***Guest Appearance
Credits to:
https://www.youtube.com/@harcourtsauctions
“Private Investing for Realtors: How to Build Your Private Lending Network from Scratch”
https://www.youtube.com/watch?v=2lo11foe4oE&t=9s
In a dynamic real estate market, the ability to secure funding can often determine an investor’s success or failure. Jay Conner’s insights into raising private money offer a revolutionary approach that can transform your real estate ventures, making funding more accessible and flexible.
Welcome back to another insightful episode of the Raising Private Money podcast! If you’re a real estate investor eager to master the art of raising and leveraging private money, you’re in the right place.
Today, Jay Conner joins Ben Brady in his Rethink Real Estate Podcast where they dive deep into the world of private money in real estate, they discuss the strategies behind raising significant funds without ever having to ask for a dime directly. Jay shares his journey and effective methods that have helped him raise over $8 million, even in tough financial times.
The Challenges of Traditional Funding
Traditional funding sources such as banks and institutional lenders come with their own set of challenges. For instance, during economic downturns, banks tighten their lending criteria, making it difficult for investors to secure loans. This was evident during the global financial crisis when many investors found their lines of credit abruptly closed. Today’s high interest rates and stringent lending requirements continue to pose similar challenges, making traditional funding less reliable.
Enter Private Money
Private money represents a more flexible and reliable way to finance real estate deals. Essentially, this involves doing business with individual lenders rather than institutional ones, allowing investors to set the terms and streamline the process. This method provides a more straightforward way to secure funding without the typical red tape associated with banks.
An innovative approach to raising private money eliminates the discomfort of asking for capital. Instead, the process involves educating potential lenders about the benefits and returns of investing in real estate, transforming the conversation into one of mutual benefit rather than a plea for funds.
The Process: Teaching, Not Begging
One of the key aspects of raising private money is overcoming the fear of rejection. By focusing on teaching potential lenders about the process and benefits of private money, investors can eliminate the fear associated with asking for funds. This approach involves separating the educational conversation from specific deal discussions.
Initially, investors educate lenders about private money, interest rates, and the overall investment program without mentioning any specific deals. Once the lender is comfortable and understands the potential benefits, specific deals can be introduced, making the entire process more palatable and less stressful.
Setting the Terms
Private lenders need clear details about the terms of their investments. Offering an 8% annual interest rate is a straightforward and attractive proposition, especially when compared to traditional investments like CDs, which yield much lower returns. All loans are collateralized by real estate, providing security for the lenders and making the investment more attractive.
How Much Money Do You Need to Raise?
Determining how much money to raise depends on several factors, including the investor’s market, the average property price, and the projected number of deals each year. By using a simple formula, investors can calculate the amount needed, tailored to their specific market and investment plans. This makes the process more structured and less daunting for new investors.
Building a Reliable Team
Securing funds is crucial, but having a reliable team to execute deals is equally important. Starting with one’s crew and expanding to include additional general contractors can allow investors to handle multiple projects simultaneously, ensuring timely and profitable returns. This approach can provide the scalability needed to grow a real estate investment business effectively.
Leveraging Private Money Beyond Flips
Private money isn’t limited to fix-and-flip projects. It can be used whenever a seller requires all cash, regardless of the property’s condition. This flexibility enables investors to seize opportunities quickly, an essential attribute in a competitive market. Using private money can help investors close deals faster and with greater confidence.
A Resource for Learning: The Private Money Challenge
To assist both aspiring and seasoned investors, Jay Conner has launched the 7-Day Private Money Challenge. This series of short, informative videos offers a foundational understanding of private money. Each video is concise, ranging from 15 to 20 minutes, making the learning process convenient and engaging. Enrolling in this challenge can provide essential insights and practical tips for raising private money. Visit https://www.PrivateMoneyChallenge.com to enroll.
Conclusion: Serve First, Profit Second
A key philosophy in raising private money is leading with a servant’s heart. By focusing on providing value and serving others, investors can build trust and mutually beneficial relationships. This approach not only helps in securing funds but also contributes to building a positive reputation in the real estate community.
For those looking to transform their real estate investing ventures, adopting Jay Conner’s principles can be a game-changer. By educating yourself and others, establishing clear terms, and building reliable systems, you can unlock opportunities that traditional funding sources may keep out of reach.
By embracing these principles, you can turn private money into a powerful tool that helps you thrive in the real estate market, fostering growth and success in your investment endeavors.
10 Discussion Questions from this Episode:
- Understanding Private Money: Jay Conner’s approach to raising private money without asking for money seems counterintuitive. How do you think teaching potential investors rather than directly asking them for money changes the dynamic of raising funds?
- Recession Lessons: Jay Conner mentions that the current climate for raising private money is similar to the 2009 financial crisis. How do you think lessons from past economic downturns can be applied to today’s real estate market?
- 8% Consistency: Jay has consistently offered an 8% interest rate to his private lenders since 2009. Despite changing market rates, how feasible do you think it is for other real estate investors to maintain such consistent terms?
- Servant Leadership: Jay speaks about leading with a servant’s heart and providing value first. How can this principle be effectively applied to other areas of business or personal life?
- Educational Strategy: Jay emphasizes educating potential investors about private money and self-directed IRAs. What are the potential benefits and drawbacks of using this education-first approach in fundraising?
- Different Market Strategies: Jay’s real estate strategies can be tailored according to various markets. What factors should investors consider when deciding how much private money to raise in their specific market?
- Collaborations with Realtors: Jay has maintained long-term professional relationships with realtors. How essential do you think these relationships are for the success of real estate investors?
- Ethical Considerations: Jay criticizes the notion of securing deals first and then scrambling to find the funding. What are the ethical implications of this approach, and how can transparency be maintained in real estate transactions?
- Adapting Business Models: Considering the shifts in lending environments, how flexible should real estate investors be in adapting their business models? What potential shifts could significantly impact real estate investment strategies?
- Resource Recommendations: Jay recommends “The Go-Giver” book. How can adopting the principles from this book, particularly servant leadership and value-first mentality, impact one’s personal and professional relationships?
Fun facts that were revealed in the episode:
- Jay Conner has raised over $8,000,000 in private money without ever asking anyone for money directly.
- Jay has been working with the same two realtors for 19 years in his real estate ventures.
- Jay Conner hosts another podcast called “Raising Private Money with Jay Conner.”
Timestamps:
00:01 Raising Private Money Without Asking For It
04:11 Great time for private real estate funding.
07:20 Teaching private money programs eliminate rejection fear.
09:47 Reputational damage from investors not committing deals.
13:45 Consistent 8% payment; lender rules, bank comparison.
16:00 Promise to pay 6 months’ interest minimum.
20:28 Crew availability is crucial for successful smaller flips.
24:37 Long-term collaboration with realtors ensures listings.
25:35 Real estate opportunity: self-funding and business expansion
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
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Proven Methods for Raising Private Money in Today’s Market
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.
Ben Brady [00:00:28]:
Today Today, I’m rethinking real estate. We have Jay Connor. Jay is talking about how to raise private money. Now one of the really interesting parts about this is that I’ve certainly had many, many people that I’ve witnessed over the years within the real estate business only sell residential real estate. There are a fair few people that have gone and segued through not only to just selling real estate but then having their own flipping business on the side that gets restricted by having to raise capital. Jay talks about the process of doing so and how you can make it easy to build a community that is going to be a private your private money group, which therefore you can lead the deals in. I think it’s valuable as realtors that ultimately you have an understanding of real estate marketplaces so that you can identify opportunities very clearly, and this can be another bucket. There are a fair few people that we know as well, and one of them joined our podcast very early on in Rethink Real Estate, who’ve managed to segue out of selling real estate to just doing flipping because they’ve been able to expand their private money network.
Ben Brady [00:01:27]:
Hopefully, Jay’s insights, give you some idea of how this might be able to be another bucket for you, but also he’s got some great resources that he makes available throughout the podcast as well. Thanks so much. Welcome to rethink real estate. My name is Ben Brady, and this is a real estate podcast aimed at delivering sales strategies, marketing tips, and business insights from industry experts and myself to build a listing-focused business for the future. Let’s get into it. Jay, welcome to Rethink Real Estate.
Jay Conner [00:02:01]:
Ben, thank you so much for having me. My lands, I’m so excited to be here, to be so passionate to talk about my most important topic on real estate, that being private money, because that’s had more of an impact on our business than any other strategy.
Ben Brady [00:02:17]:
Well, again, now you’ve sort of already jumped into that first question that I was gonna ask you, Jay, as I ask most guests is sort of why should somebody hang around. Because private money, the reason that I had you on the podcast is because honestly when it comes to raising capital, it’s probably one of the most, I’d like to think of myself as a pretty seasoned real estate professional, you know, done a lot of deals. But asking others for capital is probably one of the things that I despise the most. Right. So if somebody’s listening to the episode, why should they hang around from a strategy perspective?
Jay Conner [00:02:49]:
Well, the reason people should hang around to the end of this episode is because we’re going to fix your problem, Ben. You’ve mentioned that your problem is you hate asking people for money. Well, guess what? In this episode, I’m gonna share how I’ve raised over $8,000,000 in private money, and I never asked for money. So stick around. You’re gonna learn how to raise a lot of private money without ever having to ask anybody for money.
Ben Brady [00:03:17]:
So let’s talk about your company, Jay. I think that the concept of which you are offering to people from an investment perspective to, you know, raising money to do real estate deals. I think that the episode and when we’re recording it at the moment is very timely because the marketplaces seem to change a fair bit. Because it is that there is a great deal of real estate more real estate opportunities than what they were previously because of how hot the marketplace was. Okay. So as we’re coming into a time where you’re probably going to see a little bit more opportunity for people out there, Again, our primary audience is real estate agents, and they’re advising their clients, but a lot of those people are doing their flips or their real estate investing. I guess that from a timing perspective, where does this all start, and how do we understand how you do it better?
Jay Conner [00:04:11]:
Yes. Well, the reason right now is a great time to be attracting private money for real estate deals is because it reminds me of January 2009 when I first got involved with private money. You see, from 2003 until 2009, I relied on the local banks to fund my real estate deals, which were primarily single-family houses, and have primarily been that over all these years. Well, the only thing that I knew to do, Ben, what to get my deals funded, was go to the local bank or institutional money, get on my hands and knees, put my hands underneath my chin, and say, please fund my deal, and, you know, pull up my skirt so they can look at my assets, and look at my, you know, financial statements. Well, that’s the traditional way to borrow money. Well, all that changed for me in January 2009. For the 1st 6 years that plan worked okay. However, I called him my banker in January 2009.
Jay Conner [00:05:14]:
I had 2 houses under contract to invest in, And I learned like that, that my line of credit had been closed with no notice whatsoever. And so I knew I had to find a better way, and a quicker way to fund my deals. So, of course, most of us remember what was going on in 2007, 8, and 9, and everything, you know, drying up. And, I, you know, I said to my banker, I said, what in the world? Why are you cutting off my line of credit? He says, Jay, don’t you know there’s a global financial crisis going on right now? I said, no. But you just gave me a financial crisis because I can’t fund my deals. Well, I hung up the phone, and I knew I had to find a better and quicker way. Well, what was going on in 2009 was lenders had tightened up. They weren’t lending money.
Jay Conner [00:06:04]:
Well, guess what’s going on today? I mean, it’s tight. Right? Interest rates are high. It’s hard to get qualified for a loan. But, it’s for a very, very different reason. For very, very different reasons. But, the fact remains, that lending is tight from institutional lenders. Well, the beautiful thing about raising private money, and let me be very clear, when I say private money, I’m talking about doing business with individuals, and human beings, not any kind of institutional money. And so, when you’re doing business with them, in this world, we get to make the rules.
Jay Conner [00:06:40]:
We set the interest rate. And, you know, Ben, this was a very, very hard concept for me to get my mind wrapped around when I first started raising private money. There’s no selling, begging, or persuading. Instead of asking for money, you’re teaching. I have what I call my teacher hat, which stands for private money teacher. Right? You know what’s interesting? I have 47 private lenders right now funding our deals. Not one of them, Ben, had ever heard of private money, or self-directed IRAs. How they can use retirement funds to be a passive investor and fund real estate investing deals.
Jay Conner [00:07:20]:
They never heard about that until I put on my teacher hat and I started teaching. So one common question that I get from real estate investors or people who have never raised private money is they’ll say, how do I get over the fear of rejection? Well, I answer that question with a question. How can you be rejected if you’re not asking anybody for money? You know, what’s funny, Ben, I’ve never pitched a deal ever since I’ve been using private money. And let me go ahead and just pull the curtain back and reveal exactly how I do that, and how other real estate investors are doing it when they learn how to do it my way. We separate now what I’m getting ready to say is critical. We separate the conversations from teaching somebody what private money is and how they can get high rates of return to safety and security. I call them teaching the program. Here’s the interest rate I pay.
Jay Conner [00:08:13]:
Here’s how you can get your money back in case of an emergency. Here’s the length of the note. Here’s the maximum loan to value. We teach that. Here’s the program. While not having a deal for them to fund. You know, desperation has got a smell to it. Yes.
Jay Conner [00:08:28]:
And if you’re talking about a deal you need funded and your private lending opportunity, you’re already sounding desperate without you know, the worst time to be raising money is when you need it for a deal.
Ben Brady [00:08:40]:
So Do you and that is and that is probably the number one mistake that most people make is that they find the deal and then they try and find the money. It’s it’s it’s gotta work in it’s gotta work in the other way because, you know, it’ll probably open your eyes up to a lot more opportunity or being a little bit more critical of the opportunity and not rushing into things if ultimately you’ve got the patience of the money there waiting.
Jay Conner [00:09:04]:
You know what, Ben? I’m so glad you just said that because let me tell you what drives me stupid crazy every time I hear it? I wanna go run into a brick wall. You’ll have these educators and gurus on stage teaching new real estate investors, And here’s what they say, quote-unquote, oh, just go get the deal. Go get the property under contract. The money will show up. Or they’ll say, the money follows the deal. And you know what I wanna say, Ben? I wanna ask, where? Where is the money gonna show up? Is it just gonna, like, rain out of clouds? I mean, I just don’t wanna be under the stress of getting a house or deal under contract, and I have no idea where the funding is gonna come from. So that’s
Ben Brady [00:09:47]:
Why I was But but, Jay, I think that there’s another part of this as well that I think about reputational damage. Like, I’ve gotta be honest. I dislike dealing with some investors because the reality is they come in, they try and secure the deal, they’ve got all this due diligence that they put on the contract or the contingencies that they put on it, and very few times do they execute. And then that investor locally starts getting a reputation of not being able to commit to a deal, okay, and trying to hold up the deal and wasting a great deal of people’s time, I think that there’s a reputational damage element of this that that, that if if you’re shopping the deal after you’ve identified, it just creates a great deal of harm to your reputation if you’re not moving through with those deals. Less people will come to you based on their inability to actually to to know that your inability to commit to it.
Jay Conner [00:10:40]:
Well, what you just shared is a fact of life. I mean, it’s not gonna take long for a real estate investor to do well, for realtors, not to even want with it, not even work with them, not even want to take their offer. And because of private money, I’ve never put an offer on a property that was negotiated, and now we’re under a contract that I wasn’t able to close on for goodness’ sake. You know? And, you know, particularly if you’re making offers on bank-owned properties, there’s no bank-owned properties in the multiple listing service these days in our area anyway. But, of course, you’re gonna need proof of funds for that, which I got the answer to that. But, anyway, back to not asking, I want to share very quickly with your audience, Ben. This won’t take me just a second. I want to share my exact script and the exact words that I say to one of my private lenders when I have a deal for them to fund.
Jay Conner [00:11:36]:
So they’ve already told me that they’ve got, say, a $150,000 that they want, you know, to invest. And let’s say that it’s retirement funds, and they’re not happy with the returns they’re getting at one of the large investment houses like Schwab etcetera. So they’ve generally got a 150. Well, I’ll introduce them to a self-directed IRA company where they can move those funds over and have them ready to go. Only takes about 2 weeks. Here is the exact script, and I call it the great news phone call. So let’s pretend, Ben, that you’re one of my new private lenders and you have got $150,000 that you’ve moved over to a self-directed IRA company. Here’s the script.
Jay Conner [00:12:18]:
Hey, Ben, and we’ll have a little chit-chat. I said, Ben, I got great news for you. I can now put your money to work. I’ve got a house and a property under contract here in Newport, North Carolina. The repaired value is $200,000 Now, the funding required is 150,000, which matches what you have available. Closing is going to be next Thursday, so you’ll need to have your funds wired to my real estate attorney’s trust account by next Wednesday. I’m going to have my attorney wire you the or, email you the wiring instructions. End of conversation.
Jay Conner [00:12:51]:
The most stupid thing or question that I could ask you as my new private lender is, do you want to fund the deal? Of course, you want to fund the deal. You’ve been waiting for the good news phone call. I told you I’d put your money to work for you. And, particularly, if you have moved your retirement funds over to a self-directed IRA that I recommended, you as my private lender are not making any money until I put your money to work. And, of course, I’m not gonna bring you a deal to fund that doesn’t match the program that I taught you. It’s that simple. Keep the conversation separate.
Ben Brady [00:13:27]:
So from a logistic perspective, with the conversation that you’re having with them around returns to the private money, what are what are some of the rates that you’re offering people from a private money perspective at the moment? Does that vary? Does it vary based on the amount? Does it vary based on the availability? Like, how does all of that work?
Jay Conner [00:13:45]:
It’s been the same, Ben, since I started. When I put my program together in February of 2009 as to what I was gonna offer individual private lenders, it was 8%. It’s still 8% today, all these years down the road. And, you know, one question I’ve gotten recently, over the past year is people will ask me, they’ll say, Jay, how in the world can you be paying the same interest rate to your private lenders that you did in February of 2009, and you’re paying the same thing today, and interest rates have like shot up out of the roof. How are you doing that? I said, well, there are 2 answers to that question. First of all, the first answer is I make the rules, not the lender. So, this is the program, this is the program. The second answer to that question is, well, you can go here in Morehead City, North Carolina to First Citizens Bank, and you can get a 12-month CD for right now in between 4 a quarter and 4 a half percent.
Jay Conner [00:14:46]:
Well, guess what? 8% is a whole lot more than that, almost double. Right? So it’s still a great return. All, all the notes are collateralized by the real estate. They’re not loaning money out unsecured. It’s still a win-win for everybody.
Ben Brady [00:15:03]:
So then as far as them loaning it out let’s say that they do direct that money into us, the IRA that you made reference to. So let’s just for round numbers, let’s say that I move $100,000 over. Now that you’re only paying interest when that money is in use? Yes. To, is that right?
Jay Conner [00:15:20]:
Yeah. That’s an annual percentage rate. So let’s say, for example, I borrow $100,000. If I use the 100,000 on that property for 12 months, they’re gonna earn $8,000. If they’re using retirement funds, that’s tax-deferred or tax-free, depending on the amount of retirement funds. Now let’s say, let’s say that I use it for only 6 months, which most of my properties, I’m holding on to for about 9 months because most of them are major rehabs that we’re doing. But if I use it for 6 months, then they’re they are going to earn half as much as 8,000. They’ll earn 4,000.
Jay Conner [00:16:00]:
That’s why I have in my promissory note that I promise to pay them a minimum, of 6 months of interest in the unlikely event that I cash out in less than 6 months. I’m gonna do a little risk here, a little advanced thing. I do a lot of substitution of collaterals. Right. So if I’ve used that money for a short period, and if I’ve got another property that immediately I’m purchasing, or if I have equity in the property and I can use smaller amounts of money for rehabbing, I’ll keep their note open, and they’ll keep earning interest, and we would just substitute the collateral, the property that is collateralized in that note.
Ben Brady [00:16:44]:
Right. So if they’re so if they are one of, like so let’s say it’s a $500,000 property and they’ve only got $100,000, they have a percentage of that value of that property. How does that work?
Jay Conner [00:16:57]:
So they’re not an equity partner. So the private lender is not getting an equity share of the property. Right. All the deals we do are what’s called one-offs. Yep. So you have a property, and then you have 1 or 2 private lenders that are funding that property. So, each private lender has got their own promissory note, got their own deed of trust, or mortgage. So, they’re each earning interest, and I pay or accrue interest only.
Jay Conner [00:17:24]:
And then when we cash out of the property, if I don’t substitute the collateral, they’ll get all their principal loan amount paid back when we cash out.
Ben Brady [00:17:32]:
Right. So this is all done based on a promissory note?
Jay Conner [00:17:36]:
Yes.
Ben Brady [00:17:37]:
Okay. So in that being said, is that you had so let’s say that somebody wants to start learning how to do this. They can reach out to you, and you’ve got a program that is available to them. Do you wanna talk to us a little bit more about that? Because I’m assuming that then you’ve got you’ve got promissory notes in there. You’ve got you’ve got some of the documentation that could get people started with this.
Jay Conner [00:17:59]:
Absolutely. Well, I’m so excited about the brand new training that I just launched. It’s called the Private Money Challenge. Private Money Challenge, the 7-Day Private Money Challenge. And what that is, it’s a series of 7 videos that are delivered into your email inbox, 1 a day. And, it gives a great foundational training and introduction to what private money is and how it works. Each video that I’ve recorded is only 15 to 20 minutes long, so it’s not going to take much time at all to consume it. And I keep it very, very simple to understand.
Jay Conner [00:18:34]:
And, yes, it does have the documents. So, when you enroll in the private money challenge, you immediately receive the first video training, in your email inbox. And then, the next 6 days in a row at 9 AM EST, you’ll receive each subsequent training. So it’s very easy to enroll, and I tell you what, not only will you learn how to raise private money, but we’ll have a lot of fun too. I’m right there on the video with you, engaging with you, giving you a little bit of homework. Go to www.private money challenge.com.private money challenge.com, and you’ll come right in there and get that first video right away.
Ben Brady [00:19:13]:
Well, Jay, we’ll make sure that we link that below as well. But I think that is just from a logistic perspective as well, I’m thinking about this out loud is that, is that how much money would you encourage somebody to sort of try and raise prior?
Jay Conner [00:19:26]:
To the going ask that, Ben. I’ve been a guest on over 800 podcasts, and nobody’s ever asked me that question till right now. So it depends on your market. It depends on your average price point, and your average after repaired value. So guess what? On day number 3 of day number 7 in the private money challenge, I’m doing a 20-minute video, and I have a very simple document for you to fill out. And I walk you through exactly how much private money you need to raise. Right. Okay.
Jay Conner [00:20:01]:
It’s going to be dependent on how many deals you’re projecting to do a year.
Ben Brady [00:20:05]:
Right.
Jay Conner [00:20:05]:
What’s your average after-repaired value of a house is gonna be, and I’ve got a very simple formula. I mean, I’ve got some members in my community that have raised 2 and a half, $3,000,000 for their annual usage, and other people are getting it done with less than $500,000.
Ben Brady [00:20:26]:
So Okay.
Jay Conner [00:20:27]:
Depends on your market.
Ben Brady [00:20:28]:
And then as far as it’s probably outside it’s outside of the money raise element, but the management of the flipping side of things, like the rehab side of things and having a crew that is available because I think that that’s going to be indicative of the success that most people have because you can do with larger flipping companies, a lot of those people can do thinner margin deals just to keep their guys working so that they’re available to the next ones. Whereas if you’re only doing 1 or 2 or 3 or 4, having the right crew availability is probably one of the downsides to to doing a smaller volume. Have you how did you manage that?
Jay Conner [00:21:05]:
Yes. So I started with my crew, and I still have my crew. I’ve got a project manager. We can do 2 houses simultaneously. But then, also, I have 2 other general contractors that I have a relationship with, and each of them can have 3 houses going simultaneously. So, as a result, I can have 10 or more houses going, but you bring up a good point, Ben, and I want to make this point. Private money is not only for the rehabbing fix and flip business. Private money.
Jay Conner [00:21:41]:
Don’t miss this. Private money is when you’re going to use private money when the seller, no matter if it’s in the multiple listing service or an off-market deal when the seller requires all the cash, that’s when you use private money regardless of the condition of the property.
Ben Brady [00:22:01]:
Right. Understood. Where do you guys get most deal flow from? Like, I know that we’re speaking to a real estate community that could reach out to you and give you some deal flow within markets you’re interested in. But I guess that for them being agents, you know, where would they look for off-market opportunities or where how do they look at this from a perspective of maybe it’s a seller that they currently have?
Jay Conner [00:22:24]:
Sure. So I and I’m in a small market here. Only 40,000 people is my target market. So I have multiple marketing channels and funnels bringing me deals. So, here in my market, there are no deals to buy in the multiple listing service. By the way, I’ve been working I’m not a realtor on purpose, but I’ve been working with the same 2 realtors for 19 years.
Ben Brady [00:22:49]:
Understood. Okay.
Jay Conner [00:22:49]:
1 here in Carteret County, 1 in Craven County. We have a beautiful working relationship. So I’m gonna answer your question, and then I’ll quickly say, how do I work with my realtors what does our relationship look like as far as making money, and who does what? So I get a lot of leads. Of course, all my leads are off-market for sale by owners. And so Google pay per lead, Google pay per lead, 5. 5 different companies are providing me leads, and I’ll share them with you right now. Libertyleads.com, fasthomeoffers.com, motivatedsellers.com, need to sell my house fast dot com, and Zolo, the zololeads.com. So I have the so those are people that are individuals that are searching on Google,
Ben Brady [00:23:41]:
And you pay for those subs. Mhmm. Do you pay for those subscriptions, or do you copy
Jay Conner [00:23:47]:
The lead?
Ben Brady [00:23:47]:
Percentage? Okay.
Jay Conner [00:23:48]:
By the lead. So, you know, depending on the provider, that’s how you know, most of them I’m paying around $150 per lead.
Ben Brady [00:23:57]:
Understood.
Jay Conner [00:23:58]:
But I only need 7 leads to buy a house. Got it. Right? So those are those are our top funnels coming in right now, that that anybody else, you know, can plug into. And so the way I work with my realtors is these are for sale by owners. So, Chris and Tracy, are the 2 realtors I’ve been with for 19 years. If it looks like there’s a deal there, they’ll do all the research. They’ll do, the comps. They’ll send me and my acquisition is well, here’s what I think based on comps, the repaired value on this property will be after you make it beautiful.
Jay Conner [00:24:37]:
And, of course, both of my realtors know what I’m gonna do, we’ve been working together for 19 years. Yes. I’m gonna do granite countertops. I’m gonna do LVP. I’m not just gonna be doing lipstick and paint. So they’ll send us the after repaired value. I use their figures, my realtor’s figures, to calculate my maximum allowable offer when I’m paying all cash. And so any deal that I buy, any house property I buy that my realtors did research on, which is all of them, then, of course, who’s gonna get the listing when I go to sell it? Of course, Chris or Tracy is going to get the listing every time because they researched it before I bought it.
Jay Conner [00:25:18]:
And then, of course, if there’s any property in the multiple listing service that I’m interested in, well, who’s gonna make the offer for me? It’s not I’m not going to the listing agent. It’s either gonna be Chris, my relationship, or Tracy, my relationship, that’s gonna make all my offers.
Ben Brady [00:25:35]:
Right. Well, again, I think that the infrastructure for somebody to start doing all of this, probably the rehabbing and having the teams available is one element of it, but I think that’s very solvable with the relationships that agents or people have at this point. It’s the raising of liquidity, and people think that it needs to be their own money that they need to do it with or whatever it may be that often stops most people. So I think that this is an opportunity for them to build another department of their business. If we’re speaking to the real estate community, yes, they sell real estate. Yes, they do all of that. But when there’s a good opportunity, instead of farming it out to an investor, there’s an opportunity for them to do it themselves because they know it better. The commissional element side of it is a saving for them as well.
Ben Brady [00:26:18]:
There are many, many different ways. So encouraging them to reach out to you, Jay, and and check that out a little bit further. But I guess as we round out the episode, one of the things we like to leave the community with that I ask most guests are sort of a little bit of either a life hack, favorite podcast, favorite books, things that have influenced you, you know, over the number of years that you’ve been doing what you’re doing. Anything or any, pearls of wisdom that you can leave us with with different resources.
Jay Conner [00:26:44]:
Absolutely. Lead everything that you do with a servant’s heart. Looking for a way to lead with value first. How can you give? How can you give first and bring value? So I was, I was very blessed to have the co-author, on my podcast, which is Raising Private Money with Jay Conner, Raising Private Money, it’s on all the platforms. Anyway, Bob Berg is the co-author of The Go-Giver, The Go-Giver. And it’s a wonderful book. It’s short. It’s in parable form, but, it’ll open your eyes as to how having a servant’s heart and just leading with value is through the reciprocity, through the law of reciprocity.
Jay Conner [00:27:28]:
What goes around comes around. My hero, one of my heroes, Zig Ziglar, that I got to meet 2 times before he passed away. You know what he said? You help enough other people get what they want. You don’t have to worry about getting what you want. I highly encourage you. Get the book, The Go-Giver.
Ben Brady [00:27:45]:
Wonderful. Jay, thank you so much for the insight that you’ve given us. No doubt that the audience will reach out further because the information is very valuable. But thanks again for being on Rethink Real Estate.
Jay Conner [00:27:55]:
Ben, thank you so much for having me. God bless you.
Ben Brady [00:27:58]:
So about 75% of our audience hasn’t liked, followed, or subscribed to our podcast. It would mean the world to us, and it would help this podcast more than, you know, to expand our reach. If you would like, follow or subscribe on any of the platforms that you’re watching or listening on. Thanks again.
Narrator [00:28:21]:
Are you feeling inspired by the knowledge you gained in this episode? Then head over to https://www.JayConner.com/MoneyGuide. That’s https://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 https://www.JayConner.com/MoneyGuide to get your free guide. We’ll see you next time on raising private money with Jay Conner.