***Guest Appearance
Credits to:
https://www.youtube.com/@eXpRealty
“Real Estate Success: From Bank Rejection to $2M in 90 Days | Jay Conner’s Private Money Blueprint”
https://www.youtube.com/watch?v=o0yMZaYE3fk&t=2s
If you’ve ever faced the sudden loss of traditional funding as a real estate investor, you know the feeling: panic, frustration, and a moment of reflection about how to keep your business alive. This was the pivotal moment Jay Conner faced back in January 2009 when his long-standing line of credit was suddenly withdrawn—no warning, no backup plan. Yet rather than accept defeat, he pivoted to a new way of thinking: attracting private money.
In the recent episode of the Raising Private Money podcast, Jay Conner joined Leo Pareja and shared the strategies and mindset shifts that not only saved his business but helped it thrive beyond what traditional financing could ever offer.
Shifting the Mindset: From Begging to Teaching
Jay’s first lesson is all about mindset. Too often, real estate investors approach raising capital with a sense of desperation, especially when a deal is at stake. As Jay puts it, “Desperation’s got a smell to it. The worst time in the world to be looking for private money is when you need it for a deal.” To avoid this, he repositions the investor from a beggar to a teacher—someone who introduces a new opportunity to people unaware of the private lending world.
Rather than chasing, persuading, or begging for money, Jay advocates for leading with a servant’s heart, exposing your network to the concept of private money, and teaching them what you offer well before you have a deal on the table. The secret sauce is to build relationships first and teach the program, not pitch individual deals. This approach means the money is ready and waiting, removing stress and shifting the power dynamic in your favor.
Structuring the Conversation
So, what does a real-life conversation look like? Jay suggests starting with your own network—people you go to church with, friends, family, and anyone with whom you already have trust. As he recounted, he approached a friend at church not directly to ask for money, but instead to ask for help referring others who might be dissatisfied with their investment returns. This “I need your help” approach piques curiosity and often leads to the person wanting to get involved themselves.
When they show interest, avoid the mistake of giving away all the details at once. Instead, share just enough to get them intrigued (“greed glands swelling,” as Jay jokingly calls it), then sit down to teach them about the program: interest rates, security, and how their investment is protected. Only after they understand and are excited do you bring them a deal, using Jay’s “good news phone call” script—a confident, matter-of-fact notice that their money can now be put to work.
Building a Pipeline: One-on-One and Group Presentations
Jay emphasizes that your initial private lenders often come from one-on-one conversations, but scaling up requires a broader approach. He suggests hosting “private lender luncheons,” inviting people in your network to a group presentation where you teach the opportunity and answer questions, all without pitching specific deals. With this method, you can attract substantial sums—Jay raised nearly a million dollars from just one luncheon.
Additionally, using educational audio recordings, brief and tantalizing, can spur potential lenders to reach out to you, saving you from the traditional chase. Sharing insights about tax-free returns with self-directed IRAs is another way to open conversations and provide real value.
Adapting Strategy to the Market
The exit strategy for your deals—whether BRRRR, flipping, or lease-purchase—depends on current market conditions. Flexibility and market awareness give you more options to produce returns for your private lenders, maintaining their trust and excitement in continuing to invest with you. Final Takeaway
The best time to raise private money is before you need it. By serving and educating your network, you create a pipeline of ready funds and lifelong relationships, allowing you to move quickly and confidently on opportunities. Jay Conner’s journey is proof that when traditional financing dries up, a shift in mindset and a focus on relationships can unlock a world of private money—and take your business to the next level.
For more in-depth strategies, check out Jay Conner’s book, podcast, or even attend his live events—details are available through his site and podcast channels.
10 Discussion Questions from this Episode
- How did losing access to traditional bank financing act as a catalyst for discovering private money strategies in the stories shared?
- What are the key differences between raising private money and securing funding from traditional institutions, as explained in the episode?
- Why is it important to separate teaching about the opportunity from pitching individual deals to potential private lenders?
- How does approaching private lender relationships with a “servant’s heart” impact the results, according to the speaker’s experience?
- What are the main steps involved in the process of raising private money as described in the episode?
- How does mindset influence success when seeking and managing private lender relationships?
- The episode detailed a “good news phone call” script—what makes this approach effective in securing private funding?
- What role does networking within your existing community and contacts play in sourcing private lenders, based on the examples given?
- How should real estate investors adapt their exit strategies—like flipping versus holding—based on current market conditions?
- What strategies for sourcing off-market deals were outlined, and how can investors apply these in today’s environment?
Fun facts that were revealed in the episode:
- The “Good News Phone Call” Script
One of the most successful techniques described for raising private money is the use of a “good news phone call.” Instead of asking if someone wants to fund a deal, the call is simply to inform them their money is ready to be put to work—a strategy that builds excitement and anticipation for the opportunity. - Private Lender Luncheons Yield Big Results
A single private lender luncheon—featuring lunch at a local oceanfront club and a PowerPoint teaching session—brought in $969,000 in pledges, showcasing the power of group education over individual pitching. - Curiosity Builds Commitment
Handing out a simple 16-minute audio recording, which purposefully never shares interest rates or deal details but just piques curiosity, converted an acquaintance into a $650,000 private lender—demonstrating that intrigue can be one of the best tools in raising funds.
Timestamps:
00:00 Starting with traditional financing
04:10 Line of credit closed unexpectedly
07:50 First real estate seminar experience
13:14 Mindset and teaching private lenders
17:17 Telling Wayne about investment opportunities
18:06 Discussing interest rates with Wayne
22:29 Leo is eager to fund the deal
26:10 Introducing Private Money Concept
30:02 Shifting from lease to flip houses
32:52 Lender wants profit participation
36:25 Using Google and private money in real estate
38:36 Offering a free real estate book
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
Servant Leadership in Lending: Lessons on Attracting Private Capital with Jay Conner
Jay Conner [00:00:00]:
So I learned very quickly, Leo, Al had a problem. He had over a million dollars in his checking account, and he didn’t know what to do with it, where to put it. He didn’t want to put it in the local bank and make that kind of little bit of interest. And so I walked him through my little PowerPoint presentation, the same one I did at the private lender luncheon. Al became my next $650,000 private lender by me simply giving him an audio recording where I met him, and notice I didn’t follow up with him. He’s chasing me after he listened to this little 16-minute introductory. You see, that audio does not spill the beans. It doesn’t tell the interest rate or the length of the note, but it piques curiosity.
Jay Conner [00:00:44]:
And the purpose of that 16-minute audio is to get a potential private lender’s greed glands in their neck swelling up so they can’t wait to hear the details of the program and the opportunity.
Narrator [00:00:57]:
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 to raise 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.
Leo Pareja [00:01:25]:
Jay, thank you so much for joining me on my podcast today. I like to showcase and tell people stories, and, you know, what you do and some of the folks that follow you overlap quite well with our community. And investing in real estate has been a very important part of my journey. So when I found the opportunity to have you on, I was excited. So thank you for being here. And you could just take us from the top of whatever part of the origin story that would be what took you to the business that you’re in today, would be a great place to kick it off, surely.
Jay Conner [00:01:56]:
Oh, well, first of all, thank you so much for inviting me to come along and talk about what I’m so excited and passionate about, that being private money. Because private money in my real estate investing business has had more of an impact than any other strategy or anything else that I’ve done. So how in the world did this come about? Carol, Joy, my wife, and I started investing primarily in single-family houses. Now I’ve done shopping centers and condominiums, but the focus since 2003 has been single-family houses here in eastern North Carolina in a very, very small area. Our total target market is only 40,000 people. And our average profits for the past 12 months have been $86,000 per per transaction. And I don’t share that, Leo, to brag at all. I share that to make a point.
Jay Conner [00:02:47]:
And the point is, there’s an argument to be made to be a big fish in a small pond. So I don’t have that many competitors here in our small area, and we do all kinds of marketing to find off-market houses, etc. So anyway, from 2003 when we started, until January of 2009, our very first six years, all I knew to do, Leo, to get my deals funded was go to the local bank or the mortgage company and get on my hands and knees and say, please fund my deal. And the banker would make me pull up my skirt and show my personal assets and have my credit score pulled and all that stuff. So it was traditional financing. You know what’s funny, Leo? Back then, I didn’t even know what hard money was. Never heard of it. That’s because I live underneath a rock here in eastern North Carolina.
Jay Conner [00:03:41]:
Nonetheless, in January of 2009, Leo, everything changed. I called up my banker. His name was Steve. He had been my banker for six years. We’d done a lot of deals together. And I called up Steve in January 2009, and I told him about these two houses that I had under contract to purchase. And I thought I still had a line of credit at the bank. Nobody had told me otherwise.
Jay Conner [00:04:10]:
So, in the middle of that conversation, Le Steve informs me that my line of credit has been closed with no notice to me. And I said, Steve, what in the world are you talking about, closing my line of credit? We have had a great six-year relationship, always made your payments on time. I’ve got an 800 credit score. Why is the bank shutting down my line of credit? Steve said,” Jayy, don’t you know there’s a global financial crisis going on right now? I said no, but you just gave me a financial crisis. I don’t have a way to fund these two deals, which have a potential profit of over $100,000 just on these two deals. And so Steve proceeded to tell me, ” Sorry, we’re not loaning money out to real estate investors or any other real estate investors. So I hung up the phone. Leo, I sat here at this desk for a moment, and I thought to myself, what am I going to do? Well, I have choices.
Jay Conner [00:05:09]:
I learned from Jack Canfield the formula as to how to be in control of your destiny, which is E plus R equals O. That’s the event that happens in your life. You’re 100% responsible for how you want to respond to that event and, therefore,e be a part of your own outcome that you experience. So I sat her,e and I asked myself a question. And you know, the power is in asking the right questions. I want to share with you, Leo, and your audience this powerful question that I asked myself, because the answer to this question pivoted my entire real estate investing journey. And the question I asked myself was, and by the way, this question will help solve any problem anybody has. And you know these people running around saying, ” Oh, every problem’s an opportunity.
Jay Conner [00:05:57]:
I want to throw up. I want to be the Kool-Aid guy who runs into the brick wall on TV. I didn’t have an opportunity; I had a problem. Let’s face the facts now. This opportunity or this problem became an opportunity. But at the moment, it’s a problem. So here’s the question I asked myself. I said, ” Jay, who do you know? It’s not how, it’s who.
Jay Conner [00:06:19]:
Who do you know that can help fix your problem? And that question will help fix any problem. Health, finances, career, relationships, it doesn’t matter. And you know what’s interesting, Leo? When I asked myself that question, I immediately thought of a dear friend of ours, Jeff Blankenship. He lived in Greensboro, North Carolina, at the time,e and he was investing in single-family houses. So I said, ” Hey, I bet Jeff can help me. I called up Jeff, and I told him what had just happened with me and my banker over the telephone. And Jeff said,” Well, welcome to the club, Jay. I said, ” Well, what club is that? I’m not sure I want to be a member.
Jay Conner [00:06:57]:
He said, ” Well, my bank just shut me down last week. I said, w” Well, Jeff, how are you going to fund your single-family house deals? He said, well, have you ever heard of private money? I said, no, what’s that? He said, ” Well, have you ever heard of self-directed IRAs and how individuals can move retirement funds over to a self-directed IRA company? And the interest that we real estate investors pay them is either tax-free or tax-deferred. I said, Jeff, I don’t have a clue what in the world you’re talking about. What’s private money? He said, ” Well, there’s this gentleman down in Jacksonville, Florida, by the name of Ron Legrand. And Jeff says, Ron Legrand can, can teach us about private money. I said, ” Well, what is it? Jeff said, I don’t know. But Ron says we could get a whole lot of it very, very quickly. I said, ” Great.
Jay Conner [00:07:50]:
So, Leo, that was my very first real estate investing seminar that I went to in February 2009. I have been doing this business for six years, just leveraging my experience from being in the mobile home and manufactured housing business after that industry went to pot. And so I went to Ron de Grand’s seminar. I learned about private money, and I only had a million-dollar line of credit, which is nothing at the local bank. I was able to attract over $2 million in less than 90 days of new funding from private lenders and individuals. And you know what’s interesting, Leo? I got 47 private lenders investing in our deals, loaning us money, and not one of those private lenders ever heard of private money until I put on my teacher hat, my private money teacher hat. None of them ever heard of private money, private lending. None of them ever heard of self-directed IRAs.
Jay Conner [00:08:47]:
Over half of those 47 people are using their retirement funds to fund our deals and loan us money. Since that time, I’ve never asked anybody for money, and I’ve never pitched a deal in my life since 2009. And it’s all because of leading with a servant’s heart, teaching the program the big secret sauce. And then I’ll turn it back to you, Leo, because I could talk about this all day. The big secret sauce is separating conversations between teaching the opportunity to be a private lender and teaching what I offer,r versus having a deal for them to fund. I get my deals funded without ever pitching a deal by calling them up with a script that I call the good news phone call. I’ll share that with you and your audience if you want me to. And you know, here’s a writer downer.
Jay Conner [00:09:41]:
Desperation’s got a smell to it. And the worst time in the world to be looking for private money is when you need it for a deal. That’s the worst time in the world to be looking for private money. And you know, I tell people it’s a mistake to be looking for private money after you got a deal on the contract. Leo, I’m getting ready to take a little risk. I’m getting ready to take a little risk here. I mean, you run a huge organization, so odds are you’ve probably heard this phrase. Want to share the phrase? And then I’ll tell you what I think about it. Have you ever heard the guru or the speaker on the platform of the stage say, oh, just get the deal under contract, the money will show up.
Jay Conner [00:10:25]:
Have you ever heard that? Hogwash. Baloney. Or they’ll say, they’ll say, oh, money finds good deals. I mean, does money have legs and run around? I mean, that’s the most stupid thing I’ve ever heard in my life. And it seems to me, get the money lined up first, establish a relationship with a hard money lender such as yourself, or raise money from private lenders, and get the money ready to go. And just think how much more confident real estate investors and entrepreneurs are going to be to make offers when they’ve got the money lined up, burning a hole in their pocket, ready to do deals. So people ask me all the time, Leo, how do I start raising private money? I’ll tell you how to start.
Jay Conner [00:11:09]:
You start by owning the real estate between your ears. Get your mindset right. No chasing, no begging, no selling, no persuading, serving, exposing people to what this world of private money is all about. And then you create win-win scenarios with those private lenders that you’ve taught, and everybody wins.
Leo Pareja [00:11:31]:
And so I completely resonate with the story. I also saw Ron Legrand’s seminar during the early financial crisis. My story: I started investing in flipping houses. I also had a line of credit with BB&T that was shut down from one day to the next.
Jay Conner [00:11:50]:
That’s where my line of credit was.
Leo Pareja [00:11:53]:
So we had the same banker. And by the way, I was actually flipping houses in the Carolinas in Wilmington, so.
Jay Conner [00:11:58]:
Oh, that’s only an hour and 45 minutes from where I live.
Leo Pareja [00:12:02]:
Yep. There was a small airport that had just an eminent domain, and I was able to acquire 10 single-family homes, and I moved them on a truck. So I’ve had some crazy real estate stories, and I was using BB&T, and they informed me that from one day to the next, I no longer had a credit facility.
Jay Conner [00:12:17]:
Well, hey, look, you’re blessed, Leo. They informed you.
Leo Pareja [00:12:23]:
I was drawing on it when they informed me, so.
Jay Conner [00:12:25]:
Oh, okay, same scenario. Same scenario.
Leo Pareja [00:12:29]:
Yeah. So. And then I went on to start a private lending business. And for me, it was a little different. I was, I had, I had gotten some folks who had trusted me with their money, but then I stopped using it because the prices kept going down. And I was like, I’m just gonna wait, wait this market out. And they told me they didn’t want it back. They were very accustomed to the rate, and that’s what kind of put me on the path to become a lender.
Leo Pareja [00:12:58]:
But walk me through that initial conversation. What’s the structure like? What are the tactical things people can do when listening?
Jay Conner [00:13:06]:
So you mean, as far as how to go about raising prices?
Leo Pareja [00:13:09]:
Yeah, so, so, so give us the step one in your process.
Jay Conner [00:13:14]:
Right, well, step one is your mindset. You’re not chasing and begging, you’re serving and leading. Right? You’re teaching people who don’t know about this. That’s step number one. Step number two: What are you going to teach? What are you going to offer? So the next step is you’ve got to know what you are offering, what the opportunity you’re offering is. And one big mindset shift for me, Leo, is that when I’m teaching private lenders that have never heard of this world before, then we as the borrower, this is very different from institutional money. We as the borrower, we are, we are our own underwriter. We set the interest rate, we set the length of the note, we set the maximum value to the after-repaired value, which is 180 degrees from traditional institutional lending, because 99.9% of the time, it’s the lender, he or she, who has the cash that makes the rules.
Jay Conner [00:14:16]:
So here’s another big mindset shift. We’re offering an opportunity. And here’s the interest rate that we’re offering, etc. For example, since 2009, when I started, I’ve been paying all my private lenders 8%, no points, a maximum of 75% of the after-repaired value loan-to-value. The length of a note is typically two years. However, most of the time we don’t use it that long. And so what is, so what’s the next thing you do? What is the opportunity that you are teaching? Right. And with your permission, Leo, at the end of this show, I’ll actually give my book for free to your audience, so that I can get the money now and ship it to them.
Jay Conner [00:15:01]:
And in the book, I go over the entire program that I taught, and I still teach my new potential private lenders. So what are you going to teach? Know what it is that you’re offering. And then the next step is to make your list from your own contacts, your own network. Who do you go to church with? Who do you see regularly on a. Every week, the trust factor is already in place. And so I’ll share a short story that explains these steps. I was thinking of a gentleman named Wayne that Carol Joy and I went to church with. He’s passed away now, unfortunately.
Jay Conner [00:15:39]:
But it was a Wednesday night, Leo, at Bible study here at the Mor City Church of Christ in Morehead City, North Carolina, on Barber Road. Well, Carol Jo and I whavebeen a member of that church for a long time. I walked into the foyer. Now, bear in mind I had just gotten cut off from the bank, but I had put my program together as to what I wanted to offer an opportunity to potential private lenders that never knew anything about this world. I walked into the foyer, and I looked at Wayne. I saw Wayne there. I walked up to him,m and I saidWaynene, I’d like to visit with you confidentially for a few minutes after Bible study, if you have a few minutes. He said,” Well, sure, Brother J.
Jay Conner [00:16:17]:
So we had Bible study, and we got together in the nursery right after Bible study on that Wednesday night. Leo, here’s exactly what I said to Wayne. Remember, I’m not begging, chasing, persuading, or selling, and I’m not asking anybody for money. 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 way back when in Morehead City, North Carolina. Now, if you’re listening to this show and you don’t know who the Zenith Television dealer was, that means you’re too young to remember life before Walmart came to town.
Jay Conner [00:16:59]:
You actually bought your TVs from the Zenith dealer. He would finance your TV. He’d come to your house and repair your TV. Well, Wayne had put a TV in practically everybody’s house in Morehead City. And I said, Wayne, you know everybody in this town. He was well-connected with the Rotary Club. I said, and here’s the magic phrase. Here’s the magic phrase.
Jay Conner [00:17:17]:
I said, Wayne, I need your help. I said, I’ve now opened up my real estate investing business by referral. Only when you run across somebody who’s complaining about the volatility of the stock market or making hardly any money in the local bank in a CD would you refer them to me, and I’ll tell them about the insane rates of return that I’m paying my investors. Well, what do you think? Wayne said? Wayne looked at me, and he said, ” Well, now, Brother Jay, what you got going on there? And I said, w” Well, are you saying you might be interested? He said, ” Well, I might be interested. I said,” Why is that? He says, but we’re losing money in the stock market. He and his wife. I’m only making 3%, which is. That’s what it was in 2009 in the local bank in a CD.
Jay Conner [00:18:06]:
He says, ” What kind of rates are you paying? I said, well, Wayne, that sort of depends on the deal. I said, what sounds high to you? He said, ” Well, I’m getting 3% of the bank losing money in the stock market. He 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 the next day, on Thursday afternoon, I went to his and his wife’s home, and I sat down,n and I brought them and put on my teacher hat. I brought them the entire program as to what I do with my private lenders. How am I going to protect them? I don’t borrow unsecured funds.
Jay Conner [00:18:49]:
They get a deed of trust. I name them on the insurance policy; there’s the mortgagee. They give them another layer of protection. And so I went over the program with them, and after two cups of coffee, Leo, that $250,000 became $500,000 that they wanted to invest. Because you see, a new private lender always has more than they tell you, right? As you very well know. And so they became my very first private lenders. I didn’t bring up any deals, but then I called them up within a week with the good news phone call. And Leo, would you like me to share the script of the good news phone call?
Leo Pareja [00:19:28]:
Absolutely. And before. Before you go there. So it’s basically, you set up the money on call until you find a deal.
Jay Conner [00:19:35]:
Correct.
Leo Pareja [00:19:36]:
All right. An important part of the process. Okay.
Jay Conner [00:19:40]:
Very important part of the process. That way, I don’t have to pitch. Right? So Leo lets you and me do a little role play. Let’s do a little role play. By the way, what kind of tea are you drinking this morning? I love hot tea.
Leo Pareja [00:19:53]:
That is a.. It’s a ginger matcha green tea.
Jay Conner [00:19:57]:
Hush.
Leo Pareja [00:20:00]:
With a squeeze of lemon.
Jay Conner [00:20:01]:
I love ginger and jasmine green tea mixed together. That’s. That’s my go-to. Anyway, I digress. So, Leo, let’s let me share the script of exactly what I say in the good news phone call to a private lender when I’ve got a deal for them to fund. So, Leo, let’s do a couple of hypothetical assumptions. First of all, let’s assume that you and I have been friends for a while. We’ve got the trust factor with each other.
Jay Conner [00:20:32]:
Let’s say we go to church together for the sake of, you know, conversation. And let’s also assume, Leo, that I’ve taught you my program. I’ve taught you what I pay, how you’re protected with no deal attached to it, and you like the program. Let’s also assume, Leo, that you have a 401 (k) retirement fund with a previous employer. You’ve left the employment. The 401k is still with the plan administrator of that previous employer. And let’s say you got $150,000 sitting over there and you don’t like how it’s performing. Let’s also assume that in my teaching to you of this opportunity, let’s assume I have introduced you to a self-directed IRA company and a rep that I recommend.
Jay Conner [00:21:19]:
And let’s also assume you’ve moved that $150,000 over to the self-directed IRA company. And I have promised you I will put your money to work for you just as soon as possible. So there’s the setup. I call you up on the phone, and here’s the script of the good news phone call. I say, Leo, I’ve got great news for you. I can now put your money to work. I’ve got a house under contract in Newport, North Carolina, with an after-repaired value of $200,000. Now the funding required for the deal matches up to what you’ve got, $150,000.
Jay Conner [00:22:00]:
Now, closing is going to be next Monday. Monday, a week from Monday. And I’m gonna need you to wire your $150,000 to my real estate attorney’s trust account. I’m going to have my attorney email you the wiring instructions. So you’ll need to email those funds from your self-directed IRA account to my real estate attorney by a week from today. By next Friday. End of conversation. Now let’s unpack that for a second.
Jay Conner [00:22:29]:
First of all, the most stupid question I could ask Leo is, does he want to fund the deal? Of course, he wants to fund the deal. For three reasons. Number one, Leo trusted me to move his money to the self-directed IRA company that I introduced him to. Number two reason Leo wants to fund my deal is that Leo knows I’m not going to bring any deal for him to fund unless it matches the criteria of the program that I already taught him. He already knows the underwriting and the terms. Notice funding was $150,000, 75% of the after-repaired value. The third reason Leo is ecstatic about wanting to fund my deal in this hypothetical situation is that Leo’s not making any money until I put his money to work. So, to just unpack that the stages are very, very important.
Jay Conner [00:23:27]:
Leo, as you pointed out, you’ve taught the program;m they’ve got their money lined up, ready to go. You promised them you’d bring them a deal just as soon as possible to put their money to work. You follow through. You call them with the good news phone call for them to fund the deal, al and they’re ready to go. It’s that Simple.
Leo Pareja [00:23:46]:
And how did it go from there? Did they refer you to,lks like, tell me how it went for?. You said 250 to 2 million?
Jay Conner [00:23:55]:
Well, that’s a good question. So with Wayne and his wife, that 250,000 by Thursday afternoon became 500,000, right? So where’d the other 2 million come from? I put on one. My very first private lender luncheon. What in the world is a private lender luncheon? Well, I got a whole chapter in the book on how to have a successful private lender luncheon. I invited 20 people in my own network, people I go to church with, people in my cell phone contacts that I’ve known for a while. I invited them to a luncheon at the Dunes Club, which is an oceanfront private club here in Atlantic Beach, North Carolina. And I invited them to lunch.
Jay Conner [00:24:35]:
I had my CPA there, my realtor there, my real estate attorney there, and I fed them lunch. And then I pulled up my little PowerPoint presentation, Leo. And I taught the program, the same one that I talked to Wayne and his wife at their home. And I had a little interest form on the table, no deals attached to this. And from that one private lender luncheon, I raised $969,000 in pledges from people who wanted to invest. So right there, that accounted for one and a half million. And then shortly thereafter, I’ll try to make this short. I was.
Jay Conner [00:25:16]:
I wanted to lose some weight, right? I’ve been wanting to lose weight all my life. So anyway, I was born, a nd my mother put me on a diet. But anyway, I wanted to lose some weight. And here in Morehead City, Leo, there was this pharmacy called the Medical Park Pharmacy. And they were having a little clinic on Monday night at 7:30. They were selling these female hormone drops. And if you put them under your tongue every morning, it’ll kill your appetite. And you lose 30 pounds in 30 days and eat all the Cheetos you want.
Jay Conner [00:25:48]:
So sign me up, right? I’ll buy anything. Well, while I was there at the pharmacy, Leo, I met this guy named Al. I had never met Al before in my life. Well, let me just tell you, Al needed more hormone drops than I did, if you know what I mean. He was. He was Big Al. So we chatted a little bit after the little presentation. And here’s exactly what I said to Al.
Jay Conner [00:26:10]:
I said, I’ve got a 16-minute. Now, this is when we had CDs back in the day, when we had CDs. Now it’s just an audio that you can text to people, I said, al, I got a 16-minute CD in the car that I think you’ll find interesting. It’ll actually show you how to get higher returns on your money than you probably get anywhere else. I went to the car, I got the CD, and I handed it to him. It was an audio that I had recorded, 16 minutes long,g called Stres: How to Print Money Automatically. And so it introduces this world of private money. And what it is, it doesn’t give any of the terms, but what is private money? So I gave it to Al, and I said, by the way,y Al, this has got nothing to do with multi-level marketing.
Jay Conner [00:26:54]:
And I didn’t tell him anything about real estate or private money or anything. That was on Monday night and Thursday. Al called me up. He said, ” Jay, I’ve listened to this recording three times. When can we get together? And I said, ” Well, whenever you want to. He said, ” Well, I’m traveling, I’ll be back in town on Monday. So he came here to my office, walked in the door, we walked into my conference room, and I said, by the way, Al, what in the world do you do? He said, Multi-level marketing. I said, really? So I learned very quickly, Leo, Al had a problem.
Jay Conner [00:27:28]:
He had over a million dollars in his checking account, and he didn’t know what to do with it, where to put it. He didn’t want to put it in the local bank and make that kind of little bit of interest. And so I walked in with my little PowerPoint presentation, the same one I did at the private lender luncheon. Al became my next six hundred fifty thousand dollar private lender by me simply giving him an audio recording where I met him, and notice I didn’t follow up with him. He’s chasing me after he listened to this little 16-minute introductory. You see, that audio does not spill the beans. It doesn’t tell the interest rate or the length of the note. But it piques curiosity.
Jay Conner [00:28:09]:
And the purpose of that 16-minute audio is to get a potential private lender’s greed glands in their neck swelling up so they can’t wait to hear the details of the program and the opportunity. So I did it one-on-one. I did it in a group at the private lender luncheon. And I just went about my daily life asking people did you know questions? I love did you know questions. My favorite did you know question is, well, by the way, did you know there’s a way people can earn unlimited money per year tax-free? Nobody’s going to know the answer to that question. Of course, I’m talking about a Roth IRA in a self-directed IRA company. And so that just opens up conversations that allow you to teach people about self-directed IRAs and how they can earn money tax-free and tax-deferred.
Leo Pareja [00:29:01]:
So from there, what is your typical strategy? Is it buy and hold, and then the BRRRR method?. Would you refinance out, or is it to actually buy, fix,x, and flip? And how does that funnel work for you?
Jay Conner [00:29:12]:
Well, as of recently, it doesn’t make sense to do the BRRRR method because commercial rates have actually been higher than what I’ve been paying my private lenders at 8%. The BRRRR method does make sense when you can refinance and your commercial rate, of course, is less than what you’ve been paying your private lender. With private lenders, there are no points and et cetera, the way I do it. So for a long time, years ago, Leo, I would. When the market was slow, when the market was slow in the early 2000s, I did a lot of deals where I’d buy with private money. I’d rehab the house, turn it beautiful. I put it in the multiple listing service, and I would simultaneously market it to potential rent-to-own or lease purchase buyers. So whoever showed up first, that’s who I sold it to.
Jay Conner [00:30:02]:
And I did that a lot. While the market was slow, we actually cashed out 80% of our lease purchase buyers. We forced them into credit repair and forced them to get a mortgage to cash out because I didn’t want to leave private money buried in there forever. But the, since COVID came along, for goodness ‘ sake, and the values of houses going sky high, I haven’t sold many houses on lease purchase since COVID. If I renovate them, and I flip them, because we still have no inventory whatsoever in the multiple listing service. Case in point, I put a house on the market on Country Club Road here in Morehead City a couple of weeks ago, Leo, when I went active with my real estate. tor On Friday, in 48 hours, we had 20 showings. Can you imagine 20 showings? I bought that house for $150,000. I put $50,000 worth of renovation in it, for a total investment of $200,000. Put it on the market with my realtor for $389,900.
Jay Conner [00:31:07]:
And I’m under contract right away for 415,000 with multiple offers. So, with the market still being crazy as it is here in my local market, my exit strategy is to flip most of them due to the lack of inventory in the MLS.
Leo Pareja [00:31:26]:
So you kind of turn on whatever strategy works based on the market. So. So you either hold them or flip them based on what’s going on in the macro.
Jay Conner [00:31:33]:
Absolutely. Adapt to the market. Adapt to the market. You know, one question I’ll get. I mean, I’ve already lived through four cycles of real estate, right? And sometimes I’ll get the question from people. They’ll say, ” Well, Jay, aren’t you concerned about, you know, the market going down, the real estate market going down, etc. And I say, I don’t care what the market does. People are always going to need somewhere to live.
Jay Conner [00:32:00]:
They are always going to need housing. And if I need to sell a house on lease, purchase, or rent, to own, to adapt with the market, then that’s fine. I can actually buy them upside down, and with them owing more money than they’re worth. Because if I sell on lease purchase, I’m going to collect a large non-refundable lease option deposit. The legal term is an option fee, and then as long as I can collect per month more than the underlying debt on that house, then, you know, I’ll sit on that house forever. Because I know from experience, the longer you own a property, the more money you make.
Leo Pareja [00:32:40]:
And do your investors ever want to participate in a different function than just as a lender, or do they get curious about what it is you do to create those returns?
Jay Conner [00:32:52]:
One out of 47. Actually, one out of 48, because he passed away. And I’m not talking about Wayne, I’m talking about a different private lender. So this particular private lender that I’m speaking of, very, very smart, very smart entrepreneur, owned his own business, a wealthy guy. And so he had been a private lender with me for maybe, I don’t know, two or three years at least. And he calls me up one day,y and he says, ” Jay, I’ve enjoyed that past tense always sort of puts you on your heels, right? He says, I’ve enjoyed being a private lender and the rate of return you’ve been paying me. He says, but I really don’t want to do that anymore. I want to participate in the deals and get a percentage of the profit in the back end.
Jay Conner [00:33:40]:
And I said, well, I don’t blame you for asking, but that’s not my business model. You see too many cooks in the kitchen, burns the toast. If you want to get a percentage of the profit and a part of the back end, then you know what you need to do. What I do, you need to go look for deals, you need to spend Money on marketing. You need to negotiate deals, and you need to oversee general contractors. Unless you’re just. If you’re tired of just sitting back, collecting checks, and doing nothing, and if you want a percentage of the profit, then you need to be an operator.
Leo Pareja [00:34:13]:
And what do you, what would you say are the tips or the best strategies to source deals? Because I think that’s the hardest part of the funnel for people.
Jay Conner [00:34:23]:
Particularly today, in today’s market, it’s challenging to find the deals. Obviously, they’re not in the mobile listing service for the reason I just said. I’ve put a beautiful home in the, in the MLS. I got 20 showings in 48 hours. I haven’t bought a house out of the multiple listing service in over five years, since before COVID. So,o where do we find these properties? Well, more than one place. And so I’ll share with you right now. Number one is Google pay per lead. So I don’t do Google pay-per-click, but Google pay-per-lead.
Jay Conner [00:35:02]:
I have seven different vendors that supply m,d my team, my acquisitionist. I’ve had my acquisitionist with me for 20 years, who talks to all my sellers. Her name is Kim. And so we have seven vendors that are providing us leads of off-market houses. People who do not have their houses in the multiple listing service, who are motivated to sell for whatever reason, moving out of the area, somebody passed away, somebody lost a job, somebody got a divorce, etc. So Google pays per lead. Another large market is inherited houses. Inherited properties.
Jay Conner [00:35:44]:
I’m thinking of a particular inherited property from last year. In fact, a year ago next month had a Google Pay per leave come into my marketing funnel. It was an oceanfront condominium at Pinell Shores, North Carolina, on the island right down from Atlantic Beach. Not only was it an inherited property, but it was vacant. The son lives in South Carolina, and the property is going to the foreclosure courthouse steps for sale in two weeks. Lots of layers of motivation. So long story short, I bought that house using private money. That condominium, I should say, for $425,000.
Jay Conner [00:36:25]:
I put $11,000 worth of paint and touch-up in it, and I sold it very, very quickly for $615,000 right away. The point of that story is that if I hadn’t had the Google pay-per-lead coming in, I would have missed out on that deal. A real estate investor would have bought it at the courthouse steps. And if I hadn’t had private money to close in less than seven days, that’s a big thing right there with private money, I close deals in 7 days or less when we need to. So Google pays per lead. We also direct mail inherited properties and the heirs of inherited properties. In addition to that, Leo, since 2004, we’ve been mailing every person, family that’s facing pre-foreclosure in our target market here locally, and we’re taking advantage of nobody. We’re again leading with a servant’s heart.
Jay Conner [00:37:24]:
Most of these people will sell to u,s subject to the existing note, te without even needing private money. And we don’t buy it for what they owe. We put three or four thousand dollars in their pocket to actually help them get back on their feet. So we direct mail people facing foreclosure. I have a full-time outbound caller and texter, and we are now using a list provided by one of the very first AI Driving for Dollars services. I met this guy in a mastermind that I’m a member of. So that’s outbound calling and texting, and so we use all kinds of, I mean, networking. Networking is a big part of getting leads.
Jay Conner [00:38:07]:
Networking with realtors who have a house that needs just repair, and they’re really sort of hesitant about putting it in the multiple listing service. So,o having multiple relationships with multiple realtors as well. There’s more, but those are the main ones.
Leo Pareja [00:38:26]:
Well, that is fascinating how that journey started and where it’s come. Se, where can people find you in your content? Why don’t you share that as we wrap up?
Jay Conner [00:38:36]:
Sure Leo. The best and easiest way to find Jay Conner, by the way, I’m an er, not an o,r so the best and easiest way is. Let me give you my recent best-selling book, which is called ” Where to Get the money now it’s on Amazon for 20 bucks, but don’t spend 20 bucks on Amazon. The subtitle is ” How and Where to get all the Real Estate. All the money for your real estate deals without relying on traditional lenders. That is the BB and Ts that you and I know about. Leo and I’ll autograph it. I will ship it via three-day express.
Jay Conner [00:39:11]:
I’ll give it to you, just cover shipping. You can pick up the book at www.JayConner.com/Book. Again, that’s www.JayConner.com/Book. I’ll rush it out to you. I’m also going to include two tickets to the private money conference, an in-person conference that I do three times a year. And in addition to that, come check me out on my podcast. I’m now in my eighth year of podcasting. The name of my podcast is Raising Private Money with Jay Conner.
Jay Conner [00:39:53]:
Very easy to find. It’s on all the platforms.
Leo Pareja [00:39:56]:
Well, Jay, thank you so much for joining me today and sharing your wisdom and your journey.
Jay Conner [00:40:00]:
I appreciate you, Leo. Thank you so much for joining, for having me join you. God bless you.
Narrator [00:40:06]:
Are you feeling inspired by the knowledge you gained in this episode? Then head over to www.JayConner.com/MoneyGuide. That’s www.JayConner.com/MoneyGuide, and download your free guide that shares seven reasons why private money will skyrocket your real estate investing business, right now! Again, that’s www.JayConner.com/MoneyGuide to get your free guide. We’ll see you next time on Raising Private Money with Jay Conner.