***Guest Appearance
Credits to:
https://www.youtube.com/@FusionNotes
“Raising Private Money, with Jay Conner”
https://www.youtube.com/watch?v=PF4zvLVu04Q&t=4s
Raising private money is a crucial step for many real estate investors looking to grow their businesses. Understanding the mindset shift needed and how to strategize effectively can make a world of difference. In this episode, we’ll delve into key insights from a recent discussion between Jay Conner, the Private Money Authority, and Dan Deppen, host of the Note Investor podcast.
Adopting the Right Mindset
Switch from Asking to Attracting
One of the foremost strategies Jay Conner emphasizes is changing your mindset from asking for money to attracting it. This mental shift transforms investors from beggars to educators. By leading with a servant’s heart and imparting knowledge about private money to potential lenders, investors can attract funds without ever directly asking for them. This approach not only alleviates the fear of rejection but also positions you as a valuable resource to your lenders.
Building Your Private Money Program
Know What You’re Offering
Having a clear, consistent program to offer potential private lenders is foundational in raising private money. Jay maintains a uniform program for all his lenders, covering interest rates, securing the funds, and the duration of the notes. This consistency helps build trust and makes the offering straightforward and attractive. Knowing exactly what you are offering allows potential lenders to clearly understand the benefits and terms, assuring them of the safety and profitability of their investment.
The Power of Teaching
Educating Potential Lenders
Educating potential lenders is crucial. Most of Jay’s private lenders had never heard of private money or self-directed IRAs until he taught them. He conducts educational events and one-on-one meetings to explain how private money works and the benefits of using self-directed IRAs for investment. By taking on the role of a teacher, you can demystify the process for your lenders, showing them the promise of high returns and the security of their investments. This educational approach ensures that lenders are not just willing but eager to be part of your investment ventures.
Leverage Networking Groups
Expand Your Reach
Networking groups, like Business Networking International (BNI), are potent channels for expanding your reach. These groups consist of individuals committed to helping each other grow their businesses through referrals. Leveraging these groups can amplify your message and attract more potential lenders. Regular attendance and participation in such groups can lead to valuable connections and opportunities to present your private money program in a supportive setting.
Utilizing Self-Directed IRAs
Unlocking Retirement Funds
Self-directed IRAs are a powerful tool for raising private money. They allow individuals to use retirement funds to invest in real estate or notes. Collaborating with companies like Directed IRA, where experts help prospective lenders set up their accounts, can significantly streamline the process. Self-directed IRAs offer a flexible and tax-efficient way for lenders to achieve high returns on their investments, thus making your program even more appealing.
Maintaining and Managing Relationships
Building Trust and Encouraging Referrals
Trust is paramount in maintaining relationships with private lenders. Once you’ve secured a lender and completed a deal, fostering that relationship can lead to valuable referrals. Jay highlights the concept of the “trust bridge,” where the trust a current lender has in him transfers to new referrals. Successfully managing these relationships by keeping communication lines open, providing regular updates, and ensuring the agreed terms are met will encourage your lenders to not only continue working with you but also to refer new potential lenders to your program.
Conclusion
Consistency and Education are Key
Raising private money for real estate investments hinges on adopting the right mindset, building a strong program, educating potential lenders, leveraging networking groups, utilizing self-directed IRAs, and maintaining strong relationships. Following these strategies, as outlined by Jay Conner, can help you attract private money without ever directly asking for it.
10 Discussion Questions from this Episode:
- Familiarity with Guest: How has Jay Conner’s longstanding acquaintance with Nate Haire benefited his understanding and implementation of self-directed IRAs?
- Company Insights: What roles do companies like directedira.com play in facilitating self-directed IRAs, and why is their IRS approval significant for investors?
- Investment Flexibility: What are the advantages of investing through a self-directed IRA compared to traditional IRAs, and how can this flexibility affect an investor’s portfolio?
- Earnings Structure: How do the tax-free or tax-deferred benefits of self-directed IRAs impact an investor’s long-term financial strategy?
- Partial Rollovers: In what scenarios might partial rollovers of existing retirement funds into self-directed IRAs be advantageous, and how does this approach aid in fund management?
- Building Trust with Lenders: What strategies does Jay Conner use to build and transfer trust with private lenders, and how does he ensure transparency and security?
- Engagement with Private Lenders: How effective is Jay Conner’s method of securing verbal commitments from private lenders before presenting deals, and what are the key elements of his approach?
- Jay Conner’s System: How does Jay Conner’s sophisticated system of managing multiple investors and tracking properties and lenders contribute to his success in raising private money?
- Substitution of Collateral: What is the process of substituting collateral in real estate investments, and why do lenders generally prefer keeping their investments active with an 8% return rate?
- Educational Resources: How do Jay Conner’s educational initiatives, such as the “7 Day Private Money Challenge” and the free guide available at jconner.com/moneyguide, provide value to new and experienced investors alike in raising private money?
Fun facts that were revealed in the episode:
- Jay Conner manages $8.5 million through 47 private lenders without directly pitching deals.
- He uses a “good news phone call” approach to inform lenders about opportunities without soliciting funds directly.
- Jay once raised $969,000 from a single private lender event through educational presentations and structured programs.
Timestamps:
00:01 Mindset shift is essential for real estate.
06:15 Program consistency and communication drive investment success.
08:44 House funding deal with $150K by Tuesday.
13:17 Get the money first
17:14 Self-directed IRA companies are IRS-approved custodians.
18:47 Invest IRA gains tax-free/ deferred until retirement.
21:47 Referrals build trust, attracting more private lenders.
25:28 Substitution of collateral maintains lender’s note security.
28:53 Learn to raise private money with fun.
Connect With Jay Conner:
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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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Advanced Techniques in Securing Private Funds for Real Estate Investments
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.
Dan Deppen [00:00:31]:
Alright. Welcome to the to the Note Investor podcast. I’m Dan Deppen. And today, I’m joined by Jay Conner, the Private Money Authority. Jay, how are you doing?
Jay Conner [00:00:39]:
Hey, Dan. I’m doing fantastic, and thank you so much for inviting me to come along to talk about what I’m so passionate about. That’s private money because that’s had more of an impact on our business than anything else we’ve done.
Dan Deppen [00:00:52]:
Yeah. I think that’ll be a great topic for our audience because I use a lot of private money, in note investing. One of the things I’ve talked about for a few years and included in courses is that raising private money is a lot more straightforward and probably less scary than people think. But I noticed something that people who haven’t done it before tend to have, like, a lot of resistance to, or they just kind of assume it’s really hard. So I’m glad you’re here to kinda talk about how you go about it and some of the other concepts, and I’m looking forward to learning from you as well.
Jay Conner [00:01:26]:
Absolutely. But, you know, what I love talking about on private money is how to raise private money without ever asking for money. You know, it’s funny, Dan. I’ve been raising I’ve been investing in real estate full-time since 2003 here in Eastern North Carolina. I’ve been raising private money for real estate deals since 2009. I have 47 private lenders right now. I’ve never asked for money, and so, I’m looking forward to diving in deep with you. Exactly how do I go? And, you know, I’ve never pitched a deal.
Jay Conner [00:02:02]:
I’ve never pitched it. They said, well, Jay, how do you get all that private money? We got about 8 and a half $1,000,000 in private money that we use from, you know, projects to projects. And, so it’s all about attracting and not chasing, begging, selling, or trying to persuade, or talk anybody into anything.
Dan Deppen [00:02:19]:
No. That sounds great. So I guess we can, you know, to begin. So, like, where does somebody start if they’ve never done this before?
Jay Conner [00:02:27]:
Sure. Well, a great place to start is it’s hard to own real estate. It’s hard to invest in notes until you own the real estate that’s between your ears. So, what in the world do I mean by that? So, it’s a big mind a big mindset shift. You see when I was when I started in real estate, the only thing I knew to do was go to the local bank, get on my hands and knees, put my hands underneath my chin, beg, and fill out applications, and they pull my credit score, and they look up my skirt at my assets, and they do a colonoscopy. I mean, you know, and they ask for your firstborn. That’s all I know to do. Right? Well, all that changed in January o009.
Jay Conner [00:03:16]:
I’ve been in this business full-time for 6 years, and I picked up my telephone here at the desk. I called my banker. I’ve been doing business with him for 6 years. Told him about 2 deals I had under contract, and I learned like that, Dan, over the phone that my line of credit had been shut down with no notice.
Dan Deppen [00:03:34]:
Oh, and this was 09. Yeah. That happened to my dad as well. Yeah. I think they were turning those off like crazy during that time.
Jay Conner [00:03:41]:
The spigot turned off overnight. Yeah. So I said to my banker, I said, Steve, what do you mean? What are you talking about? You’re closing my line of credit. We’ve got a great business relationship here for 6 years. Never been late on a payment. He said, Jay, don’t you know there’s a global financial crisis going on right now? I said, no, but now you just gave me a global financial crisis. I don’t have a way to fund these two deals that I’ve got under contract. So, anyway, I hung up the phone.
Jay Conner [00:04:09]:
I asked myself a very important question. You know the powers in the questions. And the question I asked myself was, Jay, who do you know that can help you with your problem? And by the way, these people running around saying every problem’s an opportunity. I want to throw up. I didn’t have an opportunity. I had a problem. I couldn’t fund my two deals. Well, when I asked myself, who do I know? I immediately thought of a good friend, Jeff Blankenship, who lived in Greensboro, North Carolina at the time, and I called him up.
Jay Conner [00:04:37]:
I told him what had just happened. Jeff said, Jay, welcome to the club. I said, what club is that? He said, the club of having the bank shut you down. They shut me down last week. I said, I said, okay. I said, how are you gonna fund your deals? He said, well have you ever heard of private money? I said, no. He said, have you ever heard of self-directed IRAs and how individuals can use retirement funds to be a private lender, and loan money out to real estate investors? I said, no. So I knew Jeff had told me something.
Jay Conner [00:05:10]:
So I studied private money, and I established a relationship with a self-directed IRA company where I could refer potential private lenders to those who have current retirement funds not getting a high rate of return. So back to your question, how does somebody start? We wanna get our minds straight on this. Again, we’re not chasing, or begging, or selling. Instead of asking for money, this is all the mindset, we are leading with a servant’s heart, and we are doing what? We’re putting on, just like I did, my private money teacher hat. So the mindset, I formed a mindset of being a teacher. Here’s what’s interesting. Of those 47 private lenders that I’ve got, not one of them had ever heard of private money until I taught them about it. Not one of them had ever heard of self-directed IRAs until I told them about it.
Jay Conner [00:06:15]:
Now another big distinction is separating the conversation between your program and what you’re offering and how people can make high rates of return safely and securely. So, back to your question, where do you start? Along with your mindset, what you have to start with is, what are you offering? What’s your program? And for me, it’s the same program with every one of my private lenders. I pay the same interest rate, I protect them the same way because I don’t borrow unsecured funds, and the length of the notes is the same. And so, what’s the program that you’re going to teach to people and that you’re going to share? And so then, once I’ve taught the program, I don’t have to ask them if they want to sign up, or they want to enroll as a private lender. They’re going to tell me, right? They’re going to tell me if they want to or not. And so, another part of the secret sauce, the magic, is when I’ve got a deal for them to fund, or in your case Dan, you got a note for that that you’re looking to be funded, or if I’ve got a single-family house to be funded, or if I’m raising money, you know, for something else. I have what’s called the good news phone call. The good news is a phone call.
Jay Conner [00:07:31]:
So, Dan, let’s say you’re one of my new private lenders and let’s say you’ve got a $150,000 that you want to loan out and invest. And let’s just say that, for example, let’s say it was retirement funds. Let’s say it’s not liquid capital. Let’s say it’s retirement funds, and let’s say it’s a 401 ks you had lying around and you’re not happy with the returns. Well, I introduced you to a self-directed company. You moved your funds over tax-free or no-tax, the event is triggered by that. So now, your money is sitting there waiting for me to put your money to work, because the way it works, I tell my new private lenders, I’m gonna put your money to work for you just as soon as possible. So, here’s the good news phone script.
Jay Conner [00:08:15]:
This is all an example of what I’m going over right now, which is to have your mind set straight of no begging, no selling, no chasing, and no persuading, you’re serving. So I already served by teaching the program. Right? Mhmm. Now I’m going to protect you. Now here’s the good news phone script. So the phone rings, and I call up Dan, my new private lender. I say, Dan, I’ve got great news for you. I can now put your money to work.
Jay Conner [00:08:44]:
I’ve got a single-family house in Newport with an after-repair value of $200,000. The funding required is $150,000, so this deal matches up to the funding that you have available. Closing is gonna be next Tuesday, so you need to have your funds wired to my real estate attorney’s trust account because they’re gonna do the closing by next Monday. I’m gonna have my attorney wire you the closing instructions. End of conversation. Notice, that I did not ask Dan, do you want to fund the deal. Of course, you want to fund the deal. You’ve been waiting for the phone call, and I’m not bringing a deal for you to fund unless it matches the criteria of the program that I already taught you. And then in addition to that, if Dan has moved his $150,000 from this retirement account over here to the self-directed IRA company that I recommended, he’s done that at my recommendation, and he’s not making any money until I do put his money to work.
Jay Conner [00:09:49]:
So that mindset of being a teacher, you know, new real estate investors ask me all the time, Dan, they’ll say, well, how do I get over the fear of rejection? Well, let me answer that question with a question. How can you be afraid of rejection if you’re not asking anybody for anything?
Dan Deppen [00:10:09]:
Right.
Jay Conner [00:10:09]:
Right? You’re sharing, you’re teaching, you’re sharing an opportunity in a program with no deal attached to it. You know the worst time in the world to be raising money for real estate is when you need it for a deal. Mhmm. That’s the worst time.
Dan Deppen [00:10:25]:
So so who wants
Jay Conner [00:10:26]:
Who wants that pressure?
Dan Deppen [00:10:27]:
Yeah. So, you’re lining up all the funding ahead of time, then going out and finding deals.
Jay Conner [00:10:33]:
Absolutely. Now, Dan, I’m getting ready to risk. I’m getting ready to take a risk right now. I’m getting ready to share a quote that I know you have heard from stage, educators in real estate say, and it drives me crazy. It makes me want to run into a wall. And here it is. They’ll say to new real estate investors from the stage, oh, just get the deal under contract. The money is
Jay Conner [00:11:02]:
Showing up.
Dan Deppen [00:11:03]:
So a guy that I originally learned notes from who I don’t recommend, that was kind of his attitude. Once you go out and find the deal, then you’ll, like, figure it out after that. And especially in the note space, that happens all the time. And what people do is they get the deal, and then they end up not being able to fund it, and then they scorch their relationship with the seller. And then it makes it that much harder the next time.
Jay Conner [00:11:33]:
Yeah. It’s like I mean, it and this is the way I’ve been doing it ever since day 1. It just seems to me, if I’ve got the money lined up first, if I’ve got the money lined up there’s always gonna be deals. There’s always gonna be deals. But if I’ve got the money lined up first, just think how much more confident, how many more offers I’m gonna make if I’ve got the money burning a hole in my pocket ready to go and close fast. Like, that’s one reason I get so many more offers accepted than my competition. Look. I just bought an oceanfront condominium a few weeks ago.
Jay Conner [00:12:12]:
Oceanfront, 3rd story here at Atlantic Beach, North Carolina, $425,000, is what I paid for it. The renovation, interior paint, and a little bit of sheetrock repair were only $10,000. So I had 4.35 in it. I put it on the market, and it was gone. Like, I had multiple offers. I sold it for $628,000. Here’s the point of the story though. The seller had to close from the time they contacted us, one of our Google Ads.
Jay Conner [00:12:43]:
Had to close in 5 days because it was going to the courthouse as a foreclosure sale.
Dan Deppen [00:12:48]:
Oh, yeah. And if
Jay Conner [00:12:49]:
I hadn’t had the money already lined up ready to go, ready to close, I would have missed out on that deal. Mhmm. I mean, time kills deals.
Dan Deppen [00:13:03]:
Yeah. Absolutely.
Jay Conner [00:13:04]:
And you can’t make money in slow motion.
Dan Deppen [00:13:07]:
Well, and for the seller in that case too. Right? If they let it go to the foreclosure auction, they may still get some money, but it’s not gonna sell for as much as if they can sell it on their own. Mhmm.
Jay Conner [00:13:17]:
Exactly. Exactly. So those are some really important reasons right there as to why it’s so important, in my opinion, in my experience, to get the money lined up first. Know your program, put on your teacher hat, and be a servant. And, you know, one question I get all the time, Dan, is, well, how do you get the word out? Like, how do you, like, start sharing this information? Well, there’s several ways. I mean, you can have, you know, 1 on 1 visits, go to lunch with people, you know, have coffee. But I like I like to leverage my time. Right? So when I was cut off from the banks way back in 2009, I put my program together, like I’m talking about, and it’s it’s generic.
Jay Conner [00:14:06]:
It goes for no matter what the deal is. And so then I just invited about 20 people to a luncheon and, and had my CPA and my realtor and my real estate attorney there. And I had 20 people just in my network. Right? Just in my network and buy them I bought them lunch, and then I did a 20-minute presentation on what is private money, what’s a private lender, how you can use retirement funds to do this, and be passive. And so I just taught the program. And, you know, I had a sheet with a level of interest, you know, that I handed out after I raised $969,000 from that one private lender event.
Dan Deppen [00:14:49]:
Yeah. I raised some of my first private money from there used to be a local notes meetup that we had here in Denver, and it was just from showing up there and talking about what I did. And then I did give a couple of presentations Yeah. At one point, but it’s very similar to what you’re talking about then. A lot of times, some of those first people asked me if I had any deals or anything going on. So it was very much like pull versus push. I’ve never tried to, like, sell anyone on doing something with me.
Jay Conner [00:15:17]:
Exactly. And I’ll tell you another place where I got the word out very, very quickly, and I got a lot of private money. And that was Business Networking International, also known as BNI. Well, that’s a national actually, an international group founded by Ivan Meisner. The purpose of that group is to give your fellow members in your local area leads for business. So we met every week, 7:30 in the morning, and so I had, you know, 23, 24 other people spreading the word for me about how I’m paying high rates of returns safely and securely for people that don’t wanna be passively involved in real estate. So they’d refer me, people. They’d refer people that have cash sitting on the sidelines, refer me people that, you know, were retired and not happy with their retirement funds.
Jay Conner [00:16:09]:
So then I could teach about self-directed IRAs. So, it’s all about leveraging your time and not, you know, running around with your hair on fire.
Dan Deppen [00:16:18]:
Yeah. Maybe you could talk about self-directed IRAs a little bit. Like, is there anybody in particular that you recommend or IRA custodians you typically work with?
Jay Conner [00:16:27]:
Sure. Absolutely. So, I just got his new contact information, but I’ve known this gentleman for a very, very long time. His name is Nate Haire, h a r e, and he has been in the self-directed IRA space for many, many, many years, and the company that he represents is called directedira.com. So that’s www. Directeddirectedira.com, and, just go to that website. You can go to directedira.comforward/appointment, and you can book a call with Nate himself. But he’s all about customer service and etcetera.
Jay Conner [00:17:14]:
And just in case somebody’s listening to this show and you don’t know what a self-directed IRA company is, here’s what it is in a nutshell. A self-directed IRA company is a company that has been approved by the IRS to be what’s called a third-party custodian. Over 99% of the people walking around never heard of it. Financial advisers haven’t heard of it because there are no commissions in it for financial advisers. So what a self-directed IRA company does and what the IIRS allows you to do is take current retirement funds or you can open up a new account for $100. But if you wanna get going fast, you can take current funds that you might have dedicated as retirement funds in the stock market or mutual funds. You know, that would be with, you know, Schwab, Vanguard, etcetera, or it may be a 401k from a previous employer. Well, the IRS allows you to move those funds, with no tax effect, over to the self-directed IRA company, and it takes your account maybe a couple of weeks to get funded.
Jay Conner [00:18:25]:
Once your account is funded, now you can truly, here’s why it’s called that, You can now truly self-direct. Right? Mhmm.
Dan Deppen [00:18:34]:
You
Jay Conner [00:18:34]:
Know, the stock brokerages, they’ll say, hey. You know, you can you can self-direct. Well, you can choose which mutual fund.
Dan Deppen [00:18:41]:
You can choose from a menu, and it’s a relatively small menu typically, especially for employer plans. Yeah.
Jay Conner [00:18:47]:
Exactly. But that’s not this world. I mean, you can use yourself to read a diary account to go invest in a house and flip it or invest in notes and flip the note, or hold the notes, or whatever, but all the profits and the returns go back into your IRA account at the self-directed IRA. But they’re all coming back in. You’re earning money either tax-deferred or tax-free, depending on the type of retirement accounts you’ve got. I mean, where else can you go earn tax-free money, or at least tax-deferred money until you retire, like this?
Dan Deppen [00:19:28]:
Yeah. The other thing I always tell people too is sometimes people, like, assume if they’re gonna roll the money over from another retirement account and is self-directed, they gotta roll the whole thing, but you don’t. Like, if you can just roll a small amount to do one deal and get started in fact, I recommend not rolling the whole thing unless you’re ready to go and deploy it so it’s not sitting in cash. Mhmm.
Jay Conner [00:19:50]:
Exactly. Well, if it’s just sitting there, it’s not gonna earn any money.
Dan Deppen [00:19:54]:
Yeah. Exactly. So now you will have some fees and things like that as well with the IRAs, but it provides a lot of flexibility in what you can invest in. You can even do I’ve only done notes in mine, but we can’t even do, like, businesses and other sorts of things.
Jay Conner [00:20:10]:
Oh, yeah. It’s easier to list what you can’t do.
Dan Deppen [00:20:16]:
Yeah.
Jay Conner [00:20:16]:
Versus what you can do. I mean I mean, shoot. You got people with, retirement funds and self-funded IRAs who are investing in horse sperm. Can you believe it? Right?
Dan Deppen [00:20:30]:
I’ve not heard of that one. No. I’m retired.
Jay Conner [00:20:34]:
But, but, I mean, they I mean, you you can’t invest using your retirement funds. You can’t invest in, you can’t invest in liquor or alcohol.
Jay Conner [00:20:44]:
You can’t invest in antiques, such as oriental rugs, but, you can invest in real estate, you can invest in notes. Interestingly enough, over 70% of people who have an account at a self-directed IRA company want to loan you, the real estate investor, or note investor money. Over 70% of them. They like the space, They just wanna be passive and let somebody else oversee the deals.
Dan Deppen [00:21:13]:
Yeah. And I forget what the numbers are, but there’s a hellacious amount of cash sitting in self-directed accounts. It’s like A lot of 100 and 100 of 1,000,000 dollars.
Jay Conner [00:21:23]:
Yes. Yes. There’s hey. Look. In my experience, there’s more money available than there are deals.
Dan Deppen [00:21:30]:
Yeah. That’s been my experience as well. A lot of times, people are surprised when I tell them that, but at least in my business, finding the right deal at the right price is more challenging typically than finding the money.
Jay Conner [00:21:43]:
Absolutely. Absolutely.
Dan Deppen [00:21:45]:
The deal.
Jay Conner [00:21:47]:
I mean and, you know, after starting to do business with private lenders, and they start referring other people. Another way, I get it without asking. Now I got other people chasing me, wanting to give me money, and, I mean, I’ve got quite a few private lenders I’ve never met. I don’t even know what they look like. Talked to them over the phone quite a bit, but you know, when you have a private lender refer you to another potential private lender, then what happens is this thing called the trust bridge. The trust bridge, like that referred new private lender. Never heard of Jay Conner, don’t know who Jay Conner is, but the person who referred him has been doing business with me for years. And so now the trust that that current private lender has in me now transfers to the new person that’s referred.
Dan Deppen [00:22:36]:
Well, that brings up another question I had. So for you as the operator, how do you go about, screening your funding partners and and making sure that they understand the deal and that you’re involved with the right folks?
Jay Conner [00:22:51]:
Yeah. Well, when they’re referred to me, they already know the program. Mhmm. I mean, the person doing the referring has already told them the interest rate that I’m paying, how they’re protected, how I’m not borrowing unsecured funds, you know, a conservative loan to values, etcetera. So they already know the program. So when they’re referred to me, I review that program with them again to make sure that they do understand the program, and then they simply give me a verbal pledge as to how much they’ve got to work with. They always have more than they tell you.
Dan Deppen [00:23:28]:
Oh, really? Yeah.
Jay Conner [00:23:29]:
They always have more than they tell you initially. And, so they wanna get started. And so I’ll tell them I’ll put their money to work for them as soon as possible. If they’ve got retirement funds, I’ll go ahead and introduce them to, my representative such as Nate Hyer, to get their account funded if they’re using retirement funds. I’ve got private lenders that are using just liquid investment capital and their retirement funds. I have some private lenders that are just using liquid capital. Some are using just retirement funds. So, you know, all the above.
Jay Conner [00:24:02]:
So in answer to your question, I simply review with them, what they’ve already been told by the current private lender, and they tell me what they’ve got, and then I put their money to work just as soon as possible.
Dan Deppen [00:24:15]:
Oh, that that’s very, very cool. So once someone gets started on this, like, what are some tips for people who wanna begin to scale things up? So I know for most folks, usually, they start a notice. They’re deploying their own money, and then, you know, that’s always limited no matter who you are. And then they might start using outside funding to keep growing. What’s a good way for people to manage once you get to like, you say you have 50 investors? Like, doing one investor is one thing. How do you manage that once you start going to, like, 5, 10 and more?
Jay Conner [00:24:52]:
Well, I mean, we have a very very sophisticated system. They’re all on a spreadsheet by property.
Jay Conner [00:25:01]:
By property. So, we got 2 spreadsheets. We got a spreadsheet with our properties, and what private lenders or private lenders have loan money secured by that real estate. And then, we have another spreadsheet, let’s watch which is called the queue. So, when I have a new private lender come on board, they go to the top of the queue. They get the next deal. Depending on if they’ve got the right amount of money. So, they get the next deal because I want to prove to them that we can perform.
Jay Conner [00:25:28]:
Now, when we pay off someone, pay off a private lender because we cashed out on the deal, then they will go to the bottom of the queue and work their way back up. Now, one thing that we do as well to keep, the money used is in real estate with single-family houses, we’ll do a lot of substitutions of collateral. So what in the world is a substitution of collateral? Well, the private lender’s got a promissory note that’s secured by a property. Well, if that property is sold, it’s no longer there to secure that note because we had to clear out the lien when we sold it. So, now if I have another property that I’m getting ready to renovate, or another property to purchase, then we will substitute the new property, and now a new property or another property will secure that promissory note that’s already in place, so they can keep their note open and keep earning money.
Dan Deppen [00:26:27]:
Gotcha. And then and then what happens if for some reason the investor says, I don’t want it to be secured by the new property? You just cash them out at that point and then get funding from
Jay Conner [00:26:37]:
Well, that’s an interesting question. When you substitute the property, they have to sign in front of a notary, and I’ve got private lenders all over 10 different states. They have to sign in front of a notary. This it’s it’s a it’s a loan modification, is what it is. So, they have to sign the loan modification and agree to that substitution of collateral. Interestingly enough, Dan, in all these years since 2009, I’ve never had a private lender not want to keep their note in play and open. Now this is assuming the term has not come due. Right.
Jay Conner [00:27:11]:
This is assuming the term has not expired. But, if they want the I mean if they want their money back, what are they gonna do with it? In other words, where are they gonna earn these kinds of rates of return? I pay 8%. I’ve been I’ve been paying 8%, no origination fees ever since 2009. So the fact of the matter is, they don’t want the money back. When I have a new private lender and I’m getting ready to pay them off and cash out, invariably, they’ll say, Jay, can’t you just keep the money? Well, the answer is no. I’m not gonna keep your money unless I can secure it, safely and securely in a conservative way, you know, buy a property.
Dan Deppen [00:27:49]:
Now that makes sense. So what are some ways that people can get a hold of you if they want to learn more?
Jay Conner [00:27:56]:
Sure. Well, Dan, I’m so excited. I just finished my brand new 7-day private money challenge. Well, what in the world is the 7-day private money challenge? This is a series of 7 videos, and each video is only 15 to 20 minutes in length, very easy to understand, and I cover all the foundation, and all the basics of private money, and it’s very simple. You can enroll by simply going to www.privatemoneychallenge.com. Www.privatemoneychallenge.com. You can enroll right there, and when you enroll, you will immediately receive in your email inbox the first video of 7, and then the next morning, for the next 6 mornings at 9 AM Eastern Time, you’ll receive each subsequent video training. That’s me right there, and two things about it.
Jay Conner [00:28:53]:
You’re gonna learn how to raise private money. Even if you’ve been raising private money, you’ll learn how to raise more of it more easily. And I promise you, you’re gonna have a lot of fun, because if I’m not having fun, I’m not doing it. In addition to that, I’m now beginning my 8th year of my podcast, so you can follow me on my podcast. And imagine what the name of my podcast is, Raising Private Money with Jay Conner. So, I’m on all the platforms, iTunes, Spotify, whatever your favorite podcast platform is. Just go search for raising private money, and you’ll see it pop up, raising private money with Jay Conner. I have 2 shows a week, and I always have amazing guests that I interview.
Jay Conner [00:29:36]:
And what do I interview them about? I interviewed them about how they have gone out and raised private money. So we all learn from each other about how our different methods work and how we get all the money we need for our deals.
Dan Deppen [00:29:50]:
That’s perfect. And I’ll put the links to both of those, the podcast and the private money channel, and the notes so it’s easy for people to just click on it. So, Jay, thanks so much for joining. I appreciate it.
Jay Conner [00:30:02]:
Dan, thank you much, thank you so much for having me, and god bless you.
Dan Deppen [00:30:06]:
Alright. You too. Thanks.
Narrator [00:30:09]:
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.