March 16, 2024 • 42 mins
Dive into the world of private financing with the expertise of Jay Conner, a renowned figure in the realm of real estate investments, in this latest episode of The Optimized Real Estate Podcast. As the landscape of real estate continues to evolve, finding innovative ways to finance deals becomes increasingly critical. Hosted by the insightful Rod Wilson, this episode is a goldmine of strategies, tips, and secrets on harnessing the power of private money in the current competitive market.Listeners will gain exclusive access to Jay Conner's proven methods for:
- Understanding the fundamentals of private financing in today's economic climate.
- Strategies to attract and secure private lenders to fund your real estate deals.
- Navigating the legal and ethical considerations of private money.
- Practical steps to build trust and credibility with potential investors.
- Leveraging private financing to scale your real estate portfolio efficiently.
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Transcript
Episode Transcript
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(00:06):
Welcome to Optimize real Estate Podcast.Hey they're real estate professionals. Welcome to
another episode the Optimized real Estate Podcast. I'm Brod Wilson. My job is
basically interview some of the movers andshakers of the residential real estate industry and
pull out their top secrets, ideas, strategies, and really focused around helping
(00:26):
you optimize your own real estate business. And today I have an amazing guest.
Honestly, this guy's bio is solong, I'm going to have to
cut it short. In fact,I'm already thinking this is like one of
those guests where you're already thinking aboutyour number two, your second podcast,
and even third, because there wasjust so much to cover with him.
Jay Connor is a national speaker,best selling author. He's been buying and
(00:48):
selling since two thousand and three.He's actually flipped over four hundred and seventy
five houses himself. What's cool andI didn't cover that this in this particular
episode, but he has automated hiswhole business to where he's, you know,
seven figure business, totally automated.We'll have to get into that next
time. It's funny. I feltlike I was talking to Zig ziggler.
(01:10):
You'll appreciate that when you hear hisaccent. But super good guy. He's
an expert at raising private money.That's the reason I wanted to have him
on. He basically gets into youknow, who to look for when you're
looking for private money, who togo after? And actually that statement go
after. He has a system towhere you don't really go after people,
they come to you. You becomekind of a magnet as far as you
know, generating people and deal flowcoming to you. How to find people
(01:34):
that will invest in your deals.We talk about self directed iras, which
you know seems kind of boring,but the way he describes it and some
of the resources he provides is amazing. Why you want to be a teacher
and not a pitch guy or gal, not a salesperson? He gets into
He throws on his teach your hata few times. You know, you
really just focused on when you're lookingfor private money, You're focused on educating
(01:57):
people, explaining your deal, yourprocess. Why that by investing in your
company and in your projects, it'sa safe investment and a whole lot more
so. Anyway, I'm excited foryou to listen and or watch this episode.
And that's it for now without anyfurther Ado, let's get on with
Jay Connor. Oh, I'm onwith Jay Connor this morning. How you
(02:20):
doing, Jay, my lands Rod, I am doing fantastic, and thank
you so much for inviting me alongto talk about the subject I'm most passionate
about, and that's private money.How to get money for your deals without
relying on the banks or traditional lenders, you know, putting yourself in the
driver's seat to where you're attracting moremoney than you can use. How to
(02:43):
use private money and never miss outon a deal. Okay, my investors
and followers and they're all their earsjust perked up. That's become a big
topic. And why don't we dothis. By the way, I have
to say, I feel like I'mtalking to zig Ziggler here you I'll tell
you I love zig Zigger. Imet him twice. I met him twice.
(03:07):
Cool met zig in Dallas, Texas, where he was from all the
way back in nineteen ninety four.He was on this show called Dawn Dawn,
which stood for Dynamic Achiever Worldwide Networkand they needed a studio audience.
I said, Hey, I'll bea studio audience participate, and then I
met him in Raleigh, North Carolinain two thousand and seven for the second
(03:29):
time. He was on the PeterLow Tour where they would do fifteen sixteen
thousand people in an arena. Butyeah, I started listening to Zigziglar tapes
when I was twenty four years old, and I had most of them memorized.
Of course that was forty years ago, right, No, I had
that program, as were one ofhis programs as well. And just you
know, I basically wore him outin my car driving up and down it
(03:52):
was in the Bay Area, upand down to San Francisco every day.
We can go on forever on yourbackground and experience, which is really really
pressive, but just to kind ofcut things, you know, relatively short,
why don't you give us a littlebit on your background. Sure,
well, I'm here in eastern NorthCarolina, small market. Our total target
market's only about forty thousand people herein this small market in eastern North Carolina.
(04:16):
My wife, Carol Joy and Iwe've been full time investing in real
estate since two thousand and three,and so we do two to three deals
a month, single family deals.Most of them we fix and flip.
I've done a bunch of buy andhold and rent to own sales in the
past, but in this market today, my lens, so we do two
to three deals a month in thissmall market. Our average profit right now
(04:39):
seventy eight thousand dollars per deal.And I don't say that to brag Rod.
I say that to make a point. You don't have to be in
a big market to really make bigmoney and significant income when you know how
to find the deal, structure thedeals, and you got the money lined
up. So we started back intwo thousand three. So what's my background?
(05:00):
The first six years two thousand andthree to two thousand and nine.
Those first six years, all Iknew to do, Rod was rely on
the local banks to fund my deals. That's all I knew. I never
heard of hard money. I neverheard of private money. In fact,
I never heard about buying houses onterms. I never heard a subject to
the existing note seller finance and leaseoptions. I don't know any of that
(05:25):
stuff. The first six years Iwas using my prior experience in the manufactured
housing and mobile home business. Sofirst six years local bank, well,
I remember it, Rod like itwas yesterday. I picked up my telephone
here in my office. Believe ornot, we still have handsets and cords
here in North Carolina. I knowthat's hard to believe. But I picked
(05:46):
up my telephone and I called mybanker. His name was Steve. January
two thousand and nine. I hadtwo houses under contract when I made this
phone call, and I learned,like that Rod, my line of credit
had been shut down. I amwith no notice. I said, Steve,
what in the word are you tellingme my line of credit is shut
down? He says, Jay,don't you know we got a global financial
(06:08):
crisis going on right now? Isaid no. But now I got a
financial crisis going on because these twohouses represented over one hundred thousand dollars in
profit, and now I ain't gotno way to fund my deal. So
I hung up the phone, andI asked myself an important question. So
here's a writer down her. Iasked myself, who do I know to
(06:29):
help me with my problem? Itell you one thing, Rod, People
drive me crazy that say, hey, look, you ain't got no problem,
you got an opportunity. Don't makeme throw up. I had a
problem, right, I don't haveany way to fund those two deals.
I was cut off from the bank. So I asked myself, who do
I know? I loved the newbook that came out a couple of years
ago by doctor Benjamin Hardy and DanSullivan, who not have So when I
(06:51):
asked myself that question, I thoughtof Jeff Blanknship in Greensboro, North Carolina,
a good friend of mine. Hewas investing in real estate back them.
I called him up. I said, Jeff, the bank just cut
me off. He said, welcometo the club. They cut me off
last week. I said, well, how you gonna fund your deals?
He said, you ever heard ofprivate money? I said no. He
(07:12):
said you ever heard of self directorthat I raised. I said no.
He says, well, let metell you about them. So he did.
I hung up the phone from Jeff, and I put my private lending
program on steroids. Now what Imean by that is I put a program
together to where I was going togo around to people that I knew had
a relationship with, go to churchwith, you know, people in my
(07:36):
cell phone, et cetera. AndI was going to teach them what private
money was and how they could gethigh rates of return safely and securely.
And so I did I put myprogram together and in less than ninety days,
I raised two million, one hundredand fifty thousand dollars in funds available
to fund my deals. So,you know what, Rod, that was
(07:57):
the biggest blessing and disguise I've everhad in this business. I mean,
those first twelve months of losing myline of credit at the bank, we
tripled our business. You know whatwas going on back there foreclosures were everywhere.
The banks weren't lending money. Youhad to have all the cash to
buy those foreclosures. And so becauseof private money, we tripled our business,
(08:22):
got to pick and choose which dealswe wanted to do, and since
that time we've never missed out ona deal for not having the money.
Wow, we could go deep.I experienced some similar pain, but didn't
have the epiphany that you had,unfortunately, because like you said, you
come up against a problem and youjust got attack it and come up with
a solution, and you did.So. The thing that comes to mind,
(08:45):
I guess for my listeners that wouldbe really interesting to hear is I
personally like when you're almost seen goingto a and this is maybe my sales
background. I can go to athird person, a third party all day
long and just pitch away. Friendsand family were always hard to for me
to go to. So I guessthe first question is how would you approach
him? What was your overall approach? What was the pitch? How'd you
(09:05):
do that? Yeah, so Ididn't know what I was actually doing.
I mean, I actually have aname now for what I did. So
I tell you what I did,how I got my very first private lender,
what I said, and now whatI call it, because I now,
when looking back, I know whatI did. So I was so
(09:26):
my wife Carol Joyce, he's fromTexas, by the way, so we're
very involved in our local church.Been going to the same church, Church
of Christ on Barbara Road here inmore Ridge City since nineteen eighty eight.
And so I had these two dealsunder contract, and Jeff, my friend,
told me about private money. Istudied it, so I had my
program put together. So it wasRoddy was on a Wednesday night, Wednesday
(09:46):
night Bible study. Carol joy andI get there to the church during a
few minutes ahead of time, andI walked up to a gentleman that I
had known for a while, let'scall him Frank, and so I walked
up to Frank, and here's exactwhat I said to Frank. I said,
Frank, I said, I gotsomething I want to talk with you
about confidentially. Could we get togetherfor a few minutes after Bible study?
(10:07):
He said, well, sure,brother Jay. So we sit down for
Bible study Wednesday night at seven pointthirty here in Moorhead City, and Bible
study is over. And so nextthing I know, Frank has like almost
like run over to me, becausewe sat on the other side of the
auditorium at church. He came tome, he says, our brother Jay,
what you want to talk about?We see the last hour all he'd
(10:28):
been thinking about this confidential thing Iwanted to talk to him about, right,
And so he's running over here towhat's this confidential thing? So so
I said, well, let's comedown here in the nursery, shut the
door, and we'll visit for afew minutes. So we went in there
and rod here's exactly what I saidto Frank. I said, Frank,
you know everybody in this town,and he did. He was the original
(10:50):
Zenith television dealer in Morhead City,North Carolina. Now, for you listeners,
if you don't know what a Zenithtelevision dealer is, that means you're
too young and you don't remember lifewithout Walmart. Okay, when you bought
your television from Dezina television dealer backthen. So anyway, I told him,
I said, Frank, you knoweverybody in this town. He was
(11:11):
an entrepreneur, he was retired,he was very involved in the Rotary club,
he was an elder in the church. He was a leader, spiritual
leader, all that. And Iwent, I said, Frank, you
know everybody in this town. Andhere's the magic words. I said.
After that, I said, Frank, I need your help, and here's
(11:33):
what I need you to help with. Frank, I said, you see,
Carol Joy and I have now openedup our real estate investing business by
referral only, and I'm now payinghigh rates of return, insane high rates
of return to our investors. Whenyou run across somebody that's complaining about those
CD rates in the bank and thevolatility of the stock market, would you
(11:54):
refer them to me so I cantell them about my program. And Frank
looked to me, he says,one now, brother Jay, what you
got in mind? And I said, well, are you, saying that
you might be interested. He said, well, I'll tell you what.
We're only earning three percent in thelocal bank certificate deposit. You could get
three percent back in two thousand andnine. You can actually get four percent
(12:16):
now. I got four percent theother day. At first that iss In's
bank. He said, we onlygetting three percent in the local bank,
and we're losing our behind with thevolatile in the stock market. He says,
well, he said, well,tell me about your program. What
kind of interest rate are you paying? I said, when I Frank,
that depends on the deal. Butwhat sounds high to you? He said,
I don't know, maybe five percentor six percent. And I said,
(12:37):
Frank, I can't pay you fiveor six percent, but I can
pay you eight percent. He said, put me down for two hundred and
fifty thousand dollars. So the nextday I went to Frank and his wife's
home and we sat down over somecoffee, and I laid out the program
to him. What am I paying? What was my interest rate? By
(12:58):
the way, don't miss what I'mgetting ready to say right now. I
wasn't pitching a deal. Now,bear in mind, I had those two
deals under contract that was, youknow, talking in my head. But
I would not let myself say oneword about them deals. Right But if
I knew, if I open mymouth up about them deals, I'm gonna
(13:18):
be sounding desperate, and desperate hasgot a smell to it. So I
we're gonna talk about them deal.I'm just talking about the program, right'.
That's a huge nugget and a hugemistake because I've done it byself,
and I see guys doing it allthe time. They just they get so
focused on the deal you're talking about. There's also some magic in there,
just about the confidential thing, youknow, needing help, you know,
(13:39):
you get their interests. They startcoming to you. And what I hear
is you're like a magnet. Theystart coming to you versus you pitching and
trying to close them. Absolutely,see, here's the deal. And I'll
finish the script here in a second. But here's the deal. The traditional
way to borrow money, ask mehow I know, is to go to
the bank, get on your handsand knees, put your hands under your
(14:01):
chin, and say, please fundmy deal, Please fund my deal.
Well, that's asking for a mortgage. There's an application, there's credit scores,
there's all that. You know what, in this world, it's a
one to eighty. Now in Kentuckythey call it a three sixty. They're
offul a little bit. But anyway, it's the opposite direction. I'm not
asking for a mortgage. I'm offeringa mortgage. So you see here.
(14:26):
Look when I got there to Frankand his wife's house on Thursday afternoon after
Bible study on Wednesday night, Ididn't go there asking or pitching. You
know what it did, Rod,I put on my teacher hat. Nice,
yeah, I put on my teacherhat. I'm leading with a servant's
heart because they got a problem.Their problem is they're all over the place
(14:50):
losing money in the stock market.They're sick and tired of the local bank
and CDs and everybody else. Youknow, they're not getting any kind of
safe return. So I put onmy teacher hat, led with a servant's
heart as to what I could offerthem and do for them. So when
I got there, sat down overcoffee, and so I taught them my
program. Right, I said,here's how you can get high rich return
(15:13):
safely and securely. And I toldthem, I said, I don't have
a deal for you today. Ididn't. I wasn't going to give them
a deal today, right, becauseI'm separating the conversation, right. So
I taught on the interest rate.I taught them in my program how they
can get their money back early ifthey have an emergency. I taught them,
you know, frequency of payments,how often they're going to go to
(15:35):
the payments. You know. Iasked them, are you using retirement funds?
Are you using just investment liquid capital, because that's going to depend if
I want to tell them about myselfdirected IRA company that I would refer them
to, right, so they couldget tax free or tax deferred income.
So I just had this conversation thatlasted about twenty minutes. By the way,
new private lenders always have more thanthey tell you, right. So
(16:00):
started out with two hundred and fiftythousand dollars. So they gave me a
verbal, a verbal here's how muchwe got, right. I said,
Well, and listen, don't missthis. And I said to him myself,
I will put your money to workfor you just as soon as I
can. Well, they just hadtwo hundred fifty thousand dollars in investment capital.
They didn't have to like move retirementmoney over to a self directed diary
(16:22):
company. They said, two hundredfifty thousand dollars burning a hole in there,
no interest bearing account at the bank. And so I let a few
days go by. I still gotthem two deals under contract, right.
I let a few days go by, and I called them up. And
here's exactly what I said to Frank. So I got on my receiver here,
my hand receiver, you know,got on the phone here, I
(16:45):
said, Frank, I got greatnews for you. I can now put
your money to work. And here'sexactly what I said. I said,
I got a house over in Newportwith an after repaired value of two hundred
thousand dollars. Funding required for thisdeal is one hundred and fifty. So
Frank, I can't use all ofyou to fifty. They told me they
had two fifty. I said,I can't use all you to fifty.
(17:07):
I said, but this is onehundred and fifty deal. So put one
hundred and fifty to work. Andclosing is going to be next Tuesday,
So you'll need to wire your fundsto my real estate attorney's trust account on
Monday. I'm going to have myreal estate attorney Julie email you the wiring
instructions and you have it there byMonday. End of conversation. I didn't
(17:30):
ask Frank if he wanted to dothe deal. That's the most stupid question
in the world. I got toask him. Of course he wanted to
do the deal. He loves theprogram. He's been sitting by the telephone
waiting for the phone call because Itold him I'll put your money to work
for you just as soon as Ican. So I call him up with
great news. I can now putyour money to work, and so we
(17:52):
did. We closed on that deal. And so you see there's no pitching
in this. You're serving, you'reeducating now. Now this is in your
warm market. Don't miss that.Where did I? Where did I?
Where did I talk to Frank?I talked to Frank at church? Right,
Frank could have been at the RotaryClub. Frank could have been at
Business and Business, Business, NetworkingInternational. Frank could have been at the
(18:15):
Chamber of Commerce. Frank could havebeen at Score. Frank could have been
anywhere that he and I already kneweach other. Don't miss that. So
that's the warm market, right,But you got all these other private lenders
that are existing private lenders, they'realready loaning money out. Well, you
don't have to put on you teachyour hat, right, you ain't gonna
(18:37):
teach them your private learning program.You're going to reach out to them,
network and find out what they areaccustomed to getting. Well where in the
world you're gonna find them people,Well, let me let you in a
little secret that's called self directed IRAcompanies. Now, if you don't know
about self directed IRA companies, talkedto Rod, because Rod can tell you
all about self directed IRA companies.I got one in particular that all my
(19:02):
private lenders that are using their retirementfunds have got their funds over there,
and I get my deals funded inthree days from that particular company. But
you see these existing private lenders,they already know the deal, right,
they're already owning out. Now,I got an interesting statistic for you that
you might not know. Did youknow that over seventy percent, in fact,
(19:26):
seventy one percent of this particular separatediary company, seventy one percent of
account holders that have an account ata self directed diary company want to loan
money to you the real estate industry, right, they want to be in
real estate, but they don't wantto go find deals. They don't want
to negotiate deals. They just wantto sit back and watch their money grow
(19:48):
right on automatic. And here's somethinginteresting. I know one particular So you
just need to research this a littlebit, unless Rod wants me to tell
you. But anyway, there's oneparticular SELFI Redediary company that the fourth Wednesday
night of every month, at seventhirty pm Eastern time, has a zoom
(20:11):
meeting open to whoever wants to come. I tell you who comes to that
meeting. Their account holders come tothat meeting that have money burning a hole
in their account because they ain't earningno money sitting there in the account.
And so now US real estate investorscome there and they put you in breakout
rooms on zoom and you all getto meet with each other. Right now,
(20:32):
you're not going to teach them yourprivate minding, your private linding program
there like I did to Frank andhis wife. Right, We're just going
to network getting to know each other. You're going to find out, you
know, what they're accustomed to getand y'all can do business you know,
one on one there, So privatepeople in your private war market. Hey,
listen, Carol, Joey and I. Right now, we've got forty
(20:52):
seven individuals private lenders that are fundingour deals. And you know what's interesting,
Not one of them had ever heardof private money or self directed irase
until I put on my teacher hat. Yeah, and I started teaching them
about that stuff. And here's anotherwriter down or actionable item. Established if
(21:15):
you want to get private money.By the way, eighty seven percent for
sale by owners will not sell toyou creatively. You got to have all
the cash. If you don't haveprivate money, you're missing out on eighty
seven percent of the fizbo deals outthere. But here's the actual item.
Establish a relationship with a self directedIRA company that you can refer your new
(21:38):
private lenders from your warm market tothat have retirement funds. Listen, over
half of our forty seven private lendersare using retirement funds to fund my deals.
Well, here's the takeaway on that. If you don't have if you
don't have a relationship with a selfardof the IRA company that you can refer
(21:59):
your private enter to this Scott retirementfunds, you gonna miss out on over
half the money before COVID, therewas eighteen trillion dollars in cash sitting on
the sidelines, and now today thirtyone trillion dollars in cash sitting on the
sidelines. And look, it's ourmoral and ethical responsibility to relieve them of
(22:22):
their problem. There you go.Yeah, no, I like, that's
the whole mindset shift. So ifyou don't mind, I'm curious, if
you don't mind sharing, what doesthe returns? I know it's probably dictated
a little bit about the deal.I don't know, maybe not the profit
of the deal or whatever, ifsomeone's doing I mean, we do have
a lot of investors that do multifamily, larger you know projects. As I
(22:44):
explained, my audience anyway, ispretty focused on single family. A lot
of single family, whether it's fixedflip by well, me too. I
mean, since two thousand and three, we've flipped, fix and flipped over
four hundred and seventy five single familyhouses, with the majority of those being
using private money for funding. Okay, so two things. One is I'm
curious, like, how do youstructure the deal, what kind of returns
(23:06):
I've I've done it many many waysin the past, and I have a
lot of guys that'll last me.Like, you know, how do you
how do you structure your deals?I get, you know, it kind
of depends. And then the secondthing was, well, let me let
me have you answer that. Sure, So the structure is real simple first
of all, and I've done thisfor years. Every private lender gets the
same deal. I don't mean thesame property, I mean the same program.
(23:29):
Right, So here it is hereit is today. Eight percent in
first position, ten percent in ajunior position, no points, no fees,
no extension fees. Maximum loan tovalue is seventy five percent of the
after repaired value. I did notsay seventy five percent of purchase. Seventy
five percent of the after repaired value. Of course, I'm buying properties at
(23:52):
fifty percent of the after repaired value. The length of the note two years
if it's just liquid investment capital,five years, if they're using retirement funds,
frequency of payments, if it's investmentcapital, I leave it up to
them. I mean, I gotelderly private lenders that need the monthly income.
Right. They don't want to touchtheir principle, but they need that
(24:15):
monthly income that they want to liveoff of. I got some private lenders
using just lipping investment capital. Idon't make any payments till I cash out.
I just let the interest accrue.Some I'll do quarterly. Now,
if they're using retirement funds from theirIRA, moved it over to a separated
IRA. I ain't gonna make monthlypayments. That's stupid, and the money's
(24:37):
not going directly to them, it'sgoing to the retirement accuntl So we'll either
make quarterly payments or semiannual. Right. I don't want anything past semi annual
because I just don't want to coughup that big of a check you go
into the retirement Right now, there'sa caveat to that. If I have
used the retirement funds and I'm gonnabe selling it on rent to own,
(25:00):
then if I got money coming inper month, I want money going out
per month, right right. Butmost of the time, if I'm doing
a flip, if it's retirement fundsthey used, and it's a self to
ready di IRA, it'll be quarterlyor semi annual, and I let them
choose. I mean, it reallydoesn't matter. I'm not gonna pay any
more money. It's just it's justa matter of how often their retirement account
(25:21):
gets it. So here's the easyanswer. It comes down to their objectives.
Okay. And so you basically there'sno giving them a portion of the
upside of the profit. It's astraight interest rate. Yeah, okay.
So it's like, I mean,the old business model. And by the
way, there's nothing against it.I mean, it's your business, do
(25:41):
business the way you want to.But I just decided years ago I'm not
joint venturing. Okay, I'm gonnalet the prival center be the bank.
Like if when I borrow money fromthe bank, they didn't get a piece
of the hind end of my deal. Right, Let the bank the bank,
and so they're going to know exactlywhy their return is going to be
(26:03):
okay. But you know, here'swhat's funny about that, Rod. I'm
thinking of one particular private lender.We've been doing business for three or four
years, and he called me upone day. He had like post a
million dollars with me, and hecalled me out when he says, Jay,
I've been loving your private learning program. And I thought to myself,
Okay, where's this conversation going.He said, I've been loving your prival
(26:26):
ending program. But I want toget a piece of the action, now,
I said, oh, I said, well, here's the way it
works. I let my private lendersdo what they do best, which is
investing the deal and sit back andcollect money. And then I do what
I do best, which is finedeals, negotiate deals, oversea deals,
(26:47):
rehab deals, be the orchestra director, and do all that stuff so you
can get a high rate of return, safety and securely. So if you
want to get a piece of theaction, you need to start doing what
I do. Right, Okay,that's great. Those are so guess what
he said? What's that? Okay, yeah, exactly. And there's probably
(27:07):
twenty other things you didn't mention thatyou do every day and the stress of
it and everything else. So that'sinteresting. Did you start doing that day
one? How do you get theconfidence to go back to someone who has
that conversation, because as we're talking, I think the I guess the mistake
that I made I had. Ihad a lot of guys that wanted to
be developers. They didn't want tobe just straight investors. And that's where
(27:30):
I think kind of a little bitof the flaw in my model, because
they didn't want to sit back.They wanted to be part of the deal.
They you know, kind of alot of them came to me wanting
basically, you know, in onthese and I didn't really I guess,
for lack of a better way toput it, put them in their place
as far as what their role wasversus mine. Just to be honest,
I was usually trying to get them. I mean, this was part of
(27:52):
my pitch. I hate to saynow, but eighteen to twenty four percent
and some they got thirty to sixtypercent and some got you know there,
I had a preferred return of youknow, anywhere from six to eight.
So anyway, going back to myquestion, did you develop this confidence?
Did you just come out of thegates and say, no, this is
the way the deal is. Solet me come in on that, because
I have more than one thought on, first of all, how to have
(28:15):
confidence in presenting the program and talkingwith potential private lenders. First of all,
and this is paramount. I mean, we got to own the real
estate between our ears before we cango out there and own single family houses
and you know, commercially all that. We got to own this. So
how do we own this? Numberone? It's been my observation Rod that
(28:37):
when a real estate investor, whetherthey're new or their season, when they
first start looking to raise private money, they have this fear of rejection.
And here's the deal. Let meask you a question, Rod and your
audience. How can you be rejectedwhen there's nothing to reject? Now,
let's hang out on that for asecond. How can you be rejected when
(29:00):
there's nothing to reject? If you'repitching a deal, your deal can be
rejected. But if you are teachinga program for someone to get high rates
of return safely and securely, allyou're doing is sharing information. That's such
a huge nugget that I have atstarred and written down. But you're in
(29:21):
back to the teacher hat. You'reyou're educating, You're there is nothing and
then that's where almost confidence is itneeded because it's not like you're selling.
You're not really pitching, you're justexplaining. Yeah, so here's a big
writer down er quote unquote, servicenot sales, service not sales. I
ain't selling nothing, I'm serving,right, And so so that's number one.
(29:45):
You cannot be rejected if you're notasking anybody for anything, right,
you're sharing your teaching right. Numbertwo, how are you going to be
confident? You better know your program. You see, it's your program right
now, I'm talking about raising andattracting money. And by the way,
which is easier attracting or chasing?Right, We ain't chasing nobody. I'm
(30:07):
not selling, you know, persuading, pitching, talking anybody know I'm not
selling. I'm attracting, right,And so you better know your program.
That's what you're teaching. You're teachingyour program. And of course my program
is all laid out in my book. That all you got to do is
just duplicate, right, You justteach the program, that's what you're sharing.
(30:29):
So how do you get confident?Big one word preparation, preparation,
right, So you got to knowthe program. And look, it's not
that I mean, it's not thatdifficult for goodness sakes, right, I
mean, if you can read,you can teach the program, right,
So know the program? Right.Another thought that comes to mind, how
(30:52):
to be confident. If you're abrand new real estate investor, you may
be thinking to yourself, well,Jay, for goodness sakes, I might
know the program. I might beall confident, but who in the world
is gonna loan me money, andI ain't never done a deal before.
Here's the answer to the question,and write it down. If you don't
pay the private lender, the propertydoes. So that's why we have such
(31:17):
a conservative loan to value to wherewe are protecting that private lender and most
of private lenders you're gonna do businesswith in your warm market. They ain't
never heard of private money. Theyain't never heard of self directed ie raise.
Right, So you got to lookafter you private lenders. Part of
the program is you're gonna name youprivate lender on the insurance policy as the
mortgagee. So god forbid if thatthing burns down that there's a claim.
(31:41):
Their name is on the check.Just like your entity. They are protected.
I'm gonna name them on the titlepolicies and initially insured. So confidence
you know you're gonna be looking afterthe private lender. You're gonna lead with
a servant's heart. You're gonna puton your teach your hat, share the
program, and I tell you what, you're gonna have a problem, just
like I did and I still dotoday. You're gonna have more money than
(32:04):
you can use. So okay,that's a good segue. Into the program.
So I'm assuming when you say program, it's basically your business, and
everyone's got a little bit different tweakon how they approach the business. How
deep you get into I guess themechanics of let's just say fix and flipping.
Is it mostly around? Well youtell me. I mean, I'm
(32:25):
not gonna put words in your mouth, but I had a certain way of
kind of explaining my business, andI'm curious how you do that. So
in my PowerPoint presentation, so likeI've raised nine hundred and sixty nine thousand
dollars at one private lender luncheon,you know, I've got multiple ways to
get the word out. You canhave a one on one conversation. You
can have Starbucks, you know youcan. You can do an educational presentation
(32:50):
to Rotary club, et cetera.But in the PowerPoint presentation of teaching this
private lending program, and when Isay program, I'm just talking about the
private lending pro pro how an individualcan make high rates of returns safely and
securely, either using investment capital andor retirement funds. So when I'm teaching
it to them, I just givea couple of examples of the deals that
(33:13):
I do. But as far asmy business model and how I find deals
and how I oversee deals, andhow I do business with general contractors and
the marketing that I use to finddeals, think it careless. All they
want to know is am I protected? How can I get my money back
in case of emergency? And howmuch money you're gonna pay me? That's
(33:35):
all they want to know, right, I've learned the hard way over the
years. When I talk too much, things do not go well. Keep
it simple, Keep it simple,and talk from their perspective. What do
they want to know? How muchcan I earn? How am I protected?
And what happens if I need mymoney back? And so the third
(33:55):
one, what happens if what's theresponse to that one? Because I'll see
the first one. They're secured,They're in first position, they're insured.
You know, they're buying it fiftypercent loan to value, you know,
so that all makes sense. I'mcurious how you would address someone who need
their money. So, if theyare loaning me money, just investment capital.
I put in the promissory note aninety day call option, and what
(34:17):
the nine of day call option isis if they have an emergency come up
and they need their funds back.All they got to do is give me
a nine a day notice that theyneed to call the new DO. Now,
if they were investing their money inthe bank, there would be a
penalty involved in that on calling aCD DO early, But I want to
do business, keep it simple.I don't charge any kind of penalty.
I say, look, if youneed your money back, I know you
(34:39):
don't want it back because we're whatyou going to get these high rates of
return safely and securely. But ifyou you know, life and circumstances happen
sometimes, you know you might needyour money back. Give me a nine
a day notice. That gives memore than enough time to replace your private
money with another one of my privatevendor's money and go ahead and cash you
out. In the real world,right since two thousand and three, you
(35:00):
know how many ninety day call optionsI've had actually called two? Okay,
actually two two, and both ofthem were thirty thousand dollars notes that I'd
use for rehab money, and bothof them were medical situations, medical emergencies
that they needed the money for.But in the real world, I mean,
you know, look at all theseyears, right, right, Hey,
(35:22):
look, they don't want the moneyback, right, I mean where
they where are they going to putit? I am by the way,
if they're funding a deal using retirementfunds, I do not give a nine
a day call option because that money'snot going back to them directly. That's
their retirement money. Right. Okay, Well, no, we're getting close
to running out of time here.This is always something that comes up.
And again this is I hate toeven ask this of you because there's so
(35:44):
many, you know, different waysI can go with this. But you've
done a lot of deals. Inventorieshave been tight for a while and have
gotten tighter, and I think they'regoing to remain tight. Where do you
find your deals? Where do youfind these these fifty percent deals? Absolutely?
So here we go Google pay perlead. I don't do pay per
click. I do Google pay perlead. So I've got three different companies
(36:06):
that I pay to where people goonline and they're searching buy my house,
sell my house, you know,fast, all that kind of stuff.
So Google, Right, So Iuse Google. I also use Facebook paid
ads. So I've got two differentFacebook campaigns that I run every day.
One is called the Distressed Seller campaignand the others the generic campaign. And
so these are Facebook ads that justshow up in people's Facebook news feed here
(36:30):
in my zip codes. Right,it's a picture of me standing in front
of a plain Jain bread and butterbread and butter house here in our area,
and I'm holding a yellow sign thatsays I buy houses, right,
I buy houses full price, andthe phone number that goes to my answer
in service twenty four hours a day. I then have mining Carol Joy's foreclosure
(36:52):
system that we've been developing ever sincetwo thousand and four. We track every
foreclosure I'm talking cannot pre in odI'm talking, they're actually in foreclosure.
The substitute trustee has been hired,so we track every one of those files
on public record. We've got eightsequential letters that we mail to these people.
Again, this is all about serving, not looking to take the advantage
(37:14):
of anybody. When they respond toour letters, I actually ask them,
or my acquisitionist does. Now,I ask them, do you want to
keep your home? If they sayyes, and we can give them an
idea as to how they can geta loan modification or a deferment you know
program, and we can help themkeep their own home. Then that's fantastic.
Nothing in it for us directly,but I know this, it's all
(37:36):
about sewing. It's not about thereaping low of reciprocity. All comes around,
but our foreclosure system and so thoseare the main ones right there,
Facebook ads. We don't drive fordollars. I've never driven for dollars in
my life. It's it's great.You know, if you're on a budget
and you can't invest money on marketing, then drive for dollars. Of course.
(37:58):
I got a good friend that youknow is the creator of deal machine
dot com, David. But youknow, if you're driving for dollars,
you can use those methods as well. But those are the methods that we
use every day to consistently get ourtwo to three deals a month at seventy
eight thousand profit each. That's amazing, No, I think, thanks for
that, and I know we needto wrap up a couple more things for
(38:20):
you. You mentioned a zoom callfor retirement funds. Retirement, I guess
people that manage retirement accounts, right, yes, Ira is do you mind
sharing that? Oh? Of course, I'm glad to share it. So
the name of the company is questTrust dot com out of Houston, Texas
www dot quest, q U Es T and then t r U s
(38:42):
TW dot com Quest Trust. I'vebeen. I've had all my private lenders
with their retirement funds with them forprobably seven years now. Their customer service,
hands down, is the best.As I said, my private lenders
have got their funds there, Iget my deals funded in three business days.
Amazing. Okay, huge nugget there. And by the way, it's
(39:02):
Quest Trust that has the networking eventthe fourth Wednesday night of every month seven
thirty pm Meastern. Just go totheir website. You'll see to the top
of their website the networking event onthe fourth Wednesday night of the month.
Okay, perfect. So I guessin closing, I've got a ton of
notes and probably twenty more questions.But in real we can always do Part
two. Yeah, I think we'regonna have to because there's a lot on
(39:24):
here. And yeah, your yourbio is significant. It's there's so many
things that you sounds like you perfectedand you've got you know, programs and
books and everything else. So numberone, how can people find you?
Where's the easiest way to find you? Sure, so you can find me
and follow me on my podcast,which is raising private money. Imagine that
(39:45):
Raising private money with j Connor,Co, N N, E R.
Whatever your platform is for podcasts,iTunes, Spotify, you know, whatever
it is you name it. Justsearch for Raising Private Money with Jay Connor
and guess what. I have amazingguests on there all the time and I
interview them on how do they raiseprivate money? Right? How do you
(40:07):
start conversations with people that you don'teven know that's going to attract money?
And of course you can find meat Jconnor dot com, my website.
We actually have our phone number thereon the website and you may find it
very hard to believe, but whensomebody calls us, we actually pick up
the phone and answer the phone.I know that's some of the concept.
(40:29):
It's what a concept, you know, but we do pick of the phone
and you can also connect with me. You can get my book, my
book twenty Bucks on Amazon. Youcan get it free at my website.
But it's the name of the bookis where to get the money now?
This is not an e book.You can't even download it. We ship
it to you in the mail.Where to get the money now? How
and where to get money for yourreal estate deals without relying on traditional lenders.
(40:53):
You can pick this book up,I'll autograph it for you, ship
it to you in the mail,and it's got my program in it for
you to duplicate. Right www.Dot Jcommer Jay co n n Er dot
com Forward slash Book. Really appreciatethat, Jay. And by the way,
some of my followers are probably like, why are you talking to this
(41:14):
guy about private lending. You're youknow, you're a hard money lender,
but you know, I think thisis something that every investor should have as
part of their business plan and theirstrategy, their go to market, whether
you're using one hundred percent private individualsto fund your deal or you know,
we didn't get too deep into differentcapital stacks. And I've used debt before
and then equity, and obviously inthis case, they'd be in second position
(41:35):
if you had traditional debt. Butthere's a lot of ways to kind of
skin a deal. This is justone of them, and I think it's
It could really help a lot ofpeople from a profitability perspective, from being
competitive in the market and closing dealsquickly. And there's just so many advantages
in using private individuals and private money. Absolutely, and by the way,
I will say the podcast is amazing. I was about halfway through this Gary
(41:57):
Wilson, which is not my brotheror anything, but this is not a
plug for Gary, but amazing contentand podcasts. So I do encourage everybody
to go check out Jay's his podcast, and definitely the website. And by
the way, Jay, thanks alot for the book offer. I'm going
to be getting mine as well.And I guess that's part one for now.
We'll have to regroup. Absolutely,I really enjoy being with you Rod,
(42:19):
You're an amazing host and interviewer.I look forward to part two.
God bless you absolutely. Thanks forthe time, Jay, talk to you soon.
Welcome to Optimize real Estate Podcast.Hey they're real estate professionals. Welcome to
another episode the Optimized real Estate Podcast. I'm Brod Wilson. My job is
basically interview some of the movers andshakers of the residential real estate industry and
pull out their top secrets, ideas, strategies, and really focused around helping
(00:26):
you optimize your own real estate business. And today I have an amazing guest.
Honestly, this guy's bio is solong, I'm going to have to
cut it short. In fact,I'm already thinking this is like one of
those guests where you're already thinking aboutyour number two, your second podcast,
and even third, because there wasjust so much to cover with him.
Jay Connor is a national speaker,best selling author. He's been buying and
(00:48):
selling since two thousand and three.He's actually flipped over four hundred and seventy
five houses himself. What's cool andI didn't cover that this in this particular
episode, but he has automated hiswhole business to where he's, you know,
seven figure business, totally automated.We'll have to get into that next
time. It's funny. I feltlike I was talking to Zig ziggler.
(01:10):
You'll appreciate that when you hear hisaccent. But super good guy. He's
an expert at raising private money.That's the reason I wanted to have him
on. He basically gets into youknow, who to look for when you're
looking for private money, who togo after? And actually that statement go
after. He has a system towhere you don't really go after people,
they come to you. You becomekind of a magnet as far as you
know, generating people and deal flowcoming to you. How to find people
(01:34):
that will invest in your deals.We talk about self directed iras, which
you know seems kind of boring,but the way he describes it and some
of the resources he provides is amazing. Why you want to be a teacher
and not a pitch guy or gal, not a salesperson? He gets into
He throws on his teach your hata few times. You know, you
really just focused on when you're lookingfor private money, You're focused on educating
(01:57):
people, explaining your deal, yourprocess. Why that by investing in your
company and in your projects, it'sa safe investment and a whole lot more
so. Anyway, I'm excited foryou to listen and or watch this episode.
And that's it for now without anyfurther Ado, let's get on with
Jay Connor. Oh, I'm onwith Jay Connor this morning. How you
(02:20):
doing, Jay, my lands Rod, I am doing fantastic, and thank
you so much for inviting me alongto talk about the subject I'm most passionate
about, and that's private money.How to get money for your deals without
relying on the banks or traditional lenders, you know, putting yourself in the
driver's seat to where you're attracting moremoney than you can use. How to
(02:43):
use private money and never miss outon a deal. Okay, my investors
and followers and they're all their earsjust perked up. That's become a big
topic. And why don't we dothis. By the way, I have
to say, I feel like I'mtalking to zig Ziggler here you I'll tell
you I love zig Zigger. Imet him twice. I met him twice.
(03:07):
Cool met zig in Dallas, Texas, where he was from all the
way back in nineteen ninety four.He was on this show called Dawn Dawn,
which stood for Dynamic Achiever Worldwide Networkand they needed a studio audience.
I said, Hey, I'll bea studio audience participate, and then I
met him in Raleigh, North Carolinain two thousand and seven for the second
(03:29):
time. He was on the PeterLow Tour where they would do fifteen sixteen
thousand people in an arena. Butyeah, I started listening to Zigziglar tapes
when I was twenty four years old, and I had most of them memorized.
Of course that was forty years ago, right, No, I had
that program, as were one ofhis programs as well. And just you
know, I basically wore him outin my car driving up and down it
(03:52):
was in the Bay Area, upand down to San Francisco every day.
We can go on forever on yourbackground and experience, which is really really
pressive, but just to kind ofcut things, you know, relatively short,
why don't you give us a littlebit on your background. Sure,
well, I'm here in eastern NorthCarolina, small market. Our total target
market's only about forty thousand people herein this small market in eastern North Carolina.
(04:16):
My wife, Carol Joy and Iwe've been full time investing in real
estate since two thousand and three,and so we do two to three deals
a month, single family deals.Most of them we fix and flip.
I've done a bunch of buy andhold and rent to own sales in the
past, but in this market today, my lens, so we do two
to three deals a month in thissmall market. Our average profit right now
(04:39):
seventy eight thousand dollars per deal.And I don't say that to brag Rod.
I say that to make a point. You don't have to be in
a big market to really make bigmoney and significant income when you know how
to find the deal, structure thedeals, and you got the money lined
up. So we started back intwo thousand three. So what's my background?
(05:00):
The first six years two thousand andthree to two thousand and nine.
Those first six years, all Iknew to do, Rod was rely on
the local banks to fund my deals. That's all I knew. I never
heard of hard money. I neverheard of private money. In fact,
I never heard about buying houses onterms. I never heard a subject to
the existing note seller finance and leaseoptions. I don't know any of that
(05:25):
stuff. The first six years Iwas using my prior experience in the manufactured
housing and mobile home business. Sofirst six years local bank, well,
I remember it, Rod like itwas yesterday. I picked up my telephone
here in my office. Believe ornot, we still have handsets and cords
here in North Carolina. I knowthat's hard to believe. But I picked
(05:46):
up my telephone and I called mybanker. His name was Steve. January
two thousand and nine. I hadtwo houses under contract when I made this
phone call, and I learned,like that Rod, my line of credit
had been shut down. I amwith no notice. I said, Steve,
what in the word are you tellingme my line of credit is shut
down? He says, Jay,don't you know we got a global financial
(06:08):
crisis going on right now? Isaid no. But now I got a
financial crisis going on because these twohouses represented over one hundred thousand dollars in
profit, and now I ain't gotno way to fund my deal. So
I hung up the phone, andI asked myself an important question. So
here's a writer down her. Iasked myself, who do I know to
(06:29):
help me with my problem? Itell you one thing, Rod, People
drive me crazy that say, hey, look, you ain't got no problem,
you got an opportunity. Don't makeme throw up. I had a
problem, right, I don't haveany way to fund those two deals.
I was cut off from the bank. So I asked myself, who do
I know? I loved the newbook that came out a couple of years
ago by doctor Benjamin Hardy and DanSullivan, who not have So when I
(06:51):
asked myself that question, I thoughtof Jeff Blanknship in Greensboro, North Carolina,
a good friend of mine. Hewas investing in real estate back them.
I called him up. I said, Jeff, the bank just cut
me off. He said, welcometo the club. They cut me off
last week. I said, well, how you gonna fund your deals?
He said, you ever heard ofprivate money? I said no. He
(07:12):
said you ever heard of self directorthat I raised. I said no.
He says, well, let metell you about them. So he did.
I hung up the phone from Jeff, and I put my private lending
program on steroids. Now what Imean by that is I put a program
together to where I was going togo around to people that I knew had
a relationship with, go to churchwith, you know, people in my
(07:36):
cell phone, et cetera. AndI was going to teach them what private
money was and how they could gethigh rates of return safely and securely.
And so I did I put myprogram together and in less than ninety days,
I raised two million, one hundredand fifty thousand dollars in funds available
to fund my deals. So,you know what, Rod, that was
(07:57):
the biggest blessing and disguise I've everhad in this business. I mean,
those first twelve months of losing myline of credit at the bank, we
tripled our business. You know whatwas going on back there foreclosures were everywhere.
The banks weren't lending money. Youhad to have all the cash to
buy those foreclosures. And so becauseof private money, we tripled our business,
(08:22):
got to pick and choose which dealswe wanted to do, and since
that time we've never missed out ona deal for not having the money.
Wow, we could go deep.I experienced some similar pain, but didn't
have the epiphany that you had,unfortunately, because like you said, you
come up against a problem and youjust got attack it and come up with
a solution, and you did.So. The thing that comes to mind,
(08:45):
I guess for my listeners that wouldbe really interesting to hear is I
personally like when you're almost seen goingto a and this is maybe my sales
background. I can go to athird person, a third party all day
long and just pitch away. Friendsand family were always hard to for me
to go to. So I guessthe first question is how would you approach
him? What was your overall approach? What was the pitch? How'd you
(09:05):
do that? Yeah, so Ididn't know what I was actually doing.
I mean, I actually have aname now for what I did. So
I tell you what I did,how I got my very first private lender,
what I said, and now whatI call it, because I now,
when looking back, I know whatI did. So I was so
(09:26):
my wife Carol Joyce, he's fromTexas, by the way, so we're
very involved in our local church.Been going to the same church, Church
of Christ on Barbara Road here inmore Ridge City since nineteen eighty eight.
And so I had these two dealsunder contract, and Jeff, my friend,
told me about private money. Istudied it, so I had my
program put together. So it wasRoddy was on a Wednesday night, Wednesday
(09:46):
night Bible study. Carol joy andI get there to the church during a
few minutes ahead of time, andI walked up to a gentleman that I
had known for a while, let'scall him Frank, and so I walked
up to Frank, and here's exactwhat I said to Frank. I said,
Frank, I said, I gotsomething I want to talk with you
about confidentially. Could we get togetherfor a few minutes after Bible study?
(10:07):
He said, well, sure,brother Jay. So we sit down for
Bible study Wednesday night at seven pointthirty here in Moorhead City, and Bible
study is over. And so nextthing I know, Frank has like almost
like run over to me, becausewe sat on the other side of the
auditorium at church. He came tome, he says, our brother Jay,
what you want to talk about?We see the last hour all he'd
(10:28):
been thinking about this confidential thing Iwanted to talk to him about, right,
And so he's running over here towhat's this confidential thing? So so
I said, well, let's comedown here in the nursery, shut the
door, and we'll visit for afew minutes. So we went in there
and rod here's exactly what I saidto Frank. I said, Frank,
you know everybody in this town,and he did. He was the original
(10:50):
Zenith television dealer in Morhead City,North Carolina. Now, for you listeners,
if you don't know what a Zenithtelevision dealer is, that means you're
too young and you don't remember lifewithout Walmart. Okay, when you bought
your television from Dezina television dealer backthen. So anyway, I told him,
I said, Frank, you knoweverybody in this town. He was
(11:11):
an entrepreneur, he was retired,he was very involved in the Rotary club,
he was an elder in the church. He was a leader, spiritual
leader, all that. And Iwent, I said, Frank, you
know everybody in this town. Andhere's the magic words. I said.
After that, I said, Frank, I need your help, and here's
(11:33):
what I need you to help with. Frank, I said, you see,
Carol Joy and I have now openedup our real estate investing business by
referral only, and I'm now payinghigh rates of return, insane high rates
of return to our investors. Whenyou run across somebody that's complaining about those
CD rates in the bank and thevolatility of the stock market, would you
(11:54):
refer them to me so I cantell them about my program. And Frank
looked to me, he says,one now, brother Jay, what you
got in mind? And I said, well, are you, saying that
you might be interested. He said, well, I'll tell you what.
We're only earning three percent in thelocal bank certificate deposit. You could get
three percent back in two thousand andnine. You can actually get four percent
(12:16):
now. I got four percent theother day. At first that iss In's
bank. He said, we onlygetting three percent in the local bank,
and we're losing our behind with thevolatile in the stock market. He says,
well, he said, well,tell me about your program. What
kind of interest rate are you paying? I said, when I Frank,
that depends on the deal. Butwhat sounds high to you? He said,
I don't know, maybe five percentor six percent. And I said,
(12:37):
Frank, I can't pay you fiveor six percent, but I can
pay you eight percent. He said, put me down for two hundred and
fifty thousand dollars. So the nextday I went to Frank and his wife's
home and we sat down over somecoffee, and I laid out the program
to him. What am I paying? What was my interest rate? By
(12:58):
the way, don't miss what I'mgetting ready to say right now. I
wasn't pitching a deal. Now,bear in mind, I had those two
deals under contract that was, youknow, talking in my head. But
I would not let myself say oneword about them deals. Right But if
I knew, if I open mymouth up about them deals, I'm gonna
(13:18):
be sounding desperate, and desperate hasgot a smell to it. So I
we're gonna talk about them deal.I'm just talking about the program, right'.
That's a huge nugget and a hugemistake because I've done it byself,
and I see guys doing it allthe time. They just they get so
focused on the deal you're talking about. There's also some magic in there,
just about the confidential thing, youknow, needing help, you know,
(13:39):
you get their interests. They startcoming to you. And what I hear
is you're like a magnet. Theystart coming to you versus you pitching and
trying to close them. Absolutely,see, here's the deal. And I'll
finish the script here in a second. But here's the deal. The traditional
way to borrow money, ask mehow I know, is to go to
the bank, get on your handsand knees, put your hands under your
(14:01):
chin, and say, please fundmy deal, Please fund my deal.
Well, that's asking for a mortgage. There's an application, there's credit scores,
there's all that. You know what, in this world, it's a
one to eighty. Now in Kentuckythey call it a three sixty. They're
offul a little bit. But anyway, it's the opposite direction. I'm not
asking for a mortgage. I'm offeringa mortgage. So you see here.
(14:26):
Look when I got there to Frankand his wife's house on Thursday afternoon after
Bible study on Wednesday night, Ididn't go there asking or pitching. You
know what it did, Rod,I put on my teacher hat. Nice,
yeah, I put on my teacherhat. I'm leading with a servant's
heart because they got a problem.Their problem is they're all over the place
(14:50):
losing money in the stock market.They're sick and tired of the local bank
and CDs and everybody else. Youknow, they're not getting any kind of
safe return. So I put onmy teacher hat, led with a servant's
heart as to what I could offerthem and do for them. So when
I got there, sat down overcoffee, and so I taught them my
program. Right, I said,here's how you can get high rich return
(15:13):
safely and securely. And I toldthem, I said, I don't have
a deal for you today. Ididn't. I wasn't going to give them
a deal today, right, becauseI'm separating the conversation, right. So
I taught on the interest rate.I taught them in my program how they
can get their money back early ifthey have an emergency. I taught them,
you know, frequency of payments,how often they're going to go to
(15:35):
the payments. You know. Iasked them, are you using retirement funds?
Are you using just investment liquid capital, because that's going to depend if
I want to tell them about myselfdirected IRA company that I would refer them
to, right, so they couldget tax free or tax deferred income.
So I just had this conversation thatlasted about twenty minutes. By the way,
new private lenders always have more thanthey tell you, right. So
(16:00):
started out with two hundred and fiftythousand dollars. So they gave me a
verbal, a verbal here's how muchwe got, right. I said,
Well, and listen, don't missthis. And I said to him myself,
I will put your money to workfor you just as soon as I
can. Well, they just hadtwo hundred fifty thousand dollars in investment capital.
They didn't have to like move retirementmoney over to a self directed diary
(16:22):
company. They said, two hundredfifty thousand dollars burning a hole in there,
no interest bearing account at the bank. And so I let a few
days go by. I still gotthem two deals under contract, right.
I let a few days go by, and I called them up. And
here's exactly what I said to Frank. So I got on my receiver here,
my hand receiver, you know,got on the phone here, I
(16:45):
said, Frank, I got greatnews for you. I can now put
your money to work. And here'sexactly what I said. I said,
I got a house over in Newportwith an after repaired value of two hundred
thousand dollars. Funding required for thisdeal is one hundred and fifty. So
Frank, I can't use all ofyou to fifty. They told me they
had two fifty. I said,I can't use all you to fifty.
(17:07):
I said, but this is onehundred and fifty deal. So put one
hundred and fifty to work. Andclosing is going to be next Tuesday,
So you'll need to wire your fundsto my real estate attorney's trust account on
Monday. I'm going to have myreal estate attorney Julie email you the wiring
instructions and you have it there byMonday. End of conversation. I didn't
(17:30):
ask Frank if he wanted to dothe deal. That's the most stupid question
in the world. I got toask him. Of course he wanted to
do the deal. He loves theprogram. He's been sitting by the telephone
waiting for the phone call because Itold him I'll put your money to work
for you just as soon as Ican. So I call him up with
great news. I can now putyour money to work, and so we
(17:52):
did. We closed on that deal. And so you see there's no pitching
in this. You're serving, you'reeducating now. Now this is in your
warm market. Don't miss that.Where did I? Where did I?
Where did I talk to Frank?I talked to Frank at church? Right,
Frank could have been at the RotaryClub. Frank could have been at
Business and Business, Business, NetworkingInternational. Frank could have been at the
(18:15):
Chamber of Commerce. Frank could havebeen at Score. Frank could have been
anywhere that he and I already kneweach other. Don't miss that. So
that's the warm market, right,But you got all these other private lenders
that are existing private lenders, they'realready loaning money out. Well, you
don't have to put on you teachyour hat, right, you ain't gonna
(18:37):
teach them your private learning program.You're going to reach out to them,
network and find out what they areaccustomed to getting. Well where in the
world you're gonna find them people,Well, let me let you in a
little secret that's called self directed IRAcompanies. Now, if you don't know
about self directed IRA companies, talkedto Rod, because Rod can tell you
all about self directed IRA companies.I got one in particular that all my
(19:02):
private lenders that are using their retirementfunds have got their funds over there,
and I get my deals funded inthree days from that particular company. But
you see these existing private lenders,they already know the deal, right,
they're already owning out. Now,I got an interesting statistic for you that
you might not know. Did youknow that over seventy percent, in fact,
(19:26):
seventy one percent of this particular separatediary company, seventy one percent of
account holders that have an account ata self directed diary company want to loan
money to you the real estate industry, right, they want to be in
real estate, but they don't wantto go find deals. They don't want
to negotiate deals. They just wantto sit back and watch their money grow
(19:48):
right on automatic. And here's somethinginteresting. I know one particular So you
just need to research this a littlebit, unless Rod wants me to tell
you. But anyway, there's oneparticular SELFI Redediary company that the fourth Wednesday
night of every month, at seventhirty pm Eastern time, has a zoom
(20:11):
meeting open to whoever wants to come. I tell you who comes to that
meeting. Their account holders come tothat meeting that have money burning a hole
in their account because they ain't earningno money sitting there in the account.
And so now US real estate investorscome there and they put you in breakout
rooms on zoom and you all getto meet with each other. Right now,
(20:32):
you're not going to teach them yourprivate minding, your private linding program
there like I did to Frank andhis wife. Right, We're just going
to network getting to know each other. You're going to find out, you
know, what they're accustomed to getand y'all can do business you know,
one on one there, So privatepeople in your private war market. Hey,
listen, Carol, Joey and I. Right now, we've got forty
(20:52):
seven individuals private lenders that are fundingour deals. And you know what's interesting,
Not one of them had ever heardof private money or self directed irase
until I put on my teacher hat. Yeah, and I started teaching them
about that stuff. And here's anotherwriter down or actionable item. Established if
(21:15):
you want to get private money.By the way, eighty seven percent for
sale by owners will not sell toyou creatively. You got to have all
the cash. If you don't haveprivate money, you're missing out on eighty
seven percent of the fizbo deals outthere. But here's the actual item.
Establish a relationship with a self directedIRA company that you can refer your new
(21:38):
private lenders from your warm market tothat have retirement funds. Listen, over
half of our forty seven private lendersare using retirement funds to fund my deals.
Well, here's the takeaway on that. If you don't have if you
don't have a relationship with a selfardof the IRA company that you can refer
(21:59):
your private enter to this Scott retirementfunds, you gonna miss out on over
half the money before COVID, therewas eighteen trillion dollars in cash sitting on
the sidelines, and now today thirtyone trillion dollars in cash sitting on the
sidelines. And look, it's ourmoral and ethical responsibility to relieve them of
(22:22):
their problem. There you go.Yeah, no, I like, that's
the whole mindset shift. So ifyou don't mind, I'm curious, if
you don't mind sharing, what doesthe returns? I know it's probably dictated
a little bit about the deal.I don't know, maybe not the profit
of the deal or whatever, ifsomeone's doing I mean, we do have
a lot of investors that do multifamily, larger you know projects. As I
(22:44):
explained, my audience anyway, ispretty focused on single family. A lot
of single family, whether it's fixedflip by well, me too. I
mean, since two thousand and three, we've flipped, fix and flipped over
four hundred and seventy five single familyhouses, with the majority of those being
using private money for funding. Okay, so two things. One is I'm
curious, like, how do youstructure the deal, what kind of returns
(23:06):
I've I've done it many many waysin the past, and I have a
lot of guys that'll last me.Like, you know, how do you
how do you structure your deals?I get, you know, it kind
of depends. And then the secondthing was, well, let me let
me have you answer that. Sure, So the structure is real simple first
of all, and I've done thisfor years. Every private lender gets the
same deal. I don't mean thesame property, I mean the same program.
(23:29):
Right, So here it is hereit is today. Eight percent in
first position, ten percent in ajunior position, no points, no fees,
no extension fees. Maximum loan tovalue is seventy five percent of the
after repaired value. I did notsay seventy five percent of purchase. Seventy
five percent of the after repaired value. Of course, I'm buying properties at
(23:52):
fifty percent of the after repaired value. The length of the note two years
if it's just liquid investment capital,five years, if they're using retirement funds,
frequency of payments, if it's investmentcapital, I leave it up to
them. I mean, I gotelderly private lenders that need the monthly income.
Right. They don't want to touchtheir principle, but they need that
(24:15):
monthly income that they want to liveoff of. I got some private lenders
using just lipping investment capital. Idon't make any payments till I cash out.
I just let the interest accrue.Some I'll do quarterly. Now,
if they're using retirement funds from theirIRA, moved it over to a separated
IRA. I ain't gonna make monthlypayments. That's stupid, and the money's
(24:37):
not going directly to them, it'sgoing to the retirement accuntl So we'll either
make quarterly payments or semiannual. Right. I don't want anything past semi annual
because I just don't want to coughup that big of a check you go
into the retirement Right now, there'sa caveat to that. If I have
used the retirement funds and I'm gonnabe selling it on rent to own,
(25:00):
then if I got money coming inper month, I want money going out
per month, right right. Butmost of the time, if I'm doing
a flip, if it's retirement fundsthey used, and it's a self to
ready di IRA, it'll be quarterlyor semi annual, and I let them
choose. I mean, it reallydoesn't matter. I'm not gonna pay any
more money. It's just it's justa matter of how often their retirement account
(25:21):
gets it. So here's the easyanswer. It comes down to their objectives.
Okay. And so you basically there'sno giving them a portion of the
upside of the profit. It's astraight interest rate. Yeah, okay.
So it's like, I mean,the old business model. And by the
way, there's nothing against it.I mean, it's your business, do
(25:41):
business the way you want to.But I just decided years ago I'm not
joint venturing. Okay, I'm gonnalet the prival center be the bank.
Like if when I borrow money fromthe bank, they didn't get a piece
of the hind end of my deal. Right, Let the bank the bank,
and so they're going to know exactlywhy their return is going to be
(26:03):
okay. But you know, here'swhat's funny about that, Rod. I'm
thinking of one particular private lender.We've been doing business for three or four
years, and he called me upone day. He had like post a
million dollars with me, and hecalled me out when he says, Jay,
I've been loving your private learning program. And I thought to myself,
Okay, where's this conversation going.He said, I've been loving your prival
(26:26):
ending program. But I want toget a piece of the action, now,
I said, oh, I said, well, here's the way it
works. I let my private lendersdo what they do best, which is
investing the deal and sit back andcollect money. And then I do what
I do best, which is finedeals, negotiate deals, oversea deals,
(26:47):
rehab deals, be the orchestra director, and do all that stuff so you
can get a high rate of return, safety and securely. So if you
want to get a piece of theaction, you need to start doing what
I do. Right, Okay,that's great. Those are so guess what
he said? What's that? Okay, yeah, exactly. And there's probably
(27:07):
twenty other things you didn't mention thatyou do every day and the stress of
it and everything else. So that'sinteresting. Did you start doing that day
one? How do you get theconfidence to go back to someone who has
that conversation, because as we're talking, I think the I guess the mistake
that I made I had. Ihad a lot of guys that wanted to
be developers. They didn't want tobe just straight investors. And that's where
(27:30):
I think kind of a little bitof the flaw in my model, because
they didn't want to sit back.They wanted to be part of the deal.
They you know, kind of alot of them came to me wanting
basically, you know, in onthese and I didn't really I guess,
for lack of a better way toput it, put them in their place
as far as what their role wasversus mine. Just to be honest,
I was usually trying to get them. I mean, this was part of
(27:52):
my pitch. I hate to saynow, but eighteen to twenty four percent
and some they got thirty to sixtypercent and some got you know there,
I had a preferred return of youknow, anywhere from six to eight.
So anyway, going back to myquestion, did you develop this confidence?
Did you just come out of thegates and say, no, this is
the way the deal is. Solet me come in on that, because
I have more than one thought on, first of all, how to have
(28:15):
confidence in presenting the program and talkingwith potential private lenders. First of all,
and this is paramount. I mean, we got to own the real
estate between our ears before we cango out there and own single family houses
and you know, commercially all that. We got to own this. So
how do we own this? Numberone? It's been my observation Rod that
(28:37):
when a real estate investor, whetherthey're new or their season, when they
first start looking to raise private money, they have this fear of rejection.
And here's the deal. Let meask you a question, Rod and your
audience. How can you be rejectedwhen there's nothing to reject? Now,
let's hang out on that for asecond. How can you be rejected when
(29:00):
there's nothing to reject? If you'repitching a deal, your deal can be
rejected. But if you are teachinga program for someone to get high rates
of return safely and securely, allyou're doing is sharing information. That's such
a huge nugget that I have atstarred and written down. But you're in
(29:21):
back to the teacher hat. You'reyou're educating, You're there is nothing and
then that's where almost confidence is itneeded because it's not like you're selling.
You're not really pitching, you're justexplaining. Yeah, so here's a big
writer down er quote unquote, servicenot sales, service not sales. I
ain't selling nothing, I'm serving,right, And so so that's number one.
(29:45):
You cannot be rejected if you're notasking anybody for anything, right,
you're sharing your teaching right. Numbertwo, how are you going to be
confident? You better know your program. You see, it's your program right
now, I'm talking about raising andattracting money. And by the way,
which is easier attracting or chasing?Right, We ain't chasing nobody. I'm
(30:07):
not selling, you know, persuading, pitching, talking anybody know I'm not
selling. I'm attracting, right,And so you better know your program.
That's what you're teaching. You're teachingyour program. And of course my program
is all laid out in my book. That all you got to do is
just duplicate, right, You justteach the program, that's what you're sharing.
(30:29):
So how do you get confident?Big one word preparation, preparation,
right, So you got to knowthe program. And look, it's not
that I mean, it's not thatdifficult for goodness sakes, right, I
mean, if you can read,you can teach the program, right,
So know the program? Right.Another thought that comes to mind, how
(30:52):
to be confident. If you're abrand new real estate investor, you may
be thinking to yourself, well,Jay, for goodness sakes, I might
know the program. I might beall confident, but who in the world
is gonna loan me money, andI ain't never done a deal before.
Here's the answer to the question,and write it down. If you don't
pay the private lender, the propertydoes. So that's why we have such
(31:17):
a conservative loan to value to wherewe are protecting that private lender and most
of private lenders you're gonna do businesswith in your warm market. They ain't
never heard of private money. Theyain't never heard of self directed ie raise.
Right, So you got to lookafter you private lenders. Part of
the program is you're gonna name youprivate lender on the insurance policy as the
mortgagee. So god forbid if thatthing burns down that there's a claim.
(31:41):
Their name is on the check.Just like your entity. They are protected.
I'm gonna name them on the titlepolicies and initially insured. So confidence
you know you're gonna be looking afterthe private lender. You're gonna lead with
a servant's heart. You're gonna puton your teach your hat, share the
program, and I tell you what, you're gonna have a problem, just
like I did and I still dotoday. You're gonna have more money than
(32:04):
you can use. So okay,that's a good segue. Into the program.
So I'm assuming when you say program, it's basically your business, and
everyone's got a little bit different tweakon how they approach the business. How
deep you get into I guess themechanics of let's just say fix and flipping.
Is it mostly around? Well youtell me. I mean, I'm
(32:25):
not gonna put words in your mouth, but I had a certain way of
kind of explaining my business, andI'm curious how you do that. So
in my PowerPoint presentation, so likeI've raised nine hundred and sixty nine thousand
dollars at one private lender luncheon,you know, I've got multiple ways to
get the word out. You canhave a one on one conversation. You
can have Starbucks, you know youcan. You can do an educational presentation
(32:50):
to Rotary club, et cetera.But in the PowerPoint presentation of teaching this
private lending program, and when Isay program, I'm just talking about the
private lending pro pro how an individualcan make high rates of returns safely and
securely, either using investment capital andor retirement funds. So when I'm teaching
it to them, I just givea couple of examples of the deals that
(33:13):
I do. But as far asmy business model and how I find deals
and how I oversee deals, andhow I do business with general contractors and
the marketing that I use to finddeals, think it careless. All they
want to know is am I protected? How can I get my money back
in case of emergency? And howmuch money you're gonna pay me? That's
(33:35):
all they want to know, right, I've learned the hard way over the
years. When I talk too much, things do not go well. Keep
it simple, Keep it simple,and talk from their perspective. What do
they want to know? How muchcan I earn? How am I protected?
And what happens if I need mymoney back? And so the third
(33:55):
one, what happens if what's theresponse to that one? Because I'll see
the first one. They're secured,They're in first position, they're insured.
You know, they're buying it fiftypercent loan to value, you know,
so that all makes sense. I'mcurious how you would address someone who need
their money. So, if theyare loaning me money, just investment capital.
I put in the promissory note aninety day call option, and what
(34:17):
the nine of day call option isis if they have an emergency come up
and they need their funds back.All they got to do is give me
a nine a day notice that theyneed to call the new DO. Now,
if they were investing their money inthe bank, there would be a
penalty involved in that on calling aCD DO early, But I want to
do business, keep it simple.I don't charge any kind of penalty.
I say, look, if youneed your money back, I know you
(34:39):
don't want it back because we're whatyou going to get these high rates of
return safely and securely. But ifyou you know, life and circumstances happen
sometimes, you know you might needyour money back. Give me a nine
a day notice. That gives memore than enough time to replace your private
money with another one of my privatevendor's money and go ahead and cash you
out. In the real world,right since two thousand and three, you
(35:00):
know how many ninety day call optionsI've had actually called two? Okay,
actually two two, and both ofthem were thirty thousand dollars notes that I'd
use for rehab money, and bothof them were medical situations, medical emergencies
that they needed the money for.But in the real world, I mean,
you know, look at all theseyears, right, right, Hey,
(35:22):
look, they don't want the moneyback, right, I mean where
they where are they going to putit? I am by the way,
if they're funding a deal using retirementfunds, I do not give a nine
a day call option because that money'snot going back to them directly. That's
their retirement money. Right. Okay, Well, no, we're getting close
to running out of time here.This is always something that comes up.
And again this is I hate toeven ask this of you because there's so
(35:44):
many, you know, different waysI can go with this. But you've
done a lot of deals. Inventorieshave been tight for a while and have
gotten tighter, and I think they'regoing to remain tight. Where do you
find your deals? Where do youfind these these fifty percent deals? Absolutely?
So here we go Google pay perlead. I don't do pay per
click. I do Google pay perlead. So I've got three different companies
(36:06):
that I pay to where people goonline and they're searching buy my house,
sell my house, you know,fast, all that kind of stuff.
So Google, Right, So Iuse Google. I also use Facebook paid
ads. So I've got two differentFacebook campaigns that I run every day.
One is called the Distressed Seller campaignand the others the generic campaign. And
so these are Facebook ads that justshow up in people's Facebook news feed here
(36:30):
in my zip codes. Right,it's a picture of me standing in front
of a plain Jain bread and butterbread and butter house here in our area,
and I'm holding a yellow sign thatsays I buy houses, right,
I buy houses full price, andthe phone number that goes to my answer
in service twenty four hours a day. I then have mining Carol Joy's foreclosure
(36:52):
system that we've been developing ever sincetwo thousand and four. We track every
foreclosure I'm talking cannot pre in odI'm talking, they're actually in foreclosure.
The substitute trustee has been hired,so we track every one of those files
on public record. We've got eightsequential letters that we mail to these people.
Again, this is all about serving, not looking to take the advantage
(37:14):
of anybody. When they respond toour letters, I actually ask them,
or my acquisitionist does. Now,I ask them, do you want to
keep your home? If they sayyes, and we can give them an
idea as to how they can geta loan modification or a deferment you know
program, and we can help themkeep their own home. Then that's fantastic.
Nothing in it for us directly,but I know this, it's all
(37:36):
about sewing. It's not about thereaping low of reciprocity. All comes around,
but our foreclosure system and so thoseare the main ones right there,
Facebook ads. We don't drive fordollars. I've never driven for dollars in
my life. It's it's great.You know, if you're on a budget
and you can't invest money on marketing, then drive for dollars. Of course.
(37:58):
I got a good friend that youknow is the creator of deal machine
dot com, David. But youknow, if you're driving for dollars,
you can use those methods as well. But those are the methods that we
use every day to consistently get ourtwo to three deals a month at seventy
eight thousand profit each. That's amazing, No, I think, thanks for
that, and I know we needto wrap up a couple more things for
(38:20):
you. You mentioned a zoom callfor retirement funds. Retirement, I guess
people that manage retirement accounts, right, yes, Ira is do you mind
sharing that? Oh? Of course, I'm glad to share it. So
the name of the company is questTrust dot com out of Houston, Texas
www dot quest, q U Es T and then t r U s
(38:42):
TW dot com Quest Trust. I'vebeen. I've had all my private lenders
with their retirement funds with them forprobably seven years now. Their customer service,
hands down, is the best.As I said, my private lenders
have got their funds there, Iget my deals funded in three business days.
Amazing. Okay, huge nugget there. And by the way, it's
(39:02):
Quest Trust that has the networking eventthe fourth Wednesday night of every month seven
thirty pm Meastern. Just go totheir website. You'll see to the top
of their website the networking event onthe fourth Wednesday night of the month.
Okay, perfect. So I guessin closing, I've got a ton of
notes and probably twenty more questions.But in real we can always do Part
two. Yeah, I think we'regonna have to because there's a lot on
(39:24):
here. And yeah, your yourbio is significant. It's there's so many
things that you sounds like you perfectedand you've got you know, programs and
books and everything else. So numberone, how can people find you?
Where's the easiest way to find you? Sure, so you can find me
and follow me on my podcast,which is raising private money. Imagine that
(39:45):
Raising private money with j Connor,Co, N N, E R.
Whatever your platform is for podcasts,iTunes, Spotify, you know, whatever
it is you name it. Justsearch for Raising Private Money with Jay Connor
and guess what. I have amazingguests on there all the time and I
interview them on how do they raiseprivate money? Right? How do you
(40:07):
start conversations with people that you don'teven know that's going to attract money?
And of course you can find meat Jconnor dot com, my website.
We actually have our phone number thereon the website and you may find it
very hard to believe, but whensomebody calls us, we actually pick up
the phone and answer the phone.I know that's some of the concept.
(40:29):
It's what a concept, you know, but we do pick of the phone
and you can also connect with me. You can get my book, my
book twenty Bucks on Amazon. Youcan get it free at my website.
But it's the name of the bookis where to get the money now?
This is not an e book.You can't even download it. We ship
it to you in the mail.Where to get the money now? How
and where to get money for yourreal estate deals without relying on traditional lenders.
(40:53):
You can pick this book up,I'll autograph it for you, ship
it to you in the mail,and it's got my program in it for
you to duplicate. Right www.Dot Jcommer Jay co n n Er dot
com Forward slash Book. Really appreciatethat, Jay. And by the way,
some of my followers are probably like, why are you talking to this
(41:14):
guy about private lending. You're youknow, you're a hard money lender,
but you know, I think thisis something that every investor should have as
part of their business plan and theirstrategy, their go to market, whether
you're using one hundred percent private individualsto fund your deal or you know,
we didn't get too deep into differentcapital stacks. And I've used debt before
and then equity, and obviously inthis case, they'd be in second position
(41:35):
if you had traditional debt. Butthere's a lot of ways to kind of
skin a deal. This is justone of them, and I think it's
It could really help a lot ofpeople from a profitability perspective, from being
competitive in the market and closing dealsquickly. And there's just so many advantages
in using private individuals and private money. Absolutely, and by the way,
I will say the podcast is amazing. I was about halfway through this Gary
(41:57):
Wilson, which is not my brotheror anything, but this is not a
plug for Gary, but amazing contentand podcasts. So I do encourage everybody
to go check out Jay's his podcast, and definitely the website. And by
the way, Jay, thanks alot for the book offer. I'm going
to be getting mine as well.And I guess that's part one for now.
We'll have to regroup. Absolutely,I really enjoy being with you Rod,
(42:19):
You're an amazing host and interviewer.I look forward to part two.
God bless you absolutely. Thanks forthe time, Jay, talk to you soon.
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