Credits to:
https://www.youtube.com/@reimastermind
“Jay Conner Reveals Top Secret to Raising $2M in 90 Days!”
https://www.youtube.com/watch?v=98ClNRyF20g
In one of the most enlightening episodes of the “Raising Private Money with Jay Conner” podcast, Jay Conner, along with guest host Jack Hoss, delves into the intricacies of securing and leveraging private money for real estate investments. This post encapsulates the key takeaways and practical strategies shared during this conversation, focusing on mindset, preparation, security for lenders, and invaluable advice for new investors.
The Essential Mindset in Private Money
Cultivating the Right Mindset
Jay Conner emphasizes the paramount importance of the right mindset when approaching private money. Unlike the common approach of chasing funds, Jay advocates for an educational and service-oriented mindset. By focusing on educating potential lenders about the benefits and security of private lending, investors can establish a strong foundation of trust and interest. As Jay cleverly analogizes, chasing money is like chasing a runaway puppy—desperation makes it elusive, while a measured, informative approach makes it attainable.
Program Confidence and Security for Lenders
An investor’s confidence stems largely from their knowledge and understanding of their private lending program. Jay Conner consistently offers an interest rate of 8%, secured by real estate, providing a solid return with collateral for safety. This assurance of security, where the borrowed money is collateralized with the real estate property, serves as a significant selling point, especially for conservative investors wary of potential defaults.
The Timing and Process of Raising Money
Securing Funds Before the Deal
A recurring theme in Jay’s advice is the necessity of pre-arranging private funds before locating a deal. This proactive approach eliminates desperation and positions investors to confidently pursue deals knowing they have the necessary financial backing. Jay presents the notion of having lenders lined up as akin to bringing a loaded gun to a knife fight—preparedness gives a competitive edge.
Implementation Strategy: The Good News Phone Call
Once potential lenders are educated and express interest, Jay employs his signature “good news phone call” tactic. During this call, Jay shares vital details about the new investment opportunity, including the community location, after-repaired value, required funding, and closing date—without appearing needy or desperate. This method ensures that lenders stay engaged and excited about the opportunity without feeling pressured.
Critical Advice for New Investors
Finding a Mentor
For novices in the real estate investment arena, Jay stresses the importance of mentorship. A mentor can provide guidance and share their wealth of experience, significantly reducing the learning curve and avoiding common pitfalls. Leveraging a mentor’s expertise also enables new investors to gain confidence and credibility when securing funds.
Resourcefulness and Education
Jay’s educational approach sets him apart from many industry educators who often withhold key details. His transparency and willingness to share practical information empower new investors to make informed decisions. He recommends the book “University of Success” by Og Mandino as a vital read to bolster one’s mindset.
Leveraging Real Estate Financing Strategies
Maximizing Returns with Creative Financing
Jay elaborates on a strategic approach for buying and financing properties. By purchasing a property for $100,000 with an after-repair value allowing for a loan of up to $150,000, investors can take home a $50,000 check while covering renovation costs. This practice ensures the financial feasibility of the deal and secures multiple paydays.
Exit Strategies Based on Market Conditions
Another highlight is Jay’s advice on exit strategies based on the market. In a hot market with little inventory, selling for cash becomes the ideal exit. Conversely, in other scenarios, options like lease purchases provide flexibility, especially when the initial acquisition involves creative financing.
Organizational Efficacy through CRM Systems
The Value of CRM Systems
Jay underscores the importance of maintaining an organized client database using comprehensive CRM systems. Effective use of CRM can facilitate timely follow-ups and maximize potential leads. Jay shares a real-life example of closing a deal with a lead fostered over nine months, underscoring the importance of consistency and organization in real estate.
Concluding Thoughts: Embrace Education and Preparedness
The episode wraps up with a reflection on the insights shared and the importance of education and preparedness in real estate investing. Jay promotes his book, “Where to Get the Money Now,” with an enticing offer of two tickets to a private money conference in Eastern North Carolina, further encouraging listeners to deepen their knowledge and expand their network.
In conclusion, Jay Conner’s expert advice underscores the importance of mindset, strategic preparation, and educational engagement in securing private money for real estate investments. His proactive approach, combined with practical tips and organizational strategies, provides a roadmap for both seasoned and novice investors aiming to succeed in the competitive world of real estate.
10 Discussion Questions from this Episode:
- Mindset Shifts: Jay Conner emphasizes the importance of mindset in approaching private money. How do you think shifting from a mindset of chasing money to one of educating and serving can impact your success in real estate investing?
- Timing of Raising Funds: Why does Jay Conner suggest securing private funds before you actually need them for a deal, and what are the potential consequences of not following this advice?
- Security for Lenders: How does collateralizing the money borrowed with real estate provide security for lenders, and why is this an effective strategy?
- Program Confidence: Jay mentions that understanding your private lending program is crucial for confidence. How might a clear understanding of your interest rates and terms help you when speaking with potential investors?
- Mentorship for Beginners: What are the benefits of finding a mentor in real estate investing, and how can leveraging a mentor’s experience be advantageous when securing funds?
- Educational Approach vs. Pitching: Jay advocates for an educational approach rather than directly asking for money or pitching deals. How can educating your network about private money create more opportunities for investment?
- Exit Strategies: Given the varying market conditions, why does Jay recommend selling for cash in a hot market with little inventory, and selling on terms like lease purchase in other scenarios?
- Borrowing Limits and Equity: Why does Jay advise not borrowing more than 75% of the after-repaired value of a property, and how does this align with ensuring deals are bought at a discounted rate?
- Challenges in Real Estate: What are some common misconceptions about needing personal investment in every deal, and how can leveraging available equity address these challenges?
- CRM Systems and Follow-Up: How does the use of comprehensive CRM systems enhance business organization and efficiency, and what examples from Jay’s experience illustrate the long-term benefits of consistent follow-up in real estate investing?
Fun facts that were revealed in the episode:
- Runaway Puppy Analogy: Jay Conner humorously compares chasing money to chasing a runaway puppy—both becoming more elusive when pursued out of desperation.
- $1.4 Million in Four Weeks: A new member of Jay’s program secured an impressive $1.4 million in private money in just four weeks.
- Creative Financing Gap: Jay mentions that only 13% of sellers are open to creative financing deals, emphasizing the importance of cash for the remaining 87%.
Timestamps:
00:01 Raising Private Money Without Asking For IT
03:21 Marketing requires time or money for sourcing leads.
08:35 Mindset is key to attracting private lenders.
10:12 Launched private lending program for trusted referrals.
14:18 Waiting for investments to generate returns call.
19:44 Notes backed by real estate; mentorship advised.
26:04 Borrow $50K excess for renovations and balance.
26:58 The Lease option strategy offers multiple paydays.
30:33 “The University of Success” by Og Mandino recommended.
33:43 Use software for effective lead communication and organization.
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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Mastering the Success Mindset: Jay Conner’s Approach to Raising Private Money for Real Estate
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.
Jack Hoss [00:00:29]:
Jay Conner joins me here again today, and Jay, really appreciate your time. The last time you were on was a couple of years back. So this is kind of a treat because Jay is an expert when it comes to how to make sure you have enough money for your acquisitions and all of the tips and strategies associated with that. So make sure you take advantage of what Jay is offering here by heading over to www.JayConner.com/Book. You just have to pick up the postage, but Jay will send out his latest book. And I also believe, Jay, you have an upcoming event here in June, and they might even get a ticket or 2 to attend that event if they pick up your book.
Jay Conner [00:01:08]:
Jack. So along with my book, where to get the money now, which by the way, believe it or not, the United States Postal Service is still in business. We priority mail this book out where to get the money now, and how to get all the money you would want for your real estate deals without relying on any kind of institutional money or any kind of hard money. But, yes, this book lays it out simple, simple to read, step by step, how I raised over $2,000,000 in less than 90 days of funding when I was cut off from the banks all the way back in 2009. And, yes, Jack, along with the book that I will mail out to your listeners, it comes with 2 tickets to, my upcoming private money conference that’s located right here in Eastern North Carolina. So, yeah, all the details about the private money conference will be included with the book.
Jack Hoss [00:02:00]:
Well, we won’t spend a ton of time on how you managed to find your way into that situation in 2009 because they can go back to that previous episode. It is a fascinating story of the circumstances there, but I would like to jump right into some tips and strategies associated with how to make sure that people have the capital. Because it’s been driving me a little crazy, Jane. You can even even echo it or tell me it’s a myth. I think that a lot of people don’t we’ve been sold a bill of goods to a certain extent when it comes to real estate investing, tell people are being told that they can get into real estate with no money.
Jay Conner [00:02:44]:
Well, that’s true and that’s not true. So, let me explain myself. You don’t need any money to buy of your own, to buy the properties. You can use private money for all the purchases. If there are renovations involved, you can use it for renovations. And we always pick up a big check when we buy. I mean, who wants to get paid to buy a property? So we’re able when you do it the way I do it, we’re able to borrow, always borrow more money than we need for the purchase and if renovations are needed as well. But what do you need money for? Well, you need money.
Jay Conner [00:03:21]:
You need either money or your time for marketing. I mean, the 2 most popular questions that I get, particularly from new real estate investors are where do you find the deals and where do you get the money for your deals? Well, I got you covered on getting the money for your deals, but as far as lead sourcing and having and being able to find sellers of properties that are motivated to sell, well, you gotta use your time or some of your own money for marketing to get that as well. And, you know, I use all kinds of different methods of getting, lead sourcing, but I tell my members, all the time. And that is unless you’ve got a consistent lead flow of motivated sellers coming in your pipeline of wanting to sell their properties every day and every week, you’re in a hobby and you’re not in a business. So you gotta have that lead flow coming in as well. In addition to having the money available, I have you covered on that for the purchasing and renovations.
Jack Hoss [00:04:22]:
Would you say that people should be spending just as much time finding the money than the capital, the buyers for that matter as they are for those initial leads?
Jay Conner [00:04:35]:
Well, I’ll tell you what drives me crazy, Jack, and I’m taking a risk when I say this, because I hope you, I hope, I hope you and I are in alignment on what I’m getting ready to say. But one thing that drives me crazy, and I know you’ve heard it. I hear educators out there over all these years. I mean, my wife, Carol Joy, and I’ve been investing in single-family houses now since 2003. But I hear some educators saying, oh, just get the deal under contract. The money will show up. And I want to say, where is the money going to show up? Is it just going to rain out of the clouds or something? So I practice and preach. Get the money lined up first.
Jay Conner [00:05:19]:
There are always gonna be deals. There’s always gonna be deals. And, you know, I’m all about buying creatively when you can. I mean, buy a property subject to the existing note if you can. Buy with seller financing and all that. But, you know, after reviewing 1,000 and 1,000 and thousands of property lead sheets and talking to all these sellers for all these years, my statistics show that only 13% of the sellers that we talk to now I’m not including any properties in the multiple listing service and auctions and all that. I’m talking about talking directly with owners of properties. After talking to 1,000 of them, my statistics show that only 13% of those sellers will sell to me creatively, I e, they don’t they don’t want all the cash.
Jay Conner [00:06:09]:
They’ll sell subject to the existing note, etcetera. So what are the other 87% of all those for sale by owners want and require? All the cash. So stop and think about it. How much more confident are you gonna be making offers on properties when you know you’ve got the money lined up to go and you don’t have to be dimmed with the stress of talking to somebody on the phone and trying to buy creatively and, you know, they want all the cash and you don’t have it. So that’s my recommendation. And by the way, it doesn’t take long to get the money lined up. I have members all the time, readers of my book all the time, get over $500,000 in funding ready to go in less than 30 days. I got a new member that just came in a few weeks ago within 4 weeks already has $1,400,000 in private money ready to fund their deals.
Jay Conner [00:07:02]:
So that’s my recommendation on what you should focus on first, particularly if you’re brand new.
Jack Hoss [00:07:08]:
Well, we are completely in alignment when it comes to that, Jay. I can’t echo.
Jay Conner [00:07:13]:
That enough. Would be.
Jack Hoss [00:07:15]:
Yeah. I am so tired of people telling others that find the deals and the money will come, and then and then people are stymied as to what to do next.
Jay Conner [00:07:25]:
Exactly. Exactly. And, you know, I was a guest on, another podcast a few weeks ago, and the host and I were having this same topic of conversation about what should you focus on first. And, and, and I said to the host, I said, why in the world would an educator or somebody tell somebody to get a deal in the contract and they have no idea how they’re going to fund it? He says I can tell you why Jay. I said, why is that? He said because they’re selling a course on how to find deals and get deals under contract. They’re not going to help you get the money lined up. And I said, well, that makes sense.
Jack Hoss [00:08:03]:
Well, I’m gonna have that secondary thing too. I found several educators who use this as a funnel where they then have the students not know what to do with the deal. And if the deal is good enough, then the educator wants a piece of it.
Jay Conner [00:08:20]:
Well, there you go. So
Jack Hoss [00:08:23]:
But, Jay, I appreciate it if we could start at the beginning then. If somebody is going to line up the capital to to to get into the real estate investing, where should they start?
Jay Conner [00:08:35]:
Sure. Well, first of all, and I’m so glad you asked this question, Jack. The first place to start, getting more money than you can use for your real estate. We have to start with your mindset. That’s where we got to start. So what in the world do I mean by that? What kind of mindset do you need to have? Well, you see, here’s, what’s interesting. Ever since I started attracting and raising private money back in February 2009, did you know, I’ve never asked any of my private lenders for money? I’ve never even asked anybody to, I mean, I’ve never pitched a deal to a private lender and people ask me all the time. I said, well, Jay, if that’s the case, how in the world have you got 47 individuals, 47 private lenders funding your deals? And number 1, you never asked for money.
Jay Conner [00:09:29]:
And number 2, you never pitch a deal. Here’s the answer. First of all, I put on my teacher hat. So I’ve got a teacher hat here. It’s called the private money teacher hat. And you so you see, this is not about begging, chasing, selling, or persuading anybody, any new potential private lender to be a private lender. It’s about educating people that you already have some kind of connection with as to what private money is and how they can get high rates of returns safely and securely. And so when I was cut off from the banks all the way back in the first part of 2009, I learned about private money.
Jay Conner [00:10:12]:
So the first thing I did is I put my program together, my private lending program opportunity that I was gonna share with people in my network, people I go to church with, people I’m in the rotary club with, etcetera, that I’m now opening up my business to people that I know and trust. And by referral only, I’m starting to share how they can, you know, stop worrying about the volatility of the stock market etcetera. So the first thing I did was put my program together as to what I was gonna teach about how an individual could be a private lender. And by the way, the exact program that I do teach to new private lenders is in my book that I will ship to you just duplicate it. So you need to know what’s your interest rate that you’re going to be paying. What’s the length of your notes, etcetera? It is very, very simple. And so it was then, so the mindset, I’m not asking, I’m teaching.
Jay Conner [00:11:10]:
So in addition to that, people say, well, how do you not pitch a deal and you get it funded? So, you know, Jack, desperation has got a smell to it. And here’s what I mean by that. You see when I’m teaching a new potential private lender, people in my network that I run across when I’m teaching them about how they can earn high rates of return safely and securely, I never bring up a deal. I never bring up a deal in that initial conversation because you see, if I do, I’m already sounding desperate without even trying to sound desperate. So after I’ve taught the program how do you teach it? Well, my lands, all kinds of ways. You can be busy with somebody over coffee or you can do like I’ve done as well. And I’ve put on private lender luncheons. It takes the same amount of time to teach your private lending program, your opportunity to 20 people as it does one person.
Jay Conner [00:12:04]:
And so after I’ve taught it to them and they say, wow. Yeah. I like the sound of that. Or let’s say they have retirement funds. You they they can use investment capital or they can use retirement funds. And I’ll introduce them to the self-directed IRA company that I recommend where people can move their retirement funds over and start funding your deals with their retirement funds. And so then I separate the conversation of having a deal for them to fund. So when I have a deal for them to fund and they’ve already loved the program, they’re now sitting by their telephone waiting for you to call them.
Jay Conner [00:12:40]:
By the way, we still have handsets and cords here in North Carolina, believe it or not. And so I call them up with what I call the good news phone call. Well, what in the world is the good news phone call? Well, here it is. I call them up and I say, I’ve got good news for you. I can now put your money to work for you. And then I tell them 4 things about a deal. I’ll tell them the community where the property is located. They could care less about the physical address.
Jay Conner [00:13:10]:
I tell them the after-repair value of the property. I tell them the funding required for the deal and the closing date. That’s it. So here’s how the conversation might go. And so, Jack, let’s say you’re one of my private lenders, or maybe you’re one of my new private lenders. And I’ll call you up and we’ll have a little chit chat. And I’ll say, Jack, I got great news for you. I can now put your money to work.
Jay Conner [00:13:33]:
I’ve got a house over in Newport with an after-repaired value of $200,000 under contract, ready to go. Now the funding required for the deal is $150,000 By the way, I know, Jack, you have got 150,000 because you already told me when I talked to the program initially. And then I’ll say, Jack, closing is next Tuesday, so you’ll need to have your funds wired to my real estate attorney’s trust account by next Monday. I’ll have my real estate attorney email you the wiring instructions. That’s the end of the conversation. You see, you notice I didn’t ask Jack if he wants to fund the deal. That’s the most stupid question in the world I could ask Jack. Of course, he wants to fund the deal.
Jay Conner [00:14:18]:
He’s been sitting by the phone waiting for the good news phone call because I told Jack a couple of weeks ago or a week ago that I would put his money to work for him just as soon as possible, And I’ll call him when I’ve got a deal. So I’m not gonna bring to that telephone conversation a deal that doesn’t match the criteria of the program that I’ve already talked to Jack. So again, what do you do first? Get your mindset straight. You see, I hear new real estate investors all the time saying, well, they fear rejection. Well, here’s my, here’s what I say. How can you fear rejection when you’re not asking anybody for anything? You’re first educating them on how they can get higher rates of return safely and securely by duplicating the program in my book. And then you say, look, I’ll give you a good news phone call just as soon as possible as I can put your money to work. And by the way, if you have taught them about retirement I mean, self-directed IRAs, and they have moved a portion or all of their retirement funds over to a self-directed IRA company, they’re sitting on I mean, they’re like, can’t wait for the good news phone call because they’re not making any money on those retirement funds that they’ve moved over at your instruction until you put the money to work.
Jay Conner [00:15:39]:
So really you’re morally and ethically bound to give them a good news phone call just as soon as possible.
Jack Hoss [00:15:47]:
Just to remind everybody, if you are thinking to yourself that we’re just touching the tip of the iceberg here, you are right. You need to take advantage of what Jay was offering earlier by heading over to jConner.com/book, and maybe even consider going to North Carolina on June 12, 13th, and 14th for this event. Because I know you go through a lot of content there, Jay. I think did this virtually once, maybe over COVID. Yes. I can do that. I can attest. There’s a lot of great material and content at this.
Jack Hoss [00:16:25]:
So www.JayConner.com/book. If you found some value in what we’re talking about so far today, send this to one of your one of your real estate investor friends. And if you’re watching this on Facebook, YouTube, or Twitter, give us a thumbs up and like share and subscribe. So, Jay, again, you’re you’re just laying out a ton of great information and content here for everybody to ingest. But I, you know, I appreciate the script you kinda gave everybody just a minute ago. But what you’re referring to there is back to the mindset. You have to build the confidence and credibility to make sure that this kind of conversation goes down the way you just laid out. What type of, I don’t wanna say skills or exercises should people try to go through to just get their mindset? You know, repetition is part of it, but there’s gotta be some prework that has to be done.
Jay Conner [00:17:26]:
Sure. Well, absolutely. I mean, one of the first things that I teach, you know, my new students that are learning about private money is the once you got the mindset straight that you’re not chasing. I mean, it’s been my experience, Jack, over the years, anytime I try to chase money, it eludes me big time. But when I’m leading with a servant’s heart and I’m educating people, ordinary people as to how they can have something so much safer and more reliable than the volatility of the stock market, then, I’m leading with a servant’s heart. Right? So after getting your mindset straight, that you’re not, and by the way, the worst time in the world to be looking to raise private money is when you need it for a deal. Right? That’s why I focus on the money that comes first, getting that lined up. There’s always going to be deals.
Jay Conner [00:18:16]:
But the second piece to that, is how do you get the confidence? But you get the confidence by knowing your program, knowing the program that she can just duplicate in my book, knowing the interest rate that you’re going to be paying. I’ve been paying 8%, no origination fees, to my private lenders ever since I started in 2009, regardless of what the market is doing. So, you know, before COVID, a 12-month certificate of deposit yield got all the way down to 0.17%. I was paying 8%. Sometimes people ask me, so, well, Jay, you know, right now in today’s market, you can get 4 a half percent or 5%, you know, in a 12-month CD. Don’t you pay more interest? No. Remember, it’s your program. You see when I was borrowing money from the banks and institutional lenders, I had to get on my hands and knees and beg and say, please fund my deal.
Jay Conner [00:19:15]:
But in this world of private money, we make the rules. It’s your program, right? You’re not asking for a mortgage. You’re offering a mortgage. Big 180-degree difference. So in today’s market where you can get 4 and a half percent on a CD, I’m still paying 8%. And people say, well, Jay, why are your private lenders still happy with 8%? It’s simple. They’re happy with 8% because 8% is a whole lot more money than 4 a half percent or 5%.
Jay Conner [00:19:44]:
And I’m not giving them an unsecured note. I mean, I’m not giving them an unsecured note. All the promissory notes are backed by a mortgage or deed of trust, which collateral collateralizes the note with the property. So these notes are being backed by the real estate that we are purchasing. And you know, another question that I get, Jack, and sort of ties into what you just asked me. Sometimes new real estate investors will ask me they’ll say, Jay, who in the world is going to loan me money on a real estate deal? And I’ve never done a deal or, you know, I’m, I’m brand new. Why are they going to loan me money? Well, first of all, as a side note, before I answer that question, if you’re brand new for goodness sake, don’t start this business by yourself to start with. You need to get a mentor like Jack or somebody, you know, in your local area that knows what they’re doing, that can hold your hand and walk you through the process.
Jay Conner [00:20:45]:
Don’t start like I did by reading books and think you can figure this thing out on your own. That’s a side note back to answering the question. Why would somebody loan you money on a deal and you’re a new real estate investor? Here’s the answer. And this is a writer’s downer. So you want to write this one down. The quote is if you don’t pay the private lender, the property does. If you don’t pay the prob, the private under the property does, what in the world does that mean? What that means is because you’re collateralizing the promissory note with the real estate, If you don’t pay the private lender, then they get the property, right? That notice was secured by the property. Now the private lender does not want the property.
Jay Conner [00:21:30]:
They don’t want to mess with it, but they’ve got that security to where you’re not borrowing unsecured. Another thing, if you’ve got a mentor like Jack or somebody else, then you can leverage that relationship. If you’re new, you can honestly say and tell the truth, Me and my partner, like if, you know, if you were partnering up with me, you say me and my business partner, Jay Conner, he’s rehabbed and we’ve rehabbed over 500 houses. You can leverage the relationship of your business partner, say if they are a coach with you. So that’s a couple of different answers as to how you can get the money, even if you’re brand new.
Jack Hoss [00:22:11]:
No. This is great, Jay. I can’t thank you enough for laying this out. And what I like when I talk to you, Jay is that a lot of people that come on, some other educators, they seem to wanna hold on to some of their information, and they don’t wanna share the actual practical and specific tasks to implement today. So I appreciate how open you are with your information.
Jay Conner [00:22:40]:
Absolutely. And, you know, most of my last name’s Conner, and most of us spell it c0nand0r, but I’m a little different. So I’m Jay Conner, www.JayConner.com/Book for me to ship you the book, where to get the money now.
Jack Hoss [00:23:00]:
And that is gonna be a clickable link in the show notes so that, if you do have problems spelling that out, you can just click it there. Jay, you know, you mentioned this before around don’t chase, and it comes off as desperation. And I’ve shared this analogy a couple of times, but it is so true, is that it’s like when you get a puppy. And sometimes you get them off the leash, and they take off in the wrong direction. And you’re yelling and you’re chasing and they see it as a big game, and it takes forever to track them down and catch them. What I’ve learned is that as soon as you start to run in the opposite direction and make a commotion, they’ll chase you down.
Jay Conner [00:23:46]:
I love the analogy but go ahead and flesh that out.
Jack Hoss [00:23:50]:
Yeah. Well, that’s the situation here. Even when I’m talking to distressed sellers, I’m in a constant state of a situation where I don’t wanna be in that convincing state of mind I have more times than not, it’s those deals that I have had to convince Will that will fall apart.
Jay Conner [00:24:09]:
Oh, yes. Well, you know what? I’m so glad you brought that up because I learned years ago, that whenever I feel like I’m starting to sell or I feel like I’m trying to convince, I back away. I back away because nobody wants to feel like they’re being sold.
Jack Hoss [00:24:31]:
Right. With all of that being said, I’m just gonna remind everybody again. Head over to jConner.com/book. Take advantage of what Jay is talking about here and and maybe even consider going to his live event. We are just touching the tip of the iceberg here, and there’s just a lot to uncover. So, Jay, everybody’s in line now. You got the money. You got the property.
Jack Hoss [00:24:56]:
Everything is rolling. What is your exit strategy here? And the last time we talked, you even had 3 paydays that you were talking about when it comes to a property.
Jay Conner [00:25:05]:
Yes. That’s one of the big reasons that I love private money is that I get multiple, you get multiple checks and multiple paydays. First of all, you never have to take money to your own money to the closing table. And people ask me, I say, wait a minute, Jay, how can you do real estate with no skin in the game of your own money down? Well, the skin in the game, the way I do it is the equity that is in the property because you’re buying these properties at a discounted price. And so I’m not gonna borrow more than 75% of the after-repaired value. I didn’t say 75% of the purchase price. I said 75% borrow out the 75% of the after repaired value. So for example, if you’re buying a house with an after-repaired value of $200,000, it’s very common to buy that house if it needs renovations at 50% or less of the after-repaired value.
Jay Conner [00:26:04]:
So I might buy that $100,000, but I can borrow up to 150,000 because that’s 75% of the after-repaired value. So I get to bring home a $50,000 check because I borrowed 50 more than I needed to buy it, less of, you know, closing costs, etcetera. So I’m gonna use the majority of that $50,000 excess cash to close as my attorney’s check stub says for the renovation. So I might use 35 or 40 of that and have 10 left over. Then I can use any kind in any way that I want to in my business. So I’m a buy a get a check when I buy the property, always, by the way, that’s a good check-in balance. When you’re using private money, if you can’t bring home a check, when you buy the property and take none of your own money to the closing table, you should not do the deal. That’s the sort of good check and balance.
Jay Conner [00:26:58]:
Are you buying it right? So then when’s another payday? Well, if you sell it on terms, say with on rent to own or lease purchase, you can get a large non-refundable lease option deposit. And another payday, of course, is when you cash out and you sell the property and you get a check, the difference between what you sell it for fewer realtor fees. If you’re using a realtor and what you still owe the private lender, which by the way, owing the private lender, I always pay interest only or accrue interest only. That way they have all their money still invested in the deal and it helps my cash flow if I’m making interest-only payments versus principal and interest. So yes, multiple paydays and, you know, the exit strategy depends on the market and depends on your local market. So my exit strategy today, is if I’m paying with all cash, I wanna cash out. I don’t want to leave private money, or cash buried in a property for a very long time in this market. The reason for that is because there’s still no inventory to speak of in our local market.
Jay Conner [00:28:09]:
So I’m getting more than top dollar. I’m getting more than what a house would appraise for. Cause we got a lot of cash buyers around here where I live. And so because of the market and the demand for housing, when I renovate it, I’m putting it in, I’m putting it in the mobile listing service. I’ve got 2 houses going in the mobile listing service this very week. One’s going there tomorrow. So depending on your market, cash out. So right now my rule of thumb is if I pay all cash with private money, sell and cash out.
Jay Conner [00:28:44]:
If I’m buying on terms, say subject to the existing note, seller financing, etc., then I can sell on terms. Right? I can sell on lease purchase as long as I’m not putting major renovation money into the deal.
Jack Hoss [00:28:59]:
I think that one of the really important things you pointed out is walking away with money in your pocket when you’re making that initial purchase. I’ve run into a few people and that’s kind of a blind spot, especially since there’s a cost in just simply running the business, especially with marketing and stuff. So you gotta account for some of those numbers.
Jay Conner [00:29:21]:
That’s right.
Jack Hoss [00:29:22]:
So with that, are there any other bigger mistakes that rookies might make if they’re not walking into this with their eyes wide open?
Jay Conner [00:29:33]:
Yeah. The, again, the biggest mistake is your mindset. You’re not chasing and begging. You’re offering and teaching.
Jack Hoss [00:29:43]:
Yep. I can’t agree with you more, Jay. It’s always been such a great conversation with you. There’s a ton of value here, and there’s a ton of value if you visit his website. That’s gonna be clickable in the show notes, jConner.com/book. But, Jay, again, if you’re ready, we’ll jump into some rapid-fire questions as we close this episode out.
Jay Conner [00:30:04]:
Alright. I got my seat belt on. I’m ready to go.
Jack Hoss [00:30:08]:
Mhmm. What lie do real estate investors tell themselves and sometimes to others?
Jay Conner [00:30:13]:
What lie do real estate investors? I can’t do a deal, without skin in the game.
Jack Hoss [00:30:20]:
That’s a good one. That’s a good one. And I don’t think people take into account the actual equity that’s available there. As you pointed out, that’s good. Do you have a book recommendation or what are you reading right now?
Jay Conner [00:30:33]:
Well, I have a lot of book recommendations, but I’m going to share just one. And that’s the book that, first started reading to get my mindset right in my life. That goes back to when I was 24 years old. It changed my life. The name of the book is University of Success by Og Mandino. And it’s written as like a universal, there’s like semesters to it. And, it has a ton of different authors and that book, the principles in the book, it’s all mindset, are relevant today, just as much today as they were back then.
Jack Hoss [00:31:12]:
And I have yet to have somebody recommend that book, so I appreciate a new one.
Jay Conner [00:31:16]:
Absolutely.
Jack Hoss [00:31:17]:
Add it to my Audible list again. So I have so much in my audio Audible library. I don’t think I’ll ever get through them all. If you could go back in time and give your younger self one piece of advice, what would it be?
Jay Conner [00:31:31]:
My younger self? Yes. It’s so important to who you surround yourself with. You know, you know, very famous quote, Jack, and I’m sure you’ve had a ton of guests point this out by Jim Rohn. He gets the credit for it. You are the average of the 5 people that you spend most of the time with. And there’s a, there’s a misinterpretation, I think, among a lot of people that that that that quote that you are the average of the 5 people you spend the most time with. I’m not talking about your financial wherewithal. I’m not talking about your checkbook.
Jay Conner [00:32:10]:
I’m talking about your values. Right? And so if I, so the advice I would give myself I, to my younger self, be very intentional about who you are spending time with.
Jack Hoss [00:32:26]:
What single strategy process or tool have you implemented that has had the biggest time-saving impact on your business?
Jay Conner [00:32:35]:
Oh, wow. I can tell you what that is. And that is what I’ve got for my mastermind members and etcetera, proprietary software that I started using as my customer relation management software. So here’s the thing. Regardless of what software I mean, I was the most disorganized mess you’ve ever seen when I started. I was trying to run this business on a Post-it note. Post-it notes everywhere. Trying to remind me of what to do.
Jay Conner [00:33:06]:
So here are the 2 big tips that will change your business. Number 1, your calendar. Here’s my quote. Successes are scheduled. Successes are scheduled. They just don’t happen. So manage your calendar and your schedule. And in addition to that, all of your seller leads of properties, all your buyer leads, all your leads, they must go into a software system that will keep up with all your notes, all your leads, you know, what happens next? You know, what’s been happening ever since that lead came in, that seller leads.
Jay Conner [00:33:43]:
For example, we just closed on a property 3 weeks ago, and the lead first contacted us due to a Facebook ad back 9 months ago. And I tell you, if we were not keeping up with all of our leads, I mean, my acquisitions, my lead manager, myself, we all communicate in that software with each other. Well, even if you don’t have a team, you need to communicate with yourself about every motivated seller you’ve got. Keep up with it in software. Don’t try to run this business on a yellow tablet.
Jack Hoss [00:34:19]:
And that’s where my plug comes in. If you want this type of functionality that Jay just talked about with integration to Facebook and some of the other social platforms as well as SMS and voice, you wanna check out Real Deal CRM. So I appreciate it, Jay. This has been fantastic again. I hope you’ll come back again sometime. I kinda want to spend 30 minutes, or 40 minutes with you just talking about mindset and the power associated with it. So thanks again, Jay.
Jay Conner [00:34:53]:
Thank you so much for having me, Jack. God bless you.
Narrator [00:35:00]:
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.
