***Guest Appearance
Credits to:
https://www.youtube.com/@RawandRelentlesswBoDePaoli-d2f
“How Jay Conner Raises Millions Without Banks or Hard Money”
https://www.youtube.com/watch?v=8DvcXxvSQW8&t=11s
When it comes to real estate investing, adapting to changing markets and leveraging innovative strategies can separate the average investor from a true powerhouse. In the recent Raising Private Money podcast, renowned private lending expert Jay Conner shared a revealing behind-the-scenes look at how he navigates today’s tough real estate landscape, uncovers valuable off-market deals, and consistently secures funding without relying on banks or hard money lenders.
The End of MLS Deals – And the Shift to Off-Market
After 22 years of investing in single-family homes in Eastern North Carolina, Jay Conner has seen the market evolve. He explained he hasn’t bought a single-family house listed on the MLS with a realtor in over five years, a change accelerated by the disruptions of COVID. Instead, he now focuses entirely on for-sale-by-owner properties that are off the market, which he describes as “potentially motivated sellers” that other investors simply aren’t reaching.
Why this focus? The competition for on-market properties has become fierce, with TV shows and increased awareness drawing more people into the flipping game. To stay ahead, Jay targets sellers who aren’t working with agents and may be facing distress or unique life circumstances.
Where Do Today’s Deals Come From?
To consistently find off-market deals, Jay Conner emphasizes three main strategies:
- Direct Mail to Families Facing Foreclosure
Since 2004, Jay has tracked families facing foreclosure and sends a series of eight direct mail letters spaced three days apart, offering solutions rather than taking advantage of their situation. Most of these properties, he notes, end up selling on terms “subject to the existing note,” a technique allowing acquisition without immediate large investments. - Inherited Properties
Jay also targets property heirs through direct mail, running a campaign that stretches 90 days apart over two years. The messaging is tactful, never directly mentioning inheritance, and simply offers to buy the home should they be interested. - AI-Driven “Driving for Dollars”
Technology is rapidly shifting the marketing game. Jay recently began using an AI-powered service that scours Google Maps and Earth for signs of property distress—everything from roof issues to unkept yards—assigning each property a score. Direct mail is then targeted specifically to properties most likely to need a quick sale.
Leveraging Private Money – No Banks, No Hard Money
One of the biggest hurdles in real estate is access to capital. Jay’s story illustrates how traditional funding sources can dry up overnight—he shared how his local bank cut off his line of credit without warning in 2009, despite years of successful business. This crisis forced him into new territory: private lending.
Instead of chasing, begging, or negotiating with banks and hard money lenders (who charge 12%-14% plus origination fees), Jay built a network of individual private lenders—people in his own community, at his church, or in his cell phone contacts—offering them predictable, attractive returns at 8%, with no points and no fees.
How does he attract these lenders? He positions himself as a “teacher,” educating would-be investors about the opportunity and how they can use vehicles like self-directed IRAs to fund his deals safely and often tax-deferred or even tax-free. Importantly, he separates the conversation about the opportunity from the specific deals, avoiding any whiff of desperation and letting the quality of the program speak for itself.
Embracing Automation and AI
Efficiency matters. Jay Conner has built his business so that he works less than 10 hours per week, thanks in part to powerful automations through CRMs like Go High Level, Zapier integrations, and even conversational AI that responds to and qualifies new seller leads within minutes. He’s currently testing AI services that can call, text, and follow up automatically—allowing him to scale outreach far beyond what a single team member could accomplish.
Lessons for Investors
Jay’s journey is a vivid example of why adaptability and an education-first approach matter. By targeting non-traditional sellers, building a local private lender network, and embracing tech innovation, he’s built a scalable, resilient business—not just surviving, but thriving as markets shift.
Whether you’re a new investor or a seasoned pro, the takeaway is clear: mastering the art of finding off-market deals and raising private money can change the trajectory of your career. And in an age of rapid automation and AI, keeping your marketing and funding strategies at the cutting edge is more important than ever.
10 Discussion Questions from this Episode
- Jay Conner highlights that he hasn’t bought a property through the MLS in over five years, focusing instead on off-market, for-sale-by-owner deals. What are the advantages and disadvantages of this approach in today’s real estate market?
- During the 2008–2009 financial crisis, Jay Conner switched from traditional bank financing to private money. How did this shift impact his business, and what lessons can be learned for investors facing financing challenges?
- What are the key differences between private money and hard money lending, and why does Jay Conner prefer private lenders to institutional or hard money lenders?
- The episode describes a teaching mentality when approaching potential private lenders. How does this strategy differ from traditional fundraising or sales pitches, and why does it work for Jay Conner?
- Desperation is said to “have a smell,” and it’s recommended to separate conversations about lending programs from deal-specific asks. How can this mindset shift improve success rates in raising private capital?
- With an average annual return of 8% for private lenders and no points or origination fees, what makes this deal attractive to everyday investors compared to more sophisticated or institutional opportunities?
- The use of self-directed IRAs allows private lenders to invest using their retirement funds, potentially tax-deferred or tax-free. What are the risks and rewards of this strategy for both lenders and borrowers?
- Jay Conner details multiple lead generation strategies, including direct mail to homeowners in foreclosure or inherited property situations, as well as leveraging AI and Google pay-per-lead services. Which method do you think is most effective in today’s environment, and why?
- The increasing role of AI in real estate marketing and lead qualification was discussed extensively, including the use of AI phone calls and messaging. How do you see AI transforming real estate investing and deal origination over the next five years?
- Jay Conner suggests that technological advancements, like AI, will reshape roles in real estate investing rather than eliminate them. Do you agree with this outlook, or do you foresee significant disruptions to jobs and traditional roles in the industry? Why or why not?
Fun facts that were revealed in the episode:
- Zero MLS Purchases in Five Years
Jay Conner revealed that he hasn’t bought a single-family home listed through a realtor or the MLS in over five years, instead sourcing all his deals off-market or directly from for-sale-by-owner opportunities. - AI Is Changing Real Estate Deal Hunting
The episode highlighted a cutting-edge “AI Driving for Dollars” system that uses artificial intelligence, Google Maps, and Google Earth to identify distressed properties by analyzing images for 16 points of distress—completely revolutionizing how investors find off-market deals. - Creative Private Lending Education
Jay Conner shared his unique “teacher hat” approach: rather than asking people for money, he educates them on private lending and self-directed IRAs. Notably, when he started, none of his 47 private lenders had ever heard of private money or self-directed IRAs, showcasing the power of education in building investment partnerships.
Timestamps:
00:00 Flipping houses in smaller markets
05:13 Facing a financial crisis
09:42 Separating opportunity from funding requests
10:42 Explaining self-directed IRAs
13:45 Pitching investment opportunities
19:14 Managing multiple renovation projects
21:12 Introducing private lending concepts
25:42 Using private money for real estate
28:11 Finding Off-Market Property Deals
30:38 AI service evaluates property distress
34:09 Cold calling for property leads
38:58 Using AI for lead generation
41:26 Using AI for lead follow-ups
44:36 AI’s Impact on Job Markets
48:12 Getting Jay Conner’s free 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
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https://www.pinterest.com/JConner_PrivateMoneyAuthority
Advanced Real Estate Marketing and Private Funding Strategies with Jay Conner
Jay Conner [00:00:00]:
It is more challenging. I mean, I haven’t bought, maybe still do two to three deals a month, but I haven’t bought a property, a single-family house, out of the multiple listing service that was listed with a realtor in over five years. Since COVID came along, it’s been that long. So the question is, how do I find these deals? Well, all these single-family houses we buy are for sale by owner. They are off-market. And so, how do we find these potentially motivated sellers? Here’s the answer.
Narrator [00:00:35]:
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.
Bo Depaoli [00:01:12]:
All right, Jay, welcome to the show, everybody. My special guest, Jay Conner, is a legend in the private lending and real estate industry. Jay, why don’t you give everybody a quick synopsis of what you do, what you’re up to,o and we’ll kick it off.
Jay Conner [00:01:32]:
Sure. But first of all, thank you so much for inviting me to come along and talk about my most passionate subject, that being private money and private lending for real estate deals. Because private money and private lending had more of an impact on my real estate investing career than any other strategy. My wife Carol, J,,, oy and I, we’re here in eastern North Carolina. This is where I grew up. Morehead City, Atlantic Beach. Our total target markets only 40,000 people. And we started investing full-time in single-family houses in 2003.
Jay Conner [00:02:09]:
So we’ve been in it for quite a while. Today, we’ll do two to three houses a month, a lot of them due to the market these days. We flipped,p and we flipped over 500 houses. Our average profits right now are running 8. 86,000, $86,000 per transaction. And I don’t share that to brag or come from a position of ego at all. I share that to make a point, and that is there’s a strong argument to be made to invest in the outlying areas or smaller markets or smaller towns instead of the big cities, because I don’t have to compete with all those other real estate investors. I’d much rather be a big fish in a small, in a small pond.
Jay Conner [00:02:58]:
But yes, we’ve been doing this since 2003. The first six years that we were investing in single-family houses, I relied on the local banks, Bo, that’s all I knew to do. Go to the local bank or the mortgage company and apply for a mortgage. And, you know, the bank would make me pull up my skirt and show all my personal assets and give my financial statements and pull my credit. And that worked out okay for the first six years. But then everything changed in January 2009.
Bo Depaoli [00:03:36]:
Yep, that was a big time in the. In this nation.
Jay Conner [00:03:40]:
Yeah, 2007, 8, nd 9, you had all those foreclosures coming along,g and the banks weren’t loaning money, so you had to have the cash ito you know do those deals. But because in my experience, in January of 2009, our business tripled in 2009. And here’s what happened. For six years, a particular bank here locally, it was BB&T at the time. Now it’s truest was my main funding source, Bo. I had never heard of hard money lenders. I didn’t know anything about private money or hard money, which, by the way, are very different. We’ll talk about that.
Jay Conner [00:04:25]:
But the only way I knew to fund my deals was to go to the local bank and apply for mortgages. And in January of 2009, I called him, a banker. I’d had the same banker funding my deals for six years, and I had two houses under contract to purchase. I thought I still had a line of credit when I made that phone call. And I get on the phone with a banker, and I learned like that, though, that my line of credit had been closed with no notice to me. And I said to him, I said, what in the world are you telling me? Is my line of credit closed? I said, we’ve had a great business relationship for six years. I’ve never been late on my payments. And I got a great credit score, 800 credit score.
Jay Conner [00:05:13]:
Why are you closing my line of credit? And my banker said, ” Jay, don’t you know there’s a global financial crisis going on right now? And I said, no, but you just gave me a financial crisis. I don’t have a way to fund these two deals. And he said, ” Well, I’m sorry, we’re not loaning money out to real estate investors. So, Bo, I sat here at my desk for a moment, and I thought to myself, and I asked myself a very powerful question, and you know, the power in asking the right questions. And so I want to share this question with you and your audience that I asked myself, which changed the trajectory of my business forever. And by the way, these people running around saying, every problem’s an opportunity. I want to throw up. I didn’t have an opportunity. I had a problem.
Jay Conner [00:06:07]:
Let’s face the fact. And you know this question I’m getting ready to share that I asked myself, it will help fix any problem anybody’s got. I don’t care if it’s health, relationships, business, career, finances; it doesn’t matter. Here’s the question I asked myself. I said, ” Jay, who? You know it’s who, not hell. I said, ” Who do you know that can help fix your problem? And when I asked myself that question, I immediately thought of Jeff Blankenship. He’s a dear friend. He’s.
Jay Conner [00:06:44]:
He was living in Greensboro, North Carolina, at the time. He was investing in single-family houses. And I called up and told Jeff the story. And Jeff said, ” Well, Jay, welcome to the club. And I said, ” What club is that, Jeff? He said, ” That’s the club of having banks close down your line of credit. He said, ” My bank closed my line of credit down last week. I said, ” Well, Jeff, how are you going to fund your deals? He said, ” Well, there’s this gentleman down in Jacksonville, Florida, by the name of Ron LeGrand. He said,” Have you ever heard of Ron LeGrand? I said, no.
Jay Conner [00:07:20]:
He said, w” Well, Ron says that he can show us how to get a lot of private money. I said, well Jeff, what’s private money? He says, ” Well, I’m not sure. And then he says, Ron also says that we, he can teach us how to use self-directed IRA companies to fund our deals where people are using their retirement funds. I said, Jeff, I don’t have a clue what in the world you’re talking about. I said, ” What is private money? He said, ” Jay, I don’t know. But Ron says we can get a lot of it really, really quick. I said, good, I got two houses under contract. Let’s go to the conference.
Jay Conner [00:08:00]:
So bo, that’s what I did. I went to my very first real estate investing conference in February of 2009 to learn about private money and what in the world it is. Well, let me tell you, I learned about private money. I came back home and the first thing I did, bo, was I put my. I tell people, I tell students all the time. The first thing you need to do to start raising private money is own the real estate between your ears. What I mean by that is to have the right mindset. So the mindset I took on was I’m tired, and I’m through when it comes to borrowing money.
Jay Conner [00:08:43]:
I’m not going to do any more chasing, begging, selling, persuading, filling out applications, and applying by the lender’s rules. The mindset I took on, which ia 180-degreeee turnaround, I took on the mindset of, you know what, I’m going to put a program together. I’m going to put an opportunity together that I can share with people initially in my own market, my own connections, people I go to church with, people in my cell phone, people at the Rotary Club, etc. And I can share with them this opportunity about becoming a private lender and how to earn high rates of return safely and securely. Part of my mindset, bo, is putting on my teacher hat. And my teacher hat says private money, teacher. So here’s a writer downer. Desperation has got a smell to it.
Jay Conner [00:09:42]:
And what I mean by that is if I’m talking with a new potential private lender in the initial conversation, and I’m talking with him about a deal that I need funded, I already sound desperate in the same conversation. So part of the big secret of how to never ask for money is separating the conversations between sharing the opportunity, the program, with a new potential private lender,r and then having a deal for them to fund. What’s interesting as to how that works is right now Carol Joy and I’ve got 47 private lenders that are funding our real estate deals. Now. You don’t need 47 private lenders starting; one or two will get you going. But here’s what’s interesting. Due to the teacher mentality, not one of these 47 private lenders ever heard of private money. And so I exposed them to it.
Jay Conner [00:10:42]:
Not one of them ever heard of self-directed IRAs and how people can take existing retirement accounts wherever they are, move them over to a self-directed IRA company, a third-party custodian approved by the IRS, and then invest those funds and be a private lender. And the money they earn is either tax-deferred or tax-free, depending on the retirement account they have. So that’s a critical framing and critical mindset that I’m a teacher, I’m just exposing this opportunity to people. And then when I’ve got a deal for them to fund, once they’ve told me they like the program, they like the interest rate, they like the rate of return, they like how they’re protected, then I call them up with what I call bo, the good news phone calls. So, if you will allow me, I’m going to take a moment and share the exact script that I say to people when I need my real estate deal funded without asking for money. And then I’m going to turn it back to you, Bo. So let’s hypothetically give something back to you both. So let’s hyper Bo, let’s say you and I have known worry, and let’s say that I have put on my teacher hat and not shared with you the opportunity about private money and private lending.
Jay Conner [00:12:07]:
Let’s also hypothetically assume that I learned in my conversation with you that you have $150,000 sitting in a 401k from a previous employer that you used to work with,h and you’re not happy with those returns. And let’s also assume I’ve introduced you to a self-directed IRA company that I recommend, and you’ve moved that money over,r and you want me to invest your funds. So that’s the setup right there. A week or two goes by, and now I can call you up. Bo, as one of my new private lenders, here is the exact script, the exact words that I would say to you as one of my new private lenders for a deal to get funded. And here’s the way it goes. I call you up, we have a little chit chat, little pleasantry, and then here’s exactly what I say. I call it the good news phone call.
Jay Conner [00:13:01]:
I say, bo, I’ve got great news for you. I can now put your money to work. I’ve got a house under contract to purchase here in Newport, North Carolina, with an after-repaired value of $200,000. Now the funding required matches up to what you’ve got in your self-directed IRA account. That’s $150,000. So the funding requires 150,000 for this 200,000 after repaired by your house. Now, closing is going to be next Friday,y and you’ll need to have your funds wired to my real estate attorney’s trust account by next Thursday. I want to have my real estate attorney email you the wiring instructions.
Jay Conner [00:13:45]:
That’s the end of the conversation. The most stupid thing I could say to you, Bo, is do you want to fund the deal? Of course, you want to fund the deal, al and here are three reasons why you are ecstatic and can’t wait to fund my deal. Number one, you already trusted me and moved your money of $150,000 over to the self-directed IRA company that I recommended. You do. You’re looking to me to perform and deliver. That’s the number two reason why you want to fund my deal is you know I’m not going to bring a deal for you to fund that doesn’t match the criteria of the program I already taught you. You already know the Interest rate. You already know the maximum loan-to-value, which is 75% of the after-repaired value.
Jay Conner [00:14:36]:
In that little example. That’s what it is. After repaired value is 200,000. Not going to borrow more than 75% of the after-parent value. That’s the second reason, you know, I’m not going to bring a deal that doesn’t match the criteria of the program. I told you. And the third reason that Bo is ecstatic to fund my deal is that he’s not making any money until I put his money to work, which he moved over at my recommendation. So again, don’t miss this point.
Jay Conner [00:15:06]:
Separate conversations with private lenders of the program that you’re offering, and then have a deal for them to fund.
Bo Depaoli [00:15:18]:
So, the typical deals that you’re doing, what’s your typical raise on a particular home, do you think? An average raise?
Jay Conner [00:15:27]:
Sure. So it’s really all over the board. I use higher amounts of money from private lenders for purchases, and then I’ll use smaller amounts of money, which my minimumof $50,0000. I’ll use smaller amounts of money for renovations. So I’ve got, I’ve got some private lenders that I may have $50,000 with me. I have other private lenders who have over $1 million with me. So we just simply take the amount of money that they have and match it up to the deal. So in answer to your question, the median price in our area right now is $350,000 of an after-repaired-value home that’s in beautiful condition, you know, totally, you know, totally repaired and ready for Southern Living magazine pictures.
Jay Conner [00:16:18]:
So that’s the price that we sell it for. But again, we don’t borrow more than 75% of that after the repaired value. So you know, on a $400,000 home that is beautiful that I have, my team and I have renovated, I wouldn’t borrow more than $300,000 on that $400,000 after repaired value home. Now, I may have more than one private lender that’s funding that deal because everything we do is called one-offs. So we’re not regulated from doing business like this by the security exception. Because we’re not raising money for a fund. Every note we do is an asset-backed note. So we collateralize with a deed of trust. In North Carolina, most states call it a mortgage.
Jay Conner [00:17:11]:
So we’re not borrowing unsecured money. The private lender is going to know what position they’re in, and their note is going to be collateralized by that individual property.
Bo Depaoli [00:17:25]:
S, in your example where you’re using hard money, private lending to borrow 300,000, what’s the average rate of return that the investor is getting?
Jay Conner [00:17:33]:
Right. So remember, big difference between hard money and private money. Hard money is going to be an institutional lender or a broker that has gone out and raised money for their fund. So, a hard money lender they’re going to be requiring 12%, 14% and origination fees. But with my private lender, I pay them a straight 8%. 8%, no points, no origination fees, no extension fees. And the private lenders are so happy with this 8% because there’s no middle person involved. It’s a one-on-one transaction.
Jay Conner [00:18:11]:
And 8% is so much more money than they can get at the local bank.
Bo Depaoli [00:18:18]:
8% on the money you’re borrowing. So if you’re borrowing $300,000, you’re going to give them a $24,000 return if I
Jay Conner [00:18:26]:
have it for the entire year. Because that’s.
Bo Depaoli [00:18:29]:
That was going to be my question. That was going to be my question. So if you flip this, if you buy the house, rehab the house, and flip it within, let’s just say on a long, long period, 60 days, you’re going to take that annual or the 8% divide by 12, and basically you’re going to give them the pro rata of that 60 days.
Jay Conner [00:18:52]:
Yeah, there are. They’re only going to get paid money while I’m using the money on a particular property, however, as an incentive. And I never cash out a deal in 60 days. My renovation,s on average,g,e from the time I buy, renovate, and cash out, are typically going to be in that six-month to nine-month period on a flip.
Bo Depaoli [00:19:11]:
Wow, you’re spending a lot of time renovating.
Jay Conner [00:19:14]:
Well, not spending a lot of time renovating. I got 12 projects going all the time, and my contractors can’t keep up with me. So it’s going to sit there for 90 days on average before anybody gets to it. So the average length of time on a renovation, depending on the extent of it, I mean, I just finished a $135,000 renovation, which is totally out of the ordinary. Most of our renovations are between 40 and $50,000. Renovations are going to be done within 60 days. But as an incentive for my private lenders to do business with me in the promissory note, I promise them that in the unlikely event that I cash out in less than six months, I’m still going to pay them six months’ worth of interest. Mm.
Bo Depaoli [00:20:04]:
Which is about 4%, which really is cheap money. I mean, it’s a great return for the investors, but for you, it’s cheap money.
Jay Conner [00:20:12]:
Oh yeah. So it’s like cheap money compared to what? Right. It’s cheap money compared to hard money. Big time.
Bo Depaoli [00:20:20]:
Correct.
Jay Conner [00:20:21]:
Yeah, yeah.
Bo Depaoli [00:20:22]:
I mean,n look, even if you’re syndicating real estate, you know, which is what we do, you know, we syndicate for multifamily.
Jay Conner [00:20:29]:
Right.
Bo Depaoli [00:20:29]:
I mean, we are, our investors are anywhere between 15 to 20% plus IRR.
Jay Conner [00:20:40]:
Right. And what length of time is that?
Bo Depaoli [00:20:44]:
Imeana,n typical whole periods are three to five years.
Jay Conner [00:20:47]:
So is that 15 to 20% over the three years?
Bo Depaoli [00:20:52]:
No, no, no, it’s that’s annual.
Jay Conner [00:20:53]:
So that’s annual.
Bo Depaoli [00:20:55]:
Yeah. You, you, that’s, yeah. You take the time value of the money over those three to five years,s and it averages out to, you know, 15 plus basically. Per year. Per year. Yeah.
Jay Conner [00:21:05]:
That’s a great return. That’s great.
Bo Depaoli [00:21:07]:
Yeah. But that more, that more falls in line with what you’re talking about on the hard money side, you know.
Jay Conner [00:21:12]:
Correct, correct. Yep, yep. Well, and here’s the deal. You know, when I made the point and shared that all 47 of my private lenders and none of them had never heard of private money or private lending or self-driven IRAs, the reason it works and is a win-win for them and a win-win for me is that this world is brand new to them. Yeah, it’s all brand new. And 8% compared to a half percent in a savings account or 3% in a CD, that’s like, that’s almost too good to be true. So when I’m doing business, or should I say if I were doing business with an existing private lender, such as your, your existing private investors that invest in your fund, that would be a whole different conversation because they have been exposed and spoiled.
Bo Depaoli [00:22:14]:
Yeah. Right.
Jay Conner [00:22:15]:
So, now it’s going to become a negotiation conversation. And I would much rather be a teacher than a negotiator.
Bo Depaoli [00:22:24]:
Yeah, no, I totally get it because most of the people that we’re working with are either family offices or high-net-worth individuals.
Speaker B [00:22:30]:
Right, right.
Bo Depaoli [00:22:31]:
I mean, these are sophisticated investors that understand, you know, the time value of money and what the market does. But your everyday person that’s not considered a hot, you know, for people have to be what’s called an accredited investor to be able to invest.
Jay Conner [00:22:47]:
Sure.
Bo Depaoli [00:22:47]:
The people that you’re dealing with are probably not considered accredited investors.
Jay Conner [00:22:51]:
You know what’s funny about that, bo? So out of these 47 private lenders, probably 25% of them are accredited investors. But you know what? They don’t even know they are. Yeah, they don’t even know what an accredited investor is. Right, yeah. So as I say, the magic, the magic behind this formula and this process is exposing people to this world of private money that’s never heard about.
Bo Depaoli [00:23:26]:
Yeah. Well, on top of that is you are 100% right getting someone involved in a self-directed IRA because now you control your own destiny and you mitigate any tax liability that you would have. Let’s just say they weren’t in an IRA and they made 8% of their money. Well, at the end of the year you would have to, you would have to submit a K1 to them, which they would have to turn into their accountant to account for that income at the end of the year. But what you’re doing is brilliant because you can defer that tax liability, you know, as long as you technically want, until you can start collecting on the IRA.
Jay Conner [00:24:04]:
Correct? Correct. Oh, it’s beautiful. I mean, if they’ve got a Roth IRA, which is in the minority of the circumstances, but if they have a Roth IRA, I pay them unlimited money per year, tax-free on their side, because the Roth IRA is an IRA that’s made from after-tax dollars. And like there’s like, you know, one example I give of somebody having a Roth IRA, and when I share this, it just blows their mind. I never heard of this concept. I love teaching this to Rotary Club members because they’re always looking for new information. They’re always looking for a speaker. I’ll say, look, I’ll show you how to make $20,000 tax free off of a $100 investment within 60 days.
Jay Conner [00:24:53]:
And they’re saying there’s no way too good to be true. And I’ll just show them the scenario. We’ll take $100 and open up a Roth IRA at the self-directed IRA company. Take that 100 bucks and go find a deal and get it under a real estate deal. Get it under contract, single-family house, and you can assign that option or that contract out for a $20,000 assignment fee and whatever that assignment fee comes back into your IRA tax-free. Of course, I’m speaking a language they never heard of, but yep, yep.
Bo Depaoli [00:25:31]:
So what do you think? Like with all of your private lenders? You said you had 40, 40-some private lenders.
Jay Conner [00:25:38]:
That’s right.
Bo Depaoli [00:25:39]:
What do you think your raise capability is?
Jay Conner [00:25:42]:
Well, I’ve raised right now 8 and a half million dollars that I just use over and over again. I have not intentionally raised or put on my teacher hat a new potential private leader for many years because I just use the money over and over and over again. You know, that doesn’t mean that years ago, when the real estate market was slower, that doesn’t mean that I didn’t buy and hold with private money. For instance, today, Bo, I just checked it out a couple of weeks ago. First Citizens Bank, right here on Bridges Street, Morehead City, North Carolina. Commercial rate for landlord buy and hold is over 8% right now. And look, when I’m paying a private lender 8% and no points and no jump fees and no extension fees, number one, that’s less than the commercial rates. And.
Jay Conner [00:26:43]:
And secondly, there’s no hurry to pay it back as long as I’m getting that positive cash flow, of course.
Bo Depaoli [00:26:51]:
Yeah, no, you’re 100% right. And on top of that, not having to go through all of the BS with the bank of you know, all the paperwork, and as you mentioned, lifting your skirt and showing everybody, you know, especially if you go to the SBA. Right. SBA route, which is even worse.
Jay Conner [00:27:11]:
I’ve never gone that route, but I’ve heard about it.
Bo Depaoli [00:27:14]:
Oh, it’s. I mean, I get it. I mean, I get what they’re trying to achieve, trying to help small businesses, but. Yeah, I mean, you basically have to hand over your firstborn, you know.
Jay Conner [00:27:24]:
That’s right. That’s right. But now, look, now when we get off of this show, Bo, I want to talk to you about investing in your deal.
Bo Depaoli [00:27:34]:
Okay, that sounds good. One question that I have, too,o is where are you finding your deals? I think I, you know, I used to do flips back in the day. I did flips around when you started about, you know, 0809, when the market was flips were. Foreclosures were everywhere. Right. And then I feel like HGTV came around and started doing all these shows, and now everybody and their brother wants to do fix and flips. And then the market, at least the market around here, I felt, got very soft, and it was hard to find the deal. So where do you find your deals now?
Jay Conner [00:28:11]:
That’s a great question because, I mean, I have now been investing in single-family houses in eastern North Carolina for 22 years. 22 years nonstop. And it is more challenging. I mean, I haven’t bought, maybe still do two to three deals a month, but I haven’t bought a property, a single-family house, out of a multiple listing service that was listed with a realtor in over five Years since COVID came along, it’s been that long. So the question is, how do I find these deals? Well, all these single-family houses we buy are for sale by owner. They are off-market. And so, how do we find these potentially motivated sellers? Here’s the answer, number one. Ever since 2004, Carol Joy and I have been tracking and offering our services to every family facing foreclosure.
Jay Conner [00:29:11]:
Since 2004, we’ve been doing that for 21 years. We have a series of eight letters that we mail three days apart. Of course, COVID came along and shut all that down for a year and a half for 18 months. But other than those 18 months, we do sequential mailings through our foreclosures, offering solutions. I’m not out here taking advantage of anybody. In fact, most of these people facing foreclosure will sell on terms subject to the existing note, where you don’t even have to use private money unless you want to use it in a second position to bring payments, current renovations, or whatever. So we direct mail to all people who are facing foreclosures. Secondly, inherited properties.
Jay Conner [00:29:57]:
Inherited properties. So interesting. We direct mail all property owners and heirs of inherited properties again to offer that solution. We mail those letters 90 days apart for two years because some people want to leave something quickly, some people don’t. We never bring up that we know that this is an inherited property because there’s no need to exacerbate and stir painful emotions. We’re just here buying properties in this particular area, and want to know if you’re interested in selling. It’s that simple. So foreclosures, inherited properties.
Jay Conner [00:30:38]:
Thirdly, I’m now using a brand new service that’s called I Driving for Dollars. AI driving for dollars. What in the world is AI driving for? Dollars. Well, so there’s this AI service that’s actually still in beta testing, and I just launched it a month ago. And so you give the service the zip codes that you invest in, and they then take those zip codes, put them in the AI service. And AI uses Google Maps and Google Earth to actually look at all the pictures up here sideways of houses in your zip code. And AI has 16 different points of distress that it’s looking for on the property, in the yard, on the house, on the roof, the windows, etc. And then they give you a scoring system, 1 to 100.
Jay Conner [00:31:38]:
So, properties between 80 and 100 are pretty close to a teardown. The sweet spot is between 60 and 100 on their scoring. But 1 through 50 still has some size of Interest. We, we’re doing a 90-day direct mail campaign to those properties. But on top of all that, we have seven different companies, vendors that are Google pay-per-lead companies. And these Google pay-per-lead companies, I’m only paying for a lead. This is an owner of a property that’s gone on the website, typed in their information, and hit the submit button. So now they’re raising their hand, looking for us real estate investors to buy their house quickly for whatever kind of reason.
Jay Conner [00:32:30]:
I get more leads from those seven services than I do from any of the other marketing methods put together.
Bo Depaoli [00:32:38]:
Okay, that’s AI. That AI is your platform is something you built out.
Jay Conner [00:32:42]:
No, it’s a fellow Mastermind member that.
Bo Depaoli [00:32:45]:
Okay.
Jay Conner [00:32:46]:
That I met a couple of months ago and had a Mastermind meeting, and he was telling me about this AI platform that he had built out, and he’s a software geek,d and I am not a geeky greased monkey, as you can probably tell. But anyway, he built his platform out, and so I’m testing it right now.
Bo Depaoli [00:33:07]:
That’s pretty cool. Do you use any other platforms like Crexi or COSTAR to try to find distressed property? Or people whose loans are distressed or maturing?
Jay Conner [00:33:19]:
Actually, I haven’t heard of those two services. I’d love to hear more about them.
Bo Depaoli [00:33:24]:
Yeah, I mean, COSTAR is basically the back end of the MLS, right?
Speaker B [00:33:29]:
It’s.
Bo Depaoli [00:33:31]:
It has every single property you can think of and all of the information on that property. It’s mostly used for commercial. I don’t know if you can look up residential. You might be able to. But I know for sure on Crexi C R E X I that you can pull up residential properties that might be in a distressed status with their loan.
Jay Conner [00:33:56]:
Oh. Now, when you say distressed with their loan, does that mean it reports they might be behind? Correct. Really?
Bo Depaoli [00:34:04]:
Yes.
Jay Conner [00:34:05]:
Wow.
Bo Depaoli [00:34:06]:
Well, you know, because I know a lot.
Jay Conner [00:34:07]:
I’m sorry, go ahead.
Bo Depaoli [00:34:09]:
What I know a lot of guys do is, you know, they do a, they do very similar to what you do, like a grassroots style. Right. But then they also leverage these platforms, and then they’ve got VAs that are on the phone auto dialing all of these properties because they’ll get laundry lists of properties that have distressed loans on the market, and just saying, hey, are you interested in selling? Are you interested in, you know, like you said, sub 2, whi?h. I don’t know. Do you know Pace Morbi?
Jay Conner [00:34:35]:
Oh, Pace Morbi. We’re in a Mastermind together.
Bo Depaoli [00:34:38]:
Yeah, I Mean, that’s pace. His thing.
Jay Conner [00:34:39]:
His.
Bo Depaoli [00:34:40]:
His gator method with the sub2. That’s kind of his thing. So. Yeah, you nailed the hat. Nailed it right on the head there.
Jay Conner [00:34:47]:
Well, I’ve got an amazing outbound calling service. Okay. I recently started using it. I mean, they. Now I’ve got Filipino vas. Nothing against Filipino vas. I’ve got. So do I, five of them.
Jay Conner [00:35:01]:
For my outbound calling. I want the American southern twang if I can. And so the album callers that I use are American. And so I’m going to check out this crexy thing that you’ve. I can’t. You know, it amazes me, Bo, and that’s what I love about this business. There are always new things to learn and new strategies to learn, and I’m always learning. I’m only.
Jay Conner [00:35:31]:
I mean, I’m justa.. I can’t get my appetite filled when it comes to learning marketing strategies.
Bo Depaoli [00:35:36]:
I know, I know.
Jay Conner [00:35:37]:
And so thank you for sharing Tricksy with me.
Bo Depaoli [00:35:41]:
Yeah, absolutely. And yeah, I’m with you. Marketing is, man, it’s a science. It’s a total science on. On marketing. Especially when you’re doing paid ads with Google and Meta, Facebook, Instagram, TikTok, all of those. I mean, there’s. There’s so much to it.
Jay Conner [00:35:59]:
There really is. And you know, I have such an amazing team. I actually work in the business less than 10 hours per week. And what I love to do still may have had the same acquisitionist talking to my sellers for 20 years. Kim has been with me for 20 years,s talking to sellend. But what I love to do is like what you just shared with me. Crixie. I love testing new marketing vendors’ resources, strategies,s and then measuring them.
Jay Conner [00:36:30]:
You know how in the world I work in this business less than 10 hours per week, it’s because of the CRM. The software that we use. It’s driven by go high-level ghl.
Bo Depaoli [00:36:40]:
Oh yeah.
Jay Conner [00:36:41]:
And Kim and I never talk. I mean, literally, literally, we never talk. It’s all the communication is in, is in the software. And so when,n like one of those Google. You got me all excited now, though, when. When one of them leads comes in from a Google lead service. Well, we got Zapier software attached to all of them. It automatically puts the lead in our system software.
Jay Conner [00:37:09]:
And you know what? We just kicked off two months ago, Bo. We now have AI within less than two minutes, starts texting. Very conversational texting with that lead. And the purpose and objective of the AI with that lead is to set the telephone appointment for Kim to talk to them about their property. And six weeks ago, Bo, I’m really getting excited now. Six weeks ago, it would have taken Kim a day, two days, or three days of calling and texting to get the owner of that property on the phone. And now the appointment is being set within five to 10 minutes of that lead coming in.
Bo Depaoli [00:37:55]:
Yeah. Yeah. Well, Jay, I’m about to blow your mind even more. Have you seen the AI phone calls yet?
Jay Conner [00:38:01]:
I’ve heard about it, but I haven’t seen it or actually experienced it.
Bo Depaoli [00:38:05]:
Yeah, so you can actually. Because I use it, I use GoHighLevel as well. So I use Go High Level and HubSpot. And so in both platforms you can utilize a AI conversation app where it will, when that lead call or fills out the lead form, it will automatically auto dial the lead, call the lead, have a conversation with the lead, similar to the conversation that Kim is having with the lead, and be able to book, you know, the appointment or book whatever you’re trying to book. And because I’ve had a couple of people on the podcast that they run these, these platforms and their, their closing percentage is, is, is amazing. It’s through the roof. But here’s the other.
Jay Conner [00:38:54]:
After that, I will. After the show, you’ve got to introduce me.
Bo Depaoli [00:38:58]:
I will. But here’s the other, here’s the other side of that is I, I’m like, I’m not telling you this to try and get rid of Kim, but if the AI conversationalist, the AI platform can book, you could basically scale the amount of appointments or bookings that you could do, because Kim can only do so much in a day. But with AI, you, I mean, the sky’s the limit. Right? So, so those, once you qualify those leads that run through your funnel, you could, let’s just say, I’m just going to throw numbers out. Let’s say you’re getting, you know, 10 good leads per month that end up closing deals with you. You might be able to get 30 good leads that close a deal with you per month because you’ve got AI handling more of that back-end stuff. And then Ken, Kim could just be managing the whole sequence.
Jay Conner [00:39:46]:
Sure. You know, that’s amazing. That’s.
Bo Depaoli [00:39:49]:
Yeah, it’s. And the conversations are so. They sound like you’re talking to a human. It’s scary how good it is.
Jay Conner [00:39:56]:
Oh my. Lance. Well, I just started hearing about that a few months ago, but I haven’t experienced it. And I mean, I see what’s going on with texting. I mean, there might be a way to combine with the same AI service. They text, and they call.
Bo Depaoli [00:40:15]:
For sure, 100%. Yeah. And here’s what’s interesting, because I, I brought this up with my guest that, that I had had on that did this. I said to him, I said, well, I’ve always thought, especially as of recently, that most people don’t want to talk on the phone. They don’t like to be bothered. They just would rather be text. Right. Because if I see a number come up on my phone that’s calling me and I don’t know it, I’m not answering.
Bo Depaoli [00:40:42]:
Right. I’ll wait for them to leave a message, and if it’s relevant and it’s important to me, then I’ll call them back.
Jay Conner [00:40:47]:
Sure.
Bo Depaoli [00:40:47]:
But if you text me, I’m. I’m sure to respond. And he said, ” This is what was interesting. He said, ” It’s a generational thing. He said, ” You’re of that generation where, you know, you’re more. It’s more of the older generation that’s more apt to text and accept phone calls. The younger generation is more apt to take phone calls than they are to take texts.
Jay Conner [00:41:10]:
Really?
Bo Depaoli [00:41:11]:
Yes. I was really surprised by that.
Jay Conner [00:41:13]:
I am, too. I didn’t think the younger generation knew how to talk.
Bo Depaoli [00:41:18]:
I know, I know. But, yeah, that seemed, according to their data, it seems that; the younger generation picks up the phone much more often than the older generation.
Jay Conner [00:41:26]:
You know, Bo, you just made the case that if you’re using AI or you’re not using AI, I mean, this is why I had Kim for months and months and months, I had Kim texting and calling three times a day to that lead for three days in a row. But now you just made the point with AI call antics, because you really don’t know the generational. The generation of that person on the other end. Now, I tell you another thing that I discovered, I think, over the years. So two of my seven, Two of my seven Google vendors that have me that are finding motivated sellers for me, two of them automatically dial my phone and dial Kim’s phone immediately after that lead comes in, and you can tap one on your cell phone and that automatically calls them immediately. And you know what I’ve discovered? I mean, you know, you wait an hour. You wait for two hours to wait to try to get it with somebody. They don’t even remember they called you or texted.
Bo Depaoli [00:42:36]:
Yeah.
Jay Conner [00:42:36]:
Because.
Bo Depaoli [00:42:37]:
Right.
Jay Conner [00:42:37]:
You know, you’re not the only game in town. And they’re doing all this. Listen. But what I discovered is that when I have that lead come in, and I tap one, and it calls them immediately, over 90% of them pick up because they’re right there in the middle of that activity. They’re not recognizing the phone number, but they know they just hit the submit button,n and now somebody’s calling them.
Bo Depaoli [00:43:02]:
Yep. Yeah, that’s very. Yeah, that’s very common. But now imagine if you could have AI do that, because you’re only one person who could do one call, but AI can do 10 calls all at once. Right.
Jay Conner [00:43:12]:
Oh, my lands. I’m so excited.
Bo Depaoli [00:43:16]:
Yeah, yeah, it’s pretty. It’s pretty. I mean, imagine what the next five years are going to be like. You know, I say this all the time on the podcast. I mean, the way that AI and technology are going. I mean, it’s. It’s going to be crazy. The amount of scalability.
Bo Depaoli [00:43:30]:
If you’re on the right side and you use these technologies the right way, the way that you can scale and the way that you can improve operations and become way more efficient is going to be very underrated.
Jay Conner [00:43:44]:
Right, right. Well, I’m all excited about it. And, you know, I had a guest on my podcast last week, maybe wishing for last, and they were predicting, or they had read a prediction that within the next five years, 30% of the workforce will no longer be needed doing whatever they were doing. And actually, my guest said it’s really not five years. They think it’s more like three years, especially. But you know what? I’m not worried about all those people being out of work. And here’s why. When the Internet came along,g and computers came along, they said, oh, we’re going to, you know, half of the workforce is going to be out of work.
Jay Conner [00:44:25]:
No, what changes is what is then needed to run this world. We’re just running the world differently.
Bo Depaoli [00:44:36]:
Yeah, I 100% agree. I’ve had a lot of AI people on this podcast because I love the subject, and I’ve brought that. I brought that argument up, and some of them have said exactly what you said, because I’ve used the example, like when the printing press was invented. Right. They thought back then, you know, that, oh, my God, all of these people are gonna be without work. But it actually created more work. And then, when, as you said, the Internet and computers are used, but it actually create more jobs. The only pushback that I got from a guest on the whole AI subject is they said the problem with AI is it’s not like those other technologies, because the market was able to adapt to those technologies, because the technology had to grow into the market, but they said that AI is advancing so quickly that the market can’t keep up.
Bo Depaoli [00:45:28]:
And so that could be the limitation to being able to keep people employed because AI is going to take jobs away.
Jay Conner [00:45:37]:
Yeah, well, that’s a good point. I mean, that’s a good point. You know, I never even heard of AI until March 2023. In March 2023, I was in a mastermind. And being a member of mastermind groups has been the number one strategy that has kept me on the edge. And, but there was a, there was a, a presentation, a speaker there at our mastermind meeting. And he started talking about AI and how fast he was going to go. And I said, and now I look back to March of 2023, and I said, I’ll be John Brown.
Jay Conner [00:46:15]:
I mean, hey, look, a friend of mine who is a fellow podcaster and very successful real estate investor, he is now, but now he’s left real estate investor, and he’s just, he’s a private lender. That’s all he’s doing. Well, okay, let’s say hard money lender because he makes the rules, he sets the interest rate, right? And he, I had him on the show last week. His name’s Rich Lennon. Great guy. And, and he’s a, he’s in Virginia next door to me. And he was telling me that, he said, it only takes me less than three hours to underwrite a deal. I mean, from start to finish, start to finish.
Jay Conner [00:46:54]:
And I said, ” Well, Rich, let me ask you a question. I said, how are you getting your appraisal, or desktop appraisal,l or your comps pu, ll or whatever, so quickly to know what you’re looking at. His answer, AI, he uses Grok. Grok is his, is the platform that he likes. And he has got a prompt. Now, he promised me he was going to send it to me. I don’t have. Yeah, I wear him out.
Jay Conner [00:47:23]:
But he’s got a prompt that he has written that he puts in AI to give him the after-repaired value of a physical property, not the as-is value after repair value, assuming everything is in beautiful condition. And he says in less than 10 seconds, it gives me all the comps, all the physical properties, all the adjustments to square footage, et cetera. In 10 seconds, he’s got the after-repaired value.
Bo Depaoli [00:47:54]:
Amazing. Amazing. That’s what I’m saying. The next five years are going to be crazy.
Jay Conner [00:47:59]:
And it’s already getting pretty crazy fast.
Bo Depaoli [00:48:01]:
Yeah, I know, I know, I know, Jay. This was a lot of Fun. Where can everybody reach out to you, learn about you, learn to become a student of yours, all of that jazz, or invest?
Jay Conner [00:48:12]:
Well, the best way to connect with Jay Conner is for me to give you a gift. And the gift I would love to give is my recent best-selling book, which is called” Where to Get the Money Now. And the subtitle is ” How to get money for your real estate deals without relying on traditional or hard money lenders. And this is not an ebook. This is a physical book. You can spend 20 bucks on Amazon, but don’t do that. Let me give you the book for free. You can pick it up at www.
Jay Conner [00:48:43]:
And by the way, I want to send this via express mail to you. The United States Postal Service is still in business, so you can pick it up at www.jconner. and I’m an er not an or so j a y c o n n e r.com forward slash book. Again, that’s j-a y c o n n e r dot com book just cover shipping and handling. I’ll autograph it. And I actually have in the book the exact program and opportunity that I teach to my new private lenders.
Bo Depaoli [00:49:17]:
That’s great. That’s going to be really val really valuable. We’ll be sure to put that in the show notes as well. Jay, thanks so much for coming on. I really enjoyed this,s and let’s keep in touch.
Jay Conner [00:49:25]:
Bo, thank you so much. This was fantastic.
Bo Depaoli [00:49:29]:
Yes, thank you,u sir.
Narrator [00:49:40]:
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.