Episode 98: Jay Conner’s Secret to Success (And It’s Not Money)
The Profit First REI Podcast
David Richter
Summary:
Are you curious as to how people get constant money when doing real estate? The answer is simple: private money! Through the power of private money, you have the opportunity to completely transform your business and your life. It’s just a matter of taking that first step.
And this week’s guest, Jay Conner, is glad to take you guys along and help you fast track your business growth. Let’s hear it out from the private money authority himself.
Key Takeaways:
[6:17] The story of how he learned to master private money
[8:07] What is the secret to eliminating private money?
[10:23] People who learn to become real estate investors can earn an unlimited amount of money returns on their investments, at least tax deferred if not tax free.
[14:31] How does he approach someone who he wants to talk about private money with?
[21:46] Jay talks about how you should find things that you’re passionate about instead of just focusing on money.
Quotes:
[11:39] “Go where the money is. The more money you wallow in, the more money it sticks to you.”
[15:39] “It all starts with the perspective of having a servant’s heart and serving these people.”
[21:25] “If money is your primary motivation in doing anything, that is not going to be a long-term venture at all.”
Links:
Jay’s website-https://www.jayconner.com
Where to Get Money Now by Jay Conner-https://www.jayconner.com/book-details/
Tired of living deal to deal?
If you are a real estate investor or business owner who is tired of living deal to deal, and want to double your profits, head over here to book your no-obligation discovery call with me. Either myself or someone from my team will hop on a short call with you to get clear on your business goals, remove any obstacles holding you back, and map out a game plan to help you finally start keeping more of the money you work so hard to make. – David
Transcript:
Jay Conner:
And so I look at money as it’s a great measuring yard stick as to how well you or how well your business is doing. But fulfillment takes place right here in the heart and it takes place and it takes place by making a difference in other people’s lives.
Speaker 2:
Welcome to the Profit First REI podcast, where real estate investors, master financial management, eradicate entrepreneurial poverty, and learn to be profitable from day one. Now for your host David Richter,
David Richter:
Hey everyone. It is David Richter here again with Jay Conner and super excited to have him on the podcast. He is the private money authority. I mean, if you wanna know about private money, how to acquire it, how to get unlimited private money for your real estate deals, how to use it, how to, how to be a good fiduciary of that money too, and like how to protect them, how to use it and how to actually give win-win situations. There’s no one better here than Jay Conner. So Jay, great to have you on the podcast. Hey,
Jay Conner:
Thank you so much, David. I’m excited to be here and yeah, we’re talking today about my favorite subject, private money and of course, whatever else you have in mind.
David Richter:
Yes. Yeah, no, I am always looking to help our listeners because as real estate investors, they are not gonna be using cash a hundred percent of the time. So it’s definitely gonna be using other people’s money. And I know you are a big proponent of private money lending and you even have a new or book right. Where to get the money now. So Jay has a new book out where to get the money. Now you can actually go to his site, JayConner.com that’s Conner with an ER. So JayConner.com and it’s right there. It looks like it. You’ve got it on there for just free plus shipping. Is that correct? You’ve got it there. That’s awesome. Yeah,
Jay Conner:
That’s right. Yeah. That’ll save your audience about 20 bucks over at Amazon. <Laugh>
David Richter:
Yeah, exactly. So if you can get it, get it right there from his site. And he’s got some great information there too, as well. So we’ll talk about that near the end, but I at least wanted to get that out there that if they wanted more of you and more of how to get the private money, they could get that and start their start their journey down that road. But so Jay, let’s talk a little bit, I know we’ve talked before on the podcast, but for listers who may not have listed to past episodes, how did you get started in real estate and then specifically teaching about private lending and all of that? So just tell us your journey.
Jay Conner:
Sure. Well, I was actually raised David around the housing business, my father Wallace Conner at one time had the largest retail company of manufactured homes or mobile homes, whatever you wanna call ’em in the nation. So I was raised being around the industry of helping people get a home particularly in the, in the market of affordable housing. So anyway, the majority of the financing for that product went away years ago. And so I knew if I ever got outta mobile homes and manufactured houses, I wanted to get into single family houses. And so it was in 2003. So quite a few years ago, 2003, my wife, Carol Joy. And we invested in our first single family house right here in Eastern North Carolina. We’re in a little teeny, tiny town called Morehead city where the whopping population of 8,000 people, our total target, market’s only 40,000 people and we do two or three deals a month, but the average profit today is $71,000 per single family house.
Jay Conner:
And so it was 2003 where we found our first deal for the sake of time. And I’m not gonna give the long story on how we found that first deal. But anyway got that first deal. And back then, David in 2003 money from traditional lenders was very plentiful. In fact, if you could fog a mirror, you could pretty much get an unsecured line of credit. And that’s what I had. I had a $250,000. I went to the local bank, I got a $250,000 unsecured line of credit, burning a hole in my pocket to go find this first house. Well that first year we did three deals from start to finish. And so those first six years in the business from 2003 to 2009 I relied on local banks to fund our deals. And so in January of 2009, I was sitting right here at this desk.
Jay Conner:
I picked up this telephone and I called my banker. I had two houses under contract. The profits on those two houses were over a hundred thousand dollars in totality. And I’d had this conversation with my banker many times for that first six years, 2003 to 2009. And I learned very quickly on that phone call, David, that I had been cut off. I had lost my line of credit with no notice and I’d had a fantastic relationship with the bank. Never laid on payments, had a pretty much an 800 credit score, but I learned I was not, I didn’t have a corner on that market. I wasn’t the only guy or gal that had been cut off. So I, you know, you may recall a lot of your audience will, what was going on in 2007, 2008, 2009, the global financial crisis. So I hung up the phone and I thought to myself, what am I going to do?
Jay Conner:
I called my buddy, Jeff, who lived in Greensboro, North Carolina at the time he was a real estate investor. I told him I had just what had happened. And he said, welcome to the club. They cut me off last week. And I said, what are we gonna do? And he had heard of this thing called private money. I’d never heard of private money. Didn’t know what private money was. In fact, let you know how much I was living under a rock. David. I never heard of hard money. Hmm. I never, I never heard of self-directed IRAs. And this was 2009. So I knew I had to find a better and quicker way and put me and my business more in control. Yeah. So I learned about private money very, very quickly. I put my program together on private money and I started teaching people what private money was and the opportunity that involved with that.
Jay Conner:
So in less than 90 days, I was able to raise over $2 million from that phone call in January. Well, I, that was, I had a huge blessing in disguise. I mean, in fact, if I hadn’t been cut off from the bank David, you and I wouldn’t even be having this conversation today I wouldn’t have had the opportunity to also share with thousands of other real estate investors, what this world of private money is and what it does. So since that time I have yet to miss out on a deal because I didn’t have the funding. And so then in 2011, I found myself bored because I had a, and still have a fantastic team running this business. And at less than 10 hours a week. And so then I really started following my bigger purpose and passion, and that was sharing and training and coaching other real estate investors, how to get in control of their business as well by using private money. So we do the business and we share our experience and knowledge with other real estate investors as well.
David Richter:
That’s awesome. And I love that. And I love that giving back because you have, you are not one of the ones that just, oh, we did this one time. Now we’re gonna go out and teach it. You’ve been in this, the trenches for a long time. You built a team, which is incredible too, cuz that’s, you know that to have a team, you have to be that leader. You have to be the one that can get them rallied together, doing those things. And then going out there, living your higher purpose and saying, you know what, this has worked for me. I wanna go out and help other people. So let’s talk a little bit more about private money. What is let’s what is the secret to unlimited private money? And because that’s what every, probably the question on every real estate investor’s mind.
Jay Conner:
Yeah. Well, a good way to start answering that question. David is let’s define what private money is. Okay. Who a private lender is private money, private lenders. We’re doing business with individuals, human beings, just like you and me. We’re not, we’re not doing business with any kind of institutions or, or banks or mortgage companies. We’re doing business with individuals that have either investment capital or, and or retirement funds such as already in a pension already in a 401k already in a Roth, et cetera. They’ve already got retirement funds and they’re looking for higher rates of return that are safe and secure. And so we’re doing business with individuals. And so as I mentioned a second ago, in fact, right, let me just gimme an example right now here today, Carol Joy and I have, we’ve got 47 private lenders that are loaning money to us on our deals that we move from deal to deal to deal.
Jay Conner:
We got about $8 million in private money and funding that we, you know, use for flips. Some is, you know, buy and hold where we sell a lot of homes on rent to own and help people own a home. Whereas otherwise they couldn’t. So anyway, these people that, of these 47 people, David, not one of our private lenders had ever heard of private money or private lending, none of them have had heard of self-directed IRAs. Now, the reason that’s so important is because what people can do is if they have current retirement funds, they can move those funds over penalty, free tax free over to a IRS self-directed IRA an an IRS approved self-directed IRA company also known as a third party custodian. And then they can actually loan out those retirement funds get high rates of returns safely and securely. And here’s, what’s so cool about that strategy.
Jay Conner:
People can earn an unlimited amount of money returns on their investments by loaning to us, to real estate investors, at least tax deferred, depending on the type of retirement account they’ve got at least tax deferred, if not tax free, if it’s an Roth IRA. I mean, and for example, I’ve got one private lender. His name is Al I’m not giving out his last thing, but Al okay. So Al in just one year earned $65,000 as one of our private lenders tax free in his steal for IRA account. So that’s who a private lender is now, where do you find these people? I get that question all the time. Where do you find these private lenders? Well, there’s three primary categories or places that if you will, where private lenders are, the first category is what we call our warm market or your warm market. Those are people that you got some kind of connection with, or relationship with already.
Jay Conner:
The second category of private lenders are what we call your expanded warm market. Now, what I mean by that is how can you increase your circle of influence and expand it quickly? I say, go to where the money is, the more money you wallow in, the more money sticks to you, right? So your current connections, your new connections, how do you do that? And then the third category are existing private lenders. So these are, these are individuals that are already loaning money out to other real estate investors. And the question is, well, how do you find them? Well, when I started in private money back in 2009, I hired my real estate attorneys paralegal to search our local court records, looking for deeds of trust. It’s either a mortgage or deed of trust or North Carolina. It’s a deed of trust that co lateralizes the note that the lender has loaned out to us real estate investors, but just looking for individual names, not companies or LLCs or institutions and having notes that are on public records, secured and collateralized by needs of trust.
Jay Conner:
So that’s how I started locating them locally. I’m in such a small area though. We didn’t find very many to start out with. And so we actually developed a very sophisticated software called the private inner data feed. And in this data feed that my students have access to. We update that every month and we get every private lender note that’s closed in the United States. We get their contact information, the interest rate they’re being paid, the range of investment that they’re working with. So we have that data feed, but another really good place to find them are at self-directed IRA company, networking events. Here’s an, here’s an interesting statistic, David, approximately 70% of all account orders at, at that account owners that have an account at a self-direct IRA company are looking for real estate investors and opportunities to alone their money out too. Hmm. These, most of these people that have self-directed IRA accounts, they’re interested in real estate, but they want to be passive. They don’t want to go find the deal, chase the deal, negotiate the deal. If rehabbing is needed, they don’t wanna oversee that they don’t wanna sell it. They just wanna sit back and earn money, you know, just safely, securely and hassle free. So it’s a beautiful thing. It ends up being a win-win relationship for everybody.
David Richter:
Awesome. No, I love that. That’s there’s the secret right there is where to find them who they are and then taking care of those people and making sure that you know, that you are that good steward of what you’re doing there. So that was great, great info, great places. And then I think if you’re listening to this, now you could go out there right now and find someone. And I love I I’ve heard you give talks before Jay. So how do you approach someone when you want to, you know, talk to them about private money? Cuz I, I absolutely love your answers when you give when you did this.
Jay Conner:
Well, here’s the deal. It all starts with framing and, and how you’re looking at this when you’re talking with people. So interestingly enough, David, I’ve never asked anybody for money. I’ve never asked him for money. They say, Jay, how do you get $8 million in private money to use at your disposal? And you never ask any money, ask for money. So again, and I said it a moment ago, I teach people what private money is. I teach ’em my program. I teach ’em you know, the, the interest rate they get how they’re protected, how they can get their money back early in case they have an emergency, what’s their minimum rate of return. How are they protected? You know, are they named on the insurance policy? I, so the entire program takes maybe 20 minutes to explain the program very simply as to how it works.
Jay Conner:
And so I’m, so it all starts, it all starts with a perspective of having a servant’s heart and serving these people. So, I mean, as I said, these people have never heard of this. And quite frankly, yes, it is a win-win, but they need us more than we need them. And here’s why there’s more money available today than I’ve ever seen before. In fact, I got a problem. It’s a good problem. But I got over a million and I have dollars right now. What I call sitting on the shelf waiting to be deployed for, you know, into, into the next deals. And so I never ask for money. I teach people and once they learn what this, what private money is now, they’re chasing me. I mean, they’re wanting to know, well, how do I get started? What do I do? Do I write you a check?
Jay Conner:
No, you don’t write me a check. They don’t write my company a check. I just say, look, you just tell me the range of investments you got to work with and I’ll go find us a deal to do so I’m not raising money for syndication. I’m not raising money for a fund. Obviously, you know, you and I have got a lot of friends that do that. Mm-Hmm <affirmative> they raise money. They raise money for funds and that’s all well and good, but I’m not brokering money. Okay. and I got, and I got great friends that do broker money, right? Mm-Hmm <affirmative>, that’s just another source of funding. But every deal that we do with a private lender, that money that they loan to us, that money they loan to us is secured by a specific property that we are buying and investing in.
Jay Conner:
I mention, I mentioned a second ago, they don’t send me money. You know, they wanna say, can I write you a check? No, what they do is they tell me how much they gotta work with. I go find a deal for us to do as soon as possible. Then they wire the funds to our real estate attorney, our closing agent. And then after the closing funds are dispersed. So another example, David of how I’ve never asked anybody for money. So I teach ’em about it. They want to get involved. When can they start? Well, here’s another example of how I never ask anybody for money. Someone has, let’s say for example John, one of my private lenders for example, has, you know, got $200,000 ready to go and he’s waiting for me to come back with a deal. Well, David, I never call up John or any private lender and say, Hey, I got this deal.
Jay Conner:
Do you want to do the deal? That’s the most stupid thing I could ever ask. Of course they want to do the deal. They’re waiting for the phone call. I call ’em up. And I tell ’em four things. Number one, John, I got great news for you. Of course, after a little bit of chit chat, but I got great news for you, John. I can now put your $200,000 to work for you. I have a house over in Newport. The after powered value is $300,000 and 200 is required to fund the deal and closings. Next Thursday, you need to have your funds wired to member estate attorney by next Wednesday. End of conversation. <Laugh> other than they’re all happy. Yeah. And so, I mean, it’s like if I ask John, do you want to do the deal? Now? He’s thinking, well, maybe there’s some reason I shouldn’t do the deal. Right. Well, I mean, they already know the program like that. They’ve been sitting on the edge of their seat for a couple of weeks or maybe three weeks at the most four weeks waiting for the phone call that you can put my money to work. So again, it all comes down to serving teaching, instructing and leading these people. If that makes sense.
David Richter:
Yes. Makes total sense. So that, that was incredible. I love hearing how to talk with the people, where to get the money and how to frame it. Like you said, because they, there is a lot of money out there looking for the deals and you just have to be able to provide that value to them and be able to say, here we go, this is how it’s, this is the program and how it’s going to work. So I love, I love hearing that from you. This is the type of stuff too. If you’re listening to this right now that Jay teaches go to his website, get that information. If you wanna be working with more private lenders. So let’s switch gears just a little bit before we end. You are working with a lot of money. Now you have a great team. You’ve got a great system, a great process. You work with a lot of private lenders, 47 of them. You have 8 million that you’re working with. Can I ask you what early lessons did you learn about money and how does that compare to what you think about money today?
Jay Conner:
Hmm. Well, that’s a much broader question and it’s a great question. I’ll just share with you the first thing that comes to mind. Yeah,
Jay Conner:
My attitude, my attitude towards money goes back many, many years ago, back to when I was in my twenties and I would have opportunities, sometimes multilevel marketing opportunities, et cetera, come across. And here’s what I learned. And I mean, I didn’t learn it or experience it just one time. I experienced it over and over. Like I should not have experienced this like more than one time, but I’m a slow learner sometimes. So, you know what I learned, I learned every time I got involved in an opportunity and my only, or primary motivation to get involved was to make the money. You know what happened, David? Right. I failed miserably every time, every time. And so the lesson I learned about money is if money is your primary motivation in doing anything, if you experience what I experienced, that is not going to be a long term venture at all.
Jay Conner:
So what I, so my experience has been find that thing that you’re passionate about. And, and I was, and I still am passionate about the real estate investing business to where, I mean, I enjoy seeing, you know, lemons turn into lemonade like houses. I still love watching that process, right. I’m not involved in it day to day, but I love, you know, I love seeing, you know, the the caterpillar turn into the butterfly, if you will. Yeah, that’s really, really cool. But when my, and you know, my lands, the first year of using private money, we netted over a million dollars in this, you know, little teen, tiny market, but the money cannot the money. I mean, I know the old joke. If money don’t make you happy, you don’t know where to shop well, that, that’s sort of a funny joke, but here’s the deal.
Jay Conner:
And it’s gonna sound David, I apologize, but it’s gonna sound so cliche, but money does not fulfill money in and of itself does not. What you do with your money can give you fulfillment. If part of what you’re doing there is serving other people. It’s a great tool to serve other people. And so I look at money as it’s a great measuring yard stick as to how well you or how well your business is doing, but fulfillment takes place right here in the heart and it takes place and it takes place by making a difference in other people’s lives. You can’t buy that. You can only give it away.
David Richter:
Awesome. Now that’s amazing. So that was, that was some great info right there about early lessons to where you are now, just that thought process. And it is it’s about those values. It’s about how does the money line up with what your purpose is and are you fulfilling that? And are you helping other people? So that was incredible. So LA last couple questions here. Is there anything else, any other advice last minute advice that you wanna give to our audience about anything in real estate investing?
Jay Conner:
Any other advice? Well, how about I do an ask? So I would just love to have the opportunity to make a difference in your audience’s lives. And that is you got somebody or people that are, that are listening here to the podcast and they really want to, they’re either trying to get their first real estate deal, or they just want to grow their real estate business, or maybe they are a wholesaler and they’ve wholesale deals and they’ve received assignment deals, assignment fees, but they wanna stay in some of the deals and have those options. Well, the best way that I can serve your audience again, is to give them my book, where to get the money. Now, this, this explains the five easy steps of how I started out using private money and how, and how I still do today. And they can get that specifically right at J Conner, J a Y C O N N eer.com/free book, free book. But if they forget that last little bit, as you say, they just go to J con.com and they’re the book is for free just cover shipping and I’ll autograph it and ship it right out. It’ll make a difference in their business.
David Richter:
Awesome. Yes, it will. So that’s how you can provide value to him. He’s provide, Jay’s provided a ton of value here. So thank you, Jay, go to J con.com. If you’re listening to this and he’s got his book there and a lot of other things that training and other, if you want to learn more, if you wanna learn more how to work with private lenders, if you want these, you know, and you still have that feed, correct, as far as like private lender feed and like the contact info. And that’s another thing that you still do. So if you’re listening to this great contact, if you want to learn more about private lending, he’s already given a bunch of great information here. If you just took what he said today, you will, you could go out there and get either your first deal done or your hundredth deal done with a new private lender and maybe change their life as well too. So there you go. Thank you so much, Jay, for being on today. I think you provided a ton of value. So thank you for being on and providing that to our listeners.
Jay Conner:
David, thank you so much for having me.
David Richter:
Thank you so much for listening to today’s show. If you found this episode valuable, could you do me a quick favor? Could you give us an honest rating within iTunes and be honest, you could say whether you liked it or not. And obviously with iTunes, the more reviews and ratings we have, the better it is for other people that are searching for a Profit First and a podcast. So we’d love to be ranked on there and that’s thanks to your help. So we would really appreciate that if you would like to go give us a rating. Also, if you’re looking to connect with us further, I would highly recommend checking out our Facebook group Profit First for real estate investors. And that’s literally what it’s called. So you can type in Profit First for real estate investors, and you’ll be able to find <laugh>, you’ll be able to find our Facebook group right there.
David Richter:
So come join active real estate investors who are supporting each other and growing their businesses and profits together. That’s what that group is all about. The link should be in the description below. And if you’re interested in working with us in implementing Profit First in your real estate business, we offer coaching and guidance. So if you wanna work with someone who’s actually Profit First certified and who works right now, currently with real estate businesses, you can actually go start your application process by going to simpleCFO.com/apply, or just go right to simpleCFO.com. And there’s an apply button right on there. If you wanna actually start your Profit First journey with someone who can actually walk you through those step by step and help, you know, and grow your cash flow. Thanks again for joining us for another episode of the Profit First REI podcast. See you next episode.
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