In the ever-evolving world of real estate investing, many aspiring investors get stuck—not because they lack deals, but because they’re unsure how to fund them or structure them in a way that truly works. In a recent episode of the Raising Private Money podcast, Jay Conner sat down with Jeremy Davis to break down practical, no-nonsense strategies for tackling these very challenges.
If you’re ready to cut through the noise on market trends, creative financing, and raising money, here are critical takeaways from that illuminating discussion.
The Danger of Shallow Knowledge and the “One-Strategy” Trap
According to Jeremy Davis, one of the biggest pitfalls in today’s educational landscape is getting swept up in advice that lacks depth. Far too many resources cover a wide range of topics but don’t go deep enough to help you solve real-world problems. For example, the idea that “co-living” is a magical exit strategy for every deal is misleading. As Jeremy Davis points out, co-living works great with the right stabilized asset—but shouldn’t be your only ace in the hole. The reality is, every property and situation demands a different strategy, and trying to force a square peg into a round hole (like converting every property to co-living) is a recipe for failure.
Instead, real opportunity comes from targeting the right deals—specifically, those where motivation, timelines, and equity or terms align with your desired outcomes.
The Power of Niche Data in Finding Motivated Sellers
So where do investors find these ideal deals? The secret, Jeremy Davis teaches, is in niche data. For those less familiar, niche data means focusing on very specific segments of sellers—such as pre-foreclosures, tax-delinquent properties, or probate deals. These categories are goldmines because of the built-in timelines and motivation: whether someone’s about to lose their house to the bank, falls behind on property taxes, or inherits a property they can’t afford to keep, these situations force action.
Deals found through these channels not only have the highest chance of being discounted, but also offer you chances to structure financing more creatively—negotiating everything from interest rates to balloon payments.
Don’t Worry About the Money—Until You Have the Deal
A standout moment in the conversation is Jeremy Davis’s advice on the sequence of worrying about funding. Contrary to what many newbies believe, you don’t need to have all the money lined up before you secure the deal. Instead, focus first on negotiating and locking up a great property. Then, tap your pre-vetted list of private lenders or hard money investors. This approach stops analysis paralysis and gets you into action, which in turn builds the kind of momentum that attracts available capital.
However, consistency is key: if you’re only doing sporadic deals, your favorite lenders might lend their money elsewhere while you’re waiting for the next opportunity. Building a consistent pipeline is how you maintain relationships, credibility, and access to capital.
Marketing: More Than Just Finding Sellers
Most investors equate marketing with looking for motivated sellers. But, as Jeremy Davis shares, marketing is just as crucial for attracting private lenders. By becoming visible—whether through social media, networking, or sharing your journey online—you not only find deals, but you draw in people who want to put their money to work with knowledgeable operators. For instance, one simple video walking a property led him to raise $300,000 from two passive investors who were watching his content.
The Myth of 100% Financing
Yes, you can fund a deal (purchase and rehab) with zero out of pocket. But as Jeremy Davis emphasizes, these “home run” deals are rare; you’ll need to talk to a lot of sellers, sift through dozens of situations, and market consistently. When you do find a deal with strong equity or terms, private and hard money lenders will compete to fund you—because the numbers make sense, not because you talked a good game.
Raising Private Money: Credibility, Clarity, and Consistency
Finally, Jeremy Davis stresses that raising private capital isn’t about seeking out “rich people” or sophisticated financiers. It’s about being visible, clearly presenting your numbers, and establishing trust through transparency. Whether or not you use formal pitch decks, being able to answer every lender’s questions and understanding your deal inside and out is non-negotiable.
Final Thoughts
If there’s one universal truth from this episode, it’s that solving problems, not chasing unicorn exit strategies or waiting for perfect circumstances, is how you create a real estate investing business that grows. Armed with deeper knowledge, niche data, and the right approach to networking and marketing, you’ll be able to find and fund the deals that set your portfolio apart.
Interested in learning more? Jay Conner encourages listeners to check out Jeremy Davis’s free Friday workshops and keep seeking out education that goes deep, not just broad.
Ready to do your next deal? Take action, get visible, and focus on solving real problems—the money will follow.
10 Discussion Questions from this Episode
- Jay Conner mentions that finding money, rather than finding deals, is often the bigger challenge for real estate investors. Do you agree? Why or why not?
- How does Jeremy Davis define “creative finance,” and why does he believe it’s crucial for investors who lack strong credit or capital?
- Jeremy Davis discusses his concerns with co-living as an exit strategy. What do you think are the risks and rewards of co-living in today’s market?
- What is “niche data,” and why does Jeremy Davis emphasize pre-foreclosures, tax delinquency, and probate as valuable sources for investments?
- How does Jeremy Davis approach the issue of whether to focus on finding deals or raising capital first?
- In what ways does marketing help real estate investors not only find motivated sellers but also gain access to private capital?
- Jeremy Davis shares a story about losing money on a deal due to misplaced trust. What can be learned about risk, due diligence, or structuring deals from his experience?
- What steps does Jeremy Davis outline for achieving 100% financing, including rehab costs, on real estate deals?
- Jeremy Davis and Jay Conner discuss the importance of education and communication when raising Private Money. How important is a pitch deck, and what alternatives could work?
- What key misunderstandings do most investors have about raising private capital, according to Jeremy Davis, and how can these be overcome?
Fun facts that were revealed in the episode:
- Accidental Capital Raising
Jeremy Davis once raised $300,000 in private capital from a single social media video that was just about whether or not he should paint a fence black 16:13. The power of casual, authentic marketing can’t be underestimated! - 100% Financing—Even for Rehab
It’s possible to structure real estate deals with 100% financing—including the rehab costs—as long as there’s enough equity in the property. Jeremy Davis explained how deep discounts and strong deals open up options with both private and hard money lenders. - The Only Deal He Lost Money On
Despite helping over 1,000 new investors and building a massive portfolio, Jeremy Davis has only ever lost money on one deal—and it involved lending to someone who promptly left for Peru and never returned! That experience became a recurring anecdote in his family.
Timestamps:
00:00 Addressing myths in real estate education
03:39 Creative finance for new investors
08:07 Buying probate properties with no interest
11:27 Building an Investor Network
14:06 Using hard money for BRRRR strategy
19:43 Explaining 100% financing deals
21:00 Finding real estate opportunities
24:04 Understanding DSCR Loans
29:34 Common mistakes in raising capital
30:19 Educating Private Lenders and Investors
31:39 Connect with Jeremy Davis
https://investorsemester.com/workshop
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
Step-by-Step Guide to 100 Percent Financing and Problem-Solving in Real Estate Deals with Jeremy Davis
Jay Conner [00:00:02]:
What if the biggest thing holding you back from doing more real estate deals is not finding the deals, but finding the money to fund them? What if you could look at a great deal and stop thinking, how am I ever going to pay for this deal? And what if there are creative financing strategies that most real estate investors simply aren’t using? Well, today’s guest has been in the trenches on all this stuff. His name is Jeremy Davis, and Jeremy is a tactical real estate investor and creative finance expert who’s helped more than 1,000 new real estate investors close on their very first deal. Jeremy’s also the founder of The Investor Semester. I love that The Investor Semester has helped build one of the largest real estate education communities in the country. With an estimated $2.5 billion, with a B, in student deal volume. But here’s what really caught my attention about Jeremy. Jeremy has personally raised millions and millions of dollars in private money. And when Jeremy teaches, he doesn’t give you a bunch of theory.
Jay Conner [00:01:18]:
He gets very practical and shows you what to do, actually, step by step. So if you’re looking for smarter ways to structure deals, find funding, and create more opportunities as a real estate investor, you are gonna want to hear this conversation. Don’t go anywhere because in just a moment, you’re gonna meet my guest, Jeremy Davis, right after this.
Narrator [00:01:44]:
If you are a real estate investor and are wondering how to raise and leverage private money to make more profit on every deal, then you are in the right place. On Raising Private Money, we’ll speak with new and seasoned investors to dissect their deals and extract the best tips and strategies to help you get the money, because the money comes first. Now here’s your host, Jay Conner.
Jay Conner [00:02:12]:
Jeremy, welcome to Raising Private Money.
Jeremy Davis [00:02:15]:
Jay, thank you for having me. It’s an honor, man.
Jay Conner [00:02:18]:
You got it, Jeremy. Let’s start with where we are right now. There’s a lot of noise. About the real estate market: interest rates, inventory, prices, buyers, sellers. From what you’re seeing in the trenches right now, and you’ve been around a while, what’s actually working for real estate investors right now, and what has stopped working?
Jeremy Davis [00:02:42]:
Yeah, no, Jay, thank you. Uh, it’s, it’s a really good question that I wanted to kind of dive into. And, and first, before I start, let me just say that when I explain what I’m about to explain, I’m going to start by saying what is not working, more importantly, because I think that in today’s age, with interest rates where they are, we have seen a lot of lies out there in the real estate education space. And when I say lies, I mean it’s a lot easier to create an education community that’s a very wide, wide puddle, but also very shallow, where it doesn’t go deep enough into actually finding the deals. Finding the discounts and actually making a cash flow. And so when I see that, a lot of exit strategies that exist in creative finance- like, let’s define creative finance. I’m sure your audience probably already knows, but creative finance, in the basic definition, is buying properties without using a bank, right? We agree with that. And I’m assuming, Jay, a lot of your people buy with creative finance.
Jeremy Davis [00:03:39]:
It could be seller finance. It could be subject to; it could be contract for deed. But when we buy on creative terms, obviously there’s usually going to be either a balloon payment at the end, or there’s going to be a monthly payment that’s due, or there’s going to be a down payment that is owed. And when we talk about new investors, and they’re being brought into the creative finance space, you know, we’re not talking about the people that have got a great W-2 where they can just go to a bank and get a, you know, a regular conventional loan and then buy a house and turn it into an investment property. We’re not talking about those people. We’re talking about the people that maybe they don’t have the best capital, or they don’t have the best credit, and they need to start finding opportunities. And as I was saying, the negative things that I’m seeing in the space right now- have you heard of what we call co-living, Jay?
Jay Conner [00:04:28]:
Oh, absolutely.
Jeremy Davis [00:04:29]:
Okay. I’m against co-living. I’m just going to be honest. Some of you people might hate me for saying this. Co-living is an amazing exit strategy. If you have a stabilized asset, it shouldn’t be the only exit strategy that you have to pick from because it’s, like, again, essentially putting a square peg into a round hole, right? To where, oh, you get a creative deal. Congratulations. You found a seller whose property was listed with an agent on the market.
Jeremy Davis [00:04:58]:
They’re not very motivated. They don’t have a lot of equity. They’re maybe even underwater, and they’ve got a 6% interest rate where we both know tha, that PITI, that mortgage, is probably way more expensive than what you can receive from a long-term rental in today’s market. So, let’s just say the PITI is $4,000, and then the rental rate for a long-term rental is only $2,000. You’re underwater. The deal’s going to fail. You’re going to default. Everybody loses.
Jeremy Davis [00:05:26]:
But then you still get that same property under contract for 6%. The only exit strategy that you have to make that work- let’s be honest- Airbnb is not performing as it did during COVID. I wish it did, but it’s not. We lost that opportunity. Midterm rentals and corporate rentals still exist, but we need to identify: is it that we need to fit a round peg into a square hole and make co-living work? Or is it that we need to learn how to target the right sellers so that we find the right interest rates where we’re not forced to have that only exit strategy as our only option? Does that make sense? Does that all make sense?
Jay Conner [00:06:04]:
Sure. So, so, so what is, what is one of the ways to piggyback off what you just said? What is, or some of the ways that you can target sellers that have those more, um, attractive lower interest rates?
Jeremy Davis [00:06:21]:
Sure. Okay, great question. Um, I think we all know if we’re trying to get into real estate, or even the most seasoned investor, we all know that the money, uh, the profit that you make is directly proportionate to the problems that you solve. Okay. We can kind of assume that we are going to be getting a property at a discounted price because we are not just finding a property, and someone says, ” You know what? Thanks for calling me today. Today’s the day I decided to sell my property at 50% of its value. That’s never going to happen. But if you can come in and solve a problem, then you obviously give yourself a better opportunity.
Jeremy Davis [00:06:53]:
Now, obviously, if we’re focusing on niche data, which is the direction I’m going to take this conversation, Niche data is going to be the highest likelihood of that person is needing to sell in a distressed situation. And when we talk about niche data, probably the king of all niche data is going to be pre-foreclosures, right? And after that is going to be tax delinquency. And after that is going to be probate. And why are those 3? Why do you think those 3 are the highest ranked in niche data? And I’ll give you the answer. There’s a timeline.
Jay Conner [00:07:26]:
Okay?
Jeremy Davis [00:07:27]:
There’s a timeline. That means that the homeowner needs to either find a resolution to their problem or they need to sell their property within that timeline. And pre-foreclosure, for people who are losing their home to the bank, there are a couple of options. They could do loan modifications and stuff like that. And when we’re talking to those people, we give them those options. We help educate them that the ultimate goal is that we don’t want the bank to take their equity. We want them to be able to stay in their home if possible. And there are other creative ways of doing that, but I’m not going to get into that.
Jeremy Davis [00:07:54]:
That’s a much higher level conversation. But then after that comes tax delinquency and then even probate. Now, probate doesn’t necessarily have a timeline if it’s an inherited property that is maybe owned free and clear.
Jay Conner [00:08:06]:
Okay.
Jeremy Davis [00:08:07]:
Is there a timeline that they have to sell, that they’re forced to sell? Probably not. And in fact, if we can find a probate property that is owned free and clear, that’s a win-win in all regards. Number one, you get to choose the interest rate. You get to negotiate that. So, I have properties that have 0% interest, absolute 0% interest, and I own a balloon payment in about 10 years. And as long as I calculate the numbers and I go not based on appreciation, I’m not going to speculate; I’m not going to gamble with my deals, but based only on principal paydown. If I know that in 10 years I can pay down the principal enough to be able to refinance or sell the property and afford that balloon, That’s a great investment for me. And so, to kind of round out what I was saying about the probate, if it’s owned free and clear, wonderful.
Jeremy Davis [00:08:52]:
That means it’s a great deal that you can lock up and actually have an amazing cash-flowing asset. But what’s the other thing we talk about? Timeline. What if Mom passes away with a mortgage? That means the people, the family, the siblings, whoever’s inheriting the property has now also inherited that debt. And they’ve also inherited that mortgage. It doesn’t mean that just because someone passes away, their mortgage goes away with them. It means that they either need to start paying $2,000 to $3,000 more a month. And a lot of people don’t have that budget set aside, but that’s what we want to start targeting. We start targeting people that have a higher likelihood of selling their property.
Jeremy Davis [00:09:29]:
And if we can come in and solve their problems, that equals or equates to more profit from the deal. Does that all make sense?
Jay Conner [00:09:36]:
That’s a great point, Jeremy, because you’re right. Um, if we’re not solving people’s problems, we don’t have a job. That’s what people are looking for us to do. And that’s not just as a real estate investor; that’s in any kind of business that you’re in: bringing solutions to the table. Now, a lot of real estate investors think their biggest problem is finding a great deal, but sometimes the real problem is actually figuring out how to fund the deal. And I know that very well because of so many of my followers. I hear from ’em. Jeremy, before you look at a potential deal today, how are you thinking about the financing before you even make the offer? Or are you?
Jeremy Davis [00:10:23]:
Jay, that is a wonderful question, sir. Um, I typically don’t think about the funding before the deal. I think about what I need to do to raise the capital after the deal is under contract. Because if I’m using any of my brain cells ahead of time before a deal is even signed, I mean, you know this: don’t put the cart before the horse, as they say. So many new investors are thinking about what the next 5 steps are before they’ve even got the seller on the phone. Or, like, here’s a great mistake a lot of new investors make. And by the way, guys, this is a great mistake to make because it means that you’re practicing. But a lot of new investors, before they even talk to a seller, they might get a lead. Maybe their VA cold-called somebody, or maybe they got a direct mail, something like that.
Jeremy Davis [00:11:07]:
They got a lead. Okay? But before they even talk to the seller, they’re already comping the deal. They’re already underwriting it. They haven’t even got the person on the phone. And I say that in the beginning, do it. Do it as many times as you want because it is practice, and practice makes perfect and wonderful. I love that. But if you’re going to start using your brain cells before you’ve even talked to a seller.
Jeremy Davis [00:11:27]:
The same thing applies: if you’re going to start thinking about how you’re raising capital before you get a deal under contract, what you should be doing- let me clear this up. You should be creating a stable of investors, like a stable of horses, a stable of investors that you know you have vetted, that have capital, that you know are going to be available for you if the time comes. And the hardest part for me- I don’t want to say a new investor, but I’d say a blossoming investor- someone that is doing deals, not consistently enough. They’re still riding that roller coaster. You know, one month might be nothing. Then the next month after that, it might be 3 or 4 deals. They’re still riding that roller coaster. That is probably the hardest place to live for that investor because you talk to somebody, they say, yeah, Jeremy, I’ve got $100,000 I’m looking to lend.
Jeremy Davis [00:12:19]:
And I go, okay, great. Now let me find a deal for you. And then a month goes by, or 2 months go by. And then you go back to that person. You say, ” Hey, guess what? I got a deal. Can I borrow that $100,000? And they go, ” Oh man, I already lent it out to a syndication, or I already gave it to a multifamily deal, or something like that,t because you missed that opportunity. That is the limbo. It’s what we call the valley of sorrow, that until you find the consistency in your pipeline to where you are getting deals consistently, to where, let’s say, you borrow money.
Jeremy Davis [00:12:50]:
Awesome. I pay back that money. Great. But if I don’t have another deal lined up and I give them back their money, they’re probably going to lend it somewhere else or use it somewhere else. And so, I always like to say, when I start raising my capital, I’m going to create that stable of lenders that I know are trusting me, that they know that I’m the operator they want to work with. And then I bring them in on one deal. And then, as long as I know I can have another deal lined up right around the same timeframe, I’m not keeping them hanging on the clothesline, hoping that they’re ready to go with me again. Because if I’m relying on their capital and the deal is now signed under contract and I don’t have that person, guess what I have to do anyway? I have to raise capital again.
Jeremy Davis [00:13:34]:
So, what I said to you before is, no, I don’t think about what I’m going to be doing on the deal in terms of raising capital. I think, as long as I know I always have a stable of lenders available for me, that’s number one. And then once the deal’s under contract, now I know what I can actually pitch to my lenders. I can create a solid pitch deck. I can actually educate them. I mean, Jay, like there are some deals out there that I don’t need private capital at all. I actually will use hard money, and give me one second here. You’re going hard money, like you’ve got to pay points.
Jeremy Davis [00:14:06]:
Well, if you’re getting the deal under contract, and you’re at such a great price, hard money can come in lickety-split within a few hours of a deal, lend to you on the purchase price, and even lend to you on the actual rehab value, right? So, if you’re going to be doing a renovation on the property, and what you just gave yourself was a BRRRR strategy. If you’re familiar with that, it’s the buy, rehab, rent, refinance, repeat that we all knew about years ago. It’s kind of few and far between now. But that enables me to build up my portfolio using hard money, where the hard money lender does not require any monthly payments. All it is is a balloon payment once we do the refinance. So that means I get all my purchase price covered. I get all my renovation expenses covered. I’m not paying a monthly payment to that person.
Jeremy Davis [00:14:53]:
And yes, they might take some points on the front end, or if they’re a great hard money lender, they’ll take those points on the back end. And they’ll get fully paid out, a nd they’ll make their money. And then I get a property to add to my portfolio.
Jay Conner [00:15:06]:
Um, Jeremy, uh, my goodness, that was a seminar in about 4 minutes. I think—
Jeremy Davis [00:15:12]:
Sorry about that.
Jay Conner [00:15:13]:
I know, that’s, that’s all good. That’s all good. I’ve heard you, uh, make an interesting connection between marketing and raising private money. Now, most real estate investors, I think,k marketing is all about finding motivated sellers. Explain from your experience why becoming a better marketer can actually help a real estate investor get access to more private capital.
Jeremy Davis [00:15:43]:
Okay. How can I explain this the best way possible? So in all business, it’s based on sales and marketing, sales and marketing. Right? If you’re not marketing your business out there, if you’re not getting yourself known by the masses, then nobody’s aware of you. For me, I focus on marketing in terms of finding sellers; I will do outbound marketing. I will do inbound marketing. For me and my branding, for my education community, I base that more on social media. So, on social media, I’ll make a post. I remember I raised like $300,000 in capital in one single video, one single video that I was walking one of my properties, one of my rental properties.
Jeremy Davis [00:16:26]:
And I asked, ” Should I paint this fence black? That was it. That was the video. And then I had 2 people reach out to me, and then they said to me, ” Hey, Jeremy, I’ve got some capital set aside. I’d love to be able to invest with somebody who’s actually doing deals. What does it look like to work with you? And then, of course, we hop on a call; we hop on a Zoom call. And again, it comes down to marketing. And so then,n from the sales perspective, Sales and marketing. I’m marketing myself out there.
Jeremy Davis [00:16:52]:
I’m finding people with capital. Like Jay, right now, I’m on a podcast with you, sir. I bet you, while the vast majority of your audience is trying to raise capital, I bet you there are also some people who have capital, and they might be—
Jay Conner [00:17:05]:
I can assure you that’s the case.
Jeremy Davis [00:17:07]:
Right. And so, for me, what I’m doing right now is I’m marketing; I’m helping your audience. I’m obviously trying to deliver as much value as possible. But by doing that, I’m marketing myself as being a knowledgeable investor, somebody who is not going to lose money on deals. Truth is, I’ve lost money on one deal, one deal ever. Okay? I’m a more conservative investor. Please keep that in mind. I like, my demeanor might seem like I’m very outgoing and very aggressive, but I am a very conservative investor.
Jeremy Davis [00:17:35]:
All my deals are long-term rentals. All of my portfolio is based around that. But when it comes to lending money, borrowing money, all that stuff, I’ve only lost money on one deal. It was $60,000. And I lent the money out. I lent the money to a slam-dunk deal here in Salt Lake City. It was amazing. The money was there.
Jeremy Davis [00:17:55]:
Even if we had to drop the price of the sale of the property by like $40,000 or $50,000, I still would’ve made my money back. I walked the property with the lender, or sorry, with the borrower. And I’m like, this is a great deal. My wife said, ” Don’t do it. She had a bad feeling. And she doesn’t let me live this down. She brings it up all the time still. So I lent this money to this guy.
Jeremy Davis [00:18:19]:
And should I have done a staging? Should I have done it on milestone payments? Probably I should have. But I was like, yeah, let’s just get this rehab done quickly. If anything, worst-case scenario, I’ll take over the rehab. That’s totally fine. I give the guy the $60,000. He goes to Peru. He gets arrested and never comes back. I can’t do anything.
Jeremy Davis [00:18:42]:
I can’t do anything. I hire my attorney. We try to track him down. The guy, he could be dead for all I know. I have no idea. But that property ended up being in foreclosure. He was trying to fix up the property and help the family sell it before it went to foreclosure. So I lost all my money.
Jeremy Davis [00:18:58]:
The family lost their equity. Everything went to crap. That’s the only deal I’ve ever lost money on.
Jay Conner [00:19:04]:
Did you loan him the money unsecured, or was it backed by the real estate?
Jeremy Davis [00:19:09]:
It was backed by the real estate, but unfortunately there was not enough equity. And it was also a promissory note, and he had other properties. It was a mistake. It was me thinking to myself, you know what, for marketing, I wanted to use that. I didn’t have any flips at the time. Okay. My team was on pause, and I said, Let me use this for more marketing. Let me take advantage of going there and taking video and walking through it.
Jeremy Davis [00:19:32]:
And I even said to them, as part of the deal, I go, hey, I’m gonna lend you money, but I’m your partner on this deal. Now I’m gonna go into the house, I’ll take videos, I’ll use it for more marketing. That didn’t go as I planned.
Jay Conner [00:19:43]:
I hear you, man. Now let’s talk about 100% financing options, or actually options, but there’s a question behind it. So Let’s get into something here. I know our listeners are going to really want to hear this. So you structure, you do deals, you teach real estate investors how to structure deals with 100% financing. I do it all the time, and that’s including the rehab. So, step-by-step, layman’s terms, super duper simple. Walk us through how that’s possible, because most real estate investors who have never been in the world of, say, private money or creative financing, they’re going, t” There’sno way you can get 100% financing, and no way you can get 100% financing on your rehab upfront.
Jay Conner [00:20:30]:
Uh, walk us through that, Jeremy.
Jeremy Davis [00:20:31]:
Okay. Is this common, Jay? I know you, and I both know we can both agree that it is not the most common thing to get 100% financing. And, to be perfectly honest is that I’m never gonna blow smoke. I’m never gonna say that this is easier than it is. This business is just like when they say a needle in the haystack, or you’ve gotta kiss 1,000 frogs to find your prince or your princess. That is this business. And full transparency, not every deal is going to be a home run. Many deals might be a base hit.
Jeremy Davis [00:21:00]:
They might be a second base hit. But when you do this more, and you’re doing more marketing, and you’re talking to more sellers, and you’re generating more leads, the more leads you generate, the more opportunities you have to get really, really good slam dunk deals. And so, Jay, I’ll give you a great example. There was a property. This person came to our website, and they had just been arrested for meth. Okay. And so their house was red-tagged. It was fully condemned. And they go to me, and they say, Jeremy, would you make an offer on my home? I just got out of jail.
Jeremy Davis [00:21:36]:
I have nowhere to live. I’m living in a hotel night to night. Would you make me an offer on my home? And I said, well, what’s your asking price? And she says, $270,000. Now, in Salt Lake, the median household price is $550,000. Okay? Or $560,000, right around there, last time I checked. So I say to her, I go, unfortunately, I can’t do it for $270,000. I have not seen your property. I can’t set foot on your property.
Jeremy Davis [00:22:00]:
It’s condemned right now. It would be illegal for me to do that. So I’m going to have to- if I were to buy this, it would be, you know, a leap of faith. It’d be blindfolded, just making an investment and hoping to God that it wasn’t worse than it was. And I said, can you do better than $270,000? And her response: How about $140,000?
Jay Conner [00:22:20]:
That’s quite a drop.
Jeremy Davis [00:22:22]:
That’s quite a drop. That’s, that’s called motivation. To be very, very clear, that’s called motivation. And if any of you who are beginning to market to sellers have never had that opportunity yet, don’t worry, it will happen. It will. It’s, again, it’s few and far between, but when you are talking to a seller that really does have motivation, they really have a problem that needs to be solved quickly; they don’t care about their equity. They care about solving their problem and finding a solution. And so, she says to me, $140,000.
Jeremy Davis [00:22:51]:
Now, as a good negotiator, should I have said, ” Oh, I don’t know. That still is a little bit too high? No, no, no. I didn’t. I said, okay, let’s sign right now. So, we get the dotted line signed. I buy the property. I think we closed in about a week. And so, that was a purchase price of $140,000.
Jeremy Davis [00:23:08]:
The renovation on it, including the meth decontamination, which was not pretty, came to about $120,000 in renovation. So, all in, not including interest, all in, I was in for $260,000. Okay? We sold it for $510,000. And we made a lot of money on that. Now, if I decided to, in that situation, at that moment, I said, you know what? I’d rather have $200,000. Then refinance that property and have it as a cash-flowing rental. But if I did, think about that for a second. I’m in for $260,000, not including interest.
Jeremy Davis [00:23:40]:
Keep that in mind. Sure. I mean, I could throw in 10% interest, but I’m in it for $260,000, and it’s valued at about $500,000. Will it refinance? Absolutely. Right? Will I get back my purchase price and my rehab? Absolutely. Now, here’s the kicker. Here’s the catch-22. A lot of your audience probably knows what a DSCR loan is, but in case you don’t, can I explain it, Jay?
Jay Conner [00:24:03]:
Sure.
Jeremy Davis [00:24:04]:
Okay. So, a DSCR loan is a debt service coverage ratio loan, and that is a— the ratio means: will the property rent cover a ratio above what the mortgage will cost? And so, let’s just say we’re doing a ratio of 1.25%. That means that if the mortgage is $1,000 a month, that property would need to rent for $1,250. If that ratio works in your favor, some DSCRs might be 1.1, or might be higher depending on where your interest— or sorry, your credit score is. So, let’s just say 1.25; that’s the ratio. So, if my mortgage is $1,000 and I could rent it for $1,250, congratulations, I now have a DTI ratio that will be approved, and they’ll give me back all my money. Here’s the thing that sucks, though, is that the vast majority of my equity is going to be stuck in that property. Because let’s say, again, I’m in at $260,000 and the value of the property is $500,000.
Jeremy Davis [00:25:05]:
Let’s say I say to the DSER lender, I want all $500,000 back. Let me get all my equity. Well, guess what? That ratio will no longer work because now I’m getting a mortgage for $500,000 and not $260,000. So my mortgage is no longer going to be $1,000 a month. It might be $2,000 a month. And if that property will only rent for $1,250, I’m out of luck. So you have to find that balancing act to be able to take out as much equity as you can, but still make that ratio work. And so for that property, I decided I’m just going to list it on the market and make a couple hundred thousand dollars.
Jay Conner [00:25:41]:
Yay.
Jeremy Davis [00:25:42]:
Congratulations. Now I’m going to put more into marketing and stuff like that. But to the point I was trying to say about finding properties with 100% financing: if you are finding deals where the equity exists, finding 100% financing is very plausible. It’s actually almost simple. You just go to any private lender. You show them the numbers. You can go to any hard money lender. You can show them the numbers.
Jeremy Davis [00:26:06]:
Heck, you could even go to a DSCR lender, a conventional, you know, institution, and you can show them the numbers, and they will cover it because you’ve got the equity.
Jay Conner [00:26:18]:
Jeremy, you have personally raised millions of dollars in private money, just like myself. What do you believe most real estate investors misunderstand about raising private capital?
Jeremy Davis [00:26:36]:
What do most investors misunderstand about raising private capital?
Jay Conner [00:26:41]:
I know that when I asked that question, uh, I had an answer fly through my brain. So you’re my guest. You’re gonna go first. I’ll tell you, I’ll tell you, I’ll tell you my answer, uh, after you go.
Jeremy Davis [00:26:53]:
Okay. All right. I’m trying, I’m trying to think, like, there are so many different angles you can, you can borrow private capital for. Um, I would say when it comes to borrowing private capital, for most investors, number one: keep yourself visible. If you’re hiding in the shadows and you’re looking for a deal and nobody knows who you are, obviously, we talked about marketing a second ago. I’d say that’s very important. But also, it’s understanding your deal and being able to put together a very, very strong pitch deck to where any objection that your lender may have is basically answered within that pitch deck. And for any of you who have never done a pitch deck, it’s not that hard.
Jeremy Davis [00:27:30]:
It’s really a matter of, okay, here’s the property, here’s the ARV, here’s the supporting comps, here’s all that stuff. But if someone, if an investor is coming in and an operator is coming in looking for private capital and they don’t have all of the answers, if they’re trying to raise it for, let’s say, a commercial property or a multifamily property, do they have the T12? So many investors, they go, what?
Jeremy Davis [00:27:55]:
The trailing 12. Do you have the trailing 12 months of all of the financials from that commercial property, how it’s been operating before this point? There are so many things that investors don’t know what to ask for. And so, if you’re going to be borrowing money from somebody and that lender doesn’t have the answers to be able to cover all their questions, you’ve now shot your credibility, and the chance to work with that person again is probably not going to happen. That’s my answer.
Jay Conner [00:28:22]:
Hey, uh, Jeremy, so you have a podcast, right?
Jeremy Davis [00:28:25]:
I do.
Jay Conner [00:28:26]:
What’s the name of your podcast?
Jeremy Davis [00:28:27]:
The Investor Semester Podcast.
Jay Conner [00:28:29]:
I love it. The Investment Semester. And you’re going to have me on as a guest, right?
Jeremy Davis [00:28:32]:
I am.
Jay Conner [00:28:33]:
So let me put a little teaser out there.
Jeremy Davis [00:28:35]:
Okay.
Jay Conner [00:28:36]:
You and I are going to have a little contrarian conversation on your podcast if you allow it. Of course, if you allow me on your podcast, I will share how I’ve raised over $118 million in private money without ever using a pitch deck.
Jeremy Davis [00:28:55]:
All right. I want to learn it. I- and, but you know what, Jay, can I just say one thing? You have the reputation, sir.
Jay Conner [00:29:03]:
You do.
Jeremy Davis [00:29:04]:
And that’s, that’s the thing that, you know, for investors of your level. Yeah. Jay, if you’re, if you’re asking me for money, I’m going to say Jay probably knows what he’s doing. Hopefully, fingers crossed. Okay. But, you know, if, if you’re, you know, Jane Smith, you’ve never done a deal and you’re trying to raise capital, by all means, Jay, you’re absolutely right. You don’t need to have a pitch deck. That’s not necessary.
Jeremy Davis [00:29:26]:
But I think that a pitch deck is a really strong template that a new investor needs to follow to be able to answer all the questions. So, yes. Contrary.
Jay Conner [00:29:34]:
I agree. I agree 100% on that. Whether you call it a pitch deck or you call it something else. If you’re gonna raise private capital, you better have the roadmap in your mind as to what your conversation’s going to sound like. Um, yeah, I mean, as I was asking the question of what do you think most new real estate investors- what mistake, or how, how, how are they thinking wrong about raising private money? One of the first questions that came to mind- I mean, one of the first answers that came to my mind is a lot of new, uh, real estate investors or new capital raisers. They think they gotta be looking for rich people. They think they gotta be looking for sophisticated people. And here’s, here’s something really funny as we get ready to wrap up here, Jeremy.
Jay Conner [00:30:19]:
But what’s really funny is, over these years, I’ve had 47 unique individuals, private lenders, loaning money on our real estate deals. And you know what’s interesting? Not one of them ever heard of private money or self-directed IRAs. Until I, until I did something that is called putting on my teacher hat, private money teacher, and just leading with education. So yeah, it’s, um, and you know, something else that’s funny, Jeremy, as we get ready to wrap up, um, I know I have got some accredited investors that loan me money on my real estate deals, but here’s what’s funny. They don’t know they’re an accredited investor because they don’t even know what an accredited investor is. But anyway, wow, Jeremy, what a fun time having you here on the show. I know my audience wants to connect with you. You, you are just a vast resource of real estate investing knowledge and private money and creative financing.
Jay Conner [00:31:23]:
What’s the best way for them to connect with you? And my lands, I didn’t even get to 70% of my questions for you. I gotta have you back on.
Jeremy Davis [00:31:31]:
I’m super sorry about that. Yeah. You got to shut me down. You tell your producer to be like, just mute me halfway through. Yeah. To get to, you know, guys, if you guys want to, you know, come into my ecosystem, go to investorsemester.com/workshop. Every Friday, we do a free workshop, and we’ve been doing this for probably a little over 2 years now. Every single Friday, we want people to be able to come in and- Jay, if I can just give you a very light, light understanding of what I stand for.
Jeremy Davis [00:31:59]:
As I mentioned before, gurus out there, they’ll build out a really wide puddle, but it’s also very shallow. It only goes from A to B. It doesn’t go from A to Z. So why is it called The Investor Semester? It’s a curriculum. We want to go as deep as possible. And so, Fridays, what is my goal for Fridays? I want to try to give as much value for free to everybody out there because what I don’t ever want to do, I don’t ever, I mean, of course, I’ve got a coaching program. I’ve got a community. I’ve got all that stuff.
Jeremy Davis [00:32:26]:
But I don’t ever want to take even a dollar of somebody’s money until financially they’re ready to do it. I was mentioning to your producer before I got on the show or before we started the show that if I take someone’s money and that inhibits them from being able to invest in marketing, invest in systems, I’ve essentially shot them in the foot. I’ve taken their money. Congratulations to me. But their level of success is much, much lower now. And so my Friday calls, my Friday workshops, are wherever you are in the business; let me add as much value to you as possible. Let’s start getting more deals. Let’s start making more money.
Jeremy Davis [00:32:59]:
Let’s start investing that capital into the right forms of marketing. And then if you ever decide to join my program and be part of my community, we have that conversation. So yeah, investorssemester.com/workshop.
Jay Conner [00:33:11]:
I love it. Listen, folks, go check out Jeremy’s free training on Fridays, www.investorsemester.com/workshop. And of course, this will be in the show notes. Jeremy, God bless you. And thank you so much for joining me here on Raising Private Money, my friend.
Jeremy Davis [00:33:29]:
Jay, it’s an absolute honor. Once again, thank you so much for having me on. And we’re gonna have you on my podcast up next.
Jay Conner [00:33:34]:
I love it. Listen, if you got value, if you got value from this conversation with Jeremy Davis, I want you to do one thing for me right now. Think about one real estate investor that you know who is struggling to find the money to fund their deals. Maybe they’re finding good properties but don’t have the capital, or maybe they’re sitting on the sidelines waiting for the perfect quote-unquote market, which never comes. Or maybe they’re simply making real estate investing harder than it needs to be. Send them this episode. Don’t just tell them about it; actually send them this episode. And tell them you need to listen to this because one idea from this conversation with Jeremy could completely change the way they look at finding deals, funding deals, structuring deals, and raising money, raising private money.
Jay Conner [00:34:27]:
While you’re at it, share this episode on your social media, tag another investor, start a conversation. That’s how we grow this community, not by keeping great information to ourselves, but by putting it in the hands of other real estate investors who need it the most. And if you enjoyed this episode, subscribe to Raising Private Money right now. Leave me a review, share it with somebody you know, because the next deal you do, or the next deal someone you care about does, could start with something they heard right here. I’m Jay Conner, the Private Money Authority. Thanks for listening, and I’ll see you right here on the next episode of Raising Private Money.
Narrator [00:35:13]:
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 7 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.