***Guest Appearance
Credits to:
https://www.youtube.com/@CanadianRealEstateChannel
“Secrets Of Rich: Use Other People’s Money | Jay Conner.”
https://www.youtube.com/watch?v=WnXWripgNVM&t=91s
For many real estate investors, accessing capital is the key to taking advantage of opportunities and scaling up their portfolios. But while traditional banks and mortgage companies have long dictated the rules of borrowing, a different path exists for those ready to take control: private money lending. This approach offers an investor-centric alternative that can create bigger profits and enable greater agility in today’s competitive real estate environment.
Private money, as explained by Jay Conner on a recent guest episode with Matt McKeever, is all about borrowing directly from individuals—often referred to as “mom and pop” or “relationship money.” Unlike institutional hard money lenders or banks, private lenders are everyday people, sometimes even within your existing network. The difference? Instead of jumping through endless hoops and paying high fees, private money lending lets you set the terms and structure deals for mutual benefit.
Jay Conner’s personal real estate journey showcases the potency of private capital. Starting in a small community, he and his wife transitioned to using private funds after getting cut off from banks in 2009. Within 90 days, he raised over $2 million from private sources—leading to a tripling of his business within the first year. Since making the shift, he’s not missed out on a single deal due to a lack of funding.
The advantages of private money go far beyond just providing cash. Unlike equity partnerships or traditional JVs, which may require sharing profits and decision-making, private lending is structured as debt. This means you keep full ownership and control while offering the lender a secure, collateralized investment. For those worried about credit checks or borrowing limits, private money is a game-changer—you can borrow as much as you can manage, from as many lenders as you connect with, across the country or even internationally.
One of the most compelling features: the ability to borrow more than just the purchase price. It’s common practice to roll rehab funds and even equity into the loan, which provides flexibility and improves cash flow for the investor. Many deals can be funded with no out-of-pocket money, allowing you to be paid at closing and cover renovations without dipping into personal reserves.
While hard money lenders have become a mainstay for some, their terms can be punishing—often charging double-digit interest and expensive points, with strict timeframes for payback. Private money typically comes with much friendlier rates and terms, minimal fees, and no extension penalties. Most importantly, the process is relationship-driven, allowing you to create win-win solutions and close deals quickly—sometimes within just a week.
The next logical question is: Why would someone want to lend privately? The answer lies in the security, return, and certainty that the investor’s offer provides. Typical alternatives for savers—like certificates of deposit—offer paltry yields, while the stock market’s volatility sends many seeking more predictable opportunities. Private lending offers borrowers high, reliable returns, secured by a physical asset with a conservative loan-to-value ratio. These features make the offering attractive to those with idle cash or retirement funds.
Building your private lender network may seem daunting, but your warm market—existing contacts, friends, club members, or professional acquaintances—is filled with potential candidates or referrals. Rather than pitching or begging for money, Jay Conner advocates for an educational approach: put on your “teacher” hat, educate others about how the process works, and invite them to participate if it fits their needs. Group sessions, networking events, and word-of-mouth can help spread your message authentically.
Not every contact will be ready, but as your relationships grow, so does your pool of capital. The most successful investors constantly educate, network, and raise money even when they don’t immediately need it—creating a shelf of funds, ready to deploy at a moment’s notice.
Private money lending isn’t just a tool—it’s a strategy that puts investors back in control of their deals, growth, and future. Whether you’re just starting or looking to take your investments to the next level, tapping into private capital could be the catalyst needed to turn real estate dreams into reality.
10 Discussion Questions from this Episode:
- Jay Conner emphasizes the importance of raising money before you need it. Why do you think this strategy is so crucial for real estate investors, and how might it impact their ability to close deals?
- The episode makes a clear distinction between private money and hard money. In what ways do their terms, costs, and loan processes differ, and what impact does this have on an investor’s business growth?
- Matt McKeever shares that many new investors are intimidated by the idea of asking friends or family for money. What approaches from the episode could help overcome this fear?
- The concept of “educating” rather than “selling” to potential private lenders was a major theme. What benefits might this approach have for relationship-building and deal flow?
- Jay Conner describes multiple ways to find potential private lenders, from your warm market to public records. Which strategy do you think would be most effective for someone starting, and why?
- The statistics shared about creative financing (only 13% of off-market sellers accepting terms) highlight the importance of cash. Why might sellers prefer cash offers, and how does private lending facilitate such deals?
- Both speakers talk about positioning and networking (“I teach private lenders how to make a lot of money”). How does this kind of introduction change the nature of conversations at networking events?
- What are the three main reasons Jay Conner says private lenders are attracted to these deals? Which do you find most compelling, and why?
- The episode covers the “direct” and “indirect” approaches for engaging potential lenders. How do these methods differ, and in what scenarios might one be more effective than the other?
- Jay Conner mentions that having funding in place increases confidence and attracts more deals. Can you think of examples where access to private money could have changed the outcome for a real estate investor?
Fun facts that were revealed in the episode:
- Jay Conner once raised over $2 million in private funding in less than 90 days after being suddenly cut off by banks in 2009.
- Jay Conner often borrows more private money than needed for a real estate purchase, allowing him to occasionally bring home large checks (like $58,000) at closing—even before making any renovations.
- Jay Conner never directly asks anyone for money when raising private funds; instead, he educates his network about private money opportunities, which naturally encourages them to participate.
Timestamps:
00:01 Demystifying Private Money
04:37 Tripling Business with Private Money
07:22 Creative Deals Make Up 13%
10:27 Multiple Checks with Private Money
15:04 Private vs. Hard Money Explained
18:54 Private Lending vs. Hard Money
20:20 Safe, Secure, Collateralized Lending
25:19 Building and Engaging Your Network
29:45 Exclusive High-Return Investment Pitch
33:49“Real Estate Investment Referrals
34:37 Securing Private Lending Success
39:58 Answering ‘What Do You Do?’
43:50 Mastering OPM for Investors
44:44 Money Tips & Teamwork
Connect With Jay Conner:
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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
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Private vs Hard Money: Real Estate Insights and Success Stories from Jay Conner
Jay Conner [00:00:00]:
The banks made the rules. In this world of private money, you make the rules, raise money when you don’t need it. And here’s the deal. The question is, well, who in the world, Jay, is going to loan you more money than you need to buy the house? And I can tell you it’s a private lender.
Narrator [00:00:18]:
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.
Matt McKeever [00:00:35]:
YouTube. Let’s talk about OPM, other people’s money. Now, if you’ve read Rich Dad, Poor Dad, or even if you’ve just been around real estate investors for more than a minute, you’ve likely heard of this term. But I find a lot of newer investors are still really confused and intimidated by the idea of going out and asking friends and family for money when it comes to building their real estate portfolio or building the empire of real estate that they dream of. We need to understand, though, as investors, that at the end of the day, you can’t do this alone.
Matt McKeever [00:01:18]:
No man is an island unto himself, and this is doubly true when it comes to real estate investing. Understand that the more leverage and the more access to leverage and debt we have, the greater the total assets we can control. And for a lot of investors who are still focused on the growth side of their real estate investing journey, getting access to OPM or other people’s money is absolutely crucial and critical to your success long term. So in today’s video, I catch up with an investor from the U.S., Jayy, who’s going to break down for us some of his best tips, tips and tricks, when it comes to raising OPM. What is up? YouTube. Matt McIver here, and I’m really excited. Today we’ve got Jay Connor.
Matt McKeever [00:01:58]:
Jay, how’s it going?
Jay Conner [00:02:00]:
Hey, Matt. Fantastic. Thanks for having me on.
Matt McKeever [00:02:03]:
Awesome. And I’m really excited to have Jay on the channel because we’re going to be talking about private money. And so this is a subject matter that I know a lot of my audience is mildly familiar with, but depending upon their experience in real estate investing, for a lot of the newer investors, private money is something that gets thrown around, that sounds cool in theory, but doesn’t feel like something they can actually get their hands on. So it’s one of those things where you maybe listen to one webinar, see one YouTube video, or read one book, and they make it sound like there’s all kinds of crazy private money out there. But then, when it actually comes time to go find it or go ask for it, that’s where they really start second-guessing themselves, getting lost in analysis, crashing, and all that. So before we dive into, you know, what, what you recommend people do when it comes to finding that private money, Jay, could you just share with us some of your experiences with private money and why it’s important to you and your personal real estate business model?
Jay Conner [00:03:00]:
Absolutely, Matt. And I appreciate you giving me an opportunity to give a little background and a little context here. My wife Carol Joy and I started investing in single-family houses full-time back in 2003, full-time. And our total investment area and time have been focused here in a very small populated area, only 40,000 people, and we don’t do that many deals a month. Over all these years, we’ll do two to three deals a month. But since I got into using private Money back in 2009, our average profits per house, with only a median price of $225,000, our average profit is $67 per deal. And so private money. The first six years that we were investing in houses, from 2003 to 2009, we relied on local banks, mortgage companies, you know, traditional financing.
Jay Conner [00:04:01]:
And quite frankly, Matt, I didn’t know anything about creative terms, you know, like seller financing and subject to and wraparound mortgages and all that. I was just relying on local banks. In January 2009, like the rest of the world, I got cut off with no notice. I mean, boom. I mean, I had contracts, I mean, I had houses under contract, no way to fund them. And so I was introduced to this world of private money. And when I say private money, I don’t mean hard money, I don’t mean brokers, I don’t mean institutions. I mean, private money doing business with individuals.
Jay Conner [00:04:37]:
I also call it relationship money, mom and pop money, if you will. And so it was a huge blessing in disguise to be cut off from the banks because in less than 90 days, I was able to attract and raise $2,150,000 in funding from private money, individuals that I didn’t have. So,o as that was a challenge and actually a blessing in disguise, I tripled my business within the first 12 months of being, you know, introduced to this world of private money. So what’s the importance of it? Well, I know, you know, I know, I know that the Majority of the deals out there for people that are going to take them down and stay in them and not just wholesale deals, which, you know, if you stay in the deal, that’s where the biggest profits are. Having the cash is what’s required for most of the deals. So what’s this world of private money done for me and my wife and our team and family? It has tripled our business, and since 2009, Matt, thanks to private money, I’ve never missed out on a deal or opportunity that I wanted to take advantage of.
Matt McKeever [00:05:50]:
That’s awesome. And it’s definitely a great point there about not missing out on opportunities. I think a lot of people who opt to only look towards the conventional channels for financing their deals often find that they have seasoning periods and different things like that that they have to abide by, which sometimes really can put a kink into their deal funnel. Before kind of getting into your approach to private lending or private money borrowing, let’s first talk about the options that an investor has. So when an investor is thinking about doing a deal, they’ve really got kind of two choices, right? They can either sell equity or raise debt. And so, do you mind just kind of touching upon that and what your perspective is? It sounds like you’re normally going the debt route.
Jay Conner [00:06:35]:
Yeah. So right now I would. Well, I don’t, I don’t, I don’t have to guess. I know the exact statistics. So first of all, here, in the States, with the environment that we’re in right now, finding a deal or finding a house for sale, that can be a deal in the multiple listing service listed with a real estate agent or a bank-owned property, that’s not where the deals are. Right? I mean the deal, I mean anything listed with a real estate agent I look at, and my students look at as a bonus. That’s like a bonus. So the deals that we’re finding, the majority of them are what we call off-market deals or houses that people will sell that do not have them listed in the multiple listing service with a real estate agent.
Jay Conner [00:07:22]:
Well, here are the statistics after analyzing over 1000 property lead sheets as of recently. And that is only 13% of all the leads that we get. And I’m a good negotiator, and my acquisitionist has been with me for over 12 years. We know what we’re doing when it comes to building rapport and talking with a possible seller over the phone. Well, only 13% of those sellers that don’t have houses listed in the Multiple Listing Service will sell to us, creatively sell using seller financing, subject to the existing wraparound mortgages, getting an option, and controlling it on a lease option. Only 13%. That means 87% of those other leads. The majority of them want all the cash.
Jay Conner [00:08:14]:
They want all the money. Right. And you know, one misconception that some real estate investors have, particularly newer real estate investors, is that they may hear that, oh, I only need private money. I only need all the cash for ugly houses. I don’t need the cash for what we call pretty deals or pretty houses. I can just buy those on these terms. Well, if only 13% of the off-market sellers will sell to us creatively, how about those other 87%? Just last week, I went and looked at a house in Havelock, North Carolin, which is adjacent to where I live. And the after-repaired value on that house is $150,000.
Jay Conner [00:08:57]:
The sellers are willing to sell it for their payoff of only $75,000. Their motivation is another story. But those are the dollars, and the renovation is less than 10,000. And so we negotiated to sell it to us on subject to the existing note or seller financing. No, go because they have a mortgage, a Veterans Administration mortgage on it. They need that paid off to go buy another house. The only way they would sell it to us is if we paid them with all the cash. So we’re going to use the private money when the seller requires all the cash, regardless of whether it’s a beautiful house or an ugly house.
Matt McKeever [00:09:37]:
Okay, gotcha. And then when you’re kind of putting together these deals, do you mind breaking down for us why you’re choosing private money over, say, like taking on a JV partner?.
Jay Conner [00:09:48]:
Oh my lands. Well, I will tell you one thing good about a joint venture partner is there is no carrying cost. Right. There’s no unknown about how long you’re going to be carrying. You know, so there’s no private lender to pay. However, the benefits and the reasons that I use private money over and beyond a hard money lender, which by the way, you know, we get time permitting on your show, Matt, we could quickly get into the difference between hard money and private money. It’s a huge, huge difference. But why do I use private money? Well, here is the quick list.
Jay Conner [00:10:27]:
Number one, I get multiple checks on every transaction, every deal that I do. Right, right. That’s not going to happen with a joint venture partner. Right. A private lender. So you say, how do I get multiple checks? In fact, this is my favorite reason for using private money. Number one, when do I get those multiple checks? Well, first of all, I get my first big check when I’m doing a private money deal when I buy the property. So how in the world does that work? It’s because I always borrow more money than I need to buy the house, whether it’s a rehab deal, an ugly house, or whether it’s a pretty house.
Jay Conner [00:11:10]:
And here’s the deal: the question is, well, who in the world, Jay, is going to loan you more money than you need to buy the house? And I can tell you it’s a private lender. This is going to do it because it’s a collateral loan, and I’m still going to be giving them equity in that deal, so where they don’t have. They have very, very little risk. So first check, always borrow more. It’s very common. My land’s map is right here in my desk drawer. Let me just look at the most recent check that I brought home. Right here, $58,000.
Jay Conner [00:11:45]:
I brought this check home. I bought this property on Chatham Street in Newport. I brought him a $58,000 check, and I took no money to the closing table and out of my own pocket. Who wants to get paid $58,000 with no money out of their pocket to buy a house? I do. Now, am I going to bring home a $58,000 check from closing if there’s not rehab involved? Of course not. I’m using the majority of that. I mean, the rehab is only 35,000. The rest of that money I pulled out with just a big chunk of equity.
Jay Conner [00:12:22]:
That’s like a big, big infusion into my checkbook. Right. So I get a big check when I buy. If I sell on rent-to-own or lease-purchase, lease option, I’ll get my second check with a large non-refundable option fee. And then, whether I sell on rent-to-own or not, I’ll get another big check when I cash out. What is the difference between what I sell the property for and what I own? My private lender. I just put a house on the market at the end of this past week in Emerald Isle, North Carolina.
Jay Conner [00:12:54]:
$895,000. I bought it for 480. I put in 125,000 renovation. I’m getting a big check here in about three weeks. The difference between what I sell it for and what I owe the private lender. So that’s the first big reason why I love private money. And then quickly, Matt, because I know it’s a short question with a long answer. Why do I love private Money over other funding, multiple checks?
Jay Conner [00:13:20]:
Number two, no credit check. My credit has nothing to do with how much private money I can get. Number three, I have no limit on the number of private lenders I can use. Well, as contrasting mortgage lenders, hard money brokers, there’s always a limit. I have no limit on the number of private lenders I can use. No limit to the amount of private money I can get. I can get private money from any state in the United States. I can borrow private money across international lines.
Jay Conner [00:13:50]:
I can borrow from Canada; Canada can borrow from me. Number four, advance. How much advance do I get when I buy? I get over 100% as I just mentioned, when I am buying the property. So again, there are more reasons, but those are the big reasons why I love private. Oh, close fast. On all my off-market deals. I tell them I can close in seven days. Seven days. There’s no way that when we borrow money from a hard money lender or conventional lender that you can close that fast.
Jay Conner [00:14:26]:
And so I get more offers accepted, Matt, from sellers than other real estate investors that offer more money because I can close fast, and they get their money quickly.
Matt McKeever [00:14:39]:
Love it. Yeah, the flexibility that comes along with private financing is just, it allows you to get so much more creative and really solve problems, which is a big theme. We talk all the time on my YouTube channel. So I’d love to revisit. You kind of made a slight distinction there between hard money lenders and private lenders. And I’m sure some of my audience won’t realize the subtlety of the distinction you’re making. So if you don’t mind explaining that.
Jay Conner [00:15:04]:
A bit further, I’m glad you opened me up for that because not only is it subtle, it’s huge. So again, first off, the difference between private money and hard money is that hard money is most of the time. Is not. Yeah, most of the time it is institutional money, or it is. It’s a broker of money that has gone out and actually raised private money, versus doing business directly with the lender. So what I do and what I teach and coach real estate investors on is how to circumvent the broker who is just making money on money and just go straight to the sources. How do you find those people? Right, so here are the distinctions. First of all, interest rate, all my lands, interest rate.
Jay Conner [00:15:56]:
So here in the United States right now, the average interest rate from a hard money lender is 14%. Some are a lot higher, some are lower, but the average 14% private money right now is 7%. 7%. Huge difference right there in the interest rate. The second big distinction is origination fees or points. Right? So the average number of points origination fees right now on hard money lenders is 4 points or 4%. In other words, if you borrow $100,000, you have to bring $4,000 to closing to close that deal. Origination fees, the world of private money.
Jay Conner [00:16:40]:
00 points. Right. Number third distinction is the length of the note. Well, the length of the note on hard money is six months to one year. You’ve got to flip that baby, or you’ve got to pay it off, or go find somebody else to refinance it. In my world of private money, the term is two to five years. Okay, so if it’s liquid capital and not retirement funds, the notes are two years. But in this world of private money, they don’t want their money back anyway.
Jay Conner [00:17:16]:
Right. They want you to keep the money and keep using the money. We do five-year notes if it is retirement funds. And that’s a whole other podcast show right there, Matt, on self-directed IRAs and becoming educated on that. To like over half of my private lenders are using their retirement funds in the self-directed IRAs. But anyway, interest rate, origination fees, and then extension fees. So in the world of hard money, if you haven’t cashed out in six months or a year, there’s a good possibility they will extend your note. But what do they want? More money.
Jay Conner [00:17:56]:
Right. So the average extension fee is 2%. Well, when you take 14%, 4 points, and 2 points or 2% extension, we’re already up to 20% the first year with hard money. In the world of private money, we’re still at 7%. And then my biggest advantage and benefit to private money is how much money you get when you buy. How much will they advance? The average hard money lender in the US right now will only advance 80% of the purchase price, no matter how good the deal is. Who’s got to come up with the other 20%? We do. Real estate investor.
Jay Conner [00:18:38]:
But in this world of private money, we get 100% of our purchase. If there’s rehab involved, we get 100% of rehab, and we don’t have to pull any money out of our pocket. It’s all funded by private money lenders. Hallelujah.
Matt McKeever [00:18:54]:
Love it. Yeah, absolutely. That distinction is really important to make between hard money and private lenders. You know, hard money, I really view as being in the business of lending money. And so it’s very cutthroat and competitive, and there’s not the same room for negotiation or creativity that you get with private lending. When you’re dealing directly with that private lender, it’s much easier to take what you’re trying to accomplish and model the way you borrow or the way it gets lent to you in alignment with that. So yeah, I really love that. Do you mind building upon why does why do people want to privately lend to you? Like, why do people want to be private lenders?
Jay Conner [00:19:33]:
Sure. So, as we just pointed out, we know why we want to borrow private money. But why would a private lender want to do business with us? Three big reasons. Number one, the interest rate. I mean,n right n,, ow here in the US,, due to the environment we’re in. Did you know the average 12-month certificate of deposit yield at the local bank is 0.22% as of last week? 0.22%. So we come along and pay a private lender 7% or even 8%. That’s more than 20 times as much as they’re going to get in the local, you know, bank for a one-year certificate of deposit.
Jay Conner [00:20:20]:
The second reason is, is that it is safe and secure. Now, how does it say that this deal is safe and secure? Number one, we don’t borrow unsecured money; we don’t borrow unsecured funds. The private lender is going to get a mortgage or deed of trust, depending on, you know, the document that’s used in the state or wherever you are in Canada, you’re going to get it collateralized. They get it collateralized, so it’s secure, their loan is secured, and it’s safe because typically we don’t borrow more than 75 or 80% of the after-repaired value of the house. Now, if it’s a pretty house and it doesn’t need any rehab, not going to have any carrying cost, we can go right on up to 85, 90% of the value because we’re able to occupy the home so quickly with a rent-to-own buyer. And then the third reason is our private lenders love doing business with us because their loan or their principal loan amount is not volatile. Now, what am I contrasting that to the stock market? Right. So is the stock market volatile, my lands? Absolutely.
Jay Conner [00:21:34]:
I mean, immediately after you invest in the stock market, you lose money. There are fees, there are commissions, and what you invest in, the principal investment amount could be less in value tomorrow. But in this world of private money, the principal loan amount remains the same until cash out. Why is that important to the private lender? They don’t have to worry about anything coming out of their principal loan amount. And they know exactly what their return is going to be. So it gives them that security and confidence in what they’re going to earn on their investment. And it just helps them sleep at night, you know, invest in the stock market. You don’t know what your stuff is going to be worth tomorrow.
Jay Conner [00:22:20]:
So high interest rate, high return, safe and secure, and not volatile.
Matt McKeever [00:22:26]:
Awesome. Love it. So, where are you finding these private lenders? You know, and where should the audience turn to when they’re trying to find private lenders?
Jay Conner [00:22:35]:
Sure. So there are three categories of finding private money. Here are the three categories. Number one is what I call your current warm market, your current center of influence, your current contacts. And I’m going to talk about each of these quickly. Number two is what I call your new market. I say, you know, some of my students say, Jay, my warm market is broke. My people ain’t got no money.
Jay Conner [00:23:03]:
Right. I don’t know anybody with money. Well, first of all, I don’t believe you, but I know why you’re saying that. We’ll talk about that in a second. So your current contacts, your new market, your expanded market, and the third category are existing private lenders. How do you find them? People who are already loaning money out, and they know what private money is. I don’t have to educate them people. So let me talk about each of those three categories quickly.
Jay Conner [00:23:34]:
First category, your existing. Your existing market. So everybody in your cell phone is either a potential private lender or. And, or they know people who would love to learn about private money. Now, let me step back for just a quick second and frame this whole scenario. You see, I teach real estate investors how to do this business as I do. And that is, did you know I have never asked anybody for money? I’ve never asked a private lender for money.
Jay Conner [00:24:12]:
I put on my education hat, I become a teacher, and I teach people what private money is in this environment. I teach them on Zoom. I do group Zoom meetings, right? I don’t have to do in-person private lender luncheons or whatever. I don’t have to go do a one-on-one. I’ll do Zoom groups. So I teach people, I’ve never asked them for money. Because when you ask for money, you’re already compromising your position.
Jay Conner [00:24:40]:
You see, when people learn about private money, and you know the program that you’re offering, you see, these private lenders are not offering you terms. You see, there’s another distinction. When I used to borrow money from the banks. The banks made the rules. In this world of private money, you make the rules, we make the rules. We set the interest rate, we set the term. Here’s the program. And I tell you, after the private lenders hear how the program is and how it works and what it is, if they’ve got investment capital or retirement funds, I promise you they are in, they are interested, and they want to do business with you.
Jay Conner [00:25:19]:
So, back to the three categories. People, your contacts, right? Your email list, your Facebook friends, and I don’t mean your fake Facebook friends, I mean people that you actually have contacts with. And so I have a five step method that of course we don’t have time to get into here on the show, but I got a five step method on how it is that you go through the process of reaching out to your warm market, educating them and then that leading to you actually getting verbal pledges of people saying, jay, go find us a deal to do, you know, for me to fund. Sg, your existing war market. And then people say, well, you know, I don’t have many contacts. Well, I say go to where the money is because the more money you roll in, the more sticks to you, right? So where do you go? So I teach my students to do what I do and what I’ve done. Go and get involved in the civic clubs, get involved in the rotary clubs, and be a server and educate people again on what private money is. Get involved in business, networking, and international, and get involved in BizConnect, in the networking groups.
Jay Conner [00:26:35]:
Educate your networking group on what private money is. And now the money starts chasing you. Third category, existing private lenders. Existing private lenders. When you’re borrowing secured funds, they’re all on public record, right? So public record. When I started, I hired my real estate attorneys and, paralegal to search the public records every month for people, individuals in our local area, who had loaned money out collateralized by real estate. Then I contact those people, and now I don’t educate them on private money. They know what private money is.
Jay Conner [00:27:11]:
Now it’s an interview process. How much are you accustomed to getting, and when? They now tell me they’re happy with 5. I don’t try to talk them into 7%, right? So, of course, the people that come into my world, I have created software or my team has, I am not a technological guy, but I know how to find the people that are. So I have my private lender data feed that we update every month, for every private lender loan that has taken place all over the nation. And so that’s much easier and quicker to get to existing private lenders than to actually search the public records. But those are the three categories.
Matt McKeever [00:27:52]:
Got you. Yeah, that’s a really interesting way to present it. Appreciate you laying it out for us. So you touched upon briefly how you approach that conversation as an educator. Do you mind just exploring a bit further? Like, what do you actually say to a private lender when you’re trying to raise that capital?
Jay Conner [00:28:10]:
Sure. So, an example script or conversation that might be taking place over the phone or whatever, let’s say that I’m just calling up my existing warm market. Right. I’ve identified some folks I want to call again. I’m not begging, I’m not chasing, I’m not selling. This first initial call is really a pre-qualification. Right. And so it might go like this.
Jay Conner [00:28:39]:
I might, you know, dial the phone and let’s say I’m calling up someone I know by the name of Wayne. And I’ve known Wayne for a while. Wayne gets on the phone, and I might say, Hey Wayne, this is Jay. How are you doing today? Well, hey Jay, I’m doing great. Maybe I haven’t talked to Wayne in a while. Maybe where he lives, he can still play golf in the midst of all this craziness. I’ll say, hey Wayne, how’s your golf game? Fantastic. How are the grandkids? Super.
Jay Conner [00:29:04]:
A little bit of chit chat. A little bit of chit chat. But don’t chit-chat long because you need to get right to it. People are busy. And I may say something like, well, Wayne, as you may know, these days I’m investing in single-family houses, or you know, whatever real estate you’re investing in. Because this world of private money, Matt, as you know, works for single-family houses, and it works for commercial, it works for small apartments, duplexes, etc. So, as you know, I’m investing in real estate these days, Wayne, and I am now in the midst of taking advantage of the tidal wave of foreclosures that are coming about. And there’s going to be a big opportunity to serve a lot of people.
Jay Conner [00:29:45]:
As a result, Wayne, I’ve decided to open up my business to people that I know and trust. There’s an important phrase right there. I’ve decided to open up my business to people that I know and trust. So what I’m doing, Wayne, is I am paying people ridiculous high rates of return. But again, this program is only for people that I know. And in fact, Wayne, this program may not be for you. But Wayne, unless you answer yes to the following question, there’s really no need for me to give you any more information. And the question is, do you have investment capital or retirement funds not giving you a high rate of return safely and securely? Now, after I call that the magic question, do you have investment capital or retirement funds not giving you a high rate of return safely and securely? Now, if they say no, I know they’re broke because 0.22% is not a high rate of return.
Jay Conner [00:30:50]:
But if they say yes, then my next step, which is step three in the warm market, is I email them or text them my 16-minute audio called Stress Free Investing, which introduces them to the world of private money. But you know, Matt, that’s what we call the direct approach. My guess is you have a good share of your audience that knows people who have money that might be intimidated to ask that direct question. So if you’ve got another 60 seconds, I’ll share with you what I call the indirect method. Alright, let’s do it. The indirect method is what most of my students absolutely love. And it’s actually how I got my first private lender to loan me $250,000 without me asking for any money.
Matt McKeever [00:31:44]:
Do you want to get control of your financial life? Do you want to crush it in real estate with wholesaling? Do you want to join my full-time team of wholesalers like Mike or Shaheer, or about Tyler or Diego, or about Amar? Alright, and what do we do, boys?
Jay Conner [00:32:02]:
We make offers.
Matt McKeever [00:32:03]:
We buy fast. Never gonna miss a deal ’cause we pay cash. Offers, offers, offers, deals, deals, deals. Tell us, Mr. Seller.
Jay Conner [00:32:14]:
Biggest sorts of deals, Boom.
Matt McKeever [00:32:17]:
So if you guys want to crush it with wholesaling, you need to join my team. And down below, in the video description, there are all the links you need.
Jay Conner [00:32:27]:
The indirect method is what most of my students absolutely love. And it’s actually how I got my first private lender to loan me $250,000 without me asking for any money. Here’s the indirect method. So I know this person, we’ve been going to church for years. So we got the trust, we got the relationship. And it was on a Wednesday night at Bible study at church. And I walked into the church building in the foyer, and I walked up to him, and I said, Have you got a couple of minutes to visit with me on something confidential after Bible study? He said, Well, yeah. So I said, Great.
Jay Conner [00:33:09]:
So we go sit down, and an hour goes by. I promise you, this individual for an hour did not hear any Word of God. Because he’s been thinking for an hour, what’s so confidential that Jay’s got to talk to me about? So at the end, he comes running over to me, and we go to one of the classrooms. He says, What you got in mind? Here’s the indirect approach. And I said to him, I said You know, you know everybody in this town. You’ve been in business for yourself for decades. You’re plugged into the Rotary Club, and I need your help. Wow, is that an important phrase? I need your help.
Jay Conner [00:33:49]:
And here’s how I need your help. Now opening up my real estate investing business, and it’s by referral only. And I’m now paying high rates of return to people with whom I have some kind of connection by referral. And so when you run across someone that’s not happy with their rates of return on certificates of deposit or the retirement funds, would you refer them to me, and I can tell them about my program and how they can get really, really high rates of return safely and securely? He looked at me and guess what he said? He says, Well, what are you talking about? What kind of rate of return are you talking about? See, I knew he was loaded, but I’m not asking him directly, right? I’m asking him for his help. I said, What kind of rate of return did you get? I said, Well, it sort of depends on the deal.
Matt McKeever [00:34:36]:
You know.
Jay Conner [00:34:37]:
What would sound high to you? Now, this was in 2009 when I got cut off from the banks. He said, Well, and my wife and I are only making about 2%, 2 1/2% in CDs. I guess high would be about 5%. And just to condense the conversation, Matt, I said, Well, I can’t pay you 5%, but I can pay you 8%. That led to a one-on-one meeting at their house. And they became my first $250,000 private lender, and I paid them 8%. So by asking for their help to spread the word, if they’ve got investment capital, they’re in. But here’s another magic secret sauce that I know we don’t have time to go into on your show today.
Jay Conner [00:35:16]:
You gotta be prepared to share your program. What interest rate are you paying? What are your terms? What’s the length of the note? What’s your maximum loan-to-value? What’s your geographical area? Because these are the questions they’re gonna ask that you need to be prepared to answer, and share your complete program with them. But that’s what it’s all about. I mean, you’re not selling anybody on a program. You’re not selling them on a deal. In fact, man, I’ll tell you what drives me crazy. Sometimes people will ask me, well, Jay, when you’ve got a deal to present to a private lender, how do you present the deal? My land. You don’t present the deal.
Jay Conner [00:35:57]:
There’s no presentation. There’s no, do you want to do this deal? That’s a stupid question. Why would you ask your private lender, Do you want to do this deal when they already told you I’m in on the program? Here’s the secret. Don’t present your program and a deal in the initial conversation. You just compromised your whole world. You’re begging, right? I want to just talk about the program now. They’re in on the program. They tell me their range of investment.
Jay Conner [00:36:28]:
Now I’ll call them back up and tell them four things. Here’s the script. I got great news, Mr. Private Lender. For our first deal, I can now put your money to work. The after-repaired value is x 200,000. It’s on a home located in Newport. The funding required is $150,000.
Jay Conner [00:36:49]:
I know. They got it. They already told me. The funding required is $150,000. And closing is a week from this Friday, which means I need you to have your funds wired to my real estate attorney’s trust account by a week from Friday, and we’ll be doing our first deal. That’s it. There’s no, oh, I don’t know if I want to do this deal or not. You know my lands.
Jay Conner [00:37:10]:
Of course they do. I’ve never had, since 2009, a private lender say, I don’t want to do the deal. They already told me they want to do the deal. And of course, I’m not going to tell them what the next deal is unless it fits the criteria of the program. Boom.
Matt McKeever [00:37:26]:
That’s awesome. Yeah, there are a lot of great tips sprinkled throughout there. But I think the most powerful takeaway, in my opinion, is the story of asking for advice and getting money. I know that there’s a recurring theme amongst, like, startup companies and tech companies all the time that goes, if you want money, ask for advice. If you want advice, ask for money. So I think that that’s something I always try and keep in mind. And I love the way you’ve approached that with real estate investing.
Jay Conner [00:37:55]:
Exactly. And you know, to that point, real quick, Matt, I’m glad you said that. I love that you want advice, but ask for money. You want money, ask for advice. So I say, put on my teacher hat. Be a teacher. However, there may be some people in your audience influence that they may be intimidated by even putting on a teacher hat. So put on your student hat, put on your mentoree hat, and say, Look, I’ve got a new program.
Jay Conner [00:38:22]:
I know you know all about business. I need your advice on my program that I’ve put together. There you go. So you can be a teacher, or you can be a student asking for advice from someone about your program.
Matt McKeever [00:38:38]:
Awesome. Yeah, I love that. So I know we’re kind of coming up on time here. Just real quick, are there any other tips, tricks, or suggestions you’d want to share with the audience before we wrap up? When it comes to the world of private money raising.
Jay Conner [00:38:53]:
Yes. Raise money when you don’t need it.
Matt McKeever [00:38:59]:
Absolutely.
Jay Conner [00:39:01]:
I mean, when you’re raising money. I mean, I’m raising money all the time. Like, you know, so it has to be part of you. Here’s a big tip on how to raise money when you don’t need it. I mean, there’s always gonna be deals. There’s always gonna be deals. And when you’ve got money sitting on the shelf, burning a pocket, a hole in your pocket, you think you’re gonna be more confident, you’re gonna attract more deals coming to you. But if you got this deal under contract and you don’t have any way to fund it, that is like.
Jay Conner [00:39:33]:
That’s like being in an instant pot pressure cooker, right? So here’s a way you can be raising money all the time when you don’t need it. So here’s how I introduce myself and how I teach my students to introduce themselves all the time. When you meet somebody new, what’s one of the first questions they ask you? And particularly in some kind of social.
Matt McKeever [00:39:56]:
Network, what do you do?
Jay Conner [00:39:58]:
What do you do? That’s what they always ask you. What do you do? Wouldn’t it be really cool, Matt, to answer that question curiously, arouse curiosity, which would lead to a conversation, and lead to getting private money? Here’s most of us. I’m a real estate investor. And the other person who asks the question, their mind is going, that’s nice. Like, who really cares that you’re a real estate investor? Or I’m an attorney, I’m a plumber, I’m an electrician, I’m a teacher, blah, blah, blah, blah, blah. Here’s how you answer the question What do you do? And the answer is, I teach private lenders how to make a lot of money. That’s the answer. Now let’s analyze that.
Jay Conner [00:40:44]:
I teach private lenders how to make a lot of money. Number one, they don’t know what you said. They do not understand what you said. They did hear that you’re a teacher. They also heard that they make a lot of money, but they don’t know what the private lender thing is. So you tell them, I teach private lenders how to make a lot of money. And then shut up. Don’t say a word, just smile at them.
Jay Conner [00:41:13]:
And you’ll get all kinds of responses like, What? What’d you say? What? You know. And if you don’t get a response, that means they weren’t listening, and they just want to talk. Nonetheless, there’s your answer. I teach private lenders how to make a lot of money. I can’t tell you how many hundreds of thousands of dollars. Just answering that question with, What do you do? So again, raise the money. There’s no pressure. There are always deals.
Jay Conner [00:41:43]:
Get money on the shelf and never miss out on a deal again because you didn’t have the money.
Matt McKeever [00:41:49]:
Love it. Yeah, that’s a great networking tip. You always want to position yourself or answer What do you do? Question where it’s going to leads to another question. So it continues the narrative down the path that you were hoping to go. So absolutely love all the tips you’ve shared today, Jay. And I know that you mentioned right before we were recording this video, you’re gonna make one of your books available to the audience. So we’re gonna throw a link in the video description down below. Everyone can go over and grab a free copy of your book.
Matt McKeever [00:42:18]:
And beyond that, if people want to follow along with you on your journey as a real estate investor, what’s the best way to do so, or what’s the best way to get in contact?
Jay Conner [00:42:26]:
Absolutely. So, in fact, Matt, not only my new book, Private Money, and you’d. You’re gonna give them for that, you can download it, folks, or I’ll actually mail you a hard copy and autograph it for you. But to follow me, I tell you what, I’ve got a new Private Money Academy membership that I just launched. And Matt, I can give all of your followers and listeners, and viewers four weeks for free. And you get me twice a month talking about private money, and I answer your questions. If they want to take advantage of that for free, Matt, they can go to www.JayConner.com/Trial, awesome.
Matt McKeever [00:43:16]:
Thanks so much, Jay. Really appreciate you taking the time to just chat with us about private money. Very powerful concept, if, as a real estate investor, you can internalize it and then just go out there and actually put in the work to raise that money. Definitely one of the fastest ways to scale your portfolio. Every investor at some point in time is going to have to start using OPM, other people’s money, or OP, other people’s resources. I think a lot of us would be better served to jump ahead and really get into private money and raising it right from the start. So thanks again, Jay.
Jay Conner [00:43:47]:
Thank you, Matt, for having me on. God bless you.
Matt McKeever [00:43:50]:
Thanks again to Jay for taking the time to break down for us exactly his approach to raising OPM. I know this can be a very intimidating subject matter for a lot of new investors, but it’s absolutely crucial that you get accustomed and comfortable with this concept because, again, you can’t do this only with your own money. At some point in time, you’re going to have to depend on other people’s money and on other people’s resources. Thanks again to Jay for taking the time to break down for us his exact approach when it comes to raising that OPM. If you guys have any questions about raising OPM, jump in the comment section down below. Hit me up. I’m more than happy to answer those questions because I remember being that new investor who was really scared of asking friends and family for the opportunity to get access to their money so that I could go buy more real estate. So if you guys enjoyed this video, smash the like button, hit the subscribe button.
Matt McKeever [00:44:44]:
If you’re new to my channel, subscribe. And until next time, remember, making money is a team sport. There’s enough money in this world for us all to make it. But if you’re not saving it, I mean, like, what’s the point? Thanks, guys. Are you feeling inspired by the knowledge?
Jay Conner [00:44:58]:
You gain in this episode?
Narrator [00:44:59]:
Then head over to www.JayConner.com/MoneyGuide and download your free guide that shares seven reasons why private money will skyrocket. Rocket your real estate investing business right now. Again, that’s www.JayConner.com/MoneyGuide to get your free guide. We’ll see you next time on Raising Private Money with Jay Conner.