469 | Private Money Tips in 2024: Secret Framework

Jul 29

[00:00:00] Jay Conner: This question that I asked myself will help you fix any problem. You've got in your business, your financial affairs, your personal relationships, your health. I don't care what it is.
[00:00:12] Chaz Wolfe: What's up everybody. Welcome to gathering the King's podcast. I am your host, Chaz Wolfe. I'm a serial entrepreneur across franchising construction, real estate, and online education.
[00:00:25] Chaz Wolfe: And my mission. And this show is to transfer courage to you, our listeners, by sharing the real and raw stories of success from seven, eight, and even nine bigger business owners. Today, we are joined by Jay Conner, an expert in private lending and creative financing. Jay has been in real estate for over 20 years, rehabbed over 500 homes and completed 52 million in transactions.
[00:00:50] Chaz Wolfe: So how has Jay managed to navigate the volatile real estate market and secure consistent success using private money, especially with all the turbulence in the market today? In this episode, you'll learn three things. How to get private money without ever asking for it.
[00:01:07] Jay Conner: I was able to raise 2, 150, 000 in new funding for my real estate deals.
[00:01:13] Jay Conner: Without asking anybody for money, Jay's top three tips for using private money in
[00:01:18] Chaz Wolfe: real estate deals. You make the rules. They're not making the rules and Jay's formula to mitigate risk using private money.
[00:01:25] Jay Conner: How you mitigate the risk is the reason 100 percent of my private lenders have always been paid exactly what they were expecting.
[00:01:34] Jay Conner: According to the promissory note, if
[00:01:36] Chaz Wolfe: you want to
[00:01:36] Jay Conner: learn
[00:01:37] Chaz Wolfe: how to secure unlimited funding for your real estate deals and leverage private money to achieve financial freedom, you're in the right place. Stick around. This is one episode you won't want to miss. Enjoy the show.

[00:01:49] Chaz Wolfe: Jay, my man, welcome to the King stage. How you doing today?
[00:01:54] Jay Conner: Oh, my lands, Chaz. How in the world am I doing today? Let me tell you how I'm doing. I'm so excited to be here.
That's, that's fantastic you've been
[00:02:01] Chaz Wolfe: doing this for a long, long time and , you've got not only just Some great information, but some real strategies that work. You've been doing real estate for over 20 years.
[00:02:11] Chaz Wolfe: How did you get started into real estate?
[00:02:12] Jay Conner: I was actually born into real estate. I grew up with my dad. In the real estate business, he was the largest at one time. He was the largest retailer. His company was the largest retailer of mobile homes, manufactured housing in the nation,
[00:02:30] Jay Conner: and so I grew up around my dad and his company helping people own a home in the affordable housing industry.
[00:02:40] Jay Conner: And so in the early two thousands, the financing for that product, unfortunately went away. Fell out of favor with wall street. Well, I knew if I ever got out of mobile homes and manufactured housing, people used to call them wobbly boxes.
[00:02:54] Jay Conner: If I ever got out of that business, I wanted to get into single family houses.
[00:02:59] Jay Conner: And here's why. And this was way before the HGTV days, right? Uh, and all the, you know, sexy shows of flipping houses. I wanted to get into single family houses because. Way back in the 1990s, I was selling single wide mobile homes, trying to make a 3, 000 profit. And good friends of mine and Carol Joy, she's my wife of 37 years, good friends of ours in New Bern, North Carolina, flipped a house and made 30, 000 in less than 90 days back in 1993.
[00:03:31] Jay Conner: And I said, wait a minute, 30, 000 versus 3000. I like 30, 000 better than 3000. If I ever get out of mobile homes, I'm getting into single family houses. So that's what I did. So in 2003, 2003, my wife, Carol, Joy, and I embarked. On this very exciting journey. We bought our very first house by using an unsecured, unsecured line of credit at the local bank.
[00:03:58] Jay Conner: And now you could get that back in 2003, if you had a decent credit score. So we had a 250, 000 unsecured line of credit and a burning a hole in my pocket. And so. Uh, one mistake I made in this business is I didn't get the right training or education. I just relied on my experience from the mobile home days, which was not a very, very smart decision.
[00:04:20] Jay Conner: Nonetheless, I read in one of those books on how to flip houses back then that look for the nastiest smelling. House you can in, in the multiple listening service. I found it. Found it here in Moorhead city. It had been on the market for nine months, over 60 showings, no offers.
[00:04:37] Jay Conner: I said, that sounds like my house. So I took that 250, 000 unsecured line of credit and I bought it for 50, 000. I put 50, 000 worth of rehab in it. So I had a hundred thousand dollars in it. Well, it was so bad when I bought it. My wife, Carol Joy, wouldn't even get out of the car and look at it. My dad did get out of the car and look at it.
[00:04:59] Jay Conner: He told me I had lost my mind. So anyway, I rehabbed it. Well, what are you supposed to do when you're selling a house? You list it with your realtor, right? That's what I did in January of 2004. I listed it from my realtor for 149. 90. It sat on the market, Chaz, for 45 days with zero showings. I said, well, baloney on that.
[00:05:22] Jay Conner: I'll sell this thing myself. So I put an ad in the local paper. This is used to when you actually had classified ads. Chaz, I know you don't remember that either. That was before the internet. So anyway, I put an ad in the classified section with owner financing for this house. Well, my phone blew up. I had to cancel the ad after two issues.
[00:05:42] Jay Conner: One of the first guys I talked to on the phone, his name is Linwood, Earl Linwood. He met me at a gas station. He followed me and we pulled into the driveway. I had it beautifully staged. Absolutely gorgeous. He walked in, he came back. He said, Jay, I'll give you an 18, 000 non refundable lease option deposit right now. My problem was I didn't know what a lease option deposit was.
[00:06:05] Jay Conner: But my daddy told me if somebody offers you money, you take it and you'll figure it out. So I said, Lynn, would you write me that 18, 000 check? We'll put this deal together. Well, luckily I was still an active mortgage broker back in those days. And if you had a mid score credit score of 580, I could get you done and cook you in the oven and get you a mortgage.
[00:06:25] Jay Conner: And so he had a 583 credit score. So I cashed him out on that first house Really not knowing what I was doing and profited 40, 000 less realtor fees. I said, well, this is better than 3000. So I like this business. So that's how I got in the business and that's how I did the business the first six years from 2003 to 2009, I relied on the local bank.
[00:06:53] Jay Conner: That's all I knew to do to fund my deals. But then something happened in January, 2009, that changed. Everything.
[00:07:02] Chaz Wolfe: Yeah, it was, uh, just, uh, just a little blip in the real estate map. Right.
[00:07:07] Chaz Wolfe: The mechanics of what you were just saying are, are, are, uh, known, right? Like there's, I've, I've interviewed hundreds of flippers and that's cool. Like you did a great job. Good for you. Um, but in 2009, this, this, this sticky got you thinking different. Tell us what
[00:07:22] Jay Conner: Yeah. I remember it like it was yesterday, Chaz. January, 2009. I had two houses under contract. Bear in mind, I had been using the same bank and the same banker for six years funding, all my deals. Fantastic relationship. Yep. I called him up. His name was Steve. I called up Steve and I told him about these two houses that I had under contract, I told him where they were located, the funding required same song and dance.
[00:07:53] Jay Conner: That Steve and I had had many, many times for six years, Steve cleared his throat and says, Jay, I'm sorry to tell you, but the bank has closed your line of credit. And, um, I don't know if you've ever heard somebody say something to you and you didn't quite understand that they said it. And secondly, you wish you hadn't heard what they had said.
[00:08:15] Jay Conner: I said, Steve, what do you mean? The bank has shut down my line of credit. He said, Jay, don't you know, there's a global financial crisis going on right now? I said, no, but now you have just given me a global financial crisis because I can't fund my two deals. So I hung up the phone. Chaz, I asked myself a question.
[00:08:40] Jay Conner: I'm going to share with your audience right now. This question that I asked myself will help you fix any problem you've got in your business, your financial affairs, your personal relationships, your health, I don't care what it is. And here's the question I asked myself after hanging up the phone with my banker.
[00:09:00] Jay Conner: I said, Jay, who do you know that can help you with your problem? Who do you know? They can help you with your problem. And by the way, Chaz, these people going around saying every problem's an opportunity I want to throw up. I didn't have no opportunity. I had a problem. I got these deals under contract and I can't fund them.
[00:09:19] Jay Conner: Let's face reality. This is a problem.
[00:09:22] Jay Conner: Well, you know, it's not, it's not how it's who it's not how it's who. So immediately I thought of my good friend, Jeff Blankenship, who lived in Greensboro, North Carolina at the time. And, uh, he was, he was investing. He was flipping houses in Greensboro, North Carolina. I called him up and I told him what had just happened with my conversation with Steve, he said, well, Jay, welcome to the club.
[00:09:45] Jay Conner: I said, what club? He said, the club of losing your line of credit at the bank. They just cut me off last week. I said, well, Jeff, how are you going to fund your deals with no bank with no line of credit? He says, well, have you ever heard of private money? I said, no. He said, have you ever heard of self directed IRAs and how individuals can use their retirement accounts to loan that money out to real estate investors and earn unlimited money per year, either tax deferred or tax free.
[00:10:16] Jay Conner: I said, no,
[00:10:17] Jay Conner: he said, well, let me tell you about it. And you need to learn about it quick. So I did, I studied private money. What it is, how you can get it fast, how you can raise it without ever asking for money. Did you know Chaz ever since January, 2009, I've never asked anybody. For money or to fund my deals, how in the world have I got eight and a half million dollars in private money available and I get all my deals funded without ever pitching a deal. I'll answer that in just a second. So I studied private money. You know what I did, Chaz? Here's what I did. I put on my teacher hat. I put on my teacher hat, my private money teacher hat, and I started teaching people, leading with education, teaching people in my own local market here, my own network, people that I go to church with, people that's in my cell phone, people that I love to go boating with.
[00:11:12] Jay Conner: I just started sharing with people how they can earn high rates of return safely and securely without Without mentioning any deals, I'm just talking the program. I'm talking the opportunity, how they can learn, earn high rates of return safely and securely with very, very minimal risk. And so in less than nine days with me, just leading with education, I mean, I put on a private lender luncheon.
[00:11:37] Jay Conner: I invited 20 people to the luncheon, friends of ours. And I raised 969, 000 just at that one 90 minute luncheon by just sharing how they can earn high rates of return saving and securely. So I was able to raise 2, 150, 000 in new funding for my real estate deals. Without asking anybody for money. You know, the traditional way to raise money is you go to your local banker, you get on your hands and knees, you raise your skirt up for them to look at your personal assets and your financial statement and show all of it.
[00:12:09] Jay Conner: You know, your personal stuff you got going on. And then you're saying, please fund my deal. You know, please fund my deal. But you know what? That's the traditional way. There's applications, there's W2s, there's credit scores. None of that applies in this world, in this world of private money, because you see, we're not asking for mortgages.
[00:12:30] Jay Conner: We're offering a mortgage to people that have never seen this kind of opportunity. You know, this side of COVID, I've had more money chasing me. I've never had to chase the money. So that's what you do. You lead with education, you show them how it works. And now the money is chasing you.
[00:12:49] Chaz Wolfe: Love it. And the, the opportunity here, uh, I loved how you kind of separated the two here. It was, I'm not asking. Uh, I'm, I'm educating and I'm letting people know this is what's possible because you're right. Most people think when they think of even, even today, I think experienced, uh, real estate folks think of raising money.
[00:13:07] Chaz Wolfe: It's just calling mom and dad, um, or friends and family and saying, what cash do you have? And I didn't even hear you say that I heard you say reaching into a little bit more. Um, of a specific bank, if you will, with these self
[00:13:19] Chaz Wolfe: directed IRAs.
[00:13:20] Chaz Wolfe: I know that's part of your, your solution here.
[00:13:22] Chaz Wolfe: Do you want to give a little bit more, uh, on the detail and we're going to get, you wrote a book on this and, you know, you got all kinds of tactics.

[00:13:28] Jay Conner: Sure. Well, you know, one popular question that I get, uh, is well, Jay, I still don't understand how you get the money without asking for it. So here's the magic sauce. We separate the conversations between teaching the program and then having a deal for your private lender or your private lenders to fund.
[00:13:50] Jay Conner: Desperation has got a smell to it.
[00:13:54] Chaz Wolfe: that's right. Okay. very
[00:14:08] Jay Conner: money for your deals, how you smell desperate without even attending, intending to smell desperate, if you are sharing your program, here's the interest rate I paid in my private lenders.
[00:14:19] Jay Conner: Uh, here's how they can get their money back in case of an emergency. Here's the maximum loan to value, et cetera. And in that same conversation, you talk about a deal that you're looking for funding. You're desperate without you even say in a word, you're saying, Hey, Here's my program. Please fund my deal is really what you're saying.
[00:14:42] Jay Conner: So what do we do? We teach the program to a potential private lender or lenders. I don't even have to ask them if they're interested. It only takes 20 minutes, 15 minutes to walk through, you know, how the program works, how they can get higher rates of return safely and securely. And then I shut up. Well, they're going to tell me how much they've got.
[00:15:01] Jay Conner: If they've got investment capital, 150, 000, 500, 000, whatever. Or if they've got retirement funds and they're not happy with it being volatile and then maybe it's in the stock market or whatever. Well, then I'll introduce them to the self directed IRA company that I recommend because they've got fantastic customer service.
[00:15:21] Jay Conner: So let's say they moved their money or part of their retirement funds over to the self directed IRA company. So they'd moved it over there. Well, guess what? They're not making any money. Until you put their money to work, they've moved it over to your recommendation. So how do I get all my deals funded with never pitching a deal?
[00:15:43] Jay Conner: There's a good question. How do I get all these deals funded and never pitch a deal? Well, here's the answer. the answer.
[00:15:51] Jay Conner: is I call them up with the good news phone call. Well, here's the good news phone call. Chaz, let's say you're one of my private lenders, or maybe you're one of my new private lenders. And let's say you've, you want to start with 150, 000.
[00:16:05] Jay Conner: By the way, new private lenders always have more money than they tell you. So let's say you want to start with 150, 000. So I say, Chaz, I'm going to put your money to work for you. Just as soon as possible. You'll probably hear from me within the next couple of weeks or so. So I call you up. You and I have a little chit chat.
[00:16:24] Jay Conner: I say Chaz and here's the script folks. Here's the script as to how to get your deal funded without pitching the deal. You see Chaz already knows the program. He already knows what interest rate I'm going to pay. He already knows my maximum loan to value. Which by the way is 75 percent of the after repaired value, not 75 percent of purchase price, very big difference.
[00:16:46] Jay Conner: Anyway, he knows the program. He knows I'm not going to call him up with a deal that doesn't match the criteria of the program that I've already taught him. So I called up Chaz. We have a little chit chat. Here's the script. Chaz, I've got great news for you. I can now put your money to work.
[00:17:04] Jay Conner: I've got a house under contract in Newport with an after repaired value of 200, 000.
[00:17:10] Jay Conner: Now the funding required is 150, 000 for the deal. Closing is going to be next Friday. So Chaz, you'll need to wire your funds to my real estate attorney's trust account by next Thursday. And I'm going to have my real estate attorney email you the wiring instructions. End of conversation. First of all, if I had asked Chaz, does he want to fund the deal?
[00:17:32] Jay Conner: That's the most stupid question in the world. I could ask him. Of course, Chaz wants to fund the deal,
[00:17:38] Jay Conner: particularly if he's moved his money over to the self directed IRA company. He's waiting for me. I'm ethically bound to put Chaz's money to work because he's moved the money over into an anticipation of me putting his money to work, because he's So I need to perform, right?
[00:17:58] Jay Conner: I need to have Chaz fund a deal. So again, the magic is educate and teach. They give a verbal pledge. Here's how much they got to work with. Now I call them with a good news phone call and done deal.
[00:18:13] Chaz Wolfe: I love the simplicity and I've taught sales for, for so long now. And it's never goes, uh, as a point that can never be, or that it's Overstated. Um, I'll, I'll say it again and again and again, which is what you just did is that you used words in a particular way to make it make sense. Um, you didn't overcomplicate.
[00:18:32] Chaz Wolfe: I say things all the time, like a confused mind can't buy. Like the listener right now is like following this makes sense, of course, but I don't want to move on too fast because thousands of sales reps, I'm sure you've seen thousands of real estate professionals who overcomplicate. The process or the deal. And, uh, that that's actually when most things kind of spiral down is that everything in, in the process is going well, and then you complicate it. And a confused mind doesn't buy, or there can be no agreement where there's disagreement. And so if, if, if you can just keep it simple, not, not unto the, onto the way of, of keeping information, I think that's probably where a lot of people in their integrity feel like, well, no, I have to explain everything.
[00:19:14] Chaz Wolfe: And it's like, well, actually the investor. Is like you said, relying on you to be the expert, or, you know, in the case of a sales process, you know, the prospect is relying on you to be the expert. And so now they don't actually have to know every single nuance of the deal or the product. They need to know the important things that are, that are for them. And, uh, and then we got to get their money to work. That's, that's the main point. We got to, got to make them some money, got to perform.
[00:19:37] Jay Conner: That's it. You know, what you just said reminds me of this. Sometimes people say, well, well, Jay, when someone is starting out raising private money, what's a common mistake they make? I can tell you what the common mistake is. They talk too much. They talk too much. It's like, look, you're not selling anybody on anything.
[00:19:56] Jay Conner: You're not trying to persuade them. You're not trying to talk them into anything. You're just, you're just sharing information that you have that they do not have. Right? Most people walking around, even financial advisors walking around, never heard of a, of a true self directed IRA. What in the world is that?
[00:20:13] Jay Conner: What in the world is a third party custodian approved by the IRS That allows people to invest their retirement funds, truly self directed. So you've got information that other people don't have. Keep it simple in terms that they can understand and use in terms that they do understand.
[00:20:35] Chaz Wolfe: Yeah, I think that, that, uh, all of that is super good. Get let's, let's just kind of roll in. I mean, you're, you're given us so much already. I mean, the book that you wrote around this is called, uh, where to get the money. Now you've got, you've got a lot of success around that book. And so congratulations on that.
[00:20:49] Chaz Wolfe: But inside of that, you give all kinds of tips, but I want your top three, top three tips for using private money. You kind of gave us a script on how to get it, but how do we use it? Top three tips.
[00:21:00] Jay Conner: Top three tips on using private money. So first of all, number one tip, number one, it's going to be very hard for you to own real estate using private money until you own the real estate between your ears.
[00:21:14] Jay Conner: Now, what in the world by I mean by that, because this is a 90 percent head head game. This is a 90%.
[00:21:22] Jay Conner: I mean, I guess that's true in pretty much any kind of business that you're in, but
[00:21:28] Jay Conner: you got, you got to be confident. If you don't believe in yourself, nobody else is going to, who's going to loan you money if you're not confident about what you're offering people, who's going to loan you money about you being confident as to the offers that you're making on If you're not confident, then how do we get that fixed?
[00:21:47] Jay Conner: Well, you join hips with somebody that knows what they're talking about and has been through the minds for that somebody locally or whatever. Your mindset is that when you're talking with someone about private money, how they can make high rates of return safely and securely.
[00:22:06] Jay Conner: about this opportunity. I want you to picture in your mind, you got one foot out the back door getting ready to leave because whenever you feel like you're selling, stop, stop,
[00:22:24] Jay Conner: stop, stop. In other words, when you feel like you're pushing or you're really trying to convince somebody of something wrong approach.
[00:22:34] Jay Conner: Wrong approach. You are confident you are offering something that's going to be for the betterment of them. It's going to be a win, win, win scenario. And here's another part of your mindset realize. That they need you more than you need them. And here's why that's not an arrogant statement. It's a fact here's why there's more money available and there are deals.
[00:23:01] Jay Conner: How do I know that prior to COVID there was 18 trillion in cash prior to COVID in cash, sitting on the sidelines. Here in the U S of people not knowing what to do with their money today, 31 trillion in cash sitting on the sidelines, either in cash, cash, or, and when I say cash, cash, I mean, I don't mean cash.
[00:23:27] Jay Conner: I mean, investment capital sitting in a checkbook or. Retirement funds just sitting there. They don't know what they don't know what to do with it. Right. The, the, the stock market is so volatile. So there's just so much of it all around you. What's another part of your mindset? Abundance, not scarcity. If you have a mindset of there's not enough to go around, we got to get that fixed.
[00:23:54] Jay Conner: There's more than enough to go around. So the abundant mindset, there's plenty to go around. There's more money than you can ever use. You're serving, you're leading with a servant's heart. Hey, Carol, Joey, and I have received so many handwritten notes and in person thank yous from our private lenders over the years saying we have changed their retirement years.
[00:24:19] Jay Conner: I've, we got one couple of these private lenders are everywhere. I mean, we got one couple that are both retired teachers. From the public school system. And guess what? We have helped them grow their investment capital to over 1 million. They have over a million dollars that they now are using to loan back to us and fund their deals.
[00:24:43] Jay Conner: And they're saying, you know, without your program, we wouldn't have been able to enjoy our retirement years the way we have, so that's number one tip. We want to get the mindset, right? That we are out here serving people. I know you've got two more, but give me, give me just a couple of attaboys, uh, towards you on this, because I mean, it's so cliche, right? Business mindset, take care of the real estate between your ears. But I just want to like echo, uh, for the listener and just like, Hey, wait a second. Don't move too fast. Listener Jay's giving you the map, like literally the map. Now we're not talking about private money right now. We're talking about your mind and abundance and you knowing, uh, or believing that, that things can be a different way than they are currently right now for you. And so I just want to not only encourage the listener, but to, to thank you for being so real with tip number one, I know you're going to come hot and heavy with tip two, three here, but, but tip number one, if that was all that you gave. They're ready to roll. I'm ready to roll. I'm inspired. All right, give us two.
[00:25:46] Jay Conner: So tip number two, and this is a distant cousin to tip number one, but it's a specific. Tip number two, you are not applying for a mortgage. You're not applying for a mortgage. In words, this is 100. I mean, the strategies, the steps are 180 degrees opposite direction of borrowing money traditionally. You borrow money traditionally, they make the rules, the lenders making the rules.
[00:26:23] Jay Conner: And you see, this is. This is a challenge for some new real estate investors or people that are first going to be attracting private money is to get out of your mind that you are asking that you are applying, that you are having to think through this traditional way of borrowing money. And this could be no more opposite than traditional.
[00:26:50] Jay Conner: You're not applying. You're not playing by their rules. You know, you grew up thinking, well, whoever the lender is makes the rules. They set the, the lender sets the interest rate. The lender sets the frequency of payments. The lender sets the length of a note, um, et cetera, not the case here. The lender is not making the rules.
[00:27:11] Jay Conner: So number one tip, we want to get the mindset, right? Number two, distant cousin to that is. You're not applying. You make the rules. They're not making the rules. And number three tip is understand why you need private money. Some people going around is going to say, well, why, why do I, why do I need private money?
[00:27:35] Jay Conner: Well, let me tell you why you want private money. If you don't know you want it yet, let me give you a few reasons why you want private money. Number one, there's no limit to the amount of private money you can have available to you. You can scale your business to anywhere you want to go. When I was borrowing money from the banks, I had a limit.
[00:27:54] Jay Conner: I had a million dollar line of credit. That was it. When I use that line of credit, I had to pass on deals. Unless I was buying on terms subject to the existing note or whatever. I had to pass up on those deals. Well, guess what? No limit. I got eight and a half million dollars now, uh, and just moving from project to project.
[00:28:14] Jay Conner: So there's no limit to the amount of money you can get as opposed to traditional. Number two, big tip. Why do you want private money? There's no limit to the number of private lenders. You can do business with, why is that? Because we're not regulated by the commissioner of banks. We can do business. We're individuals.
[00:28:35] Jay Conner: We're doing business individual to individual. Uh, so no limit number three, no credit score, no credit check. Your credit's got absolutely nothing to do with how much private money you can get. And that's because all the notes are collateral based. So the private lenders are loaning you money. Okay. Not based on your credit, but based on the collateral that's back in that note.
[00:28:59] Jay Conner: Um, I mean, and the list just goes on and on. There's no appraisals, you know, my lands, how often have you been shackled by an appraiser? As far as you know, what's going to happen well and delays. So there's no appraisals. We simply use comparative market analysis. And there's another reason you want private money.
[00:29:19] Jay Conner: All my offers on deals that I offer to buy on property, I offered a closing seven days. And as a result, I get more offers accepted because I can close quickly. You can't close in seven days. If you're using commercial money. They're going to order an appraisal. I mean, maybe if you've got a good relationship, maybe.
[00:29:40] Jay Conner: Maybe you could close in three weeks, maybe with the hard money lender. And another thing you want to understand is this world has got nothing to do with hard money. This is not hard money. Hard money is typically a broker of private money that has raised private money for their fund. And now they're going to loan it out to you at a higher interest rate with points, et cetera.
[00:30:04] Jay Conner: There's another reason you want private money. There's no origination fees. There's no
[00:30:08] Chaz Wolfe: Just skip over the middleman.
[00:30:10] Jay Conner: You know, I mean, it's just a straight, I've been paying the same interest rate since 2009, when I started and that's 8%, it doesn't matter what the market does, the market can go up. I'm talking about interest rates, the market can go down.
[00:30:25] Jay Conner: And so, you know, one question I get recently in this market, Chad's, I say, Jay, how in the world are you still paying your private lenders? The same thing you were paying them prior to COVID. I said, well, there's two big reasons. Number one, I make the rules. Number two, 8 percent is still a whole lot more than 4 percent or four and a half percent that you can get on a 12 month CD and it's backed by real estate.
[00:30:49] Jay Conner: I'm telling you, I'm telling you, if I'm lying, I'm dying. Private money will skyrocket your real estate investing business. Because at the end of the day, what are the two, what are the two questions all of us have? How do you find the deals? And where do I get the
[00:31:05] Jay Conner: money? I got the money answer for you.
[00:31:09] Jay Conner: There are three categories as to where you find private lenders. You might want to write these down. If you're not driving the first category of finding private lenders. Is your own warm market and connections. The second category is what I call your expanded warm market.
[00:31:27] Jay Conner: I say, the more money you wallow in, the more money sticks to you. And some people say, well, my network is broke. I don't have a very good network. Well, you need to fix that because there's a direct correlation, as we all know, between your net work and your net worth, of course, so expand your network. Well, how do you expand your network?
[00:31:45] Jay Conner: I can tell you how to expand your network overnight. At a place that I've gotten millions of dollars in private money. You want to know where that is? Here it is. www. bni. com business networking international business networking international is an organization. If you're not familiar with it to where you join and you know, uh, Moorhead city where I live is only got 8, 000 people.
[00:32:11] Jay Conner: Even we have a BNI. So the purpose of BNI is not social. It's not civic group and fundraising. You are in business networking international for the purpose of giving each other leads in your group. So if there's 20 people in your group, like you're in Moorhead city, then I've got 19 other people that are endorsing me and promoting me and referring people to me that want a high rate of return safely and securely.
[00:32:41] Jay Conner: Well, in that group, there's one realtor, there's one real estate attorney, there's one general contractor, there's one plumber, there's one HVAC, and so we are endorsing each other. So just through the endorsement of Business Networking International, I've had millions of dollars referred to me. Just from BNI.
[00:33:02] Jay Conner: That's a quick way right there to grow your network very, very quickly. And the third category of private lenders are existing private lenders. These are individuals that already know the game. They are already lending money out to other real estate, to real estate investors. Where do you find those people?
[00:33:23] Jay Conner: Well, self directed IRA companies, third party custodians. Did you know over 70 percent of account holders at self directed IRA companies want to loan money out secured by real estate. They want to be a passive investor and just get the returns. So actually self directed IRA companies have regular networking events on zoom and you can go there and network and you don't even have to have an account you can network with existing private lenders but here's the catch when you're networking with an existing private lender you're not putting on your teacher hat they already know what private money is Cause they're already loaning it out.
[00:34:08] Jay Conner: So now you don't get to make the rules. Now it's a negotiation conversation and I'd rather not negotiate. I'd rather make the rules,
[00:34:19] Jay Conner: but that's where you can get private money.
Hey Kings and Queens, Chaz Wolf. I want to talk to you about something that's super important to me. We put a lot of time and effort, we meaning myself and my team into this podcast, into the content that goes out every single day. And if you have been getting any sort of value or insight from this, we want it to be able to reach other business owners too.
So we would love if you would like comment, share, leave a review, post, share again, all of the things. On social media on all the different platforms or even on the podcast mediums of apple and spotify We would love to be able to get our content into more hands more entrepreneurs So they can grow their business as quick as possible together We are building a community of like minded entrepreneurs who are committed to growing their businesses to new heights So let's do this.
Let's help each other grow
[00:35:08] Chaz Wolfe: What happens though, when a deal has gone wrong, what's the sticky? What's the black eye? What's the, Oh, the, I wish this had never happened, but it did. What, what was that moment?
[00:35:17] Jay Conner: Well, let me share a revelation. Every deal goes wrong. Every deal goes the truth? Every deal goes wrong. What do I mean by every deal goes wrong? Well, when you're rehabbing and renovating, have you ever had a rehab or renovation budget come in on budget? Of course you one. I've rehabbed over 500 houses, over 500 houses and our little teeny tiny area here of only 40, 000 people.
[00:35:45] Jay Conner: I've never had one come on budget. So. What, how do you mitigate that risk? How do you mitigate the risk? Here's how you mitigate the risk. And by the way, what I'm getting ready to tell you on how you mitigate the risk is the reason 100 percent of my private lenders have always been paid exactly what they were expecting, according to the promissory note.
[00:36:09] Jay Conner: So how did that happen? Whenever I have, I had a deal coming on budget. Here's the answer. The answer and the mitigation of risk is not in estimating repairs exactly perfectly. The mitigation of risk is in your offer. The mitigation of risk is in your offer. So one mistake that new real estate investors make is they pay too much.
[00:36:36] Jay Conner: You're paying too much for the property. You're emotionally involved, particularly in that first deal. You're dying to get that first field deal and you pay too much. And I tell you what, HGTV has ruined a lot of people when it comes to real estate investing. Because first of all, by the way, I love watching HGTV, nothing against them.
[00:36:55] Jay Conner: I love the shows. The only thing about reality TV is there's nothing real about reality TV. It's a show and so like, you know, so when they're showing like the profits, let me tell you, the profit on a deal is not what you sell it for minus repairs, minus what you paid for it. That is not the profit on a deal.
[00:37:18] Jay Conner: There's this thing called realtor fees and carrying costs and private lender fees and closing costs and insurance and taxes and utilities and cutting the grass and on and on and on. So, What I'm saying is, is how do you mitigate the risk? Well, let me give you the formula. Let's just don't talk seminar jargon.
[00:37:38] Jay Conner: Let me give you the formula. Here's my formula for when I pay what I pay for cash on a house. When I'm using private money, I take the after repaired value. So my realtor gives me all these values. He knows that I'm going to turn this home into a home. That's ready for Southern living magazine pictures.
[00:37:59] Jay Conner: When I finished the rehab on it, so he knows what the RV is. He's going to use comparable sales of other homes in the area that have been renovated to the hilt. So we take the R if the after repaired value is over 300, 000. I multiply times 80 percent if you're in California. You're going to be multiplying everything times 80 percent because you can't even get an outhouse for 200, 000.
[00:38:23] Jay Conner: So anyway, when the after repair value is over 300, 000, I multiply times 80 percent. If the after repair value is less than 300, 000, I multiply times 70 percent. I then take that figure. I subtract the estimated repairs on the property. That's going to give me a figure known as maximum allowable offer, but don't offer that all cash.
[00:38:47] Jay Conner: You got to give yourself some hedge room. So if it's less than 300, 000 on the after repaired value, I then subtract another 10, 000 for the unexpected. Now that's the maximum I'm going to pay. If it's over 300, 000 after repaired value, I'm going to subtract an extra 20, 000. For what I will is the maximum that I'm going to pay one way.
[00:39:11] Jay Conner: I get a lot of offers accepted besides saying I can close in seven days, which I can with private money. But a lot of times people don't have anywhere to go. They want to sell, but they don't have anywhere to go. And they say, well, we're not ready to sell yet. Well, here's another writer down or time kills deals.
[00:39:28] Jay Conner: Time kills deals. The more time that goes by, the less likely you're going to do a deal. I want to close now. I want to close right now. So I'll say, look, we can close next week and, uh, and the problems will be mine. The taxes are gone. The insurance gone. You got no more mortgage payment. If you had a mortgage.
[00:39:47] Jay Conner: And I will let you live in the home for free rent free for whatever time we, we both agree is reasonable. I get a ton of my offers accepted because, Oh, they don't get all the cash by the way. They get half of their cash at closing and they get the other half of their cash when they moved out. But close that baby now because time kills deals.
[00:40:13] Chaz Wolfe: That mantra, uh, so long ago in sales is what led to what you talked about earlier, having a stench or our commission breath is what we call it in sales, but it's this desperation. and and so I want to close now, which makes me like, Like hurry up, hurry up, hurry up, hurry up. And it automatically puts us into desperation where it's like, well, actually know that foot out the door of philosophy that you talked about is, Hey, look, I'll offer you an amazing deal so much.
[00:40:38] Chaz Wolfe: So to where I want to close right now, otherwise I'm going to go to your neighbor or whatever the scenario is, you know,
[00:40:43] Jay Conner: Exactly.
[00:40:45] Chaz Wolfe: make the offer something that, uh, that they can't say no to. And so, um, okay. So, so you're, you're building in into a formula to make sure that when things go, Wrong, which is, I love how you said every single deal it's, I think it, I don't know how many deals I got
[00:41:00] Chaz Wolfe: in before the frustration of what You
[00:41:03] Chaz Wolfe: just described became just like, Oh, this is just how it goes. Got it. I'm kind of an
[00:41:10] Chaz Wolfe: exact guy. Like, you know, before we hit the record button, you were, uh, you were, uh, commenting on our process here. And, and, you know, even the thing that we mailed you as a podcast guest. And I like details. I like, I like, I like knowing exactly. And it's just, it's just rounded in real estate, .
[00:41:28] Chaz Wolfe: And, and I love how your philosophy isn't just. Uh, you as the investor are winning. Um, the person that you're buying from is winning because of the cool things that you'll be able to do close fast and get in, allow them to stay in the house.
[00:41:40] Chaz Wolfe: The investor is, uh, is winning, uh, because they're probably not making the same amount of return, uh, as they would with your deal. And of course you get to get in and get out and do the thing and make your money as well. So this is a true win, win, win. Like you said.
[00:41:53] Jay Conner: My dad, Wallace Conner that I told you about when we started out, he told me years ago, he says, Jay, if everybody isn't winning and everybody's got at least a little bit of meat left on the bone, don't do the deal. Everybody's got to win.
[00:42:10] Chaz Wolfe: Yeah. I think that, that, that, that goes into life in so many different ways, right? Like, I mean, I was just in a, um, a coaching session and one of our, um, one of our, uh, benefits of being part of the gathering, the King's community. Uh, we, we, we say we're winning in all areas. And so we talk about business, we talk about investing, of course, all those things, but we have a monthly marriage call. Where entrepreneurs and their spouse come to the call, we bring in marriage coaches and we get to all work on our marriages together. And inside of that environment, we were talking about creating win, win, wins. And, and even between the husband and wife, it's like, man, how many times have I unknowingly proposition something, whether it be for my family or for my wife, and she says, yes, knowing that like. She was trying to like honor me or do it for me, but it's not a win win. And so it doesn't work long term. Right.
[00:42:59] Jay Conner: I love that I just love it. And that you just shared in your. Mastermind or your mastermind calls or whatever it is that you, those marriage calls, because the reason that impresses me so much. Is that business is not a one dimensional or two dimensional aspect of our lives. Our business affects everything else in our lives.
[00:43:29] Jay Conner: Our personal life affects as our business, our spiritual life, whether you view yourself as a spiritual person or not affects your life. It's all intertwined. And if one part of your life, your health, your health is all intertwined here, your sleep, all that. And if it's, and if there is a, if there's a spoke in that wheel, That's not performing the way it is intended.
[00:43:55] Jay Conner: It's going to affect everything else. So if your marriage is screwed up, don't you think that might have an effect on your business as well? So that I love that Chaz. I love that, that you've got that as a component for your, um, mastermind members. Okay.
[00:44:11] Chaz Wolfe: Yeah, I appreciate that, Jay, because you're right. It does matter. Um, and all of the elements, it's kind of funny. Uh, it's almost like you were, you had my website up and you were going through what we call the five dimensions of kingship, because all of what you just said is, is basically there. And you're right.
[00:44:25] Chaz Wolfe: Uh, we even use a wheel type tool for our members to be able to grade themselves. And so, uh, inside of that mindset, um, It's the mastermind principle. And so I'm kind of leading this to one of my next questions for you here, but the mastermind principle defined by Napoleon Hill and think and grow rich chapter 10 is two or more minds working together in harmony unto achieving something definite. And so for us in the group, that's living the exceptional life. And so in order to live the exceptional life, you got to win in all areas. And so we help each other do that via a lot of the things that you just mentioned, which is, which is great, but. Inside of private money, inside of real estate, inside of your marriage.
[00:45:01] Chaz Wolfe: How have you used the mastermind principle to be successful and be where you are today?
[00:45:07] Jay Conner: The mastermind principle has been such an integral part of mine and Carol Joy's success on multiple fronts. First of all, the very first mastermind group that Carol Joy and I joined was all the way back in 2011, 2011. I'd never really heard of mastermind groups prior to 2011, but of course. Napoleon Hill had been talking about them since the early 1900s.
[00:45:37] Jay Conner: And what I learned about becoming a member in a mastermind group of working with like minded people, there's so many benefits, one huge benefit in addition to getting the results for the reason we joined. And that is to help us grow our business. Is
[00:45:54] Jay Conner: I forged and we, and Carol, Joe and I, we have got relationships with people that we did not know prior to mastermind.
[00:46:03] Jay Conner: And we're still best of friends with those people. I tell you another big benefit of being in, in masterminds is we have this thing that we really enjoy that we call safe space and in this safe space, we're able to share with each other. Confidential information. We're all under nondisclosure and we're able to share information with each other that we don't even tell our own blood relatives about ourselves.
[00:46:32] Jay Conner: I mean, the question is, where can you go? Where can you go? And, you know, we all walk around with filters on our face. All of us walk around with filters. Where can you go and totally take your filter off and really share what's going on inside your heart? Because your fellow mastermind members, you know, masterminding is.
[00:46:55] Jay Conner: Just as much about giving as it is receiving. And in my opinion, it's a whole lot more about sowing than it is about reaping. It's all about sowing. It's not about reaping because you know, I can't reap anything really until I plant something first. Give value first, share with my fellow mastermind members.
[00:47:14] Jay Conner: And, um, and in addition to that, I love being in my masterminds and the mastermind that I run and et cetera. What wonderful way to hold each other accountable and you can count on your fellow mastermind members by telling you the truth, there's not many people walking around out there. That's going to tell you exactly what the truth is.
[00:47:34] Jay Conner: And yeah, we know who said the truth has set you free and it does.
[00:47:39] Chaz Wolfe: Yeah, I agree. I was, it's making me laugh because I had a conversation with a guy just yesterday, actually. And, um, it was around just some business that he's got and, you know, he was making some excuses really was what it was. And uh, Yeah. I just let him know that he was making excuses
[00:47:56] Jay Conner: Yeah.
[00:47:57] Chaz Wolfe: just
[00:47:57] Chaz Wolfe: appreciated him for his willingness and his, his desire to share and his, uh, you know, his really what he, underneath the excuses it's he wanted to win, but he was, he, the way that he was going about it wasn't working for him.
[00:48:11] Chaz Wolfe: And so what was coming out was excuses. And, and what I have found, even in my own journey, very much similar to what you just said is. If, if we don't have other people around us, even on a call like this, where I'm being provoked to different thought, like from you, uh, if we don't have those different, uh, you know, ways of, of changing our perception, then, then we're always going to do the same thing.
[00:48:30] Chaz Wolfe: And if, if the same thing isn't working, then guess what? You're just going to always make excuses and always have the same results. And so sometimes you're right. It is just a little bit of truth to change your perspective or your perception so that you can see it differently and then make the adjustments.
[00:48:45] Chaz Wolfe: Right.
[00:48:47] Jay Conner: Absolutely. Um, unfortunately, a lot of people are walking around and they live in a world that I call blame, shame, and justification. Blame, shame, and justification. And that's sort of the cycle that a lot of people go through. Whatever's going on in their life is never their fault, not their fault.
[00:49:07] Jay Conner: Therefore, if it's not my fault, it's somebody else's fault. So I have to blame. And then after I do the blaming, but I'm still stuck with how I suck. I'm still stuck with how I suck. And so now I feel shameful because I still suck, even though it's somebody else's fault. And so now I got to justify why I suck.
[00:49:27] Jay Conner: And so now I'm justifying and now I've got this cycle going around a blame, shame and justification. I tell you, one of my favorite books, Chaz is written by Jack Canfield coauthor of chicken soup for the soul series. It's called the success principles. And there's
[00:49:42] Jay Conner: 69 of them. And his very first success principle says be 100 percent responsible for everything that happens in your life.
[00:49:51] Jay Conner: And I love his formula as to how you can be responsible. And I love it. It's E plus R equals O. Well, what's E plus R equals O? That stands for the event that happened in your life. Whether you caused it or you didn't, plus R is your response to that event, equals your outcome. E plus R equals O.
[00:50:14] Jay Conner: Unfortunately, the people that are living in blame, shame, and justification are living in a world of a different formula called E equals O. They're living in a world of event, whatever happened in my life, whether I caused it or not. Of course, they never think they caused anything. The event that happened in my life, you Equals the outcome.
[00:50:32] Jay Conner: And I can't do anything about it. Guess what? You can be, and you are 100 percent responsible for the response to what happens in your life. And therefore you get to change the outcome. That's what happened to me with the story I shared about being cut off from the bank. When Steve tells me I'm cut off from the bank, I had a choice.
[00:50:54] Jay Conner: I could live in E equals O. Oh, I'm cut off from the bank. I have no funding. I'll put my tail in between my legs. I'll go home and I'll be in blame and shame and justification. And you know, just cry in a corner or
[00:51:08] Chaz Wolfe: Okay.
[00:51:14] Jay Conner: to the event of being cut off from the bank.
[00:51:16] Jay Conner: How did I respond? Who do I know that can help me? And now I'm looking for a better and quicker way to fund my deals than being having my destiny determined by an event. Your destiny is determined by your response to the events, not by the event.
[00:51:35] Chaz Wolfe: Yeah, it's so good people, people mix up, you know, having that, uh, that fault or the, the reason the event happened, right? The fault or the blame of it. And they mix that up with the responsiveness. And so if you break down responsibility, it's the response to your ability. Right. Or your ability even to respond, you can kind of take it a couple different ways. And so I love everything that you just said there. Uh, I think that the listener just got a nice little nugget there at the end. If they're paying close attention, that nugget right there will change their life. And I'm not kidding on that one. Um, the, the rest of the show has been incredible. Jay, you are incredible.
[00:52:10] Chaz Wolfe: But that last little piece, if, if they actually grab onto that, their, their whole life will be different.
[00:52:15] Chaz Wolfe: I got, I got one last question. I want to make it clear how these folks can connect with you. You've been sensational. Like I just said, uh, you just kind of halfway muttered that you've got a mastermind group.
[00:52:24] Chaz Wolfe: I know that you coach entrepreneurs and investors. Um, I know you've got a book, you gave us a little website earlier of your, of your deal room. Someone's just like, man, I got to get more J in my life. How can they find you?
[00:52:35] Jay Conner: Yeah, well, the great thing about the challenge that I just launched is you actually get to interact with me, right? Um, and my book, where to get the money now is, you know, it's been a bestseller. Uh, you can pick it up for free. Just cover shipping at Jay Connor. And by the way, folks, I'm an ER, not an OR.
[00:52:52] Jay Conner: Most Connors are ORs. I'm an ER. So Jay, you can get it at www. jayconner. com forward slash book. Ship it to you. You really want to interact and really dive deep. Come join me in my world in the seven day challenge at www. privatemoneychallenge. com. And then of course we have my podcast that we have over 700 episodes right now.
[00:53:20] Jay Conner: Believe it or not, the name of my podcast is. Raising private money with Jay Connor, raising It's like, you're still educating people on it. Okay.
[00:53:32] Jay Conner: And so, uh, yeah, you can find me on any of your favorite, um, podcast platforms, raising private money with Jay Connor, uh, and what do I do on the show? I interviews amazing guests and all of them have raised private money.
[00:53:45] Jay Conner: So I interviewed them on how they have gone about raising private money for their real estate deals.
[00:53:50] Jay Conner: By the way, by the way, Chaz answers, if you're listening to this episode and you're finding it enlightening, inspiring, and you're learning some stuff and you really want to learn about private money, I got a brand new private money challenge.
[00:54:05] Jay Conner: Seven day challenge. I want to invite you to where we dig deep. I go, uh, I go about 15 to 20 minutes per day. So it's digestible and come, come into my world and land, get in the private money challenge. You can join me at www dot private money, challenge. com. That's private money, challenge. com. Come on into my world and let's have fun.
[00:54:30] Jay Conner: Chaz, what a honor and a fun time of being here on your show. Thank you so much.
[00:54:37] Chaz Wolfe: Yeah, no, the, the, the honor is mine. Thank you for being here. The hour that you've spent with us, uh, can be compounded into decades of experience. And so I appreciate you sharing all of that. The listener would be silly not to reach back out to you and connect with you. Grab your podcast, grab your book, all of the things that you just mentioned.
[00:54:54] Chaz Wolfe: All of that will be in the show notes as well. Jay. Blessings to you and your family. Thank you for being here. Good, sir.
[00:55:00] Jay Conner: Chaz, thank you and God bless you.
Thank you for listening to Gathering the Kings today. I hope that you were able to pull out a few nuggets to go apply into your business right away. More importantly, though, I hope that you're realizing that it takes more to be successful than just being by yourself, doing it all on your own, carrying the weight all by yourself.
What I have realized, not only in my own journey from multiple businesses and multiple different industries, and now interviewing over 200 or Other very successful seven, eight, and nine figure business owners is that it's tough to do it alone. And so gathering the Kings exists to bring together successful entrepreneurs.
In fact, we are putting together 1000 Kings specifically who are grateful, but not done. We're intentionally assembling Kings who fight tooth and nail for their business, family, and communities. And here's what we believe that in the pursuit of excellence in those areas, That it ignites within us, the responsibility to govern power and forge a lasting legacy.
So if that relates and resonates with you, and you know, that you need people around you, sharp, qualified, other very successful business owners. I want you to go to gatheringthekings. com. Once you take a look at what we're doing and see if it makes sense for you to be part of our pursuit to 1000 Kings talk soon.

Jay Conner has over 20 years of experience and has completed $52 million in transactions. Jay shares his journey from financing mobile homes to flipping single-family houses, and how he navigated the 2009 financial crisis by discovering private money. Jay provides valuable insights on raising private money without asking for it, his top tips for using private money in real estate, and how to mitigate risks to ensure successful deals. Listeners will learn actionable strategies for securing unlimited funding and leveraging private money to achieve financial freedom.

Jay Conner:

Hang out with Jay @ privatemoneychallenge.com

https://www.jayconner.com/podcast/

https://www.facebook.com/jay.conner.marketing

www.linkedin.com/company/jay-conner-private-money-authority-real-estate-investing/

https://www.youtube.com/@raisingprivatemoneyrealestate

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