Raising Private Money: Insights from Jay Conner, Richard Canfield & Jayson Lowe
In episode 177 of the Wealth Without Bay Street podcast, hosts Richard Canfield and Jayson Lowe dive deep into the world of private money, a crucial aspect of real estate investing. Joining them is guest Jay Conner, an expert in private money lending and raising capital. This episode offers valuable insights into private financing, attracting private investors, and the art of securing private equity for business ventures.
Understanding Private Money Lending
Private money, as explained by Jay Conner, is fundamentally different from traditional lending sources like banks and institutional lenders. It's about borrowing from individuals, tapping into private funding sources that offer more flexibility and control to the borrower. This form of financing is especially crucial for entrepreneurs and real estate investors who seek private money for business investments.
Private Money For Real Estate with Jay Conner
Jay Conner's story is particularly inspiring. Initially struggling with traditional financing methods, he discovered the power of private money lending. His approach to raising private capital, avoiding hefty down payments, and bypassing the conventional banking rules, marks a significant shift in real estate financing. Conner’s ability to raise $2,150,000 in a few short months exemplifies the potential of private investment in real estate.
Private Financing & Private Funding of Deals
A key takeaway from the podcast is the importance of education in the realm of private money. Conner emphasizes the need to understand the nuances of private money lending and investment. For those new to private equity or raising capital, it's not just about finding funds but also about understanding the terms, risks, and opportunities involved.
How To Raise Capital? A Skill Beyond Money
The discussion highlights that raising private money is not merely a financial transaction; it's about building relationships and trust. Conner's experience illustrates that successful private money lending hinges on transparency, clear communication, and mutual respect between the investor and the borrower. This approach is particularly appealing to private investors looking for more personalized investment opportunities.
The Future of Private Money
As the podcast progresses, the conversation shifts towards the future of private money in a post-COVID world. With a surge in available capital and a growing interest in real estate investment, the opportunities for private funding sources are expanding. This scenario presents a fertile ground for both seasoned and aspiring investors to explore private financing avenues.
Episode 177 of the Wealth Without Bay Street podcast, featuring Jay Conner, Richard Canfield, and Jayson Lowe, is a treasure trove of insights for anyone interested in private money, private equity, and raising capital. Their combined expertise offers a comprehensive guide to navigating the private financing landscape, making it a must-listen for aspiring real estate investors and entrepreneurs.
If you're looking to delve deeper into the world of private money and expand your knowledge in raising capital, exploring such podcasts can be an invaluable resource. Remember, the journey to successful private financing starts with knowledge and understanding.
Wealth Without Bay Street 177: Raising Private Money with Jay Conner, Richard Canfield & Jayson Lowe
If you're considering entering the exciting realm of real estate investment, you have the unique opportunity to grow on the side of private lending. Many individuals are eager to loan their funds from their investment capital or retirement funds to renovate properties for rental or resale.
What better way to learn about it than from the Private Money Authority himself – Jay Conner?
In this episode, Jay tells how his breakthrough came from a crisis, enabling his strategic approach to purchase and sell properties, yielding profits of at least $50,000 per deal. He teaches how to raise all the money you need and want without shelling out your own or go looking for credit.
WATCH The Full Episode here: Raising Private Money with Jay Conner
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IN THIS EPISODE, YOU WILL LEARN:
[02:33] Introduction: Learning real estate investing from big mistakes
[05:02] What is private money?
[08:56] Jay’s inspiration for Where to Get the Money book
[10:40] The #1 reason that holds people back from doing real estate deals
[16:28] 3 categories of where to find these private lenders
[19:05] How to raise money successfully: No chasing and no begging
[27:17] Conversation starters & did-you-know questions to attract private capital
[30:31] How to become a really good lender
[33:29] Only borrow 75% the amount of the after repaired value
[41:41] The business and advocacy of real estate investing
- Huge capital out there is looking for really high-caliber opportunities.
- The biggest opportunities arise when the biggest problems show up.
- In the world of private money, there's no rejection.
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Transcript from the episode:
[00:00:00] Richard Canfield: You are listening to the wealth without Bay street podcast, a canadian guide to building dependable wealth. Join your hosts, Richard Canfield and Jason Lowe, as they unlock the secrets to creating financial peace of mind in an uncertain world. Discover the strategies and mindsets to a financial future that you can bank on.
[00:00:22] Richard Canfield: Get our simple seven step guide to.
[00:00:25] Richard Canfield: Becoming your own banker.
[00:00:26] Richard Canfield: It's easy.
[00:00:27] Richard Canfield: Head over to Sevensteps CA and learn exactly the learning process required for you to implement this amazing strategy into your financial life. That's seven steps ca.
[00:00:38] Richard Canfield: Well, our guest today started out in real estate investing, and like many of us, he did it all the way, all the wrong way. And this is a common thing that happens with real estate investors. He kind of felt like he was taken to the slaughterhouse, but cut. He had to come up with all the big down payments, he had to pay the loan origination fees, and most importantly, he had to play by everyone else's rules. Now, I know our listeners aren't a big fan of that. He hated it. He felt like he was owned by the bank. He was out of control. He was stressed out. Then he realized that he needed to combine all the best aspects of the research that he had done and create a system. He refined that into a formula. And that formula, when he first tested it on the very first individual he tested it with, he raised $250,000 in private money. It blew him away. Just how easy it was. Within a few short months, he had raised in private money for real estate deals. 2,150,000. That is epic. And we are so excited to have Jay Connor with us today, the private money authority. Jay, what a wonderful story. You've been in real estate a long, long time. You've got so much value to give to our listeners. Not known for those who are real estate investors or interested in real estate investing, but really just around the understanding of how you can go about raising private capital for the things you need to get implemented, whether you're a business owner or what have you. So welcome to the program, and we're so grateful to have you.
[00:01:55] Jay Conner: Richard, Jason, thank you so much for inviting me along to talk about what I'm most passionate about, and that's private money. I mean, private money has had more of an impact on mine and my wife Carol Joy's business for the past 20 years. And I can't wait to share how fast you can get it and how easy it is to attract it. You know what's so funny? I've never asked anybody for money. I got eight and a half million dollars of private money to fund my deals. I've never asked anybody for money. I've never pitched a deal. Can you believe it? And they ask me all the time, well, how in the world do you get your deals funded? I can't wait to talk about it.
[00:02:32] Jayson Lowe: Well, and for our listeners, we can start with the basics in terms of what is private money? Is it money that just stays in the house with curtains drawn saying, I don't want to talk to anybody private.
I'm not public, I'm private money.
What is private money? Now, anyone in the real estate investment realm will have either heard that term used or maybe had some exposure to it. But at a you and me level, a simple level, what is private money?
[00:03:07] Jay Conner: Yeah, so private money is money that is borrowed from a human being, from human beings. We're talking about doing business with individuals just like you and me.
It's even easier to understand what private money is not. So private money is not institutional money. Private money is not any kind of a bank. Private money is not a hard money lender. Now, I've got many friends all across the nation and in Canada that are hard money lenders. Most of the time, a hard money lender is a broker. And what the hard money lender does, or broker does is goes out and raises private money from those individuals to invest into their hard money lending fund. And then the hard money lender loans that out to us real estate investors. But in this world of private money, we're doing business directly with the individual. So a private money lender is an individual who loans their money from either their investment capital and or their retirement funds and or retirement funds to us, the real estate investor. So it's a one on one transaction from us, the borrower, the real estate entrepreneur and the private lender, or private lenders.
[00:04:24] Jayson Lowe: And from what we've been hearing, even within our own network and community, there's a lot of capital out there that is looking for really high caliber opportunities.
[00:04:39] Jay Conner: You are so right, Jason. And here's the exact stats before COVID Now I'm just talking in the US. I'm not talking about Canada because I don't know the Canada statistics. But I can tell you the US statistics. Prior to Covid, there was $18 trillion in cash just in retirement accounts. I'm not talking about people's just liquid capital, but there was $18 trillion in cash sitting in people's retirement accounts wanting to loan money, private money to real estate investors. Right now on this side of COVID $31 trillion in cash sitting on the sidelines available. And here's the deal. The people, the individuals, don't know what to do with their money. So it's us, the real estate investor, entrepreneur, it's our ethical and moral obligation to relieve them of that problem of not knowing what to do with their money to where they can get a high rate of return safely and securely.
[00:05:41] Jayson Lowe: Excellent. Excellent. And this is actually a great time to share what you were expressing to us at the beginning of the program. Before we started recording, you mentioned that you wanted to be able to provide listeners and viewers with an opportunity to download a complimentary copy, which again, we're so grateful for. Thank you sincerely.
[00:06:03] Richard Canfield: And that's what we love about the.
[00:06:04] Jayson Lowe: Guests that come on our show. They're always giving. And so we thank you sincerely for that. And we're going to put a link in to download a copy of this ebook that is undoubtedly going to be chocked full of value. And Jay's holding that up on the screen right now.
[00:06:21] Jay Conner: Why?
[00:06:21] Jayson Lowe: Private money will skyrocket your real estate business and help you build incredible wealth.
Free. Download it, read it. I promise you, you're going to get a world of value from it.
[00:06:34] Richard Canfield: Yeah.
[00:06:34] Jay Conner: And Jason, the URL link is really simple that your listeners and audience and viewers can download this private money guide. To get on the fast track, just simply go to www.jayconner.com And I'm an ER, not an or so. Most connors are Ors. I'm an ER. So it's jayconner.com moneyguide. So. www.Jayconner.com moneyguide.
[00:07:01] Jayson Lowe: And what inspired you to write the book?
[00:07:04] Jay Conner: What inspired me to write the book was, first of all, I just think all of us are created to give back. And my journey, mine and my wife's journey through our real estate investing business, we've been full time in single family houses. We've done commercial deals as well since 2003. And the first six years, Jason, that we were investing in single family houses, I relied on the local banks, I relied on mortgage companies. That's all I knew to do. And then something happened unexpectedly. And it was the biggest blessing in disguise that I've ever had since being in this business. And what was that? Something that happened that ended up being a blessing in disguise. Believe it or not, we actually still have hand phones or handsets and cords attached to telephones here in eastern North Carolina. Some people don't even know what that is. But anyway, I remember it like it was yesterday. In January of 2009, I called up my banker. His name was Steve. I had done a ton of deals with my banker for six years. And I learned very quickly in that conversation that my lines of credit had been closed, and I had two deals under contract with profits of over $100,000. And now, no way to fund my deals. I knew I had to find a better and quicker way to fund my real estate deal. So I learned about private money.
In less than 90 days, I raised over 2 million. So what inspired me to write this, I know from experience it is the money, it's the funding. That's the number one source in addition to knowing how to find the deals. But it's the number one reason. What holds people back from doing real estate deals is the money.
And so when I learned about private money in this world, we made our own rules. We set the interest rate, we set the term. There's no application process, there's no approval process. Your credit score has got nothing to do with it. And we tripled our business the first year. So I know from over the years, getting the money for your deals is the number one thing that holds you up. And we make a big impact here in local, eastern North Carolina, we've rehabbed over 475 houses. We've helped people with problems buying houses. But I knew that I could make a much bigger impact by writing this guide for people that can download it all over the US and Canada and even elsewhere. So what's my reason? My reason is now in a part of my life, I'm 62 years old now in a part of my life where significance and impact is more important than the money and anything else.
[00:09:51] Richard Canfield: That's one of the reasons why we have you on the program, Jay.
That's our mo around here. So we're big fans of that and how people show up and how we like to show up for our listeners, for our clients. And so a lot of synergies there. What I really love about what you share about your story, that moment in time, is something that would cripple if there was a doppelganger of Jay receiving that, having that same phone call with the banker, and he just hung up. The thing is like, oh, what am I going to do? I'm going to let that $100,000 of profits disappear. And I guess I'm out of the real estate business now because it just got too hard. So there's a whole nother track of a story that could have been, but that didn't happen because you chose the path of opportunity and you went to work to figure it out. And that's a unique signifying thing that I think our listeners should really take heed of. Opportunity shows up for you, and usually the biggest opportunities are when the biggest problems show up, whether it's your problem or someone else's problem. Once you can overcome and solve that problem, now you're on the other side. And that's when the sun shines very bright by doing that. So I really appreciate that story. The second thing that really captured me, and I love what you said, that that time frame of 2009, the reason those credit lines froze, happened pretty much across the board at a lot of the major banks all across the United States. It had to do with the aftermath of the financial crisis and the bailout situation, and the property values were declining from an overinflated scenario. So there was this kind of whole ebb and flow trickle effect that impacted you on your deals in an uncharacteristic, unsuspecting way, if I'm being so bold to say it that way, and you weren't the only one impacted. Hundreds of thousands of people were impacted that way. And so we find ourselves in an interesting situation where we're hearing some interesting stories about banking collapses and buyouts and things happening presently at the time of this recording. And so there's a little bit of that similar fear taking place again here, both in Canada and the United States. So I'm curious, as you look at the opportunity for building the skill set of raising private money today, even in comparison to before. COVID what would you say about its value and its importance now, given the current economic climate?
[00:12:07] Jay Conner: Given the current economic climate, as there's more liquid capital on the street? And when I say on the street, I mean in people's back pocket, in their checkbook, there's more liquid capital. Now, regardless of your political affiliation, here's the facts. There's been more money printed in the basement of the White House in the current administration than ever before. So you've got all that. I mean, that's contributed, of course, to the inflation situation that we have. You got all this money. Well, the flip side benefit of that is you got all this money and people are looking for a place to put it. So how does that tie into your question? How do I raise money? I've never asked anybody for money. Well, what I do is I put on my teacher hat. The traditional way of borrowing money is you go to the bank or the mortgage lender or the hard money lender, and you get on your hands and knees and you put your hands underneath your chin, you go, please fund my deal, please fund my deal. Right? Or I'm going to die if you don't fund my deal. Right? By the way, I know you all have heard it. I digress here for a second. I know you all have heard it, but for goodness sakes, I'm sick and tired of the gurus out there saying, oh, just get the deal under contract. The money will show up. Have you heard that before? And I want to go, where is the money going to show up? Is it, like, going to rain out of a cloud? I can tell you why that stuff and that junk is taught, the reason that junk is taught of getting the deal under contract, the money will show up is because somebody's selling a course on how to find a deal. That's why they're saying that. So that's why I say, get the money lined up first. There's always going to be deals. Always going to be deals. So get your funding line up front. Now I'll get back on course. So back to that traditional way of raising. I mean, borrowing money is you go to the bank and you beg, right? So in this world, there's no begging, there's no chasing, there's no selling, there's no persuading.
Instead of asking for a mortgage, we are offering a mortgage. Right? So I teach people. That's how I started.
I'm going to have those two deals undercover, by the way. I closed both of those deals with private money.
[00:14:29] Richard Canfield: Right?
[00:14:30] Jay Conner: And so I teach people, there's three categories of where you find these private lenders, people you got some amount of association with or in your cell phone. Email is social media. And then I teach people how to expand their warm market. Your network is equivalent and correlates to your net worth. And then there's existing private lenders. We'll talk about how to find them if the show allows time. Anyway, I started teaching people what my private lending program was without trying to pitch a deal. I started teaching the opportunity. So I put my program together, right? What's the interest rate? I'm going to pay a straight 8%. No origination fees. I'm going to pay 8%.
I'm going to back that note. I'm not going to borrow unsecured funds.
So I started teaching the program, and it takes 20 minutes to teach the program that I've put together to people that you've got some kind of relationship with. And then by the end of that, I promise you, if they've got investment capital and or retirement funds, they're going to be saying, well, what do I do, just write you a check? No, they don't write you a check because we're going to back that note with the real estate. So they only wire funds either from their retirement account or their liquid investment capital directly to my real estate attorney or closing agent. Then we close. So how do we attract it? Teach, put on the teacher hat. What are you doing? You're serving. You see, in this world of private money, there's no rejection. You cannot be rejected if you're not asking for the money on a deal.
[00:16:03] Richard Canfield: Right?
[00:16:03] Jay Conner: So I'm teaching how they can get high rates of return safely and securely. They said, wow, I want to do this. Or if they want to use their retirement funds, I'll introduce them to myself to ready the IRA representative that I refer all my private lenders to. They're all set up to go. And then when it's time for them to fund a deal, I never pitch a deal. How in the world do I do not do that? I call them up. I say, I got great news. I tell them four things. I say, I got a house over here in Newport, North Carolina, with an after repaired value of 200,000. The funding required is 150,000. I know they got it. They already told me. And I'm closing next Friday. So you got to wire your funds next Thursday. I'm going to have my real estate attorney email you the wiring instructions. You notice I didn't say, do you want to fund the deal? That's the most stupid question in the world I could ever ask. Of course they want to fund the deal. They're waiting for the phone call because they told me. And particularly if I introduced them to the self directed Ira company, and they've transferred their money over to the self credited ra company, they're not earning any money until they put it to work. They're counting on me to put their money to work. So, you see, what's the first step in being successful in attracting private money?
You got to own the real estate between your ears before you can own the real estate out there. It's the mindset. No chasing, no begging. I'm teaching. Here we go. I got the money lined up. All right, let's get the deals funded.
[00:17:31] Jayson Lowe: And what do you see? Some of the common mistakes that people make when they first kind of forge their way into lending their capital.
How often have you seen people make mistakes in that space where.
[00:17:51] Jay Conner: From the standpoint of the private lender, from the standpoint of the private lender, number one, if you're interested in being a private lender. And I mean, this money guide is written for the real estate investor that wants to borrow private money and teach private money. On the other hand, if you want to be a private lender and loan your money out, number one, don't ever loan money out unsecured.
[00:18:16] Richard Canfield: Yeah. No promissory notes.
[00:18:18] Jay Conner: Yeah. I mean, you can, it's legal, right. But for goodness sake, your recourse is a piece of paper is your recourse. Right. So secondly, who are you doing business with, right? I mean, how well do you know this person? I mean, the operator, the guy, or the gal running the show, really, from the standpoint of a private lender, you're really not investing in that piece of real estate. You're investing in that person is really what you're doing, right? So where's your level of trust? Where's your level of confidence?
[00:18:58] Richard Canfield: Right?
[00:19:02] Jay Conner: Pretty much. I'm not going to be, and I'm a private lender myself, right? Private lending is beautiful. I mean, it's passive. I don't have to go find a deal. I don't have to negotiate a deal. I don't have to rehab a house. I just sit back and watch the money get printed. But who am I going to do business with? I'm going to do business with, first of all, of how well do I know them? I mean, I'm obviously not going to take a phone call or an email from somebody that I don't know and they pitch me a deal and I'm going to invest in it. I don't care how lucrative it looks, right? Because I'm really not investing in that real estate. I'm investing in that person and their knowledge, and they know what's going on. Now, here's another red flag on the other side of the coin, big red flag for you real estate investors, whether you're brand new or seasoned or whatever, let me tell you one of the biggest scams out there on the Internet right now, private money scam. And here's the private money scam. You get an email or it shows up in your newsfeed or whatever. And here is a person, an individual, not an institution, private lender. Here's Max money, Sam whatever his name is, and he's offering you money at only 3%. Well, there's a red flag right there. Who's going to loan you money at 3% in today's economy, right? So he's going to loan you money at some ridiculously low rate, and he's going to say, no appraisals no this, no that. Know that I'll fund you deal in three days, blah, blah, blah, blah, blah, blah, blah. And here's the catch.
You just got to send me $1,500 application fee, and I can get you all set up within about 48 hours. Okay? You send that $1,500 moneymax, Sam is gone.
But here's how you know. You never, as a real estate investor, borrower. You never did I say never as a borrower, send money to a lender before closing.
You never send them any money before closing. There's no application fee and all that mess, right?
My lands the way I do private money when I close on a deal, I never take any of my own money. Down payment money to the closing table anyway. I always bring a check back home. I'm not taking money to the closing table. And how do I do that? Because I borrow more than I need. Right? Because there's a lot of equity in these discounted houses that we buy. But while we're talking about red flags and how to protect yourself, private lender, you're investing in that person borrower. Don't you pay no junk application fee up front.
[00:21:52] Richard Canfield: Before you go to closing, become your.
[00:21:56] Richard Canfield: Own banker and take back control over your financial life. Hey, is this even possible? You may be asking, can I even do this? Well, you better believe it. In fact, it's easy to get going. So easy that we've put together a free report. Seven simple steps to becoming your own banker. Download it right now. Go to sevensteps ca. That's seven steps ca. Now let's get back to the episode.
[00:22:25] Richard Canfield: I'm glad to hear your commentary on things like the promissory notes. I mean, when a real estate market starts getting really hot and things are happening, everyone who wants to get in on the deal, whatever the deal is, and then that's what you start to see happen. I've even heard of a lot of even real estate coaches who are then doing deals with people that they're coaching, but they're doing the deals, raising private money from students, using promissory notes, not even securing on title. And if you're coaching someone to be successful in real estate and you're not even coaching them to take security on the deal that you're helping them get involved with, I mean, that to me is a pretty big red flag.
[00:23:01] Jay Conner: You reckon?
[00:23:03] Richard Canfield: Well, I love it. One of the thing I'm really curious about is you mentioned again, seasoned investors versus the newer investors. Just because we have so many listeners on our program, some people who are just getting excited about getting into real know, if you're new, maybe you've got one or two or three doors. You're kind of at that state, and you're looking to grow. Maybe you've tapped out your current banking relationship. You already had that call with Steve, and Steve's like, I can't get you any more money, and you're looking at moving into the private money space.
What would you say about helping that person have the confidence? Maybe because they're still new in the game, maybe they don't have enough years under their belt of experience.
What kind of tips and tricks would you give them to help them get what they need so they can start having those teaching conversations appropriately? So again, they're not chasing, not asking for capital, but they're setting themselves up in the best position so that the capital will begin to flow.
[00:24:01] Jay Conner: Richard, I love your question, because there's one word in your question that is critical. The word you said was confidence.
So, first of all, nobody's going to loan you money for your real estate deal unless you believe in yourself and your deal and your private lending program to start with. I mean, you got to believe what's going on here. You got to be passionate, right? You got to be passionate about what you've got going on. Look, people are attracted to passion, right? People are attracted to people that know what they're talking about. So you better know what you're talking about. Well, how are you going to know what you're talking about? You need to know your private lending program, which is duplicate mine, that you teach other people. You need to know your program inside and out. Like, you can just talk about it in your sleep right now. I've got a beautiful PowerPoint that if you can read, it works, right? And it takes like, 20 minutes to go through it. And it teaches the private lending program. But if you're eating fried chicken and pork barbecue and coleslaw at Smithfield's barbecue chicken joint after church on a Sunday, you ain't going to have your PowerPoint and your laptop on the fried chicken table, right? So you need to be able to have just this nice, little casual, fluid conversation about what you know. I love did you know questions. I love “did you know” questions. It's a great conversation starter about private money. For example, here's one of my favorite did you know questions. So, Jason, you look like you would enjoy fried chicken. I'm not sure. But anyway, let's say you and I are hanging out there at Smithfield's fried chicken. And we're eating along. And let's say you don't know, Harley. I mean, you know, I invest in real estate or whatever, but you don't know how I fund my, you know, we're right know, chomping on a chicken leg and we're talking about what's going to happen this coming week. And then I say, Jason, did you know there's a way that people can earn unlimited money per year tax free? And of course, you're not going to know the answer to that question because where in the world can you go and earn money, unlimited money, tax free? And of course, you almost say, what? How do you earn tax free money? Well, my next, did you know? Question is my next question. I said, well, have you ever heard of self directed IRAS? And of course you haven't. 99% of the people walking around ain't never heard of this ever. And I'll say, well, and now here I go.
Now the door is open. I opened the door, you stepped in, and now I can say, well, you know, self directed IRAS is a great vehicle that hardly anybody knows about. Financial advisors don't know about it because there's no commissions in it. If you have got retirement funds, you can transfer them over. And if you've transferred over and you got a Roth IRA, you can be a private lender and invest in real estate and earn unlimited money per year with no tax effect, no penalties, no nothing. And so we talk about self care dollars.
The did you know? Questions. So back to the question. Brand new real estate investor hasn't raised any private money. Number one, get you thinking straight. You're not asking, you're not begging, you're not chasing, you're teaching. Right. And I'm talking about in your warm up, we haven't talked about existing private lenders. You don't teach existing private lenders anything because they already know what a private lender is. Right? You ain't teaching an existing private lender your private lending program because they're already doing it.
[00:27:49] Richard Canfield: Right.
[00:27:50] Jay Conner: So you teach people in your warm market, teach them your program.
And hey, looky here. Now, don't make this mistake.
Don't be teaching your potential private lender your program. And in the same conversation, talk about the House you got at 411 Chatham street that's under contract that you need funded. You're already begging and sounding desperate and you didn't even mean to because I told you not to sound desperate. Well, you're already desperate because you combined the conversation of the program and now you got this deal in the contract. So we separate. How do you think I learned all this stuff? Because I screwed it up to start with.
[00:28:33] Richard Canfield: If you learned you have this unemployable shirt on, but I bet you in your closet there's a school of hard knocks shirt that you probably have as well.
[00:28:41] Jayson Lowe: So Richard, one of our late mentors, he said, this was years ago. He said, you know how you become a really good lender? And we said, no, how do you become a really good lender? He said, be a bad one.
[00:29:00] Jay Conner: Exactly.
That's how you become a really good one.
I don't know how we got off on that. But anyway, we separate the conversations of teaching the program, and then they tell us how much they got. Is it retirement funds? Do we need to introduce them to our company that we recommend to use as your self directed IRA, third party custodian? Anyway, so they got their money lined up to go, I know how much they got.
And then I call them up and I do that little script that I did a few minutes ago, and I say, I got great news. I can now put your money to work. And I'm not asking them, do they want to fund this deal?
It's just a natural progression. I taught you what private money is. You love it. You're all excited. You want to get going, right? By the way, they always have more than they tell you. I got a private lender by the name of Terry. That's all the name I'm going to give because I know how you are. Right? So I have this private lender, and Terry has been loaning me money for quite a while. And that's all she had. That's all she had until Tuesday of this week. Lo and behold, here's another $250,000. How fast can you put it to work? Well, I put it to work today, and I brought home a check for $50,000 because we always bring home a check when we buy. Who wants to get paid to buy houses, right? So, anyway, back to that confidence thing. Know the program you're teaching, you're not asking, you're not begging. But, like, back to the fried chicken story. It's got to be a conversation, right? And look, it doesn't take long to get this down. There's only 14 talking points, and all of them are short, right. That you just talk through the talking points. And there you go.
By the way, I'm sorry this comes to mind. And again, here's the deal.
I hear this all the time. I know you all heard it. I hear this all the time. New real estate investor says Jay Connor. Who in the world is going to loan me money? And I've never done a deal before in my life.
[00:31:23] Richard Canfield: Right.
[00:31:24] Jay Conner: Well, here's the answer. And here's a writer downer, as we say here in North Carolina, if you don't pay them, the property does. Now, they don't want the property back, right? They don't want the property. That's why they're a private lender. But you see, we don't borrow more than 75% of the after repaired value. I didn't say 75% of the purchase price. And by the way, all that's in the money guide for the download. But since we only borrow 75% of the after repaired value, then if you screw up, and you're going to. You're going to screw up. I mean, I've done 475 rehabs and they never come in on budget. So that's why the magic is not in estimating repairs. The magic is in the offer that you do on the house. But I digress. But if that deal goes sideways, then your private lender has got a ton of equity, right? We call it a 25% equity cushion to where, if the house needed to be liquidated, then your private lender can be made whole. That's back to looking after your private lender. But let me also comment on what I just said, and that is, if you've never done a deal before, then for goodness sakes, don't do it by yourself.
Right? I don't care how many books you've read. I don't care how many seminars you've been to. You better have a mentor or a coach or a seasoned investor in your local market that will work with you on that deal. Hey, look, here's the deal. You're going to pay for your education one way or the other, and you do not want to pay to go to a seminar that you did not intend on going to, trust me.
[00:33:04] Richard Canfield: Yeah, I'm pretty sure Jason and I could both put our hands up in regards to the seminars that we've paid for unintentionally on our time frame. And what I love about this is that as people are listening to this episode as it goes live, obviously you might want to consider getting some stock in the fried chicken establishments that you know, anyone who's a listener that actually owns a fried chicken establishment, you can send the checks to Wealth Without Bay street. So we're happy to support your business in that, you know, as you're talking about that I could just picture that conversation happening, by the way, down in Eugene's fried chicken down in Alabama, which is absolutely amazing. We love that place. Shout out to Eugene's. So, you know what's really cool about this? Something that you centered on, you said several times, it's something that similar language to what we use when we talk about how we help people in our process. But you really emphasize the program. And I think to expand on that, I'm going to give you what I interpret as it runs through Richard's brain filter, and I'm going to shoot it back out and you just tell me if I'm on base or not. Jay, the program really is a set of guidelines and steps about how you go about doing your deal so that the deals themselves, when it comes to the raising of capital, are systemized.
They are similar systemized. In other words, real estate deal a and real estate deal b don't have different lending rules and lending this and lending that. So you've got everything systemized, whether it's the repayment, how the repayments works, the time frame of the loan, how long capital is tied up for, how you're going to go about delivering ongoing cash flow payments. All of that's part of the systematic aspect that's built into the program. Am I on track?
[00:34:47] Jay Conner: I wish I could have said it that clearly. Yes.
Your filter gave me beautiful nine and a half ph water. That was great. So, yes, that's it. Right? Because, and here's an example of what you just said.
I got Ray over here as a private lender, and then over there, I got Terry that I mentioned is a private lender. Guess what?
Ray's program with me is exactly the same as Terry's program.
[00:35:24] Richard Canfield: Right?
[00:35:24] Jay Conner: I don't negotiate, man. I've heard this, for goodness sakes. I don't negotiate on the rate that I'm going to pay. I am an equal opportunity borrower.
Okay? There's a writer downer. I never thought of that in 20 years till right now. There's an equal opportunity borrower, meaning everybody's got the same opportunity. And that way people talk. Right. And by the way, when you start attracting private money, which you will very quickly, I got students all the time getting at least $500,000 in private money in less than 30 days from just starting to implement. But the thing of it is, number one, they already have more that they always have more than they tell you. And they refer other private lenders, new private lenders to you. Right. But the deal of it is, yes, everybody's treated the same. The only thing different is two things. Only thing different is two things between private lenders. Number one is the interest rate I pay. So the interest rate is either 8% or 10%. So I pay 8% to private lenders that are loaning money, and their mortgage or deed of trust is in first position.
[00:36:35] Richard Canfield: Right.
[00:36:35] Jay Conner: Because you can have multiple private lenders secured by the same piece of property. So a junior lien position or a second position or second mortgage. I use smaller amounts of money, such as $50,000, 40,000 for rehab money.
[00:36:50] Richard Canfield: Right.
[00:36:50] Jay Conner: Well, I'll pay 10%. So it's either 8% or 10%, and that's just depending on the position. The program didn't change. The system didn't change. It was what position the note was in. And the only other thing that changes from one lender to the other is how often are they paid? And guess what? They get to pick. They get to choose how often they're paid. I mean, if I'm doing a fix and flip and I'm only going to be using the money for six to nine months, I'll say, well, you're going to earn the same money whether I write you a check every month or we just let the interest accrue and I'll just write you one big interest check at the end of the deal. But I've got some private lenders that are elderly and they need the monthly income.
I got one private lender's got a million dollars investment capital, $1 million, and he and his wife are retired school teachers.
[00:37:44] Richard Canfield: Right.
[00:37:44] Jay Conner: Well, guess what? They're living off of the million dollar invested with me. They're living off of that, along with their Social Security and a little bit of teacher retirement. But let me tell you what, they are living the dream, having a million dollars with me because they're getting those high rates of return. So anyway, yes, same program, same system. Everybody's treated equal.
[00:38:11] Richard Canfield: Love it. Yeah, very clear. Rich. Well, I want to thank you for coming on the program, Jay.
[00:38:19] Jay Conner: It's not over, is it? It's not already over, is it?
[00:38:22] Jayson Lowe: Time flies.
[00:38:24] Richard Canfield: You mentioned, and we're going off for fried chicken. Yeah, fried chicken. Not as going on that. Now, when you said that everything's the same for each duplicate, I heard in back of my head one of our mentors, the late R. Nelson Nash, saying, say me namely, I thought he would describe, well, how's the deal for that same. Me? Same.
And the nice thing about this, that language is very simple. It is comical. And it gets people to connect with what you're doing. And so again, that's just one thing that we learned from one mentor, just in how he exercises verbiage and communication. And when you're talking about the ability to communicate and teach these deals, that's some of the skill set and the learning that you're going to be doing as you go out there and do it. But if you don't have the conversation, you're not going to learn squat. So you got to start having those conversations, I think is a key takeaway. And make sure to get a copy of Jay's download there. We're going to, again, we'll put the link down in the show notes what our final question for you is, Jay and I really want to just have you open up on this a little bit.
Although you showed up today without a cape on, you are wearing an unemployable shirt, which is just almost as cool. And so you may not show up to your podcast studio every day and think, I'm a superhero today, but every time that someone downloads your ebook, every time that someone reads your other book, where to get the money. Now, anytime that someone does those things, you're showing up as a hero for them in their world because you're teaching them a way to create more freedom in their life and to share a bigger impact. So our question for you is, who do you most want to be a hero to?
[00:40:01] Jay Conner: I want to be a hero to a person that wants to serve and give back this game of, and it's not a game, it's a business. But this business of real estate investing, it's not first about the money. And I'll tell you why it's not first about the money.
Every time I've been involved in an opportunity or a business, and my primary focus, or my only focus was making money, I failed miserably. In fact, I failed so miserable, I never got off the ground. I never got it launched right. Because when it's only focused on the money, who are you focusing on?
You're focusing on yourself. When you're only focusing on the money. This business is not primarily about the money. This business is a people business.
And for goodness sakes, there's so many people to serve. And when you put serve first out there, you ain't got to worry about yourself. If you've got a smart business plan, of course you got to have a smart business plan right for it to work. But when your focus is on the other person, everything else falls into place. Who am I talking about, well, we ain't buying nothing these days in the multiple listing service from realtors because there ain't nothing in there. We're buying all of our deals and we have since decided Covid from for sale by owners. Those are people. Those are real people. And those real people have got problems or they wouldn't be responding to your marketing that you can offer a solution.
[00:41:40] Richard Canfield: Right.
[00:41:41] Jay Conner: It's about understanding where are they coming from. I mean, they wouldn't be reaching out to you unless there was some kind of distress going on most of the time. So you're there to help these people. For example, I was talking to, I wasn't. My acquisitionist was talking to a seller a couple of weeks ago at 123 Paradise Circle is where their house is located. And she was talking to him and come to find out, just lost the spouse. The spouse had just died. They got financial stress coming on, but for other reasons, they can't move out of the house until August. So they said, but we can't sell to August. I said, yeah, we can. Do you want to sell now and still stay in your house for free with no rent for the next few months? So we fixed the problem by understanding what the problem was.
[00:42:30] Richard Canfield: Right.
[00:42:31] Jay Conner: This is a people business, private lenders. Right? They're looking for a safe place to put their money. Those are real people that you better be looking after and taking care of.
[00:42:42] Richard Canfield: Right?
[00:42:42] Jay Conner: And then there's all the other people that you work with, your contractors, your assistants. And so who am I looking to make an impact with and to serve somebody that is interested in the other person first? I was riding down the road the other day with a dear friend of mine. We've been going to church together for over 20 years. We're riding down the road and he says, jay, I'm confused. I said, what are you confused about, Neil? He said, when is enough enough?
I said, I think I know what you mean by that question, but tell me what you mean. He says, well, how do you reconcile the scripture in the Bible that says, when the apostle Paul says to be content?
I said, oh, now I understand the question. I said, neil, enough is never enough when it's not about you.
[00:43:35] Jayson Lowe: So well said.
[00:43:36] Richard Canfield: Beautiful. Love it.
[00:43:37] Jay Conner: Great.
[00:43:38] Jayson Lowe: And to all of our viewers watching, the episode on YouTube's playlist just showed up. Thanks to our amazing editing team, whom we give all the credit to in every episode. And make sure you click that next video, continue that journey of learning. That's really what this is all about. And we can't thank Jay enough for being with us, and we'll certainly, definitely going to have him back. Have an expanded conversation on fried chicken, and we can talk about some of the points in the book while we're eating.
[00:44:08] Richard Canfield: We might even raise some private money to buy a chicken joint.
[00:44:11] Jayson Lowe: And so, Jay, thank you sincerely and to all our viewers and listeners. Make the rest of your week outstanding. This was fantastic.
[00:44:18] Jay Conner: Thanks, Jay. Thank you.
[00:44:21] Richard Canfield: Thanks for listening to the wealth without Bay street podcast, where your wealth matters.
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