Episode 240: Mastermind Strategies: How Jonathan and Cara Closed Their $550,000 Property Deal

In the latest episode of Raising Private Money, Jay Conner dives into the inspiring story of Jonathan and Cara Broyles, a dynamic duo in the world of real estate investment. From starting their journey in 2021 to closing high-value deals, Jonathan and Cara have shown the power of strategic planning, persistence, and the importance of nurturing relationships with private lenders. This episode highlights their recent property acquisition and the lessons they learned along the way.

Securing the Deal: 143 Royalty Drive

Jonathan and Cara’s most recent endeavor revolves around a property located at 143 Royalty Drive. The property, after undergoing necessary repairs and renovations, boasts an impressive After Repair Value (ARV) of $550,000. However, reaching this point was no small feat.

Assessing the Property:

The house, previously occupied by an owner and 80 Siberian husky dogs, was in dire need of cosmetic repairs. Recognizing the potential in the property, Jonathan and Cara estimated a generous $100,000 for the rehab, including a contingency fund for unexpected expenses—a strategy they call “Murphy,” named after Murphy’s Law that suggests if something can go wrong, it likely will.

Negotiating Purchase Price:

Initially listed by a wholesaler for $367,000, Jonathan and Cara knew their maximum allowable offer based on their rehab estimates would be $310,000. Despite the significant gap between their offer and the asking price, they stuck to their numbers, a testament to their disciplined approach to real estate investment. The wholesaler initially countered with $330,000, but eventually, Jonathan and Cara’s persistence paid off—their $310,000 offer was accepted.

Lesson Learned:

  • Stick to your evaluated numbers and don’t let emotions sway your decisions. By adhering to their calculations, Jonathan and Cara secured the property at a price that allowed for a profitable investment.

The Power of Private Lending

A vital piece of Jonathan and Cara’s strategy involves leveraging private lenders to fund their property acquisitions and renovations. This approach minimizes the need for traditional loans, accelerates the buying process, and often provides more favorable terms.

Expanding Their Network:

For the 143 Royalty Drive property, Jonathan and Cara initially anticipated using $250,000 from a new private lender. However, this transaction took an exciting turn—the lender expressed interest in funding the entire deal, boosting his investment to $410,000. This unexpected increase emphasized a crucial point in private lending: private lenders often have more funds available than they initially disclose.

Key Point:

  • Always present opportunities to your private lenders confidently. They may have more capital ready to deploy once they see a promising investment.

Interest Rates and Returns:

For this particular deal, the private lender agreed to an 8% interest rate on the $410,000 loan. Over the projected six-month rehabilitation period, this translates to approximately $16,000 in interest—a reasonable return for the lender while still allowing Jonathan and Cara to achieve their target profit margins.

Working with Realtors: A Smart Investment

Another pillar of Jonathan and Cara’s strategy is their partnership with a reliable realtor. Although paying realtor fees can seem daunting—30,000 in this case on a $550,000 sale—the benefits far outweigh the costs.

Benefits of a Professional Realtor:

  • Realtors handle the legwork, both pre- and post-renovation, helping to price the property appropriately and sell it quickly.
  • They ensure the property reaches a wide audience, increasing the chances of a top-dollar sale.

Advice to Investors:

  • Invest in a good realtor. Their expertise can make a profound difference in the success of your property sale.

Lessons from the Field

Reflecting on their recent success, Jonathan and Cara shared essential lessons for fellow investors:

  1. Always Offer: Regardless of the listed price, don’t shy away from making offers based on your calculations. The initial rejection might turn into acceptance later.
  2. Private Lenders Have More: Never hesitate to present more significant opportunities to your private lenders, as they often have additional funds they’re willing to invest with trusted partners.
  3. Stick to Your Numbers: Emotional decisions can lead to financial pitfalls. Stick with your estimated figures to ensure profitability.

Jonathan and Cara’s journey is a remarkable example of how strategic planning, leveraging private lending, and forming strong professional relationships can lead to successful real estate investments. Their story serves as an inspiration for both new and seasoned investors aiming to maximize their returns in the property market.

Conclusion

As 2025 approaches, the real estate market continues to offer numerous opportunities for those willing to apply the right strategies. Jonathan and Cara’s story is a testament to what can be achieved with persistence, discipline, and strategic financial planning. Whether you’re just starting or looking to improve your current strategies, the lessons from their journey provide valuable insights into successful real estate investing.

10 Discussion Questions from this Episode:

  1. Why did Jonathan and Cara Broyles decide to include an additional amount for “Murphy” in their rehab budget, and how does this strategy help them in their real estate projects?
  2. What was the after-repair value (ARV) of the property on Royalty Drive, and how does this figure influence their buying and rehab decisions?
  3. Jonathan mentioned a key takeaway about making offers on properties, even when the listed price seems too high. Can you discuss why this approach can be beneficial in real estate investing?
  4. Jonathan and Cara increased their available funds with their private lender from $250,000 to $410,000. Why is it important to maintain strong relationships with private lenders, and how can other investors replicate this success?
  5. How did Jonathan and Cara handle the negotiation process with the wholesaler, and what lessons can other investors learn from their experience?
  6. The podcast touched on the importance of using a realtor for selling properties. What are the main advantages of working with a realtor, according to Jonathan and Jay Conner?
  7. Why did Jonathan and Cara decide to stay “loyal” to their realtor, and how does this loyalty impact their business?
  8. Jonathan and Cara mentioned that one of their existing private lenders introduced them to a new lender. How do referrals and word-of-mouth play a role in building a network of private lenders?
  9. Cara Broyles highlighted the importance of trust in their new private lender deciding to work with them. Why is trust such a crucial element in private lending, and how can investors build and maintain trust with their lenders?
  10. How do Jonathan and Cara ensure they stick to their investment numbers, and why is this discipline important for the success and safety of their real estate deals?

Fun facts that were revealed in the episode:

  1. The house that Jonathan and Cara purchased was previously occupied by someone with 80 Siberian husky dogs, resulting in significant cosmetic damage.
  2. The concept of “Murphy” was introduced, representing unexpected costs that arise during a rehab project.
  3. Jonathan and Cara’s newest private lender initially pledged $250,000 but decided to fund the entire $410,000 deal after seeing the potential, showing that private lenders often have more funds available than they initially disclose.

Timestamps:

00:01 Murphy: the unexpected costs in every rehab.

04:12 House damaged by huskies; 6-month rehab planned.

09:33 Friend introduced a new private lender to the program.

10:31 Trust led him to become our lender.

 

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Mastermind Strategies: How Jonathan and Cara Closed Their $550,000 Property Deal

 

 

Jay Conner [00:00:06]:

Okay. Let’s talk another real deal. And guess who got drawn second here? Alright. The next real deal we’re gonna talk about right here is with Cara Broyles, not Cara, Jonathan Broyles. Cara’s not here, but with, Jonathan. Hey, Jonathan.

 

Jonathan Broyles [00:00:26]:

Hey. You got the bad one today. I’m sorry.

 

Jay Conner [00:00:31]:

So you are out in Kentucky. Right?

 

Jonathan Broyles [00:00:36]:

Yes, sir.

 

Jay Conner [00:00:36]:

Okay. How long we’ve been working together?

 

Jonathan Broyles [00:00:39]:

Since 2021, so about 3 years now.

 

Jay Conner [00:00:42]:

Okay. Another amazing mastermind member. Alright. So, let me get my page turned over here because I wanna take notes, Jonathan. Alright, Jonathan. Tell us about your deal.

 

Jonathan Broyles [00:00:58]:

Look who joined me.

 

Jay Conner [00:00:59]:

Hey, Cara. We got the good-looking one. Hey. Alright, sir. How are you doing today?

 

Cara Broyles [00:01:06]:

Good. Just,

 

Jay Conner [00:01:08]:

You know Thank you for, thank you for joining us today.

 

Cara Broyles [00:01:11]:

Thank you. We got all kinds of class Christmas parties, so I was helping with that and just got back. So

 

Jay Conner [00:01:19]:

Okay. Now, here’s how we’re gonna do this. Everybody just heard how we broke that deal down, so I’m gonna let Jonathan, and Cara go through the deal, and then I need for you all to ask some questions and clarifications, and let’s get the takeaways on this. So alright. Let’s hear about it, y’all.

 

Jonathan Broyles [00:01:42]:

Okay. So I thought I would share about our most recent purchase, and our newest private lender as well because they’re tied together on this particular deal. So on this property, 143 Royalty Drive, the after-repair value is 550,000. Whoo.

 

Jay Conner [00:02:00]:

You got you a big one.

 

Jonathan Broyles [00:02:02]:

It’s it’s a big one. It’s a nice house. Has the potential to be a nice house.

 

Jay Conner [00:02:07]:

And that’s the ARV, after repair value

 

Jonathan Broyles [00:02:09]:

Of 5. The arve. We estimate a $100,000 rehab, and that includes our addition for Murphy.

 

Jay Conner [00:02:19]:

Yep. We purchased the house You might wanna tell everybody what is Murphy.

 

Jonathan Broyles [00:02:24]:

So Murphy Or who is Murphy? Murphy is really the unexpected that is bound to come up during a rehab, which truly does come up in every single rehab. So we figure out our rehab cost, and then we add an additional 10, 15, and 20,000 depending on the value of the home or how much potential Murphy unknowns are in the property that might add to the total rehab cost.

 

Jay Conner [00:02:51]:

There you go. Alright. Go ahead.

 

Jonathan Broyles [00:02:54]:

Alright. So the purchase price is 310,000. We purchased this one from a wholesaler is where we got the lead. They had it listed for 367,000, and we offered 310 because that was the max that we could offer with our Mayo formula and the maximum loan to value based on the rehab that we had already calculated by walking the property.

 

Jay Conner [00:03:22]:

That’s a big takeaway right there. Don’t miss that lesson, everybody. You might have thought, oh, no need to make the offer of 3.10. Wholesaler’s asking 367. There’s no need to make that offer. Right? Spreads too far. But Jonathan and Cara, what do we say all the time? If you want if you want the deal, make the offer. Right? Yeah.

 

Jay Conner [00:03:48]:

That’s

 

Jonathan Broyles [00:03:48]:

Nice. And they and they didn’t like the offer at first. They came back and said there’s no way they could go that low, and they talked to their management and said the best they could do is 3:30. And I said, I can’t do 3:30. And so he came back to me the very next day and said we can take your offer. So they came all the way down to where we needed them to be.

 

Jay Conner [00:04:08]:

The big lesson right there. Go ahead.

 

Jonathan Broyles [00:04:12]:

So this property, we are anticipating it will take 6 months. We’ve just started in the past 2 weeks. It’s quite a major rehab, a lot of cosmetic repair. The owner of this house tore it up in three and a half years. He moved in with 80 Siberian husky dogs and cosmetically destroyed this house. So it’s gonna require a lot of that kind of work to rehab it, but 6 months. And all in all, after our rehab, after our private lender interest, private lender loan, the realtor fees, carrying costs. After all of that for us, I calculate that this deal should net profit us about 70,000.

 

Jay Conner [00:05:02]:

Okay. Can you give us more details or line items of those dollar figures?

 

Jonathan Broyles [00:05:08]:

Sure. So in terms of interest oh, actually, that’s I’m glad you asked that because, with our private lender on this particular property, it’s our newest private lender. He had pledged $250,000 to us, and we were looking for a property to put his money to work. Well, the first one that came up for us was an LTV of 410,000. So when we brought this deal to him, rather than saying he had 250,000, he said he wanted to fund the whole deal. So we immediately, just from one conversation, increased our private lending funds from 2.50 to 4.10 with this one lender.

 

Jay Conner [00:05:46]:

So there’s another big lesson. Quite, quote, unquote, private lenders always have more than they tell you. Yep.

 

Jonathan Broyles [00:05:53]:

Right? Yep.

 

Jay Conner [00:05:55]:

Okay. Go ahead.

 

Jonathan Broyles [00:05:56]:

So we’re paying him 8% interest on this. So with his $410,000 loan for the purchase price and the rehab, after 6 months, that comes to a little over 16,000.

 

Jay Conner [00:06:10]:

16,000 in private lender interest.

 

Jonathan Broyles [00:06:13]:

Yep. We pay our realtor 5 and a half percent. So at a sell price of 550,000, our realtor fees come to just over 30,000.

 

Jay Conner [00:06:26]:

Do you mind paying your realtor $30,000 in commissions to do a deal?

 

Jonathan Broyles [00:06:31]:

Not when I’m making 74,000. No.

 

Jay Conner [00:06:34]:

Yeah. Why don’t you just list it, for sale by owner.com?

 

Jonathan Broyles [00:06:39]:

She does everything for us. She helps us on the front end as well. So she does a lot of leg work for us on the purchasing side of properties that she’s not getting paid on. So we are loyal to her to make sure that we list our properties for that reason, and she helps us sell them at top dollar and very quickly.

 

Cara Broyles [00:06:59]:

So We like paying her, don’t we? Yeah. We fix them. Well,

 

Jay Conner [00:07:03]:

So for for everyone who’s listening right now, regardless of where you are listening, do not try to sell a rehabbed house, completely rehabbed and beautiful, on your own without your realtor. And don’t try to take pictures yourself, for goodness’ sake, and try to save that money. Right? So, yes, all of us, I mean, we are super glad to pay our realtor our realtors. Right? Go ahead, Jonathan and Cara.

 

Jonathan Broyles [00:07:36]:

Yeah. So I think that’s basically all I was going to say. I even added in here since it’s such a high dollar house at the 500 and $50,000 arve, I even included a little bit more cushion in here, just thinking about being able to go a little bit higher on that LTV, to begin with over the 75%. So if we have to draw a little bit more on the rehab, I’d included a cushion in here for us as well.

 

Jay Conner [00:08:03]:

Yeah. Are there any, takeaways or lessons from this deal, that you wanna share, with Jonathan or Cara?

 

Jonathan Broyles [00:08:11]:

I mean, the biggest one for me 2 of them for me is one with a private lender. As you’ve already said, they’ve always got more. So just by presenting an opportunity to our private lender, it increased our private lender funds by 160,000 just, you know, in the blink of an eye. Mhmm. So just giving the opportunity is key, and then also just sticking to your numbers because this is a house that it would be easy to be emotional about when you see the before photos. It’s a beautiful house on a nice street. And so, you know, when the wholesaler comes back and says, we can come we can come all the way down from 367 to 330, It’s easy to start spinning your wheels thinking that, maybe I can make 3:30 work. But we stuck to it.

 

Jonathan Broyles [00:09:01]:

We stuck to our numbers and stayed at 310, and, ultimately, they came down to us, which sometimes happens, sometimes doesn’t happen, but that’s the safety of what we do is sticking with those numbers.

 

Jay Conner [00:09:15]:

Well, congratulations on the deal, and those are some very, very important takeaways. And with that, I wanna give you the all sophisticated, congratulatory plates right there.

 

Cara Broyles [00:09:29]:

Someone had asked where we got our private lender.

 

Jay Conner [00:09:33]:

Oh, yeah.

 

Cara Broyles [00:09:33]:

And this was, actually, we are longtime friends, but we did not share our program with him, initially. And I think I mentioned this last time on PMA, but I know there are new people. But we were so excited about this. Another private lender is also friends with this person, and she’s so happy with the return she gets. She was telling him about it and was, like, excited to share, it with him. And so she’s the one she’s the re one of our other existing lenders is the reason we have this guy. And so, yeah, we shared, the the presentation with him and just the nuts and bolts of our of our program, and he was excited. He’s known about private lending for a long time, but he was always, nervous to do, you know, deals with people he didn’t know.

 

Cara Broyles [00:10:31]:

And so, the fact that he knew us and trusted us was what he needed, to do it. And so, yeah, that’s how that’s how we got this private lender.

 

Jay Conner [00:10:43]:

That’s fantastic. Thank you so much for sharing, Jonathan and Cara. Thank you.

 

Jonathan Broyles [00:10:48]:

You’re welcome.

 

Jay Conner [00:10:58]:

You too.