Today on Raising Private Money with Jay Conner, Jay takes us on a deep dive into the world of private money and its immense potential for real estate investors like yourself.
We have a fascinating topic to Demystifying Private Money What It Is and Why You Need It in your real estate investing journey.
Jay Conner stumbled upon the power of self-directed IRAs after losing his line of credit at the bank. He discovered that these IRAs, approved by the IRS, allow individuals to move their existing retirement funds into real estate investments without penalties or taxes. With over half of his 47 private lenders using their retirement funds for deals, Jay is a true expert in attracting private money.
In this episode, Jay delves into the importance of separating the activity of teaching people about private money from actually having a deal for them to fund. He will also provide actionable steps to start attracting money before you even need it, ensuring that you have private money lined up when pursuing a deal. This fundamental concept can be a game changer in your real estate investing journey.
But that’s not all – Jay will also guide us through the differences between hard money and private money lenders, highlighting how private money grants you greater control over your business.
Additionally, he will explore the various options for real estate investing, such as wholesaling, flipping, and buy-and-holds, and how private money can be utilized in each of these strategies.
If you’ve ever dreamt of escaping your nine-to-five job and diving into real estate investing but were held back by the complexities of private money, this episode is for you.
Jay’s expertise and experience investing in over 475 houses will provide you with valuable insights and practical tips to overcome your fears and start attracting private money to fund your deals.
So, grab a pen and paper, get ready to take notes, and let’s demystify private money together with Jay Conner on this special episode of Raising Private Money!
Timestamps:
00:28 – Private Money: A Game-Changer in Real Estate.
03:04 – Real estate investing options and challenges.
06:52 – Self-directed IRAs: move retirement funds penalty-free.
11:23 – Private money vs. hard money lending explained.
14:04 – Hard money lenders set short-term loan lengths.
18:18 – Excess cash when using private money.
20:53 – Hard money vs. private money: control in business
23:48 – Separating teaching and attracting private money.
28:12 – Flexible private money for commercial and residential.
31:37 – Local CD pays little. Borrow 8%. Safe, conservative loan. Private money is all around you. First lender from church Bible study.
33:14 – High-rate investment opportunity offered by referral.
36:22 – Secure private money before seeking deals. Download guide.
38:58 – Duplicate my program, teach, and attract money.
Episode 87: Demystifying Private Money:
What It Is and Why You Need It
Jay Conner [00:00:28]:
Welcome to this special episode of Raising Private Money. And before I get started here, I’ve got a couple of questions for you. First of all, are you perhaps dreaming of escaping your nine-to-five job and wanting to get into real estate investing, but perhaps you just don’t know where to start? Or in addition to that, maybe the term private money is holding you back from closing your first deal because maybe it seems complicated or out of reach. Well, let me tell you if you can resonate with what I just said, you are in the right place. Today I’ll be demystifying the game changer that I call private Money. How was private money a game changer for me? Let me tell you something. Private money has had a bigger impact on Carol Joy, my wife, and my business than any other strategy or any other skill set that we use in our real estate investing business. You see, we started investing in single-family houses.
Jay Conner [00:01:37]:
We also do commercial deals. But we started investing in single-family houses back full-time in 2003. And this world of private money unlocked the door to doing so many more deals and putting us in charge and putting us in control of our own business. So what I’m going to do here in this episode is I’m going to unpack what private money is. Why? Private money is the key to unlocking your real estate success. In addition to that, private money could help you fast-track your journey from a day job to a successful real estate investor. Now, I want you to stay tuned. Don’t miss a second of this episode, because in this episode, this just might be your first step on your path to financial freedom.
Jay Conner [00:02:33]:
Now, I understand. I want you to know I know exactly where you’re coming from. I probably know how you feel. I mean, maybe you’re in a place where you haven’t even done your first real estate deal yet. Perhaps you would love to leave your day job and jump into and plunge into real estate investing, but you’re overwhelmed and you just really don’t know where to start. Let me tell you something. I know exactly how that feels. I know where you are.
Jay Conner [00:03:04]:
If you can relate to this, like, where do I start? Right? I mean, maybe you’ve thought about in this world of real estate investing, maybe you’ve thought about wholesaling or you’ve thought about flipping houses. I mean, my lands, Carol Joy and myself, and my team, we have rehabbed and flipped over 475 houses. Maybe you’ve thought about buy and holds. I got buy-and-hold deals as well. I mean, you got all these different ways that you can do real estate investing, but until clarity comes along, all these options can be, like, really confusing. And then on top of that, there are distractions and there’s a lack of focus. And then on top of that, if you’ve never done a real estate deal or you’ve never used private money, there’s this thing called fear. Like, who in the world is going to loan me money? Who’s going to loan you money on your real estate deals or real estate deals? And maybe you’ve never done a deal before, or maybe you’ve done a lot of deals.
Jay Conner [00:04:04]:
I mean, I did a lot of deals the first six years that Carol Joy and I were in business, from 2003 to 2009. I did a ton of deals, but I relied on the local bank and then I lost my line of credit, and now I’m having to use or I’m learning about private money. So I’ve got this fear. Who in the world is going to loan me money and how do I even start a conversation with a private lender to fund my deal? I’m going to unpack all that here in this episode. And then in addition to all that, there’s the emotion of I just lack knowledge. I just don’t know what to do, how to use private money, how to even find my first real estate deal. Don’t worry, I got you covered. I can relate.
Jay Conner [00:04:48]:
I know exactly where you’re coming from. And all these emotions, all these feelings, I mean, they are real. I mean, they’re like really valid feelings, right? I know what they felt like. And these things can hold most people back from ever, like, even getting started in real estate. And one of those fears might just be around the concept of private money. So let’s go ahead and dive in and jump in. Let’s start our conversation here about understanding exactly what is private money. Who’s a private lender? Well, in simple terms, here’s what private money is.
Jay Conner [00:05:29]:
Private money or a private lender is a human being just like you. Just like me, who loans money to you, the real estate investor from either their investment capital just liquid funds in their checking account, in their savings account, and or their retirement funds. Wow. Now let’s stop right there. You see, Carol Joy and I, we got 47 private lenders funding our deals. And don’t worry, you don’t need 47 private lenders. You want to start with just one or two, which is exactly how I started. So as I said, a private lender is an individual that’s loaning us money either from their investment capital or their retirement funds.
Jay Conner [00:06:11]:
Well, let’s talk about retirement funds. And this is a really important point. And by the way, if you’re not driving down the road if you’re not on your StairMaster or your bicycle exercising, you’re actually where you can take some notes. It would be really good for you to start taking some notes right now. So retirement funds, how is it that an individual can use their retirement funds in addition to their investment capital to fund their real estate deals? Well, here is some magic sauce. I never even heard about it. What I’m getting ready to tell you until back in 2009. And what that’s called is self-directed IRAs.
Jay Conner [00:06:52]:
I never heard of self-directed IRAs until I lost my line of credit at the bank. And here’s what a self-directed IRA is. A self-directed IRA is a company. It’s also known as a third-party custodian that is approved by the IRS which allows an individual, one of your private lenders allows an individual to move their current retirement funds that they already have. I mean, those funds could be in a 401, could be like at a previous employer that they had retirement funds that were started. They could have retirement funds invested in the stock market and oh my land, they might be sick and tired of that with the volatility of the stock market. So what the IRS allows an individual to do is take their retirement funds and transfer or roll over those retirement funds into a self-directed IRA company and guess what? It’s penalty-free, tax-free. No tax effect is triggered on that individual when they do that.
Jay Conner [00:07:59]:
And so when they move those funds over to a self-directed IRA company now they can loan that money, they can invest that money in your real estate deal or your real estate deals and they earn money either tax-free or tax deferred. How about that? Hey, look, of the 47 private lenders that Carol Joy and I have, over half of them, over half of these private lenders are using their retirement funds to fund our deals. Now, I will tell you this. I have done business with more than one self-directed IRA company. Let me tell you, hands down, the absolute best self-directed IRA company to recommend to your private lenders to do business with is www.QuestTrust.com out of Houston, Texas. That’s www.QuestTrust.com out of Houston, Texas. Their customer service is stellar. I get my real estate deals funded within three days, right within 72 hours of having a deal that I’m ready to get funded.
Jay Conner [00:09:11]:
Well, the way that works is, you see, I have taught, I have told my private lender that has retirement funds and they’re not happy with the rate of returns wherever they’ve got those monies. I’ve taught them about self-rated IRAs and introduced them to Quest. They’ve moved their money over to Quest and now they’re funding my deals. And so this is one of the last ways that I know that people can earn money tax-free and tax-deferred. So here is an actionable item. Here’s how for you to get started. Right now, in using private money. And I want you to write this down.
Jay Conner [00:09:49]:
All right? So here’s what I’d like for you to do. Write down questtrust.com. You see, it’s really important when you want to be attractive. And you see we’re not chasing, begging, persuading, selling, trying to talk anybody into doing business with us and funding our deals, right? We’re sharing with people that we already know and we have a connection with about what this world is all about. And so they’re able to move that money over. And it’s just one of the last ways I know that an individual can earn money on their retirement funds tax-free, tax-deferred. So here’s what I’d like for you to do. I would like for you to reach out to quest.com, and tell them Jay Conner sent you, they know me very well and you want to establish a relationship with a rep at Quest Trust.
Jay Conner [00:10:42]:
You simply tell them I want to refer all my new private lenders to you that have retirement funds and boy, are they going to take care of you. As I say at Quest Trust, I get my deals funded within three days. So that in simple terms is what private money is. Now let’s talk about what private money is not. Very simply, private money is not hard money. Now I’ve got some very good friends who are hard money lenders, and hard money brokers. I say establish as many relationships as you can with people who can fund your deals. But in this world, I’m not talking about hard money.
Jay Conner [00:11:23]:
So let’s be very clear. Let me make a little contrast here between private money and hard money. Private money, again, we’re doing business with individuals, right? With hard money most of the time, a hard money lender is a broker of money. And you see what the hard money lender has done. They have gone out and they have raised and attracted private money from individuals just like you’re going to be getting funding from. The hard money lender has gone out and raised private money and they’ve established a fund. So they have a hard money lending fund that individuals, those are the private lenders that invest in the hard money lender’s fund. So then the hard money lender turns around and then loans that out to the real estate investor, right? So the hard money lender is going to make their money by charging points or origination fees.
Jay Conner [00:12:20]:
In this world of private money, there are no points, there are no origination fees. And then they loan the money out, right? They also will typically charge a higher interest rate to you, the borrower, than they’re paying their private lenders. So let me give you a few big differences right now between hard money and private money. First of all, hard money, let’s start with the interest rate. So right now the average interest rate nationwide for a hard money lender loan is around 14%. Now you can get some in the high eleven s, right around 12% rate. But most of them are going to be in that twelve to 14%. Well, here in this world of private money, the interest rate is 8% national average.
Jay Conner [00:13:10]:
8% is what I pay my private lenders for the deals that they are funding with me. So the interest rate, there’s a big difference there. The second big distinction is what we call the origination fee or points. So your hard money lender is going to charge you about four points. That includes all their junk fees and everything. So now you’re already up to 18% per year with the hard money lender on average, some charge less. In this world of private money, there are no origination fees, there are no points, and I’ve never paid any of my private lenders’ points or origination fees. We’re still at the 8%, right? The third distinction and big contrast between hard money and private money are extension fees.
Jay Conner [00:14:04]:
So you see, a hard money lender is going to set the term typically at six months to nine months in length. Some will go twelve months but most are going to be six to nine months for the length of that note that you’re borrowing the money. Well, in my world of private money and now your world of private money, the length of the note is either going to be two years or five years. There’s no hurry to pay back private money, but with hard money, there are six months, nine months, and twelve months. You got to get in and get out. However, extension fees, if you have not cashed out your deal with the hard money lender and you’ve paid your payments on time, typically they will extend your note. But what do they want? More money, right? So they will charge an extension fee. So the average extension fee with a hard money lender right now is about 2%.
Jay Conner [00:14:52]:
I know one hard money lender that’s a friend of mine who will extend it for 90 days and charge 3%. If you borrowed $100,000 on a deal and you haven’t cashed out, you have to pay another $3,000 just to extend the note by 90 days. In this world of private money, there are no extension fees. The private lenders don’t even want their money back, they want you to keep it invested. So you’re still at 8%. In the world of private money with hard money, you’re already up to 20% in this example. What’s another big difference or distinction between hard money and private money? Well, it’s called the advance. So if you’re taking notes I would like for you to write this down.
Jay Conner [00:15:39]:
Advance. What I mean by the terminology advance is how much money is the hard money lender versus the private lender the individual going to give you or loan to you when you purchase the property. And here’s a big difference. A hard money lender is going to loan you somewhere between 60 and 85% on average of the purchase price. Whoo, there’s a writer-downer. They’re only going to advance you or loan you 60% to 85% of the purchase price. So no matter how good your deal is, when you’re borrowing hard money, who’s got to come up with the difference for a down payment? Of course, you do. You got to come up with the difference, right? In this world of private money, the advance, you get 100% of your purchase price.
Jay Conner [00:16:30]:
And if you’re rehabbing, you get 100% of your rehab. Now, let’s be clear on this. Private money is not only for the rehabbing business. Don’t miss this. Do not miss this. Private money is when the seller requires all the cash, okay? And that’s the real world. I mean, the seller, whether it’s a bank-owned property or anything in the multiple listing service, most sellers are going to require all the money. So even if you like to stay in what I call the pretty house business, to where you’re not doing rehabs, if you can’t buy that house creatively, what we call on terms, perhaps subject to the existing note, you’re going to use private money to where you never miss out on any deal because you did not have the money.
Jay Conner [00:17:21]:
So those are the big differences between hard money and private money. The interest rate, I mean, you’re already up to 20% using hard money, right? The interest rate is much lower on private money. There are no points and origination fees. There are no extension fees. With private money, you’re going to get all your money. I mean, let me ask you a question. Do you want to get paid to buy houses? Really? Private money is a no-down payment strategy because you’re not bringing any of your own money to the table and getting a big check when you buy a property, right? It’s because you never take any of your own money to the closing. My real estate attorney, her name is Julie, and we’ve been using the same attorney and law firm all 20 years that we’ve been in business.
Jay Conner [00:18:18]:
My favorite phrase on her check stubs is I pick up because we always pick up a check when we buy a property when we’re using private money to fund it. Her phrase on the check is excess cash to close. And let me tell you something, I love some excess cash, right? And so we pick up a check. Well, we’re going to get a check if we’re rehabbing. We’re getting all of our rehab money up front, not taking any of our own money to the closing table. Not only am I going to get the money upfront for the rehabbing, but if there’s rehabbing and the purchase price, I can also pull out equity when I’m buying that property when I’m using private money to fund the deal. Listen, I don’t know a quicker way to get a big infusion of cash in your checkbook. In this world of real estate investing than using private money.
Jay Conner [00:19:12]:
Now, sometimes I’ll hear some people say you can’t fund a deal without having skin in the game. I’m sure you’ve heard that you got to have skin in the game. What they mean is you can’t buy a property unless you’re taking some cash yourself to the closing table. That is not true. That’s a lie. That is a myth because I have closed hundreds and hundreds of deals without taking any of my own money to the closing table. And in fact, we get a big check when we pick it up. So what is the skin in the game? Quote, unquote, what is the skin in the game on these deals? I can tell you what the skin in the game is.
Jay Conner [00:19:51]:
And we protect the private lender. There’s always a large equity cushion, a large equity cushion between what we are borrowing and comparing that to the value of the property, the repaired value. You see, I don’t borrow typically more than 75% of the after-repaired value of that property. I didn’t say 75% of the purchase price. And of course, this only works if you’re buying properties at a discount, right? So let’s say you got an after-repaired value on a property of $200,000. Well, I’m not going to borrow more than $150,000. That’s 75% of the repaired value. So how do I bring home a $50,000 check when I bought that house and take none of my own money to the closing table? Well, if I buy it for $100,000 and I do that all the time, I’ll buy houses at 50% of the after-repaired value.
Jay Conner [00:20:53]:
Well, if I buy it for $100,000, if I borrow $150,000, I’m bringing home a $50,000 check when I buy that property. So those are the big differences between hard money and private money. I mean, it just puts you in control of your business. Right? Now, I want to answer this question. Why do you want private money? Did you know that? I have reviewed thousands of property lead sheets over the years, information that I’ve gotten from for-sale by owners. And that’s where we’re getting all the deals these days, right? We’re buying directly from For Sale by owners, which we call off-market houses. Did you know that? Me reviewing all these property lead sheets, thousands of them over the years, I have discovered that 87% of all those for sale by owners will not sell to me creatively. They won’t sell to me subject to the existing note or with seller financing or a lease option, right? So with that being the case, did you know 87% of for sale by owners will not sell to you because you don’t have private money? You see, it’s with the private money, we’re able to pay these for sale by owners cash.
Jay Conner [00:22:18]:
I mean, in the real world, they require and they want all the cash. So without private money, you’re going to be missing out on 87% of the deals. Now let’s move over our discussion and let’s talk about my favorite reasons why you’re going to be loving to use private money for your real estate deals. First of all, and this is huge for you to understand, you make the rules, we make the rules. When we’re borrowing money. When we’re borrowing private money. Now let me contrast this to borrowing money from the bank. You know, the traditional method and way of borrowing money for a real estate deal is you go to your local bank, you get on your hands and knees, you put your hands underneath your chin and you say, please fund my deal.
Jay Conner [00:23:06]:
Please fund my deal. Well, that is begging, that’s chasing, right, in this world of private money. This is so important for you to get this straight and understand this because I had to get this straight in my mind when I started. We are not asking for a mortgage. We’re offering a mortgage to our private lenders. You see, in this process of borrowing private money, there’s no application, you’re already approved, and there’s no application fee. There’s no application process, right? Because we are not asking for a mortgage. I never ask for someone to fund my deal.
Jay Conner [00:23:48]:
Well, how in the world does that work? Here’s how it works. We separate the activity of teaching. This is the secret sauce we’re putting on our teacher hat and we’re teaching people that we have some kind of connection to, right? They’re on our cell phones, they’re on our social media. We go to church with them, they’re on our Facebook, we go to the Rotary Club with them. Ever how you know people. And by the way, in just a few minutes, when I get to the end of this episode, I’m going to give you a very specific actionable item that will get you started raising private money and attracting it. You see, attracting private money, attracting is so much easier than chasing it, right? So how do I never ask for money? Well, we separate the activity of teaching what private money is to people in our warm market, right, what it is teaching the program, what interest rate they were going to pay, et cetera, and then having a deal for them to fund. You see, the most dangerous time and desperate time to be raising and attracting private money for your real estate deals is when you need it for a deal when you need the funding, right? So the money comes first.
Jay Conner [00:25:11]:
I say it all the time. Focus on getting the money lined up first and you don’t have to worry about missing out on any of your real estate deals. Let me tell you what drives me crazy. What drives me crazy is when you have some educators out there for real estate investing and they’ll say, oh just get the deal under contract. Just get the deal under contract, the money will show up and I want to go, where is the money going to show up? Is it like going to rain out of clouds? Of course not. Right? So we want to attract and get the money lined up first from our private lenders. So, first of all, we make the rules, right? Not the lender. When I was borrowing money from the banks, they made the rules, they set the interest rate, and they set the frequency of payments.
Jay Conner [00:25:57]:
Well, we do all that in this world. My second big reason for loving private money and why you need it is you get to always bring home a big check when you buy a property without taking any of your own money to the closing table. Thirdly, your credit score has absolutely nothing to do with how much private money you can get. There’s no credit check at all. And here’s why. It’s because this is a collateral loan. We’re not going to be borrowing unsecured money, we’re going to collateralize. You will collateralize that note with the real estate that you’re buying.
Jay Conner [00:26:36]:
Fourthly, you’re going to love this world of private money because there’s no income verification like banks require. You don’t have to show your w two S. You don’t have to show your tax returns. So your income has got nothing to do with it. Your experience has got nothing to do with it. If you’re a brand new real estate investor and you’re looking to do your first deal, you’re going to be able to get just as much private money as anybody else. And why is that? If you’re taking notes, I’d like for you to write this down. Write this down.
Jay Conner [00:27:09]:
The private lender does not own the property, you do. The private lender owns the property. I mean, you own the property. And in addition to that, here’s why. You’re going to be able to get just as much private money and quotation marks. Write this down. If you don’t pay the private lender, the property does. If you don’t pay the private lender, the property does.
Jay Conner [00:27:32]:
Which means it’s collateralized. If you don’t pay them, they get the property. The next reason that you’re going to love private money is there are no points, there are no origination fees. In addition to that, there are no appraisals. Did you know? Not one of my private lenders has ever required an appraisal. Now, of course, you’re going to get at least a comparative market analysis from your realtor. If you are not a realtor, you’re going to know what the value of that property is before you even make an offer. My next reason for loving private money is you receive multiple checks on every deal that you do. You’re going to get a big check when you buy, you’re going to get another big check when you sell.
Jay Conner [00:28:12]:
And if you happen to be selling this property on rent-to-own or lease purchase, you’ll get a large nonrefundable lease option deposit when you sell it. Now, by the way, I want to make a really important point right here. Private money is not just for single-family houses. Private money is for any kind of commercial as well, as commercial deals. I mean, if you’re interested in doing small apartments, triplexes quadplexes small apartments, this private money works for you, right? We just structure the deal differently. My next reason that you’re going to love private money is that there’s no limit to the number of private lenders that you can do business with. There’s no limit to the amount of private money, or the number of private lenders that you can have. Next to that, I love private money because you can borrow it across state lines.
Jay Conner [00:29:03]:
You don’t have to be borrowing money from a private lender in the state where the property is located. And the reason for that is that we are not regulated by the Commissioner of Banks. In addition to all that, I love private money. And you will too, because you’re not limited to borrowing from accredited investors. You see, if you have a fund and you’re raising money for a fund, then typically you’re going to need to have accredited investors. But in this world, you can borrow from anybody. And that’s because they are getting a deed of trust or a mortgage for each note that they get. So you’re not limited to accredited investors.
Jay Conner [00:29:41]:
I also love private money because you can close deals so much quicker. You can negotiate deals. I mean, I close my real estate deals within seven calendar days and as a result of that, you will get more offers accepted. You can have competition making offers on real estate deals even more than you’re offering. But guess what? You get the offer accepted because you can close fast when you’re using private money. And in addition to that, you can do an unlimited number of deals with multiple private lenders. There are no personal guarantees in this world of private lending. When I was borrowing money from the banks, the bank required a personal guarantee.
Jay Conner [00:30:24]:
There are no monthly payments. I mean, stop and think about fixing your cash flow. We structure deals to where you make absolutely no monthly payments until you cash out. That is if you’re doing a quick flip. Now stop and think how much that’s going to positively affect your checkbook. You get a big check when you buy. Take none of your own money to the closing table and make no monthly payments until you cash out. Wow.
Jay Conner [00:30:50]:
You now see why I’m so excited about private money and how I’m so excited for you that you’re now going to be able to use it. So when are you going to use private money? Well, if you’re wholesaling deals, you’re not going to need private money. So you’re going to need private money when the seller requires all the cash. That’s. For bank-owned properties, short sales, auctions, and as I said a moment ago, the majority of your for sale by owners off-market deals because they’re going to require all the cash. So why would a private lender want to loan you money? We just named 15 reasons why we want to use it. Why is the private lender going to loan you money? Well, here are three big reasons. Number one, they’re going to make a lot of money by land.
Jay Conner [00:31:37]:
The local certificate of deposit at the bank is paying them hardly anything. You come along and pay them 8%. They’re mighty happy with that. Secondly, we’re not borrowing money unsecured, right? We’re going to give them a deed of trust or a mortgage and it’s safe for them because we’re going to be borrowing what we call a conservative loan amount. So listen, where is all this private money? Where is it? Well, let me tell you, it is all around you. It could be your brother-in-law, it could be a past co-worker, it could be a friend, it could be somebody you go to church with. And speaking of church, let me tell you about my very first private lender that funded mine and Carol Joy’s very first deal using private money. It was on a Wednesday night at Bible study at church right here in Morehead City, North Carolina.
Jay Conner [00:32:29]:
I went to Bible study on that Wednesday night. I walked into the foyer and I walked up to let’s call his name, Frank to keep it confidential. So I walked up to this gentleman named Frank and I said Frank, I want to visit with you about something confidential at the end of Bible study. He says, well sure brother Jay, we’ll get together so we have Bible study, and then Frank and I get together in the nursery there at the church building. And here’s how I got my very first private lender. I said Frank, you know everybody in this town and I need your help. Frank. Frank, you see, I’ve now opened up my real estate investing business to people that I know and trust.
Jay Conner [00:33:14]:
And by referral only, I’m now paying insane high rates of return to the investors while I’m opening up my business. So here’s what I need your help with Frank. When you run across someone that’s complaining about the low rates at the bank on CDs, and twelve-month certificates of deposit, or you hear somebody complaining about the volatility of the stock market and they’re losing money in the stock market, would you refer them to me? And I’ll tell them about my program so that they can earn crazy high rates of returns safely and securely. Well, you know what Frank looked at me and said? He says, well now Brother Jay, what you got in mind? And I said, well the interest rate that I pay depends on the deal. But Frank, are you saying that you and your wife might be interested? He said, well, yeah, I think so. He says, Right now we’re getting 3% in the local bank and you could back in 2009 and we’re losing money in the stock market. What kind of rate are you paying Jay? And I said, well again Frank, it depends on the deal, but what sounds high to you? Frank looked at me and he said, well, I don’t know, maybe five or 6%. And I said, Frank, I can’t pay you five or 6%, but I can pay you 8%.
Jay Conner [00:34:32]:
And Frank said, Put me down for $250,000. So the very next day I went to Frank’s home and his wife’s home and I told him about the program and how they would be protected. And so he was my 1st $250,000 lender. And so then I went and put his money to work. You notice I did not pitch him on a deal and teach him the private lending program in the very first conversation. So about a week went by, I called up Frank, I said, Frank, I’ve got great news for you and I want you to listen here to what I said to Frank over the phone. I did not pitch him on this deal. Here’s.
Jay Conner [00:35:13]:
Exactly what I said to Frank. I said, Frank, I’ve got a house over here in Newport with a repaired value of $200,000. The funding required is 150,000. I can’t use your entire 250,000, but this deal requires 150,000. Closing is going to be next Wednesday. So I’ll need for you to have the 150,000 wired to my real estate attorney trust account and I’m going to have my attorney email you the wiring instructions. Notice that was the end of the conversation. I didn’t ask Frank if he wanted to fund the deal.
Jay Conner [00:35:50]:
That would be the most stupid question I could ever ask Frank. Of course, he wanted to fund the deal. He was waiting for the phone call. So you see how we do this world of private money without asking, chasing, begging, selling, trying to persuade or talk anybody into anything. I mean the most desperate time to be raising private money is when you need it for a deal. And here’s another writer’s downer for you. Desperation has got a smell. Desperation has got a smell.
Jay Conner [00:36:22]:
And if you’ve got a deal that you need funding, that is not the time to be attracting and raising private money. Get the private money lined up first and think about just how much more confident you’re going to be in getting in, making offers on deals when you’ve got the money burning a hole in your pocket. That’s how I started and it’s going to be so easy for you to start as well. So hopefully you now see that private money is the missing link in this business that you might have been searching for. So now that you understand the significance of private money, let’s talk about how you can get started right now to attract private money into your world. So first, here’s what I like for you to do. I would like for you to download my free guide. This is going to put you on the fast track to Private Money, the name of my free guide.
Jay Conner [00:37:18]:
Here are seven reasons why private Money will skyrocket your real estate investing business and help you create and attract incredible wealth into your world. You can download my guide at www.JayConner.com/MoneyGuide. So that’s the first thing I’d like for you to do right after you download the Money Guide and it will be delivered to you instantly in your email right after you download the Private Money Guide. The next thing that I would like for you to do is I would like for you to make a list of all the retired people that are on your cell phone and your social connections and in church.
Jay Conner [00:38:13]:
Once you have this list and you know who’s retired, the reason I want you to make this list is to know retired people. There’s a good chance they got retirement funds and then you can plug them into Quest Trust. Now, the Money Guide is going to give you some steps as to exactly what you need to do and what you want to do with these people. So you make the list and the Money Guide that you’re downloading is going to tell you how to get started with these retired people, what to say to them, how to start a conversation. Well, I’m so glad you’ve joined me here for this episode of Raising Private Money. I mean, what are the key points that we’ve gone over? You’re not asking for money. You’re not chasing, you’re not applying for money. You make the rules.
Jay Conner [00:38:58]:
Just copy my program, right? Just duplicate my private lending program. You’ll never have to ask for money and the money is going to be chasing you. You simply put on your teacher hat and start sharing and teaching. And you’ll never miss out on a deal going forward when you’ve got this private money. So listen, my friend, do not let the fear of the unknown hold you back with private money. Your real estate dreams are going to come true. I’m so excited for you. If you’re starting your adventure into real estate, if you’re brand new, or if you’re a seasoned real estate investor, how this private money is now just going to rock your world, be sure to follow me or subscribe to me here on the show this podcast so you don’t miss out on any of the upcoming amazing episodes of Raising Private Money.
Jay Conner [00:39:49]:
I’m Jay Conner and I hope to see you right here on the next episode of Raising Private Money. God bless.