***Guest Appearance
Credits to:
https://www.youtube.com/@DavidOldsREI
“Jay Conner’s Secret to Funding Deals Without Banks – David Olds”
https://www.youtube.com/watch?v=8XCccXH7s3E
If you’re a real estate investor—or have considered diving into this lucrative world—you’ve probably encountered the question: “How do I get the money to fund my deals?” For many, the answer has always involved banks, stern loan officers, and stacks of paperwork. But Jay Conner, a legendary investor and coach, has made it his mission to show that there’s a better, easier, and more empowering way: private money.
From Bank Roadblocks to Private Lending Breakthroughs
Jay’s story is relatable for anyone who’s ever found themselves at the mercy of institutional lending. For six years, he did what most investors do: went to the bank, provided loads of documentation, and hoped for approval. That all changed in January 2009, when his longtime banker informed him—unexpectedly and without warning—that his line of credit was closed, a casualty of the global financial crisis.
This pivotal moment forced Jay to ask himself an incredibly powerful question: “Who do I know that can help fix my problem?” This shift in mindset (a lesson in itself!) led him to discover the world of private money lending.
Teaching, Not Pitching: The Secret Sauce
Unlike traditional approaches, Jay never asks for money or pitches deals outright. His strategy? Education first. By donning his “teacher hat,” Jay introduces friends, acquaintances, and community members to the concept of private lending—including strategies using self-directed IRAs to lend money to investors for real estate deals. Most of his lenders had never heard of private lending or self-directed IRAs until Jay explained it—showing that sometimes the best deals come from simply educating those around you.
The teaching approach does more than inform; it removes desperation from the equation. As Jay humorously puts it, “Desperation’s got a smell to it.” Instead, he shares the opportunity in a relaxed, informative setting, such as a private luncheon, where people can learn and ask questions. At one such luncheon, he garnered nearly a million dollars in pledges.
No Applications. No Begging. Just Win-Win Solutions.
Jay flips the traditional money-chasing script. Rather than applying for a limited resource, he positions private lending as an opportunity—a way for others to earn high, predictable returns (often between 8-10%) with their idle cash or retirement accounts. There are no complicated forms or credit pulls; he’s offering others a service, not asking for favors.
New private lenders aren’t bombarded with jargon or pressured to commit. Instead, Jay explains the process in simple terms, answers questions, and only talks deals once a lender is fully on board. Many of his lenders started with modest sums and, after seeing the results, increased their investments, sometimes doubling their original pledges.
Expanding Beyond Your Network
What if you run out of friends and family to approach? Jay recommends getting involved with local networking groups, such as Business Networking International (BNI), Rotary Clubs, and your local Chamber of Commerce. These settings not only build your professional circle but also expand your reach to potential lenders looking for stable, above-average returns.
Managing Private Money Responsibly
As your pool of private funds grows, another good problem arises: keeping everyone’s money working. Jay’s solution is to give new lenders priority on new deals, sometimes refinancing existing properties to put fresh money to work. He leverages strategies like substitutions of collateral—swapping out properties securing a lender’s note—to ensure all parties are protected and their returns continue uninterrupted.
The Takeaway
Jay Conner’s approach is a masterclass in shifting the mindset around raising money for real estate deals. By leading with education, focusing on relationships, and creating true win-win scenarios, he’s built a real estate empire—and helped countless others do the same. Whether you’re a new investor or seasoned pro, Jay’s “private money comes first” philosophy is worth adopting. As Jay demonstrates, there’s more private money out there than deals to be done—if you know how to ask the right way.
10 Discussion Questions from this Episode:
- Jay Conner stresses the importance of a “teacher hat” instead of a “sales hat” when raising private money. In what ways have you seen this educational approach work (or not work) in your real estate experience?
- Jay talks about never pitching a deal during the initial conversation with a private lender. Why do you think this approach reduces the feeling of desperation, and how might it influence a potential investor’s trust?
- One key strategy Jay uses is reaching out to people in his existing network, like church groups or business networking clubs. What local communities or organizations could you tap into to find potential private lenders?
- Jay mentions that most of his private lenders had never heard of self-directed IRAs or private lending before he educated them. How could you simplify and present these financial concepts to people in your network who are unfamiliar?
- The conversation highlights the importance of mindset and “owning the real estate between your ears.” What mindset shifts did Jay have to embrace to successfully raise capital, and how could those apply to you?
- Jay’s method involves never asking directly for money, but instead teaching the opportunity. How comfortable are you with teaching versus selling, and how might you adapt your style to fit this model?
- A recurring statement is “the money comes first.” How would having private money already lined up change your deal-making process and negotiation tactics?
- Jay talks about managing multiple private lenders and keeping everyone’s money working. What systems or processes do you think are important for tracking and effectively managing your capital sources?
- Jay shared a story about using an “indirect method” to attract lenders, approaching people for referrals rather than pitching them directly. What are the pros and cons of this approach for you?
- The episode ended with a discussion about scaling up and growing your network beyond your immediate connections. What steps could you take to expand your own network strategically for finding private money?
Fun facts that were revealed in the episode:
- Jay Conner Raised Close to $1 Million at a Luncheon: Jay once organized a private lender luncheon and received pledges for $969,000 in just 90 minutes—all without pitching a specific deal, just by teaching attendees about private money lending.
- No Applications Needed: Unlike traditional bank loans, Jay’s system for raising private money involves no applications or credit checks. He teaches real estate investors to be their own underwriters and simply “offer” a mortgage, not “ask” for one.
- Oceanfront Conferences for Learning: Jay hosts his Private Money Conference at an oceanfront hotel in Morehead City, North Carolina, where attendees not only learn his methods but also enjoy beach views and VIP receptions at a private beach club!
Timestamps:
00:01 Impact of Private Money on Investing
05:56 Teacher Boosts Private Lending Knowledge
07:41 Effortless Deal Funding Formula
12:23 Private Lending Benefits Real Estate Investors
13:17 Finding Lenders Through Bible Study
19:16 Transformative Financial Solutions
20:54 Prioritizing New Private Lenders
24:16 Private Money for Cash Deals
27:00 Flexible Home Sale Agreement
30:48 Networking Growth in Morehead City
35:41 Real Estate: The Secure Investment
37:19 Free Real Estate Investment Guide
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
Addressing Challenges and Solutions in Private Real Estate Funding with Jay Conner
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.
David Olds [00:00:29]:
Foreign.
David Olds [00:00:45]:
Guys, welcome back.
Jay Conner [00:00:47]:
Today.
David Olds [00:00:47]:
Very, very excited to have my friend Jay Connor on today. Jay, you’re a best-selling author, investor, Flipper rehabber, and nationwide speaker coach to thousands of students. You’ve raised millions of dollars in private money. You’re a legend in this business. We’re in, we’re in a mastermind together, the family mastermind. You’re one of the to-to, kind of, you know, bigger-than-life personalities there. But how did you get, how did you get started in all this? What kind of kicked it off?
Jay Conner [00:01:19]:
Well, first of all, David, thank you so much for inviting me to come along and talk about my favorite subject that I’m so passionate about. That being private money and private money. Because private money and private lending had more of an impact on our real estate investing business than any other strategy that we have employed. We’ve been investing in single-family houses full-time since 2003 here in Eastern North Carolina in a small market. And David, the first six years that we were investing in single-family houses, from 2003 until January of 2009, the only thing I knew to do to get my deals funded was go to the local bank, get on my hands and knees, say Please fund my deals and give me my financial statements. They pulled my credit, and they made me pull up my skirt to show all my assets. And anyway, all that worked okay for the first six years. But David, you asked how I got involved in private money.
Jay Conner [00:02:19]:
Everything changed in January 2009. Yeah, two houses under contract to purchase. And I called up my banker. His name was Steve. And Steve and I had done a ton of deals together for six years, and I learned over the telephone that they had closed my line of credit for my investing business. And I said, Steve, what in the world are you telling me, my line of credit is closed? I’ve got a great track record with you. What’s going on? And Steve said, Jay, don’t you know there’s a global financial crisis going on right now? I said, No, but you just gave me a global financial crisis.
David Olds [00:03:02]:
That’s right, because now I’ve got my.
Jay Conner [00:03:04]:
Deals under contract and no way to get them funded. So I hung up the phone. Sitting here at my desk, David, and I want to share with you and your audience a very powerful question that I asked myself. And this question will help fix any problem that you or your audience has. I don’t care if it’s relationship, financial, career, or health; it doesn’t matter.
David Olds [00:03:28]:
I love it.
Jay Conner [00:03:28]:
And here’s the question I ask, by the way, these people running around saying every hour, every problem is an opportunity. I want to be the Kool-Aid guy that runs, you know, headfirst into the brick wall that drives me crazy. Listen, I didn’t have an opportunity. I had a problem. Now that the problem has become an opportunity. Right? But at the moment, it was a problem. Here’s the question, question that I asked myself. I said, Jay, who do you know that can help fix your problem? You know, all the powers in asking the right questions.
David Olds [00:04:07]:
That’s right.
Jay Conner [00:04:07]:
You know, David, when I asked myself that question, I immediately thought of our good friend Jeff Blankenship, who lived in Greensboro, North Carolina, at the time. He was investing in single-family houses. And I called him up and I told him what had just happened. He said, Well, Jay, welcome to the club.
David Olds [00:04:26]:
Yeah.
Jay Conner [00:04:27]:
I said, What club is that? He said, the club of having the bank shut down your line of credit. He said, My bank shut me down last week. I said, Well, Jeff, how are you going to fund your deals?
David Olds [00:04:39]:
Yeah.
Jay Conner [00:04:40]:
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 people can use retirement funds and lend money to us real estate investors and earn passive income either tax-free or tax-deferred? I said, Jeff, I don’t have a clue what you’re talking about. I said, What is private money? He said, Well, I don’t know either, but there’s this guy down in Jacksonville, Florida, by the name of Ron Legrand. Tell us how to get a lot of it. I said, Okayy. So I went to my very first real estate investing seminar after being away for six years.
David Olds [00:05:19]:
Yeah.
Jay Conner [00:05:20]:
To go learn about private money. And I learned about private money. I came back home, David, and I put my program together that I was going to offer potential private lenders. And you know what’s interesting, David? Since that time, I’ve never asked anybody for money. I’ve never pitched a deal. And people ask me, they say, Jay, well, how do you have all those millions of dollars available to you in private money? And you never asked for money, and you never pitched a deal? I said, Here’s the secret I put on my teacher hat.
David Olds [00:05:55]:
Yeah, I love it.
Jay Conner [00:05:56]:
The teacher’s hat says private money. Teacher is what? So you know what’s interesting, David, is that I got 47 private lenders funding my deals. Not one of my private lenders ever heard of private money or private lending, or self-directed IRAs, and how they can use your funds. Until I put on my teacher hat and I went about teaching them what this world is about, how they can earn high rates of returns safely and securely. And here’s a big part of the secret sauce, David. I did not. Ever. When I would first talk about private money and private lending and the program and the opportunity I would offer, I never talked about a deal initially.
David Olds [00:06:42]:
Yeah.
Jay Conner [00:06:43]:
That I needed funding because here’s a writer downer, desperation. Desperation’s got a smell to it.
David Olds [00:06:52]:
Yeah, that’s true.
Jay Conner [00:06:53]:
And if you’re talking about an opportunity and what private money is, and in the same conversation, talk about a deal that you need funded, you’re already sounding desperate without even trying to sound desperate. So I shared the opportunity with people that I go to church with, and business networking, International, and Rotary Club. I put on a private inter-luncheon. I got a pledge at that one 90-minute luncheon for $969,000. And it was all led by having an outlook of a servant’s heart.
David Olds [00:07:25]:
Yeah.
Jay Conner [00:07:26]:
None of these people, none of these people, ever heard of self-directed IRAs. None of them had heard of private money until I taught them about it. And then I’m going to share a short little script with you and your audience, and I’m going to turn it back to you.
David Olds [00:07:41]:
Cool.
Jay Conner [00:07:41]:
And so then after I taught on the program, they loved it. They tell me how much they have to work with. Here’s the exact script, David. Here’s the exact script that I use to get all my deals funded without ever having to pitch a deal. Now remember, the important part of this process is teaching the program first, the opportunity, without having any deals attached to it. And then I know if they’ve got retirement funds, I know if they’ve got investment capital, whatever. They tell me how much they have to work with. Maybe I need to introduce them to a self-directed IRA representative.
Jay Conner [00:08:20]:
They got funds moved over. And then I tell them, okay, I’m going to give you the good news. Phone call just as soon as possible, and I’m going to put your money to work. So maybe a week or two goes by, and David, let’s say you’re one of my new private lenders.
David Olds [00:08:35]:
Yep.
Jay Conner [00:08:35]:
And let’s say you moved over $150,000 from a 401k or wherever. And you’ve got that set in the account, and you’ve got it ready to go. Here’s the exact script that I call up and would tell you as my new private lender. I call you up, you answer. We have a little chit chat, and then here’s the script. I say, David, I’ve got great news for you. I can now put your money to work. I’ve got a house under contract in Newport with an after-repaired value of $200,000.
Jay Conner [00:09:10]:
Now the funding required for the deal matches up to what you have ready to go, $150,000. And closing is going to be next Tuesday. So I’ll need you to have your funds wired to my real estate attorney’s trust account by next Monday. I’m going to have my attorney email you the wiring instructions. That’s the end of the conversation.
David Olds [00:09:34]:
So don’t overcomplicate it.
Jay Conner [00:09:36]:
No, keep it simple. It’s like the most stupid question I could have asked you: Do you want to fund the deal? Well, of course, you want to fund the deal for three big reasons.
David Olds [00:09:47]:
Okay.
Jay Conner [00:09:47]:
Number one, you trusted me to tell you about this world, and you moved over that $150,000 to the self-directed IRA company that I recommended. Secondly, you’re not earning any money until I put your money to work.
David Olds [00:10:07]:
Right.
Jay Conner [00:10:07]:
You’re counting on me to put your money to work. And thirdly, you know I’m not going to bring any deal for you to fund unless it matches the criteria of the program that I already told you about. The maximum loan-to-value and all that. So, you know, I’m gonna call you with a deal to fund that matches what I already taught you. Right? So for those three reasons, you cannot wait to wire your funds for my closing.
David Olds [00:10:32]:
Wow, I love it.
David Olds [00:10:34]:
That’s fantastic. So I’ve borrowed a lot of private money, but I don’t think I’ve ever done it quite that way. And I love what you’re doing. It’s certainly a lot smoother. So you talk about lots of ways to teach them and educate them. But even before that, like, how are you, how are you attracting the right people to even have these conversations? Like, where are you finding them? Like, what are you doing to bring them to you?
Jay Conner [00:10:58]:
Yeah. The right people, quite frankly, or anybody that I know. But let me zero down on that. I teach people. I teach real estate investors how to do this exactly the way that I do it. And step one. Well, no, let’s back up, let’s back up. When they asked me what the first thing I need to do? Yeah, here’s what I tell them. The first thing you’ve got to do is own the real estate between your ears. And what I mean by that is get the right mindset.
Jay Conner [00:11:27]:
And this is particularly a challenge for real estate investors who have never raised capital. Yeah, most people think you’ve got to pitch deals. Most people think you’ve got to chase and beg and sell and all that kind of stuff. And the opposite is true. You know, the traditional way to borrow money, institutional money, even from hard money lenders in this world. I’m not talking about hard money. The traditional way that only people know is, is to apply. Well, guess what? There are no applications.
Jay Conner [00:11:59]:
You’re already approved. Why are you already approved? Because you are the underwriter. You’re the underwriter of your deals. Traditionally, it’s the bank or it’s the person who’s got the cash that makes the rules. Not in this world. You see, we’re not asking for a mortgage. We’re offering a mortgage. So step one to get straight is the mindset.
Jay Conner [00:12:23]:
And you know what I learned over the years, David, is that our private lenders appreciate us so much because they. They’re earning so much more money than they would be, say, at the local CD in the bank. And they don’t have to worry about the volatility of the stock market when they invest with us. It’s a debt. They know exactly what their rate of return is going to be, which, by the way, I’ve been paying 8 to 10% ever since 2009 with no origination fees, no extension fees, and they never want their money back. Anyway, back to your question. Where do I find, where do I find these people? Well, when I teach other real estate investors to make their list of potential private lenders, that are in their cell phone. Sure, they’re in their cell phone.
Jay Conner [00:13:12]:
Make your list first of who’s retired. Who’s retired?
David Olds [00:13:16]:
Yeah.
Jay Conner [00:13:17]:
Because if you start with retired people, there’s a good chance they have retirement funds. But where do I find these people? I’ll tell you a short story. One of my very first private lenders. I put my program together, and I’ve got two different methods that I teach for having opening conversations with people. One is the direct method, and one is the indirect method. I’ll just share the indirect method in the form of a story. So it was on a Wednesday night at 7:30. Carol Joy and I went to Bible study at the Morehead City Church of Christ here in Morehead City on Barber Road.
Jay Conner [00:13:55]:
So we were going there to Bible study on a Wednesday night, right after I’d put my program together. I walked into the foyer of the church building, and I walked up to a gentleman. He and I had known each other for a while, and his name was Wayne. So I walked up to Wayne and I. Here’s exactly what I said to Wayne. I said, Wayne, I’d like to visit with you about something confidential after we finish tonight here at Bible study. Have you got a few minutes? He said, Sure. So we had Bible study.
Jay Conner [00:14:22]:
We get together down in the nursery and shut the door. Here’s exactly what I said to Wayne. I said, Wayne, you know everybody in this town. And he did. He was the Zenith television dealer decades ago, in a really small city, North Carolina. And I looked at if you’re listening to this show and you don’t know who or what the Zen, the television dealer was, that means you’re too young to remember life before Walmart came to town.
David Olds [00:14:52]:
That’s right.
Jay Conner [00:14:53]:
He’d sell you a TV, finance your TV, and come to your house and repair your TV. Anyway, Wayne knew everybody. I said, Wayne, you know everybody. He was well plugged into the Rotary Club and all that. I said, Wayne, now here’s the magic phrase. Here’s the magic phrase. I said, Wayne, I need your help. I said, I have now opened up my real estate investing business by referral only to people I know and trust, and who they know and trust.
Jay Conner [00:15:22]:
And when you run across somebody who is complaining about the volatility of the stock market and not making any money in the local bank certificates of deposit, when you hear them complaining about that, would you refer them to me?
David Olds [00:15:38]:
Yeah.
Jay Conner [00:15:38]:
Because I am now paying insane high rates of return to my investors.
David Olds [00:15:43]:
Love that.
Jay Conner [00:15:44]:
Wayne looked at me and he said, Well, now, brother Jay, what you got going on there? And I said, well, what do you mean, what have I got going on? He said, Well, what kind of insane high rates of return are you paying?
David Olds [00:15:56]:
Yeah.
Jay Conner [00:15:56]:
And I said, well, are you saying you might be interested? He said, Well, I might be interested. I said, Why is that? He said, Well, we’re only earning 3%, and that’s what it was in 2009. We’re only earning 3% in the local bank on a certificate of deposit. We’re losing money right and left in the stock market. We might be interested. What kind of rate are you paying, Jay? And I said, well, you know, that sort of depends on the deal. I say, what sounds high to you? He said, Well, I don’t know. We’re getting 3%.
Jay Conner [00:16:28]:
I said, I don’t know, maybe 5 or 6%. I said, Wayne, I can’t pay you 5 or 6%, but I can pay you 8%. He said, Put me down for $250,000. And so that next afternoon, on Thursday afternoon, David, I went to his and his wife’s home, and I came to their home with my teacher hat on.
David Olds [00:16:52]:
Got it.
Jay Conner [00:16:52]:
And I taught them the entire program. What was the maximum loan-to-value that I would borrow, which by the way, is 75% of the after-repaired value? Which means when I buy a house at a discounted price, I always bring home a check when I buy.
David Olds [00:17:08]:
Okay.
Jay Conner [00:17:08]:
And take no money to the closing table. Who wants to get paid to buy houses? Right. So, anyway, the maximum loan to value, the length of the note, the frequency of payments, the interest rate, and how they can get their money back in case of an emergency before the term comes due. I taught them all that.
David Olds [00:17:26]:
Yeah.
Jay Conner [00:17:27]:
And after two cups of coffee, that $250,000 became half a million dollars that afternoon. And remember the secret sauce, no deal attached.
David Olds [00:17:40]:
Yeah.
Jay Conner [00:17:40]:
To that initial conversation. And I promised them I’d put their money to work for them just as soon as possible. And, and you know, they became, unfortunately, both of them have passed away now, but they became not only phenomenal private lenders, and they never heard of private money. They’d never heard of self-directed IRAs. Most people walking around haven’t.
David Olds [00:18:03]:
Right.
Jay Conner [00:18:03]:
And they referred so many people to me and Carol Joy over the years, and they were at that private lender luncheon that I told you about. And they even brought friends to that private lender luncheon. And so again, a big secret to this process. No chasing, no begging, no selling, no persuading. You’re teaching. You got a servant’s heart. No talk of any deals until you get the pledge. Then the good news phone call, and they’re ready to go.
Jay Conner [00:18:38]:
And they’re ready to go.
David Olds [00:18:39]:
Yeah, I love that. And I like what you’re, you know, where you talk about like they didn’t understand or know the word, probably private lender or self-directed IRA. Because I think as investors, sometimes we have a tendency to use those inside baseball-type terms. Because it makes us feel smart, but that’s sometimes not necessary at all.
Jay Conner [00:19:01]:
One of the mistakes that I hear real estate investors who are new to capital raising make is that they talk to them. They talk too much.
David Olds [00:19:11]:
Yes. We all, most investors, talk too much. Yeah.
Jay Conner [00:19:16]:
You know, and just, you know, you keep it simple. And I mean, you’re offering a way for these people to change their financial, you know, their financial situation. I mean, Wayne and his wife handwritten thank you notes as to how we changed their retirement years, and they were able to go travel and see grandkids and all that that they wouldn’t ordinarily be able to because of the kind of returns that we were giving them. So it really, really is a win-win scenario doing business with these people.
David Olds [00:19:52]:
Yeah.
David Olds [00:19:52]:
Now, Jay, is this ramped up? You know, again, I’ve raised money, not, not even a fraction of what you’ve done. But did you have a hard time keeping all of that money moving at some point?
Jay Conner [00:20:02]:
Yeah.
David Olds [00:20:03]:
Becomes a problem, right?
Jay Conner [00:20:04]:
Yes. So let’s talk about how I manage that and manage expectations. So when I have a new private lender, which, by the way, I haven’t had in a long time, it’s all I can do to keep juggling what I do have.
David Olds [00:20:19]:
Yeah.
Jay Conner [00:20:20]:
I mean, I could expand outside the area if I wanted to, but I like, that’s just my business decision. I like, I like driving by properties that I can drive by within 30 minutes if I choose to.
David Olds [00:20:32]:
Yeah.
Jay Conner [00:20:33]:
Half the properties, I don’t even go look at them. But my entire teams know I’m close by anyway.
David Olds [00:20:40]:
Keeps them honest.
Jay Conner [00:20:41]:
That’s right. So I haven’t raised new private money personally in a while. So what was I getting ready to say, David? I lost my train of thought. For goodness’ sake.
David Olds [00:20:51]:
We were talking about being busy.
Jay Conner [00:20:54]:
Yeah. Keeping it, giving it. Keep giving the money at work. So when I do have a new one or when I did have a new private lender come along, they got moved to the top of the queue to put their money to work because I want to prove to them I can perform. Right. And so if I didn’t have a deal right around the corner within a week or two, then I would take that new money and refinance a current property and pay off the current private lenders. So I could show that new private lender, hey, we can put this money to work. And then when we’re just doing normal, you know, every day, every week, every month business, it depends on how much money they’ve got to work with.
Jay Conner [00:21:36]:
Because, you know, I got some private lenders that only have $50,000 with me. Typically, I can’t buy a house with that, but I can do a renovation with that a lot of times. So I can use private money in a secondary or junior lien position below that first position. But if you know, I got, shoot, I got more than one private lender that’s got more than a million dollars, you know, with me, I got one right now that just amp, there’s up to $600,000 without me asking. And so it depends on how much money they have. But I just put them in the queue, and when I pay them off, now I do a lot of substitutions of collateral, meaning I describe that for people.
David Olds [00:22:15]:
For those who may not understand.
Jay Conner [00:22:17]:
Sure. So a substitution of collateral simply means there’s a promissory note from your private lender. You’re cashing out a property that is collateralizing that note. But now I’ve got another property that I’m closing on, say, within a week, or I’ve got another property that’s got a lot of equity in it. And now I’m getting ready to renovate that property. I can keep their note open, but just change the property that is collateralizing that note, hence substitute the collateral. And, you don’t need to know how to do that. Your real estate attorney takes care of the documentation for you.
Jay Conner [00:22:54]:
You just gotta make sure you’re protecting your private lender or lenders. And if you have more than one private lender that is being secured by that property, then we have what’s called total loan to value. So I don’t borrow more than 75% total loan to value of the after-repaired value, not of the purchase price of the after-impaired value. So let’s say I got a property in that example that I just used, David, of 200,000. Well, I’m not going to borrow more than 150,000. That’s 75%. But I could have bought that property for 100,000, 50% of the after-repair value. I got $150,000 wired to my real estate attorney’s trust account when I bought.
Jay Conner [00:23:41]:
Well, 100,000 goes to the seller, and 50,000 is what my real estate attorney’s check stub calls excess cash to close. Well, that $50,000 comes in my checkbook when I bought it without me taking any money to the closing table. And I’m going to use that $50,000, or the majority of it, for the renovation.
David Olds [00:24:04]:
Nice.
David Olds [00:24:05]:
So I love that. So I think the important thing for people who have not done this before is that you’re borrowing 100% of the purchase, the closing costs, and the repair costs.
Jay Conner [00:24:16]:
Yeah. And you know, a good check. And that’s correct. A good check and balance, David, is if you’re using private money, which you’re going to use private money whenever the seller requires all the cash. Yes. So I’m not talking about using private money when you buy on terms such as subject to the existing note. However, if I’m buying a foreclosure, I’ll use private money in second position, and if there’s enough equity to bring those payments current. Right, but you’re going to use private money when the seller requires all the cash.
Jay Conner [00:24:49]:
Yes, and I’m only going to use that formula for buying all cash when I’m paying all cash, which is the majority of the deals. That’s the majority of the deals in the real world. Regardless of what you might hear somebody say to you on stage, let me tell you something, David, I’m going to share something with you, and it drives me absolutely bonkers. I mean, I want to be like the Kool-Aid guy who runs into the brick wall.
David Olds [00:25:14]:
Yeah.
Jay Conner [00:25:14]:
When I hear. Have you ever heard the guru or the sales trainer on stage say something to the effect, Oh, just get the deal under contract. The money will show up.
David Olds [00:25:28]:
Yes. Yeah.
Jay Conner [00:25:29]:
Where. Where is the money going to show up? Now, if you’re a wholesaler, you have your buyer’s list. And I’m not talking about wholesaling.
David Olds [00:25:40]:
Yeah.
Jay Conner [00:25:41]:
I’m talking about staying in the deal. So that’s why I practice and preach. The money comes first. Get the money lined up and just think about how much more confident, how many more offers.
David Olds [00:25:54]:
I was just gonna say that.
David Olds [00:25:55]:
Yeah.
David Olds [00:25:56]:
You know, when I’ve had, you know, a million dollars or 750,0000 ready and available, I go out and negotiate a lot differently.
Jay Conner [00:26:04]:
Absolutely.
David Olds [00:26:05]:
There’s a lot more confidence and backbone in. In me making that offer, knowing I legitimately can close in three days.
Jay Conner [00:26:11]:
And we do, in fact, just a few short years ago, two or three years ago. And I’ve been in this business since 2003.
David Olds [00:26:19]:
Yeah.
Jay Conner [00:26:20]:
But it never occurred to me. Sometimes I’m a slow learner, but it never occurred to me to start using this strategy that I’m going to share to get more offers accepted. And here’s the way it works. So we know time kills deals.
David Olds [00:26:36]:
Yes.
Jay Conner [00:26:36]:
We know that the more time that goes by from the time you talk to a seller until you close on that deal, all kinds of things can go south. Right. So I want to close it now. I want to close it in three days, four days, you know, as soon as we negotiate. So what we now do. And you know, most of, most of these properties are occupied.
David Olds [00:27:00]:
Right.
Jay Conner [00:27:00]:
And so, you know, they can’t move out in three days or four days. So let’s say, look, we’ll go ahead and close now, and we’ll give you half of your proceeds now. You can stay in your home for free for whatever length of time that we agree upon. And then when you vacate the house and we walk through it and it’s nice and clean, then you’ll get the other half of your proceeds. David, I don’t know how many offers we’ve gotten accepted that we probably would not have gotten the deal.
David Olds [00:27:33]:
Yeah.
Jay Conner [00:27:33]:
If we had waited until they were ready to vacate, because of all the other folks who are going to come along and make offers and all that kind of stuff. So I want to close now and work with them to vacate later.
David Olds [00:27:49]:
Yeah, of course, the more options you can give them and, you know, work with the things that are a problem or troublesome for them. Absolutely. Makes you the most desirable offer.
Jay Conner [00:27:58]:
By far, for sure.
David Olds [00:28:00]:
Yeah.
David Olds [00:28:01]:
So when you’re, when you’re, you and your students are using this process, what’s, what’s one of the. Just the biggest objections that you might hear from a. From a potential private lender?
Jay Conner [00:28:14]:
From a potential private lender. You know, I’m glad you asked that question, because that triggers me to think of this. One of the objections that I hear not from private lenders, but from private and. But from real estate investors and entrepreneurs, Jay, I’m scared or I’m fearful of rejection. I don’t want anybody to reject me. Well, here, here’s my answer to that. How can you be rejected if you’re not asking anybody for anything? Yeah, I’m not asking anybody for anything. I’m so, I’m teaching them.
Jay Conner [00:28:49]:
So as far as objections, you know, I haven’t gotten any objections from any potential private lenders, and here’s why. They don’t hear me talk about my program and my opportunity unless they want to.
David Olds [00:29:03]:
I love that. Yeah.
Jay Conner [00:29:05]:
So I’m not telling them what the interest rate is. I’m not telling them what the whole program is, how they get their money back in case of an emergency, or the frequency. I’m not teaching them all that unless they’re interested in hearing an alternative way to invest. Because, look, when they hear 8% compared to what they’re getting in the local bank, and they’re sick and tired of the volatility, where else are they going to get this?
David Olds [00:29:33]:
Yeah.
David Olds [00:29:35]:
Yeah, they can’t, they can’t get that kind of return or interest guaranteed. I think it’s, it’s fantastic.
Jay Conner [00:29:40]:
You know, the, the only reason that a potential new private lender is not going to invest with you is either a. Well, first of all. First of all, here’s why I don’t get objections. I’m not trying to raise money from existing private lenders that already know this space.
David Olds [00:30:00]:
Okay.
Jay Conner [00:30:01]:
I’m talking with people who have never heard about this. Right. This is all brand new, and it’s going like, wow, I never. I never heard of this thing. And I’m sticking with people that I’ve already got a relationship with. So that brings up a big point. Eventually, if you want to raise and scale this, you’re going to run out of your connections. Right.
Jay Conner [00:30:27]:
There are only so many people in your cell phone. There are only so many people you go to church with. So I teach how to grow your network very, very quickly.
David Olds [00:30:39]:
Oh, okay.
Jay Conner [00:30:40]:
And meet new people. I’ve raised millions of dollars by getting involved in Business Networking International.
David Olds [00:30:47]:
Yeah.
Jay Conner [00:30:48]:
So even little teeny tiny Morehead City, North Carolina, where we started BNI back in 2007, here in Morehead City, in our small area. And so the way BNI works is it’s like you’ve got 25 other people that are on your sales force, referring potential people that you want to do business with. So talk about leveraging and growing your network. The Chamber of Commerce, the Rotary Club. The more people you are connected with, that you can see yourself. And you can show how you serve, which always attracts people to you, then you’re going to end up with the same problem I did, and that is being able to use all the money, because frankly, there’s more money out here available than there are deals.
David Olds [00:31:37]:
I think that’s fantastic because it is such a limiting belief. I did, you know, a session the other day talking about those kinds of those. Those big obstacles, or at least mental obstacles. The obstacles between your ears.
David Olds [00:31:48]:
Yeah.
David Olds [00:31:48]:
That there were no deals left out there. Same thing with.
David Olds [00:31:50]:
With. There’s. There’s so much private money out there.
Jay Conner [00:31:53]:
So.
David Olds [00:31:54]:
True. Yeah.
David Olds [00:31:55]:
No, absolutely. Now, so are you able to, you know, borrow money and then re. Lend it out or these deals you’re only using, or are these funds that you’re only using for your deals?
Jay Conner [00:32:05]:
Yeah, these are funds I only use for my deals. So I don’t lend money out. I don’t. I don’t match up private lenders with real estate investors. Ask me why I did that. I don’t do that anymore. I did that years ago because when I introduce a private lender to someone else, my reputation’s on the line. Right.
Jay Conner [00:32:26]:
And so, nope, don’t do that anymore. I teach entrepreneurs and real estate investors how to raise very, very quickly. Their own, their capital.
David Olds [00:32:37]:
Nice.
David Olds [00:32:38]:
Well, that’s the perfect segue. Jay, what is the best way for people to get in touch with you and to just learn more about this? Because I, I love it and I think it’s going to be valuable new investors who are just getting started, but even people like me who have done some deals and even have a basic understanding of private money, how we can take what, what you’ve learned over the years and just throw gasoline and accelerate what we’re already doing.
Jay Conner [00:33:00]:
Yes. Speaking of that, David, I’m thinking of Sue and Harriet Baldwin up in Elvira, New York. And they came into my world a few years ago, very active in my mastermind group, for quite a few years. Well, they came into my world, and they already had a hundred houses in their portfolio. They had already raised over a million dollars in private money. But you know, we can learn from each other. Sure. So I recorded an evergreen webinar with them, and just that webinar got them an extra $3 million.
Jay Conner [00:33:35]:
So, as you said, whether it’s somebody that’s never raised capital or you’re a seasoned real estate entrepreneur, you want to raise more capital, then I want to give you my new book, which I’m so excited about. It’s called Where to get the money now subtitle: how and where to get all the money for your real estate deals you’d ever want without relying on institutional or hard money lenders. And this is a book. Book. This is not an ebook. The Postal Service is still in business. I’ll autograph it for you. I’ll show it to you, Three Day Express.
Jay Conner [00:34:09]:
And I’m going to include it with the book. And by the way, the book goes over step by step the exact program that I teach an opportunity I teach my private lenders. But there’s a gold medallion right up here. I’m also going to include two tickets to my upcoming Private Money conference, which is an in-person conference. Private money conference. So I’m going to include these two tickets valued at $3,000 in the live event. So I’ll send you the book, just cover shipping at www.jconner.com forward slash book. And I’m an ER, not an OR.
Jay Conner [00:34:45]:
So agai,n that’s www.j a y c o n n e r.com Jay connor.com forward slash book, and I’ll rush it right out to you.
David Olds [00:34:57]:
Awesome. Well, I’m gonna jump on there and grab a copy because I’d love to attend that event too. That sounds amazing. Where is the event being held?
Jay Conner [00:35:04]:
Right here in our hometown, Morehead City, Atlantic Beach, North Carolina. And the upcoming event is right at an oceanfront hotel. Beautiful time of year to come here. It’s a three-day event, Wednesday, Thursday, and Friday. I’ll have private lenders there for you to network with. And I dive deep. I’m there all three days diving deep on getting all the private money for your deals. And on top of that, we have a great time.
Jay Conner [00:35:30]:
We got a VIP reception at the Dunes Club, Private Beach Club on Thursday night. We have a good time, and you’re gonna get a lot of private money after you attend this event.
David Olds [00:35:41]:
Awesome, Jay, thank you so much, man. This was, was a lot of fun. I think private money is with, you know, things that are going on in the stock market, and things are up and down and topsy-turvy. There are a lot of people who are pulling their money out because they’re nervous and they need a place to put it, and I think real estate is always the absolute best bet for these people. There’s nothing, nothing more safe and secure. I like to tell people I can, you know, I can drive down the road, I can look at my house. I can touch it, feel it, taste it, you know, lick it, crawl underneath it. I know it’s there.
David Olds [00:36:10]:
It’s a real, tangible thing. And you know, that’s far safer than sometimes just throwing a dart and picking a stock out of the ticker and hoping it does well.
Jay Conner [00:36:19]:
Absolutely. In addition to that, David, let me invite your audience to check out my podcast. I’m now in my 8th, 8th year, 8th year of my podcast. The name of my podcast is Raising Private Money. Imagine that. Raising Private Money with Jay Connor. And I have two shows a week, and I’m always interviewing other real estate investors, interviewing them as to how they have gone about raising private money.
David Olds [00:36:46]:
Love that.
Jay Conner [00:36:46]:
And so, yeah, any podcast platform that you like listening to your podcast, come join the party. Raising Private Money with Jay Connor.
David Olds [00:36:57]:
Awesome.
David Olds [00:36:57]:
We’ll put, make sure that we put that down there in the notes. And for those of you who get this, when we email it out, I will. I’ll be sure to put the link there, plus the link to get Jay’s book. Jay, thank you so much, my friend.
Jay Conner [00:37:08]:
I’ll.
David Olds [00:37:08]:
I’ve been looking forward to this. I told you before we jumped on.
Jay Conner [00:37:11]:
It’s.
David Olds [00:37:11]:
It’s been on my schedule for a while, so I’m glad we finally got to do it.
Jay Conner [00:37:14]:
Thank you, David, for having me so much. God bless you.
David Olds [00:37:17]:
Thank you.
Narrator [00:37:19]:
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. We’ll see you next time on Raising Private Money with Jay Conner.