In a recent episode of the Raising Private Money podcast, Jay Conner delves into the inspiring journey of Jonathan Broyles, a real estate investor from Lexington, Kentucky. Jonathan and his wife Cara have been making waves in the industry since attending Jay’s live private money conference in February 2022. With a remarkable track record of closing 17 deals and raising nearly $2,000,000 in private funding, Jonathan shares valuable tips and insights on leveraging private money for real estate ventures.
Understanding Private Money in Real Estate
Private money is a powerful tool for real estate investors looking to bypass traditional banking methods. Unlike loans from banks or hard money lenders, private lending involves securing funds from individuals who act in the capacity of a bank, offering investors flexibility, speed, and fewer restrictions on their transactions.
Jonathan, in his discussion with Jay, highlights the simplicity and efficiency of using private money. The traditional bank processes are often slow and laden with bureaucracies, which can be a hindrance for investors needing to move quickly on a property. Private lenders provide a smooth, straightforward financing process, allowing investors like Jonathan to close deals efficiently and with confidence.
The Role of Private Lenders
Private lenders are typically everyday individuals dissatisfied with the returns from traditional investments such as CDs, money markets, or volatile stock markets. By investing in real estate through private lending, they secure a consistent and often higher rate of return, backed by the real estate itself.
Jonathan emphasizes the importance of building relationships with these lenders. For him and Cara, the goal is to offer financial opportunities that benefit the lenders, creating a win-win situation. They source funds from savings accounts, money markets, and retirement accounts, transforming these into lucrative investments for their private lenders.
Real-Life Impact: A Case Study
Jonathan shares a compelling story of one of their private lenders, a widow who was previously earning a meager $750 annually from her money market investments. By shifting her funds to a private lending structure with Jonathan and Cara, her annual earnings skyrocketed to over $12,000. Such impactful changes illustrate the profound difference private money can make not only for investors but also for the lenders themselves.
Benefits for Investors
Jonathan explains how private money offers several advantages over traditional financing for real estate investors. Firstly, it provides unparalleled speed, an essential aspect when competing for properties, especially those requiring quick solutions. Secondly, there are no limitations on the number of ongoing deals, offering investors the flexibility to expand and diversify their portfolios.
Furthermore, using private money allows Jonathan and Cara to adhere strictly to financial safety measures for their investors. They ensure deals are never over-leveraged, maintaining a robust equity cushion and securing investments with mortgages similar to banks.
A $1,250,000 Deal: A Walkthrough
One of Jonathan’s most compelling examples is a current deal with an after-repaired value of $1,250,000. He explains their meticulous process: starting with finding the property through a reputable wholesaler, assessing the extent of necessary repairs, and calculating precise offer limits based on potential returns and costs.
Even when the wholesaler’s asking price was significantly higher, Jonathan and Cara’s disciplined approach, sticking to their formulated offer based on realistic repair estimates and conservative valuations, paid off. The wholesaler eventually agreed to their terms, demonstrating the power of adhering to solid financial principles.
Final Thoughts
Jonathan Broyles’ journey showcases how leveraging private money can revolutionize real estate investing. His focus on ethical practices, financial safety for investors, and creating mutually beneficial relationships with private lenders embodies a model strategy for aspiring and seasoned investors alike. For those interested in this transformative approach, reaching out to professionals like Jonathan and Cara Broyles can open new doors to successful real estate ventures, offering both investors and private lenders a path to secure, profitable futures.
10 Discussion Questions from this Episode:
- How did Jonathan Broyles and his wife Cara become interested in real estate investing, and what role did attending Jay Conner’s event play in their journey?
- What are some of the key advantages of using private money for real estate deals, as highlighted by Jonathan in this episode?
- Discuss the types of individuals who qualify as private lenders in the context of Jonathan and Cara’s real estate investments. How do they differ from traditional institutional lenders?
- According to Jonathan, what factors make private money a more appealing option compared to traditional bank loans or hard money lenders?
- Jonathan mentioned a widow whose annual income significantly increased through private lending. How does this story highlight the potential benefits private lending offers to everyday investors?
- Explore the process Jonathan and Cara underwent to negotiate the purchase of the $1,250,000 property. What strategy did they use to justify their offer?
- What are the steps Jonathan and Cara take to ensure the safety and security of their private lenders’ investments?
- How does the use of private money allow Jonathan and Cara to be more nimble and flexible in their real estate investment strategy?
- What steps do Jonathan and Cara take to evaluate and ensure the profitability of a real estate deal, as illustrated by their approach to the $1,250,000 deal?
- Reflect on the ethical considerations of real estate investing and private lending that Jonathan and Cara emphasize in their business practice. How do they balance business interests with providing value to their private lenders and the community?
Fun facts that were revealed in the episode:
- Jonathan and Cara Broyles have closed nearly $2,000,000 from private lenders since starting real estate investing in February 2022, despite beginning their journey by attending a live private money conference in that same month.
- Jonathan and Cara were able to negotiate a purchase price with a wholesaler significantly lower than the listed price, from $672,000 to $560,000, demonstrating their commitment to sticking to their financial safety limits.
- They have already done approximately 17 real estate deals and are working on a $1,250,000 project, showing rapid progress and success in their real estate investment journey in a relatively short period.
Timestamps:
00:01 Insights on Raising Private Money
03:33 Real Estate Venture with Jay
08:29 Lender Investment Security Measures
11:57 Improved Returns for Private Lenders
13:37 Advantages of Private Lending
17:00 Connect with Jonathan Broyles:
https://www.GoldenRodInvestments.info
19:39 Property Assessment: High Potential Area
20:21 Evaluating Extensive Repair Needs
26:39 Effective Property Price Negotiation
28:48 Lender Commitment Limits Negotiations
Connect With Jay Conner:
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https://www.jayconner.com/MoneyReport
Join the Private Money Academy:
https://www.JayConner.com/trial/
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It is available FREE (all you pay is the shipping and handling) at https://www.JayConner.com/Book
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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.
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Jonathan Broyles Shares $1 Million Deal Strategies in Real Estate Investing
Jay Conner [00:00:01]:
Welcome to another amazing episode of Raising Private Money. I’m Jay Conner, your host, also known as the Private Money Authority. This is the podcast where we talk about how to get all the private money you would ever want for your real estate deals without ever having to ask anybody for money. Well, I don’t know anybody better to give you a great example of how they have gone about raising private money in this exact way. And so my special guest today is he and his wife are in my top elite group, my mastermind family, and they’re real estate investors. They hail from Lexington, Kentucky, and they’ve been investing in real estate actually since 02/2022. Now their journey began when they attended my live private money conference event, conference event back in February. And that’s where they discovered the power of private lending and what that can do to your real estate investing business.
Jay Conner [00:01:07]:
Private lending is where you don’t rely on banks or any kind of institutional lenders. You don’t have to rely on hard money lenders. It’s private lending. We’re gonna talk about exactly what that is. Well, since then, in February, they’ve specialized, like myself, in teaching people how to earn high returns safely and securely through this strategy. Well, they’ve raised nearly $2,000,000 from private lenders to invest in their deals, 1,900,000.0 to be exact as of today. And their seventeenth deal is just about to close. They are so passionate about helping others build wealth through smart, strategic investing.
Jay Conner [00:01:48]:
In just a moment, you’re gonna meet my friend, mastermind member, and fellow Christian, Jonathan Broyles, right after this.
Narrator [00:02:00]:
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 is the best tips and strategies to help you get the money because the money comes first. Now here’s your host, Jay Conner.
Jay Conner [00:02:28]:
Well, hey there, Jonathan. Welcome to the show.
Jonathan Broyles [00:02:31]:
Hey, Jake. Thanks for having me.
Jay Conner [00:02:33]:
Absolutely. Good to see you after seeing you and your wife, Cara, in person last week at our, most recent mastermind get-together. And, so I can see now you made it safely back home to Kentucky. I did. Well, Jonathan, I wanted to invite you to raise private money today, to talk about several things, case study the case study specifically, this deal that you and your wife, Cara, are working on, that’s got an after- repaired value on it of over a million dollars. And, we wanna slice and dice that deal, how you found the deal and the numbers and what they look like. But before we get into analyzing this over-a-million-dollar deal, share with the audience, your and Kara’s background. In other words, a mini-short autobiographical story.
Jay Conner [00:03:28]:
And, then what led you to get into real estate investing?
Jonathan Broyles [00:03:33]:
Yeah. So my wife and I have been married for twenty years now. And, ever since the beginning of our marriage, we both had a very high interest in real estate and just never really knew where to get started with it until we met Jay back in June of twenty twenty-one as he already said. And so after meeting Jay, we learned all about the awesome world of private lending and how easy it is to purchase houses in that way. And not only how easy it is to purchase houses, but how much of a blessing we can truly be to everyone that we encounter through the process, whether it be our private lenders our realtors our contractors the homeowners, the sellers who are trying to get out of a situation and needing support. We’ve realized in working with Jay just how much of a blessing we can be. And so it’s been an incredible journey for us, and we are just thrilled for what the next few years are gonna bring for us.
Jay Conner [00:04:35]:
Yeah. I didn’t realize until, the introduction that you all were already, around 17 deals, and so that’s just phenomenal. So let’s make sure that our audience understands what we mean about private money in case we’ve got any new listeners and we always do. But when we talk about private money, really unpack that. What are we talking about as far as how are we how are you getting funding for your deals and what is a private lender?
Jonathan Broyles [00:05:06]:
Yeah. So a private lender is, I mean, very simply put, it’s an individual who does really what the banks do to earn a high rate of return on their investment capital or their retirement accounts. So we go out and present opportunities to everyday folks, and just allow them to earn a high rate of return on the money that they may have, money that may be in a traditional investment like a CD or a money market or even a retirement account that’s not earning a high rate of return or maybe it is earning a higher rate of return, but it’s not as consistent. There’s a lot of volatility in where they’ve got it. And so we present an opportunity for folks to invest their funds into real estate and earn a high rate that is very consistent, that is backed up by the real estate itself.
Jay Conner [00:06:02]:
So what do these private lenders look like? And you’re in Cara’s world. Are these, like, sophisticated, ultra-wealthy people? Are these people how would you describe them?
Jonathan Broyles [00:06:16]:
Yep. So I would say in my world, no. They are not the sophisticated and ultra-wealthy because those are not the people that are in my sphere in my life. They are truly, as I said, they’re everyday people. I mean, they are they’re just like me. They’re like my in-laws. They’re like families from church, who just are not satisfied with the return that they’re currently getting.
Jay Conner [00:06:40]:
Are they using where are they getting their money? Where are they getting money or funds to invest in your deals?
Jonathan Broyles [00:06:47]:
Yeah. So we’re seeing a wide range of where people are getting their funds from. One of our largest lenders just has it sitting in a savings account earning extremely low interest. So they’re thrilled to be earning a high rate now. We’ve got lenders who have pulled it out of a money market, again, earning very low interest in a money market to now earning a high consistent rate. We’ve got retirement funds, folks who have brought their money over from an actual retirement account to earn a higher consistent rate of return. So really a broad range of where they can pull their funds from and what we’re experiencing in our lenders.
Jay Conner [00:07:26]:
So what do you think your private lend enjoy the most about investing with you? In other words, what’s the benefit to them? Why are they interested in investing with you and Cara instead of, you know, putting their money in the local bank in a certificate of deposit for twelve months or whatever? And what kind of protections do you have in place for them to mitigate any risk?
Jonathan Broyles [00:07:56]:
Yeah. I mean, I would say the most obvious reason why our lenders enjoy doing business with us is because they know exactly what they’re gonna get and when they’re gonna get it. And so there is no volatility with how they are receiving their return from the very beginning. They have high expectations and know exactly what that’s going to look like through the entire course of their investment. In terms of I’m sorry, Jay, were you gonna say something else?
Jay Conner [00:08:28]:
No, I’m fine.
Jonathan Broyles [00:08:29]:
Okay. So in terms of, just the protections that they have, there’s a couple of protections. We always talk about with our lenders that their investment is safe and it’s secure. And those are the two terms that we like to use. And we say that it’s safe because we make sure that we’re never over-leveraged with their funds in any given property. The 75% loan-to-value ratio is the most that we go on the majority of our properties to make sure that we’ve got a large equity cushion, a 20 to 25% equity cushion at a minimum in each property. So they’re protected in that way as well as they receive a mortgage just like a bank does when you’re getting a mortgage from a bank. So, each loan is backed up specifically and secured by a specific piece of real estate.
Jonathan Broyles [00:09:29]:
As well as some of the other protections that they get, title insurance. We get property insurance on every single property as well. We’re using, really the market experts. We rely on our realtor to provide us with our values as opposed to going out and trying to read the market and understand what a house is going to be worth. We rely on expertise in all of the various fields to make sure that all of our numbers, especially on the front end as we’re entering into a deal, we wanna make sure that all of our numbers are very accurate.
Jay Conner [00:10:03]:
So to repack or to to summarize what you were just saying there, you look after your your private lenders. They get a high rate of return, much higher than they’re gonna get at the local bank. They know exactly what their rate of return is going to be. You mentioned it’s not volatile. So in that, in that sentence, you’re contrasting what you offer your private lenders to the stock market versus investing in the stock market. Because when they invest in the stock market, they already lose money with fees and commissions. And the value of what they invest with you could be worth less I mean, the value they invest in the stock market could be worth less tomorrow than it is today. It could be worth more tomorrow than it is today.
Jay Conner [00:10:49]:
So it’s just up and down and all over the place. And you summed it up perfectly when you said the private lender is in the same capacity as the bank. So they’re not joint venturing with you the, on the opportunity. They’re acting in the capacity of the bank, and then you’re doing all the work. So, another great benefit for these private lenders is they get to enjoy the wonderful returns that real estate offers in a very passive way. I mean, what do your private lenders have to do to be involved in a transaction?
Jonathan Broyles [00:11:29]:
They have to do almost nothing at all. They wire their funds. We go out and we find the deal. We make sure all of the numbers are the way that we need them. And then we schedule a closing with our real estate attorney, and the real estate attorney draws up the paperwork. And our private lender will wire in per the instructions of the attorney, and that’s all they have to do.
Jay Conner [00:11:53]:
Except sit back and open their mailbox for, mailbox money.
Jonathan Broyles [00:11:57]:
Exactly right. And Jay, I would add in terms of the benefit for our private lenders, what we’ve come to realize in doing this is that we truly can positively impact lives even with our private lenders. One of our private lenders is a widow whose husband died, about six or seven years ago, and she had her money in a money market account, and she was earning $750 a year on that investment. Her financial adviser advised her to keep her funds in that money market because it was a safe return, but she was earning such a low return on it. Now in working with us, she’s earning over $12,000 a year on that same investment, and it has significantly impacted her life and the level of income that she’s receiving on a monthly and a yearly basis just by moving her funds from a traditional investment into working with us as a private lender. So we’ve come to realize that we are, providing a blessing to a lot of people in their lives.
Jay Conner [00:13:01]:
Well, $12,000 a year is a whole lot more than $750 a year on the same investment. So we’ve talked a little bit about why your private lenders enjoy doing business with you and and some of the benefits that they receive. So on the other side of the coin, why have you and Kara chosen to do business with private lenders instead of going to the local bank, and, and just doing business with the local bank or say doing business with hard money lenders?
Jonathan Broyles [00:13:37]:
Yeah. So a couple of the reasons, the two primary reasons for us why we enjoy working with private lenders, really three reasons, I guess. The first one I’ve already stated is that we are very happy to know that we are a blessing to these people in providing a return that they’re extremely satisfied with. But then from our perspective as well, using private money as opposed to hard money or even traditional financing through a bank, we can operate at a speed that is not even close to using traditional financing. A lot of times the homes that we’re purchasing, sellers are needing quick solutions so using private money can be a very fast transaction because you’re not going through all of the hoops, cutting through all of the red tape of all the requirements that the banks have. So we can move a whole lot faster. And then also in line with that, banks, there’s a certain number of deals that you can have going at any one time with a bank. They’re only gonna allow a certain number of loans.
Jonathan Broyles [00:14:50]:
But that’s not the case with using private money. We can have as many properties in our portfolio, and as many deals in the works as we’ve got private money for. So there is absolutely no limit in that regard. So just simply put, the ease of the process is extremely easy using private money, while at the same time, it’s still, an extremely safe and secure investment for our lenders.
Jay Conner [00:15:18]:
Yeah. Well, Jonathan, just in case, we’re getting ready to slice and dice and unpack this, $1,250,000 deal that you and Kara have gotten in the works. So, but in case somebody’s got the jump off early, and doesn’t hear the details of this deal, I want all of the audience to know how to get in contact with you because I’m telling you, I’ve known you and Kara for quite a while. And to all of our audience, I want you all to know there’s nobody that I have worked with that’s got any higher integrity than Jonathan and Cara Broyles do out there in Kentucky. Are all your private lenders right there in Kentucky or are they all over the nation?
Jonathan Broyles [00:16:02]:
Yeah. We’ve got them. We’ve got some in Texas, some in North Carolina, several here in Kentucky. So, just kinda scattered throughout.
Jay Conner [00:16:09]:
Yeah. So, you’re not limiting new private lenders to live in Kentucky. Right? No. Not. You’re you you are not you are not being, you’re not offering any kind of favoritism, so that’s wonderful. So I want you to give out your contact information. And if you’re watching or listening to this show and you’ve got investment capital that’s laying around that you’re not happy with the kind of returns on it, or you’ve got retirement funds and you’re not happy with those, then I highly endorse Jonathan and Kara for you to have a conversation with them about how they can put your money to work very, very safely and securely with no volatility and, and make some high returns. So, Jonathan, go ahead and give out your contact information, and then we’ll slice and dice this 1 and a quarter million dollar deal.
Jonathan Broyles [00:16:58]:
Sure. So I would start with my website. It is goldenrodinvestments.info, and there’s a contact field in there. So if you’re interested in checking out the website, and filling out that form, that is one way that we can get in contact with each other.
Jay Conner [00:17:12]:
Let me spell that out, to everybody, Jonathan. That’s w w w dot goldenrod, golden, g o l d e n, rod, investments dot info. And, of course, that’ll be in the show notes. Go ahead, Jonathan.
Jonathan Broyles [00:17:28]:
Yep. And then very similar to that, my email address is gonna be jonathan@goldenrodinvestments.info.
Jay Conner [00:17:37]:
And, of course, that’s Jonathan spelled j o n a t h a n, Jonathan at goldenrod investments dot info. Okay?
Jonathan Broyles [00:17:46]:
And then you can have my direct cell number as well, which is (859) 388-4660.
Jay Conner [00:17:54]:
Alright. Jonathan just gave out his cell to call or text. (859) 388-4660. And, of course, you can be living anywhere, to, have the opportunity to work with Jonathan and Kara. So let’s slice and dice this $1,250,000 after repaired value deal. I know and, you and Cara have got it under contract to purchase, and it’s moving forward. So let’s analyze the deal. First of all, how did you find the deal? And, of course, you and Cara, like myself and Carol Joy, my wife, I haven’t bought anything out of the multiple listing service in a very, very long time.
Jay Conner [00:18:36]:
All the properties we’re buying are what we call off-market properties that are being sold to us directly from, owners or sellers of those properties, not through the multiple listing service. I assume this is the same way. Right? Correct. Yep. Yep. And what was your source? How did you find it?
Jonathan Broyles [00:18:54]:
So we’ve got here in Lexington, we’ve got a reputable wholesaler. And so we located this particular property through a wholesaler that we’ve purchased multiple other properties through as well.
Jay Conner [00:19:06]:
Okay. Well, there’s a big takeaway for everybody who’s watching and listening, and that is to find these off-market properties. One way to do it and the way I look at it, Jonathan, is there’s no marketing expense at all until you buy a property. So, you know, you’re not spending any marketing on getting a buyer’s list or having a relationship with wholesalers that can bring deals to you. So the wholesaler brings the deal to you, and then what happens next? Let’s go over it step by step.
Jonathan Broyles [00:19:39]:
Yeah. So we we saw this particular property on the wholesaler’s website. I reached out to my contact there to see if it was still available. And so we arranged a time for us to go take a look at the property. And we went and looked at the property. It had it is it’s a very, very desirable area of our community. And so we knew from the very beginning at looking at the property that we had very good potential here if we could get the numbers to work. So our first step was to go take a look at the property and look at it in detail.
Jonathan Broyles [00:20:21]:
And so I went and looked at it myself to begin with, walked through the property, and it needs significant repairs. So, the level of repairs is greater than I can estimate, an accurate rehab for. And so I went ahead and reached out to my contractor to have him come walk the property with me, which we’ve done two times since then. So, yeah, we looked at the property first and then really started to dig in, putting aside all other numbers of what they were asking for it. We hadn’t we weren’t able to come up with a purchase price yet because it depended on, the scope of rehab. So getting that number first was a really important piece for us to understand how all of the other numbers in this process would fall into place.
Jay Conner [00:21:20]:
So what did you do so we know the repaired value? So we’re gonna share with the audience here how we came up with, what’s the maximum allowable offer we could make when paying all cash. So what were the repairs estimated by your contractor?
Jonathan Broyles [00:21:36]:
Three hundred and twenty thousand dollars.
Jay Conner [00:21:39]:
Okay. $320,000. So we know what the after-repaired value is. I’m gonna use $1,250,000. I know you’re conservative saying one but between 1.1, 1 point 2 5. Let’s say it comes in at 1.25, and that’s what you sell it for. So to come up with the maximum allowable figure that you could offer, how about sharing that formula with the audience, and your new potential private lenders?
Jonathan Broyles [00:22:13]:
Yeah. So on this property and, Jay, I would just say we based our numbers on the 1.1 because as you said, we do try to be as conservative as we can to make sure that we are providing safety for our private lenders.
Jay Conner [00:22:29]:
Okay. Well, look. Well, we can stick with that then.
Jonathan Broyles [00:22:31]:
That’s where the safety comes in for us, and we’re very aware of that and very careful to make sure that we’re not overleveraging ourselves. So on this particular property, with an after-repair value of 1,100,000.0, we’re willing to go up to an 80% loan to value instead of a 75% just because the numbers continue to stretch and give a little bit more cushion there as the after repair value goes up. So basing all of our numbers on the low end of that ARB of 1,100,000.0, 80 percent of that is our maximum loan to value, which comes to 880,000.
Jay Conner [00:23:14]:
Okay. 880,000 would be the maximum loan amount. So on this property, there’s still a 20% equity cushion, which is by far gracious conservative, due to the dollars. So the maximum offer that you would make on this property, take 1,100,000.0, multiply that times 80%, and then subtract your repairs. So let me just run that step by step. 1,100,000 times point 80%. Of course, that’s coincidentally both the maximum amount to borrow, and we use the 80% in our formula on our maximum offer. So then we’re gonna subtract estimated repairs.
Jay Conner [00:24:02]:
And you said those were 320,000. So that gives when paying all cash, that gives a maximum amount, of the purchase price at $560,000. And I think that’s what your purchase price is. Right?
Jonathan Broyles [00:24:18]:
That’s exactly right. Yep.
Jay Conner [00:24:20]:
Okay. So you got a purchase price of $560,000 Now, let’s talk about the anticipated profit less carrying cost, 1,100,000.0. So overall, we’ll we’ll project the adjusted or projected gross profit. 1,100,000.0 minus a purchase price of 560,000 minus estimated repairs of 320,000. That’s going to give a projected profit of $220,000 less carrying costs and interest that you’ll pay to your private lender. If you sell in the multiple listing service, less your realtor fees. And so, you know, even with all that, you should anticipate have you run to the bottom dollar what you anticipate the profit to be even with carrying costs?
Jonathan Broyles [00:25:13]:
I have.
Jay Conner [00:25:14]:
What have you got?
Jonathan Broyles [00:25:15]:
So if we sell it at the 1.1, the lower end of our arve, after all of our additional costs, carrying costs, as you said, our interest to our lenders, our realtor fees, we do in or we do plan to list this on the MLS with our realtor. So subtracting all of those out as well, selling at the low end of the ARV, we’re anticipating 106,000. And if we sell on the higher end of the ARV, we’re anticipating 200 and almost 250,000 in terms of business profit on this one property. Yes.
Jay Conner [00:25:50]:
Well, and that’s a win-win. Your private lender is gonna earn a lot of interest or your private lenders. You can have multiple private lenders, of course for the deal. You know, you don’t, you don’t have to have someone, have the entire investment amount and you have multiple private lenders, being secured by the same property and still giving everybody a conservative position, in this case, not borrowing more than 80% of the, after repaired value. So, you’re I know you’re still in the contract, looking to close in a very, very short period. I know you’re just sort of starting into the deal, but, have any lessons learned from this deal yet that you would have done anything different or no lessons learned from this one yet?
Jonathan Broyles [00:26:39]:
Maybe two lessons. One really important lesson, in terms of negotiating your purchase price. As Jay worked back through the numbers and we knew what our maximum loan to value was on this particular property, which was 880,000, subtracting out the rehab costs that we had already gone through and got a detailed walkthrough and quote from our general contractor knowing that that was 320,000, that those two numbers establish our maximum allowable offer, which we knew could be no more than 560,000 to purchase the property. The lesson learned on this is the wholesaler had this particular property listed for 672,000. So we were able to get them to come down a hundred and $12,000 which is a pretty significant amount, especially for a wholesaler to come down. They had to go back and renegotiate with the seller, to accept that lower amount. But, ultimately, we stuck to the numbers that provided the safety for our investors and the safety for our business, and the wholesaler ultimately was able to come down and meet us where we needed to be met.
Jay Conner [00:27:57]:
So how do you think the offer was justified at 560 being so much less than 67? Well, there’s a big takeaway right there. Regardless of what the asking price is, you let the math make the decision and run the numbers. And if you want the property, you still make the offer, but you have to justify that offer. Would you say the justification primarily came into the scope of the renovations?
Jonathan Broyles [00:28:25]:
Absolutely. Yeah. Yeah.
Jay Conner [00:28:27]:
Yeah. Well and, you know, when you’re talking with a seller and negotiating, of course, in this case, it was the wholesaler doing the negotiating. But, you’re not you’re not just coming up with offers, you know, out of your hat. I mean, you’re justifying the offer with the formula that you use, to pay for a property. Yeah. And you wanna keep your I’m going go ahead.
Jonathan Broyles [00:28:48]:
I was just gonna say we make promises to our lenders. And so we can’t go higher than those limits because those are the promises that we make to our lenders. And in some ways, that even helps us in negotiating these deals to let the seller know whether it’s a wholesaler or just a regular homeowner who’s selling to know we’ve got specific limits to what we can do. And it’s a very nonemotional decision that’s based very much on the hard numbers to make sure that it’s a wise decision for us and all involved.
Jay Conner [00:29:21]:
There you go. But once again, Jonathan, let’s give out your contact information, to the audience. And so let’s give that out and then we will call this a wrap.
Jonathan Broyles [00:29:31]:
Alright. So the website that you can go to is www.goldenrodinvestments.info. And then similarly, my email address is gonna be jonathan@goldenrodinvestments.info.
Jonathan Broyles [00:29:51]:
And my phone number is (859) 388-4660.
Jay Conner [00:29:59]:
Wonderful. Jonathan, thank you for sharing, your and Cara’s journey, and the details of this particular deal. And, again, whoever’s listening to this show, if you have an interest in getting some higher rates of return safely and securely, be sure to reach out to Jonathan and Kara, and you’ll be glad you did. Thanks again, Jonathan. God bless you.
Jonathan Broyles [00:30:22]:
Thank you.
Jay Conner [00:30:25]:
There you have it, my friend. Another amazing episode of Raising Private Money. I’m so glad you decided to join us. And to ensure that I can continue to have amazing guests join us here on the show, be sure to like, share, subscribe, and leave a five-star review. And if you happen to be watching on YouTube, be sure and click that bell so you don’t miss out on upcoming episodes. I look forward to seeing you right here on the next Raising Private Money.
Narrator [00:30:56]:
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.