***Guest Appearance
Credits to:
https://www.youtube.com/@creativefinanceplaybook
“Private Money Mastery: How Jay Conner Transformed Real Estate Investing”
https://www.youtube.com/watch?v=R9yBCTSMkZU
If you’re a real estate investor (or striving to become one), the challenge isn’t always about finding the right property. More often, it’s about finding the money to fund your deals, especially when traditional financing decides to turn off the tap, and that can happen faster than you think.
On a recent podcast episode, seasoned investor Jay Conner sat down with Jenn and Joe Delle Fave to peel back the curtain on the game-changing role private money played in his real estate business—an approach that not only rescued his investing career but tripled his business during one of the most trying economic times in recent history.
The Moment Everything Changed
Jay Conner, along with his wife Carol Joy, had been successfully investing in single-family homes in Morehead City, North Carolina, since 2003. Like many, he relied on the steady comfort of a bank line of credit to fund his deals. That all changed in January 2009 at the height of the financial crisis. Without warning, his bank (and trusted banker, Steve) pulled the plug: his line of credit was closed, and new loans to real estate investors dried up overnight.
Faced with two lucrative deals under contract and no way to close them, Jay’s back was against the wall. But rather than seeing an insurmountable problem, he asked the transformative question: “Who do I know that can help me with this problem?” That question led him to an introduction to private money—and ultimately, to financial freedom.
What Is Private Money Lending?
Private money in real estate refers to funds lent by individuals (not institutions) to investors, typically secured by real estate. These individuals often don’t even know they want to be lenders until someone shows them what’s possible, like using their retirement accounts (self-directed IRAs) to earn outsized, secure returns.
For Jay, learning about private money meant a total mindset shift. Instead of begging the bank, he became the one offering an opportunity. He began teaching people in his network—friends, church members, business contacts—about private lending. No hard selling, no desperate asks. Just education and a willingness to be transparent about how the process worked and the secure, solid returns they could earn.
The Power of Private Money: How It Changed the Game
When Jay started implementing private money strategies, the results were immediate and dramatic. He raised over $2 million in new funding in under 90 days. Within a year, his business had tripled, even as many other real estate investors were leaving the business entirely due to a lack of financing.
Jay explained that private money brought several advantages:
- Flexibility: The investor sets the terms, not the bank. That includes interest rates, payment schedules, and what deals get funded.
- No Limits: Unlike bank lines of credit, private lenders are only limited by their comfort and resources, not an arbitrary ceiling.
- Speed: Jay has closed deals in as little as five days, a feat impossible with institutional lenders.
- Profitability: In his market, he achieved average profits of $82,000 per deal, doing only two to three deals a month, thanks largely to the reliability and ease of private funding.
Teaching, Not Selling
Jay’s secret sauce is in his approach: separate the teaching about private money from pitching a specific deal. He positions himself as a guide and trusted resource, only calling interested lenders when he has an actual investment for their funds. “Desperation has a smell,” Jay says—and investors can sense it. Education first, deal second.
Final Thoughts
Jay’s story is both an inspiration and a clear roadmap for investors who want to scale their business on their terms. Private money isn’t just for the pros or the well-connected; it’s a learnable, repeatable skill that anyone can cultivate. As Jay puts it, “Work on the real estate between your ears”—change your mindset, and you’ll unlock the money, the deals, and the freedom you’re after.
10 Discussion Questions from this Episode:
- Jay Conner describes a “pivotal moment” in his business back in 2009 when the banks stopped lending—how do you think adversity or sudden changes in the market can become opportunities for investors?
- Jay emphasizes the importance of “teaching, not asking” when attracting private lenders. Why do you think this approach is more effective than simply pitching for money?
- The episode outlines the benefits of investing in smaller markets versus large cities. Do you agree with Jay’s “big fish in a small pond” strategy? Why or why not?
- What misconceptions about private money do Jen, Joe, and Jay address during this conversation?
- Jay shares that he typically borrows up to 75% of the after-repair value (ARV) of a property. What are the advantages and potential risks of this approach?
- The discussion highlights the importance of separating the conversations about educating potential lenders and discussing specific deals. How might combining these conversations backfire?
- Jen mentions that private money sounds intimidating, but Jay breaks it down simply. After hearing this, what mental barriers do you think investors commonly face, and how can they overcome them?
- The hosts ask about how Jay structures deals to bring home a check at closing. How does this compare to traditional bank-financed deals, and what impact could this have on cash flow?
- Jay mentions that about 47 of his private lenders had never heard of concepts like self-directed IRAs before he educated them. What does this suggest about the potential pool of private money lenders?
- Reflecting on Jay’s story about the recent oceanfront condo deal, what are the key factors that enabled such a fast and profitable turnaround, and how crucial was private money to making it happen?
Fun facts that were revealed in the episode:
- Small Town, Big Profits:
Jay Conner and his wife, Carol Joy, run their real estate investing business out of Morehead City, North Carolina—a town with only 8,000 people! Their entire target market is just 40,000 people, yet they still achieve average profits of $82,000 per deal. - The Power of Private Money:
Jay and Carol Joy have 47 private lenders (real people, not institutions!) funding their real estate deals. Every single one of these lenders first learned what private lending was through Jay’s “teacher hat.” - Business Tripled with Private Money:
Jay’s switch from relying on traditional bank loans to private money in 2009 resulted in his business tripling in just one year. The shift wasn’t planned—it was forced when his bank unexpectedly closed his line of credit with no notice.
Timestamps:
00:01 Introduces topic: raising private money for real estate deals.
00:29 Jay Conner, The Private Money Authority
00:50 Jay Conner Shares how private money tripled his business after 2009.
03:01 High profits are possible even in small markets.
05:18 The biggest blessing in disguise.
10:22 Mindset shift: borrowers set loan terms.
11:42 Educate contacts, never directly ask for money.
13:18 The “Good News” phone call.
19:43 “E + R = O” mindset (Event + Response = Outcome).
23:01 500+ flips, steady profits, mostly flips with some creative deals.
24:40 Explains getting paid at both purchase and sale.
29:54 Jay Conner’s 7-Day Private Money Challenge.
https://www.ThePrivateMoneyChallenge.com
37:22 Jay Conner’s Recent deal: $170k profit on an oceanfront condo flip using private money.
46:41 Jay Conner’s Free Money Guide
https://www.JayConner.com/MoneyGuide
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
YouTube Channel
https://www.youtube.com/c/RealEstateInvestingWithJayConner
Apple Podcast:
Facebook:
https://www.facebook.com/jay.conner.marketing
Twitter:
https://twitter.com/JayConner01
Pinterest:
https://www.pinterest.com/JConner_PrivateMoneyAuthority
How Private Money Transformed Jay Conner’s Real Estate Business
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 for 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.
Joe Delle Fave [00:00:29]:
Hey, everybody. Welcome to another podcast with your hosts, Joe and Jen. And today we have a special guest, a legend in many different areas, but one in particular we’re excited to talk about today is private money lending. And that’s Jay Connor. So thank you so much for coming on today, Jay.
Jay Conner [00:00:50]:
Absolutely. Jen and Joe, I’m so excited to be here. And the reason I’m so excited is because we’re going to be talking about my favorite subject, which is, of course, private money. And the reason I’m so excited and passionate about it is because private money has had a bigger impact than anything else that Carol, Joy, and I have brought into our business. It’s just, I mean, we tripled our business and our income when we started using private money back in 2009. So I can’t wait to dive in and talk about it and talk about exactly how I do it. You know, I tell people all the time, I got 47 private lenders, individuals, human beings just like you and me that are investing in our deals, loaning us money on our deals. And not one of those 47 private lenders ever heard of private money or private lending or self-directed IRAs until I put on my teacher hat.
Jay Conner [00:01:47]:
I started teaching people what private money is. I mean, they don’t even know what an accredited investor is. And so I teach and I practice all the time how to raise lots of private money without ever asking for money.
Joe Delle Fave [00:02:03]:
Well, and, and spot on, because that’s how we got introduced to you was through Ron the Grand and his crowd, because Ron was like, oh, I’m bringing Jay on. You guys did tons of presentations and education, like, for a long, long time. So not trying to blow your cover, but you’re not new to this, like, you’ve been doing it for a while, am I right?
Jay Conner [00:02:21]:
Yes, true. My wife Carol, Joy, and I started investing full-time in single-family houses back in 2003. So we’ve been full-time since 2003, and we started using private money to fund our deals in February 2009. So I haven’t relied on any institutional lenders or banks or hard money lenders or any kind of institutional money since 2009.
Joe Delle Fave [00:02:51]:
So before 2009, you were a full-time investor. You’re doing it with your wife. What was that like? You were flipping houses back then? And what part of the country are you doing this in?
Jay Conner [00:03:01]:
Yeah, this is all right here in eastern North Carolina. We live in a little teeny tiny town called Morehead City, North Carolina, population 8,000. Our total target market that we invest in is only 40,000 people. We do two to three deals a month. Our average profit now is $82,000 per deal. And I don’t share that to brag. I am not bragging when I share that, but I am sharing that to make a point. And the point is, you can make good average profits and not have to do many deals.
Jay Conner [00:03:36]:
And you don’t have to be investing in a very, very large market, where there are a lot of people out there who have that misconception that you’ve got to be in the huge market. I’d rather be a big fish in a small pond and just dominate the market. I mean, there’s, there’s a great argument to be made to be investing in the outlying areas or the suburbs or smaller areas, because that way you don’t have to deal with so much of the competition like most real estate investors do.
Joe Delle Fave [00:04:06]:
And averaging $82,000, every single deal you’re doing is a fantastic number.
Jenn Delle Fave [00:04:12]:
So on two to three deals as well, instead of having to do a crazy high number, that’s, that’s incredible. Sometimes people get intimidated. I need a large team. I need to do, you know, 20 deals a month. But I can’t wait to hear a little bit more about how you’ve been able to structure all this.
Jay Conner [00:04:28]:
Sure, Absolutely. Well, it didn’t happen overnight, that’s for sure. I pretty much have to screw up everything and mess it up bad to start with itofigure it out, to get it, you know, to get it smoothed out. So I’m glad to share my mistakes, the good and the bad, and the ugly, so other people don’t have to make the same mistakes.
Jenn Delle Fave [00:04:50]:
Well, that’s what we’re here for, you know, sharing our journeys along the way because, man, it is a lot going on left, right, and other. Keeping up with everyone and everything. So you. Yeah, let’s talk about this private money. I, I’m very intrigued.
Joe Delle Fave [00:05:02]:
Well, yeah. Cause I want to talk about like, what was that shift? So you’re doing deals before that. So before, like 2009, ish, you were doing it probably like lenders of banks and credit and all that stuff. But then, or however. But then, 2009 is when you guys made that shift to private money.
Jay Conner [00:05:18]:
Yes. And it’s been my experience and what I have and what I have observed with most other real estate investors, there’s, there’s pivotal moments, there are, there are triggers, there are things that happen in your life, things that happen in your business that changes everything and can change everything for the better. Well, here’s what happened. In other words, I just didn’t wake up one morning and say, hey, I think I’ll go learn about private money and go raise some money. No, it was out of need. It was out of need of having to do something different. So from 2003 to January 2009, as I said, I just relied on the local bank to fund my deals. That’s all I knew to do.
Jay Conner [00:06:03]:
I thought that you just had to go, you know, apply. You had to go to the banker. You had to get on your hands and knees and put your hands underneath your chin and say, Please fund my deal and you know, raise your skirt so they can look at all your assets and look at your financial statements and your credit score and all that stuff. I thought that’s, that’s the only way to go. Well, I caught. So that, and that worked great. That worked great for me for six years, until January. What was that pivotal moment? So until January 2009, I had two houses under contract.
Jay Conner [00:06:42]:
I thought I still had a line of credit at the bank. And so I called up my banker, whose name was Steve. And, the bank that they’re no longer in business, they got bought out anyway. It was the BB&T Branch bank, and the Trust was the bank that was funding my deals. And I called up Steve, my banker, and we had a little chat. And then I told him about these two deals that were representing over a hundred thousand dollars in profit, and the funding required for the deals. Well, Steve and I had had this same kind of conversation many, many, many times for six years. And so I learned like that, I mean, in a second, Steve informed me that my line of credit had been closed with no notice and that the bank was no longer loaning money out, commercial money, out to real estate investors.
Jay Conner [00:07:30]:
And so I said, Steve, what in the world are you telling me? Why has the bank shut my line of credit down? I’ve always been, you know, good on my payments, good relationship. 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 because now I have these two deals under contract that I can’t fund. So I hung up the phone, and I sat right here at this very desk. And I’m going to share a question, Jen and Joe, right now that I asked myself. And this question that I asked myself can help fix any problem that your audience is facing right now, whether it’s personal, relationships, financial health, career, or anything that matters. And here’s the question I asked myself. I said, Jay, who do you know? It’s not how, it’s who. Who do you know, Jay, that can help you with your problem? And by the way, these people running around saying, every problem’s an opportunity.
Jay Conner [00:08:33]:
I want to throw up. I didn’t have any opportunity. I had a problem. I didn’t have a way to fund these two deals. And so when I asked myself that question, Who do you know, Jay, that can help you with your problem? I immediately thought of Jeff Blankenship, a good friend of mine and Carol Joy’s. He was living in Greensboro, North Carolina, at the time, and he was investing in real estate. So I called him up, and I told him about my conversation that I just had with my banker. And he said, Well, Jay, welcome to the club.
Jay Conner [00:09:04]:
I said, What club is that, Jeff? He said, the club of losing your line of credit at the banks. And my bank just shut me down last week. I said, Well, Jeff, how are you going to fund your deals? And he says, Well, Jay, have you ever heard of private money? I said, no. He said, Have you ever heard of self-directed IRAs and how regular people, individuals, can use their retirement funds to loan money out and be a private lender and fund your deals? Have you ever heard of that? I said, no. He says, well, there’s this gentleman down in Jacksonville, Florida, by the name of Ron Legrand. And Ron Legrand can teach us about private money. I said, Well, Jeff, what is private money? He says, I don’t know. But Ron says, we can get a lot of it quickly.
Jay Conner [00:09:52]:
I said, okay, good, let’s go learn about private money. So in February, that was the next training. In February of 2009, that was my very first Ron Legrand training that I went to. And I went there to learn about private money. And I did. I learned what it was. I learned that it was all about a 180-degree shift in your thinking. I tell people all the time, it’s very hard to own real estate until you own the real estate between your ears.
Jay Conner [00:10:22]:
And so I learned quickly that this word about private money is not about applying. It’s got nothing to do with your credit score. And the biggest shift in my thinking was that in this world of private money, we make the rules. We, as the borrowers, make the rules. We set the interest rate, we set the frequency of payments, and it’s non-negotiable. I mean, it’s our program. And so I learned about it. I put my program together, I came back home, and what did I do? I didn’t ask anybody for money.
Jay Conner [00:10:56]:
I put on my teacher hat and started with my network. People that I go to church with, people in my cell phone, people that I consistently see every week. I joined Business Networking International. I blew up the size of my network very, very quickly. And so I was able to attract, without asking for any money, I was able to attract $2,150,000 in new funding available to me of private money in less than 90 days. And so people will ask, they say, Jay, that sounds fantastic, but I’m still confused. How do you get your deals funded, and you’re not asking for money? So here’s the secret sauce. Here’s the secret sauce.
Jay Conner [00:11:42]:
We separate the conversations with new potential private lenders, people in our network. We separate the conversations of teaching what private money is, how they can get high rates of return safely and securely. And I’m not asking, I’m sharing, right? And I’m doing this throughout my daily life, like I’m meeting somebody for coffee or I’m having lunch or whatever. And so I share the program on how they can become involved as a private lender. And if they’re interested, they tell me I don’t have to ask them. And if they’ve got retirement funds that they’re not happy with the kind of returns they’re getting. I’ll introduce them to the representative at the self-directed IRA company that I have a relationship with, and they’ll answer any questions about that. So when they like the program, they tell me how much they’ve got to invest.
Jay Conner [00:12:36]:
And then here’s part of the secret sauce. I’ll say, all right, I’ll put your work together. I’ll put your, I’ll put your deal to work. I’ll put your money to work for you just as soon as possible. Just as soon as I find a deal that might be a week, two weeks, or months, or whatever, I’ll call you up when I’ve got that for you. So then, you know, desperation has got a smell to it. If I talk about a deal and the program in the same conversation, I’m already sounding desperate, right? So I call them up and here’s the exact scripting I’m going to give you the scripting right now. I call them up with what I call the good news phone call.
Jay Conner [00:13:18]:
The good news phone call. And I call them up, we have a little chit chat, and let’s say, Jen, you’re one of my new private lenders. I say, Jen, I got great news for you. I can now put your money to work. I’ve got a house in Newport under contract with an after-repair value of $200,000. The funding required for the deal is 150,000. Closing is next Friday. You’ll need to have your money wired to my real estate attorney’s trust account, which is going to do the closing by next Thursday.
Jay Conner [00:13:49]:
I’m going to have my attorney email you the wiring instructions. That’s the end of the conversation. The most stupid thing I could, I would say, is Jen, do you want to fund the deal? Well, of course, you want to fund the deal. You’ve been waiting for the phone call that I promised you I’d call you as soon as I could put your money to work. And another important note, if you as my new private lender, if you have moved your retirement funds or a portion of your retirement funds to a self directed IRA company at my recommendation and I introduced you to that company and you’ve moved your retirement funds over, you’re not making any money until I do put your money to work. So I’m ethically bound to give you the good news phone call, or your money’s just sitting there making no money. So again, it’s very, very important to understand that, you know, the worst time to be trying to raise money is when you need it, right? Is when you need it for a deal. So teaching, having that mindset of having a servant’s heart and just sharing with people what you’re doing, let them know about private money, and then letting them know about a deal when you’re ready to put their money to work.
Jay Conner [00:15:05]:
Very, very important to understand those steps.
Jenn Delle Fave [00:15:09]:
Wow.
Joe Delle Fave [00:15:11]:
I mean, you just gave like a whole mini-course for everybody listening. So if you’re listening to this and.
Jenn Delle Fave [00:15:16]:
You’re just stop and rewind and get your notepad and just jot all those in the script, how to, how to separate those two things, like holy smokes, like you just made it. What? Sounds a little intimidating. I’m not going to lie. Private money sounds like, oh, that’s for other people, but you just really broke it down. It’s not. Doesn’t sound that scary now.
Jay Conner [00:15:33]:
You know, private money is really easy. It’s really simple as long as you understand this whole mindset and the process that’s involved. And, you know, it’s not, I mean, it, it’s not overnight necessarily. I mean, you’ve got people that you’ve got connections with that are just sick and tired of, you know, they’re not getting any returns on their money. But I’ve got some other private lenders that, when I first told them about it, it might be a year or two down the road before they were ready. So that’s why you always want to be sewing. It’s all about sowing. It’s not about reaping.
Jay Conner [00:16:11]:
That’s why you always want to be planting those seeds. Because you never know when somebody’s going to be ready or who they’re going to tell. You know, of those 47 private lenders that we have, there are quite a few of them. I’ve never met them in person. They’ve been referred to me by other private lenders who are funding our deals. And so we’ve just talked over the phone, never met them in person. And that will happen automatically. You’ll start doing business with individuals and, you know, they talk, they tell their, they tell their friends their connections, you know, about this great, you know, program.
Jay Conner [00:16:48]:
And so the word spreads.
Joe Delle Fave [00:16:50]:
So I want to go back in time. So now it’s 2008. You have the light bulb moment, or nine. In 2009, you had the light bulb moment. Oh, my gosh. There’s this thing called private money. You start putting it to work. What you learned, you went and got the education from one of the best was Ron Love them.
Joe Delle Fave [00:17:07]:
And then obviously now, like, what did that do for your business? Like, did it, like, now you’ve got access to funding? Like, what was that? Like, is that why?
Jay Conner [00:17:16]:
Yeah, so the immediate benefit was. And there are lots of benefits, lots of reasons. I love private money over instead of institutional money. But one huge immediate benefit is that our business tripled in the first 12 months of 2009 when we started using private money. And here’s why it tripled. It tripled because you had all those foreclosures that were going on in i009. After all, people had all these mortgages that should never have been approved for a mortgage. So you got the foreclosures flooding the market, and simultaneously, the banks stopped loaning money to real estate investors. So if you were going to invest in those foreclosures, you had to have other funding because you weren’t going to borrow it from the bank.
Jay Conner [00:18:07]:
You either had to have your own money or you had to, you had to have private money. So I was able to pick and choose because of private money, all those deals, which ones I wanted to do. So that’s the main reason that our business tripled. Another reason that our business increased and still has today, right on through now, is because I had a limit to my line of credit at the bank, and so I’d have deals come across my desk. Now, of course, you all know if you can buy creatively, you’re going to buy creatively. If you can buy subject to the existing note, you will. If you can buy with seller financing, you will. But as you all know, the majority of the deals of off-market deals or any deals require all the cash.
Jay Conner [00:18:54]:
And so with private money, there’s no limit to the amount of private money you can have and use. There’s no limit to the number of private lenders with whom you can do business. So it’s like the handcuffs were taken off, the financial handcuffs were taken off. So I didn’t have to pass over any deals that I wanted to do when I was borrowing money from the bank, and I had a limit to my line of credit, I passed on deals all the time. I couldn’t wholesale them because there’s nobody around here to wholesale them to. Right.
Joe Delle Fave [00:19:28]:
So you, you got a business, you see a shift happening, you pivot, quickly adapt to what’s currently going on in the market. And with that. Right. Pivot three extra businesses. When a lot of investors back then were going out of business.
Jay Conner [00:19:43]:
Absolutely.
Joe Delle Fave [00:19:46]:
You know, this is the part of, you know, getting around the right people because if it wasn’t for your friend who even recommended going to the training, like, who knows what would have happened? You know what?
Jay Conner [00:19:54]:
It happened. Exactly, exactly. Yeah, I’m just going to share, I was just going to share a powerful post formula that I did not know I was using the formula when I executed and implemented what happened in that story that I just shared. But there’s a formula that I learned from Jack Canfield, co-author of all the Chicken Soup for the Soul series books. And, this formula is, is the following: this formula, which will help fix any problem, and the formula is E plus R equals O. Now, most people, and I’ll explain what that is, most people are walking around with a different formula, a different mindset. Most people are walking around with a different formula called E equals O. The E stands for event.
Jay Conner [00:20:45]:
Whatever that event is that happens in your life, whether you brought it into your life or you didn’t, something happens in your life. The event. Well, in my story, what was the event? I got cut off from the banks, right? So that was the event. Now, most people walking around are living with this formula. E equals O. The O stands for outcome or the result of that event, or how it is you’re experiencing life after that event. Well, that’s called a victim mentality. That’s also called not being 100% responsible for everything that happens in your life.
Jay Conner [00:21:20]:
So the better formula is E plus R equals O. E is the event. The R is your response to that event. And guess what? You can choose whatever response you want to whatever happens in your life. And it’s your response that dictates the outcome. It’s not the event that dictates the outcome, it’s your response to that event. So I had different responses that I could have done to the event. Being cut off from the bank.
Jay Conner [00:21:56]:
Well, I could have quit. I could have said, oh well, banks aren’t loaning money. Guess I’ve got to go to the house, right? Can’t be a real estate investor right now or anymore, or I could have and I did say, okay, what are the other options that we’ve got, so can help me with. My problem was the response that was going to take me down a road. And you know what, if I hadn’t responded to the event the way that I did, I wouldn’t be, I wouldn’t be here on your podcast.
Jenn Delle Fave [00:22:35]:
It’s so true. Such valuable information right there for sure.
Joe Delle Fave [00:22:39]:
And it’s really interesting. Like when you come on that fork in the road, like that one little turn could, you know, change the whole trajectory of your life. And so now here you are, you know, fast forward. I’ve seen you on stages with Ron. I’ve seen you have your things happening and your events, and things like that. So you’ve been doing deals a lot now over the last few years. Fast forward. Like, what’s business like today for you guys?
Jay Conner [00:23:01]:
Yeah. So we’ve now rehabbed over 500 single-family houses right here in our local area. Now that’s over some time. Of course, as I said, right now we’re doing, you know, two to three deals a month with the average profits of 82,000. But I mean that math works out. You don’t have to, you know, do a lot of deals. The majority of the deals that we are doing are flips because that’s where the big money is. However, when I buy a house on terms such as buying subject to the existing note or buying with seller financing, the general rule of thumb is that you buy on terms.
Jay Conner [00:23:41]:
Of course, we’re talking about off-market houses. I mean, there’s nothing in the multiple listing service. I mean, we have no inventory. When we put a house in the multiple listing service with our Realtor, I mean, there are multiple offers, and you know, it’s going right away. But the general rule of thumb is that when you buy on terms or buy creatively, then we’re going to sell on terms. You know, if the house doesn’t need a major rehab, you know, sell it on rent-to-own or lease purchase. But the majority of the deals out there require all the cash. So I don’t want to leave cash or private money buried in a property.
Jay Conner [00:24:19]:
So with that being the case, the rule of thumb is if you buy on terms, sell on terms. But if you buy with all private money, all cash, then you typically want to, you’re going to want to cash out, you know, get, get it, get it sold instead of leaving the money buried in that property.
Joe Delle Fave [00:24:35]:
Right. So write a big check to buy it, but get a bigger check back in a short time.
Jay Conner [00:24:40]:
Oh, let me tell you, that’s another reason I love private money, because I always bring home a big check when I buy the property. I mean, who wants to get paid by properties, right?
Jenn Delle Fave [00:24:54]:
Yeah.
Jay Conner [00:24:55]:
When I was borrowing from the bank, I had to, you know, take a large down payment, you know, to the closing day when I bought. But in this world of private money, we’re able to bring home a check when we buy. The phrase on my real estate attorney’s check stub is excess cash. And I love excess cash. Right. And so the way this works is I do not borrow more than 75% of the after-repaired value. I didn’t say 75% of the purchase price. Right, 75% of the after-repaired value.
Jay Conner [00:25:30]:
So if I’ve got, say, an after-repaired value of $200,000 on a single-family house, if it needs rehab of say 30 or $40,000, I’m going to buy that house all day long for either 80, 90, or no more than $100,000. Well, remember the formula, if I can borrow up to 75% of the after-repaired value? Well, 75% of $200,000. I can borrow $150,000 on that particular deal. Well, here comes $150,000 from my private lender being wired to my real estate attorney’s trust account for the closing. But if I’m buying it for a hundred thousand dollars, that’s excess cash that’s funded by $50,000. So I’ll bring home that $50,000. Well, you know, less some closing costs, and I’m going to use the majority of that 50,000 for the renovation, you know, for the rehab, and then I’ll keep most of the money on the difference of selling it and what I still owe the private lender because we do interest only or just accrue interest and not even make any payments when we’re borrowing private money. So that’s the way the cash flow works.
Jay Conner [00:26:42]:
I don’t know of another way to get a large infusion of cash into your checking account than using private money to fund your deals.
Joe Delle Fave [00:26:53]:
So, okay, if you’re listening to this and you’re like, whoa, like, what did he say? So Jay just broke down the technique. I heard you talk about this at a seminar, Ron, years and years ago. And you’re like, yeah, I actually get a check when I buy it, and then I get a bigger check when I sell it. I get another check then too. And I’m like, whoa, you’re getting paid twice on the flip, right?
Jay Conner [00:27:14]:
That’s right. Yeah, but.
Joe Delle Fave [00:27:16]:
And you found the numbers to fall into, so long as it fits this criteria and it works. And I think that’s the art of having private money, is you’re able to call these shops and make it a win for you, your lenders, too. Because now these folks who are lending you money they’re getting good returns on this money, right? They’re happy that you’re putting their money to work.
Jay Conner [00:27:36]:
Oh, yeah, I’m paying them 8%. And people ask me, they say, well, and by the way, I’ve been paying my private lenders 8% ever since February 2009, and I’m paying them 8% today. And they say, wait a minute, Jay, how are you paying your private lenders? How can you do that? How are you paying them 8% still today? And interest rates have gone up, you know, over the ceiling. How does that work? I said, well. I said, well, here’s the way it works. Before COVID, the 12-month average certificate of deposit yield at the local bank got down to 0.17%. Well, you can go down to First Citizens Bank right here on Bridges Street in Morehead City, and you can get a 12-month CD now for 4 1/2 percent. Just checked it day before yesterday, so, so that’s the difference.
Jay Conner [00:28:31]:
And they say, Jay, I mean that’s going up multiple, multiple times since COVID, I said, that’s right. I said, there are two reasons why I still pay my private lenders 8%, the same thing I was paying them in 2009. They say, well, what’s that? I said, well, first reason is I make the rules, not them, right? I make the rules, I set the interest rate. And the second reason that my private lenders love me is that 8% is still about twice as much as you can get at the local bank. And I’m not borrowing unsecured money. We’re collateralizing it with the real estate. So that’s, that’s the thing that you know, you want to get straight in your mind if you’re listening to this podcast, is that we make the rules. You always bring home a big check.
Jay Conner [00:29:20]:
Your credit score’s got nothing to do with it. There’s no limit to the amount of money you can have. And there are no appraisals. I never have to get an appraisal on the property. I just use my realtor’s comparative market analysis. And there are about 20 reasons I love private money. But right there, what I gave you is a big enough reason. If that’s all there was, lI ove it.
Joe Delle Fave [00:29:42]:
I mean, like, wow, crash course on this. So like, okay, I’m a real estate investor. I’m listening, I’m watching. Like, how do I get started in this, Jay? Is there, like, more like how do I learn or what? What is that?
Jay Conner [00:29:54]:
Absolutely. Well, thank you for asking, Joe, because I just launched my brand new seven-day private money challenge, and here’s the way it works. I’ve just recorded these videos and they’re only 15 to 20 minutes long. And as soon as someone enrolls in the seven-day Private Money Challenge, you will immediately receive the first video in your email inbox. And then the next six days at 10:00 am Eastern Time, you’ll get each subsequent training, I promise you. Come join me in the challenge. You’ll learn how to raise private money very, very quickly. And I promise you we’ll have a lot of fun while we’re doing it together.
Jay Conner [00:30:37]:
So I got a simple way for you to get enrolled. You take your cell phone and you type the word challenge, just the Word challenge. C H A L L E N G. Type the word challenge and text it to the number 5 8885. So again, come join me in the seven day private money challenge and you just take your cell phone, type in the word challenge and text the word challenge to the number 58885 and I’ll send you an immediate reply and you have the URL you can click on and come join me for a bunch of fun and get a bunch of money.
Joe Delle Fave [00:31:20]:
Well, you know what, I’m going to take you up on that offer myself. And the reason why I say that is because Jen and I have a self-directed IRA. We’ve had, you know, we do a lot of deals in there. We do a lot of deals that we’re buying with seller financing or lease purchase, or I’m sorry, with a wrap. And then we do the lease option when they move in.
Jenn Delle Fave [00:31:40]:
So buy in terms, selling terms, same as you.
Joe Delle Fave [00:31:44]:
But you know, what we’re finding is, and I don’t know if there’s just fewer investors out there or what, it’s looking like high rates are scaring people away. But we’re finding quite a fair number of deals right now. And yes, yeah, I want to be able to take some of these down, and that’s why we’re going to start getting to private money. And this is where I’m like, this is perfect timing.
Jenn Delle Fave [00:32:04]:
Absolutely. And I don’t want to deal with the banks at all. Like, so what you’re saying, I’m like, I’m mentally taking notes. I’m gonna go back and listen to all this, and we’re gonna sign up for this challenge.
Jay Conner [00:32:13]:
That’s awesome. That’s awesome. Well, I can’t wait to see you in there. I promise you, you’re gonna love it. One of the sessions that I do in the seven-day challenge because, I, it just occurred to me recently, I can teach people how to get a lot of private money. But one thing I had not been, I hadn’t been answering the question, and that is, well, really, how much private money do I need? Right? I mean, really, how much do I need to attract? So I do this session in the challenge that’s called How to calculate your freedom number. And so I will walk you right through the process. There’s a document that you download from the challenge and you’ll, you’ll, you’ll go through the exercise and you’ll figure out within less than 20 minutes exactly how much private money that you want to attract to fund the number of deals that you want to fund, that’s going to give you the freedom and the lifestyle that you want.
Joe Delle Fave [00:33:12]:
Well, and I love that too, because, you know, we have a lot of our ourselves and a lot of our clients and, you know, even just other investors that we run into that, you know, I’m going to buy a deal on terms and the seller says, Joe, I need five grand down, but you need another 5,000 for closing costs and you need an insurance policy and, you know, you got to put the utilities and, you know, you might need $15,000 for that deal. And, when you’re looking for somebody who’s going to rent and they’re going to do a lease option, they’re going to probably have 15, 20, 25, 30, sometimes more. So, even sometimes, just finding one of your private lenders who might lend you that 15,000, until you find your renter who’s going to do rent-to-own two, three months later, you can now have even that. So this is why private money could go great for fix and flips. It could go great for some of these deals where maybe you’re buying it with seller financing or terms, and that seller might need a small down payment, and you feel like I can get that back for my renter once they move in and do rent-to-own. Or you’re going to do seller financing, and they’re going to give you a big down payment, and you could pay that back. I just think that opens the door to giving more options. Doesn’t mean you have to go spend all that private money right away, but it’s going to open up the door to more options.
Joe Delle Fave [00:34:25]:
Right. And that’s what this is a benefit of. And to have that money sitting there at fair terms, your people are happy. They’re going to get a good return on it, too, and you’re able to do more deals from it. It’s a win for everybody involved.
Jay Conner [00:34:39]:
It is. And I’m so glad you brought that up, because I use private money just like that all the time in what we call second position. So we’ll use smaller amounts of private money, and the private lender still has their promissory note, still has their mortgage or deed of trust collateralized in that note, but they’re in second position underneath that first mortgage that you either bought, you know, subject to the existing note or on a wrap. So I’m so glad you made that point, Joe. It’s, it’s you can combine the two strategies of buying on terms and using private money to make the deal work.
Joe Delle Fave [00:35:16]:
Yeah, because like we just bought a deal in upstate New York. The seller wanted 10 grand down. I think we got like 7,000 in closing costs. So we needed 17,000 to buy the deal we knew we were going to close. We started marketing in the area, you know, rent-to-own, coming soon. And our renter gave us the first month’s rent and the 15,000 nonrefundable. We got a check for 17 7. So we got all that money back.
Joe Delle Fave [00:35:43]:
And on that one, it was great. It was only like a two-day separation. Usually it takes like a month or two or three or sometimes more, depending on where it is. That was a quick one. But to have that kind of capital to be able to just do that.
Jenn Delle Fave [00:35:56]:
Well, not to deplete your cash because it’s nice to know that, like you’ve got it there, but you have other options because. Cause you don’t want to always have like once you. If you’re starting to pick up steam, you don’t want to have to rely on what’s in your bank account to be able to utilize private money. That’s going to be just another game changer for so many listening, I’m sure.
Jay Conner [00:36:15]:
Absolutely.
Joe Delle Fave [00:36:18]:
So if you’re just getting started and you’re like, okay, we, we know one of the big rules of real estate, it does take money to make money. But also, one of the next rules is that you could use other people’s money. So, not having money is not an excuse. You know, Jay’s going to go over some techniques and how to start putting to work other people’s money and helping them, too, but also helping your career take off. You know, the first deal that I did, I did a double closing. You know, my lawyer actually without. I didn’t understand what was going on. But he fronted the first money because they had the certified check sitting there at the same time.
Joe Delle Fave [00:36:53]:
But that’s really what happened on that deal because my friend bought a course of the grands back in 2000. That stuff worked back then. Still works today, too. Right? So great. So we got the challenge. Somebody’s gonna get to join that, learn more about how to raise private capital, things like that. So do you have any interesting stories or a deal that you could just, you know, share with the audience? I know you probably have a plethora of them, but is there just like one, like hey, you know, like this has been a great example, or?
Jay Conner [00:37:22]:
Sure. Well, how about one I just did five weeks ago and just sold it last week that fast? And it was all because of private money being able to make it happen. So the seller’s night. So this is an off-market, off-market property. Oceanfront condominium. Oceanfront condominium, top story right here at Atlantic Beach, North Carolina. So this owner, this seller, responded to one of our Google Ads.
Jay Conner [00:37:51]:
And what I love about Google is that the sellers are looking for us. They’re going into Google and they’re typing, you know, one of 75 different magic phrases, such as sell my, how to sell my house fast. You know, sell my house on and on and on and on. So anyway, they found us on one of our Google Ads, and so we responded, of course, right away. And what we learned was that this owner had two major motivations in selling that property very, very quickly. One was that it was an inherited property. Both his parents had passed away, and he didn’t even live here. He doesn’t even live here in the area.
Jay Conner [00:38:34]:
You know, I didn’t have any interest in using this condominium. And so the other motivation is that it was going to the courthouse steps as a foreclosure being sold in less than two weeks of him finding us on Google. So you’ve got a foreclosure going to the courthouse steps, and it’s an inherited property. So he responded to our marketing, found us on Google. We talked to him, and here are the numbers in the situation. Bought it all cash. And I bought it in five days from him calling in five days, because we had to stop that foreclosure sale. Right? So if I mean, you can’t, I mean, unless you’ve got all the cash or you’ve got private money, there’s no way you’re going to close a deal in five days from the time they contact you.
Jay Conner [00:39:26]:
And you’ve got to have a relationship with your real estate attorney or your title company, whatever you know, you’re using to close deals, you’ve got to have a relationship with them to get the closing done that quickly. Because I’m telling you, time kills deals. So the offer was $425,000. And my realtor had told me that the value that we could put in the multiple listing service for the after-repaired value was, might as well say, 600,000, 525,000. I mean $595,000. So we went and looked at the property right away. The rehab, the renovation, was a whopping $11,000, and it all took. $11,000.
Jay Conner [00:40:11]:
I mean, all it was was interior paint. I mean, there’s no home inspection on a condominium that’s got HOA, right? And so interior paint and fix some scuffs, etc. In the Sheetrock. And it was already furnished totally with luxurious furniture, and paintings on the wall. Every room in the condominium had an ocean front view. I mean it’s like you were on a cross cruise ship looking out over the property. So we bought it, and we got our music video put together.
Jay Conner [00:40:43]:
We always use a music video when we go to the multiple listing service. And here’s a little secret. It’s a big secret. We go to the multiple listing service with our Realtor on Mondays with the music and video, the pictures, and everything under a category called coming soon. Which means they can see the price, they can see the music video and the pictures, but they can’t get into the property until it goes into active status. So, coming soon on money, you see, I want to build up demand. And so on Friday, we will go active. Well, on Thursday night before going active, I had two all-cash offers.
Jay Conner [00:41:22]:
No appraisals, no nothing. Sight unseen. They hadn’t even had him inside the property. They were looking at the music video. Well, those were low-ball offers, didn’t accept either one of those. But then on Friday night, the first day we went active, I had it listed for $595,000. The first offer came in, all cash, Friday night for 615,000. And then an offer right behind that came in all cash, closing in 10 days, $628,000.
Jay Conner [00:41:56]:
So we sold that oceanfront condo for $628,000. I bought it for 425,000. That’s a nice little $200,000 thing, right? Had the eleven thousand dollars in interior paint. I did pay my realtor 5%, and happy to do it. Paid, paid him a little over thirty thousand dollars for the sale. So that was a hundred and seventy thousand dollar profit in five weeks.
Joe Delle Fave [00:42:24]:
The time is a bell ringer right there. Wow.
Jay Conner [00:42:27]:
Now what’s the lesson? What are the lessons here? Number one, if I didn’t have access to private money, I couldn’t have closed on that deal before, before the foreclosure sale. Right. But I closed in five days. So, private money was the key. Having that Google Ad in place was key. Having a relationship with my real estate attorney, with whom I could do a fast closing, was key. And then having that music video and professional pictures and, and going coming soon on Monday and going active on Friday, all that just worked together to make the deal happen.
Joe Delle Fave [00:43:03]:
My gosh. And knowing you, you probably got a big old check just for even buying the deal.
Jay Conner [00:43:08]:
Of course I did. I didn’t borrow just $425,000. I think I borrowed, like, I think I borrowed like 500. Bought it for four. Yeah, I think I borrowed, like, you know, 500. Just an even 500,000. So I bought home, like, a $75,000 check, but I only used 11,000 of it, and I didn’t mind going ahead and borrowing that amount of money because I knew I was going to cash out very, very quickly.
Joe Delle Fave [00:43:35]:
Yeah, right. And you’re doing it in five weeks.
Jenn Delle Fave [00:43:38]:
What a story. So inspirational. And I hope you hear that and don’t think, oh, I could never do that, because you totally can. It’s like Jay said, it’s a mindset shift. So work on the real estate between your ears and go sign up for that challenge. I’m going to put that up here one more time in case you missed it. But, oh, my goodness, seven days, all day going into private money and hearing more about how to utilize other people’s money and not having to go to the banks. And again, we’re all about helping people out.
Jenn Delle Fave [00:44:06]:
So if you didn’t have all of those things lined up, Jay, you wouldn’t have helped that gentleman who reached out to you, right? Like the Google Ad. And that was a situation, and that.
Jay Conner [00:44:14]:
It was a big win for him. I mean, the mortgage payoff was like 325,000 or so. So the seller pocketed a hundred thousand dollars.
Jenn Delle Fave [00:44:24]:
Amazing.
Joe Delle Fave [00:44:25]:
So, does this only work where you live? Like, it sounds great there, but like, okay, I live in the middle of, sa,y we live in Florida, but like, I live in Texas. There’s no ocean. Does this work here, too?
Jay Conner [00:44:36]:
Yeah, absolutely. Well, it works where there are properties, and where there are people, you’ve got to have people and properties.
Joe Delle Fave [00:44:43]:
There you go.
Jenn Delle Fave [00:44:44]:
Exactly.
Joe Delle Fave [00:44:45]:
Okay, well, and that makes a lot of sense, too, because, you know, I’d always say be a student of your market. Right. Some markets around the country right now are all different. Like where? Upstate New York, where we’re doing a lot of our deals, that market is still red hot, on fire, no inventory, very reasonable housing prices to begin with. With really not many natural disasters besides snow. So you can still get some great deals. And that market’s red hot. In Florida, they’re still selling, but it just seems like days on market are a little bit longer.
Joe Delle Fave [00:45:16]:
So you want to always make sure that you understand what the market is in your area. Right. But there are still plenty of markets where it is red hot right now. I see all of my friends in Buffalo, Rochester, and other pockets of the country. One of my friends he’s an Allentown, Pennsylvania, and they’re like, my daughter is looking for a house and she’s frustrated because she keeps on putting offers for 30,000, 40,000 over asking, and there’s no inventory. Like, guys, go find a deal there. Yeah, right. Go find an off-market deal there that’s not on there.
Joe Delle Fave [00:45:48]:
Go find a seller. And you know, if you find those in those markets, my gosh, the sky’s the limit.
Jenn Delle Fave [00:45:53]:
Don’t wait until you need the money. That’s a big takeaway from Jay today.
Jay Conner [00:45:57]:
Yeah, absolutely. Again, I love that you’re listening to this podcast or watching it on YouTube or wherever. I’d love for you to come join the party. Text the word challenge to the number 58885.
Jenn Delle Fave [00:46:14]:
Wonderful. Well, thank you again, Jay. I know you’re a busy man, and you and Carol Joy are just such amazing people. I can’t wait to see you again, hopefully in September at the Family Mastermind, and maybe have to have you back after, you know, we’ve joined the challenge and talk more about our experience and hear some more of your wonderful stories.
Jay Conner [00:46:28]:
Yeah, I would love to. Thank you so much, Jen. And thank you so much, Joe. God bless y’all.
Joe Delle Fave [00:46:33]:
Awesome.
Jenn Delle Fave [00:46:34]:
Thank you.
Joe Delle Fave [00:46:34]:
Thank you so much for joining us, Jay.
Jenn Delle Fave [00:46:36]:
Take care.
Jay Conner [00:46:36]:
You got it.
Narrator [00:46:41]:
Are you feeling inspired by the knowledge you gained in this episode? Then head over to www.JayConnner.com/MoneyGuide, that’s www.JayConnner.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.JayConnner.com/MoneyGuide to get your free guide. We’ll see you next time on Raising Private Money with Jay Conner.