Desperation Has a Smell: The Psychology of Raising Private Money with Jay Conner
Episode Details
Transcript
Are you a real estate entrepreneur seeking private funding? Have you heard the myths about raising capital? Let's talk about the truth behind these myths and how you can raise private money ethically. Stay tuned for a game-changing strategy that will revolutionize your real estate business.
My special guest is Jay Conner, a real estate entrepreneur and the private money authority, with a wealth of experience in raising capital for real estate investments. After facing a sudden financial setback in 2009 when his line of credit was pulled, Jay delved into the world of private money and has since become a leading expert in the field. With over 15 years of experience, Jay has honed his expertise in using private funding to thrive in the real estate market, all while prioritizing the power of relationships. His ability to pivot through market changes and incorporate modern advancements while upholding the significance of genuine connections makes him a valuable resource for real estate entrepreneurs seeking to scale their businesses.
"You've got to own the real estate between your ears before you start owning real estate out there." - Jay Conner
In this episode, you will be able to:
- Master the art of raising private money for real estate to unlock new investment opportunities.
- Discover how to overcome adversity in real estate and turn challenges into opportunities for growth.
- Learn the power of utilizing private lenders in real estate to elevate your investment strategy.
- Uncover proven strategies for real estate investment success that can take your business to the next level.
- Explore the potential of leveraging technology and relationships in real estate for greater efficiency and profitability.
Connect with Jay Conner
Website: https://www.jayconner.com/
Podcast: https://www.jayconner.com/podcast/
LinkedIn: https://www.linkedin.com/in/privatemoneyauthority/
Youtube: https://www.youtube.com/@raisingprivatemoneyrealestate
Facebook: https://www.facebook.com/jay.conner.marketing
Twitter: https://x.com/JayConner
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Learn more: https://jamie.myfinancialhaven.com/
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Speaker 0
This episode with Jay Connor, the Private Money Authority, is great for anyone who's interested in raising capital, whether it's for real estate investing or a business or anything else. Jay walks us through his story of how in two thousand nine, his line of credit was pulled overnight at his surprise. And how did he deal with that? Well, he figured out he asked himself a really important question that he talks about. Who do I know who can help me solve this problem? And that went down that led him down a path of learning about private money. And I love the fact that through those fifteen years, the last fifteen years, Jay has really been focused on relationships, who not how. That said, he really has done a great job of pivoting through different market conditions, changing his strategy when needed with regard to, you know, real estate itself, but also incorporating technological advancements and automation into his business. So in a sense, he's kind of an old school guy where relationships are number one, but he's also changed with the times, and that's really kept him relevant and successful through the years. Lots of great mindset nuggets in this one about overcoming fear and not approaching people with the smell of desperation. There's a lot more packed into this episode. Toward the end, I asked a question that I've never asked on a podcast before, and Jay reveals something that he's never shared on a podcast before. So So you're gonna have to wait for that one. I know you're gonna enjoy this episode. Buckle up. Speaker 1
Welcome to From Adversity to Abundance, the go to podcast for real estate entrepreneurs seeking not just to thrive, but to conquer with resilience and mental sharpness. Each week, join us as we dive into the compelling world of real estate through the lens of mental fitness, where challenges transform into opportunities. Get ready to transform your mindset and expand your understanding of what it takes to succeed in real estate. Let's explore these stories of triumph and resilience together. Speaker 0
Welcome everybody to another episode of the from adversity to abundance podcast. I am pumped today today to have with us Jay Conner, the private money authority. Jay, I forgot to say I'm Jamie Bateman, your host. Jay, how are you doing today? Speaker 2
Jamie, I'm doing fantastic, and I'm so excited and so thankful that you invited me to come along, talk about the subject I'm so passionate about. And, of course, that's private money. I'm so excited about private money because it has had more of an impact on our real estate investing business than any other strategy that we've implemented. Speaker 0
Absolutely. Like, as you well know, Jay, if you're a a mortgage note investor or a real estate investor, you know, whether it's residential, commercial, If you're a real estate entrepreneur and you're trying to scale your business, no matter what, I've found you're gonna run out of your own capital or at least the the capital that you want to deploy to into your own business and investment. So there are many ways to raise private capital, and we're gonna get into that, but this is absolutely relevant for sure for the mortgage note investor or single family, you know, rental investor who may be listening to the show. Any kind of real estate entrepreneur who wants to scale, you've gotta get access to capital. Now before we jump into your backstory, Jay, a little bit more, what do you have going on kinda this year, if you will? Speaker 2
Well, this year well, first, let me say where I am and what kind of market that I'm investing in. So I am here in Eastern North Carolina and been investing here in North Carolina in the same market since two thousand three, focused on single family houses. I've done commercial as well, shopping center from the ground up, condominiums, townhouses. But the focus has been single family houses. We've rehabbed or renovated over five hundred single family houses now, funded with private money. But what's going on right now, my target market, Jamie, is only forty thousand people. Only forty thousand people. We do two to three deals a month, so it's not a high volume like some, you know, doing two hundred wholesale deals a year. I mean, for goodness sakes, I don't even have anybody to wholesale it to. Right? So we do two to three deals a month, but our average profit right now this year is eighty two thousand dollars per deal profit, two to three deals a month. And so these deals are now, of course, I do terms deals. I'll buy subject to the existing note, etcetera. But the majority of them are funded with private money. And so right now, I've got about ten or twelve houses at some stage or another, you know, that are Sure. Under renovation. Speaker 0
Yep. Speaker 2
What's going on right now? There's no inventory. Speaker 0
Right. Speaker 2
There's no inventory Sure. In the multiple listing service. So if you price the house right or even aggressively, you got multiple offers and it's under contract right away. What's going on right now? I'm not buying any houses, and I haven't bought any houses in forever out of the multiple listing service because there's no inventory. Mhmm. So, of course, we're finding all of our deals what we call off market or direct to seller for sale by owners. And we have many, many different marketing channels going on simultaneously. Mhmm. I have four different vendors that are getting me Google leads, people going on Google and searching for somebody to buy their house fast. We got two different direct mail programs going on. I got a full time outbound caller. And so we're using different we do Facebook ads, different marketing channels to have consistent leads coming in all the time. Well, I tell you I say it all the time, Jamie. If you don't have consistent seller leads coming in your pipeline every day, every week, you got a hobby. You don't have a business. Speaker 0
So you didn't just when the when the leads when the, transactions all dried up on the MLS, you didn't just say, okay. I guess I guess I'm out of business. I mean, you you didn't just pack it in and say there's no way to make money in this environment. And I'm guessing these market conditions, and I know these market conditions for you personally are not the is not the most this is not the most adversity you faced in your business. And so my guess is that you're applying some, you know, mental fitness lessons you learned along the way today to get creative, look outside the box. Hey. This isn't working. How how do I get this done? So let's jump back to your backstory, Jay. I know you've been through some stuff in in real estate and some some real challenges. You mentioned two thousand three. How did things go after that? Speaker 2
So I was raised in the mobile home business, and so here comes one of the adversity stories is, the consumer financing for mobile home products, also known as manufactured housing, it dried up. The whole industry fell out of favor with Wall Street. So in the early two thousands, I mean, it was in two thousand two. Woke up one morning and had twenty two million dollars in, inventory and no way to sell them. Because the consumer finance was gone. So almost had to, file bankruptcy, but we didn't. We did workouts and agreements with our vendors. But I knew, Jamie, if I ever got out of mobile homes, manufactured housing, I knew I wanted to get into single family houses, and not building them. I didn't wanna build them. I wanted to I wanted to buy these distressed properties and fix them up and flipping. This was even prior to HGTV, you know, coming along. Speaker 0
Before it was cool to be a flipper, you were you were flipping houses. Right? Speaker 2
That's right. That's right. So started in two thousand three, and the first six years from two thousand three to to two thousand nine from two thousand three to two thousand nine, I relied on the local bank to fund my deals. That's all I knew to do. All I knew all I knew to do is to go to the local bank, get on my hands and knees, put my hands underneath my chin, beg, pull my skirt up so they can look at my personal assets, and pull my credit score and all that. That's all I need to do was and and that's what most people think. That's all they know to do. And, that but but you know what? That worked great. Speaker 0
That worked great. Say, if it's working, why would you need to find an alternative solution? Right? Speaker 2
It worked great until January two thousand nine. Speaker 0
Yeah. We we well, I shouldn't say we all know, but many of the listeners likely know what happened in in two thousand eight, two thousand nine, but give us a quick refresh for those who may not be familiar. Speaker 2
Well, I was sitting right here at this desk, and I know you may find it hard to believe, Jimmy, but we actually still have landlines here in North Carolina with with cords attack. Most people don't even know what a what a handset is. You know? But, anyway, I was sitting at this very desk. I had two houses under contract, and the potential profit on those two houses was over a hundred thousand dollars. And I picked up this phone, and I called my banker. His name was Steve. And, so I called him up. Now bear in mind, Steve and I had done a ton of deals for six years. I tell he'd been my guy. He'd been my go to. And Sure. So I called him up, and I told him about these two deals I had on a contract. Well, I thought I still had a line of credit when I made those phone calls. Mhmm. I put earnest money down on those deals, Jamie. And back in two thousand nine here in North Carolina, you couldn't get your earnest money back. When you paid earnest money, I mean, you were in the deal. Right? Speaker 0
Non refundable. Yep. Speaker 2
And so I told Steve about my deals, and I learned like that on that phone call that my line of credit had been closed with no notice to me. And I see I said, Steve, what are you talking about? Why are you telling me the bank has closed my line of credit? And we've got a great relationship. I've never been late on a payment. Mhmm. And he says, Jay, don't you know there's a global financial crisis going on right now? I said, no, Steve. I don't know anything about no global financial crisis, but you're giving me a global financial crisis right now. Speaker 0
Right. Speaker 2
Because I can't fund these two deals unless unless you fund them. I don't have anywhere to go. Sure. He says, I'm sorry, Jay. That's that's just the way it is. So I hung up the phone, and I sat here for a moment and I thought. Now, Jamie, I'm getting ready to share with you and your audience the most powerful question that I could have asked myself during that moment, right after that phone call. And the power's in the questions anyway. And so, I'm gonna share a question right now that I don't care what adversity you are going through. I don't care if it's health, relationships, career, financial, whatever it is, whatever your adversity is, here's the most powerful question you can ask yourself. And here's the question I asked myself when I hung up the phone from Steve. I said, Jay, who do you know that can help you with your problem? You know, it's not how, it's who. Who can help you with your problem? And by the way, Jamie by the way I'm sorry. What'd you say? Speaker 0
Who Not How is a is a great book as well. Speaker 2
Yes. Yes. Speaker 0
Yeah. It's a and but but you're absolutely right. It's incredible incredibly powerful mindset shift. You know? Going to ask asking who, not how. So so you ask yourself who can who can help you with this problem. Speaker 2
By the way, Jamie, these people going around saying every problem is an opportunity. I wanna throw up. I didn't have no I didn't have no opportunity. I had a problem. Right? Sure. And I need somebody to help me with my problem. Speaker 0
Yeah. Well, high you know, hindsight helps with, hindsight and and maybe looking at other people's problems helps helps maybe, you know, come up with these catchy phrases. And and I think I think in after time, we end up seeing what good came out of problems. Oh, yeah. Oh, and then Speaker 2
I mean, as I share my story, you're gonna you're gonna see how this was the biggest blessing in disguise. But but I but I couldn't be Pollyanna. I couldn't be Pollyanna. We got to we gotta we gotta address this problem Speaker 0
Sure. Speaker 2
Head on Absolutely. So anyway, so I asked myself that question. Who do I know that can help me with my problem? Immediately immediately, I thought of Jeff Blankenship. Jeff is a is a dear friend of mine and Carol Joy's, my wife. And, he was living in Greensboro at the time. Greensboro, North Carolina at the time. Mhmm. And, he was he was investing in real estate as well, single family houses. So I picked up the phone, and I called Jeff. And I told him the story of what had just happened. And Jeff said, well, Jay, welcome to the club. I said, what club? He said, the club of having the bank close your line of credit. He says, my bank just shut me down last week. I said, well, Jeff, how are you gonna fund your deals? He says, well, Jay, have you heard of private money and private lending? I said, no. As he said, have you heard of self directed IRA companies where individuals, people can take their current retirement funds that they're not happy with and transfer them over to a self directed IRA company? And then they can lend money out as a private lender and make their returns either tax deferred or tax free. You ever heard of that? I said no. And so I knew Jeff had told me something. So I studied private money, private lending, and I'm not talking hard money, by the way. Mhmm. I'm not talking about brokers and and Mhmm. Any kind of institutional money. Private money, I'm talking about doing business with individuals, other people. Speaker 0
One to one. One person lends money to the other person. Right? Speaker 2
Exactly. With no middle person involved, no broker. So I studied it. And so what did I do? You see, Jamie, here's what's interesting. From that moment in time of learning about private money to this day, although that was two thousand nine, so currently to right now Speaker 0
Yeah. Fifteen years. Speaker 2
I have never never asked anybody for money. And I got eight and a half million dollars of private money that we use from projects to projects to projects. Never asked to and look, I've never pitched a deal in my life. And people ask me all the time, they say, Jay, how in the world do you get funding for your deals and you never ask anybody for money? Well, here's the answer. So, I got off the phone with Jeff, studied for money. So what did I do? I said, I'm gonna take on an attitude, of a teacher of a teacher, and leave with a servant's heart, and I'm just gonna start sharing with people one on one and in groups. Mhmm. Private lender luncheon, put on an event, have a little teaching event, and start teaching people. And by and I start well, I started with my own network and my own connections, people I go to church with, people in my cell phone, people in the rotary club, right? My own connections and just start teaching them what private money is and how they can earn high rates of return safely and securely. So, the first thing I did is I put my program or my opportunity, I put my program together that that I was gonna start teaching. Now one of the first things I had to get straight in my mind, Jamie, is that doing private money, borrowing private money, it's a hundred and eighty degree shift from going to the local bank or a hard money lender and borrowing money. Because when you're when you do it the traditional way, you're selling, you're begging, you're persuading. Speaker 0
Sure. They have all the power. Right? Speaker 2
They got all the power, and they're making all the rules. Speaker 0
Sure. Speaker 2
Absolutely. All the rule. They're doing their own they're they're doing their own underwriting. Right? Speaker 0
Right. Speaker 2
They set the interest rate. They set the length of the note, all that. So I took a hundred and eighty degree shift in that mindset. Speaker 0
Mhmm. Speaker 2
I said, guess what? I'm gonna make the rules. I'm gonna make the rules. I'm gonna put together a program that will show people how they can safely and securely make really high rates of return. And so I put my program together. I decided I'm gonna start paying everybody eight percent simple interest. Speaker 0
Sure. Speaker 2
I put my the length of the note. I put together a program called a ninety day call option, how they can get their money back in case of an emergency, etcetera. So I got I got Speaker 0
a quick quick question. Speaker 2
Sure. Speaker 0
So I love love that. How did you deal with the, with a lot of a lot of people who are starting out in a new business or new skill set, if you will, deal with what people call the imposter syndrome. So you're going out and teaching something that you just learned yourself. And and and, look, I'm not I'm not, throwing shade as they say or whatever. You know, how did you deal with that? You're pushing your own boundaries, you know, with what you know, and then you're going out and teaching others how they can invest. How did you deal with that mindset shift? Speaker 2
Well, I didn't create it by myself. All I did was pretty much copy other people's programs that they were offering. Speaker 0
Sure. Got it. Speaker 2
From other very successful other very successful Speaker 0
I love that answer because you're not I love that about real estate too. Generally speaking, you're not you don't need to reinvent the wheel. It's No. It's been done by somebody else who's very successful. Right? Success leaves clues. So, didn't mean to derail us there. I was just curious about that. Speaker 2
Sir, I put my program together that I'm gonna teach. So I take on the mindset of a teacher. And what do I do? I put on my private money teacher app. So that's how that's how I'm thinking. Speaker 0
Love it. Speaker 2
Private money teacher app. So I'm gonna teach. So I went about, teaching other people what it is, and so desperation has got a smell to it. Desperation has got a smell to it. Mhmm. So what I mean by that is one thing I learned at the at the at the very beginning is if I talk about my program, that my opportunity where people Speaker 0
can Yeah. Turn Speaker 2
these rates of return. If I talk about that and I talk about a deal or a couple of deals that I need funding for, I'm already sounding desperate. Speaker 0
Sure. You know? That makes You know? Yeah. Speaker 2
The worst time to be raising money is when you need it Speaker 0
When Right? Speaker 2
For a deal. Speaker 0
Great point. Speaker 2
Right? Speaker 0
Sure. Speaker 2
And you know what, Jamie? I'm I'm getting ready to take a risk. I'm getting ready to take a risk now. I'm getting ready to say something you might disagree with. And if you disagree with it, I'm sure you'll tell me. But let me tell you what drives me crazy. I know you've heard this. I'm getting ready to say it, and I know you've heard it. It drives me stupid crazy. These gurus, other, you know, whatever, will get on the stage or platform, and here's what they say, quote, unquote, oh, just get the deal under contract. The money will show up. Speaker 0
A hundred percent. We hear that all the time. I Speaker 2
I wanna throw up. I wanna say, where is the money gonna show up? Is it just gonna, like, rain out of clouds or something? And another thing they'll say another thing I'll say they'll say, if the deal is good enough, the money follows the deal. Right. Speaker 0
Exactly. That's what we hear a lot. I wanted to disagree with you because, you know, controversy is actually good for, for for listeners and and and views and things, but I I I agree. I mean, it it sounds good. Right? It sounds like good advice. It sounds tempting to to buy into. You know? But yeah. I mean, like, you it's a great point. Even if the money does show up, it's probably not gonna be in very favorable terms because No. I mean, you got really deep that money. Speaker 2
Now you're looking for money. Well, you just gave up your power. Speaker 0
Sure. Speaker 2
Right? Speaker 0
Right? It's a great point. Speaker 2
You're you're you're now into a negotiation. Guess what? Do private money the way I do private money. There is no negotiation. Right? I pay all my I pay all my private lenders the same exact thing. Right? And guess what? I've been paying them the same thing since, February two thousand nine when I started doing it. And here we are many years down the road. And you know what, Jamie? People say to me, they say, Jay, how in the world are you still paying your private and no points, no origination fees. Say, Jay, how in the world are you paying those people eight percent ever since two thousand nine? Look what the market has done. The interest rates have gone Right. Right. They Speaker 0
can get they can get five percent in a savings account. Why are they why are they putting their money with you? Speaker 2
Yeah. Why they putting their money with me at eight percent? There's two answers to that question. Number one, I make the rules. Right? Number two, eight percent is still a whole lot more than four and a half or five. Actually, the it's come down to four and a half recently, and and it's going to continue going down. Speaker 0
Sure. Speaker 2
So anyway, so this mindset of I'm not chasing, I'm not begging, I'm not selling. Speaker 0
Yeah. You're not desperate. Speaker 2
The rules, you know. So what I back back to what I did. Yeah. So I put on my teacher hat. Now, there's another mindset that there's two primary ways to start conversations with people about private money that don't know what private you know, I got forty seven private lenders right now. Not one of them even knows what an accredited investor is. Speaker 0
They don't Speaker 2
know what an accredited investor Speaker 0
So funny. Speaker 2
And and and and there's a small handful of them that are actually they are accredited. They are Speaker 0
accredited, but they don't know. Speaker 2
But they don't know that they're accredited. Right? Right. And and look, all forty seven, I've never heard of private money or private lending until I did what? Right. Which teacher had on. Right. And none of them had ever heard of self directed IRAs. And an important thing about self directed IRAs is establish a relationship with a self directed IRA company. Mhmm. So that when you're talking with somebody, an individual that's got retirement funds, and they're not happy with their returns, then you can introduce them to Sure. The rep so they can move them over. You know? Speaker 0
Now that's a that's a very valuable point because there, you know, there are a lot of people who have heard of self directed IRAs and who have who have capital there. But in the grand scheme of things, it's a very small number compared to those who have their your typical, you know, Vanguard account or whatever with stocks and bonds. And I mean, so there's a ton of opportunity there. Speaker 2
Your your typical financial adviser never heard of them either. Speaker 0
Never heard of it. That's so true. Speaker 2
And they hadn't heard of it because there's no money to be made for your traditional, you know, financial adviser. Anyway, how do you start conversations? For the sake of time, I'm not gonna share, but I'm I'm just I'm just gonna share what I call the indirect method. Speaker 0
Okay. Speaker 2
The indirect I like coming in the backdoor. Right? Okay. I like coming in the backdoor. So here's the indirect method. Here's how I got my first two hundred fifty thousand dollars of private money. It was on a Wednesday night at Bible study here in Morehead City, and, Carol Joy and I were going to Bible study, And, I knew there was a gentleman there that I wanted to talk to, and, his name was Wayne. He's passed away now. But nonetheless, I walk into the foyer. Wayne is standing over there. I walked up to Wayne. Here's exactly what I said. I said, Wayne, if you got a few minutes, I wanna talk to you, about something confidential after we finish bible study. He said, sure. No problem. So we have bible study. We get together. We go down to the nursery in the building, shut the door. And here's exactly what I said to him. I said, Wayne, you know everybody in this town. And he did. He was the original zenith television dealer. Now if you don't know what the zenith television dealer was, that means you're too young to remember life before Walmart came to town. Speaker 0
That's right. But, anyway I do know. Barely. Barely. Speaker 2
Barely. Barely. That's right. So so anyway, so Wayne was very connected in in the community, very involved in the Rotary Club, and I told him, I said, you know everybody in this town, and I said, Wayne, now here's the magic phrase. Here's the magic phrase. I said, Wayne, I need your help. There's the magic phrase. I said, Wayne, I need your help. I said, I've now opened up my real estate investing business by referral only, and I'm paying insane high rates of return to people that invest with me. I said, Wayne, here's how I need your help. When you run across somebody that's complaining about the stupid low CD rates at the bank, the volatility of the stock market, losing money in the stock market. Would you refer them to me, and I'll share with them the the program and the kind of rates I'm paying? Speaker 0
Mhmm. Speaker 2
What do you think Wayne said? Wayne said, well, brother Jay, what you got in mind? Right? Speaker 0
Love it. Speaker 2
Yeah. And I and I said, well, I said, Wayne, I said, are you saying that you and your wife might be interested? He said, well, yeah, we might be interested. He says, we're losing money in the stock market and not making much money, you know, in the in the CDs. He says, what kind of rate are you paying? And I said, well, Wayne, that sort of depends on the deal. I said, what sounds high to you? He says, well, we're getting three percent, and that's what it was in two thousand nine. Mhmm. He says, we're getting three percent in the local bank right now. So he said, I don't know. Maybe five percent, six percent. I said, Wayne, I can't pay you five or six percent, but I can pay you eight percent. He said, put me down for two hundred and fifty thousand dollars. So I went to his home, him and his wife's home the next day, and I went over with them the entire program, how they're protected, how I name them on the insurance policies, the mortgagee, and my maximum loan to value, and all that stuff. So so so, well, that two hundred and fifty thousand very quickly became a half a million dollars. Right? Now notice, I didn't share any kind of deal with him. Mhmm. I didn't share any kind of deal with him, just a program. Speaker 0
Right. Right. Speaker 2
And I wanna share this with you, and I'll turn it back to you, Jamie. Mhmm. So I told you at the beginning of the show, not only have I never asked anybody for money. Notice, I didn't ask him for any money. Speaker 0
Yeah. But Speaker 2
you did was asking for any money? Speaker 0
You you gave him FOMO, fear of missing out, where he's supposed to you know, he's gonna miss out on this opportunity for other people. Right? Speaker 2
Right. I just asked for his help to spread the word. Speaker 0
Sure. Absolutely. Speaker 2
So now we got his money and here and and now, how do I get deals funded without pitching deals? Here's the answer. So I said, Wayne, I'll call you just as soon as possible and I'll put your money to work for you, as soon as I got a deal for you. I said, maybe a few days, couple weeks, whatever. So I still had those two deals under contract. Remember? From from the previous that I've gotten extensions on. Well, I hadn't brought them up in conversation because I know desperation's got a smell to it. So a few days go by and I call up Wayne with what I call the good news phone call. The good news phone call. So here's the script. So I get my little handset in my hand, you know. I call him up. Wayne answers the phone. I said, Wayne, I got great news for you. I can now put part of your money to work. And but I didn't tell her about both deals. I was talking about one deal. Right? I said, I've got a house in Newport with an after repaired value of two hundred thousand dollars. The funding required is a hundred fifty thousand dollars. Closing is gonna be next Thursday, so I need for you to wire your funds by next Wednesday. I'm gonna have my attorney send you the wiring instructions. End of conversation. I didn't ask I look, the most stupid question I coulda asked Wayne was do you want to fund the deal? Well, of course, he wants to fund the deal. He's told me he's got five hundred thousand dollars ready to go to work. He's waiting for the good news phone call. And I'll tell you something else. If he had moved retirement funds to a self directed IRA company that I recommended, he wouldn't be making any money until I put his money to work. So now I'm ethically bound to borrow his money because he's moved the money at my Sure. At, you know, at my advice. Speaker 0
You're right. Yep. No. That's I love it. So you never really you you desperation has a smell to it. You you you you take the indirect method asking for his help, and you don't really ever share the deal. And and but it's focused on yeah. They don't care. Exactly. Right. And and that's what I found too. Once once people trust you as an operator, they really don't care about I mean, they they may wanna understand generally of course. Well, here's the and you just said something that's so important, Jamie. When you really get down to it, they Speaker 2
are not investing in your deals. They're investing in you. Speaker 0
That's right. Speaker 2
Absolutely. In you. Now, of course, I'm not gonna borrow unsecured money. They're gonna get the deed of trust. Most people call it a mortgage. They're gonna get a deed of trust that collateralizes. I'm not gonna borrow more than seventy five percent of the after repaired value. I didn't say purchase price. I always bring home a big check when I buy. I mean, who wants to get paid to buy houses? Right? My favorite phrase on my real estate attorney's, checking, check is, excess cash to close. I love me some Speaker 0
excess cash. Oh, yeah. Speaker 2
But, yeah, we're gonna protect them. But Sure. I mean and after that first deal, they don't even care what the after repaired value is. They don't care where it is. All they wanna know is how much and when do you need it. Speaker 0
Yeah. And, yeah, and I have a two mortgage note no funds. And and, you know, through the through the years I've operated them, it's it's become so much more apparent to me that once there is that trust level that we know what we're doing, we we give investor updates regularly. And I have to tell my team, like, don't focus on these on the assets themselves. They really it's I mean, we have full transparency. If you wanna log in and see what we purchased in the fund, that's fine. You know? That we're we're not stopping any of our investors, but they really don't care. They wanna know, you know, when's my check hitting? When when's my ACH hitting? When's where's my k one? How are how the return's looking? And do you know what you're doing as an operator? And so absolutely true. So kinda briefly from, say, two thousand nine through today, you know, what has your business looked like? Big picture, maybe one or two highlights. How were you able to scale, and maybe one or two kind of takeaways? I know that's a lot in one in one question, but you kinda review the last fifteen years for us. Just quick overview if you would. Speaker 2
Sure. Well, we've had we've had market, swings and changes during that period of time. And so, for example, when when the market is slow and houses are not moving, like, the market's super hot, still where I am, no inventory. You put it in the multiple listing service, and boom, it's gone. It's gone. Mhmm. But it's not always like that. Sure. It's not always like that. Right. So I will pivot during those market cycles, and I'll buy more houses on what we call terms. I'll buy more houses Sure. Subject to the existing note Mhmm. Etcetera. Because when you buy a house on terms and for if if anyone's listening, you don't know what I'm talking about. Yeah. You know, subject to the existing note. Yeah. They leave the mortgage in their name. They transfer title over. The rule of thumb is when you buy on terms, sell on terms. Mhmm. Like sell on lease purchase. Mhmm. Sell on rent to own. And when you're selling on terms, you don't care what the market does. You don't care if the price goes up. You don't care if the price goes down because Sure. You're not looking to cash out anyway. Right? Speaker 0
Right. Right. Yeah. That makes sense. Speaker 2
So, you know, it depend it depends on what the market is doing. But by and large, over the past fifteen years Speaker 0
Yeah. Speaker 2
The majority of my business still has been, fix and flip. That's where the biggest profits are. Your big when you when you've when you've got a a property to renovate or rehab, the biggest profits are in the rehabs. Oh, look. I just bought an oceanfront condominium seven weeks ago. Oceanfront, third story. You look like you're on a cruise ship looking out over the Atlantic Ocean. Well, I bought it for four hundred twenty five thousand dollars. The renovation was a whopping eleven thousand dollars. That never happens. That was just interior paint, a little bit of sheetrock. And so, I had it for only three weeks, put it in the multiple listing service for and I cashed out and sold it for six hundred twenty eight thousand dollars, and I only owned the property for five weeks. I'm not sharing that store. So my net net after realtor fees was a hundred and sixty hundred and sixty thousand dollars. The only reason I share that story is not to brag. Not to brag. The reason I share that story is because it's the power of private money being available that allowed me to do that deal. Thus, the the property was going to the foreclosure steps in two weeks from the time the seller contacted us, and I closed on it in five days. You can't close on a property in five days unless you got all the cash and you got a relationship with a real estate attorney. Speaker 0
Gonna say not through a bank. Right? Speaker 2
No. No appraisals. No appraisals. None of that stuff. And so having the power of private money allows you not to miss out on any deals even when you gotta close fast. Speaker 0
Absolutely. And and that is a risk we take with this with with the show is is, you know, one, focusing on adversity too much can be problematic, and then two, focusing on abunt quote, unquote, abundance can be come across as bragging or, you know, can actually make the listener feel worse about themselves. That's not the intent at all. The intent is to inspire and to show the power of of the mindset that Jay is talking about and and the tactical, you know, real estate and and private lending, knowledge and tools that he's putting to work. So walk us through a little bit more detail, Jay, and then we'll get to some rapid fire questions. Walk us through that that recent deal as a as an example. Just a quick case study. I know you mentioned a couple of pieces to it, but how did that come to your across your desk, and then how did you fund it, and how did you exit it? Speaker 2
Sure. So that lead, that seller lead came in as a from a Google ad. So the seller's name was Brian, younger fella. He didn't he don't live around here. Speaker 0
Mhmm. He don't Speaker 2
live around here. Speaker 0
Okay. Speaker 2
So he went he went to Google and he googled, did a Google search. I don't know what he put in. We tracked about seventy five different phrases. Okay. Good people are searching for when they need to sell if it's a for sale by owner, they need to sell fast. So the Google lead comes in. So when that lead comes in, it immediately goes into my CRM. Okay. And it's emailed to my acquisitionist. Well, what in the world was an acquisitionist? I've had her for eighteen years. Her name's Kim. She talks to all my sellers. I haven't talked to a seller in, I don't know how many years. Anyway, so she talks to all my sellers, does the negotiation, gets the information, sends me all the information, and I decide what I wanna offer on the property. So, it comes in, goes into our contact management, she gets it, she gets, gets Brian on the phone and gets the information on the property. We'll come to find out he had two motivating factors. Number one no. Three motivating factors. Number one, he didn't live around here. Not even in this state, I don't think. Speaker 0
So he's not he's not emotionally attached or and doesn't have, you know, real good knowledge of the the ground truth, as to the property value or or maybe the market conditions, etcetera. Speaker 2
Exactly. And, so secondly, it was inherited. Speaker 0
Mhmm. Mhmm. Speaker 2
Inherited. Right? So both his father and mother had passed away. Mhmm. So now it's an inherited property. Mhmm. He doesn't he doesn't have the interest or the time to come use it. And the next big, huge motivating factor is that it's going to sail at the courthouse steps as a foreclosure in less than two weeks. Speaker 0
Yeah. That's a massive one. Speaker 2
Right? Absolutely. So, anyway, he owed, or his his parents the mortgage, owed three hundred twenty five thousand dollars. So I guess he came up with his price of four hundred twenty five thousand because he's happy pocketing a hundred grand. Speaker 0
Sure. So it's a lot of money. Right? Speaker 2
Right. And so he gives us his price, and so I tell Kim, and all of our communication is through the software. Mhmm. I send back, I say, offer I'll pay all cash and close in five days. Five days. So he took the offer. I got two of my private lenders to fund the deal. One in first position, one in second position. Mhmm. So we closed on it in five days. And so then I already knew what the renovation needed. It needed interior paint and need a little bit of sheetrock work, and and that was it. Speaker 0
There's not much. Speaker 2
We got it done in one week from the time I closed. Got the interior paint done in one week. And so, anyway, I'm talking to I'm talking to my realtor. See, we stage all of our houses. I didn't go look at the house. My realtor went and looked at the house and, my project manager. Our realtor went to look at it to see if he had any different opinion on the value. Mhmm. And my project manager went to look to estimate the repairs. I knew all that before I met before I had my acquisitionist make the offer. So we've closed on it. Right? Renovations are underway, etcetera. I haven't been at the property. And so, so I I we always stage all of our properties, and I do a music video that goes in the mobile listing service. And so I'm talking to my realtor over the phone, I said I said, Chris, how in the world are we gonna get this beautiful oceanfront condominium staged and get furniture and elevators and all that stuff upstairs? He says, Jay, don't you know? Speaker 0
Oh, no. Speaker 2
It came furnished with luxurious furniture and painting on the walls. I said, wow. No. I didn't know that. No. But nobody ever seen told me it came in beautiful, luxurious furniture. Speaker 0
That's so funny. I thought you were gonna say, AI just to, you know, pretend there's furniture there. Speaker 2
So anyway so anyway, we we got it got it, got the renovation done, got the music video done. Now here's a big secret on how we sell houses really, really fast in the multiple listing service, other than there's no inventory. We go I have my realtor do a status called coming soon on Monday. Coming soon. So that's the coming soon status in the mobile listening service. That means that people can watch the music video, they can look at pictures, they can see the written description, they can see the price, but they can't get in the property. Speaker 0
Right? Right. Speaker 2
So, I want to build up demand. I want to build up scarcity, urgency. And so, then on Friday morning at eight o'clock, we go active active status. You see, I want appointments lined up of people seeing this property back to back to back. Right? Speaker 0
Sure. Speaker 2
More scarcity. More FOMO. Speaker 0
And then they see each other. Yeah. Phone they see and then they see each other. Right? And Exactly. I I would do that when I was, managing my own rental properties. One, for efficiency and not wasting my own time. But two, I would, sorry. I should explain what it what it is. I'd always have the, you know, specific window where we meet the prospective tenants, not not on their own time, but this is when I'm gonna be there from four to six or whatever it is. And they see each other. You know? And so that it creates that that demand and that, you know, the bandwagon effect, I guess, if you will, or and and that FOMO. So okay, I love the fact too that you you clearly, you know, have been at this for a while, and and and clearly, you already talked about the who is who do I know that can help me with this. So it's clearly very much a relationship thing for you, but you've also automated your business and and and are not afraid of technology, it sounds like. So, not only pivoting with regard to market conditions, but also pivoting with regard to technological advancements and, but keeping the relationships front and center. That's that's just, top of mind, a few things that I'm pulling from this. So, I love the approach. And and so to wrap up that deal, then how did it go? Speaker 2
Yeah. So it went live. Right? Active Friday morning at eight o'clock. Well, on Thursday night, I got two all cash offers on Thursday, sight unseen Speaker 0
Wow. Speaker 2
Before it even went active. Well, they were lowball offers, so nothing nothing there. Speaker 0
Right? Speaker 2
But then on Friday, I had three offers, two of which ended up being a little bidding war. Speaker 0
Mhmm. Speaker 2
And I I I had it listed for five ninety five. Mhmm. But I had a offer for six fifteen, and then the the the the winning offer was six hundred twenty eight. And listen to how clean this offer was. All cash. Mhmm. No mortgage. No mortgage. All cash. No appraisal. No inspection. No inspection. Of course, it's a condominium. Right? What do you mean? Speaker 0
Yeah. Yeah. Right. Speaker 2
No inspection. Close in ten days. All kinds. Right? Speaker 0
Higher than list price. What else what else could you want? Speaker 2
Right. It's like twist twist my arm. Okay. So so there we go. So sold it at six two hundred twenty eight. Yeah. Paid my realtor five percent because of the volume I paid five and not six. And Speaker 0
and Speaker 2
I only had and I only had carrying cost, you know, for Speaker 0
a for a month and a half. Brief period. Right. And the reason you're able to have those funding partners is because you've done so many deals prior to this, and you've built that reputation. And they you say, send me the money here or send them send the wire here, and they do it. It sounds like I mean, I don't wanna put words in your mouth, but, you wouldn't be able to pull off a deal like that without a a track record. Speaker 2
Oh, absolutely. Right. Absolutely. Absolutely. Yeah. You again, the worst time to be raising private money is when you need it for a deal. Speaker 0
Right. Speaker 2
So you want your private money lined up, ready to go. That's why I teach and preach the money comes first. Speaker 0
Love it. Alright. Jay Conner, are you ready for a few rapid fire questions? No. That's the first time anybody said that. I love it. Alright. Some of these are business and some are a little more personal. But we'll try to fly through them. What is a book or two that you'd recommend for my audience? I know you have a couple of your own books, but Speaker 2
go ahead. Well, one book I would definitely recommend changed my life when I was twenty four years old. I was in a very, very dark place. And the name of the book, and it's still in print, the name of the book is University of Success by Aug Mandino. University of Success by Aug Mandino. And, another book I would recommend, and I know you've heard of it probably, Jamie. In fact, I've had the co author, Bob Berg on my podcast. And the name of the book is The Go Giver, of course. Yep. The Go Giver. Speaker 0
Absolutely. Great book. Yep. Love it. How about something you've seen in your in the industry that you'd view as or maybe that you would label as controversial, maybe unethical. You don't have to name names or anything, but, I mean, the real estate space is, generally, there's a low barrier to entry, so tends to attract some less than ethical people. So Oh, Speaker 2
sure. Speaker 0
Would you what would you say is a may maybe recently, a common practice that's that's questionable? Speaker 2
Well, it's a common practice right now. Most real estate investors, and in my opinion, it's unethical. Most real estate investors, when they sell a house on lease purchase or rent to own Speaker 0
Mhmm. Speaker 2
They'll collect, as I do, a large non refundable lease option deposit. The actual legal term is an option fee. Okay. Speaker 0
Which Speaker 2
means that that money will be applied towards the purchase price. Speaker 0
Mhmm. Speaker 2
If and when the, we call them tenant buyers. The person renting the house gets ready for a mortgage and there's a predetermined price. So that's called the option price. Sure. It's called an option because they have an option to close on the deal to buy it, but they don't have the obligation. Mhmm. But they have to pay an option fee. So typically, you know, I'm I'm gonna get at least a five percent minimum Speaker 0
Okay. Speaker 2
Of the purchase price. Speaker 0
In Speaker 2
my opinion, it's unethical to take that money without helping those people get a mortgage. Mhmm. Speaker 0
Now I Speaker 2
know from doing this for for since two thousand three, the likelihood of them ever getting a mortgage is less than five percent. Mhmm. Mhmm. Sure. And since I know that since I know that, then I'm going to offer to help them get the the the reason they're buying on terms is because Speaker 0
because they either they can't verify the income have other options. Right? Speaker 2
Or their credit is messed up. Speaker 0
Sure. Speaker 2
So I'm gonna offer to help them get ready for the mortgage. Now I can't babysit them, and I can't make them. Yeah. But at least I'm gonna say, hey. Look. I know you need help getting your credit score up so you cannot exercise this option. So let me plug you into the credit repair company that I recommend. Speaker 0
Okay. I love it. And I know this is rapid fire, but we I I enjoy in the mortgage note space having that discretion. And I bought a lot of land contracts or contracts for deed, which are similar to lease option. And we will try to work with borrowers or or buyers, you know, in that case. And, you know, but but you're right. It's you can't I can't I can't force them to improve their credit. I can't force them to manage their money well. And so that is one of the most frustrating things is is you wanna help people, but it's it's they've gotta help themselves as well. And so but I do love the the fact that you and I, we have discretion, you know, on a deal level basis to be able to help people. So and that makes a lot of sense that that's unethical. What would you say is one of the biggest psychological barriers that real estate entrepreneurs face today? Speaker 2
Psychological barriers. Wow. That's a big question. So, one psychological barrier is and you and you and I talked about this a little bit before we went live on the show. One psychological barrier is fear. You know, psychologists can't even figure out what fear is Speaker 0
Interesting. Speaker 2
Or what causes it. But you know what it feels like. Speaker 0
Yeah. You know it when you when you feel it. Right? Speaker 2
You know when you feel fear, but Yeah. You really can't figure out Speaker 0
how to define it. Speaker 2
Is it. Right? Speaker 0
Mhmm. Speaker 2
So people ask me, Jay, what's the best way to get started in real estate? You gotta own the real estate between your ears before you start owning real estate, you know, out there. What do I mean by that? Well, the first thing I mean is, first of all, how do you eradicate this fear? Well, in the context of private money, let me ask you a question. How can you fear rejection if you're not asking anybody for money? How can you fear being rejected if you're not asking? Now I am asking for their help. I'm asking them to help me spread the word. Right? Mhmm. But I I can't be I can't be rejected if all I'm doing is offering to serve. Right? And so now now what causes this feeling of fear? One thing that causes this feeling of fear is you don't feel confident. Right? Yeah. Well, how do you start feeling confident? You start feeling confident by knowing what you know. Speaker 0
Mhmm. Speaker 2
So if in the in the context of private money, the first step in raising private money in addition to getting your mindset right is you gotta know your program. You gotta know your opportunity. You gotta know what you're offering. I mean, what interest rate are you gonna I mean, I say just sort of duplicate my program. It seems to work pretty well. Mhmm. Right. Two thousand nine. Right? Speaker 0
Yeah. Speaker 2
But be confident about your program. And and here's a big mind shift right here. Mhmm. You're serving these people, these potential private lenders. Speaker 0
Yeah. Speaker 2
I mean, Carol Joy and I have gotten I don't know how many handwritten notes and hugs and kisses from our private lenders, particularly our elderly private lenders. Mhmm. We've changed their retirement years. Speaker 0
Yeah. That's really good. I mean, and that is definitely a mindset shift that that goes a long way. And it really is about becoming empathetic and putting yourself in someone else's shoes and solving their problem and and serving them. They don't want to do what you're doing. They don't want to go out and find the deals, and they wanna put their money to work and go enjoy their their their grandkids or enjoy their career or whatever that whatever else it is. So you absolutely are serving a need for them. So, yeah, I love that. If you could have coffee with any or or a drink or whatever with any historical figure, whom would you choose? Speaker 2
Historical figure. Wow. Probably Beethoven. Speaker 0
Okay. Interesting. Probably Beethoven. Speaker 2
Yeah. Probably Beethoven. I'm a pianist. I'm a composer. I've been writing and recording and releasing piano music since nineteen ninety seven, and my stuff is in Universal Studio movies and all that kind of stuff like that. Speaker 0
Wow. That's amazing. Speaker 2
But I studied my first five years of piano, I studied classical, and Beethoven was my favorite. The thing about Beethoven I mean, you talk about resiliency and not stopping. You know, Beethoven was deaf. I did. Beethoven was deaf. Speaker 0
Yeah. Speaker 2
And and do you know how he could hear his music? He took the legs off of his grand piano and put the piano on the hardwood floor, and he would lay straight out on the floor and put his ear down to the hardwood floor and play his compositions, and he actually felt the vibration. And that's how he heard his music. Speaker 0
Talk about overcoming adversity and getting to abundance. Right? That's that's that's amazing. Alright. I've never asked this question. Final question. What is something you've never shared on a podcast before? Speaker 2
Wow. Well Speaker 0
I just just popped into my head. Speaker 2
Well, I've never shared on a podcast that I actually on Christmas day, when I was twenty two years old, I played the piano in my parents' family room while Glenn Campbell sang, have yourself a merry little Christmas. Speaker 0
Really? That's that's amazing. Speaker 2
There's a story behind that, but that's the bottom line. Speaker 0
We'll we'll tell that story when I bring you back if you have if you have time to come back. Speaker 2
I'd love to come back sometime, Jamie. You're a great host and interviewer. Speaker 0
I appreciate that. Jay Connor, where can our listeners find you online? Speaker 2
Well, believe it or not, the easiest and best place to find me is at w w w dot j conner dot com. And I'm a e r, not a o r. So j a y c o n n e r dot com. Now here's why you want to go to j conner dot com. It's not to look at my picture. I can assure you. The reason you want to go to j conner dot com is because I just finished and just launched and released my brand new seven day private money challenge. And so I recorded seven videos. They're only fifteen to twenty minutes long, chock block full of how to raise private money, how to get it quickly step by step. And, go to j connor dot com. I'll come into your email inbox every morning for seven days, at ten AM eastern time. And so if you want to learn really step by step about how to raise private money and never miss out on a real estate deal, go to Jay Conner dot com and enroll in the private money challenge with me. Oh. Speaker 0
I love it. Speaker 2
In addition to that, I got a podcast with over seven hundred episodes. Speaker 0
Wow. Speaker 2
This is my seventh year podcasting. And so come check me out at, I know it's gonna be hard to believe, the name of my show is Raising Private Money. How about that? So, I'm on iTunes, Spotify, all the popular, platforms. So, just go search for Raising Private Money with Jay Connor, and, I have amazing guests just like Jamie. Speaker 0
Yeah. That's right. Speaker 2
Come on my show, twice a week, Monday mornings and Thursday mornings. Speaker 0
Yeah. I mean, that's, that's another thing that it requires staying power and persistence. You know? Doing a single episode is not really that hard, but sticking with a podcast twice a week, especially for seven years, A lot of people get what they call pod fade, and and it just, after a year or two, it's like, why am I doing this again? But, I love it, and it's a fantastic medium to build trust and and learn and build your network and and, you know, add value to the listener really ultimately. So, Jay Connor, thank you so much for spending your time with us today. Speaker 2
Jamie, thank you so much for having me, and God bless you. Speaker 0
You too. And to the listener out there, thank you for spending your most valuable resource with us, and that is your time. Thanks, everyone. Take care. Speaker 1
Thank you for joining us on from adversity to abundance. We hope today's episode has equipped you with valuable insights and practical advice to elevate your real estate journey. For more inspiring stories and resources, visit us at w w w dot adversity to abundance dot com. If this episode has inspired you, please share it with a friend who could also benefit from our conversation. Together, let's turn adversity into abundance. Until next time, keep building your mental fitness and your real estate empire. 
