphasize the point that you just made, and that is it’s about helping other people. I was riding down the road with a good friend of mine from church a few months ago. And just out of the blue, he says, Jay, I got a question for you. I said, what’s that? He says, when is enough enough?
Jay Conner [00:36:48]:
And I said, I think I understand your question, but what do you mean? He says, well, you’re traveling the nation. You’re doing all these talks in front of real estate investors, and you’re doing all these real estate deals. He says when I know that you don’t have to be doing all that stuff. He says, how do you reconcile the verse in the bible from the apostle Paul that says to be content with whatever state of life you’re in? I said, now I understand the question. And I said, Neil, let me answer your question. When is enough enough? Enough is never enough when it’s not about you.
Jay Conner [00:37:29]:
That’s fast. Never enough when it’s not about you.
Dr. Felicia Froe [00:37:32]:
About you.
Jay Conner [00:37:33]:
Now it’s partly gotta be about you. It’s partly gotta be about you. Let let me be but everybody’s gotta win.
Dr. Felicia Froe [00:37:39]:
Yeah.
Jay Conner [00:37:40]:
Everybody’s gotta win. So, what we’re talking about here, doctor Froe, is some deep stuff because a question I would encourage all the listeners to take a deep dive on and ask yourself is, why are you doing what you’re doing? Why are you do why are you doing it? Unfortunately, a lot of people can’t answer that question.
Dr. Felicia Froe [00:38:04]:
Or the answer is for the money I have to because I have to eat. We have to do with all the reasons that make you miserable and why you’re doing what you’re doing. What you do. It happens in medicine happens in law. It happens in every, but when you are doing what you do for the money only, that becomes the focus it becomes a miserable existence.
Jay Conner [00:38:24]:
Yes. Yes. Ask me how I know.
Dr. Felicia Froe [00:38:27]:
Ask me how I Ask me how I know.
Jay Conner [00:38:33]:
But where we are today is a whole lot happier than where we were yesterday.
Dr. Felicia Froe [00:38:38]:
Yes. Yes. That is the reason why I talk about having that income coming from something else. Just thinking about that. You could be as happy as a lark in where you are, but you never know where that’s going to lead you that happiness is gonna fall, or you wanna do something else. And it, it happens. It happened to me 5 years into my medical practice. I wanna do something else.
Dr. Felicia Froe [00:39:01]:
And I couldn’t because I had no money coming for anything else. I want no other person to ever be in that position.
Jay Conner [00:39:09]:
So true.
Dr. Felicia Froe [00:39:10]:
That’s where I am. Jay, what do you have going on that can help people become private lenders or start using private money to do deals they’re doing? How are you helping people with that?
Jay Conner [00:39:22]:
Absolutely. Well, I’m so excited about this that I’m getting ready to announce it. I just finished recently recording my brand new 7-day private money challenge. So what in the world is the private money challenge? Well, I’ve recorded 7 short, easy-to-understand videos. They’re like 15 to 20 minutes long, and they give you all the basics of what private money is, and how you could either start being a private money lender or using private money as a real estate investor. And and so here it is. Here’s here’s the website. Privatemoneychallenge.com.
Jay Conner [00:39:59]:
How about that? Okay. Privatemoneychallenge.com. Get on over there to the website. Come join me, and I promise you, you’re gonna learn about private money for real estate deals, and we’re gonna have a lot of fun engaging with each other.
Dr. Felicia Froe [00:40:14]:
Is the purpose of your challenge to help someone be a private lender or to become someone who raises money through private lending?
Jay Conner [00:40:23]:
Yeah. It focuses on the real estate investor looking to raise money for their real estate deals. However, if someone wants to become a private lender, it’ll give you both sides of the equation.
Dr. Felicia Froe [00:40:35]:
And I think I believe that if you want to be a private lender, you need to know that other side so that you can know what they’re thinking about when they’re asking you or when they’re teaching you. You could even maybe give them some point or so now we’re serving each other.
Jay Conner [00:40:50]:
Exactly. In a much
Dr. Felicia Froe [00:40:51]:
Bigger way.
Jay Conner [00:40:51]:
So Exactly.
Dr. Felicia Froe [00:40:52]:
, I look at it from both sides. If you want to be a private lender, go take the challenge. If you want to start using funds in your real estate investing with private money, money, go do the challenge. I appreciate it. Jay, how else can people get in touch with
Jay Conner [00:41:08]:
You? Well, jayconner.com. And by the way, I haven’t said it yet on your show. I’m an ER, not an R. So I’m jayc0nner dot com. I
Dr. Felicia Froe [00:41:20]:
Don’t know why I always spell Connor with the e-r. And then I go back and look and go, is it in in my oh, yeah. It is e r.
Jay Conner [00:41:26]:
Okay. Well, most Connors are an o r, but I’m one of those e rs.
Dr. Felicia Froe [00:41:32]:
Gotcha. Gotcha. This has been so good. Everybody, Jay’s contact information will be in the show notes because I know if you’re like me, you listen to podcasts doing something else, not you’re driving, you’re tending to things, folding clothes, doing whatever, cooking dinner. It’s in the show notes. So if this intrigues you, and I certainly hope it does go to the show notes, click on something, and get to the challenge. Learn about being a private lender, or if you’re already doing some investing and you need some money and you wanna help your friends, you can now teach them how they can be lenders. Alright?
Jay Conner [00:42:08]:
Absolutely. And by the way, doctor Froede didn’t mention it, so I just started my 8th year of my podcast.
Dr. Felicia Froe [00:42:14]:
Oh, you said
Jay Conner [00:42:15]:
Yes. And I this is gonna shock you, I’m sure, but the name of my podcast is Raising Private Money.
Dr. Felicia Froe [00:42:23]:
I didn’t realize you had a podcast, so I very much apologize for that.
Jay Conner [00:42:27]:
No. You’re fine.
Dr. Felicia Froe [00:42:28]:
Go check out Jay’s podcast, Raising Private Money. That will be in the show notes also. Perfect. Again, subscribe to his podcast while you’re going there. Don’t just go there. Hit subscribe. And when you subscribe to him, come back and subscribe to mine if you haven’t done that already. Alright? I
Jay Conner [00:42:42]:
Heard that. Thank
Dr. Felicia Froe [00:42:44]:
You so much for being here. This has been so much fun. I really
Dr. Felicia Froe [00:42:44]:
Appreciate it. Doctor Froede, god bless you, and thank you for having me. Thank
Jay Conner [00:42:47]:
You. You’ve been listening to Money with
Dr. Felicia Froe[00:42:53]:
Mission. Projects are happening right now where you can have a great financial return while positively affecting the lives of others. To learn more about our opportunities, go to money with mission.com.
Narrator [00:43:07]:
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.
